[Congressional Record (Bound Edition), Volume 147 (2001), Part 1]
[Senate]
[Pages 209-545]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Dodd, Mr. Bingaman, 
        Mrs. Murray, Mr. Wellstone, Mr. Dorgan, Ms. Mikulski, Mr. 
        Levin, Mrs. Clinton, Mr. Schumer, Mr. Rockefeller, Mr. Johnson, 
        Mr. Corzine, Mr. Biden, Mr. Kerry, and Mr. Reed):
  S. 6. A bill to amend the Public Health Service Act, the Employee 
Retirement Income Security Act of 1974, and the Internal Revenue Code 
of 1986 to protect consumers in managed care plans and other health 
coverage; to the Committee on Health, Education, Labor, and Pensions.


                      patients' bill of rights act

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

                                  S. 6

       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 ``Patients' 
     Bill of Rights Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                    TITLE I--IMPROVING MANAGED CARE

                   Subtitle A--Grievance and Appeals

Sec. 101. Utilization review activities.
Sec. 102. Internal appeals procedures.
Sec. 103. External appeals procedures.
Sec. 104. Establishment of a grievance process.

                       Subtitle B--Access to Care

Sec. 111. Consumer choice option.
Sec. 112. Choice of health care professional.
Sec. 113. Access to emergency care.
Sec. 114. Access to specialty care.
Sec. 115. Access to obstetrical and gynecological care.
Sec. 116. Access to pediatric care.
Sec. 117. Continuity of care.
Sec. 118. Access to needed prescription drugs.
Sec. 119. Coverage for individuals participating in approved clinical 
              trials.

                   Subtitle C--Access to Information

Sec. 121. Patient access to information.

         Subtitle D--Protecting the Doctor-Patient Relationship

Sec. 131. Prohibition of interference with certain medical 
              communications.
Sec. 132. Prohibition of discrimination against providers based on 
              licensure.

[[Page 210]]

Sec. 133. Prohibition against improper incentive arrangements.
Sec. 134. Payment of claims.
Sec. 135. Protection for patient advocacy.

                        Subtitle E--Definitions

Sec. 151. Definitions.
Sec. 152. Preemption; State flexibility; construction.
Sec. 153. Exclusions.
Sec. 154. Coverage of limited scope plans.
Sec. 155. Regulations.

 TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS 
   AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT

Sec. 201. Application to group health plans and group health insurance 
              coverage.
Sec. 202. Application to individual health insurance coverage.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

Sec. 301. Application of patient protection standards to group health 
              plans and group health insurance coverage under the 
              Employee Retirement Income Security Act of 1974.
Sec. 302. ERISA preemption not to apply to certain actions involving 
              health insurance policyholders.
Sec. 303. Limitations on actions.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

Sec. 401. Amendments to the Internal Revenue Code of 1986.

        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

Sec. 501. Effective dates.
Sec. 502. Coordination in implementation.

                   TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 601. Health care paperwork simplification.
Sec. 602. No impact on social security trust fund.

                    TITLE I--IMPROVING MANAGED CARE

                   Subtitle A--Grievance and Appeals

     SEC. 101. UTILIZATION REVIEW ACTIVITIES.

       (a) Compliance With Requirements.--
       (1) In general.--A group health plan, and a health 
     insurance issuer that provides health insurance coverage, 
     shall conduct utilization review activities in connection 
     with the provision of benefits under such plan or coverage 
     only in accordance with a utilization review program that 
     meets the requirements of this section.
       (2) Use of outside agents.--Nothing in this section shall 
     be construed as preventing a group health plan or health 
     insurance issuer from arranging through a contract or 
     otherwise for persons or entities to conduct utilization 
     review activities on behalf of the plan or issuer, so long as 
     such activities are conducted in accordance with a 
     utilization review program that meets the requirements of 
     this section.
       (3) Utilization review defined.--For purposes of this 
     section, the terms ``utilization review'' and ``utilization 
     review activities'' mean procedures used to monitor or 
     evaluate the use or coverage, clinical necessity, 
     appropriateness, efficacy, or efficiency of health care 
     services, procedures or settings, and includes prospective 
     review, concurrent review, second opinions, case management, 
     discharge planning, or retrospective review.
       (b) Written Policies and Criteria.--
       (1) Written policies.--A utilization review program shall 
     be conducted consistent with written policies and procedures 
     that govern all aspects of the program.
       (2) Use of written criteria.--
       (A) In general.--Such a program shall utilize written 
     clinical review criteria developed with input from a range of 
     appropriate actively practicing health care professionals, as 
     determined by the plan, pursuant to the program. Such 
     criteria shall include written clinical review criteria that 
     are based on valid clinical evidence where available and that 
     are directed specifically at meeting the needs of at-risk 
     populations and covered individuals with chronic conditions 
     or severe illnesses, including gender-specific criteria and 
     pediatric-specific criteria where available and appropriate.
       (B) Continuing use of standards in retrospective review.--
     If a health care service has been specifically pre-authorized 
     or approved for an enrollee under such a program, the program 
     shall not, pursuant to retrospective review, revise or modify 
     the specific standards, criteria, or procedures used for the 
     utilization review for procedures, treatment, and services 
     delivered to the enrollee during the same course of 
     treatment.
       (C) Review of sample of claims denials.--Such a program 
     shall provide for an evaluation of the clinical 
     appropriateness of at least a sample of denials of claims for 
     benefits.
       (c) Conduct of Program Activities.--
       (1) Administration by health care professionals.--A 
     utilization review program shall be administered by qualified 
     health care professionals who shall oversee review decisions.
       (2) Use of qualified, independent personnel.--
       (A) In general.--A utilization review program shall provide 
     for the conduct of utilization review activities only through 
     personnel who are qualified and have received appropriate 
     training in the conduct of such activities under the program.
       (B) Prohibition of contingent compensation arrangements.--
     Such a program shall not, with respect to utilization review 
     activities, permit or provide compensation or anything of 
     value to its employees, agents, or contractors in a manner 
     that encourages denials of claims for benefits.
       (C) Prohibition of conflicts.--Such a program shall not 
     permit a health care professional who is providing health 
     care services to an individual to perform utilization review 
     activities in connection with the health care services being 
     provided to the individual.
       (3) Accessibility of review.--Such a program shall provide 
     that appropriate personnel performing utilization review 
     activities under the program, including the utilization 
     review administrator, are reasonably accessible by toll-free 
     telephone during normal business hours to discuss patient 
     care and allow response to telephone requests, and that 
     appropriate provision is made to receive and respond promptly 
     to calls received during other hours.
       (4) Limits on frequency.--Such a program shall not provide 
     for the performance of utilization review activities with 
     respect to a class of services furnished to an individual 
     more frequently than is reasonably required to assess whether 
     the services under review are medically necessary or 
     appropriate.
       (d) Deadline for Determinations.--
       (1) Prior authorization services.--
       (A) In general.--Except as provided in paragraph (2), in 
     the case of a utilization review activity involving the prior 
     authorization of health care items and services for an 
     individual, the utilization review program shall make a 
     determination concerning such authorization, and provide 
     notice of the determination to the individual or the 
     individual's designee and the individual's health care 
     provider by telephone and in printed form, as soon as 
     possible in accordance with the medical exigencies of the 
     case, and in no event later than the deadline specified in 
     subparagraph (B).
       (B) Deadline.--
       (i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     date of receipt of the request for prior authorization.
       (ii) Extension permitted where notice of additional 
     information required.--If a utilization review program--

       (I) receives a request for a prior authorization;
       (II) determines that additional information is necessary to 
     complete the review and make the determination on the 
     request; and
       (III) notifies the requester, not later than five business 
     days after the date of receiving the request, of the need for 
     such specified additional information,

     the deadline specified in this subparagraph is 14 days after 
     the date the program receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the prior authorization. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       (iii) Expedited cases.--In the case of a situation 
     described in section 102(c)(1)(A), the deadline specified in 
     this subparagraph is 72 hours after the time of the request 
     for prior authorization.
       (2) Ongoing care.--
       (A) Concurrent review.--
       (i) In general.--Subject to subparagraph (B), in the case 
     of a concurrent review of ongoing care (including 
     hospitalization), which results in a termination or reduction 
     of such care, the plan must provide by telephone and in 
     printed form notice of the concurrent review determination to 
     the individual or the individual's designee and the 
     individual's health care provider as soon as possible in 
     accordance with the medical exigencies of the case, with 
     sufficient time prior to the termination or reduction to 
     allow for an appeal under section 102(c)(1)(A) to be 
     completed before the termination or reduction takes effect.
       (ii) Contents of notice.--Such notice shall include, with 
     respect to ongoing health care items and services, the number 
     of ongoing services approved, the new total of approved 
     services, the date of onset of services, and the next review 
     date, if any, as well as a statement of the individual's 
     rights to further appeal.
       (B) Exception.--Subparagraph (A) shall not be interpreted 
     as requiring plans or issuers to provide coverage of care 
     that would exceed the coverage limitations for such care.
       (3) Previously provided services.--In the case of a 
     utilization review activity involving retrospective review of 
     health care services previously provided for an individual, 
     the utilization review program shall make a determination 
     concerning such services, and provide notice of the 
     determination to the individual or the individual's designee 
     and the individual's health care provider by telephone and in 
     printed form, within 30 days of

[[Page 211]]

     the date of receipt of information that is reasonably 
     necessary to make such determination, but in no case later 
     than 60 days after the date of receipt of the claim for 
     benefits.
       (4) Failure to meet deadline.--In a case in which a group 
     health plan or health insurance issuer fails to make a 
     determination on a claim for benefit under paragraph (1), 
     (2)(A), or (3) by the applicable deadline established under 
     the respective paragraph, the failure shall be treated under 
     this subtitle as a denial of the claim as of the date of the 
     deadline.
       (5) Reference to special rules for emergency services, 
     maintenance care, and post-stabilization care.--For waiver of 
     prior authorization requirements in certain cases involving 
     emergency services and maintenance care and post-
     stabilization care, see subsections (a)(1) and (b) of section 
     113, respectively.
       (e) Notice of Denials of Claims for Benefits.--
       (1) In general.--Notice of a denial of claims for benefits 
     under a utilization review program shall be provided in 
     printed form and written in a manner calculated to be 
     understood by the participant, beneficiary, or enrollee and 
     shall include--
       (A) the reasons for the denial (including the clinical 
     rationale);
       (B) instructions on how to initiate an appeal under section 
     102; and
       (C) notice of the availability, upon request of the 
     individual (or the individual's designee) of the clinical 
     review criteria relied upon to make such denial.
       (2) Specification of any additional information.--Such a 
     notice shall also specify what (if any) additional necessary 
     information must be provided to, or obtained by, the person 
     making the denial in order to make a decision on such an 
     appeal.
       (f) Claim for Benefits and Denial of Claim for Benefits 
     Defined.--For purposes of this subtitle:
       (1) Claim for benefits.--The term ``claim for benefits'' 
     means any request for coverage (including authorization of 
     coverage), for eligibility, or for payment in whole or in 
     part, for an item or service under a group health plan or 
     health insurance coverage.
       (2) Denial of claim for benefits.--The term ``denial'' 
     means, with respect to a claim for benefits, a denial, or a 
     failure to act on a timely basis upon, in whole or in part, 
     the claim for benefits and includes a failure to provide 
     benefits (including items and services) required to be 
     provided under this title.

     SEC. 102. INTERNAL APPEALS PROCEDURES.

       (a) Right of Review.--
       (1) In general.--Each group health plan, and each health 
     insurance issuer offering health insurance coverage--
       (A) shall provide adequate notice in writing to any 
     participant or beneficiary under such plan, or enrollee under 
     such coverage, whose claim for benefits under the plan or 
     coverage has been denied (within the meaning of section 
     101(f)(2)), setting forth the specific reasons for such 
     denial of claim for benefits and rights to any further review 
     or appeal, written in a manner calculated to be understood by 
     the participant, beneficiary, or enrollee; and
       (B) shall afford such a participant, beneficiary, or 
     enrollee (and any provider or other person acting on behalf 
     of such an individual with the individual's consent or 
     without such consent if the individual is medically unable to 
     provide such consent) who is dissatisfied with such a denial 
     of claim for benefits a reasonable opportunity (of not less 
     than 180 days) to request and obtain a full and fair review 
     by a named fiduciary (with respect to such plan) or named 
     appropriate individual (with respect to such coverage) of the 
     decision denying the claim.
       (2) Treatment of oral requests.--The request for review 
     under paragraph (1)(B) may be made orally, but, in the case 
     of an oral request, shall be followed by a request in 
     writing.
       (b) Internal Review Process.--
       (1) Conduct of review.--
       (A) In general.--A review of a denial of claim under this 
     section shall be made by an individual who--
       (i) in a case involving medical judgment, shall be a 
     physician or, in the case of limited scope coverage (as 
     defined in subparagraph (B)), shall be an appropriate 
     specialist;
       (ii) has been selected by the plan or issuer; and
       (iii) did not make the initial denial in the internally 
     appealable decision.
       (B) Limited scope coverage defined.--For purposes of 
     subparagraph (A), the term ``limited scope coverage'' means a 
     group health plan or health insurance coverage the only 
     benefits under which are for benefits described in section 
     2791(c)(2)(A) of the Public Health Service Act (42 U.S.C. 
     300gg-91(c)(2)).
       (2) Time limits for internal reviews.--
       (A) In general.--Having received such a request for review 
     of a denial of claim, the plan or issuer shall, in accordance 
     with the medical exigencies of the case but not later than 
     the deadline specified in subparagraph (B), complete the 
     review on the denial and transmit to the participant, 
     beneficiary, enrollee, or other person involved a decision 
     that affirms, reverses, or modifies the denial. If the 
     decision does not reverse the denial, the plan or issuer 
     shall transmit, in printed form, a notice that sets forth the 
     grounds for such decision and that includes a description of 
     rights to any further appeal. Such decision shall be treated 
     as the final decision of the plan. Failure to issue such a 
     decision by such deadline shall be treated as a final 
     decision affirming the denial of claim.
       (B) Deadline.--
       (i) In general.--Subject to clauses (ii) and (iii), the 
     deadline specified in this subparagraph is 14 days after the 
     date of receipt of the request for internal review.
       (ii) Extension permitted where notice of additional 
     information required.--If a group health plan or health 
     insurance issuer--

       (I) receives a request for internal review;
       (II) determines that additional information is necessary to 
     complete the review and make the determination on the 
     request; and
       (III) notifies the requester, not later than five business 
     days after the date of receiving the request, of the need for 
     such specified additional information,

     the deadline specified in this subparagraph is 14 days after 
     the date the plan or issuer receives the specified additional 
     information, but in no case later than 28 days after the date 
     of receipt of the request for the internal review. This 
     clause shall not apply if the deadline is specified in clause 
     (iii).
       (iii) Expedited cases.--In the case of a situation 
     described in subsection (c)(1)(A), the deadline specified in 
     this subparagraph is 72 hours after the time of the request 
     for review.
       (c) Expedited Review Process.--
       (1) In general.--A group health plan, and a health 
     insurance issuer, shall establish procedures in writing for 
     the expedited consideration of requests for review under 
     subsection (b) in situations--
       (A) in which the application of the normal timeframe for 
     making a determination could seriously jeopardize the life or 
     health of the participant, beneficiary, or enrollee or such 
     an individual's ability to regain maximum function; or
       (B) described in section 101(d)(2) (relating to requests 
     for continuation of ongoing care which would otherwise be 
     reduced or terminated).
       (2) Process.--Under such procedures--
       (A) the request for expedited review may be submitted 
     orally or in writing by an individual or provider who is 
     otherwise entitled to request the review;
       (B) all necessary information, including the plan's or 
     issuer's decision, shall be transmitted between the plan or 
     issuer and the requester by telephone, facsimile, or other 
     similarly expeditious available method; and
       (C) the plan or issuer shall expedite the review in the 
     case of any of the situations described in subparagraph (A) 
     or (B) of paragraph (1).
       (3) Deadline for decision.--The decision on the expedited 
     review must be made and communicated to the parties as soon 
     as possible in accordance with the medical exigencies of the 
     case, and in no event later than 72 hours after the time of 
     receipt of the request for expedited review, except that in a 
     case described in paragraph (1)(B), the decision must be made 
     before the end of the approved period of care.
       (d) Waiver of Process.--A plan or issuer may waive its 
     rights for an internal review under subsection (b). In such 
     case the participant, beneficiary, or enrollee involved (and 
     any designee or provider involved) shall be relieved of any 
     obligation to complete the review involved and may, at the 
     option of such participant, beneficiary, enrollee, designee, 
     or provider, proceed directly to seek further appeal through 
     any applicable external appeals process.

     SEC. 103. EXTERNAL APPEALS PROCEDURES.

       (a) Right to External Appeal.--
       (1) In general.--A group health plan, and a health 
     insurance issuer offering health insurance coverage, shall 
     provide for an external appeals process that meets the 
     requirements of this section in the case of an externally 
     appealable decision described in paragraph (2), for which a 
     timely appeal is made either by the plan or issuer or by the 
     participant, beneficiary, or enrollee (and any provider or 
     other person acting on behalf of such an individual with the 
     individual's consent or without such consent if such an 
     individual is medically unable to provide such consent). The 
     appropriate Secretary shall establish standards to carry out 
     such requirements.
       (2) Externally appealable decision defined.--
       (A) In general.--For purposes of this section, the term 
     ``externally appealable decision'' means a denial of claim 
     for benefits (as defined in section 101(f)(2))--
       (i) that is based in whole or in part on a decision that 
     the item or service is not medically necessary or appropriate 
     or is investigational or experimental; or
       (ii) in which the decision as to whether a benefit is 
     covered involves a medical judgment.
       (B) Inclusion.--Such term also includes a failure to meet 
     an applicable deadline for internal review under section 102.
       (C) Exclusions.--Such term does not include--
       (i) specific exclusions or express limitations on the 
     amount, duration, or scope of coverage that do not involve 
     medical judgment; or

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       (ii) a decision regarding whether an individual is a 
     participant, beneficiary, or enrollee under the plan or 
     coverage.
       (3) Exhaustion of internal review process.--Except as 
     provided under section 102(d), a plan or issuer may condition 
     the use of an external appeal process in the case of an 
     externally appealable decision upon a final decision in an 
     internal review under section 102, but only if the decision 
     is made in a timely basis consistent with the deadlines 
     provided under this subtitle.
       (4) Filing fee requirement.--
       (A) In general.--Subject to subparagraph (B), a plan or 
     issuer may condition the use of an external appeal process 
     upon payment to the plan or issuer of a filing fee that does 
     not exceed $25.
       (B) Exception for indigency.--The plan or issuer may not 
     require payment of the filing fee in the case of an 
     individual participant, beneficiary, or enrollee who 
     certifies (in a form and manner specified in guidelines 
     established by the Secretary of Health and Human Services) 
     that the individual is indigent (as defined in such 
     guidelines).
       (C) Refunding fee in case of successful appeals.--The plan 
     or issuer shall refund payment of the filing fee under this 
     paragraph if the recommendation of the external appeal entity 
     is to reverse or modify the denial of a claim for benefits 
     which is the subject of the appeal.
       (b) General Elements of External Appeals Process.--
       (1) Contract with qualified external appeal entity.--
       (A) Contract requirement.--Except as provided in 
     subparagraph (D), the external appeal process under this 
     section of a plan or issuer shall be conducted under a 
     contract between the plan or issuer and one or more qualified 
     external appeal entities (as defined in subsection (c)).
       (B) Limitation on plan or issuer selection.--
       (i) In general.--The applicable authority shall implement 
     procedures--

       (I) to assure that the selection process among qualified 
     external appeal entities will not create any incentives for 
     external appeal entities to make a decision in a biased 
     manner; and
       (II) for auditing a sample of decisions by such entities to 
     assure that no such decisions are made in a biased manner.

       (ii) Limitation on ability to influence selection.--No 
     selection process established by the applicable authority 
     under this subsection shall provide the participant, 
     beneficiary, or enrollee or the plan or issuer with the 
     ability to determine or influence the selection of a 
     qualified external appeal entity to review the appeal of the 
     participant, beneficiary, or enrollee.
       (C) Other terms and conditions.--The terms and conditions 
     of a contract under this paragraph shall be consistent with 
     the standards the appropriate Secretary shall establish to 
     assure there is no real or apparent conflict of interest in 
     the conduct of external appeal activities. Such contract 
     shall provide that all costs of the process (except those 
     incurred by the participant, beneficiary, enrollee, or 
     treating professional in support of the appeal) shall be paid 
     by the plan or issuer, and not by the participant, 
     beneficiary, or enrollee. The previous sentence shall not be 
     construed as applying to the imposition of a filing fee under 
     subsection (a)(4).
       (D) State authority with respect qualified external appeal 
     entity for health insurance issuers.--With respect to health 
     insurance issuers offering health insurance coverage in a 
     State, the State may provide for external review activities 
     to be conducted by a qualified external appeal entity that is 
     designated by the State or that is selected by the State in a 
     manner determined by the State to assure an unbiased 
     determination.
       (2) Elements of process.--An external appeal process shall 
     be conducted consistent with standards established by the 
     appropriate Secretary that include at least the following:
       (A) Fair and de novo determination.--The process shall 
     provide for a fair, de novo determination. However, nothing 
     in this paragraph shall be construed as providing for 
     coverage of items and services for which benefits are 
     specifically excluded under the plan or coverage.
       (B) Standard of review.--An external appeal entity shall 
     determine whether the plan's or issuer's decision is in 
     accordance with the medical needs of the patient involved (as 
     determined by the entity) taking into account, as of the time 
     of the entity's determination, the patient's medical 
     condition and any relevant and reliable evidence the entity 
     obtains under subparagraph (D). If the entity determines the 
     decision is in accordance with such needs, the entity shall 
     affirm the decision and to the extent that the entity 
     determines the decision is not in accordance with such needs, 
     the entity shall reverse or modify the decision.
       (C) Consideration of plan or coverage definitions.--In 
     making such determination, the external appeal entity shall 
     consider (but not be bound by) any language in the plan or 
     coverage document relating to the definitions of the terms 
     medical necessity, medically necessary or appropriate, or 
     experimental, investigational, or related terms.
       (D) Evidence.--
       (i) In general.--An external appeal entity shall include, 
     among the evidence taken into consideration--

       (I) the decision made by the plan or issuer upon internal 
     review under section 102 and any guidelines or standards used 
     by the plan or issuer in reaching such decision;
       (II) any personal health and medical information supplied 
     with respect to the individual whose denial of claim for 
     benefits has been appealed; and
       (III) the opinion of the individual's treating physician or 
     health care professional.

       (ii) Additional evidence.--Such entity may also take into 
     consideration but not be limited to the following evidence 
     (to the extent available):

       (I) The results of studies that meet professionally 
     recognized standards of validity and replicability or that 
     have been published in peer-reviewed journals.
       (II) The results of professional consensus conferences 
     conducted or financed in whole or in part by one or more 
     Government agencies.
       (III) Practice and treatment guidelines prepared or 
     financed in whole or in part by Government agencies.
       (IV) Government-issued coverage and treatment policies.
       (V) Community standard of care and generally accepted 
     principles of professional medical practice.
       (VI) To the extent that the entity determines it to be free 
     of any conflict of interest, the opinions of individuals who 
     are qualified as experts in one or more fields of health care 
     which are directly related to the matters under appeal.
       (VII) To the extent that the entity determines it to be 
     free of any conflict of interest, the results of peer reviews 
     conducted by the plan or issuer involved.

       (E) Determination concerning externally appealable 
     decisions.--A qualified external appeal entity shall 
     determine--
       (i) whether a denial of claim for benefits is an externally 
     appealable decision (within the meaning of subsection 
     (a)(2));
       (ii) whether an externally appealable decision involves an 
     expedited appeal; and
       (iii) for purposes of initiating an external review, 
     whether the internal review process has been completed.
       (F) Opportunity to submit evidence.--Each party to an 
     externally appealable decision may submit evidence related to 
     the issues in dispute.
       (G) Provision of information.--The plan or issuer involved 
     shall provide timely access to the external appeal entity to 
     information and to provisions of the plan or health insurance 
     coverage relating to the matter of the externally appealable 
     decision, as determined by the entity.
       (H) Timely decisions.--A determination by the external 
     appeal entity on the decision shall--
       (i) be made orally or in writing and, if it is made orally, 
     shall be supplied to the parties in writing as soon as 
     possible;
       (ii) be made in accordance with the medical exigencies of 
     the case involved, but in no event later than 21 days after 
     the date (or, in the case of an expedited appeal, 72 hours 
     after the time) of requesting an external appeal of the 
     decision;
       (iii) state, in layperson's language, the basis for the 
     determination, including, if relevant, any basis in the terms 
     or conditions of the plan or coverage; and
       (iv) inform the participant, beneficiary, or enrollee of 
     the individual's rights (including any limitation on such 
     rights) to seek further review by the courts (or other 
     process) of the external appeal determination.
       (I) Compliance with determination.--If the external appeal 
     entity reverses or modifies the denial of a claim for 
     benefits, the plan or issuer shall--
       (i) upon the receipt of the determination, authorize 
     benefits in accordance with such determination;
       (ii) take such actions as may be necessary to provide 
     benefits (including items or services) in a timely manner 
     consistent with such determination; and
       (iii) submit information to the entity documenting 
     compliance with the entity's determination and this 
     subparagraph.
       (c) Qualifications of External Appeal Entities.--
       (1) In general.--For purposes of this section, the term 
     ``qualified external appeal entity'' means, in relation to a 
     plan or issuer, an entity that is certified under paragraph 
     (2) as meeting the following requirements:
       (A) The entity meets the independence requirements of 
     paragraph (3).
       (B) The entity conducts external appeal activities through 
     a panel of not fewer than three clinical peers.
       (C) The entity has sufficient medical, legal, and other 
     expertise and sufficient staffing to conduct external appeal 
     activities for the plan or issuer on a timely basis 
     consistent with subsection (b)(2)(G).
       (D) The entity meets such other requirements as the 
     appropriate Secretary may impose.
       (2) Initial certification of external appeal entities.--
       (A) In general.--In order to be treated as a qualified 
     external appeal entity with respect to--

[[Page 213]]

       (i) a group health plan, the entity must be certified (and, 
     in accordance with subparagraph (B), periodically 
     recertified) as meeting the requirements of paragraph (1)--

       (I) by the Secretary of Labor;
       (II) under a process recognized or approved by the 
     Secretary of Labor; or

       (III) to the extent provided in subparagraph (C)(i), by a 
     qualified private standard-setting organization (certified 
     under such subparagraph); or

       (ii) a health insurance issuer operating in a State, the 
     entity must be certified (and, in accordance with 
     subparagraph (B), periodically recertified) as meeting such 
     requirements--

       (I) by the applicable State authority (or under a process 
     recognized or approved by such authority); or
       (II) if the State has not established a certification and 
     recertification process for such entities, by the Secretary 
     of Health and Human Services, under a process recognized or 
     approved by such Secretary, or to the extent provided in 
     subparagraph (C)(ii), by a qualified private standard-setting 
     organization (certified under such subparagraph).

       (B) Recertification process.--The appropriate Secretary 
     shall develop standards for the recertification of external 
     appeal entities. Such standards shall include a review of--
       (i) the number of cases reviewed;
       (ii) a summary of the disposition of those cases;
       (iii) the length of time in making determinations on those 
     cases;
       (iv) updated information of what was required to be 
     submitted as a condition of certification for the entity's 
     performance of external appeal activities; and
       (v) such information as may be necessary to assure the 
     independence of the entity from the plans or issuers for 
     which external appeal activities are being conducted.
       (C) Certification of qualified private standard-setting 
     organizations.--
       (i) For external reviews under group health plans.--For 
     purposes of subparagraph (A)(i)(III), the Secretary of Labor 
     may provide for a process for certification (and periodic 
     recertification) of qualified private standard-setting 
     organizations which provide for certification of external 
     review entities. Such an organization shall only be certified 
     if the organization does not certify an external review 
     entity unless it meets standards required for certification 
     of such an entity by such Secretary under subparagraph 
     (A)(i)(I).
       (ii) For external reviews of health insurance issuers.--For 
     purposes of subparagraph (A)(ii)(II), the Secretary of Health 
     and Human Services may provide for a process for 
     certification (and periodic recertification) of qualified 
     private standard-setting organizations which provide for 
     certification of external review entities. Such an 
     organization shall only be certified if the organization does 
     not certify an external review entity unless it meets 
     standards required for certification of such an entity by 
     such Secretary under subparagraph (A)(ii)(II).
       (D) Requirement of sufficient number of certified 
     entities.--The appropriate Secretary shall certify and 
     recertify a sufficient number of external appeal entities 
     under this paragraph to ensure the timely and efficient 
     provision of external review services.
       (3) Independence requirements.--
       (A) In general.--A clinical peer or other entity meets the 
     independence requirements of this paragraph if--
       (i) the peer or entity does not have a familial, financial, 
     or professional relationship with any related party;
       (ii) any compensation received by such peer or entity in 
     connection with the external review is reasonable and not 
     contingent on any decision rendered by the peer or entity;
       (iii) except as provided in paragraph (4), the plan and the 
     issuer have no recourse against the peer or entity in 
     connection with the external review; and
       (iv) the peer or entity does not otherwise have a conflict 
     of interest with a related party as determined under any 
     regulations which the Secretary may prescribe.
       (B) Related party.--For purposes of this paragraph, the 
     term ``related party'' means--
       (i) with respect to--

       (I) a group health plan or health insurance coverage 
     offered in connection with such a plan, the plan or the 
     health insurance issuer offering such coverage; or
       (II) individual health insurance coverage, the health 
     insurance issuer offering such coverage,

     or any plan sponsor, fiduciary, officer, director, or 
     management employee of such plan or issuer;
       (ii) the health care professional that provided the health 
     care involved in the coverage decision;
       (iii) the institution at which the health care involved in 
     the coverage decision is provided;
       (iv) the manufacturer of any drug or other item that was 
     included in the health care involved in the coverage 
     decision; or
       (v) any other party determined under any regulations which 
     the Secretary may prescribe to have a substantial interest in 
     the coverage decision.
       (4) Limitation on liability of reviewers.--No qualified 
     external appeal entity having a contract with a plan or 
     issuer under this part and no person who is employed by any 
     such entity or who furnishes professional services to such 
     entity, shall be held by reason of the performance of any 
     duty, function, or activity required or authorized pursuant 
     to this section, to have violated any criminal law, or to be 
     civilly liable under any law of the United States or of any 
     State (or political subdivision thereof) if due care was 
     exercised in the performance of such duty, function, or 
     activity and there was no actual malice or gross misconduct 
     in the performance of such duty, function, or activity.
       (d) External Appeal Determination Binding on Plan.--The 
     determination by an external appeal entity under this section 
     is binding on the plan and issuer involved in the 
     determination.
       (e) Penalties Against Authorized Officials for Refusing to 
     Authorize the Determination of an External Review Entity.--
       (1) Monetary penalties.--In any case in which the 
     determination of an external review entity is not followed by 
     a group health plan, or by a health insurance issuer offering 
     health insurance coverage, any person who, acting in the 
     capacity of authorizing the benefit, causes such refusal may, 
     in the discretion in a court of competent jurisdiction, be 
     liable to an aggrieved participant, beneficiary, or enrollee 
     for a civil penalty in an amount of up to $1,000 a day from 
     the date on which the determination was transmitted to the 
     plan or issuer by the external review entity until the date 
     the refusal to provide the benefit is corrected.
       (2) Cease and desist order and order of attorney's fees.--
     In any action described in paragraph (1) brought by a 
     participant, beneficiary, or enrollee with respect to a group 
     health plan, or a health insurance issuer offering health 
     insurance coverage, in which a plaintiff alleges that a 
     person referred to in such paragraph has taken an action 
     resulting in a refusal of a benefit determined by an external 
     appeal entity in violation of such terms of the plan, 
     coverage, or this subtitle, or has failed to take an action 
     for which such person is responsible under the plan, 
     coverage, or this title and which is necessary under the plan 
     or coverage for authorizing a benefit, the court shall cause 
     to be served on the defendant an order requiring the 
     defendant--
       (A) to cease and desist from the alleged action or failure 
     to act; and
       (B) to pay to the plaintiff a reasonable attorney's fee and 
     other reasonable costs relating to the prosecution of the 
     action on the charges on which the plaintiff prevails.
       (3) Additional civil penalties.--
       (A) In general.--In addition to any penalty imposed under 
     paragraph (1) or (2), the appropriate Secretary may assess a 
     civil penalty against a person acting in the capacity of 
     authorizing a benefit determined by an external review entity 
     for one or more group health plans, or health insurance 
     issuers offering health insurance coverage, for--
       (i) any pattern or practice of repeated refusal to 
     authorize a benefit determined by an external appeal entity 
     in violation of the terms of such a plan, coverage, or this 
     title; or
       (ii) any pattern or practice of repeated violations of the 
     requirements of this section with respect to such plan or 
     plans or coverage.
       (B) Standard of proof and amount of penalty.--Such penalty 
     shall be payable only upon proof by clear and convincing 
     evidence of such pattern or practice and shall be in an 
     amount not to exceed the lesser of--
       (i) 25 percent of the aggregate value of benefits shown by 
     the appropriate Secretary to have not been provided, or 
     unlawfully delayed, in violation of this section under such 
     pattern or practice; or
       (ii) $500,000.
       (4) Removal and disqualification.--Any person acting in the 
     capacity of authorizing benefits who has engaged in any such 
     pattern or practice described in paragraph (3)(A) with 
     respect to a plan or coverage, upon the petition of the 
     appropriate Secretary, may be removed by the court from such 
     position, and from any other involvement, with respect to 
     such a plan or coverage, and may be precluded from returning 
     to any such position or involvement for a period determined 
     by the court.
       (f) Protection of Legal Rights.--Nothing in this subtitle 
     shall be construed as altering or eliminating any cause of 
     action or legal rights or remedies of participants, 
     beneficiaries, enrollees, and others under State or Federal 
     law (including sections 502 and 503 of the Employee 
     Retirement Income Security Act of 1974), including the right 
     to file judicial actions to enforce rights.

     SEC. 104. ESTABLISHMENT OF A GRIEVANCE PROCESS.

       (a) Establishment of Grievance System.--
       (1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall establish and maintain a system to 
     provide for the presentation and resolution of oral and 
     written grievances brought by individuals who are 
     participants, beneficiaries, or enrollees, or health care 
     providers or

[[Page 214]]

     other individuals acting on behalf of an individual and with 
     the individual's consent or without such consent if the 
     individual is medically unable to provide such consent, 
     regarding any aspect of the plan's or issuer's services.
       (2) Grievance defined.--In this section, the term 
     ``grievance'' means any question, complaint, or concern 
     brought by a participant, beneficiary or enrollee that is not 
     a claim for benefits (as defined in section 101(f)(1)).
       (b) Grievance System.--Such system shall include the 
     following components with respect to individuals who are 
     participants, beneficiaries, or enrollees:
       (1) Written notification to all such individuals and 
     providers of the telephone numbers and business addresses of 
     the plan or issuer personnel responsible for resolution of 
     grievances and appeals.
       (2) A system to record and document, over a period of at 
     least three previous years, all grievances and appeals made 
     and their status.
       (3) A process providing for timely processing and 
     resolution of grievances.
       (4) Procedures for follow-up action, including the methods 
     to inform the person making the grievance of the resolution 
     of the grievance.
     Grievances are not subject to appeal under the previous 
     provisions of this subtitle.

                       Subtitle B--Access to Care

     SEC. 111. CONSUMER CHOICE OPTION.

       (a) In General.--If--
       (1) a health insurance issuer providing health insurance 
     coverage in connection with a group health plan offers to 
     enrollees health insurance coverage which provides for 
     coverage of services only if such services are furnished 
     through health care professionals and providers who are 
     members of a network of health care professionals and 
     providers who have entered into a contract with the issuer to 
     provide such services, or
       (2) a group health plan offers to participants or 
     beneficiaries health benefits which provide for coverage of 
     services only if such services are furnished through health 
     care professionals and providers who are members of a network 
     of health care professionals and providers who have entered 
     into a contract with the plan to provide such services,

     then the issuer or plan shall also offer or arrange to be 
     offered to such enrollees, participants, or beneficiaries (at 
     the time of enrollment and during an annual open season as 
     provided under subsection (c)) the option of health insurance 
     coverage or health benefits which provide for coverage of 
     such services which are not furnished through health care 
     professionals and providers who are members of such a network 
     unless such enrollees, participants, or beneficiaries are 
     offered such non-network coverage through another group 
     health plan or through another health insurance issuer in the 
     group market.
       (b) Additional Costs.--The amount of any additional premium 
     charged by the health insurance issuer or group health plan 
     for the additional cost of the creation and maintenance of 
     the option described in subsection (a) and the amount of any 
     additional cost sharing imposed under such option shall be 
     borne by the enrollee, participant, or beneficiary unless it 
     is paid by the health plan sponsor or group health plan 
     through agreement with the health insurance issuer.
       (c) Open Season.--An enrollee, participant, or beneficiary, 
     may change to the offering provided under this section only 
     during a time period determined by the health insurance 
     issuer or group health plan. Such time period shall occur at 
     least annually.

     SEC. 112. CHOICE OF HEALTH CARE PROFESSIONAL.

       (a) Primary Care.--If a group health plan, or a health 
     insurance issuer that offers health insurance coverage, 
     requires or provides for designation by a participant, 
     beneficiary, or enrollee of a participating primary care 
     provider, then the plan or issuer shall permit each 
     participant, beneficiary, and enrollee to designate any 
     participating primary care provider who is available to 
     accept such individual.
       (b) Specialists.--
       (1) In general.--Subject to paragraph (2), a group health 
     plan and a health insurance issuer that offers health 
     insurance coverage shall permit each participant, 
     beneficiary, or enrollee to receive medically necessary or 
     appropriate specialty care, pursuant to appropriate referral 
     procedures, from any qualified participating health care 
     professional who is available to accept such individual for 
     such care.
       (2) Limitation.--Paragraph (1) shall not apply to specialty 
     care if the plan or issuer clearly informs participants, 
     beneficiaries, and enrollees of the limitations on choice of 
     participating health care professionals with respect to such 
     care.
       (3) Construction.--Nothing in this subsection shall be 
     construed as affecting the application of section 114 
     (relating to access to specialty care).

     SEC. 113. ACCESS TO EMERGENCY CARE.

       (a) Coverage of Emergency Services.--
       (1) In general.--If a group health plan, or health 
     insurance coverage offered by a health insurance issuer, 
     provides any benefits with respect to services in an 
     emergency department of a hospital, the plan or issuer shall 
     cover emergency services (as defined in paragraph (2)(B))--
       (A) without the need for any prior authorization 
     determination;
       (B) whether or not the health care provider furnishing such 
     services is a participating provider with respect to such 
     services;
       (C) in a manner so that, if such services are provided to a 
     participant, beneficiary, or enrollee--
       (i) by a nonparticipating health care provider with or 
     without prior authorization; or
       (ii) by a participating health care provider without prior 
     authorization,
     the participant, beneficiary, or enrollee is not liable for 
     amounts that exceed the amounts of liability that would be 
     incurred if the services were provided by a participating 
     health care provider with prior authorization; and
       (D) without regard to any other term or condition of such 
     coverage (other than exclusion or coordination of benefits, 
     or an affiliation or waiting period, permitted under section 
     2701 of the Public Health Service Act, section 701 of the 
     Employee Retirement Income Security Act of 1974, or section 
     9801 of the Internal Revenue Code of 1986, and other than 
     applicable cost-sharing).
       (2) Definitions.--In this section:
       (A) Emergency medical condition based on prudent layperson 
     standard.--The term ``emergency medical condition'' means a 
     medical condition manifesting itself by acute symptoms of 
     sufficient severity (including severe pain) such that a 
     prudent layperson, who possesses an average knowledge of 
     health and medicine, could reasonably expect the absence of 
     immediate medical attention to result in a condition 
     described in clause (i), (ii), or (iii) of section 
     1867(e)(1)(A) of the Social Security Act.
       (B) Emergency services.--The term ``emergency services'' 
     means--
       (i) a medical screening examination (as required under 
     section 1867 of the Social Security Act) that is within the 
     capability of the emergency department of a hospital, 
     including ancillary services routinely available to the 
     emergency department to evaluate an emergency medical 
     condition (as defined in subparagraph (A)); and
       (ii) within the capabilities of the staff and facilities 
     available at the hospital, such further medical examination 
     and treatment as are required under section 1867 of such Act 
     to stabilize the patient.
       (C) Stabilize.--The term ``to stabilize'' means, with 
     respect to an emergency medical condition, to provide such 
     medical treatment of the condition as may be necessary to 
     assure, within reasonable medical probability, that no 
     material deterioration of the condition is likely to result 
     from or occur during the transfer of the individual from a 
     facility.
       (b) Reimbursement for Maintenance Care and Post-
     Stabilization Care.--In the case of services (other than 
     emergency services) for which benefits are available under a 
     group health plan, or under health insurance coverage offered 
     by a health insurance issuer, the plan or issuer shall 
     provide for reimbursement with respect to such services 
     provided to a participant, beneficiary, or enrollee other 
     than through a participating health care provider in a manner 
     consistent with subsection (a)(1)(C) (and shall otherwise 
     comply with the guidelines established under section 
     1852(d)(2) of the Social Security Act), if the services are 
     maintenance care or post-stabilization care covered under 
     such guidelines.

     SEC. 114. ACCESS TO SPECIALTY CARE.

       (a) Specialty Care for Covered Services.--
       (1) In general.--If--
       (A) an individual is a participant or beneficiary under a 
     group health plan or an enrollee who is covered under health 
     insurance coverage offered by a health insurance issuer;
       (B) the individual has a condition or disease of sufficient 
     seriousness and complexity to require treatment by a 
     specialist; and
       (C) benefits for such treatment are provided under the plan 
     or coverage,
     the plan or issuer shall make or provide for a referral to a 
     specialist who is available and accessible to provide the 
     treatment for such condition or disease.
       (2) Specialist defined.--For purposes of this subsection, 
     the term ``specialist'' means, with respect to a condition, a 
     health care practitioner, facility, or center that has 
     adequate expertise through appropriate training and 
     experience (including, in the case of a child, appropriate 
     pediatric expertise) to provide high quality care in treating 
     the condition.
       (3) Care under referral.--A group health plan or health 
     insurance issuer may require that the care provided to an 
     individual pursuant to such referral under paragraph (1) be--
       (A) pursuant to a treatment plan, only if the treatment 
     plan is developed by the specialist and approved by the plan 
     or issuer, in consultation with the designated primary care 
     provider or specialist and the individual (or the 
     individual's designee); and
       (B) in accordance with applicable quality assurance and 
     utilization review standards of the plan or issuer.
     Nothing in this subsection shall be construed as preventing 
     such a treatment plan for an individual from requiring a 
     specialist to provide the primary care provider with regular

[[Page 215]]

     updates on the specialty care provided, as well as all 
     necessary medical information.
       (4) Referrals to participating providers.--A group health 
     plan or health insurance issuer is not required under 
     paragraph (1) to provide for a referral to a specialist that 
     is not a participating provider, unless the plan or issuer 
     does not have an appropriate specialist that is available and 
     accessible to treat the individual's condition and that is a 
     participating provider with respect to such treatment.
       (5) Treatment of nonparticipating providers.--If a plan or 
     issuer refers an individual to a nonparticipating specialist 
     pursuant to paragraph (1), services provided pursuant to the 
     approved treatment plan (if any) shall be provided at no 
     additional cost to the individual beyond what the individual 
     would otherwise pay for services received by such a 
     specialist that is a participating provider.
       (b) Specialists as Gatekeeper for Treatment of Ongoing 
     Special Conditions.--
       (1) In general.--A group health plan, or a health insurance 
     issuer, in connection with the provision of health insurance 
     coverage, shall have a procedure by which an individual who 
     is a participant, beneficiary, or enrollee and who has an 
     ongoing special condition (as defined in paragraph (3)) may 
     request and receive a referral to a specialist for such 
     condition who shall be responsible for and capable of 
     providing and coordinating the individual's care with respect 
     to the condition. Under such procedures if such an 
     individual's care would most appropriately be coordinated by 
     such a specialist, such plan or issuer shall refer the 
     individual to such specialist.
       (2) Treatment for related referrals.--Such specialists 
     shall be permitted to treat the individual without a referral 
     from the individual's primary care provider and may authorize 
     such referrals, procedures, tests, and other medical services 
     as the individual's primary care provider would otherwise be 
     permitted to provide or authorize, subject to the terms of 
     the treatment (referred to in subsection (a)(3)(A)) with 
     respect to the ongoing special condition.
       (3) Ongoing special condition defined.--In this subsection, 
     the term ``ongoing special condition'' means a condition or 
     disease that--
       (A) is life-threatening, degenerative, or disabling; and
       (B) requires specialized medical care over a prolonged 
     period of time.
       (4) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).
       (c) Standing Referrals.--
       (1) In general.--A group health plan, and a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, shall have a procedure by which an 
     individual who is a participant, beneficiary, or enrollee and 
     who has a condition that requires ongoing care from a 
     specialist may receive a standing referral to such specialist 
     for treatment of such condition. If the plan or issuer, or if 
     the primary care provider in consultation with the medical 
     director of the plan or issuer and the specialist (if any), 
     determines that such a standing referral is appropriate, the 
     plan or issuer shall make such a referral to such a 
     specialist if the individual so desires.
       (2) Terms of referral.--The provisions of paragraphs (3) 
     through (5) of subsection (a) apply with respect to referrals 
     under paragraph (1) of this subsection in the same manner as 
     they apply to referrals under subsection (a)(1).

     SEC. 115. ACCESS TO OBSTETRICAL AND GYNECOLOGICAL CARE.

       (a) In General.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for a participant, 
     beneficiary, or enrollee to designate a participating primary 
     care health care professional, the plan or issuer--
       (1) may not require authorization or a referral by the 
     individual's primary care health care professional or 
     otherwise for coverage of gynecological care (including 
     preventive women's health examinations) and pregnancy-related 
     services provided by a participating health care 
     professional, including a physician, who specializes in 
     obstetrics and gynecology to the extent such care is 
     otherwise covered; and
       (2) shall treat the ordering of other obstetrical or 
     gynecological care by such a participating professional as 
     the authorization of the primary care health care 
     professional with respect to such care under the plan or 
     coverage.
       (b) Construction.--Nothing in subsection (a) shall be 
     construed to--
       (1) waive any exclusions of coverage under the terms of the 
     plan or health insurance coverage with respect to coverage of 
     obstetrical or gynecological care; or
       (2) preclude the group health plan or health insurance 
     issuer involved from requiring that the obstetrical or 
     gynecological provider notify the primary care health care 
     professional or the plan or issuer of treatment decisions.

     SEC. 116. ACCESS TO PEDIATRIC CARE.

       (a) Pediatric Care.--If a group health plan, or a health 
     insurance issuer in connection with the provision of health 
     insurance coverage, requires or provides for an enrollee to 
     designate a participating primary care provider for a child 
     of such enrollee, the plan or issuer shall permit the 
     enrollee to designate a physician who specializes in 
     pediatrics as the child's primary care provider.
       (b) Construction.--Nothing in subsection (a) shall be 
     construed to waive any exclusions of coverage under the terms 
     of the plan or health insurance coverage with respect to 
     coverage of pediatric care.

     SEC. 117. CONTINUITY OF CARE.

       (a) In General.--
       (1) Termination of provider.--If a contract between a group 
     health plan, or a health insurance issuer in connection with 
     the provision of health insurance coverage, and a health care 
     provider is terminated (as defined in paragraph (3)(B)), or 
     benefits or coverage provided by a health care provider are 
     terminated because of a change in the terms of provider 
     participation in a group health plan, and an individual who 
     is a participant, beneficiary, or enrollee in the plan or 
     coverage is undergoing treatment from the provider for an 
     ongoing special condition (as defined in paragraph (3)(A)) at 
     the time of such termination, the plan or issuer shall--
       (A) notify the individual on a timely basis of such 
     termination and of the right to elect continuation of 
     coverage of treatment by the provider under this section; and
       (B) subject to subsection (c), permit the individual to 
     elect to continue to be covered with respect to treatment by 
     the provider of such condition during a transitional period 
     (provided under subsection (b)).
       (2) Treatment of termination of contract with health 
     insurance issuer.--If a contract for the provision of health 
     insurance coverage between a group health plan and a health 
     insurance issuer is terminated and, as a result of such 
     termination, coverage of services of a health care provider 
     is terminated with respect to an individual, the provisions 
     of paragraph (1) (and the succeeding provisions of this 
     section) shall apply under the plan in the same manner as if 
     there had been a contract between the plan and the provider 
     that had been terminated, but only with respect to benefits 
     that are covered under the plan after the contract 
     termination.
       (3) Definitions.--For purposes of this section:
       (A) Ongoing special condition.--The term ``ongoing special 
     condition'' has the meaning given such term in section 
     114(b)(3), and also includes pregnancy.
       (B) Termination.--The term ``terminated'' includes, with 
     respect to a contract, the expiration or nonrenewal of the 
     contract, but does not include a termination of the contract 
     by the plan or issuer for failure to meet applicable quality 
     standards or for fraud.
       (b) Transitional Period.--
       (1) In general.--Except as provided in paragraphs (2) 
     through (4), the transitional period under this subsection 
     shall extend up to 90 days (as determined by the treating 
     health care professional) after the date of the notice 
     described in subsection (a)(1)(A) of the provider's 
     termination.
       (2) Scheduled surgery and organ transplantation.--If 
     surgery or organ transplantation was scheduled for an 
     individual before the date of the announcement of the 
     termination of the provider status under subsection (a)(1)(A) 
     or if the individual on such date was on an established 
     waiting list or otherwise scheduled to have such surgery or 
     transplantation, the transitional period under this 
     subsection with respect to the surgery or transplantation 
     shall extend beyond the period under paragraph (1) and until 
     the date of discharge of the individual after completion of 
     the surgery or transplantation.
       (3) Pregnancy.--If--
       (A) a participant, beneficiary, or enrollee was determined 
     to be pregnant at the time of a provider's termination of 
     participation; and
       (B) the provider was treating the pregnancy before date of 
     the termination,
     the transitional period under this subsection with respect to 
     provider's treatment of the pregnancy shall extend through 
     the provision of post-partum care directly related to the 
     delivery.
       (4) Terminal illness.--If--
       (A) a participant, beneficiary, or enrollee was determined 
     to be terminally ill (as determined under section 
     1861(dd)(3)(A) of the Social Security Act) at the time of a 
     provider's termination of participation; and
       (B) the provider was treating the terminal illness before 
     the date of termination,
     the transitional period under this subsection shall extend 
     for the remainder of the individual's life for care directly 
     related to the treatment of the terminal illness or its 
     medical manifestations.
       (c) Permissible Terms and Conditions.--A group health plan 
     or health insurance issuer may condition coverage of 
     continued treatment by a provider under subsection (a)(1)(B) 
     upon the individual notifying the plan of the election of 
     continued coverage and upon the provider agreeing to the 
     following terms and conditions:
       (1) The provider agrees to accept reimbursement from the 
     plan or issuer and individual involved (with respect to cost-
     sharing) at the rates applicable prior to the start

[[Page 216]]

     of the transitional period as payment in full (or, in the 
     case described in subsection (a)(2), at the rates applicable 
     under the replacement plan or issuer after the date of the 
     termination of the contract with the health insurance issuer) 
     and not to impose cost-sharing with respect to the individual 
     in an amount that would exceed the cost-sharing that could 
     have been imposed if the contract referred to in subsection 
     (a)(1) had not been terminated.
       (2) The provider agrees to adhere to the quality assurance 
     standards of the plan or issuer responsible for payment under 
     paragraph (1) and to provide to such plan or issuer necessary 
     medical information related to the care provided.
       (3) The provider agrees otherwise to adhere to such plan's 
     or issuer's policies and procedures, including procedures 
     regarding referrals and obtaining prior authorization and 
     providing services pursuant to a treatment plan (if any) 
     approved by the plan or issuer.
       (d) Construction.--Nothing in this section shall be 
     construed to require the coverage of benefits which would not 
     have been covered if the provider involved remained a 
     participating provider.

     SEC. 118. ACCESS TO NEEDED PRESCRIPTION DRUGS.

       (a) In General.--To the extent that a group health plan, or 
     health insurance coverage offered by a health insurance 
     issuer, provides coverage for benefits with respect to 
     prescription drugs, and limits such coverage to drugs 
     included in a formulary, the plan or issuer shall--
       (1) ensure the participation of physicians and pharmacists 
     in developing and reviewing such formulary;
       (2) provide for disclosure of the formulary to providers; 
     and
       (3) in accordance with the applicable quality assurance and 
     utilization review standards of the plan or issuer, provide 
     for exceptions from the formulary limitation when a non-
     formulary alternative is medically necessary and appropriate 
     and, in the case of such an exception, apply the same cost-
     sharing requirements that would have applied in the case of a 
     drug covered under the formulary.
       (b) Coverage of Approved Drugs and Medical Devices.--
       (1) In general.--A group health plan (or health insurance 
     coverage offered in connection with such a plan) that 
     provides any coverage of prescription drugs or medical 
     devices shall not deny coverage of such a drug or device on 
     the basis that the use is investigational, if the use--
       (A) in the case of a prescription drug--
       (i) is included in the labeling authorized by the 
     application in effect for the drug pursuant to subsection (b) 
     or (j) of section 505 of the Federal Food, Drug, and Cosmetic 
     Act, without regard to any postmarketing requirements that 
     may apply under such Act; or
       (ii) is included in the labeling authorized by the 
     application in effect for the drug under section 351 of the 
     Public Health Service Act, without regard to any 
     postmarketing requirements that may apply pursuant to such 
     section; or
       (B) in the case of a medical device, is included in the 
     labeling authorized by a regulation under subsection (d) or 
     (3) of section 513 of the Federal Food, Drug, and Cosmetic 
     Act, an order under subsection (f) of such section, or an 
     application approved under section 515 of such Act, without 
     regard to any postmarketing requirements that may apply under 
     such Act.
       (2) Construction.--Nothing in this subsection shall be 
     construed as requiring a group health plan (or health 
     insurance coverage offered in connection with such a plan) to 
     provide any coverage of prescription drugs or medical 
     devices.

     SEC. 119. COVERAGE FOR INDIVIDUALS PARTICIPATING IN APPROVED 
                   CLINICAL TRIALS.

       (a) Coverage.--
       (1) In general.--If a group health plan, or health 
     insurance issuer that is providing health insurance coverage, 
     provides coverage to a qualified individual (as defined in 
     subsection (b)), the plan or issuer--
       (A) may not deny the individual participation in the 
     clinical trial referred to in subsection (b)(2);
       (B) subject to subsection (c), may not deny (or limit or 
     impose additional conditions on) the coverage of routine 
     patient costs for items and services furnished in connection 
     with participation in the trial; and
       (C) may not discriminate against the individual on the 
     basis of the enrollee's participation in such trial.
       (2) Exclusion of certain costs.--For purposes of paragraph 
     (1)(B), routine patient costs do not include the cost of the 
     tests or measurements conducted primarily for the purpose of 
     the clinical trial involved.
       (3) Use of in-network providers.--If one or more 
     participating providers is participating in a clinical trial, 
     nothing in paragraph (1) shall be construed as preventing a 
     plan or issuer from requiring that a qualified individual 
     participate in the trial through such a participating 
     provider if the provider will accept the individual as a 
     participant in the trial.
       (b) Qualified Individual Defined.--For purposes of 
     subsection (a), the term ``qualified individual'' means an 
     individual who is a participant or beneficiary in a group 
     health plan, or who is an enrollee under health insurance 
     coverage, and who meets the following conditions:
       (1)(A) The individual has a life-threatening or serious 
     illness for which no standard treatment is effective.
       (B) The individual is eligible to participate in an 
     approved clinical trial according to the trial protocol with 
     respect to treatment of such illness.
       (C) The individual's participation in the trial offers 
     meaningful potential for significant clinical benefit for the 
     individual.
       (2) Either--
       (A) the referring physician is a participating health care 
     professional and has concluded that the individual's 
     participation in such trial would be appropriate based upon 
     the individual meeting the conditions described in paragraph 
     (1); or
       (B) the participant, beneficiary, or enrollee provides 
     medical and scientific information establishing that the 
     individual's participation in such trial would be appropriate 
     based upon the individual meeting the conditions described in 
     paragraph (1).
       (c) Payment.--
       (1) In general.--Under this section a group health plan or 
     health insurance issuer shall provide for payment for routine 
     patient costs described in subsection (a)(2) but is not 
     required to pay for costs of items and services that are 
     reasonably expected (as determined by the Secretary) to be 
     paid for by the sponsors of an approved clinical trial.
       (2) Payment rate.--In the case of covered items and 
     services provided by--
       (A) a participating provider, the payment rate shall be at 
     the agreed upon rate; or
       (B) a nonparticipating provider, the payment rate shall be 
     at the rate the plan or issuer would normally pay for 
     comparable services under subparagraph (A).
       (d) Approved Clinical Trial Defined.--
       (1) In general.--In this section, the term ``approved 
     clinical trial'' means a clinical research study or clinical 
     investigation approved and funded (which may include funding 
     through in-kind contributions) by one or more of the 
     following:
       (A) The National Institutes of Health.
       (B) A cooperative group or center of the National 
     Institutes of Health.
       (C) Either of the following if the conditions described in 
     paragraph (2) are met:
       (i) The Department of Veterans Affairs.
       (ii) The Department of Defense.
       (2) Conditions for departments.--The conditions described 
     in this paragraph, for a study or investigation conducted by 
     a Department, are that the study or investigation has been 
     reviewed and approved through a system of peer review that 
     the Secretary determines--
       (A) to be comparable to the system of peer review of 
     studies and investigations used by the National Institutes of 
     Health; and
       (B) assures unbiased review of the highest scientific 
     standards by qualified individuals who have no interest in 
     the outcome of the review.
       (e) Construction.--Nothing in this section shall be 
     construed to limit a plan's or issuer's coverage with respect 
     to clinical trials.

                   Subtitle C--Access to Information

     SEC. 121. PATIENT ACCESS TO INFORMATION.

       (a) Disclosure Requirement.--
       (1) Group health plans.--A group health plan shall--
       (A) provide to participants and beneficiaries at the time 
     of initial coverage under the plan (or the effective date of 
     this section, in the case of individuals who are participants 
     or beneficiaries as of such date), and at least annually 
     thereafter, the information described in subsection (b) in 
     printed form;
       (B) provide to participants and beneficiaries, within a 
     reasonable period (as specified by the appropriate Secretary) 
     before or after the date of significant changes in the 
     information described in subsection (b), information in 
     printed form on such significant changes; and
       (C) upon request, make available to participants and 
     beneficiaries, the applicable authority, and prospective 
     participants and beneficiaries, the information described in 
     subsection (b) or (c) in printed form.
       (2) Health insurance issuers.--A health insurance issuer in 
     connection with the provision of health insurance coverage 
     shall--
       (A) provide to individuals enrolled under such coverage at 
     the time of enrollment, and at least annually thereafter, the 
     information described in subsection (b) in printed form;
       (B) provide to enrollees, within a reasonable period (as 
     specified by the appropriate Secretary) before or after the 
     date of significant changes in the information described in 
     subsection (b), information in printed form on such 
     significant changes; and
       (C) upon request, make available to the applicable 
     authority, to individuals who are prospective enrollees, and 
     to the public the information described in subsection (b) or 
     (c) in printed form.
       (b) Information Provided.--The information described in 
     this subsection with respect to a group health plan or health 
     insurance coverage offered by a health insurance issuer 
     includes the following:
       (1) Service area.--The service area of the plan or issuer.
       (2) Benefits.--Benefits offered under the plan or coverage, 
     including--

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       (A) covered benefits, including benefit limits and coverage 
     exclusions;
       (B) cost sharing, such as deductibles, coinsurance, and 
     copayment amounts, including any liability for balance 
     billing, any maximum limitations on out of pocket expenses, 
     and the maximum out of pocket costs for services that are 
     provided by nonparticipating providers or that are furnished 
     without meeting the applicable utilization review 
     requirements;
       (C) the extent to which benefits may be obtained from 
     nonparticipating providers;
       (D) the extent to which a participant, beneficiary, or 
     enrollee may select from among participating providers and 
     the types of providers participating in the plan or issuer 
     network;
       (E) process for determining experimental coverage; and
       (F) use of a prescription drug formulary.
       (3) Access.--A description of the following:
       (A) The number, mix, and distribution of providers under 
     the plan or coverage.
       (B) Out-of-network coverage (if any) provided by the plan 
     or coverage.
       (C) Any point-of-service option (including any supplemental 
     premium or cost-sharing for such option).
       (D) The procedures for participants, beneficiaries, and 
     enrollees to select, access, and change participating primary 
     and specialty providers.
       (E) The rights and procedures for obtaining referrals 
     (including standing referrals) to participating and 
     nonparticipating providers.
       (F) The name, address, and telephone number of 
     participating health care providers and an indication of 
     whether each such provider is available to accept new 
     patients.
       (G) Any limitations imposed on the selection of qualifying 
     participating health care providers, including any 
     limitations imposed under section 112(b)(2).
       (H) How the plan or issuer addresses the needs of 
     participants, beneficiaries, and enrollees and others who do 
     not speak English or who have other special communications 
     needs in accessing providers under the plan or coverage, 
     including the provision of information described in this 
     subsection and subsection (c) to such individuals.
       (4) Out-of-area coverage.--Out-of-area coverage provided by 
     the plan or issuer.
       (5) Emergency coverage.--Coverage of emergency services, 
     including--
       (A) the appropriate use of emergency services, including 
     use of the 911 telephone system or its local equivalent in 
     emergency situations and an explanation of what constitutes 
     an emergency situation;
       (B) the process and procedures of the plan or issuer for 
     obtaining emergency services; and
       (C) the locations of (i) emergency departments, and (ii) 
     other settings, in which plan physicians and hospitals 
     provide emergency services and post-stabilization care.
       (6) Percentage of premiums used for benefits (loss-
     ratios).--In the case of health insurance coverage only (and 
     not with respect to group health plans that do not provide 
     coverage through health insurance coverage), a description of 
     the overall loss-ratio for the coverage (as defined in 
     accordance with rules established or recognized by the 
     Secretary of Health and Human Services).
       (7) Prior authorization rules.--Rules regarding prior 
     authorization or other review requirements that could result 
     in noncoverage or nonpayment.
       (8) Grievance and appeals procedures.--All appeal or 
     grievance rights and procedures under the plan or coverage, 
     including the method for filing grievances and the time 
     frames and circumstances for acting on grievances and 
     appeals, who is the applicable authority with respect to the 
     plan or issuer.
       (9) Quality assurance.--Any information made public by an 
     accrediting organization in the process of accreditation of 
     the plan or issuer or any additional quality indicators the 
     plan or issuer makes available.
       (10) Information on issuer.--Notice of appropriate mailing 
     addresses and telephone numbers to be used by participants, 
     beneficiaries, and enrollees in seeking information or 
     authorization for treatment.
       (11) Notice of requirements.--Notice of the requirements of 
     this title.
       (12) Availability of information on request.--Notice that 
     the information described in subsection (c) is available upon 
     request.
       (c) Information Made Available Upon Request.--The 
     information described in this subsection is the following:
       (1) Utilization review activities.--A description of 
     procedures used and requirements (including circumstances, 
     time frames, and appeal rights) under any utilization review 
     program under section 101, including under any drug formulary 
     program under section 118.
       (2) Grievance and appeals information.--Information on the 
     number of grievances and appeals and on the disposition in 
     the aggregate of such matters.
       (3) Method of physician compensation.--A general 
     description by category (including salary, fee-for-service, 
     capitation, and such other categories as may be specified in 
     regulations of the Secretary) of the applicable method by 
     which a specified prospective or treating health care 
     professional is (or would be) compensated in connection with 
     the provision of health care under the plan or coverage.
       (4) Specific information on credentials of participating 
     providers.--In the case of each participating provider, a 
     description of the credentials of the provider.
       (5) Formulary restrictions.--A description of the nature of 
     any drug formula restrictions.
       (6) Participating provider list.--A list of current 
     participating health care providers.
       (d) Construction.--Nothing in this section shall be 
     construed as requiring public disclosure of individual 
     contracts or financial arrangements between a group health 
     plan or health insurance issuer and any provider.

         Subtitle D--Protecting the Doctor-Patient Relationship

     SEC. 131. PROHIBITION OF INTERFERENCE WITH CERTAIN MEDICAL 
                   COMMUNICATIONS.

       (a) General Rule.--The provisions of any contract or 
     agreement, or the operation of any contract or agreement, 
     between a group health plan or health insurance issuer in 
     relation to health insurance coverage (including any 
     partnership, association, or other organization that enters 
     into or administers such a contract or agreement) and a 
     health care provider (or group of health care providers) 
     shall not prohibit or otherwise restrict a health care 
     professional from advising such a participant, beneficiary, 
     or enrollee who is a patient of the professional about the 
     health status of the individual or medical care or treatment 
     for the individual's condition or disease, regardless of 
     whether benefits for such care or treatment are provided 
     under the plan or coverage, if the professional is acting 
     within the lawful scope of practice.
       (b) Nullification.--Any contract provision or agreement 
     that restricts or prohibits medical communications in 
     violation of subsection (a) shall be null and void.

     SEC. 132. PROHIBITION OF DISCRIMINATION AGAINST PROVIDERS 
                   BASED ON LICENSURE.

       (a) In General.--A group health plan and a health insurance 
     issuer offering health insurance coverage shall not 
     discriminate with respect to participation or indemnification 
     as to any provider who is acting within the scope of the 
     provider's license or certification under applicable State 
     law, solely on the basis of such license or certification.
       (b) Construction.--Subsection (a) shall not be construed--
       (1) as requiring the coverage under a group health plan or 
     health insurance coverage of particular benefits or services 
     or to prohibit a plan or issuer from including providers only 
     to the extent necessary to meet the needs of the plan's or 
     issuer's participants, beneficiaries, or enrollees or from 
     establishing any measure designed to maintain quality and 
     control costs consistent with the responsibilities of the 
     plan or issuer;
       (2) to override any State licensure or scope-of-practice 
     law; or
       (3) as requiring a plan or issuer that offers network 
     coverage to include for participation every willing provider 
     who meets the terms and conditions of the plan or issuer.

     SEC. 133. PROHIBITION AGAINST IMPROPER INCENTIVE 
                   ARRANGEMENTS.

       (a) In General.--A group health plan and a health insurance 
     issuer offering health insurance coverage may not operate any 
     physician incentive plan (as defined in subparagraph (B) of 
     section 1876(i)(8) of the Social Security Act) unless the 
     requirements described in clauses (i), (ii)(I), and (iii) of 
     subparagraph (A) of such section are met with respect to such 
     a plan.
       (b) Application.--For purposes of carrying out paragraph 
     (1), any reference in section 1876(i)(8) of the Social 
     Security Act to the Secretary, an eligible organization, or 
     an individual enrolled with the organization shall be treated 
     as a reference to the applicable authority, a group health 
     plan or health insurance issuer, respectively, and a 
     participant, beneficiary, or enrollee with the plan or 
     organization, respectively.
       (c) Construction.--Nothing in this section shall be 
     construed as prohibiting all capitation and similar 
     arrangements or all provider discount arrangements.

     SEC. 134. PAYMENT OF CLAIMS.

       A group health plan, and a health insurance issuer offering 
     group health insurance coverage, shall provide for prompt 
     payment of claims submitted for health care services or 
     supplies furnished to a participant, beneficiary, or enrollee 
     with respect to benefits covered by the plan or issuer, in a 
     manner consistent with the provisions of sections 1816(c)(2) 
     and 1842(c)(2) of the Social Security Act (42 U.S.C. 
     1395h(c)(2) and 42 U.S.C. 1395u(c)(2)), except that for 
     purposes of this section, subparagraph (C) of section 
     1816(c)(2) of the Social Security Act shall be treated as 
     applying to claims received from a participant, beneficiary, 
     or enrollee as well as claims referred to in such 
     subparagraph.

     SEC. 135. PROTECTION FOR PATIENT ADVOCACY.

       (a) Protection for Use of Utilization Review and Grievance 
     Process.--A group health plan, and a health insurance issuer 
     with respect to the provision of health insurance coverage, 
     may not retaliate against a participant, beneficiary, 
     enrollee, or health care provider based on the participant's, 
     beneficiary's, enrollee's or provider's use of,

[[Page 218]]

     or participation in, a utilization review process or a 
     grievance process of the plan or issuer (including an 
     internal or external review or appeal process) under this 
     title.
       (b) Protection for Quality Advocacy by Health Care 
     Professionals.--
       (1) In general.--A group health plan or health insurance 
     issuer may not retaliate or discriminate against a protected 
     health care professional because the professional in good 
     faith--
       (A) discloses information relating to the care, services, 
     or conditions affecting one or more participants, 
     beneficiaries, or enrollees of the plan or issuer to an 
     appropriate public regulatory agency, an appropriate private 
     accreditation body, or appropriate management personnel of 
     the plan or issuer; or
       (B) initiates, cooperates, or otherwise participates in an 
     investigation or proceeding by such an agency with respect to 
     such care, services, or conditions.

     If an institutional health care provider is a participating 
     provider with such a plan or issuer or otherwise receives 
     payments for benefits provided by such a plan or issuer, the 
     provisions of the previous sentence shall apply to the 
     provider in relation to care, services, or conditions 
     affecting one or more patients within an institutional health 
     care provider in the same manner as they apply to the plan or 
     issuer in relation to care, services, or conditions provided 
     to one or more participants, beneficiaries, or enrollees; and 
     for purposes of applying this sentence, any reference to a 
     plan or issuer is deemed a reference to the institutional 
     health care provider.
       (2) Good faith action.--For purposes of paragraph (1), a 
     protected health care professional is considered to be acting 
     in good faith with respect to disclosure of information or 
     participation if, with respect to the information disclosed 
     as part of the action--
       (A) the disclosure is made on the basis of personal 
     knowledge and is consistent with that degree of learning and 
     skill ordinarily possessed by health care professionals with 
     the same licensure or certification and the same experience;
       (B) the professional reasonably believes the information to 
     be true;
       (C) the information evidences either a violation of a law, 
     rule, or regulation, of an applicable accreditation standard, 
     or of a generally recognized professional or clinical 
     standard or that a patient is in imminent hazard of loss of 
     life or serious injury; and
       (D) subject to subparagraphs (B) and (C) of paragraph (3), 
     the professional has followed reasonable internal procedures 
     of the plan, issuer, or institutional health care provider 
     established for the purpose of addressing quality concerns 
     before making the disclosure.
       (3) Exception and special rule.--
       (A) General exception.--Paragraph (1) does not protect 
     disclosures that would violate Federal or State law or 
     diminish or impair the rights of any person to the continued 
     protection of confidentiality of communications provided by 
     such law.
       (B) Notice of internal procedures.--Subparagraph (D) of 
     paragraph (2) shall not apply unless the internal procedures 
     involved are reasonably expected to be known to the health 
     care professional involved. For purposes of this 
     subparagraph, a health care professional is reasonably 
     expected to know of internal procedures if those procedures 
     have been made available to the professional through 
     distribution or posting.
       (C) Internal procedure exception.--Subparagraph (D) of 
     paragraph (2) also shall not apply if--
       (i) the disclosure relates to an imminent hazard of loss of 
     life or serious injury to a patient;
       (ii) the disclosure is made to an appropriate private 
     accreditation body pursuant to disclosure procedures 
     established by the body; or
       (iii) the disclosure is in response to an inquiry made in 
     an investigation or proceeding of an appropriate public 
     regulatory agency and the information disclosed is limited to 
     the scope of the investigation or proceeding.
       (4) Additional considerations.--It shall not be a violation 
     of paragraph (1) to take an adverse action against a 
     protected health care professional if the plan, issuer, or 
     provider taking the adverse action involved demonstrates that 
     it would have taken the same adverse action even in the 
     absence of the activities protected under such paragraph.
       (5) Notice.--A group health plan, health insurance issuer, 
     and institutional health care provider shall post a notice, 
     to be provided or approved by the Secretary of Labor, setting 
     forth excerpts from, or summaries of, the pertinent 
     provisions of this subsection and information pertaining to 
     enforcement of such provisions.
       (6) Constructions.--
       (A) Determinations of coverage.--Nothing in this subsection 
     shall be construed to prohibit a plan or issuer from making a 
     determination not to pay for a particular medical treatment 
     or service or the services of a type of health care 
     professional.
       (B) Enforcement of peer review protocols and internal 
     procedures.--Nothing in this subsection shall be construed to 
     prohibit a plan, issuer, or provider from establishing and 
     enforcing reasonable peer review or utilization review 
     protocols or determining whether a protected health care 
     professional has complied with those protocols or from 
     establishing and enforcing internal procedures for the 
     purpose of addressing quality concerns.
       (C) Relation to other rights.--Nothing in this subsection 
     shall be construed to abridge rights of participants, 
     beneficiaries, enrollees, and protected health care 
     professionals under other applicable Federal or State laws.
       (7) Protected health care professional defined.--For 
     purposes of this subsection, the term ``protected health care 
     professional'' means an individual who is a licensed or 
     certified health care professional and who--
       (A) with respect to a group health plan or health insurance 
     issuer, is an employee of the plan or issuer or has a 
     contract with the plan or issuer for provision of services 
     for which benefits are available under the plan or issuer; or
       (B) with respect to an institutional health care provider, 
     is an employee of the provider or has a contract or other 
     arrangement with the provider respecting the provision of 
     health care services.

                        Subtitle E--Definitions

     SEC. 151. DEFINITIONS.

       (a) Incorporation of General Definitions.--Except as 
     otherwise provided, the provisions of section 2791 of the 
     Public Health Service Act shall apply for purposes of this 
     title in the same manner as they apply for purposes of title 
     XXVII of such Act.
       (b) Secretary.--Except as otherwise provided, the term 
     ``Secretary'' means the Secretary of Health and Human 
     Services, in consultation with the Secretary of Labor and the 
     term ``appropriate Secretary'' means the Secretary of Health 
     and Human Services in relation to carrying out this title 
     under sections 2706 and 2751 of the Public Health Service Act 
     and the Secretary of Labor in relation to carrying out this 
     title under section 713 of the Employee Retirement Income 
     Security Act of 1974.
       (c) Additional Definitions.--For purposes of this title:
       (1) Actively practicing.--The term ``actively practicing'' 
     means, with respect to a physician or other health care 
     professional, such a physician or professional who provides 
     professional services to individual patients on average at 
     least two full days per week.
       (2) Applicable authority.--The term ``applicable 
     authority'' means--
       (A) in the case of a group health plan, the Secretary of 
     Health and Human Services and the Secretary of Labor; and
       (B) in the case of a health insurance issuer with respect 
     to a specific provision of this title, the applicable State 
     authority (as defined in section 2791(d) of the Public Health 
     Service Act), or the Secretary of Health and Human Services, 
     if such Secretary is enforcing such provision under section 
     2722(a)(2) or 2761(a)(2) of the Public Health Service Act.
       (3) Clinical peer.--The term ``clinical peer'' means, with 
     respect to a review or appeal, an actively practicing 
     physician (allopathic or osteopathic) or other actively 
     practicing health care professional who holds a nonrestricted 
     license, and who is appropriately credentialed in the same or 
     similar specialty or subspecialty (as appropriate) as 
     typically handles the medical condition, procedure, or 
     treatment under review or appeal and includes a pediatric 
     specialist where appropriate; except that only a physician 
     (allopathic or osteopathic) may be a clinical peer with 
     respect to the review or appeal of treatment recommended or 
     rendered by a physician.
       (4) Enrollee.--The term ``enrollee'' means, with respect to 
     health insurance coverage offered by a health insurance 
     issuer, an individual enrolled with the issuer to receive 
     such coverage.
       (5) Group health plan.--The term ``group health plan'' has 
     the meaning given such term in section 733(a) of the Employee 
     Retirement Income Security Act of 1974 and in section 
     2791(a)(1) of the Public Health Service Act.
       (6) Health care professional.--The term ``health care 
     professional'' means an individual who is licensed, 
     accredited, or certified under State law to provide specified 
     health care services and who is operating within the scope of 
     such licensure, accreditation, or certification.
       (7) Health care provider.--The term ``health care 
     provider'' includes a physician or other health care 
     professional, as well as an institutional or other facility 
     or agency that provides health care services and that is 
     licensed, accredited, or certified to provide health care 
     items and services under applicable State law.
       (8) Network.--The term ``network'' means, with respect to a 
     group health plan or health insurance issuer offering health 
     insurance coverage, the participating health care 
     professionals and providers through whom the plan or issuer 
     provides health care items and services to participants, 
     beneficiaries, or enrollees.
       (9) Nonparticipating.--The term ``nonparticipating'' means, 
     with respect to a health care provider that provides health

[[Page 219]]

     care items and services to a participant, beneficiary, or 
     enrollee under group health plan or health insurance 
     coverage, a health care provider that is not a participating 
     health care provider with respect to such items and services.
       (10) Participating.--The term ``participating'' means, with 
     respect to a health care provider that provides health care 
     items and services to a participant, beneficiary, or enrollee 
     under group health plan or health insurance coverage offered 
     by a health insurance issuer, a health care provider that 
     furnishes such items and services under a contract or other 
     arrangement with the plan or issuer.
       (11) Prior authorization.--The term ``prior authorization'' 
     means the process of obtaining prior approval from a health 
     insurance issuer or group health plan for the provision or 
     coverage of medical services.

     SEC. 152. PREEMPTION; STATE FLEXIBILITY; CONSTRUCTION.

       (a) Continued Applicability of State Law With Respect to 
     Health Insurance Issuers.--
       (1) In general.--Subject to paragraph (2), this title shall 
     not be construed to supersede any provision of State law 
     which establishes, implements, or continues in effect any 
     standard or requirement solely relating to health insurance 
     issuers (in connection with group health insurance coverage 
     or otherwise) except to the extent that such standard or 
     requirement prevents the application of a requirement of this 
     title.
       (2) Continued preemption with respect to group health 
     plans.--Nothing in this title shall be construed to affect or 
     modify the provisions of section 514 of the Employee 
     Retirement Income Security Act of 1974 with respect to group 
     health plans.
       (b) Definitions.--For purposes of this section:
       (1) State law.--The term ``State law'' includes all laws, 
     decisions, rules, regulations, or other State action having 
     the effect of law, of any State. A law of the United States 
     applicable only to the District of Columbia shall be treated 
     as a State law rather than a law of the United States.
       (2) State.--The term ``State'' includes a State, the 
     District of Columbia, Puerto Rico, the Virgin Islands, Guam, 
     American Samoa, the Northern Mariana Islands, any political 
     subdivisions of such, or any agency or instrumentality of 
     such.

     SEC. 153. EXCLUSIONS.

       (a) No Benefit Requirements.--Nothing in this title shall 
     be construed to require a group health plan or a health 
     insurance issuer offering health insurance coverage to 
     include specific items and services under the terms of such a 
     plan or coverage, other than those that are provided for 
     under the terms of such plan or coverage.
       (b) Exclusion From Access to Care Managed Care Provisions 
     for Fee-for-Service Coverage.--
       (1) In general.--The provisions of sections 111 through 117 
     shall not apply to a group health plan or health insurance 
     coverage if the only coverage offered under the plan or 
     coverage is fee-for-service coverage (as defined in paragraph 
     (2)).
       (2) Fee-for-service coverage defined.--For purposes of this 
     subsection, the term ``fee-for-service coverage'' means 
     coverage under a group health plan or health insurance 
     coverage that--
       (A) reimburses hospitals, health professionals, and other 
     providers on the basis of a rate determined by the plan or 
     issuer on a fee-for-service basis without placing the 
     provider at financial risk;
       (B) does not vary reimbursement for such a provider based 
     on an agreement to contract terms and conditions or the 
     utilization of health care items or services relating to such 
     provider;
       (C) does not restrict the selection of providers among 
     those who are lawfully authorized to provide the covered 
     services and agree to accept the terms and conditions of 
     payment established under the plan or by the issuer; and
       (D) for which the plan or issuer does not require prior 
     authorization before providing coverage for any services.

     SEC. 154. COVERAGE OF LIMITED SCOPE PLANS.

       Only for purposes of applying the requirements of this 
     title under sections 2707 and 2753 of the Public Health 
     Service Act and section 714 of the Employee Retirement Income 
     Security Act of 1974, section 2791(c)(2)(A), and section 
     733(c)(2)(A) of the Employee Retirement Income Security Act 
     of 1974 shall be deemed not to apply.

     SEC. 155. REGULATIONS.

       The Secretaries of Health and Human Services and Labor 
     shall issue such regulations as may be necessary or 
     appropriate to carry out this title. Such regulations shall 
     be issued consistent with section 104 of Health Insurance 
     Portability and Accountability Act of 1996. Such Secretaries 
     may promulgate any interim final rules as the Secretaries 
     determine are appropriate to carry out this title.

 TITLE II--APPLICATION OF QUALITY CARE STANDARDS TO GROUP HEALTH PLANS 
   AND HEALTH INSURANCE COVERAGE UNDER THE PUBLIC HEALTH SERVICE ACT

     SEC. 201. APPLICATION TO GROUP HEALTH PLANS AND GROUP HEALTH 
                   INSURANCE COVERAGE.

       (a) In General.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act is amended by adding at the end the 
     following new section:

     ``SEC. 2707. PATIENT PROTECTION STANDARDS.

       ``(a) In General.--Each group health plan shall comply with 
     patient protection requirements under title I of the 
     Patients' Bill of Rights Act, and each health insurance 
     issuer shall comply with patient protection requirements 
     under such title with respect to group health insurance 
     coverage it offers, and such requirements shall be deemed to 
     be incorporated into this subsection.
       ``(b) Notice.--A group health plan shall comply with the 
     notice requirement under section 711(d) of the Employee 
     Retirement Income Security Act of 1974 with respect to the 
     requirements referred to in subsection (a) and a health 
     insurance issuer shall comply with such notice requirement as 
     if such section applied to such issuer and such issuer were a 
     group health plan.''.
       (b) Conforming Amendment.--Section 2721(b)(2)(A) of such 
     Act (42 U.S.C. 300gg-21(b)(2)(A)) is amended by inserting 
     ``(other than section 2707)'' after ``requirements of such 
     subparts''.

     SEC. 202. APPLICATION TO INDIVIDUAL HEALTH INSURANCE 
                   COVERAGE.

       Part B of title XXVII of the Public Health Service Act is 
     amended by inserting after section 2752 the following new 
     section:

     ``SEC. 2753. PATIENT PROTECTION STANDARDS.

       ``(a) In General.--Each health insurance issuer shall 
     comply with patient protection requirements under title I of 
     the Patients' Bill of Rights Act with respect to individual 
     health insurance coverage it offers, and such requirements 
     shall be deemed to be incorporated into this subsection.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 711(d) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of such title as if such section 
     applied to such issuer and such issuer were a group health 
     plan.''.

TITLE III--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
                                  1974

     SEC. 301. APPLICATION OF PATIENT PROTECTION STANDARDS TO 
                   GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE 
                   COVERAGE UNDER THE EMPLOYEE RETIREMENT INCOME 
                   SECURITY ACT OF 1974.

       Subpart B of part 7 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 is amended by 
     adding at the end the following new section:

     ``SEC. 714. PATIENT PROTECTION STANDARDS.

       ``(a) In General.--Subject to subsection (b), a group 
     health plan (and a health insurance issuer offering group 
     health insurance coverage in connection with such a plan) 
     shall comply with the requirements of title I of the 
     Patients' Bill of Rights Act (as in effect as of the date of 
     the enactment of such Act), and such requirements shall be 
     deemed to be incorporated into this subsection.
       ``(b) Plan Satisfaction of Certain Requirements.--
       ``(1) Satisfaction of certain requirements through 
     insurance.--For purposes of subsection (a), insofar as a 
     group health plan provides benefits in the form of health 
     insurance coverage through a health insurance issuer, the 
     plan shall be treated as meeting the following requirements 
     of title I of the Patients' Bill of Rights Act with respect 
     to such benefits and not be considered as failing to meet 
     such requirements because of a failure of the issuer to meet 
     such requirements so long as the plan sponsor or its 
     representatives did not cause such failure by the issuer:
       ``(A) Section 112 (relating to choice of providers).
       ``(B) Section 113 (relating to access to emergency care).
       ``(C) Section 114 (relating to access to specialty care).
       ``(D) Section 115 (relating to access to obstetrical and 
     gynecological care).
       ``(E) Section 116 (relating to access to pediatric care).
       ``(F) Section 117(a)(1) (relating to continuity in case of 
     termination of provider contract) and section 117(a)(2) 
     (relating to continuity in case of termination of issuer 
     contract), but only insofar as a replacement issuer assumes 
     the obligation for continuity of care.
       ``(G) Section 118 (relating to access to needed 
     prescription drugs).
       ``(H) Section 119 (relating to coverage for individuals 
     participating in approved clinical trials.)
       ``(I) Section 134 (relating to payment of claims).
       ``(2) Information.--With respect to information required to 
     be provided or made available under section 121, in the case 
     of a group health plan that provides benefits in the form of 
     health insurance coverage through a health insurance issuer, 
     the Secretary shall determine the circumstances under which 
     the plan is not required to provide or make available the 
     information (and is not liable for the issuer's failure to 
     provide or make available the information), if the issuer is 
     obligated to provide and make available (or provides and 
     makes available) such information.
       ``(3) Grievance and internal appeals.--With respect to the 
     internal appeals process

[[Page 220]]

     and the grievance system required to be established under 
     sections 102 and 104, in the case of a group health plan that 
     provides benefits in the form of health insurance coverage 
     through a health insurance issuer, the Secretary shall 
     determine the circumstances under which the plan is not 
     required to provide for such process and system (and is not 
     liable for the issuer's failure to provide for such process 
     and system), if the issuer is obligated to provide for (and 
     provides for) such process and system.
       ``(4) External appeals.--Pursuant to rules of the 
     Secretary, insofar as a group health plan enters into a 
     contract with a qualified external appeal entity for the 
     conduct of external appeal activities in accordance with 
     section 103, the plan shall be treated as meeting the 
     requirement of such section and is not liable for the 
     entity's failure to meet any requirements under such section.
       ``(5) Application to prohibitions.--Pursuant to rules of 
     the Secretary, if a health insurance issuer offers health 
     insurance coverage in connection with a group health plan and 
     takes an action in violation of any of the following 
     sections, the group health plan shall not be liable for such 
     violation unless the plan caused such violation:
       ``(A) Section 131 (relating to prohibition of interference 
     with certain medical communications).
       ``(B) Section 132 (relating to prohibition of 
     discrimination against providers based on licensure).
       ``(C) Section 133 (relating to prohibition against improper 
     incentive arrangements).
       ``(D) Section 135 (relating to protection for patient 
     advocacy).
       ``(6) Construction.--Nothing in this subsection shall be 
     construed to affect or modify the responsibilities of the 
     fiduciaries of a group health plan under part 4 of subtitle 
     B.
       ``(7) Application to certain prohibitions against 
     retaliation.--With respect to compliance with the 
     requirements of section 135(b)(1) of the Patients' Bill of 
     Rights Act, for purposes of this subtitle the term `group 
     health plan' is deemed to include a reference to an 
     institutional health care provider.
       ``(c) Enforcement of Certain Requirements.--
       ``(1) Complaints.--Any protected health care professional 
     who believes that the professional has been retaliated or 
     discriminated against in violation of section 135(b)(1) of 
     the Patients' Bill of Rights Act may file with the Secretary 
     a complaint within 180 days of the date of the alleged 
     retaliation or discrimination.
       ``(2) Investigation.--The Secretary shall investigate such 
     complaints and shall determine if a violation of such section 
     has occurred and, if so, shall issue an order to ensure that 
     the protected health care professional does not suffer any 
     loss of position, pay, or benefits in relation to the plan, 
     issuer, or provider involved, as a result of the violation 
     found by the Secretary.
       ``(d) Conforming Regulations.--The Secretary may issue 
     regulations to coordinate the requirements on group health 
     plans under this section with the requirements imposed under 
     the other provisions of this title.''.
       (b) Satisfaction of ERISA Claims Procedure Requirement.--
     Section 503 of such Act (29 U.S.C. 1133) is amended by 
     inserting ``(a)'' after ``Sec. 503.'' and by adding at the 
     end the following new subsection:
       ``(b) In the case of a group health plan (as defined in 
     section 733) compliance with the requirements of subtitle A 
     of title I of the Patients Bill of Rights Act in the case of 
     a claims denial shall be deemed compliance with subsection 
     (a) with respect to such claims denial.''.
       (c) Conforming Amendments.--(1) Section 732(a) of such Act 
     (29 U.S.C. 1185(a)) is amended by striking ``section 711'' 
     and inserting ``sections 711 and 714''.
       (2) The table of contents in section 1 of such Act is 
     amended by inserting after the item relating to section 713 
     the following new item:

``Sec. 714. Patient protection standards.''.

       (3) Section 502(b)(3) of such Act (29 U.S.C. 1132(b)(3)) is 
     amended by inserting ``(other than section 135(b))'' after 
     ``part 7''.

     SEC. 302. ERISA PREEMPTION NOT TO APPLY TO CERTAIN ACTIONS 
                   INVOLVING HEALTH INSURANCE POLICYHOLDERS.

       (a) In General.--Section 514 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144) (as amended by 
     section 301(b)) is amended further by adding at the end the 
     following subsections:
       ``(f) Preemption Not To Apply to Certain Actions Arising 
     Out of Provision of Health Benefits.--
       ``(1) Non-preemption of certain causes of action.--
       ``(A) In general.--Except as provided in this subsection, 
     nothing in this title shall be construed to invalidate, 
     impair, or supersede any cause of action by a participant or 
     beneficiary (or the estate of a participant or beneficiary) 
     under State law to recover damages resulting from personal 
     injury or for wrongful death against any person--
       ``(i) in connection with the provision of insurance, 
     administrative services, or medical services by such person 
     to or for a group health plan as defined in section 733), or
       ``(ii) that arises out of the arrangement by such person 
     for the provision of such insurance, administrative services, 
     or medical services by other persons.
       ``(B) Limitation on punitive damages.--
       ``(i) In general.--No person shall be liable for any 
     punitive, exemplary, or similar damages in the case of a 
     cause of action brought under subparagraph (A) if--

       ``(I) it relates to an externally appealable decision (as 
     defined in subsection (a)(2) of section 103 of the Patients' 
     Bill of Rights Act);
       ``(II) an external appeal with respect to such decision was 
     completed under such section 103;
       ``(III) in the case such external appeal was initiated by 
     the plan or issuer filing the request for the external 
     appeal, the request was filed on a timely basis before the 
     date the action was brought or, if later, within 30 days 
     after the date the externally appealable decision was made; 
     and
       ``(IV) the plan or issuer complied with the determination 
     of the external appeal entity upon receipt of the 
     determination of the external appeal entity.

     The provisions of this clause supersede any State law or 
     common law to the contrary.
       ``(ii) Exception.--Clause (i) shall not apply with respect 
     to damages in the case of a cause of action for wrongful 
     death if the applicable State law provides (or has been 
     construed to provide) for damages in such a cause of action 
     which are only punitive or exemplary in nature.
       ``(C) Personal injury defined.--For purposes of this 
     subsection, the term `personal injury' means a physical 
     injury and includes an injury arising out of the treatment 
     (or failure to treat) a mental illness or disease.
       ``(2) Exception for group health plans, employers, and 
     other plan sponsors.--
       ``(A) In general.--Subject to subparagraph (B), paragraph 
     (1) does not authorize--
       ``(i) any cause of action against a group health plan or an 
     employer or other plan sponsor maintaining the plan (or 
     against an employee of such a plan, employer, or sponsor 
     acting within the scope of employment), or
       ``(ii) a right of recovery, indemnity, or contribution by a 
     person against a group health plan or an employer or other 
     plan sponsor (or such an employee) for damages assessed 
     against the person pursuant to a cause of action under 
     paragraph (1).
       ``(B) Special rule.--Subparagraph (A) shall not preclude 
     any cause of action described in paragraph (1) against group 
     health plan or an employer or other plan sponsor (or against 
     an employee of such a plan, employer, or sponsor acting 
     within the scope of employment) if--
       ``(i) such action is based on the exercise by the plan, 
     employer, or sponsor (or employee) of discretionary authority 
     to make a decision on a claim for benefits covered under the 
     plan or health insurance coverage in the case at issue; and
       ``(ii) the exercise by the plan, employer, or sponsor (or 
     employee) of such authority resulted in personal injury or 
     wrongful death.
       ``(C) Exception.--The exercise of discretionary authority 
     described in subparagraph (B)(i) shall not be construed to 
     include--
       ``(i) the decision to include or exclude from the plan any 
     specific benefit;
       ``(ii) any decision to provide extra-contractual benefits; 
     or
       ``(iii) any decision not to consider the provision of a 
     benefit while internal or external review is being conducted.
       ``(3) Futility of exhaustion.--An individual bringing an 
     action under this subsection is required to exhaust 
     administrative processes under sections 102 and 103 of the 
     Patients' Bill of Rights Act, unless the injury to or death 
     of such individual has occurred before the completion of such 
     processes.
       ``(4) Construction.--Nothing in this subsection shall be 
     construed as--
       ``(A) permitting a cause of action under State law for the 
     failure to provide an item or service which is specifically 
     excluded under the group health plan involved;
       ``(B) as preempting a State law which requires an affidavit 
     or certificate of merit in a civil action; or
       ``(C) permitting a cause of action or remedy under State 
     law in connection with the provision or arrangement of 
     excepted benefits (as defined in section 733(c)), other than 
     those described in section 733(c)(2)(A).
       ``(g) Rules of Construction Relating to Health Care.--
     Nothing in this title shall be construed as--
       ``(1) permitting the application of State laws that are 
     otherwise superseded by this title and that mandate the 
     provision of specific benefits by a group health plan (as 
     defined in section 733(a)) or a multiple employer welfare 
     arrangement (as defined in section 3(40)), or
       ``(2) affecting any State law which regulates the practice 
     of medicine or provision of medical care, or affecting any 
     action based upon such a State law.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to acts and omissions occurring on or after the 
     date of enactment of this Act, from which a cause of action 
     arises.

     SEC. 303. LIMITATIONS ON ACTIONS.

       Section 502 of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1132) is

[[Page 221]]

     amended further by adding at the end the following new 
     subsection:
       ``(n)(1) Except as provided in this subsection, no action 
     may be brought under subsection (a)(1)(B), (a)(2), or (a)(3) 
     by a participant or beneficiary seeking relief based on the 
     application of any provision in section 101, subtitle B, or 
     subtitle D of title I of the Patients' Bill of Rights Act (as 
     incorporated under section 714).
       ``(2) An action may be brought under subsection (a)(1)(B), 
     (a)(2), or (a)(3) by a participant or beneficiary seeking 
     relief based on the application of section 101, 113, 114, 
     115, 116, 117, 119, or 118(3) of the Patients' Bill of Rights 
     Act (as incorporated under section 714) to the individual 
     circumstances of that participant or beneficiary, except 
     that--
       ``(A) such an action may not be brought or maintained as a 
     class action; and
       ``(B) in such an action, relief may only provide for the 
     provision of (or payment of) benefits, items, or services 
     denied to the individual participant or beneficiary involved 
     (and for attorney's fees and the costs of the action, at the 
     discretion of the court) and shall not provide for any other 
     relief to the participant or beneficiary or for any relief to 
     any other person.
       ``(3) Nothing in this subsection shall be construed as 
     affecting any action brought by the Secretary.''.

TITLE IV--APPLICATION TO GROUP HEALTH PLANS UNDER THE INTERNAL REVENUE 
                              CODE OF 1986

     SEC. 401. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

       Subchapter B of chapter 100 of the Internal Revenue Code of 
     1986 is amended--
       (1) in the table of sections, by inserting after the item 
     relating to section 9812 the following new item:

``Sec. 9813. Standard relating to patient freedom of choice.'';

     and
       (2) by inserting after section 9812 the following:

     ``SEC. 9813. STANDARD RELATING TO PATIENTS' BILL OF RIGHTS.

       ``A group health plan shall comply with the requirements of 
     title I of the Patients' Bill of Rights Act (as in effect as 
     of the date of the enactment of such Act), and such 
     requirements shall be deemed to be incorporated into this 
     section.''.

        TITLE V--EFFECTIVE DATES; COORDINATION IN IMPLEMENTATION

     SEC. 501. EFFECTIVE DATES.

       (a) Group Health Coverage.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by sections 201(a), 301, 303, and 401 (and title I 
     insofar as it relates to such sections) shall apply with 
     respect to group health plans, and health insurance coverage 
     offered in connection with group health plans, for plan years 
     beginning on or after January 1, 2002 (in this section 
     referred to as the ``general effective date'') and also shall 
     apply to portions of plan years occurring on and after such 
     date.
       (2) Treatment of collective bargaining agreements.--In the 
     case of a group health plan maintained pursuant to one or 
     more collective bargaining agreements between employee 
     representatives and one or more employers ratified before the 
     date of the enactment of this Act, the amendments made by 
     sections 201(a), 301, 303, and 401 (and title I insofar as it 
     relates to such sections) shall not apply to plan years 
     beginning before the later of--
       (A) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act); or
       (B) the general effective date.
     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by this Act shall not be treated as a 
     termination of such collective bargaining agreement.
       (b) Individual Health Insurance Coverage.--The amendments 
     made by section 202 shall apply with respect to individual 
     health insurance coverage offered, sold, issued, renewed, in 
     effect, or operated in the individual market on or after the 
     general effective date.

     SEC. 502. COORDINATION IN IMPLEMENTATION.

       The Secretary of Labor, the Secretary of Health and Human 
     Services, and the Secretary of the Treasury shall ensure, 
     through the execution of an interagency memorandum of 
     understanding among such Secretaries, that--
       (1) regulations, rulings, and interpretations issued by 
     such Secretaries relating to the same matter over which such 
     Secretaries have responsibility under the provisions of this 
     Act (and the amendments made thereby) are administered so as 
     to have the same effect at all times; and
       (2) coordination of policies relating to enforcing the same 
     requirements through such Secretaries in order to have a 
     coordinated enforcement strategy that avoids duplication of 
     enforcement efforts and assigns priorities in enforcement.

                   TITLE VI--MISCELLANEOUS PROVISIONS

     SEC. 601. HEALTH CARE PAPERWORK SIMPLIFICATION.

       (a) Establishment of Panel.--
       (1) Establishment.--There is established a panel to be 
     known as the Health Care Panel to Devise a Uniform 
     Explanation of Benefits (in this section referred to as the 
     ``Panel'').
       (2) Duties of panel.--
       (A) In general.--The Panel shall devise a single form for 
     use by third-party health care payers for the remittance of 
     claims to providers.
       (B) Definition.--For purposes of this section, the term 
     ``third-party health care payer'' means any entity that 
     contractually pays health care bills for an individual.
       (3) Membership.--
       (A) Size and composition.--The Secretary of Health and 
     Human Services shall determine the number of members and the 
     composition of the Panel. Such Panel shall include equal 
     numbers of representatives of private insurance 
     organizations, consumer groups, State insurance 
     commissioners, State medical societies, State hospital 
     associations, and State medical specialty societies.
       (B) Terms of appointment.--The members of the Panel shall 
     serve for the life of the Panel.
       (C) Vacancies.--A vacancy in the Panel shall not affect the 
     power of the remaining members to execute the duties of the 
     Panel, but any such vacancy shall be filled in the same 
     manner in which the original appointment was made.
       (4) Procedures.--
       (A) Meetings.--The Panel shall meet at the call of a 
     majority of its members.
       (B) First meeting.--The Panel shall convene not later than 
     60 days after the date of the enactment of the Patients' Bill 
     of Rights Act.
       (C) Quorum.--A quorum shall consist of a majority of the 
     members of the Panel.
       (D) Hearings.--For the purpose of carrying out its duties, 
     the Panel may hold such hearings and undertake such other 
     activities as the Panel determines to be necessary to carry 
     out its duties.
       (5) Administration.--
       (A) Compensation.--Except as provided in subparagraph (B), 
     members of the Panel shall receive no additional pay, 
     allowances, or benefits by reason of their service on the 
     Panel.
       (B) Travel expenses and per diem.--Each member of the Panel 
     who is not an officer or employee of the Federal Government 
     shall receive travel expenses and per diem in lieu of 
     subsistence in accordance with sections 5702 and 5703 of 
     title 5, United States Code.
       (C) Contract authority.--The Panel may contract with and 
     compensate Government and private agencies or persons for 
     items and services, without regard to section 3709 of the 
     Revised Statutes (41 U.S.C. 5).
       (D) Use of mails.--The Panel may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies and shall, for purposes of the frank, be 
     considered a commission of Congress as described in section 
     3215 of title 39, United States Code.
       (E) Administrative support services.--Upon the request of 
     the Panel, the Secretary of Health and Human Services shall 
     provide to the Panel on a reimbursable basis such 
     administrative support services as the Panel may request.
       (6) Submission of form.--Not later than 2 years after the 
     first meeting, the Panel shall submit a form to the Secretary 
     of Health and Human Services for use by third-party health 
     care payers.
       (7) Termination.--The Panel shall terminate on the day 
     after submitting the form under paragraph (6).
       (b) Requirement for Use of Form by Third-Party Care 
     Payers.--A third-party health care payer shall be required to 
     use the form devised under subsection (a) for plan years 
     beginning on or after 5 years following the date of the 
     enactment of this Act.

     SEC. 602. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

       (a) In General.--Nothing in this Act (or an amendment made 
     by this Act) shall be construed to alter or amend the Social 
     Security Act (or any regulation promulgated under that Act).
       (b) Transfers.--
       (1) Estimate of secretary.--The Secretary of the Treasury 
     shall annually estimate the impact that the enactment of this 
     Act has on the income and balances of the trust funds 
     established under section 201 of the Social Security Act (42 
     U.S.C. 401).
       (2) Transfer of funds.--If, under paragraph (1), the 
     Secretary of the Treasury estimates that the enactment of 
     this Act has a negative impact on the income and balances of 
     the trust funds established under section 201 of the Social 
     Security Act (42 U.S.C. 401), the Secretary shall transfer, 
     not less frequently than quarterly, from the general revenues 
     of the Federal Government an amount sufficient so as to 
     ensure that the income and balances of such trust funds are 
     not reduced as a result of the enactment of such Act.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Dodd, Mr. Bingaman, 
        Mrs. Murray, Mr. Wellstone, Mr. Dorgan, Ms. Mikulski, Mr. 
        Levin, Mrs. Clinton, Mr. Schumer, Mr. Rockefeller, Mr. Johnson, 
        Mr.

[[Page 222]]

        Corzine, Mr. Biden, Mr. Kerry, and Mr. Reed)
  S. 7. A bill to improve public education for all children and support 
lifelong learning; to the Committee on Health, Education, Labor, and 
Pensions.


          educational excellence for all learners act of 2001

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

                                  S.7

         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 
     ``Educational Excellence for All Learners Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

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

                  TITLE I--HOLDING SCHOOLS ACCOUNTABLE

Sec. 100. Short title.

               Subtitle A--Helping Disadvantaged Children

Sec. 101. Reservations for accountability.
Sec. 102. Improved accountability.
Sec. 103. Comprehensive school reform.

                          Subtitle B--Teachers

Sec. 121. State applications.

                    Subtitle C--Innovative Education

Sec. 131. Requirements for State plans.
Sec. 132. Performance objectives.
Sec. 133. Report cards.
Sec. 134. Additional accountability provisions.

                 TITLE II--CLOSING THE ACHIEVEMENT GAP

                Subtitle A--Reauthorization of Programs

Sec. 201. Authorization of appropriations.

   Subtitle B--Options: Opportunities to Improve our Nation's Schools

Sec. 211. Options: Opportunities to Improve our Nation's Schools.

                    Subtitle C--Parental Involvement

Sec. 221. State plans.
Sec. 222. Parental assistance.

        TITLE III--NATIONAL PRIORITIES WITH PROVEN EFFECTIVENESS

            Subtitle A--Qualified Teacher in Every Classroom

Sec. 301. Teacher quality.

           Subtitle B--Safe, Healthy Schools and Communities

                Chapter 1--Grants for School Renovation

Sec. 311. Grants for school renovation.
Sec. 312. Charter school credit enhancement initiative.

                     Chapter 2--School Construction

Sec. 321. Short title.
Sec. 322. Expansion of incentives for public schools.
Sec. 323. Application of certain labor standards on construction 
              projects financed under public school modernization 
              program.
Sec. 324. Employment and training activities relating to construction 
              or reconstruction of public school facilities.
Sec. 325. Indian school construction.

           Chapter 3--21st Century Community Learning Centers

Sec. 331. Reauthorization.

            Chapter 4--Enhancement of Basic Learning Skills

Sec. 341. Reducing class size.
Sec. 342. Reading excellence.
Sec. 343. Tutorial assistance grants.

        Chapter 5--Integration of Technology into the Classroom

Sec. 351. Short title.
Sec. 352. Local applications for school technology resource grants.
Sec. 353. Teacher preparation.
Sec. 354. Professional development.

         TITLE IV--INDIVIDUALS WITH DISABILITIES EDUCATION ACT

Sec. 401. Full funding of IDEA.

            TITLE V--MAKING HIGHER EDUCATION MORE AFFORDABLE

Sec. 501. Increase in maximum Pell grant.
Sec. 502. Deduction for higher education expenses.

     SEC. 2. REFERENCES.

       Except as otherwise expressly provided, whenever in this 
     Act an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6301 et seq.).

                  TITLE I--HOLDING SCHOOLS ACCOUNTABLE

     SEC. 100. SHORT TITLE.

       This title may be cited as the ``School Improvement 
     Accountability Act''.

               Subtitle A--Helping Disadvantaged Children

     SEC. 101. RESERVATIONS FOR ACCOUNTABILITY.

       Section 1003 (20 U.S.C. 6303) is amended to read as 
     follows:

     ``SEC. 1003. RESERVATION FOR ACCOUNTABILITY AND SCHOOL 
                   IMPROVEMENT.

       ``(a) State Reservation.--
       ``(1) In general.--Each State educational agency shall 
     reserve 3 percent of the amount the agency receives under 
     part A for each of fiscal years 2002 and 2003, and 5 percent 
     of that amount for each of fiscal years 2004 through 2006, to 
     carry out paragraph (2) and to carry out its responsibilities 
     under sections 1116 and 1117, including carrying out its 
     statewide system of technical assistance and providing 
     support for local educational agencies.
       ``(2) Local educational agencies.--Of the amount reserved 
     under paragraph (1) for any fiscal year, the State 
     educational agency shall allocate at least 80 percent 
     directly to local educational agencies. In making allocations 
     under this paragraph, the State educational agency shall give 
     first priority to agencies, and agencies serving schools, 
     identified for corrective action or improvement under section 
     1116(c).
       ``(3) Use of funds.--Each local educational agency 
     receiving an allotment under paragraph (2) shall use the 
     allotment to--
       ``(A) carry out corrective action, as defined in section 
     1116(c)(5)(A), in those schools; or
       ``(B) achieve substantial improvement in the performance of 
     those schools.
       ``(b) National Activities.--From the total amount 
     appropriated for any fiscal year to carry out this title, the 
     Secretary may reserve not more than 0.30 percent to conduct 
     evaluations and studies and to collect data.''.

     SEC. 102. IMPROVED ACCOUNTABILITY.

       (a) State Plans.--Section 1111(b) (20 U.S.C. 6311(b)) is 
     amended--
       (1) in the subsection heading, by striking ``and 
     Assessments'' and inserting ``, Assessments, and 
     Accountability'';
       (2) by amending paragraph (2) to read as follows:
       ``(2) Adequate yearly progress.--(A) Each State plan shall 
     specify what constitutes adequate yearly progress in student 
     achievement, under the State's accountability system 
     described in paragraph (4), for each school and each local 
     educational agency receiving funds under this part, and for 
     the State.
       ``(B) The specification of adequate yearly progress in the 
     State plan for schools--
       ``(i) shall be based primarily on the standards described 
     in paragraph (1) and the valid and reliable assessments 
     aligned to State standards described in paragraph (3);
       ``(ii) shall include specific numerical adequate yearly 
     progress requirements in each subject and grade included in 
     the State assessments at least for each of the assessments 
     required under paragraph (3) and shall base the numerical 
     goal required for each group of students specified in clause 
     (iv) upon a timeline that ensures all students meet or exceed 
     the proficient level of performance on the assessments 
     required by this section within 10 years after the effective 
     date of the School Improvement Accountability Act;
       ``(iii) shall include other academic indicators, such as 
     school completion or dropout rates, with the data for all 
     such academic indicators disaggregated as required by clause 
     (iv), but the inclusion of such indicators shall not decrease 
     the number of schools or local educational agencies that 
     would be subject to identification for improvement or 
     corrective action if the indicators were not included;
       ``(iv) shall compare separately data for the State as a 
     whole, for each local educational agency, and for each 
     school, regarding the performance and progress of students, 
     disaggregated by each major ethnic and racial group, by 
     English proficiency status, and by economically disadvantaged 
     students as compared with students who are not economically 
     disadvantaged (except that such disaggregation shall not be 
     required in a case in which the number of students in a 
     category would be insufficient to yield statistically 
     reliable information or the results would reveal individually 
     identifiable information about individual students); and
       ``(v) shall compare the proportion of students at the 
     basic, proficient, and advanced levels of performance in a 
     grade for a year with the proportion of students at each of 
     the 3 levels in the same grade in the previous year.
       ``(C)(i) Adequate yearly progress for a local educational 
     agency shall be based upon both--
       ``(I) the number or percentage of schools identified for 
     school improvement or corrective action; and
       ``(II) the progress of the local educational agency in 
     reducing the number or length of time schools are identified 
     for school improvement or corrective action.
       ``(ii) The State plan shall provide that each local 
     educational agency shall ensure that, not later than the end 
     of the fourth academic year after the effective date of the 
     School Improvement Accountability Act, the percentage of 
     schools making adequate yearly progress among schools whose 
     concentrations of poor children are greater than the average 
     concentration of such children served by the local 
     educational agency shall not be less than the percentage of 
     schools

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     making adequate yearly progress among schools whose 
     concentrations of poor children are less than the average 
     concentration of such children served by the local 
     educational agency.
       ``(D)(i) Adequate yearly progress for a State shall be 
     based upon both--
       ``(I) the number or percentage of local educational 
     agencies identified for improvement or corrective action; and
       ``(II) the progress of the State in reducing the number or 
     length of time local educational agencies are identified for 
     improvement or corrective action.
       ``(ii) The State plan shall provide that the State shall 
     ensure that, not later than the end of the fourth academic 
     year after the effective date of the School Improvement 
     Accountability Act, the percentage of local educational 
     agencies making adequate yearly progress among local 
     educational agencies whose concentrations of poor children 
     are greater than the State average of such concentrations 
     shall not be less than the percentage of local educational 
     agencies making adequate yearly progress among local 
     educational agencies whose concentrations of poor children 
     are less than the State average.'';
       (3) in paragraph (3)--
       (A) in the matter preceding subparagraph (A)--
       (i) by striking ``developed or adopted'' and inserting ``in 
     place''; and
       (ii) by inserting ``, not later than the school year 2000-
     2001,'' after ``will be used'';
       (B) by redesignating subparagraphs (G), (H), and (I) as 
     subparagraphs (H), (I), and (J);
       (C) in subparagraph (F)--
       (i) in clause (ii), by striking ``and'' after the 
     semicolon; and
       (ii) by adding at the end the following:
       ``(iv) the use of assessments written in Spanish for the 
     assessment of Spanish-speaking students with limited English 
     proficiency, if Spanish-language assessments are more likely 
     than English language assessments to yield accurate and 
     reliable information regarding what those students know and 
     can do in content areas other than English; and
       ``(v) notwithstanding clauses (iii) and (iv), the 
     assessment (using tests written in English) of reading or 
     language arts of any student who has attended school in the 
     United States (not including Puerto Rico) for 3 or more 
     consecutive years, for purposes of school accountability;'';
       (D) by inserting after subparagraph (F) the following:
       ``(G) result in a report from each local educational agency 
     that indicates the number and percentage of students excluded 
     from each assessment at each school, including, where 
     statistically sound, data disaggregated in accordance with 
     subparagraph (J), except that a local educational agency 
     shall be prohibited from providing such information if 
     providing the information would reveal the identity of any 
     individual student.''; and
       (E) by amending subparagraph (I) (as so redesignated) to 
     read as follows:
       ``(I) provide individual student interpretive and 
     descriptive reports, which shall include scores and other 
     information on the attainment of student performance 
     standards that reflect the quality of daily instruction and 
     learning such as measures of student coursework over time, 
     student attendance rates, student dropout rates, and rates of 
     student participation in advanced level courses; and``;
       (4) by striking paragraph (7);
       (5) by redesignating paragraphs (4), (5), (6), and (8) as 
     paragraphs (8), (9), (10), and (11), respectively;
       (6) by inserting after paragraph (3) the following:
       ``(4) Accountability.--(A) Each State plan shall 
     demonstrate that the State has developed and is implementing 
     a statewide accountability system that is or will be 
     effective in substantially increasing the numbers and 
     percentages of all students, including the lowest performing 
     students, economically disadvantaged students, and students 
     with limited proficiency in English, who meet the State's 
     proficient and advanced levels of performance within 10 years 
     after the date of enactment of the School Improvement 
     Accountability Act. The State accountability system shall--
       ``(i) be the same accountability system the State uses for 
     all schools or all local educational agencies in the State, 
     if the State has an accountability system for all schools or 
     all local educational agencies in the State;
       ``(ii) hold local educational agencies and schools 
     accountable for student achievement in at least reading and 
     mathematics and in any other subject that the State may 
     choose; and
       ``(iii) identify schools and local educational agencies for 
     improvement or corrective action based upon failure to make 
     adequate yearly progress as defined in the State plan 
     pursuant to paragraph (2).
       ``(B) The accountability system described in subparagraph 
     (A) and described in the State plan shall also include a 
     procedure for identifying for improvement a school or local 
     educational agency, intervening in that school or agency, and 
     (if that intervention is not effective) implementing a 
     corrective action not later than 3 years after first 
     identifying such agency or school, that--
       ``(i) complies with sections 1116 and 1117, including the 
     provision of technical assistance, professional development, 
     and other capacity-building as needed, to ensure that schools 
     and local educational agencies so identified have the 
     resources, skills, and knowledge needed to carry out their 
     obligations under sections 1114 and 1115 and to meet the 
     requirements for adequate yearly progress described in 
     paragraph (2); and
       ``(ii) includes rigorous criteria for identifying those 
     agencies and schools based upon failure to make adequate 
     yearly progress in student achievement in accordance with 
     paragraph (2).
       ``(5) Public notice and comment.--Each State plan shall 
     contain assurances that--
       ``(A) in developing the State plan provisions relating to 
     adequate yearly progress, the State diligently sought public 
     comment from a range of institutions and individuals in the 
     State with an interest in improved student achievement; and
       ``(B) the State will continue to make a substantial effort 
     to ensure that information regarding this part is widely 
     known and understood by citizens, parents, teachers, and 
     school administrators throughout the State, and is provided 
     in a widely read or distributed medium.
       ``(6) Annual review.--The State plan shall provide an 
     assurance that the State will annually submit to the 
     Secretary information, as part of the State's consolidated 
     plan under section 14302, on the extent to which schools and 
     local educational agencies are making adequate yearly 
     progress, including the number and names of schools and local 
     educational agencies identified for improvement and 
     corrective action under section 1116, the steps taken to 
     address the performance problems of such schools and local 
     educational agencies, and the number and names of schools 
     that are no longer so identified, for purposes of determining 
     State and local compliance with section 1116.
       ``(7) Penalties.--(A) The State plan shall provide that, if 
     the State fails to meet the deadlines described in paragraphs 
     (1)(C) and (10) for demonstrating that the State has in place 
     high-quality State content and student performance standards 
     and aligned assessments, or if the State fails to establish a 
     system for measuring and monitoring adequate yearly progress, 
     for a fiscal year, including having the ability to 
     disaggregate student achievement data for the assessments as 
     required under this section at the State, local educational 
     agency, and school levels, then the State shall be ineligible 
     to reserve a greater amount of administrative funds under 
     section 1003 for the succeeding fiscal year than the State 
     reserved for such purposes for the fiscal year preceding the 
     fiscal year in which the failure occurred.
       ``(B)(i) The State plan shall provide that, except as 
     described in clause (ii), if the State fails to meet the 
     deadlines described in paragraphs (1)(C) and (10) for a 
     fiscal year, then the Secretary may withhold funds made 
     available under this part for administrative expenses for the 
     succeeding fiscal year in such amount as the Secretary 
     determines appropriate.
       ``(ii) The State plan shall provide that, if the State 
     fails to meet the deadlines described in paragraphs (1)(C) 
     and (10) for the succeeding fiscal year or a subsequent 
     fiscal year, the Secretary shall withhold not less than \1/5\ 
     of the funds made available under this part for 
     administrative expenses for the fiscal year.
       ``(C) The State plan shall provide that, if the State has 
     not developed challenging State assessments that are aligned 
     to challenging State content standards in at least 
     mathematics and reading or language arts by school year 2000-
     2001, the State shall not be eligible for designation as an 
     Ed-Flex Partnership State under the Education Flexibility 
     Partnership Act of 1999 until the State develops such 
     assessments, and the State shall be subject to such other 
     penalties as are provided in this Act for failure to develop 
     the assessments.''; and
       (7) by adding at the end the following:
       ``(12) School reports.--The State plan shall provide that 
     individual school reports publicized and disseminated under 
     section 1116(a)(2) shall include information on the total 
     number of students excluded from each assessment at each 
     school, including, where statistically sound, data 
     disaggregated in accordance with paragraph (3)(J), and shall 
     include information on why such students were excluded from 
     the assessment. In issuing this report, a local educational 
     agency may not provide any information that would violate the 
     privacy or reveal the identity of any individual student.''.
       (b) Assurances.--Section 1112(c)(1) (20 U.S.C. 6312(c)(1)) 
     is amended--
       (1) in subparagraph (G), by striking ``; and'' and 
     inserting a semicolon;
       (2) in subparagraph (H), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(I) ensure, through incentives for voluntary transfers, 
     the provision of professional development, and recruitment 
     programs, that low-income students and minority students are 
     not taught at higher rates than other students by 
     unqualified, out-of-field, or inexperienced teachers.''.

[[Page 224]]

       (c) Assessment and Improvement.--Section 1116 (20 U.S.C. 
     6317) is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) State and Local Review.--
       ``(1) In general.--Each local educational agency receiving 
     funds under this part shall use the State assessments and 
     other academic indicators described in the State plan or in a 
     State-approved local educational agency plan to review 
     annually the progress of each school served under this part 
     by the agency to determine whether the school is making the 
     adequate yearly progress specified in section 1111(b)(2) 
     toward enabling all students to meet the State's student 
     performance standards described in the State plan.
       ``(2) Publication and dissemination; results.--Each local 
     educational agency receiving funds under this part shall--
       ``(A) publicize and disseminate in individual school 
     reports that include statistically sound results 
     disaggregated in the same manner as results are disaggregated 
     under section 1111(b)(3)(J), to teachers and other staff, 
     parents, students, and the community, the results of the 
     annual review under paragraph (1) and (if not already 
     included in the review), graduation rates, attendance rates, 
     retention rates, and rates of participation in advanced level 
     courses, for all schools served under this part; and
       ``(B) provide the results of the annual review to schools 
     served by the agency under this part so that the schools can 
     continually refine their programs of instruction to help all 
     students served under this part in those schools to meet the 
     State's student performance standards.'';
       (2) in subsection (c)--
       (A) by amending paragraph (1) to read as follows:
       ``(1) In general.--(A) A local educational agency shall 
     identify for school improvement any school served under this 
     part that--
       ``(i) for 2 consecutive years failed to make adequate 
     yearly progress as defined in the State's plan under section 
     1111, except that in the case of a school participating in a 
     targeted assistance program under section 1115, a local 
     educational agency may review the progress of only those 
     students in such school who are served under this part; or
       ``(ii) was identified for school improvement under this 
     section on the day preceding the date of enactment of the 
     School Improvement Accountability Act.
       ``(B) The 2-year period described in subparagraph (A)(i) 
     shall include any continuous period of time immediately 
     preceding the date of the enactment of such Act, during which 
     a school did not make adequate yearly progress as defined in 
     the State's plan, as such plan was in effect on the day 
     preceding the date of enactment.'';
       (B) by amending paragraph (2) to read as follows:
       ``(2) Requirements.--(A)(i) Each school identified under 
     paragraph (1)(A) shall promptly notify a parent of each 
     student enrolled in the school that the school was identified 
     for improvement by the local educational agency and provide 
     with the notification--
       ``(I) the reasons for such identification; and
       ``(II) information about opportunities for parents to 
     participate in the school improvement process.
       ``(ii) The notification under this subparagraph shall be in 
     a format and, to the extent practicable, in a language, that 
     the parents can understand.
       ``(B)(i) Before identifying a school for school improvement 
     under paragraph (1)(A), the local educational agency shall 
     inform the school that the agency proposes to identify the 
     school for school improvement and provide the school with an 
     opportunity to review the school-level data, including 
     assessment data, upon which the proposed determination 
     regarding identification is based.
       ``(ii) If the school believes that the proposed 
     identification is in error for statistical or other 
     substantive reasons, the school may provide supporting 
     evidence to the local educational agency during the review 
     period, and the agency shall consider such evidence before 
     making a final determination regarding identification.
       ``(iii) The review period under this subparagraph shall not 
     exceed 30 days. At the end of the period, the agency shall 
     make public a final determination regarding indentification 
     of the school.
       ``(C) Each school identified under paragraph (1)(A) shall, 
     within 3 months after being so identified, and in 
     consultation with parents, the local educational agency, and 
     the school support team or other outside experts, develop or 
     revise a school plan that--
       ``(i) addresses the fundamental teaching and learning needs 
     in the school;
       ``(ii) describes the specific achievement problems to be 
     solved;
       ``(iii) includes the strategies, supported by valid and 
     reliable evidence of effectiveness, with specific goals and 
     objectives, that have the greatest likelihood of improving 
     the performance of participating students in meeting the 
     State's student performance standards;
       ``(iv) explains how those strategies will work to address 
     the achievement problems identified under clause (ii), 
     including providing a summary of evaluation-based evidence of 
     student achievement after implementation of those strategies 
     in other schools;
       ``(v) addresses the need for high-quality staff by ensuring 
     that all new teachers in the school in programs supported 
     with funds provided under this part are fully qualified;
       ``(vi) addresses the professional development needs of the 
     instructional staff of the school by describing a plan for 
     spending a minimum of 10 percent of the funds received by the 
     school under this part on professional development that--
       ``(I) does not supplant professional development services 
     that the instructional staff would otherwise receive; and
       ``(II) is designed to increase the content knowledge of 
     teachers, build teachers' capacity to align classroom 
     instruction with challenging content standards, and bring all 
     students in the school to proficient or advanced levels of 
     performance;
       ``(vii) identifies specific goals and objectives the school 
     will undertake for making adequate yearly progress, including 
     specific numerical performance goals and targets that are 
     high enough to ensure that all groups of students specified 
     in section 1111(b)(2)(B)(iv) meet or exceed the proficient 
     levels of performance in each subject area within 10 years 
     after the date of enactment of the School Improvement 
     Accountability Act; and
       ``(viii) specifies the responsibilities of the school and 
     the local educational agency, including how the local 
     educational agency will hold the school accountable for, and 
     assist the school in, meeting the school's obligations to 
     provide enriched and accelerated curricula, effective 
     instructional methods, highly qualified professional 
     development, and timely and effective individual assistance, 
     in partnership with parents.
       ``(D)(i) The school shall submit the plan (including a 
     revised plan) to the local educational agency for approval.
       ``(ii) The local educational agency shall promptly subject 
     the plan to a peer review process, work with the school to 
     revise the plan as necessary, and approve the plan.
       ``(iii) The school shall implement the plan as soon as the 
     plan is approved.'';
       (C) by amending paragraph (4) to read as follows:
       ``(4) Technical assistance.--(A) For each school identified 
     for school improvement under paragraph (1)(A), the local 
     educational agency shall provide technical assistance as the 
     school develops and implements the school's plan.
       ``(B) Such technical assistance--
       ``(i) shall include information on effective methods and 
     instructional strategies that are supported by valid and 
     reliable evidence of effectiveness;
       ``(ii) shall be designed to strengthen the core academic 
     program for the students served under this part, address 
     specific elements of student performance problems, and 
     address problems, if any, in implementing the parental 
     involvement requirements in section 1118, implementing the 
     professional development provisions in section 1119, and 
     carrying out the responsibilities of the school and local 
     educational agency under the plan; and
       ``(iii) may be provided directly by the local educational 
     agency, through mechanisms authorized under section 1117, or 
     (with the local educational agency's approval) by an 
     institution of higher education whose teacher preparation 
     program is not identified as low performing by its State and 
     that is in full compliance with the requirements of section 
     207 of the Higher Education Act of 1965, a private nonprofit 
     organization, an educational service agency, a comprehensive 
     regional assistance center under part A of title XIII, or 
     other entities with experience in helping schools improve 
     achievement.
       ``(C) Technical assistance provided under this section by 
     the local educational agency or an entity approved by such 
     agency shall be supported by valid and reliable evidence of 
     effectiveness.'';
       (D) by amending paragraph (5) to read as follows:
       ``(5) Corrective action.--In order to help students served 
     under this part meet challenging State standards, each local 
     educational agency shall implement a system of corrective 
     action in accordance with the following:
       ``(A) In this paragraph, the term `corrective action' means 
     action, consistent with State and local law, that--
       ``(i) substantially and directly responds to the consistent 
     academic failure that caused the local educational agency to 
     take such action and to any underlying staffing, curricular, 
     or other problems in the school involved; and
       ``(ii) is designed to substantially increase the likelihood 
     that students will perform at the proficient and advanced 
     performance levels.
       ``(B) After providing technical assistance under paragraph 
     (4), the local educational agency--
       ``(i) may take corrective action at any time with respect 
     to a school that has been identified under paragraph (1)(A);
       ``(ii) shall take corrective action with respect to any 
     school that fails to make adequate yearly progress, as 
     defined by the

[[Page 225]]

     State, for 2 consecutive years following the school's 
     identification under paragraph (1)(A), at the end of the 
     second year; and
       ``(iii) shall continue to provide technical assistance 
     while instituting any corrective action under clause (i) or 
     (ii).
       ``(C) In the case of a school described in subparagraph 
     (B)(ii), the local educational agency--
       ``(i) shall take corrective action that changes the 
     school's administration or governance by--

       ``(I) instituting and fully implementing a new curriculum, 
     including providing appropriate professional development for 
     all relevant staff, that is supported by valid and reliable 
     evidence of effectiveness and offers substantial promise of 
     improving educational achievement for low-performing 
     students;
       ``(II) restructuring the school, such as by creating 
     schools within schools or other small learning environments, 
     or making alternative governance arrangements (such as the 
     creation of a public charter school);
       ``(III) redesigning the school by reconstituting all or 
     part of the school staff;
       ``(IV) eliminating the use of noncredentialed teachers; or
       ``(V) closing the school;

       ``(ii) shall provide professional development for all 
     relevant staff, that is supported by valid and reliable 
     evidence of effectiveness and that offers substantial promise 
     of improving student educational achievement and is directly 
     related to the content area in which each teacher is 
     providing instruction and the State's content and performance 
     standards in that content area; and
       ``(iii) may defer, reduce, or withhold funds provided to 
     carry out this title.
       ``(D)(i) When a local educational agency has identified a 
     school for corrective action under subparagraph (B)(ii), the 
     agency shall provide all students enrolled in the school with 
     the option to transfer to another public school that is 
     within the area served by the local educational agency that 
     has not been identified for school improvement and provide 
     such students with transportation (or the costs of 
     transportation) to such school, subject to the following 
     requirements:
       ``(I) Such transfer must be consistent with State or local 
     law.
       ``(II) If the local educational agency cannot accommodate 
     the request of every student from the identified school, the 
     agency shall permit as many students as possible to transfer, 
     with such students being selected at random on a 
     nondiscriminatory and equitable basis.
       ``(III) The local educational agency may use not more than 
     10 percent of the funds the local educational agency receives 
     through the State reservation under section 1003(a)(2) to 
     provide transportation to students whose parents choose to 
     transfer the students to a different school under this 
     subparagraph.
       ``(ii) If all public schools served by the local 
     educational agency are identified for corrective action, the 
     agency shall, to the extent practicable, establish a 
     cooperative agreement with another local educational agency 
     in the area to enable students served by the agency to 
     transfer to a school served by that other agency.
       ``(E) A local educational agency may delay, for a period 
     not to exceed 1 year, implementation of corrective action if 
     the failure to make adequate yearly progress was justified 
     due to exceptional or uncontrollable circumstances such as a 
     natural disaster or a precipitous and unforeseen decline in 
     the financial resources of the local educational agency or 
     school.
       ``(F) The local educational agency shall publish and 
     disseminate to parents and the public in a format and, to the 
     extent practicable, in a language the parents and the public 
     can understand, through such means as the Internet, the 
     media, and public agencies, information on any corrective 
     action the agency takes under this paragraph.
       ``(G)(i) Before taking corrective action with respect to 
     any school under this paragraph, the local educational agency 
     shall inform the school that the agency proposes to take 
     corrective action and provide the school with an opportunity 
     to review the school-level data, including assessment data, 
     upon which the proposed determination regarding corrective 
     action is based.
       ``(ii) If the school believes that the proposed 
     determination is in error for statistical or other 
     substantive reasons, the school may provide supporting 
     evidence to the local educational agency during the review 
     period, and the agency shall consider such evidence before 
     making a final determination regarding corrective action.
       ``(iii) The review period under this subparagraph shall not 
     exceed 45 days. At the end of the period, the local 
     educational agency shall make public a final determination 
     regarding corrective action for the school.'';
       (E) by amending paragraph (6) to read as follows:
       ``(6) State educational agency responsibilities.--If a 
     State educational agency determines that a local educational 
     agency failed to carry out its responsibilities under this 
     section, the State educational agency shall take such action 
     as the agency finds necessary, consistent with this section, 
     to improve the affected schools and to ensure that the local 
     educational agency carries out its responsibilities under 
     this section.''; and
       (F) by amending paragraph (7) to read as follows:
       ``(7) Waivers.--The State educational agency shall review 
     any waivers that have previously been approved for a school 
     identified for improvement or corrective action, and shall 
     terminate any waiver approved by the State, under the 
     Educational Flexibility Partnership Act of 1999, if the State 
     determines, after notice and an opportunity for a hearing, 
     that the waiver is not helping such school make adequate 
     yearly progress toward meeting the goals, objectives, and 
     performance targets in the school's improvement plan.''; and
       (3) by amending subsection (d) to read as follows:
       ``(d) State Review and Local Educational Agency 
     Improvement.--
       ``(1) In general.--A State educational agency shall 
     annually review the progress of each local educational agency 
     receiving funds under this part to determine whether schools 
     receiving assistance under this part are making adequate 
     yearly progress as defined in section 1111(b)(2) toward 
     meeting the State's student performance standards.
       ``(2) Identification of local educational agency for 
     improvement.--A State educational agency shall identify for 
     improvement any local educational agency that--
       ``(A) for 2 consecutive years failed to make adequate 
     yearly progress as defined in the State's plan under section 
     1111(b)(2); or
       ``(B) was identified for improvement under this section as 
     this section was in effect on the day preceding the date of 
     enactment of the School Improvement Accountability Act.
       ``(3) Transition.--The 2-year period described in paragraph 
     (2)(A) shall include any continuous period of time 
     immediately preceding the date of enactment of such Act, 
     during which a local educational agency did not make adequate 
     yearly progress as defined in the State's plan, as such plan 
     was in effect on the day preceding the date of enactment.
       ``(4) Targeted assistance schools.--For purposes of 
     reviewing the progress of targeted assistance schools served 
     by a local educational agency, a State educational agency may 
     choose to review the progress of only the students in such 
     schools who are served under this part.
       ``(5) Opportunity to review and present evidence.--(A) 
     Before identifying a local educational agency for improvement 
     under paragraph (2), a State educational agency shall inform 
     the local educational agency that the State educational 
     agency proposes to identify the local educational agency for 
     improvement and provide the local educational agency with an 
     opportunity to review the local educational agency data, 
     including assessment data, upon which the proposed 
     determination regarding identification is based.
       ``(B) If the local educational agency believes that the 
     proposed identification is in error for statistical or other 
     substantive reasons, the agency may provide supporting 
     evidence to the State educational agency during the review 
     period, and the agency shall consider such evidence before 
     making a final determination regarding identification.
       ``(C) The review period under this paragraph shall not 
     exceed 30 days. At the end of the period, the State shall 
     make public a final determination regarding identification of 
     the local educational agency.
       ``(6) Notification to parents.--(A) The local educational 
     agency shall promptly notify a parent of each student 
     enrolled in a school served by a local educational agency 
     identified for improvement that the agency was identified for 
     improvement and provide with the notification--
       (i) the reasons for the agency's identification; and
       (ii) information about opportunities for parents to 
     participate in upgrading the quality of the local educational 
     agency.
       ``(B) The notification under this paragraph shall be in a 
     format and, to the extent practicable, in a language, that 
     the parents can understand.
       ``(7) Local educational agency revisions.--(A) Each local 
     educational agency identified under paragraph (2) shall, not 
     later than 3 months after being so identified, develop or 
     revise a local educational agency plan and annual academic 
     achievement goals, in consultation with parents, school 
     staff, and others.
       ``(B) Achievement goals.--The annual academic achievement 
     goals shall be sufficiently high to ensure that all students 
     within the jurisdiction involved, including the lowest 
     performing students, economically disadvantaged students, 
     students of different races and ethnicities, and students 
     with limited English proficiency will meet or exceed the 
     proficient level of performance on the assessments required 
     by section 1111 within 10 years after the date of enactment 
     of the School Improvement Accountability Act.
       ``(C) The plan shall--


       ``(i) address the fundamental teaching and learning needs 
     in the schools served by that agency, and the specific 
     academic problems of low-performing students, including 
     stating a determination of why the local educational agency's 
     prior plan, if any, failed to bring about increased 
     achievement;

[[Page 226]]

       ``(ii) incorporate strategies that are supported by valid 
     and reliable evidence of effectiveness and that strengthen 
     the core academic program in the local educational agency;
       ``(iii) identify specific annual academic achievement goals 
     and objectives that will--
       ``(I) have the greatest likelihood of improving the 
     performance of participating students in meeting the State's 
     student performance standards; and
       ``(II) include specific numerical performance goals and 
     targets for each of the groups of students for which data are 
     disaggregated pursuant to section 1111(b)(2)(B)(iv);
       ``(iv) address the professional development needs of the 
     instructional staff of the schools by describing a plan for 
     spending a minimum of 10 percent of the funds received by the 
     schools under this part on professional development that--
       ``(I) does not supplant professional development services 
     that the instructional staff would otherwise receive; and
       ``(II) is designed to increase the content knowledge of 
     teachers, build teachers' capacity to align classroom 
     instruction with challenging content standards, and bring all 
     students in the schools to proficient or advanced levels of 
     performance;
       ``(v) identify measures the local educational agency will 
     undertake to make adequate yearly progress;
       ``(vi) identify how, pursuant to paragraph (6), the local 
     educational agency will provide written notification to 
     parents in a format and, to the extent practicable, in a 
     language the parents can understand;
       ``(vii) specify the responsibilities of the State 
     educational agency and the local educational agency under the 
     plan; and
       ``(viii) include strategies to promote effective parental 
     involvement in the schools.
       ``(D) The local educational agency shall submit the plan 
     (including a revised plan) to the State educational agency 
     for approval. The State educational agency shall, within 60 
     days after submission of the plan, subject the plan to a peer 
     review process, work with the local educational agency to 
     revise the plan as necessary, and approve the plan.
       ``(E) The local educational agency shall implement the plan 
     (including a revised plan) as soon as the plan is approved.
       ``(8) State educational agency responsibility.--(A) For 
     each local educational agency identified under paragraph (2), 
     the State educational agency (or an entity authorized by the 
     agency) shall provide technical or other assistance, if 
     requested, as authorized under section 1117, to better enable 
     the local educational agency--
       ``(i) to develop and implement the local educational agency 
     plan as approved by the State educational agency consistent 
     with the requirements of this section; and
       ``(ii) to work with schools identified for improvement.
       ``(B) Technical assistance provided under this section by 
     the State educational agency or an entity authorized by the 
     agency shall be supported by valid and reliable evidence of 
     effectiveness.
       ``(9) Corrective action.--In order to help students served 
     under this part meet challenging State standards, each State 
     educational agency shall implement a system of corrective 
     action in accordance with the following:
       ``(A) In this paragraph, the term `corrective action' means 
     action, consistent with State law, that--
       ``(i) substantially and directly responds to the consistent 
     academic failure that caused the State educational agency to 
     take such action and to any underlying staffing, curricular, 
     or other problems in the schools involved; and
       ``(ii) is designed to substantially increase the likelihood 
     that students served under this part will perform at the 
     proficient and advanced performance levels.
       ``(B) After providing technical assistance under paragraph 
     (8) and subject to subparagraph (D), the State educational 
     agency--
       ``(i) may take corrective action at any time with respect 
     to a local educational agency that has been identified under 
     paragraph (2);
       ``(ii) shall take corrective action with respect to any 
     local educational agency that fails to make adequate yearly 
     progress, as defined by the State, for 3 consecutive years 
     following the agency's identification under paragraph (2), at 
     the end of the third year; and
       ``(iii) shall continue to provide technical assistance 
     while instituting any corrective action under clause (i) or 
     (ii).
       ``(C) In the case of a local educational agency described 
     in subparagraph (B)(ii), the State educational agency shall 
     take at least 1 of the following corrective actions:
       ``(i) Withholding funds from the local educational agency.
       ``(ii) Reconstituting school district personnel.
       ``(iii) Removing particular schools from the jurisdiction 
     of the local educational agency and establishing alternative 
     arrangements for public governance and supervision of the 
     schools.
       ``(iv) Appointing, through the State educational agency, a 
     receiver or trustee to administer the affairs of the local 
     educational agency in place of the superintendent and school 
     board.
       ``(v) Abolishing or restructuring the local educational 
     agency.
       ``(D) When a State educational agency has identified a 
     local educational agency for corrective action under 
     subparagraph (B)(ii), the State educational agency shall 
     provide all students enrolled in a school served by the local 
     educational agency with a plan to transfer to a higher 
     performing public school served by another local educational 
     agency and shall provide such students with transportation 
     (or the costs of transportation) to such schools, subject to 
     the following requirements:
       ``(i) The provision of the transfer shall be done in 
     conjunction with at least 1 additional action described in 
     this paragraph.
       ``(ii) If the State educational agency cannot accommodate 
     the request of every student from the schools served by the 
     agency, the agency shall permit as many students as possible 
     to transfer, with such students being selected at random on a 
     nondiscriminatory and equitable basis.
       ``(iii) The State educational agency may use not more than 
     10 percent of the funds the agency receives through the State 
     reservation under section 1003(a)(2) to provide 
     transportation to students whose parents choose to transfer 
     their child to a different school under this subparagraph.
       ``(E) Prior to implementing any corrective action under 
     this paragraph, the State educational agency shall provide 
     due process and a hearing to the affected local educational 
     agency, if State law provides for such process and hearing. 
     The hearing shall take place not later than 45 days following 
     the decision to implement the corrective action.
       ``(F) The State educational agency shall publish and 
     disseminate to parents and the public in a format and, to the 
     extent practicable, in a language the parents and the public 
     can understand, through such means as the Internet, the 
     media, and public agencies, information on any corrective 
     action the agency takes under this paragraph.
       ``(G) A State educational agency may delay, for a period 
     not to exceed 1 year, implementation of corrective action if 
     the failure to make adequate yearly progress was justified 
     due to exceptional or uncontrollable circumstances such as a 
     natural disaster or a precipitous and unforeseen decline in 
     the financial resources of the local educational agency.
       ``(10) Waivers.--The State educational agency shall review 
     any waivers that have previously been approved for a local 
     educational agency identified for improvement or corrective 
     action, and shall terminate any waiver approved by the State, 
     under the Educational Flexibility Partnership Act of 1999, if 
     the State determines, after notice and an opportunity for a 
     hearing, that the waiver is not helping such agency make 
     adequate yearly progress toward meeting the goals, 
     objectives, and performance targets in the agency's 
     improvement plan.''.
       (d) State Assistance for School Support and Improvement.--
     Section 1117(a) (20 U.S.C. 6318(a)) is amended to read as 
     follows:
       ``(a) System for Support.--
       ``(1) In general.--Each State educational agency shall 
     establish a statewide system of intensive and sustained 
     support and improvement for local educational agencies and 
     schools receiving funds under this part, in order to increase 
     the opportunity for all students served by those agencies and 
     schools to meet the State's content standards and student 
     performance standards.
       ``(2) Priorities.--In carrying out this section, a State 
     educational agency shall--
       ``(A) provide support and assistance to local educational 
     agencies and schools identified for corrective action under 
     section 1116;
       ``(B) provide support and assistance to other local 
     educational agencies and schools identified for improvement 
     under section 1116; and
       ``(C) provide support and assistance to each school 
     receiving funds under this part in which the number of 
     students in poverty equals or exceeds 75 percent of the total 
     number of students enrolled in such school.
       ``(3) Approaches.--In order to achieve the objectives of 
     this subsection, each statewide system shall provide 
     technical assistance and support through approaches such as--
       ``(A) use of school support teams, composed of individuals 
     who are knowledgeable about research on and practice of 
     teaching and learning, particularly about strategies for 
     improving educational results for low-achieving students;
       ``(B) the designation and use of `Distinguished Educators', 
     chosen from schools served under this part that have been 
     especially successful in improving academic achievement;
       ``(C) assisting local educational agencies or schools to 
     implement research-based comprehensive school reform models; 
     and
       ``(D) use of a peer review process designed to increase the 
     capacity of local educational agencies and schools to develop 
     high-quality school improvement plans.
       ``(4) Funds.--Each State educational agency--
       ``(A) shall use funds reserved under section 1003(a)(1), 
     but not used under section 1003(a)(2) and funds appropriated 
     under section 1002(f) to carry out this section; and

[[Page 227]]

       ``(B) may use State administrative funds authorized for 
     such purpose.
       ``(5) Alternatives.--The State educational agency may 
     devise additional approaches to providing the assistance 
     described in subparagraphs (A) and (B) of paragraph (3), 
     other than the provision of assistance under the statewide 
     system, such as providing assistance through institutions of 
     higher education, educational service agencies, or other 
     local consortia. The State educational agency may seek 
     approval from the Secretary to use funds made available under 
     section 1003 for such approaches as part of the State 
     plan.''.
       (e) Conforming Amendments.--The 1965 (20 U.S.C. 6301 et 
     seq.) is amended--
       (1) in section 1111(b)(1)(C) (20 U.S.C. 6311(b)(1)(C)), by 
     striking ``paragraph (6)'' and inserting ``paragraph (10)'';
       (2) in section 1112(c)(1)(D) (20 U.S.C. 6312(c)(1)(D)), by 
     striking ``section 1116(c)(4)'' and inserting ``section 
     1116(c)(5)'';
       (3) in section 1117(c)(2)(A) (20 U.S.C. 6318(c)(2)(A)), by 
     striking ``section 1111(b)(2)(A)(i)'' and inserting ``section 
     1111(b)(2)(A)'';
       (4) in section 1118(c)(4)(B) (20 U.S.C. 6319(c)(4)(B)), by 
     striking ``school performance profiles required under section 
     1116(a)(3)'' and inserting ``individual school reports 
     required under section 1116(a)(2)(A)'';
       (5) in section 1118(e)(1) (20 U.S.C. 6319(e)(1)), by 
     striking ``section 1111(b)(8)'' and inserting ``section 
     1111(b)(11)''; and
       (6) in section 1119(h)(3) (20 U.S.C. 6320(h)(3)), by 
     striking ``section 1116(d)(6)'' and inserting ``section 
     1116(d)(9)''.

     SEC. 103. COMPREHENSIVE SCHOOL REFORM.

       Title I (20 U.S.C. 6301 et seq.) is amended--
       (1) by redesignating part F as part G; and
       (2) by inserting after part E the following:

                 ``PART F--COMPREHENSIVE SCHOOL REFORM

     ``SEC. 1551. PURPOSE.

       ``The purpose of this part is to provide financial 
     incentives for schools to develop comprehensive school 
     reforms based upon promising and effective practices and 
     research-based programs that emphasize basic academics and 
     parental involvement so that all children can meet 
     challenging State content and student performance standards.

     ``SEC. 1552. PROGRAM AUTHORIZATION.

       ``(a) Program Authorized.--
       ``(1) In general.--The Secretary may award grants to State 
     educational agencies, from allotments under paragraph (2), to 
     enable the State educational agencies to award subgrants to 
     local educational agencies to carry out the purpose described 
     in section 1551.
       ``(2) Allotments.--
       ``(A) Reservations.--Of the amount appropriated under 
     section 1558 for a fiscal year, the Secretary may reserve--
       ``(i) not more than 1 percent to provide assistance to 
     schools supported by the Bureau of Indian Affairs and in the 
     United States Virgin Islands, Guam, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands according to 
     their respective needs for assistance under this part; and
       ``(ii) not more than 1 percent to conduct national 
     evaluation activities described in section 1557.
       ``(B) In general.--Of the amount appropriated under section 
     1558 that remains after making the reservation under 
     subparagraph (A) for a fiscal year, the Secretary shall allot 
     to each State for the fiscal year an amount that bears the 
     same ratio to the remainder for that fiscal year as the 
     amount made available under section 1124 to the State for the 
     preceding fiscal year bears to the total amount made 
     available under section 1124 to all States for the preceding 
     fiscal year.
       ``(C) Reallotment.--If a State does not apply for funds 
     under this part, the Secretary shall reallot such funds to 
     other States in proportion to the amount allotted to such 
     other States under subparagraph (B).

     ``SEC. 1553. STATE APPLICATIONS.

       ``(a) In General.--Each State educational agency that 
     desires to receive a grant under this part shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may 
     reasonably require.
       ``(b) Contents.--Each such application shall describe--
       ``(1) the process and selection criteria by which the State 
     educational agency, using expert review, will select local 
     educational agencies to receive subgrants under this part;
       ``(2) how the State educational agency will ensure that 
     only comprehensive school reforms that are based upon 
     promising and effective practices and research-based programs 
     receive funds under this part;
       ``(3) how the State educational agency will disseminate 
     information on comprehensive school reforms that are based 
     upon promising and effective practices and research-based 
     programs;
       ``(4) how the State educational agency will evaluate the 
     implementation of such reforms and measure the extent to 
     which the reforms have resulted in increased student academic 
     performance; and
       ``(5) how the State educational agency will make available 
     technical assistance to a local educational agency in 
     evaluating, developing, and implementing comprehensive school 
     reform.

     ``SEC. 1554. STATE USE OF FUNDS.

       ``(a) In General.--Except as provided in subsection (e), a 
     State educational agency that receives a grant under this 
     part shall use the grant funds to award subgrants, on a 
     competitive basis, to local educational agencies (including 
     consortia of local educational agencies) in the State that 
     receive funds under part A.
       ``(b) Subgrant Requirements.--A subgrant to a local 
     educational agency shall be--
       ``(1) of sufficient size and scope to support the initial 
     costs for the particular comprehensive school reform plan 
     selected or designed by each school identified in the 
     application of the local educational agency;
       ``(2) in an amount not less than $50,000 for each 
     participating school; and
       ``(3) renewable for 2 additional 1-year periods after the 
     initial 1-year grant is made, if the participating school is 
     making substantial progress in the implementation of reforms.
       ``(c) Priority.--A State educational agency, in awarding 
     subgrants under this part, shall give priority to local 
     educational agencies that--
       ``(1) plan to use the funds in schools identified for 
     improvement or corrective action under section 1116(c); and
       ``(2) demonstrate a commitment to assist schools with 
     budget allocation, professional development, and other 
     strategies necessary to ensure that comprehensive school 
     reforms are properly implemented and are sustained in the 
     future.
       ``(d) Grant Consideration.--In awarding subgrants under 
     this part, the State educational agency shall take into 
     consideration the equitable distribution of subgrants to 
     different geographic regions within the State, including 
     urban and rural areas, and to schools serving elementary 
     school and secondary school students.
       ``(e) Administrative Costs.--A State educational agency 
     that receives a grant under this part may reserve not more 
     than 5 percent of the grant funds for administrative, 
     evaluation, and technical assistance expenses.
       ``(f) Supplement.--Funds made available under this part 
     shall be used to supplement, and not supplant, any other 
     Federal, State, or local funds that would otherwise be 
     available to carry out the activities assisted under this 
     part.
       ``(g) Reporting.--Each State educational agency that 
     receives a grant under this part shall provide to the 
     Secretary such information as the Secretary may require, 
     including the names of local educational agencies and schools 
     receiving assistance under this part, the amount of the 
     assistance, and a description of the comprehensive school 
     reform model selected and used.

     ``SEC. 1555. LOCAL APPLICATIONS.

       ``(a) In General.--Each local educational agency desiring a 
     subgrant under this part shall submit an application to the 
     State educational agency at such time, in such manner, and 
     containing such information as the State educational agency 
     may reasonably require.
       ``(b) Contents.--Each such application shall--
       ``(1) identify the schools, that are eligible for 
     assistance under part A, that plan to implement a 
     comprehensive school reform program and include the projected 
     costs of such program;
       ``(2) describe the promising and effective practices and 
     research-based programs that such schools will implement;
       ``(3) describe how the local educational agency will 
     provide technical assistance and support for the effective 
     implementation of the promising and effective practices and 
     research-based school reforms selected by such schools; and
       ``(4) describe how the local educational agency will 
     evaluate the implementation of such reforms and measure the 
     results achieved in improving student academic performance.

     ``SEC. 1556. LOCAL USE OF FUNDS.

       ``(a) Use of Funds.--A local educational agency that 
     receives a subgrant under this part shall provide the 
     subgrant funds to schools, that are eligible for assistance 
     under part A and served by the agency, to enable the schools 
     to implement a comprehensive school reform program for--
       ``(1) employing innovative strategies for student learning, 
     teaching, and school management that are based upon promising 
     and effective practices and research-based programs and have 
     been replicated successfully in schools with diverse 
     characteristics;
       ``(2) integrating a comprehensive design for effective 
     school functioning, including instruction, assessment, 
     classroom management, professional development, parental 
     involvement, and school management, that aligns the school's 
     curriculum, technology, and professional development into a 
     comprehensive reform plan for schoolwide change designed to 
     enable all students to meet challenging State content and 
     student performance standards and addresses needs identified 
     through a school needs assessment;
       ``(3) providing high quality and continuous teacher and 
     staff professional development;
       ``(4) including measurable goals for student performance;

[[Page 228]]

       ``(5) providing support to teachers, principals, 
     administrators, and other school personnel staff;
       ``(6) including meaningful community and parental 
     involvement initiatives that will strengthen school 
     improvement activities;
       ``(7) using high quality external technical support and 
     assistance from an entity that has experience and expertise 
     in schoolwide reform and improvement, which may include an 
     institution of higher education;
       ``(8) evaluating school reform implementation and student 
     performance; and
       ``(9) identifying other resources, including Federal, 
     State, local, and private resources, that will be used to 
     coordinate services supporting and sustaining the school 
     reform effort.
       ``(b) Special Rule.--A school that receives funds to 
     develop a comprehensive school reform program shall not be 
     limited to using the approaches identified or developed by 
     the Secretary, but may develop the school's own comprehensive 
     school reform programs for schoolwide change as described in 
     subsection (a).

     ``SEC. 1557. NATIONAL EVALUATION AND REPORTS.

       ``(a) In General.--The Secretary shall develop a plan for a 
     national evaluation of the programs assisted under this part.
       ``(b) Evaluation.--The national evaluation shall--
       ``(1) evaluate the implementation and results achieved by 
     schools after 3 years of implementing comprehensive school 
     reforms; and
       ``(2) assess the effectiveness of comprehensive school 
     reforms in schools with diverse characteristics.
       ``(c) Reports.--Prior to the completion of the national 
     evaluation, the Secretary shall submit an interim report 
     describing implementation activities for the Comprehensive 
     School Reform Program to the Committee on Education and the 
     Workforce, and the Committee on Appropriations, of the House 
     of Representatives, and the Committee on Health, Education, 
     Labor, and Pensions, and the Committee on Appropriations, of 
     the Senate.

     ``SEC. 1558. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part $500,000,000 for fiscal year 2002 and such sums as may 
     be necessary for each of the 4 succeeding fiscal years.''.

                          Subtitle B--Teachers

     SEC. 121. STATE APPLICATIONS.

       (a) Contents of State Plan.--Section 2205(b)(2) (20 U.S.C. 
     6645(b)(2)) is amended--
       (1) by amending subparagraph (N) to read as follows:
       ``(N) set specific annual, quantifiable, and measurable 
     performance goals to increase the percentage of teachers 
     participating in sustained professional development 
     activities, reduce the beginning teacher attrition rate, and 
     reduce the percentage of teachers who are not certified or 
     licensed, and the percentage who are out-of-field 
     teachers;'';
       (2) by redesignating subparagraph (O) as subparagraph (P); 
     and
       (3) by inserting after subparagraph (N) the following:
       ``(O) describe how the State will ensure that all teachers 
     in the State will be fully qualified not later than December 
     1, 2005; and''.
       (b) State and Local Activities.--Part B of title II (20 
     U.S.C. 6641 et seq.) is amended--
       (1) by redesignating section 2211 as section 2215;
       (2) by inserting after section 2210 the following:

     ``SEC. 2211. LOCAL CONTINUATION OF FUNDING.

       ``(a) Agencies.--If a local educational agency applies for 
     funds from a State under this part for a fourth or subsequent 
     fiscal year, the agency may not receive the funds for that 
     fiscal year unless the State determines that the agency has 
     demonstrated that, in carrying out activities under this part 
     during the past fiscal year, the agency has annual numerical 
     performance objectives consisting of--
       ``(1) improved student performance for all groups 
     identified in section 1111;
       ``(2) an increased percentage of teachers participating in 
     sustained professional development activities;
       ``(3) a reduction in the beginning teacher attrition rate 
     for the agency; and
       ``(4) a reduction in the percentage of teachers who are not 
     certified or licensed, and the percentage who are out-of-
     field teachers, for the agency.
       ``(b) Schools.--If a local educational agency applies for 
     funds under this part on behalf of a school for a fourth or 
     subsequent fiscal year (including applying for funds as part 
     of a partnership), the agency may not receive the funds for 
     the school for that fiscal year unless the State determines 
     that the school has demonstrated that, in carrying out 
     activities under this part during the past fiscal year, the 
     school has met the requirements of paragraphs (1) through (4) 
     of subsection (a).

     ``SEC. 2212. INFORMATION AND NOTICE TO PARENTS.

       ``(a) Parents' Right To Know Information.--
       ``(1) In general.--A local educational agency that receives 
     funds under this title shall provide, on request, in an 
     understandable and uniform format, to any parent of a student 
     attending any school served by the agency, information 
     regarding the professional qualifications of each of the 
     student's classroom teachers.
       ``(2) Contents.--The agency shall provide, at a minimum, 
     information on--
       ``(A) whether the teacher has met State certification or 
     licensing criteria for the academic subjects and grade levels 
     in which the teacher teaches the student;
       ``(B) whether the teacher is teaching with emergency or 
     other provisional credentials, due to which any State 
     certification or licensing criteria have been waived; and
       ``(C) the academic qualifications of the teacher in the 
     academic subjects and grade levels in which the teacher 
     teaches.
       ``(b) Notice.--In addition to providing the information 
     described in subsection (a), if a school that receives funds 
     under this title assigns a student to a teacher who is not a 
     fully qualified teacher or assigns a student, for 2 or more 
     consecutive weeks, to a substitute teacher who is not a fully 
     qualified teacher, the school shall provide notice of the 
     assignment to a parent of the student, not later than 15 
     school days after the assignment.

     ``SEC. 2213. GENERAL ACCOUNTING OFFICE STUDY.

       ``Not later than September 30, 2005, the Comptroller 
     General of the United States shall prepare and submit to the 
     Committee on Education and the Workforce of the House of 
     Representatives and the Committee on Health, Education, 
     Labor, and Pensions of the Senate a study setting forth 
     information regarding the progress of States' compliance in 
     increasing the percentage of fully qualified teachers for 
     fiscal years 2001 through 2004.

     ``SEC. 2214. DEFINITION OF FULLY QUALIFIED.

       ``(a) In General.--In this part, the term `fully 
     qualified', used with respect to a teacher, means a teacher 
     who--
       ``(1)(A) has demonstrated the subject matter knowledge, 
     teaching knowledge, and teaching skill necessary to teach 
     effectively in the academic subject in which the teacher 
     teaches, according to the criteria described in subsections 
     (b) and (c); and
       ``(B) is not a teacher for whom State certification or 
     licensing requirements have been waived or who is teaching 
     under an emergency or other provisional credential; or
       ``(2) meets the standards set by the National Board for 
     Professional Teaching Standards.
       ``(b) Elementary School.--For purposes of making the 
     demonstration described in subsection (a)(1), each teacher 
     who teaches elementary school students (other than middle 
     school students) shall, at a minimum--
       ``(1) have State certification (which may include 
     certification obtained through an alternative route) or a 
     State license to teach; and
       ``(2) hold a bachelor's degree and demonstrate the subject 
     matter knowledge, teaching knowledge, and teaching skill 
     required to teach effectively in reading, writing, 
     mathematics, social studies, science, and other elements of a 
     liberal arts education.
       ``(c) Middle School and Secondary School.--For purposes of 
     making the demonstration described in subsection (a)(1), each 
     teacher who teaches middle school students or secondary 
     school students shall, at a minimum--
       ``(1) have State certification (which may include 
     certification obtained through an alternative route) or a 
     State license to teach; and
       ``(2) hold a bachelor's degree or higher degree and 
     demonstrate a high level of competence in all academic 
     subjects in which the teacher teaches through--
       ``(A) achievement of a high level of performance on 
     rigorous academic subject area tests;
       ``(B) completion of an academic major (or courses totaling 
     an equivalent number of credit hours) in each of the academic 
     subjects in which the teacher teaches; or
       ``(C) in the case of teachers hired before the date of 
     enactment of the School Improvement Accountability Act, 
     completion of appropriate coursework for mastery of the 
     academic subjects in which the teacher teaches.''; and
       (3) by amending section 2215 (as so redesignated)--
       (A) in subsection (a)(3), by adding after ``agency'' the 
     following: ``for which at least 40 percent of the students 
     served by the agency are eligible for free or reduced price 
     lunches under the Richard B. Russell National School Lunch 
     Act''; and
       (B) by inserting after subsection (a)(4) the following:
       ``(5) Reporting requirements.--Each institution of higher 
     education receiving assistance under paragraph (1) shall 
     fully comply with all reporting requirements of title II of 
     the Higher Education Act of 1965.''.
       (c) Conforming Amendments.--The Act (20 U.S.C. 6301 et 
     seq.) is amended--
       (1) in section 2203(2) (20 U.S.C. 6643(2)), by striking 
     ``section 2211'' and inserting ``section 2215''; and
       (2) in section 2205(c)(2) (20 U.S.C. 6645(c)(2)), by 
     striking ``section 2211'' and inserting ``section 2215''.

[[Page 229]]



                    Subtitle C--Innovative Education

     SEC. 131. REQUIREMENTS FOR STATE PLANS.

       Part B of title VI (20 U.S.C. 7331 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 6203. REQUIREMENTS FOR STATE PLANS.

       ``(a) State Plans.--In addition to requirements relating to 
     State applications under this part, the State educational 
     agency for each State desiring a grant under this title shall 
     submit a State plan that meets the requirements of this 
     section to the Secretary at such time, in such manner, and 
     accompanied by such information as the Secretary may require.
       ``(b) Consolidated Plan.--A State plan submitted under 
     subsection (a) may be submitted as part of a consolidated 
     plan under section 14302, and as part of a State application 
     described in section 6202.
       ``(c) Contents.--Each plan submitted under subsection (a) 
     shall--
       ``(1) describe how the funds made available through the 
     grant will be used to increase student academic performance;
       ``(2) describe annual, quantifiable, and measurable 
     performance goals that will be used to measure the impact of 
     those funds on student performance;
       ``(3) describe the methods the State will use to measure 
     the annual impact of programs described in the plan and the 
     extent to which such goals are aligned with State standards;
       ``(4) certify that the State has in place the standards and 
     assessments required under section 1111;
       ``(5) certify that the State educational agency has a 
     system, as required under section 1111, for--
       ``(A) holding each local educational agency and school 
     accountable for adequate yearly progress (as described in 
     section 1111(b)(2));
       ``(B) identifying local educational agencies and schools 
     for improvement and corrective action (as required in 
     sections 1116 and 1117);
       ``(C) assisting local educational agencies and schools that 
     are identified for improvement with the development of 
     improvement plans; and
       ``(D) providing technical assistance, professional 
     development, and other capacity building as needed to get 
     such agencies and schools out of improvement status;
       ``(6) certify that the State educational agency will use 
     the disaggregated results of student assessments required 
     under section 1111(b)(3), and other measures or indicators 
     available, to review annually the progress of each local 
     educational agency and school served under this title to 
     determine whether each such agency and school is making 
     adequate yearly progress as required under section 
     1111(b)(2);
       ``(7) certify that the State educational agency will take 
     action against a local educational agency that is identified 
     for corrective action and receiving funds under this title;
       ``(8) describe what, if any, State and other non-Federal 
     resources will be provided to local educational agencies and 
     schools served under this title to carry out activities 
     consistent with this title; and
       ``(9) certify that the State educational agency has a 
     system to hold local educational agencies accountable for 
     meeting the annual performance goals required under paragraph 
     (2).
       ``(d) Approval.--The Secretary, using a peer review 
     process, shall approve a State plan submitted under this 
     section if the State plan meets the requirements of this 
     section.
       ``(e) Duration of the Plan.--Each State plan shall remain 
     in effect for the duration of the State's participation under 
     this title.
       ``(f) Requirement.--A State shall not be eligible to 
     receive funds under this title unless the State has 
     established the standards and assessments required under 
     section 1111.
       ``(g) Public Review.--Each State educational agency will 
     make publicly available the plan approved under subsection 
     (d).

     ``SEC. 6204. SANCTIONS.

       ``(a) Third Fiscal Year.--If a State receiving grant funds 
     under this title fails to meet performance goals established 
     under section 6203(c)(2) by the end of the third fiscal year 
     for which the State receives such grant funds, the Secretary 
     shall reduce by 50 percent the amount the State is entitled 
     to receive for administrative expenses under this title.
       ``(b) Fourth Fiscal Year.--If the State fails to meet such 
     performance goals by the end of the fourth fiscal year for 
     which the State receives grant funds under this title, the 
     Secretary shall reduce the total amount the State receives 
     under this title by 20 percent.
       ``(c) Technical Assistance.--The Secretary shall provide 
     technical assistance, at the request of a State subjected to 
     sanctions under subsection (a) or (b).
       ``(d) Local Sanctions.--
       ``(1) In general.--Each State receiving assistance under 
     this title shall develop a system to hold local educational 
     agencies accountable for meeting the adequate yearly progress 
     requirements established under part A of title I and the 
     performance goals established under this title.
       ``(2) Sanctions.--A system developed under paragraph (1) 
     shall include a mechanism for sanctioning local educational 
     agencies for failure to meet such performance goals and 
     adequate yearly progress levels.

     ``SEC. 6205. STATE REPORTS.

       ``Each State educational agency or Chief Executive Officer 
     of a State receiving funds under this title shall annually 
     publish and disseminate to the public in a format and, to the 
     extent practicable, in a language that the public can 
     understand, a report on--
       ``(1) the use of such funds;
       ``(2) the impact of programs conducted with such funds and 
     an assessment of such programs' effectiveness; and
       ``(3) the progress of the State toward attaining the 
     performance goals established under section 6203(c)(2), and 
     the extent to which the programs have increased student 
     achievement.

     ``SEC. 6206. STANDARDS; ASSESSMENTS ENHANCEMENT.

       ``Each State educational agency receiving a grant under 
     this title may use such grant funds, consistent with section 
     6201(a)(1)(C), to--
       ``(1) establish high quality, internationally competitive 
     content and student performance standards and strategies that 
     all students will be expected to meet;
       ``(2) provide for the establishment of high quality, 
     rigorous assessments that include multiple measures and 
     demonstrate comprehensive knowledge; or
       ``(3) develop and implement value-added assessments.''.

     SEC. 132. PERFORMANCE OBJECTIVES.

       Title VII (20 U.S.C. 7401 et seq.) is amended by inserting 
     after section 7105 the following:

     ``SEC. 7106. PERFORMANCE OBJECTIVES.

       ``(a) In General.--Each State educational agency or local 
     educational agency receiving a grant under this part shall 
     develop annual numerical performance objectives that are age-
     appropriate and developmentally-appropriate with respect to 
     helping limited English proficient students become proficient 
     in English and improve overall academic performance based 
     upon State and local content and performance standards. The 
     objectives shall include incremental percentage increases for 
     each fiscal year a State educational agency or local 
     educational agency receives a grant under this title, 
     including increases from the preceding fiscal year in the 
     number of limited English proficient students demonstrating 
     an increase in performance on annual assessments concerning 
     reading, writing, speaking, and listening comprehension.
       ``(b) Accountability.--Each State educational agency or 
     local educational agency receiving a grant under this title 
     shall be held accountable for meeting the annual numerical 
     performance objectives under this title and the adequate 
     yearly progress levels for limited English proficient 
     students under clauses (ii) and (iv) of section 
     1111(b)(2)(B). Any State educational agency or local 
     educational agency that fails to meet the annual performance 
     objectives shall be subject to sanctions described in section 
     14515.
       ``(c) Parental Notification.--
       ``(1) In general.--Each State educational agency or local 
     educational agency shall notify a parent of a student who is 
     participating in a language instruction educational program 
     under this title, in a manner and form understandable to the 
     parent, including, if necessary and to the extent feasible, 
     in the native language of the parent, of--
       ``(A) the student's level of English proficiency, how such 
     level was assessed, the status of the student's academic 
     achievement, and the implications of the student's 
     educational strengths and needs for age-appropriate and 
     grade-appropriate academic attainment, promotion, and 
     graduation;
       ``(B) what programs are available to meet the student's 
     educational strengths and needs, and how such programs differ 
     in content and instructional goals from other language 
     instruction educational programs and, in the case of a 
     student with a disability, how such available programs meet 
     the objectives of the individualized education program of 
     such a student; and
       ``(C) the instructional goals of the language instruction 
     educational program, and how the program will specifically 
     help the limited English proficient student learn English and 
     meet State and local content and performance standards, 
     including--
       ``(i) the characteristics, benefits, and past academic 
     results of the language instruction educational program and 
     of instructional alternatives; and
       ``(ii) the reasons the student was identified as being in 
     need of a language instruction educational program.
       ``(2) Option to decline.--Each parent described in 
     paragraph (1) shall also be informed that the parent has the 
     option of declining the enrollment of a student in a language 
     instruction educational program, and shall be given an 
     opportunity to decline such enrollment if the parent so 
     chooses.
       ``(3) Special rule.--A student shall not be admitted to, or 
     excluded from, any federally assisted language instruction 
     educational program solely on the basis of a surname or 
     language-minority status.''.

     SEC. 133. REPORT CARDS.

       Title XIV (20 U.S.C. 8801 et seq.) is amended by adding at 
     the end the following:

[[Page 230]]



                         ``PART I--REPORT CARDS

     ``SEC. 14901. REPORT CARDS.

       ``(a) Grants Authorized.--The Secretary shall award a 
     grant, from allotments under subsection (b), to each State 
     having a State report card meeting the requirements described 
     in subsection (e), to enable the State, and local educational 
     agencies and schools in the State, annually to publish report 
     cards for each elementary school and secondary school that 
     receives funding under this Act and is served by the State.
       ``(b) Reservations and Allotments.--
       ``(1) Reservations.--From the amount appropriated under 
     subsection (j) to carry out this part for each fiscal year, 
     the Secretary shall reserve--
       ``(A) \1/2\ of 1 percent of such amount for payments to the 
     Secretary of the Interior for activities approved by the 
     Secretary of Education, consistent with this part, in schools 
     operated or supported by the Bureau of Indian Affairs, on the 
     basis of their respective needs for assistance under this 
     part; and
       ``(B) \1/2\ of 1 percent of such amount for payments to 
     outlying areas, to be allotted in accordance with their 
     respective needs for assistance under this part, as 
     determined by the Secretary, for activities approved by the 
     Secretary, consistent with this part.
       ``(2) State allotments.--From the amount appropriated under 
     subsection (j) for a fiscal year and remaining after the 
     Secretary makes reservations under paragraph (1), the 
     Secretary shall allot to each State having a State report 
     card meeting the requirements described in subsection (e) an 
     amount that bears the same relationship to the remainder as 
     the number of public school students enrolled in elementary 
     schools and secondary schools in the State bears to the 
     number of such students so enrolled in all States.
       ``(c) State Reservation of Funds.--Each State educational 
     agency receiving a grant under subsection (a) may reserve--
       ``(1) not more than 10 percent of the grant funds to carry 
     out activities described in subsections (e) and (g)(2) for 
     fiscal year 2002; and
       ``(2) not more than 5 percent of the grant funds to carry 
     out activities described in subsections (e) and (g)(2) for 
     fiscal year 2003 and each of the 3 succeeding fiscal years.
       ``(d) Within-State Allocations.--Each State educational 
     agency receiving a grant under subsection (a) shall allocate 
     the grant funds that remain after making the reservation 
     described in subsection (c) to each local educational agency 
     in the State in an amount that bears the same relationship to 
     the remainder as the number of public school students 
     enrolled in elementary schools and secondary schools served 
     by the local educational agency bears to the number of such 
     students served by local educational agencies within the 
     State.
       ``(e) Annual State Report Card.--
       ``(1) Report cards required.--Not later than the beginning 
     of the 2002-2003 school year, a State that receives 
     assistance under this Act shall prepare and disseminate an 
     annual report card for parents, the general public, teachers, 
     and the Secretary, with respect to all elementary schools and 
     secondary schools within the State.
       ``(2) Required information.--Each State described in 
     paragraph (1), at a minimum, shall include in the annual 
     State report card information regarding--
       ``(A) student performance on statewide assessments for the 
     year for which the annual State report card is prepared and 
     the preceding year, in at least English language arts and 
     mathematics, including--
       ``(i) a comparison of the proportions of students who 
     performed at the basic, proficient, and advanced levels in 
     each subject area, for each grade level for which assessments 
     are required under title I for the year for which the report 
     card is prepared, with proportions in each of the same 3 
     levels in each subject area at the same grade levels in the 
     preceding school year;
       ``(ii) a statement on the most recent 3-year trend in the 
     percentage of students performing at the basic, proficient, 
     and advanced levels in each subject area, for each grade 
     level for which assessments are required under title I; and
       ``(iii) a statement of the percentage of students not 
     tested and a listing of categories of the reasons why such 
     students were not tested;
       ``(B) student retention rates in each grade, the number of 
     students completing advanced placement courses, annual school 
     dropout rates as calculated by procedures conforming with the 
     National Center for Education Statistics Common Core of Data, 
     and 4-year graduation rates; and
       ``(C) the professional qualifications of teachers in the 
     aggregate, including the percentage of teachers teaching with 
     emergency or provisional credentials, the percentage of class 
     sections not taught by fully qualified teachers, and the 
     percentage of teachers who are fully qualified.
       ``(3) Student data.--Student data in each report card shall 
     contain disaggregated results for the following categories:
       ``(A) Racial and ethnic groups.
       ``(B) Gender groups.
       ``(C) Economically disadvantaged students, as compared with 
     students who are not economically disadvantaged.
       ``(D) Students with limited English proficiency, as 
     compared with students who are proficient in English.
       ``(E) Migrant status groups.
       ``(F) Students with disabilities, as compared with students 
     who are not disabled.
       ``(4) Optional information.--A State may include in the 
     State annual report card any other information the State 
     determines appropriate to reflect school quality and school 
     achievement, including by grade level information on the 
     following:
       ``(A) Average class size.
       ``(B) School safety, such as the incidence of school 
     violence and drug and alcohol abuse.
       ``(C) The incidence of student suspensions and expulsions.
       ``(D) Student access to technology, including the number of 
     computers for educational purposes, the number of computers 
     per classroom, and the number of computers connected to the 
     Internet.
       ``(E) Parental involvement, as determined by such measures 
     as the extent of parental participation in schools, parental 
     involvement activities, and extended learning time programs, 
     such as after-school and summer programs.
       ``(f) Local Educational Agency and School Report Cards.--
       ``(1) In general.--The State shall ensure that each local 
     educational agency, elementary school, and secondary school 
     in the State, collects appropriate data and publishes an 
     annual report card consistent with this subsection.
       ``(2) Required information.--Each local educational agency, 
     elementary school, and secondary school described in 
     paragraph (1), at a minimum, shall include in its annual 
     report card--
       ``(A) the information described in paragraphs (2) and (3) 
     of subsection (e) for each local educational agency and 
     school;
       ``(B) in the case of a local educational agency--
       ``(i) information regarding the number and percentage of 
     schools served by the local educational agency that are 
     identified for school improvement, including schools 
     identified under section 1116;
       ``(ii) information on the most recent 3-year trend in the 
     number and percentage of elementary schools and secondary 
     schools served by the local educational agency that are 
     identified for school improvement; and
       ``(iii) information on how students in the schools served 
     by the local educational agency performed on the statewide 
     assessment compared with students in the State as a whole;
       ``(C) in the case of an elementary school or a secondary 
     school--
       ``(i) information regarding whether the school has been 
     identified for school improvement;
       ``(ii) information on how the school's students performed 
     on the statewide assessment compared with students in schools 
     served by the same local educational agency and with all 
     students in the State; and
       ``(iii) information about the enrollment of students 
     compared with the rated capacity of the schools; and
       ``(D) other appropriate information, regardless of whether 
     the information is included in the annual State report.
       ``(g) Dissemination and Accessibility of Report Cards.--
       ``(1) Report card format.--Annual report cards under this 
     part shall be--
       ``(A) concise; and
       ``(B) presented in a format and manner that parents can 
     understand, including, to the extent practicable, in a 
     language the parents can understand.
       ``(2) State report cards.--State annual report cards under 
     subsection (e) shall be disseminated to all elementary 
     schools, secondary schools, and local educational agencies in 
     the State, and made broadly available to the public through 
     means such as posting on the Internet and distribution to the 
     media, and through public agencies.
       ``(3) Local report cards.--Local educational agency report 
     cards under subsection (f) shall be disseminated to all 
     elementary schools and secondary schools served by the local 
     educational agency and to parents of students attending such 
     schools, and made broadly available to the public through 
     means such as posting on the Internet and distribution to the 
     media, and through public agencies.
       ``(4) School report cards.--Elementary school and secondary 
     school report cards under subsection (f) shall be 
     disseminated to parents of students attending that school, 
     and made broadly available to the public through means such 
     as posting on the Internet and distribution to the media, and 
     through public agencies.
       ``(h) Coordination of State Plan Content.--A State shall 
     include in its plan under part A of title I or part B of 
     title II, an assurance that the State has in effect a policy 
     that meets the requirements of this section.
       ``(i) Privacy.--Information collected under this section 
     shall be collected and disseminated in a manner that protects 
     the privacy of individuals.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this part 
     $5,000,000 for fiscal year 2002 and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.

[[Page 231]]



     ``PART J--ADDITIONAL PERFORMANCE AND ACCOUNTABILITY PROVISIONS

     ``SEC. 14911. REWARDING HIGH PERFORMANCE.

       ``(a) State Rewards.--
       ``(1) In general.--From amounts appropriated under 
     subsection (d), the Secretary shall make awards to States 
     that--
       ``(A) for 3 consecutive years have--
       ``(i) exceeded the State performance goals and objectives 
     established for any title under this Act;
       ``(ii) exceeded the adequate yearly progress levels 
     established under section 1111(b)(2);
       ``(iii) significantly narrowed the gaps between minority 
     and nonminority students, and between economically 
     disadvantaged students and students who are not economically 
     disadvantaged;
       ``(iv) raised all students to the proficient standard level 
     prior to 10 years after the date of enactment of the School 
     Improvement Accountability Act; or
       ``(v) significantly increased the percentage of core 
     classes being taught by fully qualified teachers, in schools 
     receiving funds under part A of title I; or
       ``(B) by not later than fiscal year 2005, ensure that all 
     teachers teaching in the State public elementary schools and 
     secondary schools are fully qualified.
       ``(2) State use of funds.--
       ``(A) Demonstration sites.--Each State receiving an award 
     under paragraph (1) shall use a portion of the award funds 
     that are not distributed under subsection (b) to establish 
     demonstration sites with respect to high-performing schools 
     (based upon achievement, or performance levels and adequate 
     yearly progress) in order to help low-performing schools.
       ``(B) Improvement of performance.--Each State receiving an 
     award under paragraph (1) shall use the portion of the award 
     funds that are not used pursuant to subparagraph (A) or (C) 
     and are not distributed under subsection (b) for the purpose 
     of improving the level of performance of all elementary 
     school and secondary school students in the State, based upon 
     State content and performance standards.
       ``(C) Reservation for administrative expenses.--Each State 
     receiving an award under paragraph (1) may set aside not more 
     than \1/2\ of 1 percent of the award funds for the planning 
     and administrative costs of carrying out this section, 
     including the costs of distributing awards to local 
     educational agencies.
       ``(b) Local Educational Agency Awards.--
       ``(1) In general.--Each State receiving an award under 
     subsection (a)(1) shall distribute 80 percent of the award 
     funds to local educational agencies in the State that--
       ``(A) for 3 consecutive years have--
       ``(i) exceeded the State-established local educational 
     agency performance goals and objectives established for any 
     title under this Act;
       ``(ii) exceeded the adequate yearly progress levels 
     established under section 1111(b)(2);
       ``(iii) significantly narrowed the gaps between minority 
     and nonminority students, and between economically 
     disadvantaged students and students who are not economically 
     disadvantaged;
       ``(iv) raised all students enrolled in schools served by 
     the local educational agency to the proficient standard level 
     prior to 10 years from the date of enactment of the School 
     Improvement Accountability Act; or
       ``(v) significantly increased the percentage of core 
     classes being taught by fully qualified teachers, in schools 
     receiving funds under part A of title I;
       ``(B) not later than December 31, 2005, ensure that all 
     teachers teaching in the elementary schools and secondary 
     schools served by the local educational agency are fully 
     qualified; or
       ``(C) have attained consistently high achievement in 
     another area that the State determines appropriate to reward.
       ``(2) School-based performance awards.--A local educational 
     agency shall use funds made available under paragraph (1) for 
     activities described in subsection (c) such as school-based 
     performance awards.
       ``(3) Reservation for administrative expenses.--Each local 
     educational agency receiving an award under paragraph (1) may 
     set aside not more than \1/2\ of 1 percent of the award funds 
     for the planning and administrative costs of carrying out 
     this section, including the costs of distributing awards to 
     eligible elementary schools and secondary schools, teachers, 
     and principals.
       ``(c) School Rewards.--Each local educational agency 
     receiving an award under subsection (b) shall consult with 
     teachers and principals to develop a reward system, and shall 
     use the award funds--
       ``(1) to reward individual schools that demonstrate high 
     performance with respect to--
       ``(A) increasing the academic achievement of all students;
       ``(B) narrowing the academic achievement gap described in 
     section 1111(b)(2)(B)(iv);
       ``(C) improving teacher quality;
       ``(D) increasing high-quality professional development for 
     teachers, principals, and administrators; or
       ``(E) improving the English proficiency of limited English 
     proficient students;
       ``(2) to reward collaborative teams of teachers, or teams 
     of teachers and principals, that--
       ``(A) significantly increase the annual performance of low-
     performing students; or
       ``(B) significantly improve in a fiscal year the English 
     proficiency of limited English proficient students;
       ``(3) to reward principals who successfully raise the 
     performance of a substantial number of low-performing 
     students to high academic levels;
       ``(4) to develop or implement school district-wide programs 
     or policies to increase the level of student performance on 
     State assessments that are aligned with State content 
     standards; and
       ``(5) to reward schools for consistently high achievement 
     in another area that the local educational agency determines 
     appropriate to reward.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $200,000,000 for fiscal year 2002, and such sums as may be 
     necessary for each of the 4 succeeding fiscal years.
       ``(e) Definition.--The term `low-performing student' means 
     a student who is below a basic State standard level.''.

     SEC. 134. ADDITIONAL ACCOUNTABILITY PROVISIONS.

       Part E of title XIV (20 U.S.C. 8891 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 14515. ADDITIONAL ACCOUNTABILITY PROVISIONS.

       ``(a) In General.--Notwithstanding any other provision of 
     this Act, a recipient of funds provided for a fiscal year 
     under part A of title I, part A or C of title III, part A of 
     title IV, part A of title V, or title VII, shall include--
       (1) in the plans or applications required under such part 
     or title--
       (A) the methods the recipient will use to measure the 
     annual impact of each program funded in whole or in part with 
     funds provided under such part or title and, if applicable, 
     the extent to which each such program will increase student 
     academic achievement;
       (B) the annual, quantifiable, and measurable performance 
     goals and objectives for each such program, and the extent to 
     which, if applicable, the program's performance goals and 
     objectives align with State content standards and State 
     student performance standards established under section 
     1111(b)(1)(A); and
       (C) if the recipient is a local educational agency, 
     assurances that the local educational agency consulted, at a 
     minimum, with parents, school board members, teachers, 
     administrators, business partners, education organizations, 
     and community groups to develop the plan or application 
     submitted and that such consultation will continue on a 
     regular basis; and
       ``(2) in the reports required under such part or title, a 
     report for the preceding fiscal year regarding how the plan 
     or application submitted for such fiscal year under such part 
     or title was implemented, the recipient's progress toward 
     attaining the performance goals and objectives identified in 
     the plan or application for such year, and, if applicable, 
     the extent to which programs funded in whole or in part with 
     funds provided under such part or title increased student 
     achievement.
       ``(b) Penalties.--If a recipient of funds under a part or 
     title described in subsection (a) fails to meet the 
     performance goals and objectives of the part or title for 3 
     consecutive fiscal years, the Secretary shall--
       ``(1) withhold not less than 50 percent of the funds made 
     available under the relevant program for administrative 
     expenses for the succeeding fiscal year, and for each 
     consecutive fiscal year until the recipient meets such 
     performance goals and objectives; and
       ``(2) in the case of--
       ``(A) a competitive grant (as determined by the Secretary), 
     consider the recipient ineligible for grants under the part 
     or title until the recipient meets such performance goals and 
     objectives; and
       ``(B) a formula grant (as determined by the Secretary), 
     withhold not less than 20 percent of the total amount of 
     funds provided under title VI for the succeeding fiscal year 
     and each consecutive fiscal year until the recipient meets 
     such goals and objectives.
       ``(c) Other Penalties.--A State that has not met the 
     requirements of subsection (a)(1)(B) with respect to a fiscal 
     year--
       ``(1) shall not be eligible for designation as an Ed-Flex 
     Partnership State under the Education Flexibility Partnership 
     Act of 1999 until the State meets the requirements of 
     subsection (a)(1)(B); and
       ``(2) shall be subject to such other penalties as are 
     provided in this Act for failure to meet the requirements of 
     subsection (a)(1)(B).
       ``(d) Special Rule for Secretary Awards.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, a recipient of funds provided under a direct award 
     made by the Secretary, or a contract or cooperative agreement 
     entered into with the Secretary, for a program shall include 
     the following information in any application or plan required 
     for such program:
       ``(A) How funds provided under the program will be used and 
     how such use will increase student academic achievement.
       ``(B) The goals and objectives to be met, including goals 
     for dissemination and use of

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     the information or materials produced, where applicable.
       ``(C) If the grant requires dissemination of information or 
     materials, how the recipient will track and report annually 
     to the Secretary--
       ``(i) the successful dissemination of information or 
     materials produced;
       ``(ii) where information or materials produced are being 
     used; and
       ``(iii) the impact of such use and, if applicable, the 
     extent to which such use increased student academic 
     achievement or contributed to the stated goal of the program.
       ``(2) Requirement.--If no application or plan is required 
     under a program described in paragraph (1), the Secretary 
     shall require the recipient of funds to submit a plan 
     containing the information required under paragraph (1).
       ``(3) Failure to achieve goals and objectives.--
       ``(A) In general.--The Secretary shall evaluate the 
     information submitted under this subsection to determine 
     whether the recipient has met the goals and objectives 
     described in paragraph (1)(B), where applicable, assess the 
     magnitude of dissemination described in paragraph (1)(C), 
     and, where applicable, assess the effectiveness of the 
     activity funded in raising student academic achievement in 
     places where information or materials produced with such 
     funds are used.
       ``(B) Ineligibility.--The Secretary shall consider the 
     recipient ineligible for grants, contracts, or cooperative 
     agreements under the program described in paragraph (1) if--
       ``(i) the goals and objectives described in paragraph 
     (1)(B) have not been met;
       ``(ii) where applicable, the dissemination has not been of 
     a magnitude to ensure goals and objectives are being 
     addressed; and
       ``(iii) where applicable, the information or materials 
     produced have not made a significant impact on raising 
     student achievement in places where such information or 
     materials are used.''.

                 TITLE II--CLOSING THE ACHIEVEMENT GAP

                Subtitle A--Reauthorization of Programs

     SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Section 1002(a) (20 U.S.C. 6302(a)) is 
     amended by striking ``appropriated $7,400,000,000 for fiscal 
     year 1995'' and all that follows through the period and 
     inserting the following: ``appropriated--
       ``(1) $11,000,000,000 for fiscal year 2002;
       ``(2) $13,000,000,000 for fiscal year 2003;
       ``(3) $15,000,000,000 for fiscal year 2004;
       ``(4) $15,000,000,000 for fiscal year 2005; and
       ``(5) $15,000,000,000 for fiscal year 2006.''.
       (b) Review of Allocations.--The Secretary of Education 
     shall annually review the manner in which funds are allocated 
     under title I of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6301 et seq.) to ensure that local 
     education agencies with the highest need are receiving funds 
     in proportion to that need as compared to other local 
     education agencies.

   Subtitle B--Options: Opportunities to Improve our Nation's Schools

     SEC. 211. OPTIONS: OPPORTUNITIES TO IMPROVE OUR NATION'S 
                   SCHOOLS.

       Title V (20 U.S.C. 7201 et seq.) is amended by adding at 
     the end the following:

    ``PART D--OPTIONS: OPPORTUNITIES TO IMPROVE OUR NATION'S SCHOOLS

     ``SEC. 5401. PURPOSE.

       ``It is the purpose of this part to identify and support 
     innovative approaches to high-quality public school choice by 
     providing financial assistance for the demonstration, 
     development, implementation, and evaluation of, and the 
     dissemination of information about, public school choice 
     programs that stimulate educational innovation for all public 
     schools and contribute to standards-based school reform 
     efforts.

     ``SEC. 5402. GRANTS.

       ``(a) In General.--From funds appropriated under section 
     5405(a) and not reserved under section 5405(b), the Secretary 
     is authorized to make grants to State and local educational 
     agencies to support programs that promote innovative 
     approaches to high-quality public school choice.
       ``(b) Duration.--A grant under this part shall not be 
     awarded for a period that exceeds 3 years.

     ``SEC. 5403. USES OF FUNDS.

       ``(a) Uses of Funds.--
       ``(1) In general.--Funds under this part may be used to 
     demonstrate, develop, implement, and evaluate, and to 
     disseminate information about, innovative approaches to 
     broaden public elementary school and secondary school choice, 
     including the design and development of new public school 
     choice options, the development of new strategies for 
     overcoming barriers to effective public school choice, and 
     the design and development of public school choice systems 
     that promote high standards for all students and the 
     continuous improvement of all such public schools.
       ``(2) Examples.--The approaches described in paragraph (1) 
     at the school, school district, and State levels may 
     include--
       ``(A) inter school district approaches to public school 
     choice, including approaches that increase equal access to 
     high-quality educational programs and diversity in schools;
       ``(B) public elementary and secondary programs that involve 
     partnerships with institutions of higher education and that 
     are located on the campuses of the institutions;
       ``(C) programs that allow students in public secondary 
     schools to enroll in postsecondary courses and to receive 
     both secondary and postsecondary academic credit;
       ``(D) worksite satellite schools, in which State or local 
     educational agencies form partnerships with public or private 
     employers, to create public schools at parents' places of 
     employment; and
       ``(E) approaches to school desegregation that provide 
     students and parents choice through strategies other than 
     magnet schools.
       ``(b) Limitations.--Funds under this part--
       ``(1) shall supplement, and not supplant, non-Federal funds 
     expended for existing programs;
       ``(2) may be used for providing transportation services or 
     costs, except that not more than 10 percent of the funds 
     received under this part may be used by the local educational 
     agency to provide such services or costs;
       ``(3) may be used for improving low performing schools that 
     lose students as a result of school choice plans, except that 
     not more than 10 percent of the funds under this part may be 
     used by the local educational agency for the improvement of 
     low performing schools; and
       ``(4) shall not be used to fund programs that are 
     authorized under part C, D, or E.

     ``SEC. 5404. GRANT APPLICATION; PRIORITIES.

       ``(a) Application Required.--A State or local educational 
     agency desiring to receive a grant under this part shall 
     submit an application to the Secretary in such form and 
     containing such information as the Secretary may require.
       ``(b) Application Contents.--Each application shall 
     include--
       ``(1) a description of the program for which funds are 
     sought and the goals for such program;
       ``(2) a description of how the program funded under this 
     part will be coordinated with, and will complement and 
     enhance, programs under other related Federal and non-Federal 
     programs;
       ``(3) if the program includes partners, the name of each 
     partner and a description of the partner's responsibilities; 
     and
       ``(4) a description of the policies and procedures the 
     agency will use to ensure--
       ``(A) that priority is provided to parents of students 
     attending schools identified for school improvement under 
     section 1116 in exercising choice among schools;
       ``(B) that priority is provided to parents of students who 
     want to stay enrolled at a school;
       ``(C) the agency's accountability for results, including 
     the agency's goals and performance indicators;
       ``(D) that the program is open and accessible to, and will 
     promote high academic standards for, all students regardless 
     of the achievement level or disability of the students and 
     the family income of the families of the students;
       ``(E) that all parents are provided with easily 
     comprehensible information about various school options, 
     including information on instructional approaches at 
     different schools, resources, and transportation that will be 
     provided at or for the schools on an annual basis;
       ``(F) that all parents are given timely notice about 
     opportunities to choose which school their child will attend 
     the following year and the period during which the choice may 
     be made;
       ``(G) that limitations on transfers between schools only 
     occur because of facilities constraints, statutory class size 
     limits, and local efforts to ensure that schools reflect the 
     diversity of the communities in which the schools are 
     located;
       ``(H) that a lottery or other random system be established 
     for parents of students wishing to attend a school that 
     cannot receive all students wishing to attend; and
       ``(I) that the program is carried out in a manner 
     consistent with Federal law, including court orders, such as 
     desegregation orders, issued to enforce Federal law.
       ``(c) Priorities.--
       ``(1) In general.--The Secretary shall give a priority to 
     applications for programs that will serve high-poverty local 
     educational agencies.
       ``(2) Permissive.--The Secretary may give a priority to 
     applications demonstrating that the State or local 
     educational agency will carry out the agency's program in 
     partnership with one or more public or private agencies, 
     organizations, or institutions, including institutions of 
     higher education and public or private employers.

     ``SEC. 5405. AUTHORIZATION OF APPROPRIATIONS; RESERVATION; 
                   EVALUATIONS.

       ``(a) Authorization of Appropriations.--For the purpose of 
     carrying out this part, there are authorized to be 
     appropriated $100,000,000 for each of fiscal years 2002 
     through 2006.
       ``(b) Reservation for Evaluation, Technical Assistance, and 
     Dissemination.--From the amount appropriated under subsection 
     (a) for any fiscal year, the Secretary may reserve not more 
     than 5 percent to carry out evaluations under subsection (c),

[[Page 233]]

     to provide technical assistance, and to disseminate 
     information.
       ``(c) Evaluations.--The Secretary may use funds reserved 
     under subsection (b) to carry out one or more evaluations of 
     programs assisted under this part, which, at a minimum, shall 
     address--
       ``(1) how, and the extent to which, the programs supported 
     with funds under this part promote educational equity and 
     excellence; and
       ``(2) the extent to which public schools of choice 
     supported with funds under this part are--
       ``(A) held accountable to the public;
       ``(B) effective in improving public education; and
       ``(C) open and accessible to all students.''.

                    Subtitle C--Parental Involvement

     SEC. 221. STATE PLANS.

       Section 1111 (20 U.S.C. 6311) is amended--
       (1) by redesignating subsections (d) through (g) as 
     subsections (e) through (h), respectively; and
       (2) by inserting after subsection (c) the following:
       ``(d) Parental Involvement.--Each State plan shall 
     demonstrate that the State will support, in collaboration 
     with the regional educational laboratories, the collection 
     and dissemination to local educational agencies and schools 
     of effective parental involvement practices. Such practices 
     shall--
       ``(1) be based on the most current research on effective 
     parental involvement that fosters achievement to high 
     standards for all children; and
       ``(2) be geared toward lowering barriers to greater 
     participation in school planning, review, and improvement 
     experienced by parents.''.

     SEC. 222. PARENTAL ASSISTANCE.

       Part D of title I (20 U.S.C. 6421 et seq.) is amended to 
     read as follows:

          ``PART D--PARENTAL ASSISTANCE AND CHILD OPPORTUNITY

                  ``Subpart I--Parental Assistance''.

     ``SEC. 1401. PARENTAL INFORMATION AND RESOURCE CENTERS.

       ``(a) Purpose.--The purpose of this part is--
       ``(1) to provide leadership, technical assistance, and 
     financial support to nonprofit organizations and local 
     educational agencies to help the organizations and agencies 
     implement successful and effective parental involvement 
     policies, programs, and activities that lead to improvements 
     in student performance;
       ``(2) to strengthen partnerships among parents (including 
     parents of preschool age children), teachers, principals, 
     administrators, and other school personnel in meeting the 
     educational needs of children;
       ``(3) to develop and strengthen the relationship between 
     parents and the school;
       ``(4) to further the developmental progress primarily of 
     children assisted under this part; and
       ``(5) to coordinate activities funded under this part with 
     parental involvement initiatives funded under section 1118 
     and other provisions of this Act.
       ``(b) Grants Authorized.--
       ``(1) In general.--The Secretary is authorized to award 
     grants in each fiscal year to nonprofit organizations, and 
     nonprofit organizations in consortia with local educational 
     agencies, to establish school-linked or school-based parental 
     information and resource centers that provide training, 
     information, and support to--
       ``(A) parents of children enrolled in elementary schools 
     and secondary schools;
       ``(B) individuals who work with the parents described in 
     subparagraph (A); and
       ``(C) State educational agencies, local educational 
     agencies, schools, organizations that support family-school 
     partnerships (such as parent-teacher associations), and other 
     organizations that carry out parent education and family 
     involvement programs.
       ``(2) Award rule.--In awarding grants under this part, the 
     Secretary shall ensure that such grants are distributed in 
     all geographic regions of the United States.

     ``SEC. 1402. APPLICATIONS.

       ``(a) Grants Applications.--
       ``(1) In general.--Each nonprofit organization or nonprofit 
     organization in consortium with a local educational agency 
     that desires a grant under this part shall submit an 
     application to the Secretary at such time and in such manner 
     as the Secretary shall require.
       ``(2) Contents.--Each application submitted under paragraph 
     (1), at a minimum, shall include assurances that the 
     organization or consortium will--
       ``(A)(i) be governed by a board of directors the membership 
     of which includes parents; or
       ``(ii) be an organization or consortium that represents the 
     interests of parents;
       ``(B) establish a special advisory committee the membership 
     of which includes--
       ``(i) parents described in section 1401(b)(1)(A);
       ``(ii) representatives of education professionals with 
     expertise in improving services for disadvantaged children; 
     and
       ``(iii) representatives of local elementary schools and 
     secondary schools who may include students and 
     representatives from local youth organizations;
       ``(C) use at least \1/2\ of the funds provided under this 
     part in each fiscal year to serve areas with high 
     concentrations of low-income families in order to serve 
     parents who are severely educationally or economically 
     disadvantaged;
       ``(D) operate a center of sufficient size, scope, and 
     quality to ensure that the center is adequate to serve the 
     parents in the area;
       ``(E) serve both urban and rural areas;
       ``(F) design a center that meets the unique training, 
     information, and support needs of parents described in 
     section 1401(b)(1)(A), particularly such parents who are 
     educationally or economically disadvantaged;
       ``(G) demonstrate the capacity and expertise to conduct the 
     effective training, information and support activities for 
     which assistance is sought;
       ``(H) network with--
       ``(i) local educational agencies and schools;
       ``(ii) parents of children enrolled in elementary schools 
     and secondary schools;
       ``(iii) parent training and information centers assisted 
     under section 682 of the Individuals with Disabilities 
     Education Act;
       ``(iv) clearinghouses; and
       ``(v) other organizations and agencies;
       ``(I) focus on serving parents described in section 
     1401(b)(1)(A) who are parents of low-income, minority, and 
     limited English proficient, children;
       ``(J) use part of the funds received under this part to 
     establish, expand, or operate Parents as Teachers programs or 
     Home Instruction for Preschool Youngsters programs;
       ``(K) provide assistance to parents in such areas as 
     understanding State and local standards and measures of 
     student and school performance; and
       ``(L) work with State and local educational agencies to 
     determine parental needs and delivery of services.
       ``(b) Grant Renewal.--For each fiscal year after the first 
     fiscal year an organization or consortium receives assistance 
     under this part, the organization or consortium shall 
     demonstrate in the application submitted for such fiscal year 
     after the first fiscal year that a portion of the services 
     provided by the organization or consortium is supported 
     through non-Federal contributions, which contributions may be 
     in cash or in kind.

     ``SEC. 1403. USES OF FUNDS.

       ``(a) In General.--Grant funds received under this part 
     shall be used--
       ``(1) to assist parents in participating effectively in 
     their children's education and to help their children meet 
     State and local standards, such as assisting parents--
       ``(A) to engage in activities that will improve student 
     performance, including understanding the accountability 
     systems in place within their State educational agency and 
     local educational agency and understanding their children's 
     educational performance in comparison to State and local 
     standards;
       ``(B) to provide followup support for their children's 
     educational achievement;
       ``(C) to communicate effectively with teachers, principals, 
     counselors, administrators, and other school personnel;
       ``(D) to become active participants in the development, 
     implementation, and review of school-parent compacts, parent 
     involvement policies, and school planning and improvement;
       ``(E) to participate in the design and provision of 
     assistance to students who are not making adequate 
     educational progress;
       ``(F) to participate in State and local decisionmaking; and
       ``(G) to train other parents;
       ``(2) to obtain information about the range of options, 
     programs, services, and resources available at the national, 
     State, and local levels to assist parents and school 
     personnel who work with parents;
       ``(3) to help the parents learn and use the technology 
     applied in their children's education;
       ``(4) to plan, implement, and fund activities for parents 
     that coordinate the education of their children with other 
     Federal programs that serve their children or their families; 
     and
       ``(5) to provide support for State or local educational 
     personnel if the participation of such personnel will further 
     the activities assisted under the grant.
       ``(b) Permissive Activities.--Grant funds received under 
     this part may be used to assist schools with activities such 
     as--
       ``(1) developing and implementing their plans or activities 
     under sections 1118 and 1119; and
       ``(2) developing and implementing school improvement plans, 
     including addressing problems that develop in the 
     implementation of sections 1118 and 1119.
       ``(3) providing information about assessment and individual 
     results to parents in a manner and a language the family can 
     understand;
       ``(4) coordinating the efforts of Federal, State, and local 
     parent education and family involvement initiatives; and
       ``(5) providing training, information, and support to--
       ``(A) State educational agencies;
       ``(B) local educational agencies and schools, especially 
     those local educational agencies and schools that are low 
     performing; and

[[Page 234]]

       ``(C) organizations that support family-school 
     partnerships.
       ``(c) Grandfather Clause.--The Secretary shall use funds 
     made available under this part to continue to make grant or 
     contract payments to each entity that was awarded a multiyear 
     grant or contract under title IV of the Goals 2000: Educate 
     America Act (as such title was in effect on the day before 
     the date of enactment of the Educational Excellence for All 
     Learners Act of 2001) for the duration of the grant or 
     contract award.

     ``SEC. 1403A. LOCAL FAMILY INFORMATION CENTERS.

       ``(a) Centers Authorized.--The Secretary shall award grants 
     to, and enter into contracts and cooperative agreements with, 
     local nonprofit parent organizations to enable the 
     organizations to support local family information centers 
     that help ensure that parents of students in schools assisted 
     under part A have the training, information, and support the 
     parents need to enable the parents to participate effectively 
     in helping their children to meet challenging State 
     standards.
       ``(b) Definition of Local Nonprofit Parent Organization.--
     In this section, the term `local nonprofit parent 
     organization' means a private nonprofit organization (other 
     than an institution of higher education) that--
       ``(1) has a demonstrated record of working with low-income 
     individuals and parents;
       ``(2)(A) has a board of directors the majority of whom are 
     parents of students in schools that are assisted under part A 
     and located in the geographic area to be served by the 
     center; or
       ``(B) has a special governing committee to direct and 
     implement the center, a majority of the members of whom are 
     parents of students in schools assisted under part A; and
       ``(3) is located in a community with schools that receive 
     funds under part A, and is accessible to the families of 
     students in those schools.
       ``(c) Required Center Activities.--Each center assisted 
     under this section shall be exempt from the uses of funds 
     requirements under section 1403 and shall instead--
       ``(1) provide training, information, and support that meets 
     the needs of parents of children in schools assisted under 
     part A who are served through the grant, contract, or 
     cooperative agreement, particularly underserved parents, low-
     income parents, parents of students with limited English 
     proficiency, parents of students with disabilities, and 
     parents of students in schools identified for school 
     improvement or corrective action under section 1116(c);
       ``(2) help families of students enrolled in a school 
     assisted under part A to understand and participate in all of 
     the provisions of this Act designed to improve the 
     achievement of students in the school;
       ``(3) provide information in a language and form that 
     parents understand, including taking steps to ensure that 
     underserved parents, low-income parents, parents with limited 
     English proficiency, parents of students with disabilities, 
     or parents of students in schools identified for school 
     improvement or corrective action, are effectively informed 
     and assisted;
       ``(4) assist parents to--
       ``(A) understand what their child's school is doing to 
     enable students at the school to meet the State and local 
     standards, including understanding the curriculum and 
     instructional methods the school is using to help the 
     students meet the standards;
       ``(B) better understand their child's educational needs, 
     where their child stands with respect to State standards, how 
     the school is addressing the child's education needs, and how 
     they can work with their child to increase the child's 
     academic achievement;
       ``(C) participate in the decisionmaking processes at the 
     school, school district, and State levels;
       ``(D) understand and benefit from the provisions of other 
     Federal education programs; and
       ``(E) understand public school choice options available in 
     the local community, including magnet schools, charter 
     schools, and alternative schools;
       ``(5) be designed to meet the specific needs of families 
     who experience significant isolation from available sources 
     of information and support; and
       ``(6) report annually to the Secretary regarding measures, 
     determined by the Secretary, that indicate the program's 
     effectiveness in reaching underserved parents and developing 
     meaningful parent involvement in schools assisted under part 
     A.
       ``(c) Application Requirements.--Each local nonprofit 
     parent organization desiring assistance under this section 
     shall submit to the Secretary an application (in place of the 
     application required under section 1402) at such time, in 
     such manner, and accompanied by such information as the 
     Secretary may require. Each such application shall--
       ``(1) describe how the organization will use the assistance 
     to help families under this section;
       ``(2) describe what steps the organization has taken to 
     meet with school district or school personnel in the 
     geographic area to be served by the center in order to inform 
     the personnel of the plan and application for the assistance; 
     and
       ``(3) identify with specificity the special efforts that 
     the organization will take--
       ``(A) to ensure that the needs for training, information, 
     and support for parents of students in schools assisted under 
     part A, particularly underserved parents, low-income parents, 
     parents with limited English proficiency, parents of students 
     with disabilities, and parents of students in schools 
     identified for school improvement or corrective action, are 
     effectively met; and
       ``(B) to work with community-based organizations.
       ``(d) Distribution of Funds.--
       ``(1) Allocation of funds.--The Secretary shall make at 
     least 2 awards of assistance under this section to a local 
     nonprofit parent organization in each State, unless the 
     Secretary does not receive at least 2 applications from such 
     organizations in a State of sufficient quality to warrant 
     providing the assistance in the State.
       ``(2) Selection requirement for local family information 
     centers.--
       ``(A) In general.--The Secretary shall select local 
     nonprofit parent organizations in a State to receive 
     assistance under this section in a manner that ensures the 
     provision of the most effective assistance to low-income 
     parents of students in schools assisted under part A.
       ``(B) Priority.--The Secretary shall give priority to--
       ``(i) non-profit parent organizations that are located in 
     rural and urban areas in the State where the percentage of 
     students from families at or below the poverty line is 
     greater than the median, as determined by the State; and
       ``(ii) areas with high school dropout rates, high 
     percentages of limited English proficient students, or 
     schools identified for school improvement or corrective 
     action under section 1116(c).

     ``SEC. 1404. TECHNICAL ASSISTANCE.

       ``The Secretary shall provide technical assistance, by 
     grant or contract, for the establishment, development, and 
     coordination of parent training, information, and support 
     programs and parental information and resource centers.

     ``SEC. 1405. REPORTS.

       ``(a) Information.--Each organization or consortium 
     receiving assistance under this part shall submit to the 
     Secretary, on an annual basis, information concerning the 
     parental information and resource centers assisted under this 
     part, including--
       ``(1) the number of parents (including the number of 
     minority and limited English proficient parents) who receive 
     information and training;
       ``(2) the types and modes of training, information, and 
     support provided under this part;
       ``(3) the strategies used to reach and serve parents of 
     minority and limited English proficient children, parents 
     with limited literacy skills, and other parents in need of 
     the services provided under this part;
       ``(4) the parental involvement policies and practices used 
     by the center and an evaluation of whether such policies and 
     practices are effective in improving home-school 
     communication, student achievement, student and school 
     performance, and parental involvement in school planning, 
     review, and improvement; and
       ``(5) the effectiveness of the activities that local 
     educational agencies and schools are carrying out with regard 
     to parental involvement and other activities assisted under 
     this Act that lead to improved student achievement and 
     improved student and school performance.
       ``(b) Dissemination.--The Secretary annually shall 
     disseminate, widely to the public and to Congress, the 
     information that each organization or consortium submits 
     under subsection (a) to the Secretary.

     ``SEC. 1406. GENERAL PROVISIONS.

       ``Notwithstanding any other provision of this part--
       ``(1) no person, including a parent who educates a child at 
     home, a public school parent, or a private school parent, 
     shall be required to participate in any program of parent 
     education or developmental screening pursuant to the 
     provisions of this part; and
       ``(2) no program or center assisted under this part shall 
     take any action that infringes in any manner on the right of 
     a parent to direct the education of their children.''.

        TITLE III--NATIONAL PRIORITIES WITH PROVEN EFFECTIVENESS

            Subtitle A--Qualified Teacher in Every Classroom

     SEC. 301. TEACHER QUALITY.

       (a) In General.--Title II (20 U.S.C. 6601 et seq.) is 
     amended by striking the title heading and all that follows 
     through the end of part A and inserting the following:

            ``TITLE II--QUALIFIED TEACHER IN EVERY CLASSROOM

                       ``PART A--TEACHER QUALITY

     ``SEC. 2001. PURPOSES.

       ``The purposes of this part are the following:
       ``(1) To improve student achievement in order to help every 
     student meet State content and student performance standards.
       ``(2) To--
       ``(A) enable States, local educational agencies, and 
     schools to improve the quality and success of the teaching 
     force by providing all teachers, including beginning and 
     veteran

[[Page 235]]

     teachers, with the support those teachers need to succeed and 
     stay in teaching, by providing professional development and 
     mentoring programs for teachers, by offering incentives for 
     additional qualified individuals to go into teaching, by 
     reducing out-of-field placement of teachers, and by reducing 
     the number of teachers with emergency credentials; and
       ``(B) hold the States, agencies, and schools accountable 
     for such improvements.
       ``(3) To support State and local efforts to recruit 
     qualified teachers to address teacher shortages, particularly 
     in communities with the greatest need.
       ``(4) To ensure that underqualified and inexperienced 
     teachers do not teach higher percentages of low-income 
     students and minority students than other students.

     ``SEC. 2002. DEFINITIONS.

       ``In this part:
       ``(1) Beginning teacher.--The term `beginning teacher' 
     means a fully qualified teacher who has taught for 3 years or 
     less.
       ``(2) Core academic subjects.--The term `core academic 
     subjects' means--
       ``(A) mathematics;
       ``(B) science;
       ``(C) reading (or language arts) and English;
       ``(D) social studies (consisting of history, civics, 
     government, geography, and economics);
       ``(E) foreign languages; and
       ``(F) fine arts (consisting of music, dance, drama, and the 
     visual arts).
       ``(3) Covered recruitment.--The term `covered recruitment' 
     means activities described in section 2017(c).
       ``(4) Fully qualified.--
       ``(A) In general.--The term `fully qualified', used with 
     respect to a teacher, means a teacher who--
       ``(i)(I) is certified or licensed and has demonstrated the 
     academic subject knowledge, teaching knowledge, and teaching 
     skills necessary to teach effectively in the academic subject 
     in which the teacher teaches, according to the standards 
     described in subparagraph (B) or (C), as appropriate; and
       ``(II) shall not be a teacher for whom State certification 
     or licensing requirements have been waived or who is teaching 
     under an emergency; or
       ``(ii) meets the standards of the National Board for 
     Professional Teaching Standards.
       ``(B) Elementary school instructional staff.--For purposes 
     of complying with subparagraph (A)(i), each elementary school 
     teacher (other than a middle school teacher) in the State 
     shall, at a minimum--
       ``(i) have State certification or a State license to teach 
     (which may include certification or licensing obtained 
     through alternative routes); and
       ``(ii) hold a bachelor's degree and demonstrate the 
     academic subject knowledge, teaching knowledge, and teaching 
     skills required to teach effectively in reading, writing, 
     mathematics, social studies, science, and other academic 
     subjects.
       ``(C) Middle school and secondary school instructional 
     staff.--For purposes of complying with subparagraph (A)(i), 
     each middle school or secondary school teacher in the State 
     shall, at a minimum--
       ``(i) have State certification or a State license to teach 
     (which may include certification or licensing obtained 
     through alternative routes); and
       ``(ii) hold a bachelor's degree or higher degree and 
     demonstrate a high level of competence in all academic 
     subjects in which the teacher teaches through--

       ``(I) achievement of a high level of performance on 
     rigorous academic subject tests;
       ``(II) completion of an academic major (or courses totaling 
     an equivalent number of credit hours) in each of the academic 
     subjects in which the teacher teaches; or
       ``(III) for a teacher hired prior to the date of enactment 
     of the Educational Opportunities Act, completion of 
     appropriate coursework for mastery of such academic subjects.

       ``(5) High-poverty.--The term `high-poverty', used with 
     respect to a school, means a school that serves a high number 
     or percentage of children from families with incomes below 
     the poverty line, as determined by the State in which the 
     school is located.
       ``(6) High-poverty local educational agency.--The term 
     `high-poverty local educational agency' means a local 
     educational agency for which the number of children served by 
     the agency who are age 5 through 17, and from families with 
     incomes below the poverty line--
       ``(A) is not less than 20 percent of the number of all 
     children served by the agency; or
       ``(B) is more than 10,000.
       ``(7) Institution of higher education.--The term 
     `institution of higher education'--
       ``(A) has the meaning given the term in section 101(a) of 
     the Higher Education Act of 1965; and
       ``(B) if such an institution prepares teachers and receives 
     Federal funds, means such an institution that--
       ``(i) is in full compliance with the requirements of 
     section 207 of the Higher Education Act of 1965; and
       ``(ii) does not have a teacher preparation program 
     identified by a State as low-performing.
       ``(8) Low-performing school.--The term `low-performing 
     school' means--
       ``(A) a school identified by a local educational agency for 
     school improvement under section 1116(c); or
       ``(B) a school in which the great majority of students, as 
     determined by the State in which the school is located, fail 
     to meet State student performance standards based on 
     assessments the local educational agency is using under part 
     A of title I.
       ``(9) Mentoring.--The term `mentoring' means activities 
     that--
       ``(A) consist of structured guidance and regular and 
     ongoing support for beginning teachers, that--
       ``(i) is designed to help the teachers continue to improve 
     their practice of teaching and to develop their instructional 
     skills; and
       ``(ii)(I) as part of a multiyear, developmental induction 
     process;
       ``(II) involves the assistance of a mentor teacher and 
     other appropriate individuals from a school, local 
     educational agency, or institution of higher education; and
       ``(III) may include coaching, classroom observation, team 
     teaching, and reduced teaching loads; and
       ``(B) may include the establishment of a partnership by a 
     local educational agency with an institution of higher 
     education, another local educational agency, teacher 
     organization, or another organization, for the purpose of 
     carrying out the activities described in subparagraph (A).
       ``(10) Mentor teacher.--The term `mentor teacher' means a 
     fully qualified teacher who--
       ``(A) is a highly competent classroom teacher who is 
     formally selected and trained to work effectively with 
     beginning teachers (including corps members described in 
     section 2018);
       ``(B) is full-time, and is assigned and qualified to teach 
     in the content area or grade level in which a beginning 
     teacher (including a corps member described in section 2018), 
     to whom the teacher provides mentoring, intends to teach;
       ``(C) has been consistently effective in helping diverse 
     groups of students make substantial achievement gains; and
       ``(D) has been selected to provide mentoring through a peer 
     review process that uses, as the primary selection criterion 
     for the process, the teacher's ability to help students 
     achieve academic gains.
       ``(11) Poverty line.--The term `poverty line' means the 
     income official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Community Services Block Grant Act 
     (42 U.S.C. 9902(2))) applicable to a family of the size 
     involved.
       ``(12) Professional development.--The term `professional 
     development' means activities that are--
       ``(A)(i) an integral part of broad schoolwide and 
     districtwide educational improvement plans and enhance the 
     ability of teachers and other staff to help all students, 
     including females, students with disabilities, students with 
     limited English proficiency, and students who have economic 
     and educational disadvantages, meet high State and local 
     content and student performance standards;
       ``(ii) sustained, intensive, school-embedded, tied to State 
     standards, and of high quality and sufficient duration to 
     have a positive and lasting impact on classroom instruction 
     (not one-time workshops); and
       ``(iii) based on the best available research on teaching 
     and learning; and
       ``(B) described in subparagraphs (A) through (F) of section 
     2017(a)(1).
       ``(13) Recruitment activities.--The term `recruitment 
     activities' means activities carried out through a teacher 
     corps program as described in section 2018 to attract highly 
     qualified individuals, including individuals taking 
     nontraditional routes to teaching, to enter teaching and 
     support the individuals during necessary certification and 
     licensure activities.
       ``(14) Recruitment partnership.--The term `recruitment 
     partnership' means a partnership described in section 
     2015(b)(2).

     ``SEC. 2003. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part--
       ``(1) $2,000,000,000 for fiscal year 2001, of which--
       ``(A) $1,730,000,000 shall be made available to carry out 
     subpart 1; and
       ``(B) $270,000,000 shall be made available to carry out 
     subpart 2, of which--
       ``(i) $120,000,000 shall be made available to carry out 
     chapter 1 of subpart 2;
       ``(ii) $25,000,000 shall be made available to carry out 
     chapter 2 of subpart 2;
       ``(iii) $75,000,000 shall be made available to carry out 
     chapter 3 of subpart 2; and
       ``(iv) $50,000,000 shall be made available to carry out 
     chapter 4 of subpart 2; and
       ``(2) such sums as may be necessary for each of fiscal 
     years 2002 through 2005.

      ``Subpart 1--Grants to States and Local Educational Agencies

                   ``Chapter 1--Grants and Activities

     ``SEC. 2011. ALLOTMENTS TO STATES.

       ``(a) In General.--The Secretary is authorized to make 
     grants to eligible State educational agencies for the 
     improvement of teaching and learning through sustained and 
     intensive high-quality professional development, mentoring, 
     and recruitment activities

[[Page 236]]

     (and covered recruitment, at the election of a local 
     educational agency) at the State and local levels. Each grant 
     shall consist of the allotment determined for the State under 
     subsection (b).
       ``(b) Determination of Amount of Allotment.--
       ``(1) Reservation of funds.--
       ``(A) In general.--From the total amount made available to 
     carry out this subpart under section 2003(1) for any fiscal 
     year, the Secretary shall reserve--
       ``(i) \1/2\ of 1 percent for allotments for the outlying 
     areas to be distributed among those outlying areas on the 
     basis of their relative need, as determined by the Secretary, 
     for professional development and mentoring and recruitment 
     activities carried out in accordance with the purposes of 
     this part; and
       ``(ii) \1/2\ of 1 percent for the Secretary of the Interior 
     for programs carried out in accordance with the purposes of 
     this part to provide professional development and mentoring 
     and recruitment activities for teachers and other staff in 
     schools operated or funded by the Bureau of Indian Affairs.
       ``(B) Limitation.--Notwithstanding subparagraph (A), the 
     Secretary shall not reserve, for either the outlying areas 
     under subparagraph (A)(i) or the schools operated or funded 
     by the Bureau of Indian Affairs under subparagraph (A)(ii), 
     more than the amount reserved for those areas or schools for 
     fiscal year 2000 under the authority described in paragraph 
     (2)(A)(i).
       ``(2) State allotments.--
       ``(A) Hold harmless.--
       ``(i) In general.--Subject to subparagraph (B), from the 
     total amount made available to carry out this subpart for any 
     fiscal year and not reserved under paragraph (1), the 
     Secretary shall allot to each of the 50 States, the District 
     of Columbia, and the Commonwealth of Puerto Rico an amount 
     equal to the amount that the State received for fiscal year 
     2000 under section 2202(b) of this Act (as in effect on the 
     day before the date of enactment of the Educational 
     Opportunities Act).
       ``(ii) Ratable reduction.--If the total amount made 
     available to carry out this subpart for any fiscal year and 
     not reserved under paragraph (1) is insufficient to pay the 
     full amounts that all States are eligible to receive under 
     clause (i) for any fiscal year, the Secretary shall ratably 
     reduce such amounts for such fiscal year.
       ``(B) Allotment of additional funds.--
       ``(i) In general.--Subject to clause (ii), for any fiscal 
     year for which the total amount made available to carry out 
     this subpart and not reserved under paragraph (1) exceeds the 
     total amount made available to the 50 States, the District of 
     Columbia, and the Commonwealth of Puerto Rico for fiscal year 
     2000 under the authority described in subparagraph (A)(i), 
     the Secretary shall allot to each of those States the sum 
     of--

       ``(I) an amount that bears the same relationship to 40 
     percent of the excess amount as the number of individuals age 
     5 through 17 in the State, as determined by the Secretary on 
     the basis of the most recent satisfactory data, bears to the 
     number of those individuals in all such States, as so 
     determined; and
       ``(II) an amount that bears the same relationship to 60 
     percent of the excess amount as the number of individuals age 
     5 through 17 from families with incomes below the poverty 
     line in the State, as determined by the Secretary on the 
     basis of the most recent satisfactory data, bears to the 
     number of those individuals in all such States, as so 
     determined.

       ``(ii) Exception.--No State receiving an allotment under 
     clause (i) may receive less than \1/2\ of 1 percent of the 
     total excess amount allotted under clause (i) for a fiscal 
     year.
       ``(3) Reallotment.--If any State described in paragraph (2) 
     does not apply for an allotment under paragraph (2) for any 
     fiscal year, the Secretary shall reallot such amount to the 
     remaining such States in accordance with paragraph (2).

     ``SEC. 2012. STATE APPLICATIONS.

       ``(a) Applications Required.--
       ``(1) In general.--Each State desiring to receive a grant 
     under this subpart shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may reasonably require.
       ``(2) Development.--The State educational agency shall 
     develop the State application--
       ``(A) in consultation with the State agency for higher 
     education, community-based and other nonprofit organizations, 
     and institutions of higher education; and
       ``(B) with the extensive participation of teachers, teacher 
     educators, school administrators, and content specialists.
       ``(b) Contents.--Each such application shall include--
       ``(1) a description of the State's shortages of fully 
     qualified teachers relating to high-poverty school districts 
     and high-need academic subjects (as such districts or 
     subjects are determined by the State);
       ``(2) an assessment of the need for professional 
     development for veteran teachers in the State and the need 
     for strong mentoring programs for beginning teachers that 
     is--
       ``(A) developed with the involvement of teachers; and
       ``(B) based on student achievement data in the core 
     academic subjects and other indicators of the need for 
     professional development and mentoring programs;
       ``(3) a description of how the State educational agency 
     will use funds made available under this part to improve the 
     quality of the State's teaching force, eliminate the use of 
     out-of-field placement of teachers, and eliminate the use of 
     teachers hired with emergency or other provisional 
     credentials by setting numerical, annual improvement goals, 
     and meet the requirements of this section;
       ``(4) a description of how the State educational agency 
     will align activities assisted under this subpart with State 
     content and student performance standards, and State 
     assessments by setting numerical, annual improvement goals;
       ``(5) a description of how the State educational agency 
     will coordinate activities funded under this subpart with 
     professional development and mentoring and recruitment 
     activities that are supported with funds from other relevant 
     Federal and non-Federal programs;
       ``(6) a plan, developed with the extensive participation of 
     teachers, for addressing long-term teacher recruitment, 
     retention, and professional development and mentoring needs, 
     which may include--
       ``(A) providing technical assistance to help school 
     districts reform hiring and employment practices to improve 
     the recruitment and retention of fully qualified teachers, 
     especially with respect to high-poverty schools; or
       ``(B) establishing State or regional partnerships to 
     address teacher shortages;
       ``(7) a description of how the State educational agency 
     will assist local educational agencies in implementing 
     effective and sustained professional development and 
     mentoring activities and high-quality recruitment activities 
     under this part;
       ``(8) an assurance that the State will consistently monitor 
     the progress of each local educational agency and school in 
     the State in achieving the goals specified in the information 
     submitted under paragraphs (1) through (7);
       ``(9) a description of how the State educational agency 
     will work with recipients of grants awarded for recruitment 
     activities under section 2015(b) to ensure that recruits who 
     successfully complete a teacher corps program will be 
     certified or licensed; and
       ``(10) the assurances and description referred to in 
     section 2021.
       ``(c) Approval.--The Secretary shall, using a peer-review 
     process, approve a State application if the application meets 
     the requirements of this section and holds reasonable promise 
     of achieving the purposes of this part.

     ``SEC. 2013. STATE USE OF FUNDS.

       ``(a) In General.--Of the funds allotted to a State under 
     section 2011 for a fiscal year--
       ``(1) not more than 6 percent shall be used by the State 
     educational agency to carry out State activities described in 
     section 2014, or for the administration of this subpart 
     (other than the administration of section 2019 but including 
     the administration of State activities under chapter 2), 
     except that not more than 3 percent of the allotted funds may 
     be used for the administration of this subpart;
       ``(2) 60 percent shall be used by the State educational 
     agency to provide grants to local educational agencies under 
     section 2015(a) for professional development and mentoring 
     (except as provided in section 2017(c));
       ``(3) 30 percent shall be used by the State educational 
     agency--
       ``(A) except as provided in subparagraph (B), to provide 
     grants to recruitment partnerships under section 2015(b) for 
     recruitment activities; or
       ``(B) if the State educational agency determines that all 
     elementary school and secondary school teachers in the State 
     that are teaching core academic subjects are fully qualified, 
     to provide the grants described in paragraph (2); and
       ``(4) 4 percent (or 4 percent of the amount the State would 
     have been allotted if the appropriation for this subpart were 
     $1,730,000,000, whichever is greater) shall be used by the 
     State agency for higher education to provide grants to 
     partnerships under section 2019.
       ``(b) Priority for Professional Development and Mentoring 
     in Mathematics and Science.--
       ``(1) Priority.--
       ``(A) Appropriations of not more than $300,000,000.--Except 
     as provided in section 2017(c), for any fiscal year for which 
     the appropriation for this subpart is $300,000,000 or less, 
     each State educational agency that receives funds under this 
     subpart, working jointly with the State agency for higher 
     education, shall ensure that all funds received under this 
     subpart are used for--
       ``(i) professional development and mentoring in mathematics 
     and science that is aligned with State content and student 
     performance standards; and
       ``(ii) recruitment activities to attract fully qualified 
     math and science teachers to high-poverty schools.
       ``(B) Appropriation of more than $300,000,000.--Except as 
     provided in section 2017(c), for any fiscal year for which 
     the appropriation for this subpart is greater than 
     $300,000,000, the State educational agency and the State 
     agency for higher education shall jointly ensure that the 
     total amount of funds that the agencies receive under this

[[Page 237]]

     subpart and that the agencies use for activities described in 
     subparagraph (A) is at least as great as the allotment the 
     State would have received if that appropriation had been 
     $300,000,000.
       ``(2) Interdisciplinary activities.--A State may use funds 
     received under this subpart for activities that focus on more 
     than 1 core academic subject, and apply the funds toward 
     meeting the requirements of paragraph (1), if the activities 
     include a strong focus on improving instruction in 
     mathematics or science.
       ``(3) Additional funds.--Except as provided in section 
     2017(c), each State educational agency that receives funds 
     under this subpart and the State agency for higher education 
     shall jointly ensure that any portion of the funds that 
     exceeds the amount required by paragraph (1) to be spent on 
     activities described in paragraph (1)(A) is used to provide--
       ``(A) professional development and mentoring in 1 or more 
     of the core academic subjects that is aligned with State 
     content and student performance standards; and
       ``(B) recruitment activities involving teachers of 1 or 
     more of the core academic subjects.

     ``SEC. 2014. STATE LEVEL ACTIVITIES.

       ``(a) Activities.--Each State educational agency that 
     receives a grant described in section 2011 shall use the 
     funds made available under section 2013(a)(1) to carry out 
     statewide strategies and activities to improve teacher 
     quality, including--
       ``(1) establishing, expanding, or improving alternative 
     routes to State certification or licensing of teachers, for 
     highly qualified individuals with a baccalaureate degree, 
     mid-career professionals from other occupations, or 
     paraprofessionals, that are at least as rigorous as the 
     State's standards for initial certification or licensing of 
     teachers;
       ``(2) developing or improving evaluation systems to 
     evaluate the effectiveness of professional development and 
     mentoring and recruitment activities in improving teacher 
     quality, skills, and content knowledge, and the impact of the 
     professional development and mentoring and recruitment 
     activities on increasing student academic achievement and 
     student performance with performance measures drawn from 
     assessments that objectively measure student achievement 
     against State performance standards;
       ``(3) funding projects to promote reciprocity of teacher 
     certification or licensure between or among States;
       ``(4) providing assistance to local educational agencies to 
     reduce out-of-field placements and the use of emergency 
     credentials;
       ``(5) supporting certification by the National Board for 
     Professional Teaching Standards of teachers who are teaching 
     or will teach in high-poverty schools;
       ``(6) providing assistance to local educational agencies in 
     implementing effective programs of recruitment activities, 
     and professional development and mentoring, including 
     supporting efforts to encourage and train teachers to become 
     mentor teachers;
       ``(7) increasing the rigor and quality of State 
     certification and licensure tests for individuals entering 
     the field of teaching, including subject matter tests for 
     elementary, middle and secondary school teachers; and
       ``(8) implementing teacher recognition programs.
       ``(b) Coordination.--A State that receives a grant to carry 
     out this subpart and a grant under section 202 of the Higher 
     Education Act of 1965 shall coordinate the activities carried 
     out under this section and the activities carried out under 
     that section 202.

     ``SEC. 2015. GRANTS TO LOCAL EDUCATIONAL AGENCIES.

       ``(a) Grants for Professional Development and Mentoring 
     Activities.--
       ``(1) In general.--The State educational agency of a State 
     that receives a grant described in section 2011 shall use the 
     funds made available under section 2013(a)(2) (and any funds 
     made available under section 2013(a)(3)(B)) to make grants to 
     eligible local educational agencies, from allocations made 
     under paragraph (2), to carry out the activities described in 
     section 2017(a) (except as provided in section 2017(c)).
       ``(2) Allocations.--The State educational agency shall 
     allocate to each eligible local educational agency the sum 
     of--
       ``(A) an amount that bears the same relationship to 20 
     percent of the funds described in paragraph (1) as the number 
     of individuals enrolled in public and private nonprofit 
     elementary schools and secondary schools in the geographic 
     area served by the agency bears to the number of those 
     individuals in the geographic areas served by all the local 
     educational agencies in the State; and
       ``(B) an amount that bears the same relationship to 80 
     percent of the funds as the number of individuals age 5 
     through 17 from families with incomes below the poverty line, 
     in the geographic area served by the agency, as determined by 
     the Secretary on the basis of the most recent satisfactory 
     data, bears to the number of those individuals in the 
     geographic areas served by all the local educational agencies 
     in the State, as so determined.
       ``(3) Eligibility.--To be eligible to receive a grant from 
     a State educational agency under this subsection, a local 
     educational agency shall serve schools that include--
       ``(A) high-poverty schools;
       ``(B) schools that need support for improving teacher 
     quality based on low achievement of students served;
       ``(C) schools that have low teacher retention rates;
       ``(D) schools that need to improve or expand the knowledge 
     and skills of new and veteran teachers in high-priority 
     content areas;
       ``(E) schools that have high out-of-field placement rates; 
     or
       ``(F) high-poverty schools that have been identified for 
     improvement in accordance with section 1116.
       ``(4) Equitable geographic distribution.--A State 
     educational agency shall ensure an equitable distribution of 
     grants under this subsection among eligible local educational 
     agencies serving urban and rural areas.
       ``(b) Grants for Recruitment Activities.--
       ``(1) In general.--The State educational agency of a State 
     that receives a grant under section 2011 shall use the funds 
     made available under section 2013(a)(3)(A) to make grants to 
     eligible recruitment partnerships, on a competitive basis, to 
     carry out the recruitment activities and meet requirements 
     described in section 2017(b).
       ``(2) Eligibility.--
       ``(A) In general.--To be eligible to receive a grant from a 
     State educational agency under this subsection, a recruitment 
     partnership--
       ``(i) shall include an eligible local educational agency, 
     or a consortium of eligible local educational agencies;
       ``(ii) shall include an institution of higher education, a 
     tribal college, or a community college; and
       ``(iii) may include other members, such as a nonprofit 
     organization or professional education organization.
       ``(B) Eligible local educational agency.--In subparagraph 
     (A), the term `eligible local educational agency' means a 
     local educational agency that receives assistance under part 
     A of title I, and meets any additional eligibility criteria 
     that the appropriate State educational agency may establish.
       ``(3) Equitable geographic distribution.--A State 
     educational agency shall ensure an equitable distribution of 
     grants under this subsection among eligible recruitment 
     partnerships serving urban and rural areas.

     ``SEC. 2016. LOCAL APPLICATIONS.

       ``(a) In General.--A local educational agency or a 
     recruitment partnership seeking to receive a grant from a 
     State under section 2015 to carry out activities described in 
     section 2017 shall submit an application to the State at such 
     time, in such manner, and containing such information as the 
     State may reasonably require.
       ``(b) Contents Relating to Professional Development and 
     Mentoring Activities.--If the local educational agency seeks 
     a grant under section 2015(a) to carry out activities 
     described in section 2017(a), the local application described 
     in subsection (a) shall include, at a minimum, the following:
       ``(1) A description of how the local educational agency 
     intends to use the funds provided through the grant to carry 
     out activities that meet requirements described in section 
     2017(a).
       ``(2) An assurance that the local educational agency will 
     target the funds to high-poverty, low-performing schools 
     served by the local educational agency that--
       ``(A) have the lowest proportions of qualified teachers;
       ``(B) are identified for school improvement and corrective 
     action under section 1116; or
       ``(C) are identified for school improvement in accordance 
     with other measures of school quality as determined and 
     documented by the local educational agency.
       ``(3) A description of how the local educational agency 
     will coordinate professional development and mentoring 
     activities described in section 2017(a) with professional 
     development and mentoring activities provided through other 
     Federal, State, and local programs, including programs 
     authorized under--
       ``(A) titles I, IV, and V, and part A of title VII; and
       ``(B) where applicable, the Individuals with Disabilities 
     Education Act, the Carl D. Perkins Vocational and Technical 
     Education Act of 1998, and title II of the Higher Education 
     Act of 1965.
       ``(4) A description of how the local educational agency 
     will integrate funds received to carry out activities 
     described in section 2017(a) with funds received under title 
     V that are used for professional development and mentoring in 
     order to carry out professional development and mentoring 
     activities that--
       ``(A) train teachers, paraprofessionals, counselors, pupil 
     services personnel, administrators, and other school staff, 
     including school library media specialists, in how to use 
     technology to improve learning and teaching; and
       ``(B) take into special consideration the different 
     learning needs for, and exposures to, technology for all 
     students, including females, students with disabilities, 
     students with limited English proficiency, and students who 
     have economic and educational disadvantages.

[[Page 238]]

       ``(5) A description of how the local application was 
     developed with extensive participation of teachers, 
     paraprofessionals, principals, and parents.
       ``(6) A description of how the professional development and 
     mentoring activities described in section 2017(a) will 
     address the ongoing professional development and mentoring of 
     teachers, paraprofessionals, counselors, pupil services 
     personnel, administrators, and other school staff, including 
     school library media specialists.
       ``(7) A description of how the professional development and 
     mentoring activities described in section 2017(a) will have a 
     substantial, measurable, and positive impact on student 
     achievement and how the activities will be used as part of a 
     broader strategy to eliminate the achievement gap that 
     separates low-income and minority student from other 
     students.
       ``(8) A description of how the local educational agency 
     will address the needs of teachers of students with 
     disabilities, students with limited English proficiency, and 
     other students with special needs.
       ``(9) A description of how the local educational agency 
     will provide training to teachers to enable the teachers to 
     work with parents, involve parents in their child's 
     education, and encourage parents to become collaborators with 
     schools in promoting their child's education.
       ``(10) The assurances and description referred to in 
     section 2023, with respect to professional development and 
     mentoring activities.
       ``(c) Development and Contents Relating to Recruitment 
     Activities.--If an eligible local educational agency (as 
     defined in section 2015(b)) seeks a grant under section 
     2015(b) to carry out activities described in section 
     2017(b)--
       ``(1) the eligible local educational agency shall enter 
     into a recruitment partnership, which shall jointly prepare 
     and submit the local application described in subsection (a); 
     and
       ``(2) at a minimum, the application shall include--
       ``(A) a description of how the recruitment partnership will 
     meet the teacher corps program requirements described in 
     section 2018;
       ``(B) a description of the individual and collective 
     responsibilities of members of the recruitment partnership in 
     meeting the requirements and goals of a teacher corps program 
     described in section 2018;
       ``(C) information demonstrating that the State agency 
     responsible for teacher licensure or certification in the 
     State in which a recruitment partnership is established 
     will--
       ``(i) ensure that a corps member who successfully completes 
     a teacher corps program will have the academic requirements 
     necessary for initial certification or licensure as a teacher 
     in the State; and
       ``(ii) work with the recruitment partnership to ensure the 
     partnership uses high-quality methods and establishes high-
     quality requirements concerning alternative routes to 
     certification or licensing, in order to meet State 
     requirements for certification or licensure; and
       ``(D) the assurances and description referred to in section 
     2023, with respect to recruitment activities.
       ``(d) Contents Relating to Covered Recruitment.--If the 
     local educational agency seeks a grant under section 2015(a) 
     to carry out activities described in section 2017(c), the 
     local application described in subsection (a) shall include, 
     at a minimum, a description of the activities and the manner 
     in which the activities will contribute to accomplishing the 
     objectives of section 2023, and how the activities are in 
     compliance with the requirements of this Act.
       ``(e) Approval.--A State educational agency shall approve a 
     local educational agency's or recruitment partnership's 
     application under this section only if the State educational 
     agency determines that the application is of high quality and 
     holds reasonable promise of achieving the purposes of this 
     part.

     ``SEC. 2017. LOCAL ACTIVITIES.

       ``(a) Professional Development and Mentoring Activities.--
     Except as provided in subsection (c), each local educational 
     agency receiving a grant under section 2015(a) shall use the 
     funds made available through the grant to carry out 
     activities (and only activities) that--
       ``(1) are professional development activities (as defined 
     in section 2002(12)(A)) that--
       ``(A) improve teacher knowledge of--
       ``(i) 1 or more of the core academic subjects;
       ``(ii) effective instructional strategies, methods, and 
     skills for improving student achievement in core academic 
     subjects, including strategies for identifying and 
     eliminating gender and racial bias;
       ``(iii) the use of data and assessments to inform teachers 
     about and thereby help teachers to improve classroom 
     practice; and
       ``(iv) innovative instructional methodologies designed to 
     meet the diverse learning needs of individual students, 
     including methodologies that integrate academic and technical 
     skills and applied learning (such as service learning), 
     methodologies for interactive and interdisciplinary team 
     teaching, and other alternative teaching strategies, such as 
     strategies for experiential learning, career-related 
     education, and environmental education, that integrate real 
     world applications into the core academic subjects;
       ``(B) provide teachers and paraprofessionals (and other 
     staff as appropriate) with information on recent research 
     findings on how children learn to read and with staff 
     development on research-based instructional strategies for 
     the teaching of reading;
       ``(C) replicate effective instructional practices that 
     involve collaborative groups of teachers and administrators 
     from the same school or district, using strategies such as--
       ``(i) provision of dedicated time for collaborative lesson 
     planning and curriculum development meetings;
       ``(ii) provision of collaborative professional development 
     experiences for veteran teachers based on the standards in 
     the core academic subjects of the National Board for 
     Professional Teaching Standards;
       ``(iii) consultation with exemplary teachers;
       ``(iv) provision of short-term and long-term visits to 
     classrooms and schools;
       ``(v) participation of teams of teachers in summer 
     institutes and summer immersion activities that are focused 
     on preparing teachers to enable all students to meet high 
     standards in 1 or more of the core academic subjects; and
       ``(vi) establishment and maintenance of local professional 
     networks that provide a forum for interaction among teachers 
     and administrators and that allow for the exchange of 
     information on advances in content knowledge and teaching 
     skills;
       ``(D) provide for the participation of paraprofessionals, 
     pupil services personnel, and other school staff;
       ``(E) include strategies for fostering meaningful parental 
     involvement and relations with parents to encourage parents 
     to become collaborators in their children's education, for 
     improving classroom management and discipline, and for 
     integrating technology into a curriculum;
       ``(F) as a whole, are regularly evaluated for their impact 
     on increased teacher effectiveness and improved student 
     achievement, with the findings of the evaluations used to 
     improve the quality of activities described in this 
     paragraph;
       ``(G) include, to the extent practicable, the establishment 
     of a partnership with an institution of higher education, 
     another local educational agency, a teacher organization, or 
     another organization, for the purpose of carrying out 
     activities described in this paragraph; and
       ``(H) include ongoing and school-based support for 
     activities described in this paragraph, such as support for 
     peer review, coaching, or study groups, and the provision of 
     release time as needed for the activities;
       ``(2) are mentoring activities; and
       ``(3) include local activities carried out under chapter 2.
       ``(b) Recruitment Activities.--Each recruitment partnership 
     receiving a grant under section 2015(b) shall use the funds 
     made available through the grant to carry out recruitment 
     activities (and only recruitment activities) described in 
     section 2018.
       ``(c) Covered Recruitment.--A local educational agency 
     receiving a grant under section 2015(a) for a fiscal year may 
     elect to use a portion of the funds made available through 
     the grant, but not more than the agency's share of 10 percent 
     of the funds allotted to the State involved under section 
     2011 for the fiscal year, to carry out recruitment (including 
     recruitment through the use of signing bonuses and other 
     financial incentives) and hiring of fully qualified teachers.

     ``SEC. 2018. RECRUITMENT ACTIVITIES THROUGH A TEACHER CORPS 
                   PROGRAM.

       ``(a) Teacher Corps Program Requirements.--
       ``(1) Recruitment.--A recruitment partnership that receives 
     a grant under section 2015(b) shall broadly recruit and 
     screen for a teacher corps a highly qualified pool of 
     candidates who demonstrate the potential to become effective 
     teachers. Each candidate shall meet--
       ``(A) standards to ensure that--
       ``(i) each corps member possesses appropriate, high-level 
     credentials and presents the likelihood of becoming an 
     effective teacher; and
       ``(ii) each group of corps members includes people who have 
     expertise in academic subjects and otherwise meet the 
     specific needs of the district to be served; and
       ``(B) any additional standard that the recruitment 
     partnership establishes to enhance the quality and diversity 
     of candidates and to meet the academic and grade level needs 
     of the partnership.
       ``(2) Required curriculum and placement.--Members of the 
     recruitment partnership shall work together to plan and 
     develop a program that includes--
       ``(A) a rigorous curriculum that includes a preservice 
     training program (incorporating innovative approaches to 
     preservice training, such as distance learning), for a period 
     not to exceed 1 year, that provides corps members with the 
     skills and knowledge necessary to become effective teachers, 
     by--
       ``(i) requiring completed course work in basic areas of 
     teaching, such as principles of learning and child 
     development, effective

[[Page 239]]

     teaching strategies, assessments, and classroom management, 
     and in the pedagogy related to the academic subjects in which 
     a corps member intends to teach;
       ``(ii) providing extensive preparation in the pedagogy of 
     reading to corps members, including preparation components 
     that focus on--

       ``(I) understanding the psychology of reading, and human 
     growth and development;
       ``(II) understanding the structure of the English language; 
     and
       ``(III) learning and applying the best teaching methods to 
     all aspects of reading instruction;

       ``(iii) providing training in the use of technology as a 
     tool to enhance a corps member's effectiveness as a teacher 
     and improve the achievement of the corps member's students; 
     and
       ``(iv) focusing on the teaching skills and knowledge that 
     corps members need to enable all students to meet the State's 
     highest challenging content and student performance 
     standards;
       ``(B) placement of a corps member with the local 
     educational agency participating in the recruitment 
     partnership, in a teaching internship that--
       ``(i) includes intensive mentoring;
       ``(ii) provides a reduced teaching load; and
       ``(iii) provides regular opportunities for the corps member 
     to co-teach with a mentor teacher, observe other teachers, 
     and be observed and coached by other teachers;
       ``(C) individualized inservice training over the course of 
     the corps member's first 2 years of full-time teaching that 
     provides--
       ``(i) high-quality professional development, coordinated 
     jointly by members of the recruitment partnership, and the 
     course work necessary to provide additional or supplementary 
     knowledge to meet the specific needs of the corps member; and
       ``(ii) ongoing mentoring by a teacher who meets the 
     criteria for a mentor teacher described in paragraph (4)(B), 
     including the requirements of section 2002(10); and
       ``(D) collaboration between the recruitment partnership, 
     and local community student and parent groups, to assist 
     corps members in enhancing their understanding of the 
     community in which the members are placed.
       ``(3) Evaluation.--A recruitment partnership shall evaluate 
     a corps member's progress in course study and classroom 
     practice at regular intervals. Each recruitment partnership 
     shall have a formal process to identify corps members who 
     seem unlikely to become effective teachers and terminate 
     their participation in the program.
       ``(4) Mentor teachers.--
       ``(A) In general.--A recruitment partnership shall develop 
     a plan for the program, which shall include strategies for 
     identifying, recruiting, training, and providing ongoing 
     support to individuals who will serve as mentor teachers to 
     corps members.
       ``(B) Mentor teacher requirements.--The plan described in 
     subparagraph (A) shall specify the criteria that the 
     recruitment partnership will use to identify and select 
     mentor teachers and, at a minimum, shall--
       ``(i) require a mentor teacher to meet the requirements of 
     section 2002(10); and
       ``(ii) require that consideration be given to teachers with 
     national board certification.
       ``(C) Compensation.--The plan shall specify the 
     compensation--
       ``(i) for mentor teachers, including monetary compensation, 
     release time, or a reduced work load to ensure that mentor 
     teachers can provide ongoing support for corps members; and
       ``(ii) for corps members, including salary levels and the 
     stipends, if any, that will be provided during a corps 
     member's preservice training.
       ``(5) Assurances.--The plan shall include assurances that--
       ``(A) a corps member will be assigned to teach only 
     academic subjects and grade levels for which the member is 
     fully qualified;
       ``(B) corps members, to the extent practicable, will be 
     placed in schools with teams of corps members; and
       ``(C) every mentor teacher will be provided sufficient time 
     to meet the needs of the corps members assigned to the mentor 
     teacher.
       ``(b) Corps Member Qualifications.--
       ``(1) Candidates intending to teach in elementary 
     schools.--At a minimum, to be accepted by a teacher corps 
     program, a candidate who intends to teach at the elementary 
     school level shall--
       ``(A) have a bachelor's degree;
       ``(B) possess an outstanding commitment to working with 
     children and youth;
       ``(C) possess a strong professional or postsecondary record 
     of achievement; and
       ``(D) pass all basic skills and subject matter tests 
     required by the State for teacher certification or licensure.
       ``(2) Candidates intending to teach in secondary schools.--
     At a minimum, to be accepted by a teacher corps program, a 
     candidate who intends to teach at the secondary school level 
     shall--
       ``(A) meet the requirements described in paragraph (1); and
       ``(B)(i) possess at least an academic major or 
     postsecondary degree in each academic subject in which the 
     candidate intends to teach; or
       ``(ii) if the candidate did not major or earn a 
     postsecondary degree in an academic subject in which the 
     candidate intends to teach, have completed a rigorous course 
     of instruction in that subject that is equivalent to having 
     majored in the subject.
       ``(3) Special rule.--Notwithstanding paragraph (2)(B), the 
     recruitment partnership may consider the candidate to be an 
     eligible corps member and accept the candidate for a teacher 
     corps program if the candidate has worked successfully and 
     directly in a field and in a position that provided the 
     candidate with direct and substantive knowledge in the 
     academic subject in which the candidate intends to teach.
       ``(c) Three-Year Commitment to Teaching in Eligible 
     Districts.--
       ``(1) In general.--In return for acceptance to a teacher 
     corps program, a corps member shall commit to 3 years of 
     full-time teaching in a school or district served by a local 
     educational agency participating in a recruitment partnership 
     receiving funds under this subpart.
       ``(2) Reimbursement.--
       ``(A) In general.--If a corps member leaves the school 
     district to which the corps member has been assigned prior to 
     the end of the 3-year period described in paragraph (1), the 
     corps member shall be required to reimburse the Secretary for 
     the amount of the Federal share of the cost of the corps 
     member's participation in the teacher corps program.
       ``(B) Partnership claims.--A recruitment partnership that 
     provides a teacher corps program to a corps member who leaves 
     the school district, as discussed in subparagraph (A), may 
     submit a claim to the corps member requiring the corps member 
     to reimburse the recruitment partnership for the amount of 
     the partnership's share of the cost described in subparagraph 
     (A).
       ``(C) Reduction.--Reimbursements required under this 
     paragraph may be reduced proportionally based on the amount 
     of time a corps member remained in the teacher corps program 
     beyond the corps member's initial 2 years of service.
       ``(D) Waiver.--The Secretary may waive reimbursements 
     required under subparagraph (A) in the case of severe 
     hardship to a corps member who leaves the school district, as 
     described in subparagraph (A).
       ``(d) Federal Share; Non-Federal Share.--
       ``(1) Payment of federal share.--The Secretary shall pay to 
     each recruitment partnership carrying out a teacher corps 
     program under this section the Federal share of the cost of 
     the activities described in the partnership's application 
     under section 2016(c).
       ``(2) Non-federal share.--A recruitment partnership's share 
     of the cost of the activities described in the partnership's 
     application under section 2016(c)--
       ``(A) may be provided in cash or in kind, fairly evaluated, 
     including plant, equipment, or services; and
       ``(B)(i) for the first year for which the partnership 
     receives assistance under this subpart, shall be not less 
     than 10 percent;
       ``(ii) for the second such year, shall be not less than 20 
     percent;
       ``(iii) for the third year such year, shall be not less 
     than 30 percent;
       ``(iv) for the fourth such year, shall be not less than 40 
     percent; and
       ``(v) for the fifth such year, shall be not less than 50 
     percent.

     ``SEC. 2019. GRANTS TO PARTNERSHIPS OF INSTITUTIONS OF HIGHER 
                   EDUCATION AND LOCAL EDUCATIONAL AGENCIES.

       ``(a) Administration.--A State agency for higher education 
     may use, from the funds made available to the agency under 
     section 2013(a)(4) for any fiscal year, not more than 3\1/3\ 
     percent for the expenses of the agency in administering this 
     section, including conducting evaluations of activities on 
     the performance measures described in section 2014(a)(2).
       ``(b) Grants to Partnerships.--
       ``(1) In general.--The State agency for higher education 
     shall use the remainder of the funds, in cooperation with the 
     State educational agency, to make grants to (including 
     entering into contracts or cooperative agreements with) 
     partnerships of--
       ``(A) institutions of higher education that are in full 
     compliance with all reporting requirements of title II of the 
     Higher Education Act of 1965 or nonprofit organizations of 
     demonstrated effectiveness in providing professional 
     development and mentoring in the core academic subjects; and
       ``(B) eligible local educational agencies (as defined in 
     section 2015(b)(2)),
     to carry out activities (and only activities) described in 
     subsection (e).
       ``(2) Size; duration.--Each grant made under this section 
     shall be--
       ``(A) in a sufficient amount to carry out the objectives of 
     this section effectively; and
       ``(B) for a period of 3 years, which the State agency for 
     higher education may extend for an additional 2 years if the 
     agency determines that the partnership is making substantial 
     progress toward meeting the specific goals set out in the 
     written agreement required in subsection (c) and on the 
     performance measures described in section 2014(a)(2).
       ``(3) Applications.--To be eligible to receive a grant 
     under this section, a partnership shall submit an application 
     to the State

[[Page 240]]

     agency for higher education at such time, in such manner, and 
     containing such information as the agency may reasonably 
     require.
       ``(4) Award process and basis.--The State agency for higher 
     education shall make the grants on a competitive basis, using 
     a peer review process.
       ``(5) Priority.--In making the grants, the State agency for 
     higher education shall give priority to partnerships 
     submitting applications for projects that focus on mentoring 
     programs for beginning teachers.
       ``(6) Considerations.--In making such a grant for a 
     partnership, the State agency for higher education shall 
     consider--
       ``(A) the need of the local educational agency involved for 
     the professional development and mentoring activities 
     proposed in the application;
       ``(B) the quality of the program proposed in the 
     application and the likelihood of success of the program in 
     improving classroom instruction and student academic 
     achievement; and
       ``(C) such other criteria as the agency finds to be 
     appropriate.
       ``(c) Agreements.--
       ``(1) In general.--No partnership may receive a grant under 
     this section unless the institution of higher education or 
     nonprofit organization involved enters into a written 
     agreement with at least 1 eligible local educational agency 
     (as defined in section 2015(b)(2)) to provide professional 
     development and mentoring for elementary and secondary school 
     teachers in the schools served by that agency in the core 
     academic subjects.
       ``(2) Goals.--Each such agreement shall identify specific 
     measurable annual goals concerning how the professional 
     development and mentoring that the partnership provides will 
     enhance the ability of the teachers to prepare all students 
     to meet challenging State and local content and student 
     performance standards.
       ``(d) Joint Efforts Within Institutions of Higher 
     Education.--Each professional development and mentoring 
     activity assisted under this section by a partnership 
     containing an institution of higher education shall involve 
     the joint effort of the institution of higher education's 
     school or department of education and the schools or 
     departments of the institution in the specific disciplines in 
     which the professional development and mentoring will be 
     provided.
       ``(e) Uses of Funds.--A partnership that receives funds 
     under this section shall use the funds for activities (and 
     only for activities) that consist of--
       ``(1) professional development and mentoring in the core 
     academic subjects, aligned with State or local content 
     standards, for teams of teachers from a school or school 
     district and, where appropriate, administrators and 
     paraprofessionals;
       ``(2) research-based professional development and mentoring 
     programs to assist beginning teachers, which may include--
       ``(A) mentoring and coaching by trained mentor teachers 
     that lasts at least 2 years;
       ``(B) team teaching with veteran teachers who have a 
     consistent record of helping their students make substantial 
     academic gains;
       ``(C) provision of time for observation of, and 
     consultation with, veteran teachers;
       ``(D) provision of reduced teaching loads; and
       ``(E) provision of additional time for preparation;
       ``(3) the provision of technical assistance to school and 
     agency staff for planning, implementing, and evaluating 
     professional development and mentoring;
       ``(4) the provision of training for teachers to help the 
     teachers develop the skills necessary to work most 
     effectively with parents; and
       ``(5) in appropriate cases, the provision of training to 
     address areas of teacher and administrator shortages.
       ``(f) Coordination.--Any partnership that carries out 
     professional development and mentoring activities under this 
     section shall coordinate the activities with activities 
     carried out under title II of the Higher Education Act of 
     1965, if a local educational agency or institution of higher 
     education in the partnership is participating in programs 
     funded under that title.
       ``(g) Annual Reports.--
       ``(1) In general.--Beginning with fiscal year 2002, each 
     partnership that receives a grant under this section shall 
     prepare and submit to the appropriate State agency for higher 
     education, by a date set by that agency, an annual report on 
     the progress of the partnership on the performance measures 
     described in section 2014(a)(2).
       ``(2) Contents.--Each such report shall--
       ``(A) include a copy of each written agreement required by 
     subsection (c) that is entered into by the partnership; and
       ``(B) describe how the members of the partnership have 
     collaborated to achieve the specific goals set out in the 
     agreement, and the results of that collaboration.
       ``(3) Copy.--The State agency for higher education shall 
     provide the State educational agency with a copy of each such 
     report.

                      ``Chapter 2--Accountability

     ``SEC. 2021. STATE APPLICATION ACCOUNTABILITY PROVISIONS.

       ``(a) Assurances.--Each State application submitted under 
     section 2012 shall contain assurances that--
       ``(1) beginning on the date of enactment of the Educational 
     Opportunities Act, no school in the State that is served 
     under this subpart will use funds received under this subpart 
     to hire a teacher who is not a fully qualified teacher; and
       ``(2) not later than 4 years after the date of enactment of 
     the Educational Opportunities Act, each teacher in the State 
     who provides services to students served under this subpart 
     shall be a fully qualified teacher.
       ``(b) Withholding.--If a State fails to meet the 
     requirements described in subsection (a)(2) for a fiscal year 
     in which the requirements apply--
       ``(1) the Secretary shall withhold, for the following 
     fiscal year, a portion of the funds that would otherwise be 
     available to the State under section 2013(a)(1) for the 
     administration of this subpart; and
       ``(2) the State shall be subject to such other penalties as 
     are provided by law for a violation of this Act.
       ``(c) Assistance by State Educational Agency.--Each State 
     application submitted under section 2012 shall describe how 
     the State educational agency will help each local educational 
     agency and school in the State develop the capacity to comply 
     with the requirements of this section.

     ``SEC. 2022. STATE REPORTS.

       ``(a) Report to Secretary.--
       ``(1) In general.--Each State that receives funds under 
     this subpart shall annually prepare and submit to the 
     Secretary a report containing--
       ``(A) information on the activities of the State under this 
     subpart, including statewide information, and information on 
     the activities of each grant recipient in the State;
       ``(B) information on the effectiveness of the activities, 
     and the progress of recipients of grants under this subpart, 
     on performance measures, including measures described in 
     section 2014(a)(2) and goals described in paragraphs (3) and 
     (4) of section 2012(b); and
       ``(C) such other information as the Secretary may 
     reasonably require.
       ``(2) Deadlines.--The State shall submit the reports 
     described in paragraph (1) by such deadlines as the Secretary 
     may establish.
       ``(b) Public Accountability.--
       ``(1) In general.--Each State that receives funds under 
     this subpart--
       ``(A) in the event the State provides public State report 
     cards on education, shall include in such report cards--
       ``(i) the percentage of middle school and other secondary 
     school classes in core academic subjects that are taught by 
     out-of-field teachers;
       ``(ii) the percentage of middle school, other elementary 
     school, and other secondary school classes taught by 
     individuals holding only emergency credentials, or for whom 
     any State certification or licensing standards for teachers 
     have been waived;
       ``(iii) the average statewide class size; or
       ``(B) in the event the State provides no such report card, 
     shall disseminate to the public the information described in 
     clauses (i) through (iii) of subparagraph (A) through other 
     means.
       ``(2) Public availability.--Such information shall be made 
     widely available to the public, including parents and 
     students, throughout the State.
       ``(c) General Accounting Office.--Not later than September 
     30, 2004, the Comptroller General of the United States 
     shall--
       ``(1) conduct a study of the progress of the States in 
     increasing the percentage of teachers who are fully qualified 
     teachers for fiscal years 2001 through 2003; and
       ``(2) prepare and submit to the Committee on Education and 
     Workforce of the House of Representatives and the Committee 
     on Health, Education, Labor, and Pensions of the Senate a 
     report containing the results of the study.

     ``SEC. 2023. LOCAL APPLICATION ACCOUNTABILITY PROVISIONS.

       ``Each local application submitted under section 2016 shall 
     contain assurances that--
       ``(1) the agency will not hire a teacher with funds made 
     available to the agency under this subpart, unless the 
     teacher is a fully qualified teacher;
       ``(2) the local educational agency and schools served by 
     the agency will work to ensure, through voluntary agreements 
     and incentive programs, that elementary school and secondary 
     school teachers in high-poverty schools served by the local 
     educational agency will be at least as well qualified, in 
     terms of experience and credentials, as the instructional 
     staff in schools served by the same local educational agency 
     that are not high-poverty schools;
       ``(3) any teacher who receives certification from the 
     National Board for Professional Teaching Standards will be 
     considered fully qualified to teach, in the academic subjects 
     in which the teacher is certified, in high-poverty schools in 
     any school district or community served by the local 
     educational agency; and
       ``(4) the agency will--
       ``(A) make available, on request and in an understandable 
     and uniform format, to any parent of a student attending any 
     school served by the local educational agency, information 
     regarding the professional qualifications of the student's 
     classroom teachers with regard to--

[[Page 241]]

       ``(i) whether the teacher has met State certification or 
     licensing criteria for the academic subjects and grade level 
     in which the teacher teaches the student;
       ``(ii) whether the teacher is teaching with emergency or 
     whether any State certification or licensing standard has 
     been waived for the teacher; and
       ``(iii) the academic qualifications of the teacher in the 
     academic subjects and grade levels in which the teacher 
     teaches; and
       ``(B) inform parents that the parents are entitled to 
     receive the information upon request.

     ``SEC. 2024. LOCAL CONTINUATION OF FUNDING.

       ``(a) Agencies.--If a local educational agency applies for 
     funds under this subpart for a 4th or subsequent fiscal year 
     (including applying for funds as part of a partnership), the 
     agency may receive the funds for that fiscal year only if the 
     State determines that the agency has demonstrated that the 
     agency, in carrying out activities under this subpart during 
     the past fiscal year, has met annual numerical performance 
     objectives for--
       ``(1) improved student performance for all groups described 
     in section 1111(b)(2);
       ``(2) increased participation in sustained professional 
     development and mentoring programs;
       ``(3) reduced the beginning teacher attrition rate for the 
     agency; and
       ``(4) reduced the number of teachers who are not certified 
     or licensed, and the number who are out-of-field teachers, 
     for the agency.
       ``(b) Schools.--If a local educational agency applies for 
     funds under this subpart on behalf of a school for a 4th or 
     subsequent fiscal year (including applying for funds as part 
     of a partnership), the agency may receive the funds for the 
     school for that fiscal year only if the State determines that 
     the school has demonstrated that the school, in carrying out 
     activities under this subpart during the past fiscal year, 
     has met the requirements of paragraphs (1) through (4) of 
     subsection (a).
       ``(c) Recruitment Partnerships.--
       ``(1) In general.--If not more than 90 percent of the 
     graduates of a teacher corps program assisted under this 
     subpart for a fiscal year pass applicable State or local 
     initial teacher licensing or certification examinations, the 
     recruitment partnership providing the teacher corps program 
     shall be ineligible to receive grant funds for the succeeding 
     fiscal year.
       ``(2) Waiver.--The State in which the partnership is 
     located may waive the requirement described in paragraph (1) 
     for a recruitment partnership serving a school district that 
     has special circumstances, such as a district with a small 
     number of corps members.

     ``SEC. 2025. LOCAL REPORTS.

       ``(a) In General.--Each local educational agency that 
     receives funds under this subpart (including funds received 
     through a partnership) shall prepare, make publicly 
     available, and submit to the State educational agency, every 
     year, beginning in fiscal year 2002, a report on the 
     activities of the agency under this subpart, in such form and 
     containing such information as the State educational agency 
     may reasonably require.
       ``(b) Contents.--The report shall contain, at a minimum--
       ``(1) information on progress throughout the schools served 
     by the local educational agency on the performance measures 
     described in section 2014(a)(2) and goals described in 
     paragraphs (3) and (4) of section 2012(b);
       ``(2) information on progress throughout the schools served 
     by the local educational agency toward achieving the 
     objectives of, and carrying out the activities described in, 
     this subpart;
       ``(3) data on the progress described in paragraphs (1) and 
     (2), disaggregated by school poverty level, as defined by the 
     State; and
       ``(4) a description of the methodology used to gather the 
     information and data described in paragraphs (1) through (3).

 ``Subpart 2--National Activities for the Improvement of Teaching and 
                           School Leadership

           ``Chapter 1--National Activities and Clearinghouse

     ``SEC. 2031. PROGRAM AUTHORIZED.

       ``(a) In General.--The Secretary is authorized to make 
     grants to, and to enter into contracts and cooperative 
     agreements with, local educational agencies, educational 
     service agencies, State educational agencies, State agencies 
     for higher education, institutions of higher education, and 
     other public and private nonprofit agencies, organizations, 
     and institutions to carry out subsection (b).
       ``(b) Activities.--In making the grants, and entering into 
     the contracts and cooperative agreements, the Secretary--
       ``(1) may support activities of national significance that 
     are not supported through other sources and that the 
     Secretary determines will contribute to the improvement of 
     teaching and school leadership in the Nation's schools, such 
     as--
       ``(A) supporting collaborative efforts by States, or 
     consortia of States, to review and measure the quality, 
     rigor, and alignment of State standards and assessments;
       ``(B) supporting State and local efforts to develop 
     curricula aligned with State standards and assessments;
       ``(C) supporting collaborative efforts by States, or 
     consortia of States, to review and measure the quality and 
     rigor of standards for entry into the field of teaching, 
     including the alignment of such standards with State 
     standards for students in elementary school and secondary 
     school, and the alignment of initial teacher licensing and 
     certification assessments with State standards for entry into 
     the field of teaching;
       ``(D) supporting the development of models, at the State 
     and local levels, of innovative compensation systems that--
       ``(i) provide incentives for talented individuals who have 
     a strong knowledge of academic content to enter teaching; and
       ``(ii) reward veteran teachers who acquire new knowledge 
     and skills that are needed in the schools and districts in 
     which the teachers teach; and
       ``(E) supporting collaborative efforts by States, or 
     consortia of States, to develop performance-based systems for 
     assessing content knowledge and teaching skills of teachers 
     prior to initial certification or licensure of the teachers;
       ``(2) may support activities of national significance that 
     the Secretary determines will contribute to the recruitment 
     and retention of highly qualified teachers and principals in 
     schools served by high-poverty local educational agencies, 
     such as--
       ``(A) the development and implementation of a national 
     teacher recruitment clearinghouse and job bank, which shall 
     be coordinated and, to the extent feasible, integrated with 
     the America's Job Bank administered by the Secretary of 
     Labor, to--
       ``(i) disseminate information and resources nationwide on 
     entering the teaching profession, to persons interested in 
     becoming teachers;
       ``(ii) serve as a national resource center regarding 
     effective practices for teacher professional development and 
     mentoring, recruitment, and retention;
       ``(iii) link prospective teachers to local educational 
     agencies and training resources;
       ``(iv) provide information and technical assistance to 
     prospective teachers about certification and licensing and 
     other State and local requirements related to teaching; and
       ``(v) provide data projections concerning teacher and 
     administrator supply and demand and available teaching and 
     administrator opportunities;
       ``(B) the development and implementation, or expansion, of 
     programs that recruit talented individuals to become 
     principals, including such programs that employ alternative 
     routes to State certification or licensing that are at least 
     as rigorous as the State's standards for initial 
     certification or licensing of teachers, and that prepare both 
     new and experienced principals to serve as instructional 
     leaders, which may include the creation and operation of a 
     national center or regional centers for the preparation and 
     support of principals as leaders of school reform;
       ``(C) efforts to increase the portability of teacher 
     pensions and reciprocity of teaching credentials across State 
     lines;
       ``(D) research, evaluation, and dissemination activities 
     related to effective strategies for increasing the 
     portability of teachers' credited years of experience across 
     State and school district lines;
       ``(E) the development and implementation of national or 
     regional programs to--
       ``(i) recruit highly talented individuals to become 
     teachers, through alternative routes to certification or 
     licensing that are at least as rigorous as the State's 
     standards for initial certification or licensing of teachers, 
     in schools served by high-poverty local educational agencies; 
     and
       ``(ii) help retain the individuals for more than 3 years as 
     classroom teachers in schools served by the local educational 
     agencies; and
       ``(F) the establishment of partnerships of high-poverty 
     local educational agencies, teacher organizations, and local 
     businesses, in order to help the agencies attract and retain 
     high-quality teachers and principals through provision of 
     increased pay, combined with reforms to raise teacher 
     performance including use of regular, rigorous peer 
     evaluations and (where appropriate) student evaluations of 
     every teacher;
       ``(3) may support the National Board for Professional 
     Teaching Standards;
       ``(4)(A) shall carry out a national evaluation, not sooner 
     than 3 years and not later than 4 years after the date of 
     enactment of the Educational Opportunities Act, of the effect 
     of activities carried out under this title, including an 
     assessment of changes in instructional practice and objective 
     measures of student achievement; and
       ``(B) shall submit a report containing the results of the 
     evaluation to Congress; and
       ``(5) shall annually submit to Congress a report on the 
     information contained in the State reports described in 
     section 2022.

     ``SEC. 2032. EISENHOWER NATIONAL CLEARINGHOUSE FOR 
                   MATHEMATICS AND SCIENCE EDUCATION.

       ``(a) Establishment of Clearinghouse.--The Secretary shall 
     award a grant or contract, on a competitive basis, to an 
     entity to establish and operate an Eisenhower National 
     Clearinghouse for Mathematics and Science Education (referred 
     to in this section as `the Clearinghouse').
       ``(b) Authorized Activities.--
       ``(1) Application and award basis.--
       ``(A) In general.--An entity desiring to establish and 
     operate the Clearinghouse shall

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     submit an application to the Secretary at such time, in such 
     manner, and containing such information as the Secretary may 
     reasonably require.
       ``(B) Peer review.--The Secretary shall establish a peer 
     review panel to make recommendations on the recipient of the 
     award for the Clearinghouse.
       ``(C) Basis.--The Secretary shall make the award for the 
     Clearinghouse on the basis of merit.
       ``(2) Duration.--The Secretary shall award the grant or 
     contract for the Clearinghouse for a period of 5 years.
       ``(3) Activities.--The award recipient shall use the award 
     funds to--
       ``(A) maintain a permanent collection of such mathematics 
     and science education instructional materials and programs 
     for elementary schools and secondary schools as the Secretary 
     finds appropriate, and give priority to maintaining such 
     materials and programs that have been identified as promising 
     or exemplary, through a systematic approach such as the use 
     of expert panels required under the Educational Research, 
     Development, Dissemination, and Improvement Act of 1994;
       ``(B) disseminate the materials and programs described in 
     subparagraph (A) to the public, State educational agencies, 
     local educational agencies, and schools (particularly high-
     poverty, low-performing schools), including dissemination 
     through the maintenance of an interactive national electronic 
     information management and retrieval system accessible 
     through the World Wide Web and other advanced communications 
     technologies;
       ``(C) coordinate activities with entities operating other 
     databases containing mathematics and science curriculum and 
     instructional materials, including Federal, non-Federal, and, 
     where feasible, international databases;
       ``(D) using not more than 10 percent of the amount awarded 
     under this section for any fiscal year, participate in 
     collaborative meetings of representatives of the 
     Clearinghouse and regional mathematics and science education 
     consortia to--
       ``(i) discuss issues of common interest and concern;
       ``(ii) foster effective collaboration and cooperation in 
     acquiring and distributing instructional materials and 
     programs; and
       ``(iii) coordinate and enhance computer network access to 
     the Clearinghouse and the resources of the regional 
     consortia;
       ``(E) support the development and dissemination of model 
     professional development and mentoring materials for 
     mathematics and science education;
       ``(F) contribute materials or information, as appropriate, 
     to other national repositories or networks; and
       ``(G) gather qualitative and evaluative data on submissions 
     to the Clearinghouse, and disseminate that data widely, 
     including through the use of electronic dissemination 
     networks.
       ``(4) Submission to clearinghouse.--Each Federal agency or 
     department that develops mathematics or science education 
     instructional materials or programs, including the National 
     Science Foundation and the Department, shall submit copies of 
     that materials or those programs to the Clearinghouse.
       ``(5) Steering committee.--The Secretary may appoint a 
     steering committee to recommend policies and activities for 
     the Clearinghouse.
       ``(6) Application of copyright laws.--
       ``(A) Construction.--Nothing in this section shall be 
     construed to allow the use or copying, in any medium, of any 
     material collected by the Clearinghouse that is protected 
     under the copyright laws of the United States unless the 
     Clearinghouse obtains the permission of the owner of the 
     copyright.
       ``(B) Compliance.--In carrying out this section, the 
     Clearinghouse shall ensure compliance with title 17, United 
     States Code.

                  ``Chapter 2--Transition to Teaching

     ``SEC. 2041. PURPOSE.

       ``The purpose of this chapter is to address the need of 
     high-poverty local educational agencies for highly qualified 
     teachers in particular academic subjects, such as 
     mathematics, science, foreign languages, bilingual education, 
     and special education needed by the agencies, by--
       ``(1) continuing and enhancing the Troops to Teachers model 
     for recruiting and supporting the placement of such teachers; 
     and
       ``(2) recruiting, preparing, placing, and supporting 
     career-changing professionals who have knowledge and 
     experience that will help the professionals become such 
     teachers.

     ``SEC. 2042. DEFINITIONS.

       ``In this chapter:
       ``(1) Program participant.--The term `program participant' 
     means a career-changing professional who--
       ``(A) demonstrates interest in, and commitment to, becoming 
     a teacher; and
       ``(B) has knowledge and experience that is relevant to 
     teaching a high-need academic subject for a high-poverty 
     local educational agency.
       ``(2) Secretary.--The term `Secretary' means the Secretary 
     of Education, except as otherwise determined in accordance 
     with the agreements described in section 2043(b).

     ``SEC. 2043. PROGRAM AUTHORIZED.

       ``(a) Authority.--Subject to subsection (b), using funds 
     made available to carry out this chapter under section 
     2003(2)(A) for each fiscal year, the Secretary may award 
     grants, contracts, or cooperative agreements to institutions 
     of higher education and public and private nonprofit agencies 
     or organizations to carry out programs authorized under this 
     chapter.
       ``(b) Implementation.--
       ``(1) Consultation.--Before making awards under subsection 
     (a) for any fiscal year, the Secretary of Education shall--
       ``(A) consult with the Secretary of Defense and the 
     Secretary of Transportation regarding the appropriate amount 
     of funding needed to carry out this chapter; and
       ``(B) upon agreement, transfer that amount to the 
     Department of Defense to carry out this chapter.
       ``(2) Agreement.--The Secretary of Education may enter into 
     a written agreement with the Secretary of Defense and the 
     Secretary of Transportation, or take such other steps as the 
     Secretary of Education determines are appropriate, to ensure 
     effective implementation of this chapter.

     ``SEC. 2044. APPLICATION.

       ``Each entity that desires an award under section 2043(a) 
     shall submit an application to the Secretary at such time, in 
     such manner, and containing such information as the Secretary 
     may require, including--
       ``(1) a description of the target group of career-changing 
     professionals on which the entity will focus in carrying out 
     a program under this chapter, including a description of the 
     characteristics of that target group that shows how the 
     knowledge and experience of the members of the group are 
     relevant to meeting the purpose of this chapter;
       ``(2) a description of how the entity will identify and 
     recruit program participants;
       ``(3) a description of the training that program 
     participants will receive and how that training will relate 
     to their certification or licensing as teachers;
       ``(4) a description of how the entity will ensure that 
     program participants are placed with, and teach for, high-
     poverty local educational agencies;
       ``(5) a description of the teacher induction services 
     (which may be provided through induction programs in 
     existence on the date of submission of the application) the 
     program participants will receive throughout at least their 
     first year of teaching;
       ``(6) a description of how the entity will collaborate, as 
     needed, with other institutions, agencies, or organizations 
     to recruit, train, place, and support program participants 
     under this chapter, including evidence of the commitment of 
     the institutions, agencies, or organizations to the entity's 
     program;
       ``(7) a description of how the entity will evaluate the 
     progress and effectiveness of the entity's program, including 
     a description of--
       ``(A) the program's goals and objectives;
       ``(B) the performance indicators the entity will use to 
     measure the program's progress; and
       ``(C) the outcome measures that the entity will use to 
     determine the program's effectiveness; and
       ``(8) an assurance that the entity will provide to the 
     Secretary such information as the Secretary determines to be 
     necessary to determine the overall effectiveness of programs 
     carried out under this chapter.

     ``SEC. 2045. USES OF FUNDS AND PERIOD OF SERVICE.

       ``(a) Authorized Activities.--Funds made available under 
     this chapter may be used for--
       ``(1) recruiting program participants, including informing 
     individuals who are potential participants of opportunities 
     available under the program and putting the individuals in 
     contact with other institutions, agencies, or organizations 
     that would train, place, and support the individuals;
       ``(2) providing training stipends and other financial 
     incentives for program participants, such as paying for 
     moving expenses, not to exceed $5,000, in the aggregate, per 
     participant;
       ``(3) assisting institutions of higher education or other 
     providers of teacher training to tailor their training to 
     meet the particular needs of professionals who are changing 
     their careers to teaching;
       ``(4) providing placement activities, including identifying 
     high-poverty local educational agencies with needs for the 
     particular skills and characteristics of the newly trained 
     program participants and assisting the participants to obtain 
     employment with the local educational agencies; and
       ``(5) providing post-placement induction or support 
     activities for program participants.
       ``(b) Period of Service.--A program participant in a 
     program under carried out under this chapter who completes 
     the participant's training shall serve in a high-poverty 
     local educational agency for at least 3 years.
       ``(c) Repayment.--The Secretary shall establish such 
     requirements as the Secretary determines to be appropriate to 
     ensure that program participants who receive a training 
     stipend or other financial incentive under subsection (a)(2), 
     but fail to complete their service obligation under 
     subsection (b), repay all or a portion of such stipend or 
     other incentive.

[[Page 243]]



     ``SEC. 2046. EQUITABLE DISTRIBUTION.

       ``To the extent practicable, the Secretary shall make 
     awards under this chapter that support programs in different 
     geographic regions of the Nation.

                     ``Chapter 3--Hometown Teachers

     ``SEC. 2051. PURPOSE.

       ``The purpose of this chapter is to support the efforts of 
     high-need local educational agencies to develop and implement 
     comprehensive approaches to recruiting and retaining highly 
     qualified teachers, including recruiting such teachers 
     through Hometown Teacher programs that carry out long-term 
     strategies to expand the capacity of the communities served 
     by the agencies to produce local teachers.

     ``SEC. 2052. DEFINITION.

       ``The term `high-need local educational agency' means a 
     local educational agency that serves an elementary school or 
     secondary school located in an area in which there is--
       ``(1) a high percentage (as determined by the State in 
     which the agency is located) of individuals from families 
     with incomes below the poverty line;
       ``(2) a high percentage (as determined by the State in 
     which the agency is located) of secondary school teachers not 
     teaching in the core academic subjects in which the teachers 
     were trained to teach; or
       ``(3) a high percentage (as determined by the State in 
     which the agency is located) of elementary school and 
     secondary school teachers who are not fully qualified 
     teachers.

     ``SEC. 2053. PROGRAM AUTHORIZED.

       ``From funds made available to carry out this chapter under 
     section 2003(2)(B) for each fiscal year, the Secretary may 
     award grants to high-need local educational agencies to carry 
     out Hometown Teacher programs and other activities described 
     in this chapter.

     ``SEC. 2054. APPLICATIONS.

       ``Each high-need local educational agency that desires to 
     receive a grant under section 2053 shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require, 
     including--
       ``(1) a description of the local educational agency's 
     assessment of the agency's needs for teachers, such as the 
     agency's projected shortage of qualified teachers and the 
     percentage of teachers serving the agency who lack 
     certification or licensure or who are teaching out of field;
       ``(2) a description of a Hometown Teacher program that the 
     local educational agency plans to develop and implement with 
     the funds made available through the grant, including a 
     description of--
       ``(A) strategies the agency will use to--
       ``(i) encourage secondary school and middle school students 
     in schools served by the local educational agency to consider 
     pursuing careers in the teaching profession; and
       ``(ii) provide support at the undergraduate level to those 
     students who intend to become teachers; and
       ``(B) the agency's plans to streamline the hiring timelines 
     in the hiring policies and practices of the agency for 
     participants in the Hometown Teacher program;
       ``(3) a description of the long-term strategies that the 
     agency will use, if any, to reduce the agency's teacher 
     attrition rate, including providing mentoring programs and 
     making efforts to raise teacher salaries and create more 
     desirable working conditions for teachers;
       ``(4) a description of the agency's strategy for ensuring 
     that all secondary school teachers and middle school teachers 
     in the school district are fully certified or licensed in an 
     academic subject and are teaching the majority of their 
     classes in the subject in which the teachers are certified or 
     licensed;
       ``(5) a description of the short-term strategies the agency 
     will use, if any, to address the agency's teacher shortage 
     problem, including the strategies the agency will use to 
     ensure that the teachers that the local educational agency is 
     targeting for employment are fully certified or licensed;
       ``(6) a description of the agency's long-term plan for 
     ensuring that the agency's teachers have opportunities for 
     sustained, high-quality professional development;
       ``(7) a description of the ways in which the activities 
     proposed to be carried out through the grant are part of the 
     agency's overall plan for improving the quality of teaching 
     and student achievement;
       ``(8) a description of how the agency will collaborate, as 
     needed, with other institutions, agencies, or organizations 
     to develop and implement the strategies the agency proposes 
     in the application, including evidence of the commitment of 
     the institutions, agencies, or organizations to the agency's 
     activities;
       ``(9) a description of the strategies the agency will use 
     to coordinate activities funded under the program carried out 
     under this chapter with activities funded through other 
     Federal programs that address teacher shortages, including 
     programs carried out through grants to local educational 
     agencies under title I or this title, including chapter 2, if 
     the applicant receives funds from the programs;
       ``(10) a description of how the agency will evaluate the 
     progress and effectiveness of the Hometown Teacher program, 
     including a description of--
       ``(A) the agency's goals and objectives for the program;
       ``(B) the performance indicators that the agency will use 
     to measure the program's effectiveness; and
       ``(C) the measurable outcome measures, such as increased 
     percentages of fully certified or licensed teachers, that the 
     agency will use to determine the program's effectiveness; and
       ``(11) an assurance that the agency will provide to the 
     Secretary such information as the Secretary determines to be 
     necessary to determine the overall effectiveness of programs 
     carried out under this chapter.

     ``SEC. 2055. PRIORITY.

       ``In awarding grants under this chapter, the Secretary may 
     give priority to agencies submitting applications that--
       ``(1) focus on increasing the percentage of qualified 
     teachers in particular teaching fields, such as mathematics, 
     science, and bilingual education; and
       ``(2) focus on recruiting qualified teachers for certain 
     types of communities, such as urban and rural communities.

     ``SEC. 2056. USE OF FUNDS.

       ``(a) Mandatory Use of Funds.--A local educational agency 
     that receives a grant under this chapter shall use the funds 
     made available through the grant to develop and implement 
     long-term strategies to address the agency's teacher 
     shortage, including carrying out Hometown Teacher programs 
     such as the programs described in section 2051.
       ``(b) Permissible Use of Funds.--A local educational agency 
     that receives a grant under this chapter may use the funds 
     made available through the grant to--
       ``(1) develop and implement strategies to reduce the local 
     educational agency's teacher attrition rate, including 
     providing mentoring programs, increasing teacher salaries, 
     and creating more desirable working conditions for teachers; 
     and
       ``(2) develop and implement short-term strategies to 
     address the agency's teacher shortage, including providing 
     scholarships to undergraduates who agree to teach in the 
     school district served by the agency for a certain number of 
     years, providing signing bonuses for teachers, and 
     implementing streamlined hiring practices.
       ``(c) Supplement, Not Supplant.--Funds made available under 
     this chapter shall be used to supplement, and shall not 
     supplant, State and local funds expended to carry out 
     programs and activities authorized under this chapter.

     ``SEC. 2057. SERVICE REQUIREMENTS.

       ``(a) In General.--The Secretary shall establish such 
     requirements as the Secretary finds to be necessary to ensure 
     that a recipient of a scholarship under this chapter who 
     completes a teacher education program subsequently--
       ``(1) teaches in a school district served by a high-need 
     local educational agency, for a period of time equivalent to 
     the period for which the recipient received the scholarship; 
     or
       ``(2) repays the amount of the funds provided through the 
     scholarship.
       ``(b) Use of Repaid Funds.--The Secretary shall deposit any 
     such repaid funds in an account, and use the funds to carry 
     out additional activities under this chapter.

     ``Chapter 4--Early Childhood Educator Professional Development

     ``SEC. 2061. PURPOSE.

       ``In support of the national effort to attain the first of 
     America's Education Goals, the purpose of this chapter is to 
     enhance the school readiness of young children, particularly 
     disadvantaged young children, and to prevent them from 
     encountering reading difficulties once they enter school, by 
     improving the knowledge and skills of early childhood 
     educators who work in communities that have high 
     concentrations of children living in poverty.

     ``SEC. 2062. PROGRAM AUTHORIZED.

       ``(a) Grants to Partnerships.--The Secretary shall carry 
     out the purpose of this chapter by awarding grants, on a 
     competitive basis, to partnerships consisting of--
       ``(1)(A) one or more institutions of higher education that 
     provide professional development for early childhood 
     educators who work with children from low-income families in 
     high-need communities; or
       ``(B) another public or private, nonprofit entity that 
     provides such professional development;
       ``(2) one or more public agencies (including local 
     educational agencies, State educational agencies, State human 
     services agencies, and State and local agencies administering 
     programs under the Child Care and Development Block Grant Act 
     of 1990), Head Start agencies, or private, nonprofit 
     organizations; and
       ``(3) to the extent feasible, an entity with demonstrated 
     experience in providing violence prevention education 
     training to educators in early childhood education programs.
       ``(b) Priority.--In awarding grants under this chapter, the 
     Secretary shall give priority to partnerships that include 1 
     or more local educational agencies which operate early 
     childhood education programs for children from low-income 
     families in high-need communities.
       ``(c) Duration and Number of Grants.--

[[Page 244]]

       ``(1) Duration.--Each grant under this chapter shall be 
     awarded for not more than 4 years.
       ``(2) Number.--No partnership may receive more than 1 grant 
     under this chapter.

     ``SEC. 2063. APPLICATIONS.

       ``(a) Applications Required.--Any partnership that desires 
     to receive a grant under this chapter shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require.
       ``(b) Contents.--Each such application shall include--
       ``(1) a description of the high-need community to be served 
     by the project, including such demographic and socioeconomic 
     information as the Secretary may request;
       ``(2) information on the quality of the early childhood 
     educator professional development program currently conducted 
     by the institution of higher education or other provider in 
     the partnership;
       ``(3) the results of the assessment that the entities in 
     the partnership have undertaken to determine the most 
     critical professional development needs of the early 
     childhood educators to be served by the partnership and in 
     the broader community, and a description of how the proposed 
     project will address those needs;
       ``(4) a description of how the proposed project will be 
     carried out, including--
       ``(A) how individuals will be selected to participate;
       ``(B) the types of research-based professional development 
     activities that will be carried out;
       ``(C) how research on effective professional development 
     and on adult learning will be used to design and deliver 
     project activities;
       ``(D) how the project will coordinate with and build on, 
     and will not supplant or duplicate, early childhood education 
     professional development activities that exist in the 
     community;
       ``(E) how the project will train early childhood educators 
     to provide services that are based on developmentally 
     appropriate practices and the best available research on 
     child, language, and literacy development and on early 
     childhood pedagogy;
       ``(F) how the program will train early childhood educators 
     to meet the diverse educational needs of children in the 
     community, including children who have limited English 
     proficiency, disabilities, or other special needs; and
       ``(G) how the project will train early childhood educators 
     in identifying and preventing behavioral problems or violent 
     behavior in children;
       ``(5) a description of--
       ``(A) the specific objectives that the partnership will 
     seek to attain through the project, and how the partnership 
     will measure progress toward attainment of those objectives; 
     and
       ``(B) how the objectives and the measurement activities 
     align with the performance indicators established by the 
     Secretary under section 2066(a);
       ``(6) a description of the partnership's plan for 
     institutionalizing the activities carried out under the 
     project, so that the activities continue once Federal funding 
     ceases;
       ``(7) an assurance that, where applicable, the project will 
     provide appropriate professional development to volunteer 
     staff, as well as to paid staff; and
       ``(8) an assurance that, in developing its application and 
     in carrying out its project, the partnership has consulted 
     with, and will consult with, relevant agencies and early 
     childhood educator organizations described in section 
     2062(a)(2) that are not members of the partnership.

     ``SEC. 2064. SELECTION OF GRANTEES.

       ``(a) Criteria.--The Secretary shall select partnerships to 
     receive funding on the basis of the community's need for 
     assistance and the quality of the applications.
       ``(b) Geographic Distribution.--In selecting partnerships, 
     the Secretary shall seek to ensure that communities in 
     different regions of the Nation, as well as both urban and 
     rural communities, are served.

     ``SEC. 2065. USES OF FUNDS.

       ``(a) In General.--Each partnership receiving a grant under 
     this chapter shall use the grant funds to carry out 
     activities that will improve the knowledge and skills of 
     early childhood educators who are working in early childhood 
     programs that are located in high-need communities and serve 
     concentrations of children from low-income families.
       ``(b) Allowable Activities.--Such activities may include--
       ``(1) professional development for individuals working as 
     early childhood educators, particularly to familiarize those 
     individuals with the application of recent research on child, 
     language, and literacy development and on early childhood 
     pedagogy;
       ``(2) professional development for early childhood 
     educators in working with parents, based on the best current 
     research on child, language, and literacy development and 
     parent involvement, so that the educators can prepare their 
     children to succeed in school;
       ``(3) professional development for early childhood 
     educators to work with children who have limited English 
     proficiency, disabilities, and other special needs;
       ``(4) professional development to train early childhood 
     educators in identifying and preventing behavioral problems 
     or violent behavior in children;
       ``(5) activities that assist and support early childhood 
     educators during their first three years in the field;
       ``(6) development and implementation of early childhood 
     educator professional development programs that make use of 
     distance learning and other technologies;
       ``(7) professional development activities related to the 
     selection and use of research-based diagnostic assessments to 
     improve teaching and learning; and
       ``(8) data collection, evaluation, and reporting needed to 
     meet the requirements of this chapter relating to 
     accountability.

     ``SEC. 2066. ACCOUNTABILITY.

       ``(a) Performance Indicators.--Simultaneously with the 
     publication of any application notice for grants under this 
     chapter, the Secretary shall announce performance indicators 
     for this chapter, which shall be designed to measure--
       ``(1) the quality and assessability of the professional 
     development provided;
       ``(2) the impact of that professional development on the 
     early childhood education provided by the individuals who are 
     trained; and
       ``(3) such other measures of program impact as the 
     Secretary determines appropriate.
       ``(b) Annual Reports; Termination.--
       ``(1) Annual reports.--Each partnership receiving a grant 
     under this chapter shall report annually to the Secretary on 
     the partnership's progress against the performance 
     indicators.
       ``(2) Termination.--The Secretary may terminate a grant 
     under this chapter at any time if the Secretary determines 
     that the partnership is not making satisfactory progress 
     against the indicators.

     ``SEC. 2067. COST-SHARING.

       ``(a) In General.--Each partnership shall provide, from 
     other sources, which may include other Federal sources--
       ``(1) at least 50 percent of the total cost of its project 
     for the grant period; and
       ``(2) at least 20 percent of the project cost in each year.
       ``(b) Acceptable Contributions.--A partnership may meet the 
     requirement of subsection (a) through cash or in-kind 
     contributions, fairly valued.
       ``(c) Waivers.--The Secretary may waive or modify the 
     requirements of subsection (a) in cases of demonstrated 
     financial hardship.

     ``SEC. 2068. FEDERAL COORDINATION.

       ``The Secretary and the Secretary of Health and Human 
     Services shall coordinate activities under this chapter and 
     other early childhood programs administered by the two 
     Secretaries.

     ``SEC. 2069. DEFINITIONS.

       ``In this chapter:
       ``(1) High-need community.--
       ``(A) In general.--The term `high-need community' means--
       ``(i) a municipality, or a portion of a municipality, in 
     which at least 50 percent of the children are from low-income 
     families; or
       ``(ii) a municipality that is one of the 10 percent of 
     municipalities within the State having the greatest numbers 
     of such children.
       ``(B) Determination.--In determining which communities are 
     described in subparagraph (A), the Secretary shall use such 
     data as the Secretary determines are most accurate and 
     appropriate.
       ``(2) Low-income family.--The term `low-income family' 
     means a family with an income below the poverty line (as 
     defined by the Office of Management and Budget and revised 
     annually in accordance with section 673(2) of the Community 
     Services Block Grant Act) applicable to a family of the size 
     involved for the most recent fiscal year for which 
     satisfactory data are available.
       ``(3) Early childhood educator.--The term `early childhood 
     educator' means a person who provides care and education to 
     children at any age from birth through kindergarten.''.
       (b) Conforming Amendment.--The Troops-to-Teachers Program 
     Act of 1999 (20 U.S.C. 9301 et seq.) is repealed.

           Subtitle B--Safe, Healthy Schools and Communities

                CHAPTER 1--GRANTS FOR SCHOOL RENOVATION

     SEC. 311. GRANTS FOR SCHOOL RENOVATION.

       Title X (20 U.S.C. 8001 et seq.) is amended by adding at 
     the end the following:

                      ``PART L--SCHOOL RENOVATION

     ``SEC. 10995. GRANTS FOR SCHOOL RENOVATION.

       ``(a) In General.--
       ``(1) Allocation of funds.--Of the amount appropriated for 
     each fiscal year under subsection (k), the Secretary of 
     Education shall allocate--
       ``(A) 6.0 percent of such amount for grants to impacted 
     local educational agencies (as defined in paragraph (3)) for 
     school repair, renovation, and construction;
       ``(B) 0.25 percent of such amount for grants to outlying 
     areas for school repair and renovation in high-need schools 
     and communities, allocated on such basis, and subject to such 
     terms and conditions, as the Secretary determines 
     appropriate;
       ``(C) 2 percent of such amount for grants to public 
     entities, private nonprofit entities,

[[Page 245]]

     and consortia of such entities, for use in accordance with 
     subpart 2 of part C of this title X; and
       ``(D) the remainder to State educational agencies in 
     proportion to the amount each State received under part A of 
     title I for fiscal year 2001, except that no State shall 
     receive less than 0.5 percent of the amount allocated under 
     this subparagraph.
       ``(2) Determination of grant amount.--
       ``(A) Determination of weighted student units.--For 
     purposes of computing the grant amounts under paragraph 
     (1)(A) for fiscal year 2001, the Secretary shall determine 
     the results obtained by the computation made under section 
     8003 with respect to children described in subsection 
     (a)(1)(C) of such section and computed under subsection 
     (a)(2)(B) of such section for such year--
       ``(i) for each impacted local educational agency that 
     receives funds under this section; and
       ``(ii) for all such agencies together.
       ``(B) Computation of payment.--For fiscal year 2002, the 
     Secretary shall calculate the amount of a grant to an 
     impacted local educational agency by--
       ``(i) dividing the amount described in paragraph (1)(A) by 
     the results of the computation described in subparagraph 
     (A)(ii); and
       ``(ii) multiplying the number derived under clause (i) by 
     the results of the computation described in subparagraph 
     (A)(i) for such agency.
       ``(3) Definition.--For purposes of this section, the term 
     `impacted local educational agency' means, for fiscal year 
     2001--
       ``(A) a local educational agency that receives a basic 
     support payment under section 8003(b) for such fiscal year; 
     and
       ``(B) with respect to which the number of children 
     determined under section 8003(a)(1)(C) for the preceding 
     school year constitutes at least 50 percent of the total 
     student enrollment in the schools of the agency during such 
     school year.
       ``(b) Within-State Allocations.--
       ``(1) Administrative costs.--
       ``(A) State educational agency administration.--Except as 
     provided in subparagraph (B), each State educational agency 
     may reserve not more than 1 percent of its allocation under 
     subsection (a)(1)(D) for the purpose of administering the 
     distribution of grants under this subsection.
       ``(B) State entity administration.--If the State 
     educational agency transfers funds to a State entity 
     described in paragraph (2)(A), the agency shall transfer to 
     such entity 0.75 of the amount reserved under this paragraph 
     for the purpose of administering the distribution of grants 
     under this subsection.
       ``(2) Reservation for competitive school repair and 
     renovation grants to local educational agencies.--
       ``(A) In general.--Subject to the reservation under 
     paragraph (1), of the funds allocated to a State educational 
     agency under subsection (a)(1)(D), the State educational 
     agency shall distribute 75 percent of such funds to local 
     educational agencies or, if such State educational agency is 
     not responsible for the financing of education facilities, 
     the agency shall transfer such funds to the State entity 
     responsible for the financing of education facilities 
     (referred to in this section as the `State entity') for 
     distribution by such entity to local educational agencies in 
     accordance with this paragraph, to be used, consistent with 
     subsection (c), for school repair and renovation.
       ``(B) Competitive grants to local educational agencies.--
       ``(i) In general.--The State educational agency or State 
     entity shall carry out a program of competitive grants to 
     local educational agencies for the purpose described in 
     subparagraph (A). Of the total amount available for 
     distribution to such agencies under this paragraph, the State 
     educational agency or State entity, shall, in carrying out 
     the competition--

       ``(I) award to high poverty local educational agencies 
     described in clause (ii), in the aggregate, at least an 
     amount which bears the same relationship to such total amount 
     as the aggregate amount such local educational agencies 
     received under part A of title I for fiscal year 2002 bears 
     to the aggregate amount received for such fiscal year under 
     such part by all local educational agencies in the State;
       ``(II) award to rural local educational agencies in the 
     State, in the aggregate, at least an amount which bears the 
     same relationship to such total amount as the aggregate 
     amount such rural local educational agencies received under 
     part A of title I for fiscal year 2001 bears to the aggregate 
     amount received for such fiscal year under such part by all 
     local educational agencies in the State; and
       ``(III) award the remaining funds to local educational 
     agencies not receiving an award under subclause (I) or (II), 
     including high poverty and rural local educational agencies 
     that did not receive such an award.

       ``(ii) High poverty local educational agencies.--A local 
     educational agency is described in this clause if--

       ``(I) the percentage described in subparagraph (C)(i) with 
     respect to the agency is 30 percent or greater; or
       ``(II) the number of children described in such 
     subparagraph with respect to the agency is at least 10,000.

       ``(C) Criteria for awarding grants.--In awarding 
     competitive grants under this paragraph, a State educational 
     agency or State entity shall take into account the following 
     criteria:
       ``(i) The percentage of poor children 5 to 17 years of age, 
     inclusive, in a local educational agency.
       ``(ii) The need of a local educational agency for school 
     repair and renovation, as demonstrated by the condition of 
     its public school facilities.
       ``(iii) The fiscal capacity of a local educational agency 
     to meet its needs for repair and renovation of public school 
     facilities without assistance under this section, including 
     its ability to raise funds through the use of local bonding 
     capacity and otherwise.
       ``(iv) In the case of a local educational agency that 
     proposes to fund a repair or renovation project for a charter 
     school or schools, the extent to which the school or schools 
     have access to funding for the project through the financing 
     methods available to other public schools or local 
     educational agencies in the State.
       ``(v) The likelihood that the local educational agency will 
     maintain, in good condition, any facility whose repair or 
     renovation is assisted under this section.
       ``(D) Possible matching requirement.--
       ``(i) In general.--A State educational agency or State 
     entity may require local educational agencies to match funds 
     awarded under this subsection.
       ``(ii) Match amount.--The amount of a match described in 
     clause (i) may be established by using a sliding scale that 
     takes into account the relative poverty of the population 
     served by the local educational agency.
       ``(3) Reservation for competitive idea or technology grants 
     to local educational agencies.--
       ``(A) In general.--Subject to the reservation under 
     paragraph (1), of the funds allocated to a State educational 
     agency under subsection (a)(1)(D), the State educational 
     agency shall distribute 25 percent of such funds to local 
     educational agencies through competitive grant processes, to 
     be used for the following:
       ``(i) To carry out activities under part B of the 
     Individuals with Disabilities Education Act (20 U.S.C. 1411 
     et seq.).
       ``(ii) For technology activities that are carried out in 
     connection with school repair and renovation, including--

       ``(I) wiring;
       ``(II) acquiring hardware and software;
       ``(III) acquiring connectivity linkages and resources; and
       ``(IV) acquiring microwave, fiber optics, cable, and 
     satellite transmission equipment.

       ``(B) Criteria for awarding idea grants.--In awarding 
     competitive grants under subparagraph (A) to be used to carry 
     out activities under part B of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1411 et seq.), a State 
     educational agency shall take into account the following 
     criteria:
       ``(i) The need of a local educational agency for additional 
     funds for a student whose individually allocable cost for 
     expenses related to the Individuals with Disabilities 
     Education Act substantially exceeds the State's average per-
     pupil expenditure (as defined in section 14101(2)).
       ``(ii) The need of a local educational agency for 
     additional funds for special education and related services 
     under part B of the Individuals with Disabilities Education 
     Act (20 U.S.C. 1411 et seq.).
       ``(iii) The need of a local educational agency for 
     additional funds for assistive technology devices (as defined 
     in section 602 of the Individuals with Disabilities Education 
     Act (20 U.S.C. 1401)) or assistive technology services (as so 
     defined) for children being served under part B of the 
     Individuals with Disabilities Education Act (20 U.S.C. 1411 
     et seq.).
       ``(iv) The need of a local educational agency for 
     additional funds for activities under part B of the 
     Individuals with Disabilities Education Act (20 U.S.C. 1411 
     et seq.) in order for children with disabilities to make 
     progress toward meeting the performance goals and indicators 
     established by the State under section 612(a)(16) of such Act 
     (20 U.S.C. 1412).
       ``(C) Criteria for awarding technology grants.--In awarding 
     competitive grants under subparagraph (A) to be used for 
     technology activities that are carried out in connection with 
     school repair and renovation, a State educational agency 
     shall take into account the need of a local educational 
     agency for additional funds for such activities, including 
     the need for the activities described in subclauses (I) 
     through (IV) of subparagraph (A)(ii).
       ``(c) Rules Applicable to School Repair and Renovation.--
     With respect to funds made available under this section that 
     are used for school repair and renovation, the following 
     rules shall apply:
       ``(1) Permissible uses of funds.--School repair and 
     renovation shall be limited to one or more of the following:
       ``(A) Emergency repairs or renovations to public school 
     facilities only to ensure the health and safety of students 
     and staff, including--
       ``(i) repairing, replacing, or installing roofs, electrical 
     wiring, plumbing systems, or sewage systems;

[[Page 246]]

       ``(ii) repairing, replacing, or installing heating, 
     ventilation, or air conditioning systems (including 
     insulation); and
       ``(iii) bringing public schools into compliance with fire 
     and safety codes.
       ``(B) School facilities modifications necessary to render 
     public school facilities accessible in order to comply with 
     the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 
     et seq.).
       ``(C) School facilities modifications necessary to render 
     public school facilities accessible in order to comply with 
     section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 
     794).
       ``(D) Asbestos abatement or removal from public school 
     facilities.
       ``(E) Renovation, repair, and acquisition needs related to 
     the building infrastructure of a charter school.
       ``(2) Impermissible uses of funds.--No funds received under 
     this section may be used for--
       ``(A) payment of maintenance costs in connection with any 
     projects constructed in whole or part with Federal funds 
     provided under this section;
       ``(B) the construction of new facilities, except for 
     facilities for an impacted local educational agency (as 
     defined in subsection (a)(3)); or
       ``(C) stadiums or other facilities primarily used for 
     athletic contests or exhibitions or other events for which 
     admission is charged to the general public.
       ``(3) Charter schools.--A public charter school that 
     constitutes a local educational agency under State law shall 
     be eligible for assistance under the same terms and 
     conditions as any other local educational agency (as defined 
     in section 14101(18)).
       ``(4) Supplement, not supplant.--Excluding the uses 
     described in subparagraphs (B) and (C) of paragraph (1), a 
     local educational agency shall use Federal funds subject to 
     this subsection only to supplement the amount of funds that 
     would, in the absence of such Federal funds, be made 
     available from non-Federal sources for school repair and 
     renovation.
       ``(d) Special Rule.--Each local educational agency that 
     receives funds under this section shall ensure that, if it 
     carries out repair or renovation through a contract, any such 
     contract process ensures the maximum number of qualified 
     bidders, including small, minority, and women-owned 
     businesses, through full and open competition.
       ``(e) Public Comment.--Each local educational agency 
     receiving funds under paragraph (2) or (3) of subsection 
     (b)--
       ``(1) shall provide parents, educators, and all other 
     interested members of the community the opportunity to 
     consult on the use of funds received under such paragraph;
       ``(2) shall provide the public with adequate and efficient 
     notice of the opportunity described in paragraph (1) in a 
     widely read and distributed medium; and
       ``(3) shall provide the opportunity described in paragraph 
     (1) in accordance with any applicable State and local law 
     specifying how the comments may be received and how the 
     comments may be reviewed by any member of the public.
       ``(f) Reporting.--
       ``(1) Local reporting.--Each local educational agency 
     receiving funds under subsection (a)(1)(D) shall submit a 
     report to the State educational agency, at such time as the 
     State educational agency may require, describing the use of 
     such funds for--
       ``(A) school repair and renovation (and construction, in 
     the case of an impacted local educational agency (as defined 
     in subsection (a)(3)));
       ``(B) activities under part B of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1411 et seq.); and
       ``(C) technology activities that are carried out in 
     connection with school repair and renovation, including the 
     activities described in subclauses (I) through (IV) of 
     subsection (b)(3)(A)(ii).
       ``(2) State reporting.--Each State educational agency shall 
     submit to the Secretary of Education, not later than December 
     31, 2003, a report on the use of funds received under 
     subsection (a)(1)(D) by local educational agencies for--
       ``(A) school repair and renovation (and construction, in 
     the case of an impacted local educational agency (as defined 
     in subsection (a)(3)));
       ``(B) activities under part B of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1411 et seq.); and
       ``(C) technology activities that are carried out in 
     connection with school repair and renovation, including the 
     activities described in subclauses (I) through (IV) of 
     subsection (b)(3)(A)(ii).
       ``(3) Additional reports.--Each entity receiving funds 
     allocated under subsection (a)(1) (A) of (B) shall submit to 
     the Secretary, not later than December 31, 2003, a report on 
     its uses of funds under this section, in such form and 
     containing such information as the Secretary may require.
       ``(g) Applicability of Part B of IDEA.--If a local 
     educational agency uses funds received under this section to 
     carry out activities under part B of the Individuals with 
     Disabilities Education Act (20 U.S.C. 1411 et seq.), such 
     part (including provisions respecting the participation of 
     private school children), and any other provision of law that 
     applies to such part, shall apply to such use.
       ``(h) Reallocation.--If a State educational agency does not 
     apply for an allocation of funds under subsection (a)(1)(D) 
     for fiscal year 2002, or does not use its entire allocation 
     for such fiscal year, the Secretary may reallocate the amount 
     of the State educational agency's allocation (or the 
     remainder thereof, as the case may be) to the remaining State 
     educational agencies in accordance with subsection (a)(1)(D).
       ``(i) Participation of Private Schools.--
       ``(1) In general.--Section 6402 shall apply to subsection 
     (b)(2) in the same manner as it applies to activities under 
     title VI, except that--
       ``(A) such section shall not apply with respect to the 
     title to any real property renovated or repaired with 
     assistance provided under this section;
       ``(B) the term `services' as used in section 6402 with 
     respect to funds under this section shall be provided only to 
     private, nonprofit elementary or secondary schools with a 
     rate of child poverty of at least 40 percent and may include 
     for purposes of subsection (b)(2) only--
       ``(i) modifications of school facilities necessary to meet 
     the standards applicable to public schools under the 
     Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et 
     seq.);
       ``(ii) modifications of school facilities necessary to meet 
     the standards applicable to public schools under section 504 
     of the Rehabilitation Act of 1973 (29 U.S.C. 794); and
       ``(iii) asbestos abatement or removal from school 
     facilities; and
       ``(C) notwithstanding the requirements of section 6402(b), 
     expenditures for services provided using funds made available 
     under subsection (b)(2) shall be considered equal for 
     purposes of such section if the per-pupil expenditures for 
     services described in subparagraph (B) for students enrolled 
     in private nonprofit elementary and secondary schools that 
     have child poverty rates of at least 40 percent are 
     consistent with the per-pupil expenditures under this section 
     for children enrolled in the public schools in the school 
     district of the local educational agency receiving funds 
     under this section.
       ``(2) Remaining funds.--If the expenditure for services 
     described in paragraph (1)(B) is less than the amount 
     calculated under paragraph (1)(C) because of insufficient 
     need for such services, the remainder shall be available to 
     the local educational agency for renovation and repair of 
     public school facilities.
       ``(3) Application.--If any provision of this section, or 
     the application thereof, to any person or circumstances is 
     judicially determined to be invalid, the provisions of the 
     remainder of the section and the application to other persons 
     or circumstances shall not be affected thereby.
       ``(j) Definitions.--For purposes of this section:
       ``(1) Charter school.--The term `charter school' has the 
     meaning given such term in section 10310(1).
       ``(2) Poor children and child poverty.--The terms `poor 
     children' and `child poverty' refer to children 5 to 17 years 
     of age, inclusive, who are from families with incomes below 
     the poverty line (as defined by the Office of Management and 
     Budget and revised annually in accordance with section 673(2) 
     of the Community Services Block Grant (42 U.S.C. 9902(2)) 
     applicable to a family of the size involved for the most 
     recent fiscal year for which data satisfactory to the 
     Secretary are available.
       ``(3) Rural local educational agency.--The term `rural 
     local educational agency' means a local educational agency 
     that the State determines is located in a rural area using 
     objective data and a commonly employed definition of the term 
     `rural'.
       ``(4) State.--The term `State' means each of the 50 states, 
     the District of Columbia, and the Commonwealth of Puerto 
     Rico.
       ``(k) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $1,600,000,000 
     for fiscal year 2002, and such sums as may be necessary for 
     each of fiscal years 2003 through 2006.''.

     SEC. 312. CHARTER SCHOOL CREDIT ENHANCEMENT INITIATIVE.

       Section 10331, as added by section 322 of the Departments 
     of Labor, Health and Human Services, and Education, and 
     Related Agencies Appropriations Act, 2001 (as enacted into 
     law by section 1(a)(1) of Public Law 106-554) is amended by 
     inserting before the period the following: ``, and such sums 
     as may be necessary for each of fiscal years 2002 through 
     2006''.

                     CHAPTER 2--SCHOOL CONSTRUCTION

     SEC. 321. SHORT TITLE.

       This chapter may be cited as the ``America's Better 
     Classrooms Act of 2001''.

     SEC. 322. EXPANSION OF INCENTIVES FOR PUBLIC SCHOOLS.

       (a) In General.--Chapter 1 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     subchapter:

         ``Subchapter X--Public School Modernization Provisions

``Sec. 1400F. Credit to holders of qualified public school 
              modernization bonds.
``Sec. 1400G. Qualified school construction bonds.
``Sec. 1400H. Qualified zone academy bonds.

[[Page 247]]



     ``SEC. 1400F. CREDIT TO HOLDERS OF QUALIFIED PUBLIC SCHOOL 
                   MODERNIZATION BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a qualified public school modernization bond on a 
     credit allowance date of such bond which occurs during the 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter for such taxable year an amount 
     equal to the sum of the credits determined under subsection 
     (b) with respect to credit allowance dates during such year 
     on which the taxpayer holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified public school modernization bond is 25 
     percent of the annual credit determined with respect to such 
     bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified public school modernization bond is 
     the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (1), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of issuance of the issue) on outstanding 
     long-term corporate debt obligations (determined under 
     regulations prescribed by the Secretary).
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C thereof, relating to 
     refundable credits).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) Qualified Public School Modernization Bond; Credit 
     Allowance Date.--For purposes of this section--
       ``(1) Qualified public school modernization bond.--The term 
     `qualified public school modernization bond' means--
       ``(A) a qualified zone academy bond, and
       ``(B) a qualified school construction bond.
       ``(2) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(e) Other Definitions.--For purposes of this subchapter--
       ``(1) Local educational agency.--The term `local 
     educational agency' has the meaning given to such term by 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965. Such term includes the local educational agency that 
     serves the District of Columbia but does not include any 
     other State agency.
       ``(2) Bond.--The term `bond' includes any obligation.
       ``(3) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(4) Public school facility.--The term `public school 
     facility' shall not include--
       ``(A) any stadium or other facility primarily used for 
     athletic contests or exhibitions or other events for which 
     admission is charged to the general public, or
       ``(B) any facility which is not owned by a State or local 
     government or any agency or instrumentality of a State or 
     local government.
       ``(f) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(g) Bonds Held by Regulated Investment Companies.--If any 
     qualified public school modernization bond is held by a 
     regulated investment company, the credit determined under 
     subsection (a) shall be allowed to shareholders of such 
     company under procedures prescribed by the Secretary.
       ``(h) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified public school 
     modernization bond and the entitlement to the credit under 
     this section with respect to such bond. In case of any such 
     separation, the credit under this section shall be allowed to 
     the person who on the credit allowance date holds the 
     instrument evidencing the entitlement to the credit and not 
     to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified public school modernization bond as if 
     it were a stripped bond and to the credit under this section 
     as if it were a stripped coupon.
       ``(i) Treatment for Estimated Tax Purposes.--Solely for 
     purposes of sections 6654 and 6655, the credit allowed by 
     this section to a taxpayer by reason of holding a qualified 
     public school modernization bonds on a credit allowance date 
     shall be treated as if it were a payment of estimated tax 
     made by the taxpayer on such date.
       ``(j) Credit May Be Transferred.--Nothing in any law or 
     rule of law shall be construed to limit the transferability 
     of the credit allowed by this section through sale and 
     repurchase agreements.
       ``(k) Reporting.--Issuers of qualified public school 
     modernization bonds shall submit reports similar to the 
     reports required under section 149(e).
       ``(l) Termination.--This section shall not apply to any 
     bond issued after September 30, 2006.

     ``SEC. 1400G. QUALIFIED SCHOOL CONSTRUCTION BONDS.

       ``(a) Qualified School Construction Bond.--For purposes of 
     this subchapter, the term `qualified school construction 
     bond' means any bond issued as part of an issue if--
       ``(1) 95 percent or more of the proceeds of such issue are 
     to be used for the construction, rehabilitation, or repair of 
     a public school facility or for the acquisition of land on 
     which such a facility is to be constructed with part of the 
     proceeds of such issue,
       ``(2) the bond is issued by a State or local government 
     within the jurisdiction of which such school is located,
       ``(3) the issuer designates such bond for purposes of this 
     section, and
       ``(4) the term of each bond which is part of such issue 
     does not exceed 15 years.
       ``(b) Limitation on Amount of Bonds Designated.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) by 
     any issuer shall not exceed the sum of--
       ``(1) the limitation amount allocated under subsection (d) 
     for such calendar year to such issuer, and
       ``(2) if such issuer is a large local educational agency 
     (as defined in subsection (e)(4)) or is issuing on behalf of 
     such an agency, the limitation amount allocated under 
     subsection (e) for such calendar year to such agency.
       ``(c) National Limitation on Amount of Bonds Designated.--
     There is a national qualified school construction bond 
     limitation for each calendar year. Such limitation is--
       ``(1) $11,000,000,000 for 2002,
       ``(2) $11,000,000,000 for 2003, and
       ``(3) except as provided in subsection (f), zero after 
     2003.
       ``(d) 60 Percent of Limitation Allocated Among States.--
       ``(1) In general.--60 percent of the limitation applicable 
     under subsection (c) for any calendar year shall be allocated 
     by the Secretary among the States in proportion to the 
     respective numbers of children in each State who have 
     attained age 5 but not age 18 for the most recent fiscal year 
     ending before such calendar year. The limitation amount 
     allocated to a State under the preceding sentence shall be 
     allocated by the State to issuers within such State and such 
     allocations may be made only if there is an approved State 
     application.
       ``(2) Minimum allocations to states.--
       ``(A) In general.--The Secretary shall adjust the 
     allocations under this subsection for any calendar year for 
     each State to the extent necessary to ensure that the sum 
     of--
       ``(i) the amount allocated to such State under this 
     subsection for such year, and
       ``(ii) the aggregate amounts allocated under subsection (e) 
     to large local educational agencies in such State for such 
     year,
     is not less than an amount equal to such State's minimum 
     percentage of the amount to be allocated under paragraph (1) 
     for the calendar year.
       ``(B) Minimum percentage.--A State's minimum percentage for 
     any calendar year is the minimum percentage described in 
     section 1124(d) of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 6334(d)) for such State for the most 
     recent fiscal year ending before such calendar year.
       ``(3) Allocations to certain possessions.--The amount to be 
     allocated under paragraph (1) to any possession of the United 
     States other than Puerto Rico shall be the amount which would 
     have been allocated if all allocations under paragraph (1) 
     were made on the basis of respective populations of 
     individuals below the poverty line (as defined by the Office 
     of Management and Budget). In making other allocations, the 
     amount to be allocated under paragraph (1) shall be reduced 
     by the aggregate amount allocated

[[Page 248]]

     under this paragraph to possessions of the United States.
       ``(4) Allocations for indian schools.--The provisions of 
     section 1400J shall apply with respect to the construction, 
     rehabilitation, and repair of schools funded by the Bureau of 
     Indian Affairs. No funds may be allocated under this section 
     for such schools.
       ``(5) Approved state application.--For purposes of 
     paragraph (1), the term `approved State application' means an 
     application which is approved by the Secretary of Education 
     and which includes--
       ``(A) the results of a recent publicly-available survey 
     (undertaken by the State with the involvement of local 
     education officials, members of the public, and experts in 
     school construction and management) of such State's needs for 
     public school facilities, including descriptions of--
       ``(i) health and safety problems at such facilities,
       ``(ii) the capacity of public schools in the State to house 
     projected enrollments, and
       ``(iii) the extent to which the public schools in the State 
     offer the physical infrastructure needed to provide a high-
     quality education to all students, and
       ``(B) a description of how the State will allocate to local 
     educational agencies, or otherwise use, its allocation under 
     this subsection to address the needs identified under 
     subparagraph (A), including a description of how it will--
       ``(i) ensure that the needs of both rural and urban areas 
     will be recognized,
       ``(ii) give highest priority to localities with the 
     greatest needs, as demonstrated by inadequate school 
     facilities coupled with a low level of resources to meet 
     those needs,
       ``(iii) use its allocation under this subsection to assist 
     localities that lack the fiscal capacity to issue bonds on 
     their own, and
       ``(iv) ensure that its allocation under this subsection is 
     used only to supplement, and not supplant, the amount of 
     school construction, rehabilitation, and repair in the State 
     that would have occurred in the absence of such allocation.
     Any allocation under paragraph (1) by a State shall be 
     binding if such State reasonably determined that the 
     allocation was in accordance with the plan approved under 
     this paragraph.
       ``(e) 40 Percent of Limitation Allocated Among Largest 
     School Districts.--
       ``(1) In general.--40 percent of the limitation applicable 
     under subsection (c) for any calendar year shall be allocated 
     under paragraph (2) by the Secretary among local educational 
     agencies which are large local educational agencies for such 
     year. No qualified school construction bond may be issued by 
     reason of an allocation to a large local educational agency 
     under the preceding sentence unless such agency has an 
     approved local application.
       ``(2) Allocation formula.--The amount to be allocated under 
     paragraph (1) for any calendar year shall be allocated among 
     large local educational agencies in proportion to the 
     respective amounts each such agency received for Basic Grants 
     under subpart 2 of part A of title I of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) for 
     the most recent fiscal year ending before such calendar year.
       ``(3) Allocation of unused limitation to state.--The amount 
     allocated under this subsection to a large local educational 
     agency for any calendar year may be reallocated by such 
     agency to the State in which such agency is located for such 
     calendar year. Any amount reallocated to a State under the 
     preceding sentence may be allocated as provided in subsection 
     (d)(1).
       ``(4) Large local educational agency.--For purposes of this 
     section, the term `large local educational agency' means, 
     with respect to a calendar year, any local educational agency 
     if such agency is--
       ``(A) among the 100 local educational agencies with the 
     largest numbers of children aged 5 through 17 from families 
     living below the poverty level, as determined by the 
     Secretary using the most recent data available from the 
     Department of Commerce that are satisfactory to the 
     Secretary, or
       ``(B) 1 of not more than 25 local educational agencies 
     (other than those described in subparagraph (A)) that the 
     Secretary of Education determines (based on the most recent 
     data available satisfactory to the Secretary) are in 
     particular need of assistance, based on a low level of 
     resources for school construction, a high level of enrollment 
     growth, or such other factors as the Secretary deems 
     appropriate.
       ``(5) Approved local application.--For purposes of 
     paragraph (1), the term `approved local application' means an 
     application which is approved by the Secretary of Education 
     and which includes--
       ``(A) the results of a recent publicly-available survey 
     (undertaken by the local educational agency or the State with 
     the involvement of school officials, members of the public, 
     and experts in school construction and management) of such 
     agency's needs for public school facilities, including 
     descriptions of--
       ``(i) the overall condition of the local educational 
     agency's school facilities, including health and safety 
     problems,
       ``(ii) the capacity of the agency's schools to house 
     projected enrollments, and
       ``(iii) the extent to which the agency's schools offer the 
     physical infrastructure needed to provide a high-quality 
     education to all students,
       ``(B) a description of how the local educational agency 
     will use its allocation under this subsection to address the 
     needs identified under subparagraph (A), and
       ``(C) a description of how the local educational agency 
     will ensure that its allocation under this subsection is used 
     only to supplement, and not supplant, the amount of school 
     construction, rehabilitation, or repair in the locality that 
     would have occurred in the absence of such allocation.
     A rule similar to the rule of the last sentence of subsection 
     (d)(6) shall apply for purposes of this paragraph.
       ``(f) Carryover of Unused Limitation.--If for any calendar 
     year--
       ``(1) the amount allocated under subsection (d) to any 
     State, exceeds
       ``(2) the amount of bonds issued during such year which are 
     designated under subsection (a) pursuant to such allocation,
     the limitation amount under such subsection for such State 
     for the following calendar year shall be increased by the 
     amount of such excess. A similar rule shall apply to the 
     amounts allocated under subsection (d)(5) or (e).
       ``(g) Special Rules Relating to Arbitrage.--
       ``(1) In general.--A bond shall not be treated as failing 
     to meet the requirement of subsection (a)(1) solely by reason 
     of the fact that the proceeds of the issue of which such bond 
     is a part are invested for a temporary period (but not more 
     than 36 months) until such proceeds are needed for the 
     purpose for which such issue was issued.
       ``(2) Binding commitment requirement.--Paragraph (1) shall 
     apply to an issue only if, as of the date of issuance, there 
     is a reasonable expectation that--
       ``(A) at least 10 percent of the proceeds of the issue will 
     be spent within the 6-month period beginning on such date for 
     the purpose for which such issue was issued, and
       ``(B) the remaining proceeds of the issue will be spent 
     with due diligence for such purpose.
       ``(3) Earnings on proceeds.--Any earnings on proceeds 
     during the temporary period shall be treated as proceeds of 
     the issue for purposes of applying subsection (a)(1) and 
     paragraph (1) of this subsection.

     ``SEC. 1400H. QUALIFIED ZONE ACADEMY BONDS.

       ``(a) Qualified Zone Academy Bond.--For purposes of this 
     subchapter--
       ``(1) In general.--The term `qualified zone academy bond' 
     means any bond issued as part of an issue if--
       ``(A) 95 percent or more of the proceeds of such issue are 
     to be used for a qualified purpose with respect to a 
     qualified zone academy established by a local educational 
     agency,
       ``(B) the bond is issued by a State or local government 
     within the jurisdiction of which such academy is located,
       ``(C) the issuer--
       ``(i) designates such bond for purposes of this section,
       ``(ii) certifies that it has written assurances that the 
     private business contribution requirement of paragraph (2) 
     will be met with respect to such academy, and
       ``(iii) certifies that it has the written approval of the 
     local educational agency for such bond issuance, and
       ``(D) the term of each bond which is part of such issue 
     does not exceed 15 years.

     Rules similar to the rules of section 1400G(g) shall apply 
     for purposes of paragraph (1).
       ``(2) Private business contribution requirement.--
       ``(A) In general.--For purposes of paragraph (1), the 
     private business contribution requirement of this paragraph 
     is met with respect to any issue if the local educational 
     agency that established the qualified zone academy has 
     written commitments from private entities to make qualified 
     contributions having a present value (as of the date of 
     issuance of the issue) of not less than 10 percent of the 
     proceeds of the issue.
       ``(B) Qualified contributions.--For purposes of 
     subparagraph (A), the term `qualified contribution' means any 
     contribution (of a type and quality acceptable to the local 
     educational agency) of--
       ``(i) equipment for use in the qualified zone academy 
     (including state-of-the-art technology and vocational 
     equipment),
       ``(ii) technical assistance in developing curriculum or in 
     training teachers in order to promote appropriate market 
     driven technology in the classroom,
       ``(iii) services of employees as volunteer mentors,
       ``(iv) internships, field trips, or other educational 
     opportunities outside the academy for students, or
       ``(v) any other property or service specified by the local 
     educational agency.
       ``(3) Qualified zone academy.--The term `qualified zone 
     academy' means any public school (or academic program within 
     a public school) which is established by and operated under 
     the supervision of a local educational agency to provide 
     education or training below the postsecondary level if--
       ``(A) such public school or program (as the case may be) is 
     designed in cooperation with

[[Page 249]]

     business to enhance the academic curriculum, increase 
     graduation and employment rates, and better prepare students 
     for the rigors of college and the increasingly complex 
     workforce,
       ``(B) students in such public school or program (as the 
     case may be) will be subject to the same academic standards 
     and assessments as other students educated by the local 
     educational agency,
       ``(C) the comprehensive education plan of such public 
     school or program is approved by the local educational 
     agency, and
       ``(D)(i) such public school is located in an empowerment 
     zone or enterprise community (including any such zone or 
     community designated after the date of the enactment of this 
     section), or
       ``(ii) there is a reasonable expectation (as of the date of 
     issuance of the bonds) that at least 35 percent of the 
     students attending such school or participating in such 
     program (as the case may be) will be eligible for free or 
     reduced-cost lunches under the school lunch program 
     established under the National School Lunch Act.
       ``(4) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified zone academy--
       ``(A) constructing, rehabilitating, or repairing the public 
     school facility in which the academy is established,
       ``(B) acquiring the land on which such facility is to be 
     constructed with part of the proceeds of such issue,
       ``(C) providing equipment for use at such academy,
       ``(D) developing course materials for education to be 
     provided at such academy, and
       ``(E) training teachers and other school personnel in such 
     academy.
       ``(b) Limitations on Amount of Bonds Designated.--
       ``(1) In general.--There is a national zone academy bond 
     limitation for each calendar year. Such limitation is--
       ``(A) $400,000,000 for 1999,
       ``(B) $400,000,000 for 2000,
       ``(C) $400,000,000 for 2001,
       ``(D) $1,400,000,000 for 2002,
       ``(E) $1,400,000,000 for 2003, and
       ``(F) except as provided in paragraph (3), zero after 2003.
       ``(2) Allocation of limitation.--
       ``(A) Allocation among states.--
       ``(i) 1999, 2000, and 2001 limitations.--The national zone 
     academy bond limitations for calendar years 1999, 2000, and 
     2001 shall be allocated by the Secretary among the States on 
     the basis of their respective populations of individuals 
     below the poverty line (as defined by the Office of 
     Management and Budget).
       ``(ii) Limitation after 2001.--The national zone academy 
     bond limitation for any calendar year after 2001 shall be 
     allocated by the Secretary among the States in proportion to 
     the respective amounts each such State received for Basic 
     Grants under subpart 2 of part A of title I of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) 
     for the most recent fiscal year ending before such calendar 
     year.
       ``(B) Allocation to local educational agencies.--The 
     limitation amount allocated to a State under subparagraph (A) 
     shall be allocated by the State to qualified zone academies 
     within such State.
       ``(C) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (a) 
     with respect to any qualified zone academy shall not exceed 
     the limitation amount allocated to such academy under 
     subparagraph (B) for such calendar year.
       ``(3) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the limitation amount under this subsection for any 
     State, exceeds
       ``(B) the amount of bonds issued during such year which are 
     designated under subsection (a) (or the corresponding 
     provisions of prior law) with respect to qualified zone 
     academies within such State,
     the limitation amount under this subsection for such State 
     for the following calendar year shall be increased by the 
     amount of such excess.''
       (b) Reporting.--Subsection (d) of section 6049 of such Code 
     (relating to returns regarding payments of interest) is 
     amended by adding at the end the following new paragraph:
       ``(8) Reporting of credit on qualified public school 
     modernization bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 1400F(f) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 
     1400F(d)(2)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A) of this paragraph, subsection 
     (b)(4) of this section shall be applied without regard to 
     subparagraphs (A), (H), (I), (J), (K), and (L)(i).
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''
       (c) Conforming Amendments.--
       (1) Subchapter U of chapter 1 of such Code is amended by 
     striking part IV, by redesignating part V as part IV, and by 
     redesignating section 1397F as section 1397E.
       (2) The table of subchapters for chapter 1 of such Code is 
     amended by adding at the end the following new item:

``Subchapter X. Public school modernization provisions.''

       (3) The table of parts of subchapter U of chapter 1 of such 
     Code is amended by striking the last 2 items and inserting 
     the following item:

``Part IV. Regulations.''

       (e) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to obligations issued after December 31, 2001.
       (2) Repeal of restriction on zone academy bond holders.--In 
     the case of bonds to which section 1397E of the Internal 
     Revenue Code of 1986 (as in effect before the date of the 
     enactment of this Act) applies, the limitation of such 
     section to eligible taxpayers (as defined in subsection 
     (d)(6) of such section) shall not apply after the date of the 
     enactment of this Act.

     SEC. 323. APPLICATION OF CERTAIN LABOR STANDARDS ON 
                   CONSTRUCTION PROJECTS FINANCED UNDER PUBLIC 
                   SCHOOL MODERNIZATION PROGRAM.

       Section 439 of the General Education Provisions Act 
     (relating to labor standards) is amended--
       (1) by inserting ``(a)'' before ``All laborers and 
     mechanics'', and
       (2) by adding at the end the following:
       ``(b)(1) For purposes of this section, the term `applicable 
     program' also includes the qualified zone academy bond 
     provisions enacted by section 226 of the Taxpayer Relief Act 
     of 1997 and the program established by section 322 of the 
     America's Better Classroom Act of 2001.
       ``(2) A State or local government participating in a 
     program described in paragraph (1) shall--
       ``(A) in the awarding of contracts, give priority to 
     contractors with substantial numbers of employees residing in 
     the local education area to be served by the school being 
     constructed; and
       ``(B) include in the construction contract for such school 
     a requirement that the contractor give priority in hiring new 
     workers to individuals residing in such local education area.
       ``(3) In the case of a program described in paragraph (1), 
     nothing in this subsection or subsection (a) shall be 
     construed to deny any tax credit allowed under such program. 
     If amounts are required to be withheld from contractors to 
     pay wages to which workers are entitled, such amounts shall 
     be treated as expended for construction purposes in 
     determining whether the requirements of such program are 
     met.''.

     SEC. 324. EMPLOYMENT AND TRAINING ACTIVITIES RELATING TO 
                   CONSTRUCTION OR RECONSTRUCTION OF PUBLIC SCHOOL 
                   FACILITIES.

       (a) In General.--Section 134 of the Workforce Investment 
     Act of 1998 (29 U.S.C. 2864) is amended by adding at the end 
     the following:
       ``(f) Local Employment and Training Activities Relating to 
     Construction or Reconstruction of Public School Facilities.--
       ``(1) In general.--In order to provide training services 
     related to construction or reconstruction of public school 
     facilities receiving funding assistance under an applicable 
     program, each State shall establish a specialized program of 
     training meeting the following requirements:
       ``(A) The specialized program provides training for jobs in 
     the construction industry.
       ``(B) The program provides trained workers for projects for 
     the construction or reconstruction of public school 
     facilities receiving funding assistance under an applicable 
     program.
       ``(C) The program ensures that skilled workers (residing in 
     the area to be served by the school facilities) will be 
     available for the construction or reconstruction work.
       ``(2) Coordination.--The specialized program established 
     under paragraph (1) shall be integrated with other activities 
     under this Act, with the activities carried out under the 
     National Apprenticeship Act of 1937 by the State 
     Apprenticeship Council or through the Bureau of 
     Apprenticeship and Training in the Department of Labor, as 
     appropriate, and with activities carried out under the Carl 
     D. Perkins Vocational and Technical Education Act of 1998. 
     Nothing in this subsection shall be construed to require 
     services duplicative of those referred to in the preceding 
     sentence.
       ``(3) Applicable program.--In this subsection, the term 
     `applicable program' has the meaning given the term in 
     section 439(b) of the General Education Provisions Act 
     (relating to labor standards).''.
       (b) State Plan.--Section 112(b)(17)(A) of the Workforce 
     Investment Act of 1998 (29 U.S.C. 2822(b)(17)(A)) is 
     amended--
       (1) in clause (iii), by striking ``and'' at the end;
       (2) by redesignating clause (iv) as clause (v); and

[[Page 250]]

       (3) by inserting after clause (iii) the following:
       ``(iv) how the State will establish and carry out a 
     specialized program of training under section 134(f); and''.

     SEC. 325. INDIAN SCHOOL CONSTRUCTION.

       (a) Definitions.--In this section:
       (1) Bureau.--The term ``Bureau'' means the Bureau of Indian 
     Affairs of the Department of the Interior.
       (2) Indian.--The term ``Indian'' means any individual who 
     is a member of a tribe.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (4) Tribal school.--The term ``tribal school'' means an 
     elementary school, secondary school, or dormitory that is 
     operated by a tribal organization or the Bureau for the 
     education of Indian children and that receives financial 
     assistance for its operation under an appropriation for the 
     Bureau under section 102, 103(a), or 208 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450f, 
     450h(a), and 458d) or under the Tribally Controlled Schools 
     Act of 1988 (25 U.S.C. 2501 et seq.) under a contract, a 
     grant, or an agreement, or for a Bureau-operated school.
       (5) Tribe.--The term ``tribe'' has the meaning given the 
     term ``Indian tribal government'' by section 7701(a)(40) of 
     the Internal Revenue Code of 1986, including the application 
     of section 7871(d) of such Code. Such term includes any 
     consortium of tribes approved by the Secretary.
       (b) Issuance of Bonds.--
       (1) In general.--The Secretary shall establish a pilot 
     program under which eligible tribes have the authority to 
     issue qualified tribal school modernization bonds to provide 
     funding for the construction, rehabilitation, or repair of 
     tribal schools, including the advance planning and design 
     thereof.
       (2) Eligibility.--
       (A) In general.--To be eligible to issue any qualified 
     tribal school modernization bond under the program under 
     paragraph (1), a tribe shall--
       (i) prepare and submit to the Secretary a plan of 
     construction that meets the requirements of subparagraph (B);
       (ii) provide for quarterly and final inspection of the 
     project by the Bureau; and
       (iii) pledge that the facilities financed by such bond will 
     be used primarily for elementary and secondary educational 
     purposes for not less than the period such bond remains 
     outstanding.
       (B) Plan of construction.--A plan of construction meets the 
     requirements of this subparagraph if such plan--
       (i) contains a description of the construction to be 
     undertaken with funding provided under a qualified tribal 
     school modernization bond;
       (ii) demonstrates that a comprehensive survey has been 
     undertaken concerning the construction needs of the tribal 
     school involved;
       (iii) contains assurances that funding under the bond will 
     be used only for the activities described in the plan;
       (iv) contains response to the evaluation criteria contained 
     in Instructions and Application for Replacement School 
     Construction, Revision 6, dated February 6, 1999; and
       (v) contains any other reasonable and related information 
     determined appropriate by the Secretary.
       (C) Priority.--In determining whether a tribe is eligible 
     to participate in the program under this subsection, the 
     Secretary shall give priority to tribes that, as demonstrated 
     by the relevant plans of construction, will fund projects--
       (i) described in the Education Facilities Replacement 
     Construction Priorities List as of FY 2000 of the Bureau of 
     Indian Affairs (65 Fed. Reg. 4623-4624);
       (ii) described in any subsequent priorities list published 
     in the Federal Register; or
       (iii) which meet the criteria for ranking schools as 
     described in Instructions and Application for Replacement 
     School Construction, Revision 6, dated February 6, 1999.
       (D) Advance planning and design funding.--A tribe may 
     propose in its plan of construction to receive advance 
     planning and design funding from the tribal school 
     modernization escrow account established under paragraph 
     (6)(B). Before advance planning and design funds are 
     allocated from the escrow account, the tribe shall agree to 
     issue qualified tribal school modernization bonds after the 
     receipt of such funds and agree as a condition of each bond 
     issuance that the tribe will deposit into such account or a 
     fund managed by the trustee as described in paragraph (4)(C) 
     an amount equal to the amount of such funds received from the 
     escrow account.
       (3) Permissible activities.--In addition to the use of 
     funds permitted under paragraph (1), a tribe may use amounts 
     received through the issuance of a qualified tribal school 
     modernization bond to--
       (A) enter into and make payments under contracts with 
     licensed and bonded architects, engineers, and construction 
     firms in order to determine the needs of the tribal school 
     and for the design and engineering of the school;
       (B) enter into and make payments under contracts with 
     financial advisors, underwriters, attorneys, trustees, and 
     other professionals who would be able to provide assistance 
     to the tribe in issuing bonds; and
       (C) carry out other activities determined appropriate by 
     the Secretary.



       (4) Bond trustee.--
       (A) In general.--Notwithstanding any other provision of 
     law, any qualified tribal school modernization bond issued by 
     a tribe under this subsection shall be subject to a trust 
     agreement between the tribe and a trustee.
       (B) Trustee.--Any bank or trust company that meets 
     requirements established by the Secretary may be designated 
     as a trustee under subparagraph (A).
       (C) Content of trust agreement.--A trust agreement entered 
     into by a tribe under this paragraph shall specify that the 
     trustee, with respect to any bond issued under this 
     subsection shall--
       (i) act as a repository for the proceeds of the bond;
       (ii) make payments to bondholders;
       (iii) receive, as a condition to the issuance of such bond, 
     a transfer of funds from the tribal school modernization 
     escrow account established under paragraph (6)(B) or from 
     other funds furnished by or on behalf of the tribe in an 
     amount, which together with interest earnings from the 
     investment of such funds in obligations of or fully 
     guaranteed by the United States or from other investments 
     authorized by paragraph (10), will produce moneys sufficient 
     to timely pay in full the entire principal amount of such 
     bond on the stated maturity date therefore;
       (iv) invest the funds received pursuant to clause (iii) as 
     provided by such clause; and
       (v) hold and invest the funds in a segregated fund or 
     account under the agreement, which fund or account shall be 
     applied solely to the payment of the costs of items described 
     in paragraph (3).
       (D) Requirements for making direct payments.--
       (i) In general.--Notwithstanding any other provision of 
     law, the trustee shall make any payment referred to in 
     subparagraph (C)(v) in accordance with requirements that the 
     tribe shall prescribe in the trust agreement entered into 
     under subparagraph (C). Before making a payment to a 
     contractor under subparagraph (C)(v), the trustee shall 
     require an inspection of the project by a local financial 
     institution or an independent inspecting architect or 
     engineer, to ensure the completion of the project.
       (ii) Contracts.--Each contract referred to in paragraph (3) 
     shall specify, or be renegotiated to specify, that payments 
     under the contract shall be made in accordance with this 
     paragraph.
       (5) Payments of principal and interest.--
       (A) Principal.--No principal payments on any qualified 
     tribal school modernization bond shall be required until the 
     final, stated maturity of such bond, which stated maturity 
     shall be within 15 years from the date of issuance. Upon the 
     expiration of such period, the entire outstanding principal 
     under the bond shall become due and payable.
       (B) Interest.--In lieu of interest on a qualified tribal 
     school modernization bond there shall be awarded a tax credit 
     under section 1400F of the Internal Revenue Code of 1986.
       (6) Bond guarantees.--
       (A) In general.--Payment of the principal portion of a 
     qualified tribal school modernization bond issued under this 
     subsection shall be guaranteed solely by amounts deposited 
     with each respective bond trustee as described in paragraph 
     (4)(C)(iii).
       (B) Establishment of account.--
       (i) In general.--Notwithstanding any other provision of 
     law, beginning in fiscal year 2002, from amounts made 
     available for school replacement under the construction 
     account of the Bureau, the Secretary is authorized to deposit 
     not more than $30,000,000 each fiscal year into a tribal 
     school modernization escrow account.
       (ii) Payments.--The Secretary shall use any amounts 
     deposited in the escrow account under clauses (i) and (iii) 
     to make payments to trustees appointed and acting pursuant to 
     paragraph (4) or to make payments described in paragraph 
     (2)(D).
       (iii) Transfers of excess proceeds.--Excess proceeds held 
     under any trust agreement that are not needed for any of the 
     purposes described in clauses (iii) and (v) of paragraph 
     (4)(C) shall be transferred, from time to time, by the 
     trustee for deposit into the tribal school modernization 
     escrow account.
       (7) Limitations.--
       (A) Obligation to repay.--Notwithstanding any other 
     provision of law, the principal amount on any qualified 
     tribal school modernization bond issued under this subsection 
     shall be repaid only to the extent of any escrowed funds 
     furnished under paragraph (4)(C)(iii). No qualified tribal 
     school modernization bond issued by a tribe shall be an 
     obligation of, nor shall payment of the principal thereof be 
     guaranteed by, the United States.
       (B) Land and facilities.--Any land or facilities purchased 
     or improved with amounts derived from qualified tribal school 
     modernization bonds issued under this subsection shall not be 
     mortgaged or used as collateral for such bonds.
       (8) Sale of bonds.--Qualified tribal school modernization 
     bonds may be sold at a purchase price equal to, in excess of, 
     or at a discount from the par amount thereof.

[[Page 251]]

       (9) Treatment of trust agreement earnings.--Any amounts 
     earned through the investment of funds under the control of a 
     trustee under any trust agreement described in paragraph (4) 
     shall not be subject to Federal income tax.
       (10) Investment of sinking funds.--Any sinking fund 
     established for the purpose of the payment of principal on a 
     qualified tribal school modernization bond shall be invested 
     in obligations issued by or guaranteed by the United States 
     or in such other assets as the Secretary of the Treasury may 
     by regulation allow.
       (c) Expansion of Incentives for Tribal Schools.--Chapter 1 
     of the Internal Revenue Code of 1986 (as amended by section 
     322) is further amended by adding at the end the following 
     new subchapter:

        ``Subchapter XI--Tribal School Modernization Provisions

``Sec. 1400J. Credit to holders of qualified tribal school 
              modernization bonds.

     ``SEC. 1400J. CREDIT TO HOLDERS OF QUALIFIED TRIBAL SCHOOL 
                   MODERNIZATION BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a qualified tribal school modernization bond on a 
     credit allowance date of such bond which occurs during the 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter for such taxable year an amount 
     equal to the sum of the credits determined under subsection 
     (b) with respect to credit allowance dates during such year 
     on which the taxpayer holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified tribal school modernization bond is 25 
     percent of the annual credit determined with respect to such 
     bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified tribal school modernization bond is 
     the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (1), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the date of 
     sale of the issue) on outstanding long-term corporate 
     obligations (as determined by the Secretary).
       ``(4) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C thereof, relating to 
     refundable credits).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) Qualified Tribal School Modernization Bond; Other 
     Definitions.--For purposes of this section--
       ``(1) Qualified tribal school modernization bond.--
       ``(A) In general.--The term `qualified tribal school 
     modernization bond' means, subject to subparagraph (B), any 
     bond issued as part of an issue under section 2(c) of the 
     Indian School Construction Act, as in effect on the date of 
     the enactment of this section, if--
       ``(i) 95 percent or more of the proceeds of such issue are 
     to be used for the construction, rehabilitation, or repair of 
     a school facility funded by the Bureau of Indian Affairs of 
     the Department of the Interior or for the acquisition of land 
     on which such a facility is to be constructed with part of 
     the proceeds of such issue,
       ``(ii) the bond is issued by a tribe,
       ``(iii) the issuer designates such bond for purposes of 
     this section, and
       ``(iv) the term of each bond which is part of such issue 
     does not exceed 15 years.
       ``(B) National limitation on amount of bonds designated.--
       ``(i) National limitation.--There is a national qualified 
     tribal school modernization bond limitation for each calendar 
     year. Such limitation is--

       ``(I) $200,000,000 for 2002,
       ``(II) $200,000,000 for 2003, and
       ``(III) zero after 2003.

       ``(ii) Allocation of limitation.--The national qualified 
     tribal school modernization bond limitation shall be 
     allocated to tribes by the Secretary of the Interior subject 
     to the provisions of section 2 of the Indian School 
     Construction Act, as in effect on the date of the enactment 
     of this section.
       ``(iii) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (d)(1) 
     with respect to any tribe shall not exceed the limitation 
     amount allocated to such government under clause (ii) for 
     such calendar year.
       ``(iv) Carryover of unused limitation.--If for any calendar 
     year--

       ``(I) the limitation amount under this subparagraph, 
     exceeds
       ``(II) the amount of qualified tribal school modernization 
     bonds issued during such year,

     the limitation amount under this subparagraph for the 
     following calendar year shall be increased by the amount of 
     such excess. The preceding sentence shall not apply if such 
     following calendar year is after 2010.
       ``(2) Credit allowance date.--The term `credit allowance 
     date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(3) Bond.--The term `bond' includes any obligation.
       ``(4) Tribe.--The term ``tribe'' has the meaning given the 
     term ``Indian tribal government'' by section 7701(a)(40), 
     including the application of section 7871(d). Such term 
     includes any consortium of tribes approved by the Secretary 
     of the Interior.
       ``(e) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(f) Bonds Held by Regulated Investment Companies.--If any 
     qualified tribal school modernization bond is held by a 
     regulated investment company, the credit determined under 
     subsection (a) shall be allowed to shareholders of such 
     company under procedures prescribed by the Secretary.
       ``(g) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified tribal school 
     modernization bond and the entitlement to the credit under 
     this section with respect to such bond. In case of any such 
     separation, the credit under this section shall be allowed to 
     the person who on the credit allowance date holds the 
     instrument evidencing the entitlement to the credit and not 
     to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified tribal school modernization bond as if 
     it were a stripped bond and to the credit under this section 
     as if it were a stripped coupon.
       ``(h) Treatment for Estimated Tax Purposes.--Solely for 
     purposes of sections 6654 and 6655, the credit allowed by 
     this section to a taxpayer by reason of holding a qualified 
     tribal school modernization bonds on a credit allowance date 
     shall be treated as if it were a payment of estimated tax 
     made by the taxpayer on such date.
       ``(i) Credit May Be Transferred.--Nothing in any law or 
     rule of law shall be construed to limit the transferability 
     of the credit allowed by this section through sale and 
     repurchase agreements.
       ``(j) Credit Treated as Allowed Under Part IV of Subchapter 
     A.--For purposes of subtitle F, the credit allowed by this 
     section shall be treated as a credit allowable under part IV 
     of subchapter A of this chapter.
       ``(k) Reporting.--Issuers of qualified tribal school 
     modernization bonds shall submit reports similar to the 
     reports required under section 149(e).''.
       (d) Additional Provisions.--
       (1) Sovereign immunity.--This section and the amendments 
     made by this section shall not be construed to impact, limit, 
     or affect the sovereign immunity of the Federal Government or 
     any State or tribal government.
       (2) Application.--This section and the amendments made by 
     this section shall take effect on the date of the enactment 
     of this Act with respect to bonds issued after December 31, 
     2001, regardless of the status of regulations promulgated 
     thereunder.

           CHAPTER 3--21ST CENTURY COMMUNITY LEARNING CENTERS

     SEC. 331. REAUTHORIZATION.

       Section 10907 (20 U.S.C. 8247) is amended by striking 
     ``$20,000,000 for fiscal year 1995'' and all that follows 
     through the period and inserting ``$1,000,000,000 for each of 
     fiscal years 2002 through 2006, to carry out this part.''.

            CHAPTER 4--ENHANCEMENT OF BASIC LEARNING SKILLS

     SEC. 341. REDUCING CLASS SIZE.

       Title X (20 U.S.C. 8001 et seq.), as amended by section 
     311, is further amended by adding at the end the following:

                     ``PART M--CLASS SIZE REDUCTION

     ``SEC. 10998. GRANTS FOR CLASS SIZE REDUCTION.

       ``(a) In General.--From the amount appropriated for a 
     fiscal year under subsection (i), the Secretary of 
     Education--

[[Page 252]]

       ``(1) shall make available 1 percent of such amount to the 
     Secretary of the Interior (on behalf of the Bureau of Indian 
     Affairs) and the outlying areas for activities under this 
     section; and
       ``(2) shall allocate the remainder by providing each State 
     the same percentage of that remainder as it received of the 
     funds allocated to States under section 307(a)(2) of the 
     Department of Education Appropriations Act, 1999.
       ``(b) Allocation of Funds.--
       ``(1) In general.--Each State that receives funds under 
     this section shall distribute 100 percent of such funds to 
     local educational agencies, of which--
       ``(A) 80 percent of such amount shall be allocated to such 
     local educational agencies in proportion to the number of 
     children, aged 5 to 17, who reside in the school district 
     served by such local educational agency from families with 
     incomes below the poverty line (as defined by the Office of 
     Management and Budget and revised annually in accordance with 
     section 673(2) of the Community Services Block Grant Act (42 
     U.S.C. 9902(2))) applicable to a family of the size involved 
     for the most recent fiscal year for which satisfactory data 
     are available compared to the number of such individuals who 
     reside in the school districts served by all the local 
     educational agencies in the State for that fiscal year; and
       ``(B) 20 percent of such amount shall be allocated to such 
     local educational agencies in accordance with the relative 
     enrollments of children, aged 5 to 17, in public and private 
     nonprofit elementary and secondary schools within the 
     boundaries of such agencies.
       ``(2) Exception.--Notwithstanding paragraph (1), if the 
     award to a local educational agency under this section is 
     less than the starting salary for a new fully qualified 
     teacher in that agency, who is certified within the State 
     (which may include certification through State or local 
     alternative routes), has a baccalaureate degree, and 
     demonstrates the general knowledge, teaching skills, and 
     subject matter knowledge required to teach in his or her 
     content areas, that agency may use funds under this section 
     to--
       ``(A) help pay the salary of a full- or part-time teacher 
     hired to reduce class size, which may be in combination with 
     other Federal, State, or local funds; or
       ``(B) pay for activities described in subsection 
     (c)(2)(A)(iii) which may be related to teaching in smaller 
     classes.
       ``(c) Use of Funds.--
       ``(1) Purpose, intent, and general use.--The basic purpose 
     and intent of this section is to reduce class size with fully 
     qualified teachers. Each local educational agency that 
     receives funds under this section shall use such funds to 
     carry out effective approaches to reducing class size with 
     fully qualified teachers who are certified within the State, 
     including teachers certified through State or local 
     alternative routes, and who demonstrate competency in the 
     areas in which they teach, to improve educational achievement 
     for both regular and special needs children, with particular 
     consideration given to reducing class size in the early 
     elementary grades for which some research has shown class 
     size reduction is most effective.
       ``(2) Specific uses.--
       ``(A) In general.--Each such local educational agency may 
     use funds under this section for--
       ``(i) recruiting (including through the use of signing 
     bonuses, and other financial incentives), hiring, and 
     training fully qualified regular and special education 
     teachers (which may include hiring special education teachers 
     to team-teach with regular teachers in classrooms that 
     contain both children with disabilities and non-disabled 
     children) and teachers of special-needs children who are 
     certified within the State, including teachers certified 
     through State or local alternative routes, have a 
     baccalaureate degree and demonstrate the general knowledge, 
     teaching skills, and subject matter knowledge required to 
     teach in their content areas;
       ``(ii) testing new teachers for academic content knowledge 
     and to meet State certification requirements that are 
     consistent with title II of the Higher Education Act of 1965; 
     and
       ``(iii) providing professional development (which may 
     include such activities as those described in section 2210, 
     opportunities for teachers to attend multi-week institutes, 
     such as those made available during the summer months that 
     provide intensive professional development in partnership 
     with local educational agencies and initiatives that promote 
     retention and mentoring), to teachers, including special 
     education teachers and teachers of special-needs children, in 
     order to meet the goal of ensuring that all instructional 
     staff have the subject matter knowledge, teaching knowledge, 
     and teaching skills necessary to teach effectively in the 
     content area or areas in which they provide instruction, 
     consistent with title II of the Higher Education Act of 1965.
       ``(B) Limitation.--
       ``(i) In general.--Except as provided under clause (ii), a 
     local educational agency may use not more than a total of 25 
     percent of the award received under this section for 
     activities described in clauses (ii) and (iii) of 
     subparagraph (A).
       (ii) Exception.--A local educational agency in which 10 
     percent or more of teachers in elementary schools, as defined 
     by section 14101(14), have not met applicable State and local 
     certification requirements (including certification through 
     State or local alternative routes), or if such requirements 
     have been waived, may use more than 25 percent of the funds 
     it receives under this section for activities described in 
     subparagraph (A)(iii) to help teachers who are not certified 
     by the State become certified, including through State or 
     local alternative routes, or to help teachers affected by 
     class size reduction who lack sufficient content knowledge to 
     teach effectively in the areas they teach to obtain that 
     knowledge, if the local educational agency notifies the State 
     educational agency of the percentage of the funds that it 
     will use for the purpose described in this clause.
       ``(C) Use for further reductions.--A local educational 
     agency that has already reduced class size in the early 
     grades to 18 or less children (or has already reduced class 
     size to a State or local class size reduction goal that was 
     in effect on the day before the enactment of the Department 
     of Education Appropriations Act, 2000, if that State or local 
     educational agency goal is 20 or fewer children) may use 
     funds received under this section--
       ``(i) to make further class size reductions in grades 
     kindergarten through 3;
       ``(ii) to reduce class size in other grades; or
       ``(iii) to carry out activities to improve teacher quality 
     including professional development.
       ``(D) Professional development.--If a local educational 
     agency has already reduced class size in the early grades to 
     18 or fewer children and intends to use funds provided under 
     this section to carry out professional development 
     activities, including activities to improve teacher quality, 
     then the State shall make the award under subsection (b) to 
     the local educational agency.
       ``(3) Supplement not supplant.--Each such agency shall use 
     funds under this section only to supplement, and not to 
     supplant, State and local funds that, in the absence of such 
     funds, would otherwise be spent for activities under this 
     section.
       ``(4) Limitation.--No funds made available under this 
     section may be used to increase the salaries or provide 
     benefits, other than participation in professional 
     development and enrichment programs, to teachers who are not 
     hired under this section. Funds under this section may be 
     used to pay the salary of teachers hired under section 307 of 
     the Department of Education Appropriations Act, 1999, or 
     under section 310 of the Department of Education 
     Appropriations Act, 2000.
       ``(d) Reporting.--
       ``(1) In general.--Each State receiving funds under this 
     section shall report on activities in the State under this 
     section, consistent with section 6202(a)(2).
       ``(2) Reporting to parents.--Each State and local 
     educational agency receiving funds under this section shall 
     publicly report to parents on its progress in reducing class 
     size, increasing the percentage of classes in core academic 
     areas taught by fully qualified teachers who are certified 
     within the State and demonstrate competency in the content 
     areas in which they teach, and on the impact that hiring 
     additional highly qualified teachers and reducing class size, 
     has had, if any, on increasing student academic achievement.
       ``(3) Provision of qualification to parents.--Each school 
     receiving funds under this section shall provide to parents, 
     upon request, the professional qualifications of their 
     child's teacher.
       ``(e) Professional Development.--If a local educational 
     agency uses funds made available under this section for 
     professional development activities, the agency shall ensure 
     for the equitable participation of private nonprofit 
     elementary and secondary schools in such activities. Section 
     6402 shall not apply to other activities under this section.
       ``(f) Limitation on Administrative Costs.--A local 
     educational agency that receives funds under this section may 
     use not more than 3 percent of such funds for local 
     administrative costs.
       ``(g) Application.--Each local educational agency that 
     desires to receive funds under this section shall include in 
     the application required under section 6303 a description of 
     the agency's program to reduce class size by hiring 
     additional highly qualified teachers.
       ``(h) No use of Funds for Payments to Certain Teachers.--No 
     funds under this section may be used to pay the salary of any 
     teacher hired with funds under section 307 of the Department 
     of Education Appropriations Act, 1999, unless, by the start 
     of the 2001-2002 school year, the teacher is certified within 
     the State (which may include certification through State or 
     local alternative routes) and demonstrates competency in the 
     subject areas in which he or she teaches.
       ``(i) Notification.--Not later than 30 days after the date 
     of the enactment of this section, the Secretary shall provide 
     specific notification to each local educational agency 
     eligible to receive funds under this part regarding the 
     flexibility provided under subsection (c)(2)(B)(ii) and the 
     ability to use such funds to carry out activities described 
     in subsection (c)(2)(A)(iii).

[[Page 253]]

       ``(j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section--
       ``(1) $2,317,507,723 for fiscal year 2002;
       ``(2) $3,012,015,447 for fiscal year 2003;
       ``(3) $3,706,523,170 for fiscal year 2004; and
       ``(4) $4,401,030,983 for fiscal year 2005.''.

     SEC. 342. READING EXCELLENCE.

       Part C of title II (20 U.S.C. 6661 et seq.) is amended--
       (1) by inserting after the part heading the following:

     ``SEC. 2250. SHORT TITLE.

       ``This part may be cited as the `Reading Excellence 
     Act'.'';
       (2) in section 2253(a) (20 U.S.C. 6661b(a)) by adding at 
     the end the following:
       ``(3) Amount of Grants.--From the amount appropriated for 
     each fiscal year under section 2260(a), the Secretary shall 
     award to each State educational agency a grant under this 
     part in an amount that is in proportion to the amount the 
     State received under part A of title I for the previous 
     fiscal year.'';
       (3) in section 2255 (20 U.S.C. 6661d) by adding at the end 
     the following:
       ``(f) Other Uses.--With respect to a State educational 
     agency that has used amounts received under a grant under 
     section 2253 in a previous fiscal year to sufficiently serve 
     schools described in subsection (a)(1), such State agency may 
     use amounts received under such a grant in succeeding fiscal 
     years to provide subgrants to local educational agencies to 
     assist other schools that may receive assistance under title 
     I.''; and
       (4) in section 2260(a) (20 U.S.C. 6661i(a)) by adding at 
     the end the following:
       ``(3) Other fiscal years.--There are authorized to be 
     appropriated to carry out this part and section 1202(c)--
       ``(A) $500,000,000 for fiscal year 2002;
       ``(B) $600,000,000 for fiscal year 2003;
       ``(C) $700,000,000 for fiscal year 2004;
       ``(D) $850,000,000 for fiscal year 2005; and
       ``(E) $1,000,000,000 for fiscal year 2006.''.

     SEC. 343. TUTORIAL ASSISTANCE GRANTS.

       (a) In General.--Section 2256 (20 U.S.C. 6661e) is 
     repealed.
       (b) Conforming Amendments.--Part C of title II (20 U.S.C. 
     6661 et seq.) is amended--
       (1) in section 2253 (20 U.S.C. 6661b)--
       (A) in subsection (a)(1), by striking ``sections 2254 
     through 2256'' and inserting ``sections 2254 and 2255''; and
       (B) in subsection (b)(2)--
       (i) in subparagraph (A)(ii), by striking ``sections 2255 
     and 2256'' and inserting ``section 2255'';
       (ii) in subparagraph (B)--

       (I) in clause (ii), by striking ``section 2255 and 2256'' 
     and inserting ``section 2255''; and
       (II) in clause (vi), , by striking ``sections 2255 and 
     2256'' and inserting ``section 2255''; and

       (iii) in subparagraph (E)(iii)--

       (I) by striking ``sections 2255(a)(1) and 2256(a)(1)'' and 
     inserting ``section 2255(a)(1)''; and
       (II) by striking ``sections 2255 and 2256'' and inserting 
     ``section 2255'';

       (2) in section 2254 (20 U.S.C. 6661c)--
       (A) in paragraph (1)--
       (i) by striking ``(excluding section 2256)''; and
       (ii) by striking ``; and'' and inserting a period;
       (B) by striking ``2253--'' and all that follows through 
     ``shall use'' in paragraph (1) and inserting ``2253 shall 
     use''; and
       (C) by striking in paragraph (2); and
       (3) in section 2258(a) (20 U.S.C. 6661h(a)), by striking 
     ``or 2256''.

        CHAPTER 5--INTEGRATION OF TECHNOLOGY INTO THE CLASSROOM

     SEC. 351. SHORT TITLE.

       This chapter may be cited as the ``Training for Technology 
     Act of 2001''.

     SEC. 352. LOCAL APPLICATIONS FOR SCHOOL TECHNOLOGY RESOURCE 
                   GRANTS.

       Section 3135 (20 U.S.C. 6845) is amended--
       (1) in the first sentence, by inserting ``(a) In General.--
     '' before ``Each local educational agency'';
       (2) in subsection (a) (as so redesignated)--
       (A) in paragraph (3)(B), by striking ``; and'' and 
     inserting a semicolon;
       (B) in paragraph (4), by striking the period and inserting 
     ``; and''; and
       (C) by inserting after paragraph (4) the following:
       ``(5) demonstrate the manner in which the local educational 
     agency will utilize at least 30 percent of the amounts 
     provided to the agency under this subpart in each fiscal year 
     to provide for in-service teacher training, or that the 
     agency is using at least 30 percent of its total technology 
     funding available to the agency from all sources (including 
     Federal, State, and local sources) to provide in-service 
     teacher training.'';
       (3) by redesignating subsections (d) and (e) as subsections 
     (b) and (c) respectively; and
       (4) in subsection (c) (as so redesignated), by striking 
     ``subsection (e)'' and inserting ``subsection (a)''.

     SEC. 353. TEACHER PREPARATION.

       Part A of title III (20 U.S.C. 6811 et seq.) is amended by 
     adding at the end the following:

      ``Subpart 5--Preparing Tomorrow's Teachers To Use Technology

     ``SEC. 3161. PURPOSE; PROGRAM AUTHORITY.

       ``(a) Purpose.--It is the purpose of this subpart to assist 
     consortia of public and private entities in carrying out 
     programs that prepare prospective teachers to use advanced 
     technology to foster learning environments conducive to 
     preparing all students to achieve to challenging State and 
     local content and student performance standards.
       ``(b) Program Authority.--
       ``(1) In general.--The Secretary is authorized, through the 
     Office of Educational Technology, to award grants, contracts, 
     or cooperative agreements on a competitive basis to eligible 
     applicants in order to assist them in developing or 
     redesigning teacher preparation programs to enable 
     prospective teachers to use technology effectively in their 
     classrooms.
       ``(2) Period of award.--The Secretary may award grants, 
     contracts, or cooperative agreements under this subpart for a 
     period of not more than 5 years.

     ``SEC. 3162. ELIGIBILITY.

       ``(a) Eligible Applicants.--In order to receive an award 
     under this subpart, an applicant shall be a consortium that 
     includes--
       ``(1) at least 1 institution of higher education that 
     offers a baccalaureate degree and prepares teachers for their 
     initial entry into teaching;
       ``(2) at least 1 State educational agency or local 
     educational agency; and
       ``(3) 1 or more of the following entities:
       ``(A) an institution of higher education (other than the 
     institution described in paragraph (1));
       ``(B) a school or department of education at an institution 
     of higher education;
       ``(C) a school or college of arts and sciences at an 
     institution of higher education;
       ``(D) a professional association, foundation, museum, 
     library, for-profit business, public or private nonprofit 
     organization, community-based organization, or other entity 
     with the capacity to contribute to the technology-related 
     reform of teacher preparation programs.
       ``(b) Application Requirements.--In order to receive an 
     award under this subpart, an eligible applicant shall submit 
     an application to the Secretary at such time, and containing 
     such information, as the Secretary may require. Such 
     application shall include--
       ``(1) a description of the proposed project, including how 
     the project would ensure that individuals participating in 
     the project would be prepared to use technology to create 
     learning environments conducive to preparing all students, 
     including girls and students who have economic and 
     educational disadvantages, to achieve to challenging State 
     and local content and student performance standards;
       ``(2) a demonstration of--
       ``(A) the commitment, including the financial commitment, 
     of each of the members of the consortium; and
       ``(B) the active support of the leadership of each member 
     of the consortium for the proposed project;
       ``(3) a description of how each member of the consortium 
     would be included in project activities;
       ``(4) a description of how the proposed project would be 
     continued once the Federal funds awarded under this subpart 
     end; and
       ``(5) a plan for the evaluation of the program, which shall 
     include benchmarks to monitor progress toward specific 
     project objectives.
       ``(c) Matching Requirements.--
       ``(1) In general.--The Federal share of the cost of any 
     project funded under this subpart shall not exceed 50 
     percent. Except as provided in paragraph (2), the non-Federal 
     share of such project may be in cash or in kind, fairly 
     evaluated, including services.
       ``(2) Acquisition of equipment.--Not more than 10 percent 
     of the funds awarded for a project under this subpart may be 
     used to acquire equipment, networking capabilities, or 
     infrastructure, and the non-Federal share of the cost of any 
     such acquisition shall be in cash.

     ``SEC. 3163. USE OF FUNDS.

       ``(a) Required Uses.--A recipient shall use funds under 
     this subpart for--
       ``(1) creating programs that enable prospective teachers to 
     use advanced technology to create learning environments 
     conducive to preparing all students, including girls and 
     students who have economic and educational disadvantages, to 
     achieve to challenging State and local content and student 
     performance standards; and
       ``(2) evaluating the effectiveness of the project.
       ``(b) Permissible Uses.--A recipient may use funds under 
     this subpart for activities, described in its application, 
     that carry out the purposes of this subpart, such as--
       ``(1) developing and implementing high-quality teacher 
     preparation programs that enable educators to--
       ``(A) learn the full range of resources that can be 
     accessed through the use of technology;
       ``(B) integrate a variety of technologies into the 
     classroom in order to expand students' knowledge;
       ``(C) evaluate educational technologies and their potential 
     for use in instruction; and
       ``(D) help students develop their own technical skills and 
     digital learning environments;
       ``(2) developing alternative teacher development paths that 
     provide elementary

[[Page 254]]

     schools and secondary schools with well-prepared, technology-
     proficient educators;
       ``(3) developing performance-based standards and aligned 
     assessments to measure the capacity of prospective teachers 
     to use technology effectively in their classrooms;
       ``(4) providing technical assistance to other teacher 
     preparation programs;
       ``(5) developing and disseminating resources and 
     information in order to assist institutions of higher 
     education to prepare teachers to use technology effectively 
     in their classrooms; and
       ``(6) subject to section 3162(c)(2), acquiring equipment, 
     networking capabilities, and infrastructure to carry out the 
     project.

     ``SEC. 3164. AUTHORIZATION OF APPROPRIATIONS.

       ``For purposes of carrying out this subpart, there is 
     authorized to be appropriated $150,000,000 for fiscal year 
     2002, and such sums as may be necessary for each of the 4 
     succeeding fiscal years.''.

     SEC. 354. PROFESSIONAL DEVELOPMENT.

       Section 3141(b)(2)(A) (20 U.S.C. 6861(b)(2)(A)) is 
     amended--
       (1) in clause (i), by striking ``and'' at the end;
       (2) in clause (ii)(V), by adding ``and'' after the 
     semicolon; and
       (2) by adding at the end the following:
       ``(iii) the provision of incentives, including bonus 
     payments, to recognized educators who achieve the National 
     Education Technology Standards, or an information technology 
     certification that is directly related to the curriculum or 
     content area in which the teacher provides instruction;''.

         TITLE IV--INDIVIDUALS WITH DISABILITIES EDUCATION ACT

     SEC. 401. FULL FUNDING OF IDEA.

       (a) Full Funding.--In additional to any amounts otherwise 
     appropriated, there are appropriated to carry out part B of 
     the Individuals with Disabilities Education Act (20 U.S.C. 
     1411 et seq.), $2,000,000,000 for fiscal year 2002.
       (b) Sense of the Senate.--
       (1) Findings.--The Senate makes the following findings:
       (A) Before the Individuals with Disabilities Education Act 
     (20 U.S.C. 1400 et seq.) (referred to in this subsection as 
     ``IDEA'') was enacted in 1975, as many as 4,000,000 children 
     were denied appropriate educational services. Few disabled 
     preschoolers received services. 1,000,000 children with 
     disabilities were excluded from public school. Courts ruled 
     this practice was unconstitutional.
       (B) States asked the Federal Government to help them fund 
     educational services to disabled children. Congress responded 
     by enacting IDEA to ensure that disabled children received 
     appropriate services and to provide financial support to the 
     States for providing these services.
       (C) Since the enactment of IDEA, schools have been serving 
     disabled children, helping them develop their skills and 
     abilities and go on to lead productive and independent lives. 
     Today, IDEA serves 5,400,000 children with disabilities from 
     birth through age 21. Every State offers public education and 
     early intervention services for children with disabilities. 
     Fewer than 6,000 disabled children now live in institutional 
     settings away from their families, compared to 95,000 such 
     children in 1969. The number of disabled students completing 
     high school with a diploma or certificate has increased by 10 
     percent in the last decade. The number of students with 
     disabilities entering higher education has more than tripled 
     since the implementation of IDEA.
       (D) When IDEA was enacted, the legislation included a goal 
     to provide 40 percent of the cost of providing services for 
     these students.
       (E) The cost of providing special education has increased 
     significantly for school districts across the country. The 
     Federal Government currently provides about 15 percent of the 
     national average per pupil expenditure for IDEA students.
       (F) IDEA will be up for reauthorization for fiscal year 
     2003.
       (2) Sense of the Senate.--It is the sense of the Senate 
     that--
       (A) when Congress reauthorizes the IDEA program, it should 
     ensure that the Federal Government will reach the goal of 
     providing 40 percent of the national average per pupil 
     expenditure under IDEA; and
       (B) disabled children will benefit from efforts to help 
     schools hire and train high quality teachers and principals, 
     reduce class size, renovate overcrowded and crumbling 
     buildings, integrate technology into the classroom, 
     strengthen early literacy programs, and increase the 
     availability of after-school learning opportunities.

            TITLE V--MAKING HIGHER EDUCATION MORE AFFORDABLE

     SEC. 501. INCREASE IN MAXIMUM PELL GRANT.

       (a) Findings.--Congress makes the following findings:
       (1) A college education has become increasingly important, 
     not just to the individual beneficiary, but to the nation as 
     a whole. The growth and continued expansion of the nation's 
     economy is heavily dependent on an educated and highly 
     skilled workforce.
       (2) The opportunity to gain a college education also is 
     important to the nation as a means to help advance the 
     American ideals of progress and equality.
       (3) The Federal Government plays an invaluable role in 
     making student financial aid available to ensure that 
     qualified students are able to attend college, regardless of 
     their financial means. Since the inception of the Pell Grant 
     program in 1973, nearly 80,000,000 grants have helped low- 
     and middle-income students go to college, enrich their lives, 
     and become productive members of society.
       (4) Nationwide, almost 70 percent of high school graduates 
     continue on to higher education. This degree of college 
     participation would not exist without the Federal investment 
     in student aid, especially the Pell Grant program. Nearly 25 
     percent of low- and middle-income students receive some 
     amount of Pell Grant funding.
       (5) In the next 10 years, the number of undergraduate 
     students enrolled in the nation's colleges and universities 
     will increase by 11 percent to more than 11,000,000 students. 
     Many of these students will be the first in their families to 
     attend college. One in 5 of these students will be from 
     families with incomes below the poverty level. The continued 
     investment in the Pell Grant program is essential if college 
     is to remain an achievable part of the American dream.
       (6) Increasing the maximum Pell Grant to $4,700 would allow 
     approximately 430,000 additional students to benefit from the 
     program.
       (7) Increasing the maximum Pell Grant to $4,700 would 
     result in an $800 increase in the average grant award.
       (8) Because Pell Grant recipients are more likely to 
     graduate with student loan debt and to amass more debt than 
     other student borrowers, increasing the maximum Pell Grant to 
     $4,700 by fiscal year 2004 will help remedy this disparity.
       (b) Sense of the Senate.--It is the sense of the Senate the 
     maximum Pell Grant should be increased to $4,700.

     SEC. 502. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

       (a) Deduction Allowed.--Part VII of subchapter B of chapter 
     1 of the Internal Revenue Code of 1986 (relating to 
     additional itemized deductions for individuals) is amended by 
     redesignating section 222 as section 223 and by inserting 
     after section 221 the following:

     ``SEC. 222. HIGHER EDUCATION EXPENSES.

       ``(a) Allowance of Deduction.--
       ``(1) In general.--In the case of an individual, there 
     shall be allowed as a deduction an amount equal to the 
     applicable dollar amount of the qualified higher education 
     expenses paid by the taxpayer during the taxable year.
       ``(2) Applicable dollar amount.--The applicable dollar 
     amount for any taxable year shall be determined as follows:

                                                             Applicable
``Taxable year:                                          dollar amount:
  2002......................................................$4,000 ....

  2003......................................................$8,000 ....

  2004 and thereafter......................................$12,000.....

       ``(b) Limitation Based on Modified Adjusted Gross Income.--
       ``(1) In general.--The amount which would (but for this 
     subsection) be taken into account under subsection (a) shall 
     be reduced (but not below zero) by the amount determined 
     under paragraph (2).
       ``(2) Amount of reduction.--The amount determined under 
     this paragraph equals the amount which bears the same ratio 
     to the amount which would be so taken into account as--
       ``(A) the excess of--
       ``(i) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(ii) $62,450 ($104,050 in the case of a joint return, 
     $89,150 in the case of a return filed by a head of household, 
     and $52,025 in the case of a return by a married individual 
     filing separately), bears to
       ``(B) $15,000.
       ``(3) Modified adjusted gross income.--For purposes of this 
     subsection, the term `modified adjusted gross income' means 
     the adjusted gross income of the taxpayer for the taxable 
     year determined--
       ``(A) without regard to this section and sections 911, 931, 
     and 933, and
       ``(B) after the application of sections 86, 135, 219, 220, 
     and 469.
     For purposes of the sections referred to in subparagraph (B), 
     adjusted gross income shall be determined without regard to 
     the deduction allowed under this section.
       ``(c) Qualified Higher Education Expenses.--For purposes of 
     this section--
       ``(1) Qualified higher education expenses.--
       ``(A) In general.--The term `qualified higher education 
     expenses' means tuition and fees charged by an educational 
     institution and required for the enrollment or attendance 
     of--
       ``(i) the taxpayer,
       ``(ii) the taxpayer's spouse,
       ``(iii) any dependent of the taxpayer with respect to whom 
     the taxpayer is allowed a deduction under section 151, or
       ``(iv) any grandchild of the taxpayer,
     as an eligible student at an institution of higher education.
       ``(B) Eligible courses.--Amounts paid for qualified higher 
     education expenses of any individual shall be taken into 
     account under subsection (a) only to the extent such 
     expenses--

[[Page 255]]

       ``(i) are attributable to courses of instruction for which 
     credit is allowed toward a baccalaureate degree by an 
     institution of higher education or toward a certificate of 
     required course work at a vocational school, and
       ``(ii) are not attributable to any graduate program of such 
     individual.
       ``(C) Exception for nonacademic fees.--Such term does not 
     include any student activity fees, athletic fees, insurance 
     expenses, or other expenses unrelated to a student's academic 
     course of instruction.
       ``(D) Eligible student.--For purposes of subparagraph (A), 
     the term `eligible student' means a student who--
       ``(i) meets the requirements of section 484(a)(1) of the 
     Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in 
     effect on the date of the enactment of this section, and
       ``(ii) is carrying at least one-half the normal full-time 
     work load for the course of study the student is pursuing, as 
     determined by the institution of higher education.
       ``(E) Identification requirement.--No deduction shall be 
     allowed under subsection (a) to a taxpayer with respect to an 
     eligible student unless the taxpayer includes the name, age, 
     and taxpayer identification number of such eligible student 
     on the return of tax for the taxable year.
       ``(2) Institution of higher education.--The term 
     `institution of higher education' means an institution 
     which--
       ``(A) is described in section 481 of the Higher Education 
     Act of 1965 (20 U.S.C. 1088), as in effect on the date of the 
     enactment of this section, and
       ``(B) is eligible to participate in programs under title IV 
     of such Act.
       ``(d) Special Rules.--
       ``(1) No double benefit.--
       ``(A) In general.--No deduction shall be allowed under 
     subsection (a) for any expense for which a deduction is 
     allowable to the taxpayer under any other provision of this 
     chapter unless the taxpayer irrevocably waives his right to 
     the deduction of such expense under such other provision.
       ``(B) Denial of deduction if credit elected.--No deduction 
     shall be allowed under subsection (a) for a taxable year with 
     respect to the qualified higher education expenses of an 
     individual if the taxpayer elects to have section 25A apply 
     with respect to such individual for such year.
       ``(C) Dependents.--No deduction shall be allowed under 
     subsection (a) to any individual with respect to whom a 
     deduction under section 151 is allowable to another taxpayer 
     for a taxable year beginning in the calendar year in which 
     such individual's taxable year begins.
       ``(D) Coordination with exclusions.--A deduction shall be 
     allowed under subsection (a) for qualified higher education 
     expenses only to the extent the amount of such expenses 
     exceeds the amount excludable under section 135 or 530(d)(2) 
     for the taxable year.
       ``(2) Limitation on taxable year of deduction.--
       ``(A) In general.--A deduction shall be allowed under 
     subsection (a) for qualified higher education expenses for 
     any taxable year only to the extent such expenses are in 
     connection with enrollment at an institution of higher 
     education during the taxable year.
       ``(B) Certain prepayments allowed.--Subparagraph (A) shall 
     not apply to qualified higher education expenses paid during 
     a taxable year if such expenses are in connection with an 
     academic term beginning during such taxable year or during 
     the first 3 months of the next taxable year.
       ``(3) Adjustment for certain scholarships and veterans 
     benefits.--The amount of qualified higher education expenses 
     otherwise taken into account under subsection (a) with 
     respect to the education of an individual shall be reduced 
     (before the application of subsection (b)) by the sum of the 
     amounts received with respect to such individual for the 
     taxable year as--
       ``(A) a qualified scholarship which under section 117 is 
     not includable in gross income,
       ``(B) an educational assistance allowance under chapter 30, 
     31, 32, 34, or 35 of title 38, United States Code, or
       ``(C) a payment (other than a gift, bequest, devise, or 
     inheritance within the meaning of section 102(a)) for 
     educational expenses, or attributable to enrollment at an 
     eligible educational institution, which is exempt from income 
     taxation by any law of the United States.
       ``(4) No deduction for married individuals filing separate 
     returns.--If the taxpayer is a married individual (within the 
     meaning of section 7703), this section shall apply only if 
     the taxpayer and the taxpayer's spouse file a joint return 
     for the taxable year.
       ``(5) Nonresident aliens.--If the taxpayer is a nonresident 
     alien individual for any portion of the taxable year, this 
     section shall apply only if such individual is treated as a 
     resident alien of the United States for purposes of this 
     chapter by reason of an election under subsection (g) or (h) 
     of section 6013.
       ``(6) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section, including regulations requiring recordkeeping 
     and information reporting.''.
       (b) Deduction Allowed in Computing Adjusted Gross Income.--
     Section 62(a) of the Internal Revenue Code of 1986 is amended 
     by inserting after paragraph (17) the following:
       ``(18) Higher education expenses.--The deduction allowed by 
     section 222.''.
       (c) Conforming Amendment.--The table of sections for part 
     VII of subchapter B of chapter 1 of the Internal Revenue Code 
     of 1986 is amended by striking the item relating to section 
     222 and inserting the following:

``Sec. 222. Higher education expenses.
``Sec. 223. Cross reference.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to payments made in taxable years beginning after 
     December 31, 2001.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Baucus, Mr. Dorgan, Mr. Reid, 
        Mr. Durbin, Mr. Rockefeller, Mrs. Clinton, Mr. Kerry, Mr. 
        Schumer, Mr. Dodd, and Mr. Conrad):
  S. 9. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief, and for other purposes; to the Committee on Finance.


                 working family tax relief act of 2001

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

                                  S. 9

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

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Working 
     Family Tax Relief Act of 2001''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; etc.

                  TITLE I--MARRIAGE PENALTY TAX RELIEF

Sec. 101. Optional separate calculations.

                      TITLE II--ESTATE TAX RELIEF

Sec. 201. Increase in amount of unified credit against estate and gift 
              taxes.
Sec. 202. Increase in qualified family-owned business interest 
              deduction amount.

         TITLE III--TAX RELIEF FOR AFFORDABLE HIGHER EDUCATION

Sec. 301. Deduction for higher education expenses.

         TITLE IV--TAX RELIEF FOR FAMILY CHOICES IN CHILD CARE

                 Subtitle A--Dependent Care Tax Credit

Sec. 401. Expanding the dependent care tax credit.
Sec. 402. Minimum credit allowed for stay-at-home parents.
Sec. 403. Credit made refundable.

        Subtitle B--Incentives for Employer-Provided Child Care

Sec. 411. Allowance of credit for employer expenses for child care 
              assistance.

             TITLE V--TAX RELIEF FOR LONG-TERM CARE GIVERS

Sec. 501. Long-term care tax credit.

               TITLE VI--TAX RELIEF FOR WORKING FAMILIES

Sec. 601. Increased earned income tax credit for 2 or more qualifying 
              children.
Sec. 602. Simplification of definition of earned income.
Sec. 603. Simplification of definition of child dependent.
Sec. 604. Other modifications to earned income tax credit.

          TITLE VII--TAX RELIEF FOR SELF-EMPLOYED INDIVIDUALS

Sec. 701. Deduction for health insurance costs of self-employed 
              individuals increased.

       TITLE VIII--TAX RELIEF FOR EXPANDING PENSION AVAILABILITY

Sec. 801. Nonrefundable credit to certain individuals for elective 
              deferrals and IRA contributions.
Sec. 802. Credit for qualified pension plan contributions of small 
              employers.
Sec. 803. Credit for pension plan startup costs of small employers.

               TITLE IX--TAX RELIEF FOR ADOPTIVE PARENTS

Sec. 901. Expansion of adoption credit.

                  TITLE I--MARRIAGE PENALTY TAX RELIEF

     SEC. 101. OPTIONAL SEPARATE CALCULATIONS.

       (a) In General.--Subpart B of part II of subchapter A of 
     chapter 61 (relating to income tax returns) is amended by 
     inserting after section 6013 the following new section:

     ``SEC. 6013A. COMBINED RETURN WITH SEPARATE RATES.

       ``(a) General Rule.--A husband and wife may make a combined 
     return of income taxes under subtitle A under which--

[[Page 256]]

       ``(1) a separate taxable income is determined for each 
     spouse by applying the rules provided in this section, and
       ``(2) the tax imposed by section 1 is the aggregate amount 
     resulting from applying the separate rates set forth in 
     section 1(c) to each such taxable income.
       ``(b) Treatment of Income.--For purposes of this section--
       ``(1) earned income (within the meaning of section 911(d)), 
     and any income received as a pension or annuity which arises 
     from an employer-employee relationship, shall be treated as 
     the income of the spouse who rendered the services,
       ``(2) income from property shall be divided between the 
     spouses in accordance with their respective ownership rights 
     in such property (equally in the case of property held 
     jointly by the spouses), and
       ``(3) any exclusion from income shall be allowable to the 
     spouse with respect to whom the income would be otherwise 
     includible.
       ``(c) Treatment of Deductions.--For purposes of this 
     section--
       ``(1) except as otherwise provided in this subsection, the 
     deductions described in section 62(a) shall be allowed to the 
     spouse treated as having the income to which such deductions 
     relate,
       ``(2) the deductions allowable by section 151(b) (relating 
     to personal exemptions for taxpayer and spouse) shall be 
     determined by allocating 1 personal exemption to each spouse,
       ``(3) section 63 shall be applied as if such spouses were 
     not married, except that the election whether or not to 
     itemize deductions shall be made jointly by both spouses and 
     apply to each, and
       ``(4) each spouse's share of all other deductions shall be 
     determined by multiplying the aggregate amount thereof by the 
     fraction--
       ``(A) the numerator of which is such spouse's gross income, 
     and
       ``(B) the denominator of which is the combined gross 
     incomes of the 2 spouses.

     Any fraction determined under paragraph (4) shall be rounded 
     to the nearest percentage point.
       ``(d) Treatment of Credits.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), 
     each spouse's share of credits allowed to both spouses shall 
     be determined by multiplying the aggregate amount of the 
     credits by the fraction determined under subsection (c)(4).
       ``(2) Earned income credit.--The earned income credit under 
     section 32 shall be determined as if each spouse were a 
     separate taxpayer, except that--
       ``(A) the earned income and the modified adjusted gross 
     income of each spouse shall be determined under the rules of 
     subsections (b), (c), and (e), and
       ``(B) qualifying children shall be allocated between 
     spouses proportionate to the earned income of each spouse 
     (rounded to the nearest whole number).
       ``(e) Special Rules Regarding Income Limitations.--
       ``(1) Exclusions and deductions.--For purposes of making a 
     determination under subsection (b) or (c), any eligibility 
     limitation with respect to each spouse shall be determined by 
     taking into account the limitation applicable to a single 
     individual.
       ``(2) Credits.--For purposes of making a determination 
     under subsection (d)(1), in no event shall an eligibility 
     limitation for any credit allowable to both spouses be less 
     than twice such limitation applicable to a single individual.
       ``(f) Special Rules for Alternative Minimum Tax.--If a 
     husband and wife elect the application of this section--
       ``(1) the tax imposed by section 55 shall be computed 
     separately for each spouse, and
       ``(2) for purposes of applying section 55--
       ``(A) the rules under this section for allocating items of 
     income, deduction, and credit shall apply, and
       ``(B) the exemption amount for each spouse shall be the 
     amount determined under section 55(d)(1)(B).
       ``(g) Treatment as Joint Return.--Except as otherwise 
     provided in this section or in the regulations prescribed 
     hereunder, for purposes of this title (other than sections 1 
     and 63(c)) a combined return under this section shall be 
     treated as a joint return.
       ``(h) Limitations.--
       ``(1) Phase-in of benefit.--
       ``(A) In general.--In the case of any taxable year 
     beginning before January 1, 2005, the tax imposed by section 
     1 or 55 shall in no event be less than the sum of--
       ``(i) the tax determined after the application of this 
     section, plus
       ``(ii) the applicable percentage of the excess of--

       ``(I) the tax determined without the application of this 
     section, over
       ``(II) the amount determined under clause (i).

       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A), the applicable percentage shall be determined in 
     accordance with the following table:

``For taxable years beginning in:         The applicable percentage is:
  2003..........................................................50 ....

  2004..........................................................10.....

       ``(2) Limitation of benefit based on combined adjusted 
     gross income.--With respect to spouses electing the treatment 
     of this section for any taxable year, the tax under section 1 
     or 55 shall be increased by an amount which bears the same 
     ratio to the excess of the tax determined without the 
     application of this section over the tax determined after the 
     application of this section as the ratio (but not over 100 
     percent) of the excess of the combined adjusted gross income 
     of the spouses over $100,000 bears to $50,000.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section.''.
       (b) Unmarried Rate Made Applicable.--So much of subsection 
     (c) of section 1 as precedes the table is amended to read as 
     follows:
       ``(c) Separate or Unmarried Return Rate.--There is hereby 
     imposed on the taxable income of every individual (other than 
     a married individual (as defined in section 7703) filing a 
     return which is not a combined return under section 6013A, a 
     surviving spouse as defined in section 2(a), or a head of 
     household as defined in section 2(b)) a tax determined in 
     accordance with the following table:''.
       (c) Penalty for Substantial Understatement of Income From 
     Property.--Section 6662 (relating to imposition of accuracy-
     related penalty) is amended--
       (1) by adding at the end of subsection (b) the following 
     new paragraph:
       ``(6) Any substantial understatement of income from 
     property under section 6013A.'', and
       (2) by adding at the end the following new subsection:
       ``(i) Substantial Understatement of Income From Property 
     Under Section 6013A.--For purposes of this section, there is 
     a substantial understatement of income from property under 
     section 6013A if--
       ``(1) the spouses electing the treatment of such section 
     for any taxable year transfer property from 1 spouse to the 
     other spouse in such year,
       ``(2) such transfer results in reduced tax liability under 
     such section, and
       ``(3) the significant purpose of such transfer is the 
     avoidance or evasion of Federal income tax.''.
       (d) Protection of Social Security and Medicare Trust 
     Funds.--
       (1) In general.--Nothing in this section shall be construed 
     to alter or amend the Social Security Act (or any regulation 
     promulgated under that Act).
       (2) Transfers.--
       (A) Estimate of secretary.--The Secretary of the Treasury 
     shall annually estimate the impact that the enactment of this 
     section has on the income and balances of the trust funds 
     established under sections 201 and 1817 of the Social 
     Security Act (42 U.S.C. 401 and 1395i).
       (B) Transfer of funds.--If, under subparagraph (A), the 
     Secretary of the Treasury estimates that the enactment of 
     this section has a negative impact on the income and balances 
     of such trust funds, the Secretary shall transfer, not less 
     frequently than quarterly, from the general revenues of the 
     Federal Government an amount sufficient so as to ensure that 
     the income and balances of such trust funds are not reduced 
     as a result of the enactment of this section.
       (e) Clerical Amendment.--The table of sections for subpart 
     B of part II of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6013 the 
     following new item:

``Sec. 6013A. Combined return with separate rates.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.

                      TITLE II--ESTATE TAX RELIEF

     SEC. 201. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE 
                   AND GIFT TAXES.

       (a) In General.--The table contained in section 2010(c) 
     (relating to applicable credit amount) is amended to read as 
     follows:

``In the case of estates of decedentThe applicable exclusion amount is:
      2002, 2003, 2004, 2005, and 2006......................$1,000,000 
      2007 and 2008.........................................$1,125,000 
      2009..................................................$1,500,000 
      2010 or thereafter.................................$2,000,000.''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to the estates of decedents dying, and gifts 
     made, after December 31, 2001.

     SEC. 202. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS 
                   INTEREST DEDUCTION AMOUNT.

       (a) In General.--Paragraph (2) of section 2057(a) (relating 
     to family-owned business interests) is amended to read as 
     follows:
       ``(2) Maximum deduction.--
       ``(A) In general.--The deduction allowed by this section 
     shall not exceed the sum of--
       ``(i) the applicable deduction amount, plus
       ``(ii) in the case of a decedent described in subparagraph 
     (C), the applicable unused spousal deduction amount.
       ``(B) Applicable deduction amount.--For purposes of this 
     subparagraph (A)(i), the applicable deduction amount is 
     determined in accordance with the following table:


[[Page 257]]


``In the case of estates of decedentThe applicable deduction amount is:
      2002, 2003, 2004, 2005, and 2006.......................$1,375,000
      2007 and 2008..........................................$1,625,000
      2009...................................................$2,375,000
      2010 or thereafter....................................$3,375,000.
       ``(C) Applicable unused spousal deduction amount.--With 
     respect to a decedent whose immediately predeceased spouse 
     died after December 31, 2001, and the estate of such 
     immediately predeceased spouse met the requirements of 
     subsection (b)(1), the applicable unused spousal deduction 
     amount for such decedent is equal to the excess of--
       ``(i) the applicable deduction amount allowable under this 
     section to the estate of such immediately predeceased spouse, 
     over
       ``(ii) the sum of--

       ``(I) the applicable deduction amount allowed under this 
     section to the estate of such immediately predeceased spouse, 
     plus
       ``(II) the amount of any increase in such estate's unified 
     credit under paragraph (3)(B) which was allowed to such 
     estate.''.

       (b) Conforming Amendments.--Section 2057(a)(3)(B) is 
     amended--
       (1) by striking ``$675,000'' both places it appears and 
     inserting ``the applicable deduction amount'', and
       (2) by striking ``$675,000'' in the heading and inserting 
     ``applicable deduction amount''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to the estates of decedents dying, and gifts 
     made, after December 31, 2001.

         TITLE III--TAX RELIEF FOR AFFORDABLE HIGHER EDUCATION

     SEC. 301. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

       (a) Deduction Allowed.--Part VII of subchapter B of chapter 
     1 (relating to additional itemized deductions for 
     individuals) is amended by redesignating section 222 as 
     section 223 and by inserting after section 221 the following 
     new section:

     ``SEC. 222. HIGHER EDUCATION EXPENSES.

       ``(a) Allowance of Deduction.--
       ``(1) In general.--In the case of an individual, there 
     shall be allowed as a deduction an amount equal to the 
     applicable dollar amount of the qualified higher education 
     expenses paid by the taxpayer during the taxable year.
       ``(2) Applicable dollar amount.--The applicable dollar 
     amount for any taxable year shall be determined as follows:

                                                             Applicable
``Taxable year:                                          dollar amount:
  2002......................................................$4,000 ....

  2003......................................................$8,000 ....

  2004 and thereafter......................................$12,000.....

       ``(b) Limitation Based on Modified Adjusted Gross Income.--
       ``(1) In general.--The amount which would (but for this 
     subsection) be taken into account under subsection (a) shall 
     be reduced (but not below zero) by the amount determined 
     under paragraph (2).
       ``(2) Amount of reduction.--The amount determined under 
     this paragraph equals the amount which bears the same ratio 
     to the amount which would be so taken into account as--
       ``(A) the excess of--
       ``(i) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(ii) $62,450 ($104,050 in the case of a joint return, 
     $89,150 in the case of a return filed by a head of household, 
     and $52,025 in the case of a return by a married individual 
     filing separately), bears to
       ``(B) $15,000.
       ``(3) Modified adjusted gross income.--For purposes of this 
     subsection, the term `modified adjusted gross income' means 
     the adjusted gross income of the taxpayer for the taxable 
     year determined--
       ``(A) without regard to this section and sections 911, 931, 
     and 933, and
       ``(B) after the application of sections 86, 135, 219, 220, 
     and 469.
     For purposes of the sections referred to in subparagraph (B), 
     adjusted gross income shall be determined without regard to 
     the deduction allowed under this section.
       ``(c) Qualified Higher Education Expenses.--For purposes of 
     this section--
       ``(1) Qualified higher education expenses.--
       ``(A) In general.--The term `qualified higher education 
     expenses' means tuition and fees charged by an educational 
     institution and required for the enrollment or attendance 
     of--
       ``(i) the taxpayer,
       ``(ii) the taxpayer's spouse,
       ``(iii) any dependent of the taxpayer with respect to whom 
     the taxpayer is allowed a deduction under section 151, or
       ``(iv) any grandchild of the taxpayer,
     as an eligible student at an institution of higher education.
       ``(B) Eligible courses.--Amounts paid for qualified higher 
     education expenses of any individual shall be taken into 
     account under subsection (a) only to the extent such 
     expenses--
       ``(i) are attributable to courses of instruction for which 
     credit is allowed toward a baccalaureate degree by an 
     institution of higher education or toward a certificate of 
     required course work at a vocational school, and
       ``(ii) are not attributable to any graduate program of such 
     individual.
       ``(C) Exception for nonacademic fees.--Such term does not 
     include any student activity fees, athletic fees, insurance 
     expenses, or other expenses unrelated to a student's academic 
     course of instruction.
       ``(D) Eligible student.--For purposes of subparagraph (A), 
     the term `eligible student' means a student who--
       ``(i) meets the requirements of section 484(a)(1) of the 
     Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in 
     effect on the date of the enactment of this section, and
       ``(ii) is carrying at least one-half the normal full-time 
     work load for the course of study the student is pursuing, as 
     determined by the institution of higher education.
       ``(E) Identification requirement.--No deduction shall be 
     allowed under subsection (a) to a taxpayer with respect to an 
     eligible student unless the taxpayer includes the name, age, 
     and taxpayer identification number of such eligible student 
     on the return of tax for the taxable year.
       ``(2) Institution of higher education.--The term 
     `institution of higher education' means an institution 
     which--
       ``(A) is described in section 481 of the Higher Education 
     Act of 1965 (20 U.S.C. 1088), as in effect on the date of the 
     enactment of this section, and
       ``(B) is eligible to participate in programs under title IV 
     of such Act.
       ``(d) Special Rules.--
       ``(1) No double benefit.--
       ``(A) In general.--No deduction shall be allowed under 
     subsection (a) for any expense for which a deduction is 
     allowable to the taxpayer under any other provision of this 
     chapter unless the taxpayer irrevocably waives his right to 
     the deduction of such expense under such other provision.
       ``(B) Denial of deduction if credit elected.--No deduction 
     shall be allowed under subsection (a) for a taxable year with 
     respect to the qualified higher education expenses of an 
     individual if the taxpayer elects to have section 25A apply 
     with respect to such individual for such year.
       ``(C) Dependents.--No deduction shall be allowed under 
     subsection (a) to any individual with respect to whom a 
     deduction under section 151 is allowable to another taxpayer 
     for a taxable year beginning in the calendar year in which 
     such individual's taxable year begins.
       ``(D) Coordination with exclusions.--A deduction shall be 
     allowed under subsection (a) for qualified higher education 
     expenses only to the extent the amount of such expenses 
     exceeds the amount excludable under section 135 or 530(d)(2) 
     for the taxable year.
       ``(2) Limitation on taxable year of deduction.--
       ``(A) In general.--A deduction shall be allowed under 
     subsection (a) for qualified higher education expenses for 
     any taxable year only to the extent such expenses are in 
     connection with enrollment at an institution of higher 
     education during the taxable year.
       ``(B) Certain prepayments allowed.--Subparagraph (A) shall 
     not apply to qualified higher education expenses paid during 
     a taxable year if such expenses are in connection with an 
     academic term beginning during such taxable year or during 
     the first 3 months of the next taxable year.
       ``(3) Adjustment for certain scholarships and veterans 
     benefits.--The amount of qualified higher education expenses 
     otherwise taken into account under subsection (a) with 
     respect to the education of an individual shall be reduced 
     (before the application of subsection (b)) by the sum of the 
     amounts received with respect to such individual for the 
     taxable year as--
       ``(A) a qualified scholarship which under section 117 is 
     not includable in gross income,
       ``(B) an educational assistance allowance under chapter 30, 
     31, 32, 34, or 35 of title 38, United States Code, or
       ``(C) a payment (other than a gift, bequest, devise, or 
     inheritance within the meaning of section 102(a)) for 
     educational expenses, or attributable to enrollment at an 
     eligible educational institution, which is exempt from income 
     taxation by any law of the United States.
       ``(4) No deduction for married individuals filing separate 
     returns.--If the taxpayer is a married individual (within the 
     meaning of section 7703), this section shall apply only if 
     the taxpayer and the taxpayer's spouse file a joint return 
     for the taxable year.
       ``(5) Nonresident aliens.--If the taxpayer is a nonresident 
     alien individual for any portion of the taxable year, this 
     section shall apply only if such individual is treated as a 
     resident alien of the United States for purposes of this 
     chapter by reason of an election under subsection (g) or (h) 
     of section 6013.
       ``(6) Regulations.--The Secretary may prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this section, including regulations requiring recordkeeping 
     and information reporting.''.
       (b) Deduction Allowed in Computing Adjusted Gross Income.--
     Section 62(a) is amended by inserting after paragraph (17) 
     the following new paragraph:
       ``(18) Higher education expenses.--The deduction allowed by 
     section 222.''.

[[Page 258]]

       (c) Conforming Amendment.--The table of sections for part 
     VII of subchapter B of chapter 1 is amended by striking the 
     item relating to section 222 and inserting the following new 
     items:

``Sec. 222. Higher education expenses.
``Sec. 223. Cross reference.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to payments made in taxable years beginning after 
     December 31, 2001.

         TITLE IV--TAX RELIEF FOR FAMILY CHOICES IN CHILD CARE

                 Subtitle A--Dependent Care Tax Credit

     SEC. 401. EXPANDING THE DEPENDENT CARE TAX CREDIT.

       (a) Percentage of Employment-Related Expenses Determined by 
     Taxpayer Status.--Section 21(a)(2) (defining applicable 
     percentage) is amended to read as follows:
       ``(2) Applicable percentage defined.--For purposes of 
     paragraph (1), the term `applicable percentage' means--
       ``(A) except as provided in subparagraph (B), 50 percent 
     reduced (but not below 20 percent) by 1 percentage point for 
     each $1,000, or fraction thereof, by which the taxpayers's 
     adjusted gross income for the taxable year exceeds $30,000, 
     and
       ``(B) in the case of employment-related expenses described 
     in subsection (e)(11), 50 percent reduced (but not below 
     zero) by 1 percentage point for each $800, or fraction 
     thereof, by which the taxpayers's adjusted gross income for 
     the taxable year exceeds $30,000.''.
       (b) Inflation Adjustment for Allowable Expenses.--Section 
     21(c) (relating to dollar limit on amount creditable) is 
     amended by striking ``The amount determined'' and inserting 
     ``In the case of any taxable year beginning after 2002, each 
     dollar amount referred to in paragraphs (1) and (2) shall be 
     increased by an amount equal to such dollar amount multiplied 
     by the cost-of-living adjustment determined under section 
     1(f)(3) for the calendar year in which the taxable year 
     begins, by substituting `calendar year 2001' for `calendar 
     year 1992' in subparagraph (B) thereof. If any dollar amount 
     after being increased under the preceding sentence is not a 
     multiple of $10, such dollar amount shall be rounded to the 
     nearest multiple of $10. The amount determined''.
       (c) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2001.

     SEC. 402. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS.

       (a) In General.--Section 21(e) (relating to special rules) 
     is amended by adding at the end the following new paragraph:
       ``(11) Minimum credit allowed for stay-at-home parents.--
     Notwithstanding subsection (d), in the case of any taxpayer 
     with one or more qualifying individuals described in 
     subsection (b)(1)(A) under the age of 1 at any time during 
     the taxable year, such taxpayer shall be deemed to have 
     employment-related expenses with respect to such qualifying 
     individuals in an amount equal to the sum of--
       ``(A) $90 for each month in such taxable year during which 
     at least one of such qualifying individuals is under the age 
     of 1, and
       ``(B) the amount of employment-related expenses otherwise 
     incurred for such qualifying individuals for the taxable year 
     (determined under this section without regard to this 
     paragraph).''.
       (b) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2001.

     SEC. 403. CREDIT MADE REFUNDABLE.

       (a) In General.--Part IV of subchapter A of chapter 1 
     (relating to credits against tax) is amended--
       (1) by redesignating section 35 as section 36, and
       (2) by redesignating section 21 as section 35.
       (b) Advance Payment of Credit.--Chapter 25 (relating to 
     general provisions relating to employment taxes) is amended 
     by inserting after section 3507 the following new section:

     ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

       ``(a) General Rule.--Except as otherwise provided in this 
     section, every employer making payment of wages with respect 
     to whom a dependent care eligibility certificate is in effect 
     shall, at the time of paying such wages, make an additional 
     payment equal to such employee's dependent care advance 
     amount.
       ``(b) Dependent Care Eligibility Certificate.--For purposes 
     of this title, a dependent care eligibility certificate is a 
     statement furnished by an employee to the employer which--
       ``(1) certifies that the employee will be eligible to 
     receive the credit provided by section 35 for the taxable 
     year,
       ``(2) certifies that the employee reasonably expects to be 
     an applicable taxpayer for the taxable year,
       ``(3) certifies that the employee does not have a dependent 
     care eligibility certificate in effect for the calendar year 
     with respect to the payment of wages by another employer,
       ``(4) states whether or not the employee's spouse has a 
     dependent care eligibility certificate in effect,
       ``(5) states the number of qualifying individuals in the 
     household maintained by the employee, and
       ``(6) estimates the amount of employment-related expenses 
     for the calendar year.
       ``(c) Dependent Care Advance Amount.--
       ``(1) In general.--For purposes of this title, the term 
     `dependent care advance amount' means, with respect to any 
     payroll period, the amount determined--
       ``(A) on the basis of the employee's wages from the 
     employer for such period,
       ``(B) on the basis of the employee's estimated employment-
     related expenses included in the dependent care eligibility 
     certificate, and
       ``(C) in accordance with tables provided by the Secretary.
       ``(2) Advance amount tables.--The tables referred to in 
     paragraph (1)(C) shall be similar in form to the tables 
     prescribed under section 3402 and, to the maximum extent 
     feasible, shall be coordinated with such tables and the 
     tables prescribed under section 3507(c).
       ``(d) Other Rules.--For purposes of this section, rules 
     similar to the rules of subsections (d) and (e) of section 
     3507 shall apply.
       ``(e) Definitions.--For purposes of this section, terms 
     used in this section which are defined in section 35 shall 
     have the respective meanings given such terms by section 
     35.''.
       (c) Conforming Amendments.--
       (1) Section 35(a)(1), as redesignated by subsection (a)(1), 
     is amended by striking ``chapter'' and inserting 
     ``subtitle''.
       (2) Section 35(e), as so redesignated and amended by 
     section 402(a), is amended by adding at the end the following 
     new paragraph:
       ``(12) Coordination with advance payments and minimum 
     tax.--Rules similar to the rules of subsections (g) and (h) 
     of section 32 shall apply for purposes of this section.''.
       (3) Sections 23(f)(1) and 129(a)(2)(C) are each amended by 
     striking ``section 21(e)'' and inserting ``section 35(e)''.
       (4) Section 129(b)(2) is amended by striking ``section 
     21(d)(2)'' and inserting ``section 35(d)(2)''.
       (5) Section 129(e)(1) is amended by striking ``section 
     21(b)(2)'' and inserting ``section 35(b)(2)''.
       (6) Section 213(e) is amended by striking ``section 21'' 
     and inserting ``section 35''.
       (7) Section 995(f)(2)(C) is amended by striking ``and 34'' 
     and inserting ``34, and 35''.
       (8) Section 6211(b)(4)(A) is amended by striking ``and 34'' 
     and inserting ``, 34, and 35''.
       (9) Section 6213(g)(2)(H) is amended by striking ``section 
     21'' and inserting ``section 35''.
       (10) Section 6213(g)(2)(L) is amended by striking ``section 
     21, 24, or 32'' and inserting ``section 24, 32, or 35''.
       (11) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 is amended by striking the item 
     relating to section 35 and inserting the following new items:

``Sec. 35. Expenses for household and dependent care services necessary 
              for gainful employment.
``Sec. 36. Overpayments of tax.''.
       (12) The table of sections for subpart A of such part IV is 
     amended by striking the item relating to section 21.
       (13) The table of sections for chapter 25 is amended by 
     adding after the item relating to section 3507 the following 
     new item:

``Sec. 3507A. Advance payment of dependent care credit.''.
       (14) Section 1324(b)(2) of title 31, United States Code, is 
     amended by striking ``or'' before ``enacted'' and by 
     inserting before the period at the end ``, or from section 35 
     of such Code''.
       (d) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2001.

        Subtitle B--Incentives for Employer-Provided Child Care

     SEC. 411. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD 
                   CARE ASSISTANCE.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by adding at the end the following new section:

     ``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to the sum 
     of--
       ``(1) 25 percent of the qualified child care expenditures, 
     and
       ``(2) 10 percent of the qualified child care resource and 
     referral expenditures,
     of the taxpayer for such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $150,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--
       ``(A) In general.--The term `qualified child care 
     expenditure' means any amount paid or incurred--
       ``(i) to acquire, construct, rehabilitate, or expand 
     property--

       ``(I) which is to be used as part of a qualified child care 
     facility of the taxpayer,

[[Page 259]]

       ``(II) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(III) which does not constitute part of the principal 
     residence (within the meaning of section 121) of the taxpayer 
     or any employee of the taxpayer,

       ``(ii) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees, to scholarship programs, and to the 
     providing of increased compensation to employees with higher 
     levels of child care training,
       ``(iii) under a contract with a qualified child care 
     facility to provide child care services to employees of the 
     taxpayer, or
       ``(iv) to reimburse an employee for expenses for child care 
     which enables the employee to be gainfully employed including 
     expenses related to--

       ``(I) day care and before and after school care,
       ``(II) transportation associated with such care, and
       ``(III) before and after school and holiday programs 
     including educational and recreational programs and camp 
     programs.

       ``(B) Fair market value.--The term `qualified child care 
     expenditures' shall not include expenses in excess of the 
     fair market value of such care.
       ``(2) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including the licensing of the facility as a 
     child care facility.
     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 121) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--
       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) if the facility is the principal trade or business 
     of the taxpayer, at least 30 percent of the enrollees of such 
     facility are dependents of employees of the taxpayer, and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(3) Qualified child care resource and referral 
     expenditure.--The term `qualified child care resource and 
     referral expenditure' means any amount paid or incurred under 
     a contract to provide child care resource and referral 
     services to an employee of the taxpayer.
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--
       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer described in subsection (c)(1)(A) with respect to 
     such facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

``If the recapture event occurs The applicable recapture percentage is:
    Years 1-3....................................................100   
    Year 4........................................................85   
    Year 5........................................................70   
    Year 6........................................................55   
    Year 7........................................................40   
    Year 8........................................................25   
    Years 9 and 10................................................10   
    Years 11 and thereafter........................................0.  
       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the taxable year in which the 
     qualified child care facility is placed in service by the 
     taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If, during any taxable year, 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.''.
       (b) Conforming Amendments.--
       (1) Section 38(b) is amended by striking ``plus'' at the 
     end of paragraph (12), by striking the period at the end of 
     paragraph (13) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(14) the employer-provided child care credit determined 
     under section 45E.''.
       (2) Subsection (d) of section 39 is amended by adding at 
     the end the following new paragraph:
       ``(10) No carryback of employer-provided child care credit 
     before january 1, 2002.--No portion of the unused business 
     credit for any taxable year which is attributable to the 
     credit under section 45E may be carried back to a taxable 
     year ending before January 1, 2002.''.
       (3) Subsection (c) of section 196 is amended by striking 
     ``and'' at the end of paragraph (8), by striking the period 
     at the end of paragraph (9) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(10) the employer-provided child care credit determined 
     under section 45E(a).''.
       (4) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 is amended by adding at the end the 
     following new item:

``Sec. 45E. Employer-provided child care credit.''.
       (5) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (26), by striking the period at the end of 
     paragraph (27) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(28) in the case of a facility with respect to which a 
     credit was allowed under section 45E, to the extent provided 
     in section 45E(f)(1).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

             TITLE V--TAX RELIEF FOR LONG-TERM CARE GIVERS

     SEC. 501. LONG-TERM CARE TAX CREDIT.

       (a) Allowance of Credit.--
       (1) In general.--Section 24(a) (relating to allowance of 
     child tax credit) is amended to read as follows:
       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) $500 multiplied by the number of qualifying children 
     of the taxpayer, plus
       ``(2) $3,000 multiplied by the number of applicable 
     individuals with respect to whom the taxpayer is an eligible 
     caregiver for the taxable year.''.

[[Page 260]]

       (2) Additional credit for taxpayer with 3 or more separate 
     credit amounts.--So much of section 24(d) as precedes 
     paragraph (1)(A) thereof is amended to read as follows:
       ``(d) Additional Credit for Taxpayers With 3 or More 
     Separate Credit Amounts.--
       ``(1) In general.--If the sum of the number of qualifying 
     children of the taxpayer and the number of applicable 
     individuals with respect to which the taxpayer is an eligible 
     caregiver is 3 or more for any taxable year, the aggregate 
     credits allowed under subpart C shall be increased by the 
     lesser of--''.
       (3) Conforming amendments.--
       (A) The heading for section 32(n) is amended by striking 
     ``Child'' and inserting ``Family Care''.
       (B) The heading for section 24 is amended to read as 
     follows:

     ``SEC. 24. FAMILY CARE CREDIT.''.

       (C) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 is amended by striking the item 
     relating to section 24 and inserting the following new item:

``Sec. 24. Family care credit.''.

       (b) Definitions.--Section 24(c) (defining qualifying child) 
     is amended to read as follows:
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualifying child.--
       ``(A) In general.--The term `qualifying child' means any 
     individual if--
       ``(i) the taxpayer is allowed a deduction under section 151 
     with respect to such individual for the taxable year,
       ``(ii) such individual has not attained the age of 17 as of 
     the close of the calendar year in which the taxable year of 
     the taxpayer begins, and
       ``(iii) such individual bears a relationship to the 
     taxpayer described in section 32(c)(3)(B).
       ``(B) Exception for certain noncitizens.--The term 
     `qualifying child' shall not include any individual who would 
     not be a dependent if the first sentence of section 152(b)(3) 
     were applied without regard to all that follows `resident of 
     the United States'.
       ``(2) Applicable individual.--
       ``(A) In general.--The term `applicable individual' means, 
     with respect to any taxable year, any individual who has been 
     certified, before the due date for filing the return of tax 
     for the taxable year (without extensions), by a physician (as 
     defined in section 1861(r)(1) of the Social Security Act) as 
     being an individual with long-term care needs described in 
     subparagraph (B) for a period--
       ``(i) which is at least 180 consecutive days, and
       ``(ii) a portion of which occurs within the taxable year.
     Such term shall not include any individual otherwise meeting 
     the requirements of the preceding sentence unless within the 
     39\1/2\ month period ending on such due date (or such other 
     period as the Secretary prescribes) a physician (as so 
     defined) has certified that such individual meets such 
     requirements.
       ``(B) Individuals with long-term care needs.--An individual 
     is described in this subparagraph if the individual meets any 
     of the following requirements:
       ``(i) The individual is at least 6 years of age and--

       ``(I) is unable to perform (without substantial assistance 
     from another individual) at least 3 activities of daily 
     living (as defined in section 7702B(c)(2)(B)) due to a loss 
     of functional capacity, or

       ``(II) requires substantial supervision to protect such 
     individual from threats to health and safety due to severe 
     cognitive impairment and is unable to perform at least 1 
     activity of daily living (as so defined) or to the extent 
     provided in regulations prescribed by the Secretary (in 
     consultation with the Secretary of Health and Human 
     Services), is unable to engage in age appropriate activities.

       ``(ii) The individual is at least 2 but not 6 years of age 
     and is unable due to a loss of functional capacity to perform 
     (without substantial assistance from another individual) at 
     least 2 of the following activities: eating, transferring, or 
     mobility.
       ``(iii) The individual is under 2 years of age and requires 
     specific durable medical equipment by reason of a severe 
     health condition or requires a skilled practitioner trained 
     to address the individual's condition to be available if the 
     individual's parents or guardians are absent.
       ``(3) Eligible caregiver.--
       ``(A) In general.--A taxpayer shall be treated as an 
     eligible caregiver for any taxable year with respect to the 
     following individuals:
       ``(i) The taxpayer.
       ``(ii) The taxpayer's spouse.
       ``(iii) An individual with respect to whom the taxpayer is 
     allowed a deduction under section 151 for the taxable year.
       ``(iv) An individual who would be described in clause (iii) 
     for the taxable year if section 151(c)(1)(A) were applied by 
     substituting for the exemption amount an amount equal to the 
     sum of the exemption amount, the standard deduction under 
     section 63(c)(2)(C), and any additional standard deduction 
     under section 63(c)(3) which would be applicable to the 
     individual if clause (iii) applied.
       ``(v) An individual who would be described in clause (iii) 
     for the taxable year if--

       ``(I) the requirements of clause (iv) are met with respect 
     to the individual, and
       ``(II) the requirements of subparagraph (B) are met with 
     respect to the individual in lieu of the support test of 
     section 152(a).

       ``(B) Residency test.--The requirements of this 
     subparagraph are met if an individual has as his principal 
     place of abode the home of the taxpayer and--
       ``(i) in the case of an individual who is an ancestor or 
     descendant of the taxpayer or the taxpayer's spouse, is a 
     member of the taxpayer's household for over half the taxable 
     year, or
       ``(ii) in the case of any other individual, is a member of 
     the taxpayer's household for the entire taxable year.
       ``(C) Special rules where more than 1 eligible caregiver.--
       ``(i) In general.--If more than 1 individual is an eligible 
     caregiver with respect to the same applicable individual for 
     taxable years ending with or within the same calendar year, a 
     taxpayer shall be treated as the eligible caregiver if each 
     such individual (other than the taxpayer) files a written 
     declaration (in such form and manner as the Secretary may 
     prescribe) that such individual will not claim such 
     applicable individual for the credit under this section.
       ``(ii) No agreement.--If each individual required under 
     clause (i) to file a written declaration under clause (i) 
     does not do so, the individual with the highest modified 
     adjusted gross income (as defined in section 32(c)(5)) shall 
     be treated as the eligible caregiver.
       ``(iii) Married individuals filing separately.--In the case 
     of married individuals filing separately, the determination 
     under this subparagraph as to whether the husband or wife is 
     the eligible caregiver shall be made under the rules of 
     clause (ii) (whether or not one of them has filed a written 
     declaration under clause (i)).''.
       (c) Identification Requirements.--
       (1) In general.--Section 24(e) is amended by adding at the 
     end the following new sentence: ``No credit shall be allowed 
     under this section to a taxpayer with respect to any 
     applicable individual unless the taxpayer includes the name 
     and taxpayer identification number of such individual, and 
     the identification number of the physician certifying such 
     individual, on the return of tax for the taxable year.''.
       (2) Assessment.--Section 6213(g)(2)(I) is amended--
       (A) by inserting ``or physician identification'' after 
     ``correct TIN'', and
       (B) by striking ``child'' and inserting ``family care''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

               TITLE VI--TAX RELIEF FOR WORKING FAMILIES

     SEC. 601. INCREASED EARNED INCOME TAX CREDIT FOR 2 OR MORE 
                   QUALIFYING CHILDREN.

       (a) In General.--The table in section 32(b)(1)(A) (relating 
     to percentages) is amended--
       (1) in the second item--
       (A) by striking ``or more'', and
       (B) by striking ``21.06'' and inserting ``19.06'', and
       (2) by inserting after the second item the following new 
     item:




``3 or more qualifying children.........................     45  19.06''


       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 602. SIMPLIFICATION OF DEFINITION OF EARNED INCOME.

       (a) In General.--Section 32(c)(2)(A)(i) (defining earned 
     income) is amended by inserting ``, but only if such amounts 
     are includible in gross income for the taxable year'' after 
     ``other employee compensation''.
       (b) Conforming Amendment.--Section 32(c)(2)(B) is amended 
     by striking ``and'' at the end of clause (iv), by striking 
     the period at the end of clause (v) and inserting ``, and'', 
     and by adding at the end the following new clause:
     ``(vi) the requirement under subparagraph (A)(i) that an 
     amount be includible in gross income shall not apply if such 
     amount is exempt from tax under section 7873 or is derived 
     directly from restricted and allotted land under the Act of 
     February 8, 1887 (commonly known as the Indian General 
     Allotment Act) (25 U.S.C. 331 et seq.) or from land held 
     under Acts or treaties containing an exception provision 
     similar to the Indian General Allotment Act.''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to amounts received in taxable years beginning 
     after December 31, 2001.

     SEC. 603. SIMPLIFICATION OF DEFINITION OF CHILD DEPENDENT.

       (a) Removal of Support Test for Certain Individuals.--
     Section 152(a) (relating to definition of dependent) is 
     amended to read as follows:
       ``(a) General Definition.--For purposes of this subtitle--
       ``(1) Dependent.--The term `dependent' means--

[[Page 261]]

       ``(A) any individual described in paragraph (2) over half 
     of whose support, for the calendar year in which the taxable 
     year of the taxpayer begins, was received from the taxpayer 
     (or is treated under subsection (c) as received from the 
     taxpayer), or
       ``(B) any individual described in subsection (f).
       ``(2) Individuals.--An individual is described in this 
     paragraph if such individual is--
       ``(A) a brother, sister, stepbrother, or stepsister of the 
     taxpayer,
       ``(B) the father or mother of the taxpayer, or an ancestor 
     of either,
       ``(C) a stepfather or stepmother of the taxpayer,
       ``(D) a son or daughter of a brother or sister of the 
     taxpayer,
       ``(E) a brother or sister of the father or mother of the 
     taxpayer,
       ``(F) a son-in-law, daughter-in-law, father-in-law, mother-
     in-law, brother-in-law, or sister-in-law of the taxpayer, or
       ``(G) an individual (other than an individual who at any 
     time during the taxable year was the spouse, determined 
     without regard to section 7703, of the taxpayer) who, for the 
     taxable year of the taxpayer, has as their principal place of 
     abode the home of the taxpayer and is a member of the 
     taxpayer's household.''.
       (b) Other Modifications.--Section 152 is amended by adding 
     at the end the following new subsection:
       ``(f) Subsection (f) Dependents.--
       ``(1) In general.--An individual is described in this 
     subsection for the taxable year if such individual--
       ``(A) bears a relationship to the taxpayer described in 
     paragraph (2),
       ``(B) except in the case of an eligible foster child or as 
     provided in subsection (e), has the same principal place of 
     abode as the taxpayer for more than one-half of such taxable 
     year, and
       ``(C)(i) has not attained the age of 19 at the close of the 
     calendar year in which the taxable year begins, or
       ``(ii) is a student (within the meaning of section 
     151(c)(4)) who has not attained the age of 24 at the close of 
     such calendar year.
       ``(2) Relationship test.--An individual bears a 
     relationship to the taxpayer described in this paragraph if 
     such individual is--
       ``(A) a son or daughter of the taxpayer, or a descendant of 
     either, or
       ``(B) a stepson or stepdaughter of the taxpayer.
       ``(3) Special rules.--
       ``(A) 2 or more claiming dependent.--Except as provided in 
     subparagraph (B), if an individual may be claimed as a 
     dependent by 2 or more taxpayers (but for this subparagraph) 
     for a taxable year beginning in the same calendar year, only 
     the taxpayer with the highest adjusted gross income for such 
     taxable year shall be allowed the deduction with respect to 
     such individual.
       ``(B) Release of claim to exemption.--Subparagraph (A) 
     shall not apply with respect to an individual if--
       ``(i) the taxpayer with the highest adjusted gross income 
     under subparagraph (A), for any calendar year signs a written 
     declaration (in such manner and form as the Secretary may by 
     regulations prescribe) that such taxpayer will not claim such 
     individual as a dependent for any taxable year beginning in 
     such calendar year,
       ``(ii) the other taxpayer provides over half of such 
     individual's support for the calendar year in which the 
     taxable year of such other taxpayer begins, and
       ``(iii) such other taxpayer attaches such written 
     declaration to such taxpayer's return for the taxable year 
     beginning during such calendar year.''.
       (c) Rules Relating to Foster Child.--Section 152(b)(2) 
     (relating to rules relating to general definition) is amended 
     by striking ``a foster child'' and all that follows through 
     ``individual)'' and inserting ``an eligible foster child (as 
     defined in section 32(c)(3)(B)(iii)) of an individual''.
       (d) Exemption From Gross Income Test.--Section 151(c)(3) 
     (relating to definition of child) is amended by striking ``or 
     stepdaughter'' and inserting ``stepdaughter, or a descendant 
     of such individual''.
       (e) Waiver of Deduction for Divorced Parents.--
       (1) In general.--So much of section 152(e) as precedes 
     paragraph (4) (relating to support test in case of child of 
     divorced parents, etc.) is amended to read as follows:
       ``(e) Special Rules for Child of Divorced Parents.--
       ``(1) Release of claim to exemption.--In the case of a 
     child (as defined in section 151(c)(3)) of parents--
       ``(A) who are divorced or legally separated under a decree 
     of divorce or separate maintenance,
       ``(B) who are separated under a written separation 
     agreement, or
       ``(C) who live apart at all times during the last 6 months 
     of the calendar year,

     the custodial parent who is entitled to the deduction under 
     section 151 for a taxable year with respect to such child may 
     release such deduction to the noncustodial parent.
       ``(2) Procedure.--The noncustodial parent may claim a child 
     described in paragraph (1) as a dependent for the taxable 
     year if--
       ``(A) the custodial parent signs a written declaration (in 
     such manner and form as the Secretary may by regulations 
     prescribe) that such custodial parent will not claim such 
     child as a dependent for any taxable year beginning in such 
     calendar year,
       ``(B) the custodial parent and the noncustodial parent 
     provide over half of such child's support for the calendar 
     year in which the taxable years of such parents begin, and
       ``(C) the noncustodial parent attaches such written 
     declaration to such noncustodial parent's return for the 
     taxable year beginning during such calendar year.
       ``(3) Definitions.--For purposes of this subsection--
       ``(A) Custodial parent.--The term `custodial parent' means, 
     with regard to an individual, a parent who has custody of 
     such individual for a greater portion of the calendar year 
     than the noncustodial parent.
       ``(B) Noncustodial parent.--The term `noncustodial parent' 
     means the parent who is not the custodial parent.''.
       (2) Pre-1985 instruments.--Section 152(e)(4)(A) is amended 
     by striking ``A child'' and all that follows through 
     ``noncustodial parent'' and inserting ``A noncustodial parent 
     described in paragraph (1) shall be entitled to the deduction 
     under section 151 for a taxable year with respect to a child 
     if''.
       (f) Conforming Amendments.--
       (1) Section 1(g)(5)(A) is amended by inserting ``as in 
     effect on the day before the date of the enactment of the 
     Working Family Tax Relief Act of 2001'' after ``152(e)''.
       (2) Section 2(b)(1)(A)(i) is amended by striking 
     ``paragraph (2) or (4) of''.
       (3) Section 2(b)(3)(B)(i) is amended by striking 
     ``paragraph (9)'' and inserting ``paragraph (2)(G)''.
       (4) Section 21(e)(5)(A) is amended by striking ``paragraph 
     (2) or (4) of''.
       (5) Section 21(e)(5) is amended in the matter following 
     subclause (B) by inserting ``as in effect on the day before 
     the date of the enactment of the Working Family Tax Relief 
     Act of 2001'' after ``152(e)(1)''.
       (6) Section 32(c)(1)(G) is amended by striking ``(3)(D).'' 
     and inserting ``(1)(C). An individual whose qualifying child 
     or qualifying children are not taken into account under 
     subsection (b) solely by reason of paragraph (3)(D) shall be 
     treated as an eligible individual if such individual 
     otherwise meets the requirements of subparagraph (A)(ii).''.
       (7) Section 32(c)(3)(B)(ii) is amended by striking 
     ``paragraph (2) or (4) of''.
       (8) Section 51(i)(1)(C) is amended by striking 
     ``152(a)(9)'' and inserting ``152(a)(2)(G)''.
       (9) Section 152(b) is amended by striking ``specified in 
     subsection (a)'' and inserting ``specified in subsection 
     (a)(2) or (f)(2)''.
       (10) Section 152(c) is amended by striking ``(a)'' and 
     inserting ``(a)(1)''.
       (11) Section 7703(b)(1) is amended by striking ``paragraph 
     (2) or (4) of''.
       (12) The following provisions of are each amended by 
     striking ``paragraphs (1) through (8) of section 152(a)'' and 
     inserting ``subparagraphs (A) through (F) of subsection 
     (a)(2) or subsection (f)(2) of section 152'':
       (A) Section 170(g)(3).
       (B) Subparagraphs (A) and (B) of section 51(i)(1).
       (C) The second sentence of section 213(d)(11).
       (D) Section 529(e)(2)(B).
       (E) Section 7702B(f)(2)(C)(iii).
       (g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 604. OTHER MODIFICATIONS TO EARNED INCOME TAX CREDIT.

       (a) Modification of Joint Return Requirement.--Subsection 
     (d) of section 32 is amended to read as follows:
       ``(d) Married Individuals.--
       ``(1) In general.--If the taxpayer is married at the close 
     of the taxable year, the credit shall be allowed under 
     subsection (a) only if the taxpayer and his spouse file a 
     joint return for the taxable year.
       ``(2) Marital status.--For purposes of paragraph (1), an 
     individual legally separated from his spouse under a decree 
     of divorce or of separate maintenance shall not be considered 
     as married.
       ``(3) Certain married individuals living apart.--For 
     purposes of paragraph (1), if--
       ``(A) an individual --
       ``(i) is married and files a separate return, and
       ``(ii) has a qualifying child who is a son, daughter, 
     stepson, or stepdaughter of such individual, and
       ``(B) during the last 6 months of such taxable year, such 
     individual and such individual's spouse do not have the same 
     principal place of abode,

     such individual shall not be considered as married.''.
       (b) Modification of Rule Where There Are 2 or More Eligible 
     Individuals.--Subparagraph (C) of section 32(c)(1) is amended 
     to read as follows:
       ``(C) 2 or more eligible individuals.--
       ``(i) In general.--Except as provided in clause (ii), if 2 
     or more individuals would (but for this subparagraph and 
     after application of subparagraph (B)) be treated as eligible 
     individuals with respect to the same qualifying child for 
     taxable years beginning in the same calendar year, only the 
     individual with the highest modified adjusted gross income 
     for such taxable years shall be treated as an eligible 
     individual with respect to such qualifying child.

[[Page 262]]

       ``(ii) Exception for certain parents.--An otherwise 
     eligible individual who is not treated under clause (i) as 
     the only eligible individual with respect to any qualifying 
     child shall be treated as an eligible individual with respect 
     to such child if--

       ``(I) such child is the son, daughter, stepson, or 
     stepdaughter of such individual,
       ``(II) such child is not taken into account under 
     subsection (b) by any other individual, and
       ``(III) the limitation under subsection (a)(2) for the 
     individual who would (but for this clause) be treated under 
     clause (i) as the only eligible individual with respect to 
     such child would be greater than zero (determined as if such 
     individual had 2 qualifying children).''.

       (c) Expansion of Mathematical Error Authority.--Paragraph 
     (2) of section 6213(g) is amended by striking ``and'' at the 
     end of subparagraph (K), by striking the period at the end of 
     subparagraph (L) and inserting ``, and'', and by inserting 
     after subparagraph (L) the following new subparagraph:
       ``(M) the entry on the return claiming the credit under 
     section 32 with respect to a child if, according to the 
     Federal Case Registry of Child Support Orders established 
     under section 453(h) of the Social Security Act, the taxpayer 
     is a noncustodial parent of such child.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

          TITLE VII--TAX RELIEF FOR SELF-EMPLOYED INDIVIDUALS

     SEC. 701. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS INCREASED.

       (a) In General.--Section 162(l)(1) (relating to special 
     rules for health insurance costs of self-employed 
     individuals) is amended to read as follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical care for the taxpayer, 
     the taxpayer's spouse, and dependents.''.
       (b) Clarification of Limitations on Other Coverage.--The 
     first sentence of section 162(l)(2)(B) is amended to read as 
     follows: ``Paragraph (1) shall not apply to any taxpayer for 
     any calendar month for which the taxpayer participates in any 
     subsidized health plan maintained by any employer (other than 
     an employer described in section 401(c)(4)) of the taxpayer 
     or the spouse of the taxpayer.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

       TITLE VIII--TAX RELIEF FOR EXPANDING PENSION AVAILABILITY

     SEC. 801. NONREFUNDABLE CREDIT TO CERTAIN INDIVIDUALS FOR 
                   ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 (relating to nonrefundable personal credits), as 
     amended by section 302(a), is amended by inserting after 
     section 25B the following new section:

     ``SEC. 25C. ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS BY 
                   CERTAIN INDIVIDUALS.

       ``(a) Allowance of Credit.--In the case of an eligible 
     individual, there shall be allowed as a credit against the 
     tax imposed by this subtitle for the taxable year an amount 
     equal to the applicable percentage of so much of the 
     qualified retirement savings contributions of the eligible 
     individual for the taxable year as do not exceed $2,000.
       ``(b) Applicable Percentage.--For purposes of this section, 
     the applicable percentage is the percentage determined in 
     accordance with the following table:

----------------------------------------------------------------------------------------------------------------
                                      Adjusted Gross Income
-------------------------------------------------------------------------------------------------
          Joint return                  Head of a household               All other cases           Applicable
-------------------------------------------------------------------------------------------------   percentage
      Over           Not over          Over          Not over          Over          Not over
----------------------------------------------------------------------------------------------------------------
           $0          $35,000               $0         $26,250              $0         $17,500              50
       35,000           40,000           26,250          30,000          17,500          20,000              40
       40,000           45,000           30,000          33,750          20,000          22,500              30
       45,000           50,000           33,750          37,500          22,500          25,000              15
----------------------------------------------------------------------------------------------------------------

       ``(c) Eligible Individual.--For purposes of this section--
       ``(1) In general.--The term `eligible individual' means any 
     individual if such individual has attained the age of 18 as 
     of the close of the taxable year.
       ``(2) Dependents and full-time students not eligible.--The 
     term `eligible individual' shall not include--
       ``(A) any individual with respect to whom a deduction under 
     section 151 is allowed to another taxpayer for a taxable year 
     beginning in the calendar year in which such individual's 
     taxable year begins, and
       ``(B) any individual who is a student (as defined in 
     section 151(c)(4)).
       ``(d) Qualified Retirement Savings Contributions.--For 
     purposes of this section--
       ``(1) In general.--The term `qualified retirement savings 
     contributions' means, with respect to any taxable year, the 
     sum of--
       ``(A) the amount of the qualified retirement contributions 
     (as defined in section 219(e)) made by the eligible 
     individual,
       ``(B) the amount of--
       ``(i) any elective deferrals (as defined in section 
     402(g)(3)) of such individual, and
       ``(ii) any elective deferral of compensation by such 
     individual under an eligible deferred compensation plan (as 
     defined in section 457(b)) of an eligible employer described 
     in section 457(e)(1)(A), and
       ``(C) the amount of voluntary employee contributions by 
     such individual to any qualified retirement plan (as defined 
     in section 4974(c)).
       ``(2) Reduction for certain distributions.--
       ``(A) In general.--The qualified retirement savings 
     contributions determined under paragraph (1) shall be reduced 
     (but not below zero) by the sum of--
       ``(i) any distribution from a qualified retirement plan (as 
     defined in section 4974(c)), or from an eligible deferred 
     compensation plan (as defined in section 457(b)), received by 
     the individual during the testing period which is includible 
     in gross income, and
       ``(ii) any distribution from a Roth IRA received by the 
     individual during the testing period which is not a qualified 
     rollover contribution (as defined in section 408A(e)) to a 
     Roth IRA.
       ``(B) Testing period.--For purposes of subparagraph (A), 
     the testing period, with respect to a taxable year, is the 
     period which includes--
       ``(i) such taxable year,
       ``(ii) the 2 preceding taxable years, and
       ``(iii) the period after such taxable year and before the 
     due date (including extensions) for filing the return of tax 
     for such taxable year.
       ``(C) Excepted distributions.--There shall not be taken 
     into account under subparagraph (A)--
       ``(i) any distribution referred to in section 72(p), 
     401(k)(8), 401(m)(6), 402(g)(2), 404(k), or 408(d)(4), and
       ``(ii) any distribution to which section 408A(d)(3) 
     applies.
       ``(D) Treatment of distributions received by spouse of 
     individual.--For purposes of determining distributions 
     received by an individual under subparagraph (A) for any 
     taxable year, any distribution received by the spouse of such 
     individual shall be treated as received by such individual if 
     such individual and spouse file a joint return for such 
     taxable year and for the taxable year during which the spouse 
     receives the distribution.
       ``(e) Adjusted Gross Income.--For purposes of this section, 
     adjusted gross income shall be determined without regard to 
     sections 911, 931, and 933.
       ``(f) Investment in the Contract.--Notwithstanding any 
     other provision of law, a qualified retirement savings 
     contribution shall not fail to be included in determining the 
     investment in the contract for purposes of section 72 by 
     reason of the credit under this section.''.
       (b) Credit Allowed Against Regular Tax and Alternative 
     Minimum Tax.--
       (1) In general.--Subsection (a) of section 26 is amended by 
     inserting ``(other than the credit allowed by section 25C)'' 
     after ``credits allowed by this subpart''.
       (2) Conforming amendment.--Section 25C, as added by 
     subsection (a), is amended by inserting after subsection (f) 
     the following new subsection:
       ``(g) Limitation Based on Amount of Tax.--The aggregate 
     credit allowed by this section for the taxable year shall not 
     exceed the sum of--
       ``(1) the taxpayer's regular tax liability for the taxable 
     year reduced by the sum of the credits allowed by sections 
     21, 22, 23, 24, 25, 25A, and 25B, plus
       ``(2) the tax imposed by section 55 for such taxable 
     year.''.
       (c) Annual Report.--The Comptroller General of the United 
     States shall submit a report annually to the Committee on 
     Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate regarding the number of 
     taxpayers receiving the credit allowed under section 25C of 
     the Internal Revenue Code of 1986, as added by subsection 
     (a).
       (d) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1, as amended 
     by section 302(b), is amended by inserting after the

[[Page 263]]

     item relating to section 25B the following new item:

``Sec. 25C. Elective deferrals and IRA contributions by certain 
              individuals.''.

       (e) Effective Dates.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 802. CREDIT FOR QUALIFIED PENSION PLAN CONTRIBUTIONS OF 
                   SMALL EMPLOYERS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by section 411(a), is amended by adding at the end the 
     following new section:

     ``SEC. 45F. SMALL EMPLOYER PENSION PLAN CONTRIBUTIONS.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an eligible employer, the small employer pension plan 
     contribution credit determined under this section for any 
     taxable year is an amount equal to 50 percent of the amount 
     which would (but for subsection (f)(1)) be allowed as a 
     deduction under section 404 for such taxable year for 
     qualified employer contributions made to any qualified 
     retirement plan on behalf of any employee who is not a highly 
     compensated employee.
       ``(b) Credit Limited to 3 Years.--The credit allowable by 
     this section shall be allowed only with respect to the period 
     of 3 taxable years beginning with the first taxable year for 
     which a credit is allowable with respect to a plan under this 
     section.
       ``(c) Qualified Employer Contribution.--For purposes of 
     this section--
       ``(1) Defined contribution plans.--In the case of a defined 
     contribution plan, the term `qualified employer contribution' 
     means the amount of nonelective and matching contributions to 
     the plan made by the employer on behalf of any employee who 
     is not a highly compensated employee to the extent such 
     amount does not exceed 3 percent of such employee's 
     compensation from the employer for the year.
       ``(2) Defined benefit plans.--In the case of a defined 
     benefit plan, the term `qualified employer contribution' 
     means the amount of employer contributions to the plan made 
     on behalf of any employee who is not a highly compensated 
     employee to the extent that the accrued benefit of such 
     employee derived from employer contributions for the year 
     does not exceed the equivalent (as determined under 
     regulations prescribed by the Secretary and without regard to 
     contributions and benefits under the Social Security Act) of 
     3 percent of such employee's compensation from the employer 
     for the year.
       ``(d) Qualified Retirement Plan.--
       ``(1) In general.--The term `qualified retirement plan' 
     means any plan described in section 401(a) which includes a 
     trust exempt from tax under section 501(a) if the plan 
     meets--
       ``(A) the contribution requirements of paragraph (2),
       ``(B) the vesting requirements of paragraph (3), and
       ``(C) the distributions requirements of paragraph (4).
       ``(2) Contribution requirements.--
       ``(A) In general.--The requirements of this paragraph are 
     met if, under the plan--
       ``(i) the employer is required to make nonelective 
     contributions of at least 1 percent of compensation (or the 
     equivalent thereof in the case of a defined benefit plan) for 
     each employee who is not a highly compensated employee who is 
     eligible to participate in the plan, and
       ``(ii) allocations of nonelective employer contributions 
     are either in equal dollar amounts for all employees covered 
     by the plan or bear a uniform relationship to the total 
     compensation, or the basic or regular rate of compensation, 
     of the employees covered by the plan.
       ``(B) Compensation limitation.--The compensation taken into 
     account under subparagraph (A) for any year shall not exceed 
     the limitation in effect for such year under section 
     401(a)(17).
       ``(3) Vesting requirements.--The requirements of this 
     paragraph are met if the plan satisfies the requirements of 
     subparagraph (A) or (B).
       ``(A) 3-year vesting.--A plan satisfies the requirements of 
     this subparagraph if an employee who has completed at least 3 
     years of service has a nonforfeitable right to 100 percent of 
     the employee's accrued benefit derived from employer 
     contributions.
       ``(B) 5-year graded vesting.--A plan satisfies the 
     requirements of this subparagraph if an employee has a 
     nonforfeitable right to a percentage of the employee's 
     accrued benefit derived from employer contributions 
     determined under the following table:

                                                     The nonforfeitable
``Years of service:                                      percentage is:
  1.............................................................20 ....

  2.............................................................40 ....

  3.............................................................60 ....

  4.............................................................80 ....

  5............................................................100.....

       ``(4) Distribution requirements.--In the case of a profit-
     sharing or stock bonus plan, the requirements of this 
     paragraph are met if, under the plan, qualified employer 
     contributions are distributable only as provided in section 
     401(k)(2)(B).
       ``(e) Other Definitions.--For purposes of this section--
       ``(1) Eligible employer.--
       ``(A) In general.--The term `eligible employer' means, with 
     respect to any year, an employer which has no more than 50 
     employees who received at least $5,000 of compensation from 
     the employer for the preceding year.
       ``(B) Requirement for new qualified employer plans.--Such 
     term shall not include an employer if, during the 3-taxable 
     year period immediately preceding the 1st taxable year for 
     which the credit under this section is otherwise allowable 
     for a qualified employer plan of the employer, the employer 
     or any member of any controlled group including the employer 
     (or any predecessor of either) established or maintained a 
     qualified employer plan with respect to which contributions 
     were made, or benefits were accrued, for substantially the 
     same employees as are in the qualified employer plan.
       ``(2) Highly compensated employee.--The term `highly 
     compensated employee' has the meaning given such term by 
     section 414(q) (determined without regard to section 
     414(q)(1)(B)(ii)).
       ``(f) Special Rules.--
       ``(1) Disallowance of deduction.--No deduction shall be 
     allowed for that portion of the qualified employer 
     contributions paid or incurred for the taxable year which is 
     equal to the credit determined under subsection (a).
       ``(2) Election not to claim credit.--This section shall not 
     apply to a taxpayer for any taxable year if such taxpayer 
     elects to have this section not apply for such taxable year.
       ``(3) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52, or 
     subsection (n) or (o) of section 414, shall be treated as one 
     person. All eligible employer plans shall be treated as 1 
     eligible employer plan.
       ``(g) Recapture of Credit on Forfeited Contributions.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     any accrued benefit which is forfeitable by reason of 
     subsection (d)(3) is forfeited, the employer's tax imposed by 
     this chapter for the taxable year in which the forfeiture 
     occurs shall be increased by 35 percent of the employer 
     contributions from which such benefit is derived to the 
     extent such contributions were taken into account in 
     determining the credit under this section.
       ``(2) Reallocated contributions.--Paragraph (1) shall not 
     apply to any contribution which is reallocated by the 
     employer under the plan to employees who are not highly 
     compensated employees.''.
       (b) Credit Allowed as Part of General Business Credit.--
     Section 38(b) (defining current year business credit), as 
     amended by section 411(b)(1), is amended by striking ``plus'' 
     at the end of paragraph (13), by striking the period at the 
     end of paragraph (14) and inserting ``, plus'', and by adding 
     at the end the following new paragraph:
       ``(15) in the case of an eligible employer (as defined in 
     section 45F(e)), the small employer pension plan contribution 
     credit determined under section 45F(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d), as amended by section 411(b)(2), is 
     amended by adding at the end the following new paragraph:
       ``(11) No carryback of small employer pension plan 
     contribution credit before january 1, 2002.--No portion of 
     the unused business credit for any taxable year which is 
     attributable to the small employer pension plan contribution 
     credit determined under section 45F may be carried back to a 
     taxable year beginning before January 1, 2002.''.
       (2) Subsection (c) of section 196, as amended by section 
     411(b)(3), is amended by striking ``and'' at the end of 
     paragraph (9), by striking the period at the end of paragraph 
     (10) and inserting ``, and'', and by adding at the end the 
     following new paragraph:
       ``(11) the small employer pension plan contribution credit 
     determined under section 45F(a).''.
       (3) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by section 411(b)(4), 
     is amended by adding at the end the following new item:

``Sec. 45F. Small employer pension plan contributions.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to contributions paid or incurred in taxable 
     years beginning after December 31, 2001.

     SEC. 803. CREDIT FOR PENSION PLAN STARTUP COSTS OF SMALL 
                   EMPLOYERS.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by section 802(a), is amended by adding at the end the 
     following new section:

     ``SEC. 45G. SMALL EMPLOYER PENSION PLAN STARTUP COSTS.

       ``(a) General Rule.--For purposes of section 38, in the 
     case of an eligible employer, the small employer pension plan 
     startup cost credit determined under this section for any 
     taxable year is an amount equal to 50 percent of the 
     qualified startup costs paid or incurred by the taxpayer 
     during the taxable year.
       ``(b) Dollar Limitation.--The amount of the credit 
     determined under this section for any taxable year shall not 
     exceed--
       ``(1) $500 for the first credit year and each of the 2 
     taxable years immediately following the first credit year, 
     and

[[Page 264]]

       ``(2) zero for any other taxable year.
       ``(c) Eligible Employer.--For purposes of this section--
       ``(1) In general.--The term `eligible employer' has the 
     meaning given such term by section 408(p)(2)(C)(i).
       ``(2) Requirement for new qualified employer plans.--Such 
     term shall not include an employer if, during the 3-taxable 
     year period immediately preceding the 1st taxable year for 
     which the credit under this section is otherwise allowable 
     for a qualified employer plan of the employer, the employer 
     or any member of any controlled group including the employer 
     (or any predecessor of either) established or maintained a 
     qualified employer plan with respect to which contributions 
     were made, or benefits were accrued, for substantially the 
     same employees as are in the qualified employer plan.
       ``(d) Other Definitions.--For purposes of this section--
       ``(1) Qualified startup costs.--
       ``(A) In general.--The term `qualified startup costs' means 
     any ordinary and necessary expenses of an eligible employer 
     which are paid or incurred in connection with--
       ``(i) the establishment or administration of an eligible 
     employer plan, or
       ``(ii) the retirement-related education of employees with 
     respect to such plan.
       ``(B) Plan must have at least 1 participant.--Such term 
     shall not include any expense in connection with a plan that 
     does not have at least 1 employee eligible to participate who 
     is not a highly compensated employee.
       ``(2) Eligible employer plan.--The term `eligible employer 
     plan' means a qualified employer plan within the meaning of 
     section 4972(d).
       ``(3) First credit year.--The term `first credit year' 
     means--
       ``(A) the taxable year which includes the date that the 
     eligible employer plan to which such costs relate becomes 
     effective, or
       ``(B) at the election of the eligible employer, the taxable 
     year preceding the taxable year referred to in subparagraph 
     (A).
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52, or 
     subsection (n) or (o) of section 414, shall be treated as one 
     person. All eligible employer plans shall be treated as 1 
     eligible employer plan.
       ``(2) Disallowance of deduction.--No deduction shall be 
     allowed for that portion of the qualified startup costs paid 
     or incurred for the taxable year which is equal to the credit 
     determined under subsection (a).
       ``(3) Election not to claim credit.--This section shall not 
     apply to a taxpayer for any taxable year if such taxpayer 
     elects to have this section not apply for such taxable 
     year.''.
       (b) Credit Allowed as Part of General Business Credit.--
     Section 38(b) (defining current year business credit), as 
     amended by section 802(b), is amended by striking ``plus'' at 
     the end of paragraph (14), by striking the period at the end 
     of paragraph (15) and inserting ``, plus'', and by adding at 
     the end the following new paragraph:
       ``(16) in the case of an eligible employer (as defined in 
     section 45G(c)), the small employer pension plan startup cost 
     credit determined under section 45G(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d), as amended by section 802(c)(1), is 
     amended by adding at the end the following new paragraph:
       ``(12) No carryback of small employer pension plan startup 
     cost credit before january 1, 2002.--No portion of the unused 
     business credit for any taxable year which is attributable to 
     the small employer pension plan startup cost credit 
     determined under section 45G may be carried back to a taxable 
     year beginning before January 1, 2002.''.
       (2) Subsection (c) of section 196, as amended by section 
     802(c)(2), is amended by striking ``and'' at the end of 
     paragraph (10), by striking the period at the end of 
     paragraph (11) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(12) the small employer pension plan startup cost credit 
     determined under section 45G(a).''.
       (3) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by section 802(c)(3), 
     is amended by adding at the end the following new item:

``Sec. 45G. Small employer pension plan startup costs.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to costs paid or incurred in taxable years 
     beginning after December 31, 2001, with respect to qualified 
     employer plans established after such date.

               TITLE IX--TAX RELIEF FOR ADOPTIVE PARENTS

     SEC. 901. EXPANSION OF ADOPTION CREDIT.

       (a) In General.--
       (1) Adoption credit.--Section 23(a)(1) (relating to 
     allowance of credit) is amended to read as follows:
       ``(1) In general.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter--
       ``(A) in the case of an adoption of a child other than a 
     child with special needs, the amount of the qualified 
     adoption expenses paid or incurred by the taxpayer, and
       ``(B) in the case of an adoption of a child with special 
     needs, $10,000.''.
       (2) Adoption assistance programs.--Section 137(a) (relating 
     to adoption assistance programs) is amended to read as 
     follows:
       ``(a) In General.--Gross income of an employee does not 
     include amounts paid or expenses incurred by the employer for 
     adoption expenses in connection with the adoption of a child 
     by an employee if such amounts are furnished purusant to an 
     adoption assistance program. The amount of the exclusion 
     shall be--
       ``(1) in the case of an adoption of a child other than a 
     child with special needs, the amount of the qualified 
     adoption expenses paid or incurred by the taxpayer, and
       ``(2) in the case of an adoption of a child with special 
     needs, $10,000.''.
       (b) Dollar Limitations.--
       (1) Dollar amount of allowed expenses.--
       (A) Adoption expenses.--Section 23(b)(1) (relating to 
     allowance of credit) is amended--
       (i) by striking ``$5,000'' and inserting ``$10,000'',
       (ii) by striking ``($6,000, in the case of a child with 
     special needs)'', and
       (iii) by striking ``subsection (a)'' and inserting 
     ``subsection (a)(1)(A)''.
       (B) Adoption assistance programs.--Section 137(b)(1) 
     (relating to dollar limitations for adoption assistance 
     programs) is amended--
       (i) by striking ``$5,000'' and inserting ``$10,000'', and
       (ii) by striking ``($6,000, in the case of a child with 
     special needs)'', and
       (iii) by striking ``subsection (a)'' and inserting 
     ``subsection (a)(1)''.
       (2) Phase-out limitation.--
       (A) Adoption expenses.--Clause (i) of section 23(b)(2)(A) 
     (relating to income limitation) is amended by striking 
     ``$75,000'' and inserting ``$150,000''.
       (B) Adoption assistance programs.--Section 137(b)(2)(A) 
     (relating to income limitation) is amended by striking 
     ``$75,000'' and inserting ``$150,000''.
       (c) Year Credit Allowed.--Section 23(a)(2) is amended by 
     adding at the end the following new flush sentence:
     ``In the case of the adoption of a child with special needs, 
     the credit allowed under paragraph (1) shall be allowed for 
     the taxable year in which the adoption becomes final.''.
       (d) Repeal of Sunset Provisions.--
       (1) Children Without Special Needs.--Paragraph (2) of 
     section 23(d) (relating to definition of eligible child) is 
     amended to read as follows:
       ``(2) Eligible child.--The term `eligible child' means any 
     individual who--
       ``(A) has not attained age 18, or
       ``(B) is physically or mentally incapable of caring for 
     himself.''.
       (2) Adoption Assistance Programs.--Section 137 (relating to 
     adoption assistance programs) is amended by striking 
     subsection (f).
       (e) Adjustment of Dollar and Income Limitations for 
     Inflation.--
       (1) Adoption credit.--Section 23 is amended by 
     redesignating subsection (h) as subsection (i) and by 
     inserting after subsection (g) the following new subsection:
       ``(h) Adjustments for Inflation.--In the case of a taxable 
     year beginning after December 31, 2002, each of the dollar 
     amounts in subsection (a)(1)(B) and paragraphs (1) and 
     (2)(A)(i) of subsection (b) shall be increased by an amount 
     equal to--
       ``(1) such dollar amount, multiplied by
       ``(2) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2001' 
     for `calendar year 1992' in subparagraph (B) thereof.''.
       (2) Adoption assistance programs.--Section 137, as amended 
     by subsection (d), is amended by adding at the end the 
     following new subsection:
       ``(f) Adjustments for Inflation.--In the case of a taxable 
     year beginning after December 31, 2002, each of the dollar 
     amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of 
     subsection (b) shall be increased by an amount equal to--
       ``(1) such dollar amount, multiplied by
       ``(2) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2001' 
     for `calendar year 1992' in subparagraph (B) thereof.''.
       (f) Limitation Based on Amount of Tax.--
       (1) In general.--Subsection (c) of section 23 is amended by 
     striking ``the limitation imposed'' and all that follows 
     through ``1400C)'' and inserting ``the applicable tax 
     limitation''.
       (2) Applicable tax limitation.--Subsection (d) of section 
     23 is amended by adding at the end the following new 
     paragraph:
       ``(4) Applicable tax limitation.--The term `applicable tax 
     limitation' means the sum of--
       ``(A) the taxpayer's regular tax liability for the taxable 
     year, reduced (but not below zero) by the sum of the credits 
     allowed by sections 21, 22, 24 (other than the amount of the 
     increase under subsection (d) thereof), 25, and 25A, and
       ``(B) the tax imposed by section 55 for such taxable 
     year.''.

[[Page 265]]

       (3) Conforming amendments.--
       (A) Subsection (a) of section 26 (relating to limitation 
     based on amount of tax) is amended by inserting ``(other than 
     section 23)'' after ``allowed by this subpart''.
       (B) Paragraph (1) of section 53(b) (relating to minimum tax 
     credit) is amended by inserting ``reduced by the aggregate 
     amount taken into account under section 23(d)(3)(B) for all 
     such prior taxable years,'' after ``1986,''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Baucus, Mr. Graham, Mr. Kennedy, 
        Mr. Akaka, Mr. Biden, Mr. Bingaman, Mrs. Boxer, Mr. Byrd, Mrs. 
        Carnahan, Mr. Cleland, Mrs. Clinton, Mr. Corzine, Mr. Dayton, 
        Mr. Dodd, Mr. Dorgan, Mr. Durbin, Mr. Hollings, Mr. Inouye, Mr. 
        Johnson, Mr. Kerry, Mr. Leahy, Mr. Levin, Mrs. Lincoln, Ms. 
        Mikulski, Mrs. Murray, Mr. Nelson of Florida, Mr. Reed, Mr. 
        Reid, Mr. Rockefeller, Mr. Sarbanes and, Mr. Schumer):
  S. 10. A bill to amend title XVIII of the Social Security Act to 
provide coverage of outpatient prescription drugs under the Medicare 
Program; to the Committee on Finance.


            medicare prescription drug coverage act of 2001

  Mr. BAUCUS. Mr. President, today I introduce legislation, along with 
Senator Daschle and our colleagues, to establish a universal 
prescription drug benefit program in Medicare. I am pleased to be part 
of this effort, because I believe Congress should enact a drug benefit 
this year. The lack of coverage for outpatient prescription drugs in 
Medicare has become a glaring gap in the program.
  The practice of medicine has changed dramatically since Medicare was 
created in 1965. Today, more often than not, a trip to the doctor 
results in a trip to the pharmacy, to fill a prescription as part of 
the therapy. In many cases, prescription drugs allow patients to avoid 
more expensive and invasive therapies such as hospitalization and 
surgery.
  Our increasing reliance on pharmaceutical products has also fueled 
drug spending. Pharmaceuticals are the fastest growing segment of 
national health expenditures. In 2000, national drug spending increased 
by an estimated 11 percent, compared with 7 percent for physician 
services and 6 percent for hospital care. Since 1990, national spending 
for prescription drugs has tripled.
  And as the role and expense of prescription drugs have grown, their 
absence from Medicare's outpatient benefit package has become 
increasingly problematic for beneficiaries. An estimated 35 percent of 
Medicare beneficiaries currently lack coverage for outpatient 
prescription drugs. But that figure may understate the problem. One 
study has shown that only about 50 percent of seniors have drug 
coverage throughout the year, and for many who do have coverage, it is 
often limited or inadequate.
  In my home state of Montana, Medicare beneficiaries are even less 
likely to have coverage for prescription drugs than those living in 
other parts of the country. A National Economic Council study that I 
requested last year showed that rural Medicare beneficiaries are 50 
percent less likely than their urban counterparts to have prescription 
drug coverage. And although rural Medicare beneficiaries use 10 percent 
more prescriptions than urban folks, they pay 25 percent more out-of-
pocket for their drugs.
  These factors underscore the importance of this issue to folks back 
home. I intend to work hard this year to pass a Medicare drug bill for 
them and for the millions of other Medicare beneficiaries who lack 
coverage or are at risk of losing the coverage they currently have. It 
is time for Congress to act on this issue and pass legislation to 
provide prescription drugs for America's seniors.
  The Medicare Prescription Drug Coverage Act of 2001 is a good place 
to start. This legislation builds on the excellent work of Senator 
Graham and other members of the Finance Committee, including Senators 
Conrad, Jeffords, and Rockefeller. The benefit is universal, it is part 
of the Medicare program, it includes a deductible, and patient 
coinsurance decreases as drug expenditures increase. The proposal 
provides subsidies for low-income seniors to help them with their 
premiums and cost sharing. And the proposal relies on private sector 
entities to administer the benefit.
  Let me add--by no means does this legislation represent the end of 
the debate. Rather, it represents a beginning, a starting point. For 
example, the bill does not address many of the elements of Medicare 
reform that are currently on the table and, quite frankly, should be 
included. President Bush and others have emphasized that a new drug 
benefit must be added in the context of overall Medicare reform. As 
Senator Breaux is fond of saying, a prescription drug benefit is the 
dessert that we get when we take the medicine of reform.
  I expect that any prescription drug legislation we pass, and the 
President signs, will include provisions addressing solvency, 
competition, HCFA reform, and fee-for-service modernizations. These are 
areas, in addition to adding a drug benefit, where Medicare could also 
be updated and improved, and the bipartisan Medicare Commission has 
gone a long way toward putting these issues on the national agenda.
  I am encouraged that the new administration also recognizes that 
prescription drugs is an important issue. President Bush campaigned on 
a promise to address this issue early on, and I sincerely appreciate 
that it is one of the top priorities of the new administration. 
Likewise, I know that Senator Grassley also cares deeply about this 
issue.
  In closing, I want to reiterate that I am committed to working with 
Senator Grassley, with the other members of the Finance Committee, and 
with the new Administration to come up with a compromise solution. It 
is truly my hope that we can work together, build consensus, and forge 
compromise solutions on this issue. If we're creative, and if we listen 
to each other, I am confident that we can find balanced and bipartisan 
solution.
  Mr. BAUCUS. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 10

       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 ``Medicare 
     Prescription Drug Coverage Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Medicare outpatient prescription drug benefit program.

         ``Part D--Outpatient Prescription Drug Benefit Program

``Sec. 1860. Definitions.

  ``Subpart 1--Establishment of Outpatient Prescription Drug Benefit 
                                Program

``Sec. 1860A. Establishment of outpatient prescription drug benefit 
              program.
``Sec. 1860B. Enrollment.
``Sec. 1860C. Providing information to beneficiaries.
``Sec. 1860D. Premiums.
``Sec. 1860E. Cost-sharing.
``Sec. 1860F. Selection of entities to provide outpatient drug benefit.
``Sec. 1860G. Conditions for awarding contract.
``Sec. 1860H. Payments.
``Sec. 1860I. Employer incentive program for employment-based retiree 
              drug coverage.
``Sec. 1860J. Procedures for partial year implementation.
``Sec. 1860K. Appropriations.

    ``Subpart 2--Medicare Pharmacy and Therapeutics (P&T) Advisory 
                               Committee

``Sec. 1860M. Medicare Pharmacy and Therapeutics (P&T) Advisory 
              Committee.''.
Sec. 4. Part D benefits under Medicare+Choice plans.
Sec. 5. Exclusion of part D costs from determination of part B monthly 
              premium.
Sec. 6. Additional assistance for low-income beneficiaries.

[[Page 266]]

Sec. 7. Medigap revisions.
Sec. 8. Comprehensive immunosuppressive drug coverage for transplant 
              patients.
Sec. 9. HHS studies and report to Congress regarding outpatient 
              prescription drug benefit program.
Sec. 10. GAO study and biennial reports on competition and savings.
Sec. 11. MedPAC study and annual reports on the pharmaceutical market, 
              pharmacies, and beneficiary access.
Sec. 12. Appropriations.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Prescription drug coverage was not a standard part of 
     health insurance when the medicare program under title XVIII 
     of the Social Security Act was enacted in 1965. Since 1965, 
     however, drug coverage has become a key component of most 
     private and public health insurance coverage, except for the 
     medicare program.
       (2) At least \2/3\ of medicare beneficiaries have 
     unreliable, inadequate, or no drug coverage at all.
       (3) Seniors who do not have drug coverage typically pay 15 
     percent more for prescription drugs than individuals that 
     have such coverage pay for such drugs, and often pay 2 times 
     the best available price for such drugs.
       (4) Although many medicare beneficiaries who lack 
     prescription drug coverage have low incomes, more than \1/2\ 
     of such beneficiaries have incomes greater than 150 percent 
     of the poverty line.
       (5) The number of private firms offering retiree health 
     coverage is declining.
       (6) The premiums for medicare supplemental policies 
     (medigap policies) that provide prescription drug coverage 
     are too expensive for most medicare beneficiaries and are 
     highest for older senior citizens who need prescription drug 
     coverage the most and typically have the lowest incomes.
       (7) The management of a medicare prescription drug benefit 
     should mirror the practices employed by private entities in 
     delivering prescription drugs. Discounts should be achieved 
     through competition.
       (8) All medicare beneficiaries should have access to a 
     voluntary, reliable, affordable outpatient drug benefit as 
     part of the medicare program that assists with the high cost 
     of prescription drugs and protects them against excessive 
     out-of-pocket costs.
       (9) The addition of a medicare drug benefit should be 
     consistent with an overall plan to strengthen and modernize 
     the medicare program.

     SEC. 3. MEDICARE OUTPATIENT PRESCRIPTION DRUG BENEFIT 
                   PROGRAM.

       (a) Establishment.--Title XVIII of the Social Security Act 
     (42 U.S.C. 1395 et seq.) is amended by redesignating part D 
     as part E and by inserting after part C the following new 
     part:

         ``Part D--Outpatient Prescription Drug Benefit Program


                             ``definitions

       ``Sec. 1860. In this part:
       ``(1) Covered outpatient drug.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `covered outpatient drug' means any of the following 
     products:
       ``(i) A drug which may be dispensed only upon prescription, 
     and--

       ``(I) which is approved for safety and effectiveness as a 
     prescription drug under section 505 of the Federal Food, 
     Drug, and Cosmetic Act;
       ``(II)(aa) which was commercially used or sold in the 
     United States before the date of enactment of the Drug 
     Amendments of 1962 or which is identical, similar, or related 
     (within the meaning of section 310.6(b)(1) of title 21 of the 
     Code of Federal Regulations) to such a drug, and (bb) which 
     has not been the subject of a final determination by the 
     Secretary that it is a `new drug' (within the meaning of 
     section 201(p) of the Federal Food, Drug, and Cosmetic Act) 
     or an action brought by the Secretary under section 301, 
     302(a), or 304(a) of such Act to enforce section 502(f) or 
     505(a) of such Act; or
       ``(III)(aa) which is described in section 107(c)(3) of the 
     Drug Amendments of 1962 and for which the Secretary has 
     determined there is a compelling justification for its 
     medical need, or is identical, similar, or related (within 
     the meaning of section 310.6(b)(1) of title 21 of the Code of 
     Federal Regulations) to such a drug, and (bb) for which the 
     Secretary has not issued a notice of an opportunity for a 
     hearing under section 505(e) of the Federal Food, Drug, and 
     Cosmetic Act on a proposed order of the Secretary to withdraw 
     approval of an application for such drug under such section 
     because the Secretary has determined that the drug is less 
     than effective for all conditions of use prescribed, 
     recommended, or suggested in its labeling.

       ``(ii) A biological product which--

       ``(I) may only be dispensed upon prescription;
       ``(II) is licensed under section 351 of the Public Health 
     Service Act; and
       ``(III) is produced at an establishment licensed under such 
     section to produce such product.

       ``(iii) Insulin approved under appropriate Federal law, 
     including needles, syringes, and disposable pumps for the 
     administration of such insulin.
       ``(iv) A prescribed drug or biological product that would 
     meet the requirements of clause (i) or (ii) but that it is 
     available over-the-counter in addition to being available 
     upon prescription.
       ``(B) Exclusion.--The term `covered outpatient drug' does 
     not include any product--
       ``(i) except as provided in subparagraph (A)(iv), which may 
     be distributed to individuals without a prescription;
       ``(ii) that is covered under part A or B (unless coverage 
     of such product is not available because benefits under part 
     A or B have been exhausted); or
       ``(iii) except for agents used to promote smoking 
     cessation, for which coverage may be excluded or restricted 
     under section 1927(d)(2).
       ``(2) Eligible beneficiary.--The term `eligible 
     beneficiary' means an individual that is entitled to benefits 
     under part A or enrolled under part B.
       ``(3) Eligible entity.--The term `eligible entity' means 
     any entity that the Secretary determines to be appropriate to 
     provide eligible beneficiaries with covered outpatient drugs 
     under a contract entered into under this part, including--
       ``(A) a pharmacy benefit management company;
       ``(B) a retail pharmacy delivery system;
       ``(C) a health plan or insurer;
       ``(D) a State (through mechanisms established under a State 
     plan under title XIX);
       ``(E) any other entity approved by the Secretary; or
       ``(F) any combination of the entities described in 
     subparagraphs (A) through (E) if the Secretary determines 
     that such combination--
       ``(i) increases the scope or efficiency of the provision of 
     benefits under this part; and
       ``(ii) is not anticompetitive.

  ``Subpart 1--Establishment of Outpatient Prescription Drug Benefit 
                                Program


    ``establishment of outpatient prescription drug benefit program

       ``Sec. 1860A. (a) Provision of Benefit.--Beginning on the 
     date that is 1 year after the date of enactment of this Act, 
     the Secretary shall provide for an outpatient prescription 
     drug benefit program under which an eligible beneficiary 
     shall be provided covered outpatient drugs.
       ``(b) Voluntary Nature of Program.--Nothing in this part 
     shall be construed as requiring an eligible beneficiary to 
     enroll in the program established under this part.
       ``(c) Scope of Benefits.--The program established under 
     this part shall provide for coverage of all therapeutic 
     classes of covered outpatient drugs.
       ``(d) Financing.--The costs of providing benefits under 
     this part shall be payable from the Federal Supplementary 
     Medical Insurance Trust Fund established under section 1841.


                              ``enrollment

       ``Sec. 1860B. (a) Enrollment Under Part D.--
       ``(1) Establishment of process.--
       ``(A) In general.--The Secretary shall establish a process 
     through which an eligible beneficiary (including an eligible 
     beneficiary enrolled in a Medicare+Choice plan offered by a 
     Medicare+Choice organization) may make an election to enroll 
     under this part. Such process shall be similar to the process 
     for enrollment in part B under section 1837.
       ``(B) Requirement of enrollment.--An eligible beneficiary 
     must enroll under this part in order to be eligible to 
     receive covered outpatient drugs under this title.
       ``(2) Enrollment procedures.--
       ``(A) Late enrollment penalty.--
       ``(i) In general.--Subject to the succeeding provisions of 
     this subparagraph, in the case of an eligible beneficiary 
     whose coverage period under this part began pursuant to an 
     enrollment after the beneficiary's initial enrollment period 
     under part B (determined pursuant to section 1837(d)) and not 
     pursuant to the open enrollment period described in 
     subparagraph (B), the Secretary shall establish procedures 
     for increasing the amount of the monthly premium under 
     section 1860D applicable to such beneficiary--

       ``(I) by an amount that is equal to 10 percent of such 
     premium for each full 12-month period (in the same continuous 
     period of eligibility) in which the eligible beneficiary 
     could have been enrolled under this part but was not so 
     enrolled; or
       ``(II) if determined appropriate by the Secretary, by an 
     amount that the Secretary determines is actuarily sound for 
     each such period.

       ``(ii) Periods taken into account.--For purposes of 
     calculating any 12-month period under clause (i), there shall 
     be taken into account--

       ``(I) the months which elapsed between the close of the 
     eligible beneficiary's initial enrollment period and the 
     close of the enrollment period in which the beneficiary 
     enrolled; and
       ``(II) in the case of an eligible beneficiary who reenrolls 
     under this part, the months which elapsed between the date of 
     termination of a previous coverage period and the close of 
     the enrollment period in which the beneficiary reenrolled.

       ``(iii) Periods not taken into account.--

[[Page 267]]

       ``(I) In general.--For purposes of calculating any 12-month 
     period under clause (i), subject to subclause (II), there 
     shall not be taken into account months for which the eligible 
     beneficiary can demonstrate that the beneficiary was covered 
     under a group health plan, including a qualified retiree 
     prescription drug plan (as defined in section 1860I(e)(3)) 
     for which an incentive payment was paid under section 1860I, 
     that provides coverage of the cost of prescription drugs 
     whose actuarial value (as defined by the Secretary) to the 
     beneficiary equals or exceeds the actuarial value of the 
     benefits provided to an individual enrolled in the outpatient 
     prescription drug benefit program under this part.
       ``(II) Application.--This clause shall only apply with 
     respect to a coverage period the enrollment for which occurs 
     before the end of the 60-day period that begins on the first 
     day of the month which includes the date on which the plan 
     terminates, ceases to provide, or reduces the value of the 
     prescription drug coverage under such plan to below the value 
     of the coverage provided under the program under this part.

       ``(iv) Periods treated separately.--Any increase in an 
     eligible beneficiary's monthly premium under clause (i) with 
     respect to a particular continuous period of eligibility 
     shall not be applicable with respect to any other continuous 
     period of eligibility which the beneficiary may have.
       ``(v) Continuous period of eligibility.--

       ``(I) In general.--Subject to subclause (II), for purposes 
     of this subparagraph, an eligible beneficiary's `continuous 
     period of eligibility' is the period that begins with the 
     first day on which the beneficiary is eligible to enroll 
     under section 1836 and ends with the beneficiary's death.
       ``(II) Separate period.--Any period during all of which an 
     eligible beneficiary satisfied paragraph (1) of section 1836 
     and which terminated in or before the month preceding the 
     month in which the beneficiary attained age 65 shall be a 
     separate `continuous period of eligibility' with respect to 
     the beneficiary (and each such period which terminates shall 
     be deemed not to have existed for purposes of subsequently 
     applying this subparagraph).

       ``(B) Open enrollment period for current beneficiaries in 
     which late enrollment procedures do not apply.--The Secretary 
     shall establish an applicable period, which shall begin on 
     the date on which the Secretary first begins to accept 
     elections for enrollment under this part, during which any 
     eligible beneficiary may enroll under this part without the 
     application of the late enrollment procedures established 
     under subparagraph (A)(i).
       ``(3) Period of coverage.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an eligible beneficiary's coverage under the program under 
     this part shall be effective for the period provided in 
     section 1838, as if that section applied to the program under 
     this part.
       ``(B) Open enrollment.--An eligible beneficiary who enrolls 
     under the program under this part pursuant to paragraph 
     (2)(B) shall be entitled to the benefits under this part 
     beginning on the first day of the month following the month 
     in which such enrollment occurs.
       ``(C) Limitation.--Coverage under this part shall not begin 
     prior to the date that is 1 year after the date of enactment 
     of this Act.
       ``(4) Part d coverage terminated by termination of coverage 
     under parts a and b.--
       ``(A) In general.--In addition to the causes of termination 
     specified in section 1838, the Secretary shall terminate an 
     individual's coverage under this part if the individual is no 
     longer enrolled in either part A or part B.
       ``(B) Effective date.--The termination described in 
     subparagraph (A) shall be effective on the effective date of 
     termination of coverage under part A or (if later) under part 
     B.
       ``(b) Enrollment With Eligible Entity.--
       ``(1) Process.--
       ``(A) In general.--The Secretary shall establish a process 
     through which an eligible beneficiary who is enrolled under 
     this part but not enrolled in a Medicare+Choice plan offered 
     by a Medicare+Choice organization shall make an annual 
     election to enroll with any eligible entity that has been 
     awarded a contract under this part and serves the geographic 
     area in which the beneficiary resides.
       ``(B) Rules.--In establishing the process under 
     subparagraph (A), the Secretary shall use rules similar to 
     the rules for enrollment and disenrollment with a 
     Medicare+Choice plan under section 1851 (including special 
     election periods under subsection (e)(4) of such section).
       ``(2) Medicare+choice enrollees.--An eligible beneficiary 
     who is enrolled under this part and enrolled in a 
     Medicare+Choice plan offered by a Medicare+Choice 
     organization shall receive coverage of covered outpatient 
     drugs under this part through such plan.
       ``(c) First Enrollment Period.--The processes developed 
     under subsections (a) and (b) shall ensure that eligible 
     beneficiaries are permitted to enroll under this part and 
     with an eligible entity prior to the date that is 1 year 
     after the date of enactment of this Act, in order to ensure 
     that coverage under this part is effective as of such date.


                ``providing information to beneficiaries

       ``Sec. 1860C. (a) Activities.--
       ``(1) In general.--The Secretary shall conduct activities 
     that are designed to broadly disseminate information to 
     eligible beneficiaries (and prospective eligible 
     beneficiaries) regarding the coverage provided under this 
     part.
       ``(2) Special rule for first enrollment under the 
     program.--To the extent practicable, the activities described 
     in paragraph (1) shall ensure that eligible beneficiaries are 
     provided with such information at least 30 days prior to the 
     first enrollment period described in section 1860B(c).
       ``(b) Requirements.--
       ``(1) In general.--The activities described in subsection 
     (a) shall--
       ``(A) be similar to the activities performed by the 
     Secretary under section 1851(d);
       ``(B) be coordinated with the activities performed by the 
     Secretary under such section and under section 1804; and
       ``(C) provide for the dissemination of information 
     comparing the eligible entities that are available to 
     eligible beneficiaries residing in an area under this part.
       ``(2) Comparative information.--The comparative information 
     described in paragraph (1)(B) shall include the following:
       ``(A) Benefits.--A comparison of the benefits provided by 
     each eligible entity, including a comparison of the pharmacy 
     networks used by each eligible entity and the formularies and 
     appeals processes implemented by each entity.
       ``(B) Quality and performance.--To the extent available, 
     the quality and performance of each eligible entity.
       ``(C) Beneficiary costs.--The cost-sharing required of 
     eligible beneficiaries enrolled in each eligible entity.
       ``(D) Consumer satisfaction surveys.--To the extent 
     available, the results of consumer satisfaction surveys 
     regarding each eligible entity.
       ``(E) Additional information.--Such additional information 
     as the Secretary may prescribe.
       ``(3) Information standards.--The Secretary shall develop 
     standards to ensure that the information provided to eligible 
     beneficiaries under this part is complete, accurate, and 
     uniform.
       ``(c) Use of Medicare Consumer Coalitions To Provide 
     Information.--
       ``(1) In general.--The Secretary may contract with Medicare 
     Consumer Coalitions to conduct the informational activities--
       ``(A) under this section;
       ``(B) under section 1851(d); and
       ``(C) under section 1804.
       ``(2) Selection of coalitions.--If the Secretary determines 
     the use of Medicare Consumer Coalitions to be appropriate, 
     the Secretary shall--
       ``(A) develop and disseminate, in such areas as the 
     Secretary determines appropriate, a request for proposals for 
     Medicare Consumer Coalitions to contract with the Secretary 
     in order to conduct any of the informational activities 
     described in paragraph (1); and
       ``(B) select a proposal of a Medicare Consumer Coalition to 
     conduct the informational activities in each such area, with 
     a preference for broad participation by organizations with 
     experience in providing information to beneficiaries under 
     this title.
       ``(3) Payment to medicare consumer coalitions.--The 
     Secretary shall make payments to Medicare Consumer Coalitions 
     contracting under this subsection in such amounts and in such 
     manner as the Secretary determines appropriate.
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     may be necessary to contract with Medicare Consumer 
     Coalitions under this section.
       ``(5) Medicare consumer coalition defined.--In this 
     subsection, the term `Medicare Consumer Coalition' means an 
     entity that is a nonprofit organization operated under the 
     direction of a board of directors that is primarily composed 
     of beneficiaries under this title.


                               ``premiums

       ``Sec. 1860D. (a) Annual Establishment of Monthly Premium 
     Rates.--
       ``(1) Premium.--The Secretary shall, during September of 
     each year (beginning with the first September after the day 
     that is 1 year after the date of enactment of the Medicare 
     Prescription Drug Coverage Act of 2001), determine and 
     promulgate a monthly premium rate for the succeeding year in 
     accordance with the provisions of this subsection.
       ``(2) Actuarial determinations.--
       ``(A) Determination of annual benefit and administrative 
     costs.--The Secretary shall estimate annually for the 
     succeeding year the amount equal to the total of the benefits 
     and administrative costs that will be payable from the 
     Federal Supplementary Medical Insurance Trust Fund for 
     providing covered outpatient drugs in such calendar year with 
     respect to enrollees in the program under this part.
       ``(B) Determination of monthly premium rates.--
       ``(i) In general.--The Secretary shall determine the 
     monthly premium rate with respect to such enrollees for such 
     succeeding year, which shall be \1/12\ of the applicable 
     percent of the amount determined under subparagraph (A), 
     divided by the total number of such enrollees, and rounded 
     (if such rate is

[[Page 268]]

     not a multiple of 10 cents) to the nearest multiple of 10 
     cents.
       ``(ii) Definition of applicable percent.--For purposes of 
     clause (i), the term `applicable percent' means--

       ``(I) 45 percent, in the case of premiums paid by an 
     eligible beneficiary enrolled in the program under this part; 
     and
       ``(II) 66.66 percent, in the case of premiums paid for such 
     a beneficiary by an employer (as defined in section 
     1860I(e)(2)) that the beneficiary formerly worked for.

       ``(3) Publication of assumptions.--The Secretary shall 
     publish, together with the promulgation of the monthly 
     premium rates for the succeeding year, a statement setting 
     forth the actuarial assumptions and bases employed in 
     arriving at the amounts and rates determined under paragraphs 
     (1) and (2).
       ``(b) Collection of Premium.--The monthly premium 
     applicable to an eligible beneficiary under this part shall 
     be collected and credited to the Federal Supplementary 
     Medical Insurance Trust Fund in the same manner as the 
     monthly premium determined under section 1839 is collected 
     and credited to such Trust Fund under section 1840.


                             ``cost-sharing

       ``Sec. 1860E. (a) Deductible.--
       ``(1) In general.--Subject to paragraph (2), no payments 
     shall be made under this part on behalf of an eligible 
     beneficiary until the beneficiary has met a $250 deductible.
       ``(2) Waiver of deductible for generic drugs.--
       ``(A) In general.--An eligible entity may provide that 
     generic drugs are not subject to the deductible described in 
     paragraph (1) if the Secretary determines that the waiver of 
     the deductible--
       ``(i) is tied to the performance measures and other 
     incentives applicable to the entity pursuant to section 
     1860H(a); and
       ``(ii) will not result in an increase in the expenditures 
     made from the Federal Supplementary Medical Insurance Trust 
     Fund.
       ``(B) Credit for amounts paid.--If the deductible is waived 
     pursuant to subparagraph (A), any coinsurance paid by an 
     eligible beneficiary for the generic drug shall be credited 
     toward the annual deductible.
       ``(b) Coinsurance.--
       ``(1) Establishment.--
       ``(A) In general.--Subject to paragraph (2), if any covered 
     outpatient drug is provided to an eligible beneficiary in a 
     year after the beneficiary has met any deductible requirement 
     under subsection (a) for the year, the beneficiary shall be 
     responsible for making payments for the drug in an amount 
     equal to the applicable percentage of the cost of the drug.
       ``(B) Applicable percentage defined.--For purposes of 
     subparagraph (A), the `applicable percentage' means, with 
     respect to any covered outpatient drug provided to an 
     eligible beneficiary in a year--
       ``(i) 50 percent to the extent the out-of-pocket expenses 
     of the beneficiary for such drug, when added to the out-of-
     pocket expenses of the beneficiary for covered outpatient 
     drugs previously provided in the year, do not exceed $3,500;
       ``(ii) 25 percent to the extent such expenses, when so 
     added, exceed $3,500 but do not exceed $4,000; and
       ``(iii) 0 percent to the extent such expenses, when so 
     added, would exceed $4,000.
       ``(C) Out-of-pocket expenses defined.--For purposes of 
     subparagraph (B), the term `out-of-pocket expenses' means 
     expenses incurred as a result of the application of the 
     deductible under subsection (a) and the coinsurance required 
     under this subsection.
       ``(2) Reduction by eligible entity.--An eligible entity may 
     reduce the applicable percentage that an eligible beneficiary 
     is subject to under paragraph (1) if the Secretary determines 
     that such reduction--
       ``(A) is tied to the performance measures and other 
     incentives applicable to the entity pursuant to section 
     1860H(a); and
       ``(B) will not result in an increase in the expenditures 
     made from the Federal Supplementary Medical Insurance Trust 
     Fund.
       ``(c) Inflation Adjustment.--
       ``(1) In general.--In the case of any calendar year 
     beginning after 2004, each of the dollar amounts in 
     subsections (a)(1) and (b)(1)(B) shall be increased by an 
     amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the percentage (if any) by which the amount of 
     average per capita expenditures under this part in the 
     preceding calendar year exceeds the amount of such 
     expenditures in 2003.
       ``(2) Rounding.--If any dollar amount after being increased 
     under paragraph (1) is not a multiple of $5, such dollar 
     amount shall be rounded to the nearest multiple of $5.


       ``selection of entities to provide outpatient drug benefit

       ``Sec. 1860F. (a) Establishment of Bidding Process.--
       ``(1) In general.--The Secretary shall establish procedures 
     under which the Secretary accepts bids submitted by eligible 
     entities and awards contracts to such entities in order to 
     administer and deliver the benefits provided under this part 
     to eligible beneficiaries in an area.
       ``(2) Competitive procedures.--Competitive procedures (as 
     defined in section 4(5) of the Office of Federal Procurement 
     Policy Act (41 U.S.C. 403(5))) shall be used to enter into 
     contracts under this part.
       ``(b) Area for Contracts.--
       ``(1) Regional basis.--
       ``(A) In general.--Except as provided in subparagraph (B) 
     and subject to paragraph (2), the contract entered into 
     between the Secretary and an eligible entity shall require 
     the eligible entity to provide covered outpatient drugs on a 
     regional basis.
       ``(B) Partial regional basis.--
       ``(i) In general.--If determined appropriate by the 
     Secretary, the Secretary may permit the coverage described in 
     subparagraph (A) to be provided on a partial regional basis.
       ``(ii) Requirements.--If the Secretary permits coverage 
     pursuant to clause (i), the Secretary shall ensure that the 
     partial region in which coverage is provided is--

       ``(I) at least the size of the commercial service area of 
     the eligible entity for that area; and
       ``(II) not smaller than a State.

       ``(2) Determination.--
       ``(A) In general.--In determining coverage areas under this 
     part, the Secretary shall--
       ``(i) take into account the number of eligible 
     beneficiaries in an area in order to encourage participation 
     by eligible entities; and
       ``(ii) ensure that there are at least 10 different coverage 
     areas in the United States.
       ``(B) No administrative or judicial review.--The 
     determination of coverage areas under this part shall not be 
     subject to administrative or judicial review.
       ``(c) Submission of Bids.--
       ``(1) In general.--Each eligible entity desiring to provide 
     covered outpatient drugs under this part shall submit a bid 
     to the Secretary at such time, in such manner, and 
     accompanied by such information as the Secretary may 
     reasonably require.
       ``(2) Required information.--The bids described in 
     paragraph (1) shall include--
       ``(A) a proposal for the estimated prices of covered 
     outpatient drugs and the projected annual increases in such 
     prices, including differentials between formulary and 
     nonformulary prices, if applicable;
       ``(B) the amount that the entity will charge the Secretary 
     for administering and delivering the benefits under such 
     contract;
       ``(C) a statement regarding whether the entity will waive 
     the deductible for generic drugs pursuant to section 
     1860E(a)(2);
       ``(D) a statement regarding whether the entity will reduce 
     the applicable coinsurance percentage pursuant to section 
     1860E(b)(2) and if so, the amount of such reduction;
       ``(E) a detailed description of--
       ``(i) the risk corridors tied to performance measures and 
     other incentives that the entity will accept under the 
     contract; and
       ``(ii) how the entity will meet such measures and 
     incentives;
       ``(F) a detailed description of proposed contracts with 
     local pharmacy providers designed to ensure access, including 
     compensation for local pharmacists' services;
       ``(G) a detailed description of any ownership or shared 
     financial interests with other entities involved in the 
     delivery of the benefit as proposed;
       ``(H) a detailed description of the entity's estimated 
     marketing and advertising expenditures related to enrolling 
     and retaining eligible beneficiaries; and
       ``(I) such other information that the Secretary determines 
     is necessary in order to carry out this part, including 
     information relating to the bidding process under this part.
       ``(d) Access.--
       ``(1) In general.--The Secretary shall ensure that an 
     eligible entity--
       ``(A) complies with the access requirements described in 
     section 1860G(a)(4)(A); and
       ``(B) makes available to each beneficiary covered under the 
     contract the full scope of the benefits required under this 
     part.
       ``(2) Areas not covered by contracts.--The Secretary shall 
     develop procedures for the provision of covered outpatient 
     drugs under this part to each eligible beneficiary that 
     resides in an area that is not covered by any contract under 
     this part.
       ``(3) Beneficiaries residing in different locations.--The 
     Secretary shall develop procedures to ensure that each 
     eligible beneficiary that resides in different areas in a 
     year is provided the benefits under this part throughout the 
     entire year.
       ``(4) Special attention to rural and hard-to-serve areas.--
       ``(A) In general.--The Secretary shall ensure that all 
     eligible beneficiaries have access to the full range of 
     benefits under this part, and shall give special attention to 
     access, pharmacist counseling, and delivery in rural and 
     hard-to-serve areas (as the Secretary may define by 
     regulation).
       ``(B) Special attention defined.--For purposes of 
     subparagraph (A), the term `special attention' may include 
     bonus payments to retail pharmacists in rural areas, extra 
     payments to eligible entities for the cost of rapid delivery 
     of pharmaceuticals, and any other actions the Secretary 
     determines are necessary to ensure full access to benefits 
     under this part by eligible beneficiaries residing in rural 
     and hard-to-serve areas.
       ``(C) GAO report.--Not later than 2 years after the date of 
     enactment of the Medicare

[[Page 269]]

     Prescription Drug Coverage Act of 2001, the Comptroller 
     General of the United States shall submit to Congress a 
     report on the access to benefits under this part by eligible 
     beneficiaries residing in rural and hard-to-serve areas, 
     together with any recommendations of the Comptroller General 
     regarding any additional steps the Secretary may need to take 
     to ensure the access of medicare beneficiaries to such 
     benefits.
       ``(e) Awarding of Contracts.--
       ``(1) Number of contracts.--The Secretary shall, consistent 
     with the requirements of this part and the goal of containing 
     costs under this title, award in a competitive manner at 
     least 2 contracts in an area, unless only 1 bidding entity 
     meets the minimum standards specified under this part and by 
     the Secretary.
       ``(2) Determination.--In determining which of the eligible 
     entities that submitted bids that meet the minimum standards 
     specified under this part and by the Secretary (including the 
     terms and conditions described in section 1860G) to award a 
     contract, the Secretary shall consider the comparative merits 
     of each bid, as determined on the basis of the past 
     performance of the entity and other relevant factors, with 
     respect to--
       ``(A) how well the entity meets such minimum standards;
       ``(B) the amount that the entity will charge the Secretary 
     for administering and delivering the benefits under the 
     contract;
       ``(C) the proposed prices of covered outpatient drugs and 
     annual increases in such prices;
       ``(D) the proposed risk corridors tied to performance 
     measures and other incentives that the entity will be subject 
     to under the contract;
       ``(E) the factors described in section 1860C(b)(2);
       ``(F) prior experience in administering a prescription drug 
     benefit program;
       ``(G) effectiveness in containing costs through pricing 
     incentives and utilization management; and
       ``(H) such other factors as the Secretary deems necessary 
     to evaluate the merits of each bid.
       ``(3) Exception to conflict of interest rules.--In awarding 
     contracts under this part, the Secretary may waive conflict 
     of interest laws generally applicable to Federal acquisitions 
     (subject to such safeguards as the Secretary may find 
     necessary to impose) in circumstances where the Secretary 
     finds that such waiver--
       ``(A) is not inconsistent with the--
       ``(i) purposes of the programs under this title; or
       ``(ii) best interests of enrolled individuals; and
       ``(B) permits a sufficient level of competition for such 
     contracts, promotes efficiency of benefits administration, or 
     otherwise serves the objectives of the program under this 
     part.
       ``(4) No administrative or judicial review.--The 
     determination of the Secretary to award or not award a 
     contract to an eligible entity under this part shall not be 
     subject to administrative or judicial review.
       ``(f) Approval of Marketing Material and Application 
     Forms.--The provisions of section 1851(h) shall apply to 
     marketing material and application forms under this part in 
     the same manner as such provisions apply to marketing 
     material and application forms under part C.
       ``(g) Duration of Contracts.--Each contract under this part 
     shall be for a term of at least 2 years but not more than 5 
     years, as determined by the Secretary.


                   ``conditions for awarding contract

       ``Sec. 1860G. (a) In General.--The Secretary shall not 
     award a contract to an eligible entity under this part unless 
     the Secretary finds that the eligible entity agrees to comply 
     with such terms and conditions as the Secretary shall 
     specify, including the following:
       ``(1) Quality and financial standards.--The eligible entity 
     meets the quality and financial standards specified by the 
     Secretary.
       ``(2) Procedures to ensure proper utilization, compliance, 
     and avoidance of adverse drug reactions.--The eligible entity 
     has in place drug utilization review procedures to ensure--
       ``(A) the appropriate utilization by eligible beneficiaries 
     of the benefits to be provided under the contract; and
       ``(B) the avoidance of adverse drug reactions among 
     eligible beneficiaries enrolled with the entity, including 
     problems due to therapeutic duplication, drug-disease 
     contraindications, drug-drug interactions (including serious 
     interactions with nonprescription or over-the-counter drugs), 
     incorrect drug dosage or duration of drug treatment, drug-
     allergy interactions, and clinical abuse and misuse.
       ``(3) Cost-effective provision of benefits.--
       ``(A) In general.--In providing the benefits under a 
     contract under this part, an eligible entity may--
       ``(i) employ mechanisms to provide the benefits 
     economically, including the use of--

       ``(I) formularies (pursuant to subparagraph (B));
       ``(II) alternative methods of distribution; and
       ``(III) generic drug substitution;

       ``(ii) use mechanisms to encourage eligible beneficiaries 
     to select cost-effective drugs or less costly means of 
     receiving drugs, including the use of pharmacy incentive 
     programs, therapeutic interchange programs, and disease 
     management programs; and
       ``(iii) encourage pharmacy providers to--

       ``(I) inform beneficiaries of the differentials in price 
     between generic and nongeneric drug equivalents; and
       ``(II) provide medication therapy management programs in 
     order to enhance beneficiaries' understanding of the 
     appropriate use of medications and to reduce the risk of 
     potential adverse events associated with medications.

       ``(B) Formularies.--If an eligible entity uses a formulary 
     under this part, such formulary shall comply with standards 
     established by the Secretary in consultation with the 
     Medicare Pharmacy and Therapeutics Advisory Committee 
     established under section 1860M. Such standards shall require 
     that the eligible entity--
       ``(i) use a pharmacy and therapeutic committee (that meets 
     the standards for a pharmacy and therapeutic committee 
     established by the Secretary in consultation with the 
     Medicare Pharmacy and Therapeutics Advisory Committee 
     established under section 1860M) to develop and implement the 
     formulary;
       ``(ii) include in the formulary--

       ``(I) at least 1 drug from each therapeutic class (as 
     defined by the entity's pharmacy and therapeutic committee in 
     accordance with standards established by the Secretary in 
     consultation with the Medicare Pharmacy and Therapeutics 
     Advisory Committee established under section 1860M);

       ``(II) if there is more than 1 drug available in a 
     therapeutic class, at least 2 drugs from such class; and
       ``(III) if there are more than 2 drugs available in a 
     therapeutic class, at least 2 drugs from such class and a 
     generic drug substitute if available;

       ``(iii) develop procedures for the--

       ``(I) addition of new therapeutic classes to the formulary;
       ``(II) addition of new drugs to an existing therapeutic 
     class; and
       ``(III) modification of the formulary;

       ``(iv) provide for coverage of otherwise covered non-
     formulary drugs when recommended by a prescribing provider; 
     and
       ``(v) disclose to current and prospective beneficiaries and 
     to providers in the service area the nature of the formulary 
     restrictions, including information regarding the drugs 
     included in the formulary, coinsurance, and any difference in 
     the cost-sharing for different types of drugs.
       ``(C) Construction.--Nothing in this paragraph shall be 
     construed as precluding an eligible entity from--
       ``(i) requiring cost-sharing for nonformulary drugs that is 
     higher than the cost-sharing established in section 1860E(b), 
     except that such entity shall provide for coverage of a 
     nonformulary drug at the same cost-sharing level as a drug 
     within the formulary if such nonformulary drug is recommended 
     by a prescribing provider;
       ``(ii) educating prescribing providers, pharmacists, and 
     beneficiaries about the medical and cost benefits of 
     formulary drugs (including generic drugs); or
       ``(iii) requiring prescribing providers to consider a 
     formulary drug prior to dispensing of a nonformulary drug, as 
     long as such requirement does not unduly delay the provision 
     of the drug.
       ``(4) Patient protections.--
       ``(A) Access.--The eligible entity ensures that the covered 
     outpatient drugs are accessible and convenient to eligible 
     beneficiaries covered under the contract, including by doing 
     the following:
       ``(i) Services during emergencies.--Offering services 24 
     hours a day and 7 days a week for emergencies.
       ``(ii) Agreements with pharmacies.--Entering into 
     participation agreements under subsection (b) with 
     pharmacies, that include terms that--

       ``(I) secure the participation of sufficient numbers of 
     pharmacies to ensure convenient access (including adequate 
     emergency access); and
       ``(II) permit the participation of any pharmacy in the 
     service area that meets the participation requirements 
     described in subsection (b).

       ``(B) Continuity of care.--
       ``(i) In general.--The eligible entity ensures that, in the 
     case of an eligible beneficiary who loses coverage under this 
     part with such entity under circumstances that would permit a 
     special election period (as established by the Secretary 
     under section 1860B(b)), the entity will continue to provide 
     coverage under this part to such beneficiary until the 
     beneficiary enrolls and receives such coverage with another 
     eligible entity under this part.
       ``(ii) Limited period.--In no event shall an eligible 
     entity be required to provide the extended coverage required 
     under clause (i) beyond the date which is 30 days after the 
     coverage with such entity would have terminated but for this 
     subparagraph.
       ``(C) Procedures regarding denials of care.--The eligible 
     entity has in place procedures to ensure--
       ``(i) a timely internal and external review and resolution 
     of denials of coverage (in

[[Page 270]]

     whole or in part) and complaints (including those regarding 
     the use of formularies under paragraph (3)) by eligible 
     beneficiaries, or by providers, pharmacists, and other 
     individuals acting on behalf of each such beneficiary (with 
     the beneficiary's consent) in accordance with requirements 
     (as established by the Secretary) that are comparable to such 
     requirements for Medicare+Choice organizations under part C; 
     and
       ``(ii) that beneficiaries are provided with information 
     regarding the appeals procedures under this part at the time 
     of enrollment.
       ``(D) Procedures regarding patient confidentiality.--
     Insofar as an eligible entity maintains individually 
     identifiable medical records or other health information 
     regarding eligible beneficiaries under a contract entered 
     into under this part, the entity has in place procedures to--
       ``(i) safeguard the privacy of any individually 
     identifiable beneficiary information;
       ``(ii) maintain such records and information in a manner 
     that is accurate and timely;
       ``(iii) ensure timely access by such beneficiaries to such 
     records and information; and
       ``(iv) otherwise comply with applicable laws relating to 
     patient confidentiality.
       ``(E) Procedures regarding transfer of medical records.--
       ``(i) In general.--The eligible entity has in place 
     procedures for the timely transfer of records and information 
     described in subparagraph (D) (with respect to a beneficiary 
     who loses coverage under this part with the entity and 
     enrolls with another entity under this part) to such other 
     entity.
       ``(ii) Patient confidentiality.--The procedures described 
     in clause (i) shall comply with the patient confidentiality 
     procedures described in subparagraph (D).
       ``(F) Procedures regarding medical errors.--The eligible 
     entity has in place procedures for working with the Secretary 
     to deter medical errors related to the provision of covered 
     outpatient drugs.
       ``(5) Procedures to control fraud, abuse, and waste.--The 
     eligible entity has in place procedures to control fraud, 
     abuse, and waste.
       ``(6) Reporting requirements.--
       ``(A) In general.--The eligible entity provides the 
     Secretary with reports containing information regarding the 
     following:
       ``(i) The prices that the eligible entity is paying for 
     covered outpatient drugs.
       ``(ii) The prices that eligible beneficiaries enrolled with 
     the entity will be charged for covered outpatient drugs.
       ``(iii) The administrative costs of providing such 
     benefits.
       ``(iv) Utilization of such benefits.
       ``(v) Marketing and advertising expenditures related to 
     enrolling and retaining eligible beneficiaries.
       ``(B) Timeframe for submitting reports.--
       ``(i) In general.--The eligible entity shall submit a 
     report described in subparagraph (A) to the Secretary within 
     3 months after the end of each 12-month period in which the 
     eligible entity has a contract under this part. Such report 
     shall contain information concerning the benefits provided 
     during such 12-month period.
       ``(ii) Last year of contract.--In the case of the last year 
     of a contract under this section, the Secretary may require 
     that a report described in subparagraph (A) be submitted 3 
     months prior to the end of the contract. Such report shall 
     contain information concerning the benefits provided between 
     the period covered by the most recent report under this 
     subparagraph and the date that a report is submitted under 
     this clause.
       ``(C) Confidentiality of information.--
       ``(i) In general.--Notwithstanding any other provision of 
     law and subject to clause (ii), information disclosed by an 
     eligible entity pursuant to subparagraph (A) is confidential 
     and shall only be used by the Secretary for the purposes of, 
     and to the extent necessary, to carry out this part.
       ``(ii) Utilization data.--Subject to patient 
     confidentiality laws, the Secretary shall make information 
     disclosed by an eligible entity pursuant to subparagraph 
     (A)(iv) (regarding utilization data) available for research 
     purposes. The Secretary may charge a reasonable fee for 
     making such information available.
       ``(7) Approval of marketing material and application 
     forms.--The eligible entity will comply with the requirements 
     described in section 1860F(f).
       ``(8) Records and audits.--The eligible entity maintains 
     adequate records related to the administration of the benefit 
     under this part and affords the Secretary access to such 
     records for auditing purposes.
       ``(b) Pharmacy Participation Agreements.--
       ``(1) In general.--A pharmacy that meets the requirements 
     of this subsection shall be eligible to enter an agreement 
     with an eligible entity to furnish covered outpatient drugs 
     and pharmacists' services to eligible beneficiaries enrolled 
     with such entity and residing in the service area.
       ``(2) Terms of agreement.--An agreement under this 
     subsection shall include the following terms and 
     requirements:
       ``(A) Licensing.--The pharmacy and pharmacists shall meet 
     (and throughout the contract period will continue to meet) 
     all applicable State and local licensing requirements.
       ``(B) Limitation on charges.--Pharmacies participating 
     under this part shall not charge an eligible beneficiary 
     enrolled with the eligible entity more than--
       ``(i) the negotiated price for an individual drug (as 
     reported to the Secretary pursuant to subsection (a)(6)(A)); 
     or
       ``(ii) the amount of the beneficiary's obligation (as 
     determined in accordance with the provisions of this part) of 
     the negotiated price of such drug.
       ``(C) Performance standards.--The pharmacy shall comply 
     with performance standards relating to--
       ``(i) measures for quality assurance, reduction of medical 
     errors, and compliance with the drug utilization review 
     procedures described in subsection (a)(2);
       ``(ii) systems to ensure compliance with the patient 
     confidentiality standards applicable under subsection 
     (a)(4)(D); and
       ``(iii) other requirements as the Secretary may impose to 
     ensure integrity, efficiency, and the quality of the program 
     under this part.


                               ``payments

       ``Sec. 1860H. (a) Payments to Eligible Entities.--
       ``(1) Procedures.--
       ``(A) In general.--The Secretary shall establish procedures 
     for making payments to an eligible entity under a contract 
     entered into under this part for the administration and 
     delivery of the benefits under this part.
       ``(B) Entities only subject to limited risk.--Under the 
     procedures established under subparagraph (A), an eligible 
     entity shall only be at risk to the extent that the entity is 
     at risk under paragraph (2).
       ``(2) Risk corridors tied to performance measures and other 
     incentives.--
       ``(A) In general.--The procedures established under 
     paragraph (1) may include the use of--
       ``(i) risk corridors tied to performance measures that have 
     been agreed to between the eligible entity and the Secretary 
     under the contract; and
       ``(ii) any other incentives that the Secretary determines 
     appropriate.
       ``(B) Phase-in of risk corridors tied to performance 
     measures.--The Secretary may phase-in the use of risk 
     corridors tied to performance measures if the Secretary 
     determines such phase-in to be appropriate.
       ``(C) Payments subject to incentives.--If a contract under 
     this part includes the use of risk corridors tied to 
     performance measures or other incentives pursuant to 
     subparagraph (A), payments to eligible entities under such 
     contract shall be subject to such risk corridors tied to 
     performance measures and other incentives.
       ``(3) Risk adjustment.--To the extent that eligible 
     entities are at risk because of the risk corridors or other 
     incentives described in paragraph (2)(A), the procedures 
     established under paragraph (1) may include a methodology for 
     adjusting the payments made to such entities based on the 
     differences in actuarial risk of different enrollees being 
     served if the Secretary determines such adjustments to be 
     necessary and appropriate.
       ``(b) Secondary Payer Provisions.--The provisions of 
     section 1862(b) shall apply to the benefits provided under 
     this part.


``employer incentive program for employment-based retiree drug coverage

       ``Sec. 1860I. (a) Program Authority.--The Secretary is 
     authorized to develop and implement a program under this 
     section called the `Employer Incentive Program' that 
     encourages employers and other sponsors of employment-based 
     health care coverage to provide adequate prescription drug 
     benefits to retired individuals by subsidizing, in part, the 
     sponsor's cost of providing coverage under qualifying plans.
       ``(b) Sponsor Requirements.--In order to be eligible to 
     receive an incentive payment under this section with respect 
     to coverage of an individual under a qualified retiree 
     prescription drug plan (as defined in subsection (f)(3)), a 
     sponsor shall meet the following requirements:
       ``(1) Assurances.--The sponsor shall--
       ``(A) annually attest, and provide such assurances as the 
     Secretary may require, that the coverage offered by the 
     sponsor is a qualified retiree prescription drug plan, and 
     will remain such a plan for the duration of the sponsor's 
     participation in the program under this section; and
       ``(B) guarantee that it will give notice to the Secretary 
     and covered retirees--
       ``(i) at least 120 days before terminating its plan; and
       ``(ii) immediately upon determining that the actuarial 
     value of the prescription drug benefit under the plan falls 
     below the actuarial value of the outpatient prescription drug 
     benefit under this part.
       ``(2) Beneficiary information.--The sponsor shall report to 
     the Secretary, for each calendar quarter for which it seeks 
     an incentive payment under this section, the names and social 
     security numbers of all retirees (and their spouses and 
     dependents) covered under such plan during such quarter and 
     the dates (if less than the full quarter) during which each 
     such individual was covered.
       ``(3) Audits.--The sponsor and the employment-based retiree 
     health coverage plan

[[Page 271]]

     seeking incentive payments under this section shall agree to 
     maintain, and to afford the Secretary access to, such records 
     as the Secretary may require for purposes of audits and other 
     oversight activities necessary to ensure the adequacy of 
     prescription drug coverage, the accuracy of incentive 
     payments made, and such other matters as may be appropriate.
       ``(4) Other requirements.--The sponsor shall provide such 
     other information, and comply with such other requirements, 
     as the Secretary may find necessary to administer the program 
     under this section.
       ``(c) Incentive Payments.--
       ``(1) In general.--A sponsor that meets the requirements of 
     subsection (b) with respect to a quarter in a calendar year 
     shall be entitled to have payment made by the Secretary on a 
     quarterly basis (to the sponsor or, at the sponsor's 
     direction, to the appropriate employment-based health plan) 
     of an incentive payment, in the amount determined in 
     paragraph (2), for each retired individual (or spouse) who--
       ``(A) was covered under the sponsor's qualified retiree 
     prescription drug plan during such quarter; and
       ``(B) was eligible for, but was not enrolled in, the 
     outpatient prescription drug benefit program under this part.
       ``(2) Amount of incentive.--The payment under this section 
     with respect to each individual described in paragraph (1) 
     for a month shall be equal to \2/3\ of the monthly premium 
     amount payable by an eligible beneficiary enrolled under this 
     part, as set for the calendar year pursuant to section 
     1860D(a)(2).
       ``(3) Payment date.--The incentive under this section with 
     respect to a calendar quarter shall be payable as of the end 
     of the next succeeding calendar quarter.
       ``(d) Civil Money Penalties.--A sponsor, health plan, or 
     other entity that the Secretary determines has, directly or 
     through its agent, provided information in connection with a 
     request for an incentive payment under this section that the 
     entity knew or should have known to be false shall be subject 
     to a civil monetary penalty in an amount up to 3 times the 
     total incentive amounts under subsection (c) that were paid 
     (or would have been payable) on the basis of such 
     information.
       ``(e) Definitions.--In this section:
       ``(1) Employment-based retiree health coverage.--The term 
     `employment-based retiree health coverage' means health 
     insurance or other coverage of health care costs for retired 
     individuals (or for such individuals and their spouses and 
     dependents) based on their status as former employees or 
     labor union members.
       ``(2) Employer.--The term `employer' has the meaning given 
     the term in section 3(5) of the Employee Retirement Income 
     Security Act of 1974 (except that such term shall include 
     only employers of 2 or more employees).
       ``(3) Qualified retiree prescription drug plan.--The term 
     `qualified retiree prescription drug plan' means health 
     insurance coverage included in employment-based retiree 
     health coverage that--
       ``(A) provides coverage of the cost of prescription drugs 
     whose actuarial value (as defined by the Secretary) to each 
     retired beneficiary equals or exceeds the actuarial value of 
     the benefits provided to an individual enrolled in the 
     outpatient prescription drug benefit program under this part; 
     and
       ``(B) does not deny, limit, or condition the coverage or 
     provision of prescription drug benefits for retired 
     individuals based on age or any health status-related factor 
     described in section 2702(a)(1) of the Public Health Service 
     Act.
       ``(4) Sponsor.--The term `sponsor' has the meaning given 
     the term `plan sponsor' in section 3(16)(B) of the Employer 
     Retirement Income Security Act of 1974.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated from time to time, out of any 
     moneys in the Treasury not otherwise appropriated, such sums 
     as may be necessary to carry out the program under this 
     section.


              ``procedures for partial year implementation

       ``Sec. 1860J. If the Secretary first implements the program 
     under this part on a day other that January 1 of a year, the 
     Secretary shall establish procedures for implementing the 
     program during the period between the date of implementation 
     and December 31 of such year, including procedures--
       ``(1) for prorating premiums, deductibles, and coinsurance 
     under the program during such period; and
       ``(2) relating to requirements and payments under the 
     Medicare+Choice program during such period.


                            ``appropriations

       ``Sec. 1860K. There are authorized to be appropriated from 
     time to time, out of any moneys in the Treasury not otherwise 
     appropriated, to the Federal Supplementary Medical Insurance 
     Trust Fund established under section 1841, an amount equal to 
     the amount by which the benefits and administrative costs of 
     providing the benefits under this part exceed the premiums 
     collected under section 1860D.

    ``Subpart 2--Medicare Pharmacy and Therapeutics (P&T) Advisory 
                               Committee


     ``medicare pharmacy and therapeutics (p&t) advisory committee

       ``Sec. 1860M. (a) Establishment of Committee.--There is 
     established a Medicare Pharmacy and Therapeutics Advisory 
     Committee (in this section referred to as the `Committee').
       ``(b) Functions of Committee.--On and after January 1, 
     2002, the Committee shall advise the Secretary on policies 
     related to--
       ``(1) the development of guidelines for the implementation 
     and administration of the outpatient prescription drug 
     benefit program under this part; and
       ``(2) the development of--
       ``(A) standards for a pharmacy and therapeutics committee 
     required of eligible entities under section 
     1860G(a)(3)(B)(i);
       ``(B) standards for--
       ``(i) defining therapeutic classes;
       ``(ii) adding new therapeutic classes to a formulary;
       ``(iii) adding new drugs to a therapeutic class within a 
     formulary; and
       ``(iv) when and how often a formulary should be modified;
       ``(C) procedures to evaluate the bids submitted by eligible 
     entities under this part; and
       ``(D) procedures to ensure that eligible entities with a 
     contract under this part are in compliance with the 
     requirements under this part.
       ``(c) Structure and Membership of the Committee.--
       ``(1) Structure.--The Committee shall be composed of 19 
     members who shall be appointed by the Secretary.
       ``(2) Membership.--
       ``(A) In general.--The members of the Committee shall be 
     chosen on the basis of their integrity, impartiality, and 
     good judgment, and shall be individuals who are, by reason of 
     their education, experience, and attainments, exceptionally 
     qualified to perform the duties of members of the Committee.
       ``(B) Specific members.--Of the members appointed under 
     paragraph (1)--
       ``(i) eleven shall be chosen to represent physicians;
       ``(ii) four shall be chosen to represent pharmacists;
       ``(iii) one shall be chosen to represent the Health Care 
     Financing Administration;
       ``(iv) two shall be chosen to represent actuaries and 
     pharmacoeconomists; and
       ``(v) one shall be chosen to represent emerging drug 
     technologies.
       ``(d) Terms of Appointment.--Each member of the Committee 
     shall serve for a term determined appropriate by the 
     Secretary. The terms of service of the members initially 
     appointed shall begin on January 1, 2002.
       ``(e) Chairman.--The Secretary shall designate a member of 
     the Committee as Chairman. The term as Chairman shall be for 
     a 1-year period.
       ``(f) Compensation and Travel Expenses.--
       ``(1) Compensation of members.--Each member of the 
     Committee who is not an officer or employee of the Federal 
     Government shall be compensated at a rate equal to the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level IV of the Executive Schedule under section 5315 of 
     title 5, United States Code, for each day (including travel 
     time) during which such member is engaged in the performance 
     of the duties of the Committee. All members of the Committee 
     who are officers or employees of the United States shall 
     serve without compensation in addition to that received for 
     their services as officers or employees of the United States.
       ``(2) Travel expenses.--The members of the Committee shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Committee.
       ``(g) Operation of the Committee.--
       ``(1) Meetings.--The Committee shall meet at the call of 
     the Chairman (after consultation with the other members of 
     the Committee) not less often than quarterly to consider a 
     specific agenda of issues, as determined by the Chairman 
     after such consultation.
       ``(2) Quorum.--Ten members of the Committee shall 
     constitute a quorum for purposes of conducting business.
       ``(h) Federal Advisory Committee Act.--Section 14 of the 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the Committee.
       ``(i) Transfer of Personnel, Resources, and Assets.--For 
     purposes of carrying out its duties, the Secretary and the 
     Committee may provide for the transfer to the Committee of 
     such civil service personnel in the employ of the Department 
     of Health and Human Services, and such resources and assets 
     of the Department used in carrying out this title, as the 
     Committee requires.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out the purposes of this section.''.
       (b) Exclusions From Coverage.--
       (1) Application to part d.--Section 1862(a) of the Social 
     Security Act (42 U.S.C. 1395y(a))

[[Page 272]]

     is amended in the matter preceding paragraph (1) by striking 
     ``part A or part B'' and inserting ``part A, B, or D''.
       (2) Prescription drugs not excluded from coverage if 
     appropriately prescribed.--Section 1862(a)(1) of the Social 
     Security Act (42 U.S.C. 1395y(a)(1)) is amended--
       (A) in subparagraph (H), by striking ``and'' at the end;
       (B) in subparagraph (I), by striking the semicolon at the 
     end and inserting ``, and''; and
       (C) by adding at the end the following new subparagraph:
       ``(J) in the case of prescription drugs covered under part 
     D, which are not prescribed in accordance with such part;''.
       (c) Conforming References to Previous Part D.--
       (1) In general.--Any reference in law (in effect before the 
     date of enactment of this Act) to part D of title XVIII of 
     the Social Security Act is deemed a reference to part E of 
     such title (as in effect after such date).
       (2) Secretarial submission of legislative proposal.--Not 
     later than 6 months after the date of enactment of this Act, 
     the Secretary of Health and Human Services shall submit to 
     the appropriate committees of Congress a legislative proposal 
     providing for such technical and conforming amendments in the 
     law as are required by the provisions of this Act.

     SEC. 4. PART D BENEFITS UNDER MEDICARE+CHOICE PLANS.

       (a) Eligibility, Election, and Enrollment.--Section 1851 of 
     the Social Security Act (42 U.S.C. 1395w-21) is amended--
       (1) in subsection (a)(1)(A), by striking ``parts A and B'' 
     and inserting ``parts A, B, and D''; and
       (2) in subsection (i)(1), by striking ``parts A and B'' and 
     inserting ``parts A, B, and D''.
       (b) Voluntary Beneficiary Enrollment for Drug Coverage.--
     Section 1852(a)(1)(A) of such Act (42 U.S.C. 1395w-
     22(a)(1)(A)) is amended by inserting ``(and under part D to 
     individuals also enrolled under that part)'' after ``parts A 
     and B''.
       (c) Access to Services.--Section 1852(d)(1) of such Act (42 
     U.S.C. 1395w-22(d)(1)) is amended--
       (1) in subparagraph (D), by striking ``and'' at the end;
       (2) in subparagraph (E), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(F) in the case of covered outpatient drugs provided to 
     individuals enrolled under part D (as defined in section 
     1860(1)), the organization complies with the access 
     requirements applicable under part D.''.
       (d) Payments to Organizations.--Section 1853(a)(1)(A) of 
     such Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended--
       (1) by inserting ``determined separately for the benefits 
     under parts A and B and under part D (for individuals 
     enrolled under that part)'' after ``as calculated under 
     subsection (c)'';
       (2) by striking ``that area, adjusted for such risk 
     factors'' and inserting ``that area. In the case of payment 
     for the benefits under parts A and B, such payment shall be 
     adjusted for such risk factors as''; and
       (3) by inserting before the last sentence the following: 
     ``In the case of the payments for the benefits under part D, 
     such payment shall initially be adjusted for the risk factors 
     of each enrollee as the Secretary determines to be feasible 
     and appropriate to ensure actuarial equivalence. By 2006, the 
     adjustments to payments for benefits under part D shall be 
     for the same risk factors used to adjust payments for the 
     benefits under parts A and B.''.
       (e) Calculation of Annual Medicare+Choice Capitation 
     Rates.--Section 1853(c) of such Act (42 U.S.C. 1395w-23(c)) 
     is amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by inserting ``for benefits under parts A and B'' after 
     ``capitation rate''; and
       (2) by adding at the end the following new paragraph:
       ``(8) Payment for part d benefits.--The Secretary shall 
     determine a capitation rate for part D benefits (for 
     individuals enrolled under such part) as follows:
       ``(A) Drugs dispensed before 2004.--In the case of 
     prescription drugs dispensed on or after the date that is 1 
     year after the date of enactment of the Medicare Prescription 
     Drug Coverage Act of 2001 and before January 1, 2004, the 
     capitation rate shall be based on the projected national per 
     capita costs for prescription drug benefits under part D and 
     associated claims processing costs for beneficiaries enrolled 
     under part D and not enrolled with a Medicare+Choice 
     organization under this part.
       ``(B) Drugs dispensed in subsequent years.--In the case of 
     prescription drugs dispensed in 2004 or a subsequent year, 
     the capitation rate shall be equal to the capitation rate for 
     the preceding year increased by the Secretary's estimate of 
     the projected per capita rate of growth in expenditures under 
     this title for an individual enrolled under part D for such 
     subsequent year.''.
       (f) Limitation on Enrollee Liability.--Section 1854(e) of 
     such Act (42 U.S.C. 1395w-24(e)) is amended by adding at the 
     end the following new paragraph:
       ``(5) Special rule for part d benefits.--With respect to 
     outpatient prescription drug benefits under part D, a 
     Medicare+Choice organization may not require that an enrollee 
     pay a deductible or a coinsurance percentage that exceeds the 
     deductible or coinsurance percentage applicable for such 
     benefits for an eligible beneficiary under part D.''.
       (g) Requirement for Additional Benefits.--Section 
     1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is amended 
     by adding at the end the following new sentence: ``Such 
     determination shall be made separately for the benefits under 
     parts A and B and for prescription drug benefits under part 
     D.''.
       (h) Effective Date.--The amendments made by this section 
     shall apply to items and services provided under a 
     Medicare+Choice plan on or after the date that is 1 year 
     after the date of enactment of this Act.

     SEC. 5. EXCLUSION OF PART D COSTS FROM DETERMINATION OF PART 
                   B MONTHLY PREMIUM.

       Section 1839(g) of the Social Security Act (42 U.S.C. 
     1395r(g)) is amended--
       (1) by striking ``attributable to the application of 
     section'' and inserting ``attributable to--
       ``(1) the application of section'';
       (2) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(2) the program under part D providing payment for 
     covered outpatient drugs (including costs associated with 
     making payments to employers and other sponsors of 
     employment-based health care coverage under the Employer 
     Incentive Program under section 1860I).''.

     SEC. 6. ADDITIONAL ASSISTANCE FOR LOW-INCOME BENEFICIARIES.

       (a) Inclusion in Medicare Cost-Sharing.--Section 1905(p)(3) 
     of the Social Security Act (42 U.S.C. 1396d(p)(3)) is 
     amended--
       (1) in subparagraph (A)--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii), by inserting ``and'' at the end; and
       (C) by adding at the end the following new clause:
       ``(iii) premiums under section 1860D.'';
       (2) in subparagraph (B), by striking ``section 1813'' and 
     inserting ``sections 1813 and 1860E(b)''; and
       (3) in subparagraph (C), by striking ``section 1813 and 
     section 1833(b)'' and inserting ``sections 1813, 1833(b), and 
     1860E(a)''.
       (b) Expansion of Medical Assistance.--Section 
     1902(a)(10)(E) of the Social Security Act (42 U.S.C. 
     1396a(a)(10)(E)) is amended--
       (1) in clause (iii)--
       (A) by striking ``section 1905(p)(3)(A)(ii)'' and inserting 
     ``clauses (ii) and (iii) of section 1905(p)(3)(A), for the 
     coinsurance described in section 1860E(b), and for the 
     deductible described in section 1860E(a)''; and
       (B) by striking ``and'' at the end;
       (2) by redesignating clause (iv) as clause (vi); and
       (3) by inserting after clause (iii) the following new 
     clauses:
       ``(iv) for making medical assistance available for Medicare 
     cost-sharing described in section 1905(p)(3)(A)(iii), for the 
     coinsurance described in section 1860E(b), and for the 
     deductible described in section 1860E(a) for individuals who 
     would be qualified Medicare beneficiaries described in 
     section 1905(p)(1) but for the fact that their income exceeds 
     120 percent but does not exceed 135 percent of such official 
     poverty line for a family of the size involved;
       ``(v) for making medical assistance available for Medicare 
     cost-sharing described in section 1905(p)(3)(A)(iii) on a 
     linear sliding scale based on the income of such individuals 
     for individuals who would be qualified Medicare beneficiaries 
     described in section 1905(p)(1) but for the fact that their 
     income exceeds 135 percent but does not exceed 175 percent of 
     such official poverty line for a family of the size involved; 
     and''.
       (c) Nonapplicability of Resource Requirements to Medicare 
     Part D Cost-Sharing.--Section 1905(p)(1) of the Social 
     Security Act (42 U.S.C. 1396d(p)(1)) is amended by adding at 
     the end the following flush sentence:
     ``In determining if an individual is a qualified medicare 
     beneficiary under this paragraph, subparagraph (C) shall not 
     be applied for purposes of providing the individual with 
     medicare cost-sharing that consists of premiums under section 
     1860D, coinsurance described in section 1860E(b), or 
     deductibles described in section 1860E(a).''.
       (d) Nonapplicability of Payment Differential Requirements 
     to Medicare Part D Cost-Sharing.--Section 1902(n)(2) of the 
     Social Security Act (42 U.S.C. 1396a(n)(2)) is amended by 
     adding at the end the following new sentence: ``The preceding 
     sentence shall not apply to coinsurance described in section 
     1860E(b) or deductibles described in section 1860E(a).''.
       (e) 100 Percent Federal Medical Assistance Percentage.--The 
     first sentence of section 1905(b) of the Social Security Act 
     (42 U.S.C. 1396d(b)) is amended--
       (1) by striking ``and'' before ``(3)''; and
       (2) by inserting before the period at the end the 
     following: ``, and (4) the Federal medical assistance 
     percentage shall be 100 percent

[[Page 273]]

     with respect to medical assistance provided under clauses 
     (iv) and (v) of section 1902(a)(10)(E)''.
       (f) Treatment of Territories.--Section 1108(g) of such Act 
     (42 U.S.C. 1308(g)) is amended by adding at the end the 
     following new paragraph:
       ``(3) Notwithstanding the preceding provisions of this 
     subsection, with respect to the first fiscal quarter that 
     begins on or after the date that is 1 year after the date of 
     enactment of the Medicare Prescription Drug Coverage Act of 
     2001 and any fiscal year thereafter, the amount otherwise 
     determined under this subsection (and subsection (f)) for the 
     fiscal year for a Commonwealth or territory shall be 
     increased by the ratio (as estimated by the Secretary) of--
       ``(A) the aggregate amount of payments made to the 50 
     States and the District of Columbia for the fiscal year under 
     title XIX that are attributable to making medical assistance 
     available for individuals described in clauses (i), (iii), 
     (iv), and (v) of section 1902(a)(10)(E) for payment of 
     Medicare cost-sharing that consists of premiums under section 
     1860D, coinsurance described in section 1860E(b), or 
     deductibles described in section 1860E(a); to
       ``(B) the aggregate amount of total payments made to such 
     States and District for the fiscal year under such title.''.
       (g) Conforming Amendments.--Section 1933 of the Social 
     Security Act (42 U.S.C. 1396u-3) is amended--
       (1) in subsection (a), by striking ``section 
     1902(a)(10)(E)(iv)'' and inserting ``section 
     1902(a)(10)(E)(vi)'';
       (2) in subsection (c)(2)(A)--
       (A) in clause (i), by striking ``section 
     1902(a)(10)(E)(iv)(I)'' and inserting ``section 
     1902(a)(10)(E)(vi)(I)''; and
       (B) in clause (ii), by striking ``section 
     1902(a)(10)(E)(iv)(II)'' and inserting ``section 
     1902(a)(10)(E)(vi)(II)'';
       (3) in subsection (d), by striking ``section 
     1902(a)(10)(E)(iv)'' and inserting ``section 
     1902(a)(10)(E)(vi)''; and
       (4) in subsection (e), by striking ``section 
     1902(a)(10)(E)(iv)'' and inserting ``section 
     1902(a)(10)(E)(vi)''.
       (h) Effective Date.--The amendments made by this section 
     shall apply for medical assistance provided under section 
     1902(a)(10)(E) of the Social Security Act (42 U.S.C. 
     1396a(a)(10)(E)) on and after the date that is 1 year after 
     the date of enactment of this Act.

     SEC. 7. MEDIGAP REVISIONS.

       Section 1882 of the Social Security Act (42 U.S.C. 1395ss) 
     is amended by adding at the end the following new subsection:
       ``(v) Modernized Benefit Packages for Medicare Supplemental 
     Policies.--
       ``(1) Promulgation of model regulation.--
       ``(A) NAIC model regulation.--If, within 6 months after the 
     date of enactment of the Medicare Prescription Drug Coverage 
     Act of 2001, the National Association of Insurance 
     Commissioners (in this subsection referred to as the `NAIC') 
     changes the 1991 NAIC Model Regulation (described in 
     subsection (p)) to revise the benefit packages classified as 
     `H', `I', and `J' under the standards established by 
     subsection (p)(2) (including the benefit package classified 
     as `J' with a high deductible feature, as described in 
     subsection (p)(11)) so that--
       ``(i) the coverage for outpatient prescription drugs 
     available under such benefit packages is replaced with 
     coverage for outpatient prescription drugs that compliments 
     but does not duplicate the benefits for outpatient 
     prescription drugs that beneficiaries are otherwise entitled 
     to under this title;
       ``(ii) the revised benefit packages provide a range of 
     coverage options for outpatient prescription drugs for 
     beneficiaries, but do not provide coverage for--

       ``(I) the deductible under section 1860E(a); or
       ``(II) more than 90 percent of the coinsurance applicable 
     to an individual under section 1860E(b);

       ``(iii) uniform language and definitions are used with 
     respect to such revised benefits;
       ``(iv) uniform format is used in the policy with respect to 
     such revised benefits; and
       ``(v) such revised standards meet any additional 
     requirements imposed by the Medicare Prescription Drug 
     Coverage Act of 2001;
     subsection (g)(2)(A) shall be applied in each State, 
     effective for policies issued to policy holders on and after 
     the date that is 1 year after the date of enactment of the 
     Medicare Prescription Drug Coverage Act of 2001, as if the 
     reference to the Model Regulation adopted on June 6, 1979, 
     were a reference to the 1991 NAIC Model Regulation as changed 
     under this subparagraph (such changed regulation referred to 
     in this section as the `2002 NAIC Model Regulation').
       ``(B) Regulation by the secretary.--If the NAIC does not 
     make the changes in the 1991 NAIC Model Regulation within the 
     6-month period specified in subparagraph (A), the Secretary 
     shall promulgate, not later than 6 months after the end of 
     such period, a regulation and subsection (g)(2)(A) shall be 
     applied in each State, effective for policies issued to 
     policy holders on and after the date that is 1 year after the 
     date of enactment of the Medicare Prescription Drug Coverage 
     Act of 2001, as if the reference to the Model Regulation 
     adopted on June 6, 1979, were a reference to the 1991 NAIC 
     Model Regulation as changed by the Secretary under this 
     subparagraph (such changed regulation referred to in this 
     section as the `2002 Federal Regulation').
       ``(C) Consultation with working group.--In promulgating 
     standards under this paragraph, the NAIC or Secretary shall 
     consult with a working group similar to the working group 
     described in subsection (p)(1)(D).
       ``(D) Modification of standards if medicare benefits 
     change.--If benefits (including deductibles and coinsurance) 
     under part D of this title are changed and the Secretary 
     determines, in consultation with the NAIC, that changes in 
     the 2002 NAIC Model Regulation or 2002 Federal Regulation are 
     needed to reflect such changes, the preceding provisions of 
     this paragraph shall apply to the modification of standards 
     previously established in the same manner as they applied to 
     the original establishment of such standards.
       ``(2) Construction of benefits in other medicare 
     supplemental policies.--Nothing in the benefit packages 
     classified as `A' through `G' under the standards established 
     by subsection (p)(2) (including the benefit package 
     classified as `F' with a high deductible feature, as 
     described in subsection (p)(11)) shall be construed as 
     providing coverage for benefits for which payment may be made 
     under part D.
       ``(3) Application of provisions and conforming 
     references.--
       ``(A) Application of provisions.--The provisions of 
     paragraphs (4) through (10) of subsection (p) shall apply 
     under this section, except that--
       ``(i) any reference to the model regulation applicable 
     under that subsection shall be deemed to be a reference to 
     the applicable 2002 NAIC Model Regulation or 2002 Federal 
     Regulation; and
       ``(ii) any reference to a date under such paragraphs of 
     subsection (p) shall be deemed to be a reference to the 
     appropriate date under this subsection.
       ``(B) Other references.--Any reference to a provision of 
     subsection (p) or a date applicable under such subsection 
     shall also be considered to be a reference to the appropriate 
     provision or date under this subsection.''.

     SEC. 8. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE FOR 
                   TRANSPLANT PATIENTS.

       (a) In General.--Section 1861(s)(2)(J) of the Social 
     Security Act (42 U.S.C. 1395x(s)(2)(J)), as amended by 
     section 113(a) of the Medicare, Medicaid, and SCHIP Benefits 
     Improvement and Protection Act of 2000 (as enacted into law 
     by section 1(a)(6) of Public Law 106-554), is amended by 
     striking ``, to an individual who receives'' and all that 
     follows before the semicolon at the end and inserting ``to an 
     individual who has received an organ transplant''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to drugs furnished on or after the date of 
     enactment of this Act.

     SEC. 9. HHS STUDIES AND REPORT TO CONGRESS REGARDING 
                   OUTPATIENT PRESCRIPTION DRUG BENEFIT PROGRAM.

       (a) Studies.--The Secretary of Health and Human Services 
     shall conduct a study on the following:
       (1) Waiver or reduction of late enrollment penalty.--The 
     feasibility and advisability of establishing an annual open 
     enrollment period under the outpatient prescription drug 
     benefit program under part D of title XVIII of the Social 
     Security Act (as added by section 3) in which the late 
     enrollment penalty under section 1860B(a)(2)(A) of the Social 
     Security Act (as so added) would be reduced or would not be 
     applied. Such study shall include a projection of the costs 
     if open enrollment was allowed with a reduced penalty or 
     without a penalty.
       (2) Uniform format for pharmacy benefit cards.--The 
     feasibility and advisability of establishing a uniform format 
     for pharmacy benefit cards provided to beneficiaries by 
     eligible entities under such outpatient prescription drug 
     benefit program.
       (3) Development of systems to electronically transfer 
     prescriptions.--The feasibility and advisability of 
     developing systems to electronically transfer prescriptions 
     under such outpatient prescription drug benefit program from 
     the prescriber to the pharmacist.
       (b) Report.--Not later than 9 months after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall submit to Congress a report on the results of 
     the studies conducted under subsection (a), together with any 
     recommendations for legislation that the Secretary determines 
     to be appropriate as a result of such studies.

     SEC. 10. GAO STUDY AND BIENNIAL REPORTS ON COMPETITION AND 
                   SAVINGS.

       (a) Ongoing Study.--The Comptroller General of the United 
     States shall conduct an ongoing study and analysis of the 
     outpatient prescription drug benefit program under part D of 
     title XVIII of the Social Security Act (as added by section 
     3), including an analysis of--
       (1) the extent to which the competitive bidding process 
     under such program fosters maximum competition and 
     efficiency; and
       (2) the savings to the medicare program resulting from such 
     outpatient prescription drug benefit program, including the 
     reduction in the number or length of hospital visits.

[[Page 274]]

       (b) Initial Report on Competitive Bidding Process.--Not 
     later than 9 months after the date of enactment of this Act, 
     the Comptroller General shall submit to Congress a report on 
     the extent to which the competitive bidding process under the 
     outpatient prescription drug benefit program under part D of 
     title XVIII of the Social Security Act (as added by section 
     3) is expected to foster maximum competition and efficiency.
       (c) Biennial Reports.--Not later than January 1, 2004, and 
     biennially thereafter, the Comptroller General of the United 
     States shall submit to Congress a report on the results of 
     the study conducted under subsection (a), together with any 
     recommendations for legislation that the Comptroller General 
     determines to be appropriate as a result of such study.

     SEC. 11. MEDPAC STUDY AND ANNUAL REPORTS ON THE 
                   PHARMACEUTICAL MARKET, PHARMACIES, AND 
                   BENEFICIARY ACCESS.

       (a) Ongoing Study.--The Medicare Payment Advisory 
     Commission shall conduct an ongoing study and analysis of the 
     outpatient prescription drug benefit program under part D of 
     title XVIII of the Social Security Act (as added by section 
     3), including an analysis of the impact of such program on--
       (1) the pharmaceutical market, including costs and pricing 
     of pharmaceuticals, beneficiary access to such 
     pharmaceuticals, and trends in research and development;
       (2) franchise, independent, and rural pharmacies; and
       (3) beneficiary access to outpatient prescription drugs, 
     including an assessment of--
       (A) out-of-pocket spending;
       (B) generic and brand-name utilization; and
       (C) pharmacists' services.
       (b) Report.--Not later than January 1, 2004, and annually 
     thereafter, the Medicare Payment Advisory Commission shall 
     submit to Congress a report on the results of the study 
     conducted under subsection (a), together with any 
     recommendations for legislation that such Commission 
     determines to be appropriate as a result of such study.

     SEC. 12. APPROPRIATIONS.

       In addition to amounts otherwise appropriated to the 
     Secretary of Health and Human Services, there are authorized 
     to be appropriated to the Secretary for fiscal year 2002 and 
     each subsequent fiscal year such sums as may be necessary to 
     administer the outpatient prescription drug benefit program 
     under part D of title XVIII of the Social Security Act (as 
     added by section 3).
                                 ______
                                 
      By Mrs. HUTCHISON (for herself, Mr. Lott, Mr. Brownback, Mr. 
        Nickles, Mr. Kyl, Mr. Murkowski, Mr. Allen, Mr. Gramm, Mr. 
        Crapo, Mr. Warner, Mr. Hagel, Mr. Bunning, Mr. Frist, Mr. 
        McConnell, Mr. Burns, Mr. Ensign, Mr. Helms, and Mr. Craig):
  S. 11. A bill to amend the Internal Revenue Code of 1986 to eliminate 
the marriage penalty by providing that the income tax rate bracket 
amounts, and the amount of the standard deduction, for joint returns 
shall be twice the amounts applicable to unmarried individuals, and for 
other purposes; to the Committee on Finance.


                      marriage penalty legislation

  Mrs. HUTCHISON. Mr. President, for 4 years now, I have introduced a 
bill to eliminate the marriage penalty tax. I have said all of these 
years that I do not think Americans should have to choose between love 
and money. They should be able to get married and not be penalized 
because they do. But in fact 25 million married couples in America 
today do pay a penalty just because they got married. The sad thing is, 
the average penalty they pay is about $1,400. That is $1,400 that a 
young couple would like to have as they are starting their lives 
together, for the things they want: Like the down payment on the new 
house or the new car or the expenses associated with having children. 
We want them to be able to have the money they earn to make their 
choices rather than having Uncle Sam take $1,400 more just because of 
what amounts to a glitch in the Tax Code that requires these married 
couples to pay this penalty.
  The bill I have just introduced today, S. 11, is cosponsored by 
Senators Brownback, Lott, Nickles, Allen, Bunning, Burns, Crapo, Frist, 
Gramm, Hagel, Kyl, Ensign, McConnell, Murkowski and Warner.
  This is a bill that I hope will have broad bipartisan support 
because, in fact, we have passed it twice and sent it to the President 
with bipartisan majorities in the past. The President has chose to veto 
the bills before, but today we have a new President who I believe will 
sign marriage penalty relief. It was part of President Bush's campaign. 
When we send him Marriage penalty relief for the third time in a 
bipartisan way in Congress, I believe President Bush will sign it.
  I am very pleased this bill will double the standard deduction for 
married couples. Today, if you get married the standard deduction that 
two single people would have is not double. We want to double the 
standard deduction. Two people getting married who have two incomes but 
do not itemize would receive a increase of $1,500 in their standard 
deduction. That is what we want to do.
  Secondly, we will double each tax bracket for married couples filing 
a joint return. For example, if a couple is in the 15-percent income 
tax bracket but they get married and are thrown into the 30-percent 
bracket, we want to provide them relief such that they will effectively 
remain in the 15 percent bracket. This bill would widen the 15-percent 
bracket by $9,000 for married couples.
  Congress passed this legislation, and it was vetoed. Today, I am 
introducing this bill. I know we are going to pass it in this Congress, 
and I know it will be signed. This is the beginning of a new day in our 
United States of America, and we are going to eliminate the marriage 
penalty this year. I will count on it.
  Mr. BURNS. Mr. President, I rise in support of legislation my 
colleague from Texas introduced today that will put an end to the 
``marriage penalty'' tax. Mr. President, we've been fighting this tax 
inequity for several years now. The people of Montana have spoken to me 
either through letters or conversation--they think this tax is unfair.
  When we first started working to resolve this issue, I was contacted 
by Joshua and Jody Hayes of Billings, Montana. The Hayes paid $971 more 
in taxes because they were married than they would have paid if they 
remained single.
  In Montana, it is estimated that nearly 90,000 couples are penalized 
by this tax to the tune of $51.5 million--solely for being married. 
Making a living--supporting a family--is a difficult task in today's 
fast paced economy. A young couple married today is immediately subject 
to an additional financial burden because they want to share their 
lives together. The federal tax system penalizes these young couples. 
These are not wealthy people--this effort to provide tax relief does 
not discriminate--this effort does not single out a specific income 
group. It is a tax on families.
  I, along with my Republican colleagues, have made it clear that 
continued tax reform and tax relief is necessary, but I can think of no 
other tax that has such a dramatic impact on so many people.
  If ever there was a disincentive to be married, this penalty would be 
it. I believe this, along with the estate tax, is one of the most 
unfair taxes on Americans. It is not right for people to be penalized 
with higher taxes simply because they choose to get married.
  According to the Congressional Budget Office (CBO), almost half of 
all married couples pay higher taxes due to their marital status. 
Cumulatively, the marriage penalty increases taxes on affected couples 
by $29 billion per year. Currently, this tax penalty imposes an average 
additional tax of $1400 on 21 million married couples nationwide.
  Mr. President, the marriage penalty can have significantly negative 
economic implications for the country as a whole as well. Not only does 
this penalty within the tax system stand as a likely obstacle to 
marriage, it can actually discourage a spouse from entering the 
workforce.
  By adding together husband and wife under the rate schedule, tax laws 
both encourage families to identify a primary and secondary worker and 
then place an extra burden on the secondary worker because his or her 
wages come on top of the primary earner's wages.
  As the American family realizes lower income levels, the nation 
realizes lower economic output. From a strictly economic perspective, 
the fact that potential workers would avoid the labor force as a result 
of a tax penalty is a clear sign of a failure to maximize true

[[Page 275]]

economic output. As a result, the nation as a whole fails to reach its 
economic potential, which is demonstrated by decreased earnings and 
international competitiveness.
  Whereas I am very disappointed President Clinton has vetoed this 
initiative in the past, I am confident our new President will support 
America's families.
  Congress has momentum considering this body has already passed this 
legislation to correct this inequity. I encourage my colleagues to 
support this legislation to repeal the marriage penalty.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Leahy, Mr. Schumer, Mr. Durbin, 
        Mrs. Boxer, Mr. Breaux, Mrs. Clinton, Mr. Corzine, Mr. 
        Rockefeller, Mr. Levin, and Mr. Johnson):
  S. 16. A bill to improve law enforcement, crime prevention, and 
victim assistance in the 21st century; to the Committee on the 
Judiciary.


21st Century Law Enforcement, Crime Prevention, and Victims Assistance 
                                  Act

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

                                 S. 16

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``21st 
     Century Law Enforcement, Crime Prevention, and Victims 
     Assistance Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.

TITLE I--SUPPORTING LAW ENFORCEMENT AND THE EFFECTIVE ADMINISTRATION OF 
                                JUSTICE

              Subtitle A--Support for Community Personnel

Sec. 1101. 21st Century Community Policing Initiative.

   Subtitle B--Protecting Federal, State, and Local Law Enforcement 
                       Officers and the Judiciary

Sec. 1201. Expansion of protection of Federal officers and employees 
              from murder due to their status.
Sec. 1202. Assaulting, resisting, or impeding certain officers or 
              employees.
Sec. 1203. Influencing, impeding, or retaliating against a Federal 
              official by threatening a family member.
Sec. 1204. Mailing threatening communications.
Sec. 1205. Amendment of the sentencing guidelines for assaults and 
              threats against Federal judges and certain other Federal 
              officials and employees.
Sec. 1206. Killing persons aiding Federal investigations or State 
              correctional officers.
Sec. 1207. Killing State correctional officers.
Sec. 1208. Establishment of protective function privilege.

   Subtitle C--Disarming Felons and Protecting Children From Violence

                   Part 1--Extension of Project Exile

Sec. 1311. Authorization of funding for additional State and local gun 
              prosecutors.
Sec. 1312. Authorization of funding for additional Federal firearms 
              prosecutors and gun enforcement teams.

    Part 2--Expansion of the Youth Crime Gun Interdiction Initiative

Sec. 1321. Youth Crime Gun Interdiction Initiative.

                          Part 3--Gun Offenses

Sec. 1331. Gun ban for dangerous juvenile offenders.
Sec. 1332. Improving firearms safety.
Sec. 1333. Juvenile handgun safety.
Sec. 1334. Serious juvenile drug offenses as armed career criminal 
              predicates.
Sec. 1335. Increased penalty for transferring a firearm to a minor for 
              use in crime of violence or drug trafficking crime.
Sec. 1336. Increased penalty for firearms conspiracy.

                 Part 4--Closing the Gun Show Loophole

Sec. 1341. Extension of Brady background checks to gun shows.

Subtitle D--Assistance to States for Prosecuting and Punishing Juvenile 
                 Offenders, and Reducing Juvenile Crime

Sec. 1401. Juvenile and violent offender incarceration grants.
Sec. 1402. Certain punishment and graduated sanctions for youth 
              offenders.
Sec. 1403. Pilot program to promote replication of recent successful 
              juvenile crime reduction strategies.
Sec. 1404. Reimbursement of States for costs of incarcerating juvenile 
              alien offenders.

     Subtitle E--Ballistics, Law Assistance, and Safety Technology

Sec. 1501. Short title.
Sec. 1502. Purposes.
Sec. 1503. Definition of ballistics.
Sec. 1504. Test firing and automated storage of ballistics records.
Sec. 1505. Privacy rights of law abiding citizens.
Sec. 1506. Demonstration firearm crime reduction strategy.

           Subtitle F--Offender Reentry and Community Safety

Sec. 1601. Short title.
Sec. 1602. Findings.
Sec. 1603. Purposes.

             Part 1--Federal Reentry Demonstration Projects

Sec. 1611. Federal reentry center demonstration.
Sec. 1612. Federal high-risk offender reentry demonstration.
Sec. 1613. District of Columbia Intensive Supervision, Tracking, and 
              Reentry Training (DC iSTART) Demonstration.
Sec. 1614. Federal Intensive Supervision, Tracking, and Reentry 
              Training (FED iSTART) Demonstration.
Sec. 1615. Federal enhanced in-prison vocational assessment and 
              training and demonstration.
Sec. 1616. Research and reports to Congress.
Sec. 1617. Definitions.
Sec. 1618. Authorization of appropriations.

                  Part 2--State Reentry Grant Programs

Sec. 1621. Amendments to the Omnibus Crime Control and Safe Streets Act 
              of 1968.

           TITLE II--STRENGTHENING THE FEDERAL CRIMINAL LAWS

                  Subtitle A--Combating Gang Violence

         Part 1--Enhanced Penalties for Gang-related Activities

Sec. 2101. Gang franchising.
Sec. 2102. Enhanced penalty for use or recruitment of minors in gangs.
Sec. 2103. Gang franchising as a RICO predicate.
Sec. 2104. Increase in offense level for participation in crime as gang 
              member.
Sec. 2105. Enhanced penalty for discharge of firearms in relation to 
              counts of violence or drug trafficking crimes.
Sec. 2106. Punishment of arson or bombing at facilities receiving 
              Federal financial assistance.
Sec. 2107. Elimination of statute of limitations for murder.
Sec. 2108. Extension of statute of limitations for violent and drug 
              trafficking crimes.
Sec. 2109. Increased penalties under the RICO law for gang and violent 
              crimes.
Sec. 2110. Increased penalty and broadened scope of statute against 
              violent crimes in aid of racketeering.
Sec. 2111. Facilitating the prosecution of carjacking offenses.
Sec. 2112. Facilitation of RICO prosecutions.
Sec. 2113. Assault as a RICO predicate.
Sec. 2114. Expansion of definition of ``racketeering activity'' to 
              affect gangs in Indian country.
Sec. 2115. Increased penalties for violence in the course of riot 
              offenses.
Sec. 2116. Expansion of Federal jurisdiction over crimes occurring in 
              private penal facilities housing Federal prisoners or 
              prisoners from other States.

              Part 2--Targeting Gang-related Gun Offenses

Sec. 2121. Transfer of firearm to commit a crime of violence.
Sec. 2122. Increased penalty for knowingly receiving firearm with 
              obliterated serial number.



Sec. 2123. Amendment of the sentencing guidelines for transfers of 
              firearms to prohibited persons.

  Part 3--Using and Protecting Witnesses to Help Prosecute Gangs and 
                        Other Violent Criminals

Sec. 2131. Interstate travel to engage in witness intimidation or 
              obstruction of justice.
Sec. 2132. Expanding pretrial detention eligibility for serious gang 
              and other violent criminals.
Sec. 2133. Conspiracy penalty for obstruction of justice offenses 
              involving victims, witnesses, and informants.
Sec. 2134. Allowing a reduction of sentence for providing useful 
              investigative information although not regarding a 
              particular individual.
Sec. 2135. Increasing the penalty for using physical force to tamper 
              with witnesses, victims, or informants.

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Sec. 2136. Expansion of Federal kidnapping offense to cover when death 
              of victim occurs before crossing State line and when 
              facility in interstate commerce or the mails are used.
Sec. 2137. Assaults or other crimes of violence for hire.
Sec. 2138. Clarification of interstate threat statute to cover threats 
              to kill.
Sec. 2139. Conforming amendment to law punishing obstruction of justice 
              by notification of existence of a subpoena for records in 
              certain types of investigations.

                       Part 4--Gang Paraphernalia

Sec. 2141. Streamlining procedures for law enforcement access to clone 
              numeric pagers.
Sec. 2142. Sentencing enhancement for using body armor in commission of 
              a felony.
Sec. 2143. Sentencing enhancement for using laser sighting devices in 
              commission of a felony.
Sec. 2144. Government access to location information.
Sec. 2145. Limitation on obtaining transactional information from pen 
              registers or trap and trace devices.

                 Subtitle B--Combating Money Laundering

Sec. 2201. Short title.
Sec. 2202. Illegal money transmitting businesses.
Sec. 2203. Restraint of assets of persons arrested abroad.
Sec. 2204. Civil money laundering jurisdiction over foreign persons.
Sec. 2205. Punishment of laundering money through foreign banks.
Sec. 2206. Addition of serious foreign crimes to list of money 
              laundering predicates.
Sec. 2207. Criminal forfeiture for money laundering conspiracies.
Sec. 2208. Fungible property in foreign bank accounts.
Sec. 2209. Admissibility of foreign business records.
Sec. 2210. Charging money laundering as a course of conduct.
Sec. 2211. Venue in money laundering cases.
Sec. 2212. Technical amendment to restore wiretap authority for certain 
              money laundering offenses.
Sec. 2213. Criminal penalties for violations of anti-money laundering 
              orders.
Sec. 2214. Encouraging financial institutions to notify law enforcement 
              authorities of suspicious financial transactions.
Sec. 2215. Coverage of foreign bank branches in the territories.
Sec. 2216. Conforming statute of limitations amendment for certain bank 
              fraud offenses.
Sec. 2217. Jurisdiction over certain financial crimes committed abroad.
Sec. 2218. Knowledge that the property is the proceeds of a felony.
Sec. 2219. Money laundering transactions; commingled accounts.
Sec. 2220. Laundering the proceeds of terrorism.
Sec. 2221. Violations of section 6050i.
Sec. 2222. Including agencies of tribal governments in the definition 
              of a financial institution.
Sec. 2223. Penalties for violations of geographic targeting orders and 
              certain recordkeeping requirements.

                    Subtitle C--Antidrug Provisions

Sec. 2301. Amendments concerning temporary emergency scheduling.
Sec. 2302. Amendment to reporting requirement for transactions 
              involving certain listed chemicals.
Sec. 2303. Drug paraphernalia.
Sec. 2304. Counterfeit substances/imitation controlled substances.
Sec. 2305. Conforming amendment concerning marijuana plants.
Sec. 2306. Serious juvenile drug trafficking offenses as armed career 
              criminal act predicates.
Sec. 2307. Increased penalties for using Federal property to grow or 
              manufacture controlled substances.
Sec. 2308. Clarification of length of supervised release terms in 
              controlled substance cases.
Sec. 2309. Supervised release period after conviction for continuing 
              criminal enterprise.
Sec. 2310. Technical correction to ensure compliance of sentencing 
              guidelines with provisions of all Federal statutes.
Sec. 2311. Import and export of chemicals used to produce illicit 
              drugs.

                   Subtitle D--Deterring Cargo Theft

Sec. 2351. Punishment of cargo theft.
Sec. 2352. Reports to Congress on cargo theft.
Sec. 2353. Establishment of Advisory Committee on Cargo Theft.
Sec. 2354. Addition of attempted theft and counterfeiting offenses to 
              eliminate gaps and inconsistencies in coverage.
Sec. 2355. Clarification of scienter requirement for receiving property 
              stolen from an Indian tribal organization.
Sec. 2356. Larceny involving post office boxes and postal stamp vending 
              machines.
Sec. 2357. Expansion of Federal theft offenses to cover theft of 
              vessels.

            Subtitle E--Improvements to Federal Criminal Law

                    Part 1--Sentencing Improvements

Sec. 2411. Application of sentencing guidelines to all pertinent 
              statutes.
Sec. 2412. Doubling maximum penalty for voluntary manslaughter.
Sec. 2413. Authorization of imposition of both a fine and imprisonment 
              rather than only either penalty in certain offenses.
Sec. 2414. Addition of supervised release violation as predicates for 
              certain offenses.
Sec. 2415. Authority of court to impose a sentence of probation or 
              supervised release when reducing a sentence of 
              imprisonment in certain cases.
Sec. 2416. Elimination of proof of value requirement for felony theft 
              or conversion of grand jury material.
Sec. 2417. Increased maximum corporate penalty for antitrust 
              violations.
Sec. 2418. Amendment of Federal sentencing guidelines for counterfeit 
              bearer obligations of the United States.

        Part 2--Additional Improvements to Federal Criminal Law

Sec. 2421. Violence directed at dwellings in Indian country.
Sec. 2422. Corrections to Amber Hagerman Child Protection Act.
Sec. 2423. Elimination of ``bodily harm'' element in assault with a 
              dangerous weapon offense.
Sec. 2424. Appeals from certain dismissals.
Sec. 2425. Authority for injunction against disposal of ill-gotten 
              gains from violations of fraud statutes.
Sec. 2426. Expansion of interstate travel fraud statute to cover 
              interstate travel by perpetrator.
Sec. 2427. Clarification of scope of unauthorized selling of military 
              medals or decorations.
Sec. 2428. Amendment to section 669 to conform to Public Law 104-294.
Sec. 2429. Expansion of jurisdiction over child buying and selling 
              offenses.
Sec. 2430. Limits on disclosure of wiretap orders.
Sec. 2431. Prison credit and aging prisoner reform.
Sec. 2432. Miranda reaffirmation.

    TITLE III--PROTECTING AMERICANS AND SUPPORTING VICTIMS OF CRIME

                  Subtitle A--Crime Victims Assistance

Sec. 3101. Short title.

                         Part 1--Victim Rights

Sec. 3111. Right to notice and to be heard concerning detention.
Sec. 3112. Right to a speedy trial.
Sec. 3113. Right to notice and to be heard concerning plea.
Sec. 3114. Enhanced participatory rights at trial.
Sec. 3115. Right to notice and to be heard concerning sentence.
Sec. 3116. Right to notice and to be heard concerning sentence 
              adjustment.
Sec. 3117. Right to notice of release or escape.
Sec. 3118. Right to notice and to be heard concerning executive 
              clemency.
Sec. 3119. Remedies for noncompliance.

                 Part 2--Victim Assistance Initiatives

Sec. 3121. Pilot programs to establish ombudsman programs for crime 
              victims.
Sec. 3122. Amendments to Victims of Crime Act of 1984.
Sec. 3123. Increased training for law enforcement officers and court 
              personnel to respond to the needs of crime victims.
Sec. 3124. Increased resources to develop State-of-the-art systems for 
              notifying crime victims of important dates and 
              developments.

       Part 3--Victim-offender Programs: ``Restorative Justice''

Sec. 3131. Pilot program and study on effectiveness of restorative 
              justice approach on behalf of victims of crime.

          Subtitle B--Violence Against Women Act Enhancements

Sec. 3201. Shelter services for battered women and children.
Sec. 3202. Transitional housing assistance for victims of domestic 
              violence.
Sec. 3203. Family unity demonstration project.

                       Subtitle C--Senior Safety

Sec. 3301. Short title.
Sec. 3302. Findings and purposes.
Sec. 3303. Definitions.

                Part 1--Combating Crimes Against Seniors

Sec. 3311. Enhanced sentencing penalties based on age of victim.

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Sec. 3312. Study and report on health care fraud sentences.
Sec. 3313. Increased penalties for fraud resulting in serious injury or 
              death.
Sec. 3314. Safeguarding pension plans from fraud and theft.
Sec. 3315. Additional civil penalties for defrauding pension plans.
Sec. 3316. Punishing bribery and graft in connection with employee 
              benefit plans.

                 Part 2--Preventing Telemarketing Fraud

Sec. 3321. Centralized complaint and consumer education service for 
              victims of telemarketing fraud.
Sec. 3322. Blocking of telemarketing scams.

                  Part 3--Preventing Health Care Fraud

Sec. 3331. Injunctive authority relating to false claims and illegal 
              kickback schemes involving Federal health care programs.
Sec. 3332. Authorized investigative demand procedures.
Sec. 3333. Extending antifraud safeguards to the Federal employee 
              health benefits program.
Sec. 3334. Grand jury disclosure.
Sec. 3335. Increasing the effectiveness of civil investigative demands 
              in false claims investigations.

         Part 4--Protecting the Rights of Elderly Crime Victims

Sec. 3341. Use of forfeited funds to pay restitution to crime victims 
              and regulatory agencies.
Sec. 3342. Victim restitution.
Sec. 3343. Bankruptcy proceedings not used to shield illegal gains from 
              false claims.
Sec. 3344. Forfeiture for retirement offenses.

             Subtitle D--Violent Crime Reduction Trust Fund

Sec. 3401. Extension of violent crime reduction trust fund.

           TITLE IV--BREAKING THE CYCLE OF DRUGS AND VIOLENCE

  Subtitle A--Drug Courts, Drug Treatment, and Alternative Sentencing

                    Part 1--Expansion of Drug Courts

Sec. 4111. Reauthorization of drug courts program.
Sec. 4112. Juvenile drug courts.

                  Part 2--Zero Tolerance Drug Testing

Sec. 4121. Grant authority.
Sec. 4122. Administration.
Sec. 4123. Applications.
Sec. 4124. Federal share.
Sec. 4125. Geographic distribution.
Sec. 4126. Technical assistance, training, and evaluation.
Sec. 4127. Authorization of appropriations.
Sec. 4128. Permanent set-aside for research and evaluation.
Sec. 4129. Additional requirements for the use of funds under the 
              violent offender incarceration and truth-in-sentencing 
              grant programs.

                         Part 3--Drug Treatment

Sec. 4131. Drug treatment alternative to prison programs administered 
              by State or local prosecutors.
Sec. 4132. Substance abuse treatment in Federal prisons 
              reauthorization.
Sec. 4133. Residential substance abuse treatment for State prisoners 
              reauthorization
Sec. 4134. Drug treatment for juveniles.

            Part 4--Funding for Drug Free Community Programs

Sec. 4141. Extension of safe and drug-free schools and communities 
              program.
Sec. 4142. Say No to Drugs community centers.
Sec. 4143. Drug education and prevention relating to youth gangs.
Sec. 4144. Drug education and prevention program for runaway and 
              homeless youth.

         Subtitle B--Youth Crime Prevention and Juvenile Courts

                 Part 1--Grants to Youth Organizations

Sec. 4211. Grant program.
Sec. 4212. Grants to national organizations.
Sec. 4213. Grants to States.
Sec. 4214. Allocation; grant limitation.
Sec. 4215. Report and evaluation.
Sec. 4216. Authorization of appropriations.
Sec. 4217. Grants to public and private agencies.

   Part 2--Reauthorization of Incentive Grants for Local Delinquency 
                          Prevention Programs

Sec. 4221. Incentive grants for local delinquency prevention programs.
Sec. 4222. Research, evaluation, and training.

                           Part 3--Jump Ahead

Sec. 4231. Short title.
Sec. 4232. Findings.
Sec. 4233. Juvenile mentoring grants.
Sec. 4234. Implementation and evaluation grants.
Sec. 4235. Evaluations; reports.

                       Part 4--Truancy Prevention

Sec. 4241. Short title.
Sec. 4242. Findings.
Sec. 4243. Grants.

     Part 5--Juvenile Crime Control and Delinquency Prevention Act

Sec. 4251. Short title.
Sec. 4252. Findings.
Sec. 4253. Purpose.
Sec. 4254. Definitions.
Sec. 4255. Name of office.
Sec. 4256. Concentration of Federal effort.
Sec. 4257. Allocation.
Sec. 4258. State plans.
Sec. 4259. Juvenile delinquency prevention block grant program.
Sec. 4260. Research; evaluation; technical assistance; training.
Sec. 4261. Demonstration projects.
Sec. 4262. Authorization of appropriations.
Sec. 4263. Administrative authority.
Sec. 4264. Use of funds.
Sec. 4265. Limitation on use of funds.
Sec. 4266. Rules of construction.
Sec. 4267. Leasing surplus Federal property.
Sec. 4268. Issuance of rules.
Sec. 4269. Technical and conforming amendments.
Sec. 4270. References.

             Part 6--Local Gun Violence Prevention Programs

Sec. 4271. Competitive grants for children's firearm safety education.
Sec. 4272. Dissemination of best practices via the Internet.
Sec. 4273. Grant priority for tracing of guns used in crimes by 
              juveniles.

TITLE I--SUPPORTING LAW ENFORCEMENT AND THE EFFECTIVE ADMINISTRATION OF 
                                JUSTICE

              Subtitle A--Support for Community Personnel

     SEC. 1101. 21ST CENTURY COMMUNITY POLICING INITIATIVE.

       (a) COPS Program.--Section 1701(a) of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796dd(a)) is amended by--
       (1) inserting ``and prosecutor'' after ``increase police''; 
     and
       (2) inserting ``to enhance law enforcement access to new 
     technologies, and'' after ``presence,''.
       (b) Hiring and Redeployment Grant Projects.--Section 
     1701(b) of title I of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3796dd(b)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``and'' at the end of subparagraph (B) and 
     inserting after ``Nation,'' ``or pay overtime to existing 
     career law enforcement officers;'';
       (B) by striking the period at the end of subparagraph (C) 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(D) promote higher education among inservice State and 
     local law enforcement officers by reimbursing them for the 
     costs associated with seeking a college or graduate school 
     education.''; and
       (2) in paragraph (2), by striking all that follows 
     ``Support systems.--'' and inserting ``Grants pursuant to 
     paragraph (1)(A) for overtime may not exceed 25 percent of 
     the funds available for grants pursuant to this subsection 
     for any fiscal year; grants pursuant to paragraph (1)(C) may 
     not exceed 20 percent of the funds available for grants 
     pursuant to this subsection in any fiscal year, and grants 
     pursuant to paragraph (1)(D) may not exceed 5 percent of the 
     funds available for grants pursuant to this subsection for 
     any fiscal year.''.
       (c) Additional Grant Projects.--Section 1701(d) of title I 
     of the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd(d)) is amended--
       (1) in paragraph (2)--
       (A) by inserting ``integrity and ethics'' after 
     ``specialized''; and
       (B) by inserting ``and'' after ``enforcement officers'';
       (2) in paragraph (7), by inserting ``school officials, 
     religiously affiliated organizations,'' after ``enforcement 
     officers'';
       (3) by striking paragraph (8) and inserting the following:
       ``(8) establish school-based partnerships between local law 
     enforcement agencies and local school systems, by using 
     school resource officers who operate in and around elementary 
     and secondary schools to serve as a law enforcement liaison 
     with other Federal, State, and local law enforcement and 
     regulatory agencies, combat school-related crime and disorder 
     problems, gang membership and criminal activity, firearms and 
     explosives-related incidents, illegal use and possession of 
     alcohol and illegal possession, use, and distribution of 
     drugs;'';
       (4) in paragraph (10), by striking ``and'' at the end;
       (5) in paragraph (11), by striking the period that appears 
     at the end and inserting a semicolon; and
       (6) by adding at the end the following:
       ``(12) develop and implement innovative programs (such as 
     the TRIAD program) that bring together a community's sheriff, 
     chief of police, and elderly residents to address the public 
     safety concerns of older citizens; and
       ``(13) assist State, local, or tribal prosecutors' offices 
     in the implementation of community-based programs that build 
     on local community efforts through the--
       ``(A) hiring of additional indigent defense attorneys to be 
     assigned to community programs; and

[[Page 278]]

       ``(B) establishment of programs to assist local indigent 
     defense offices in the implementation of programs that help 
     them identify and respond to priority needs of a community 
     with specifically tailored solutions.''.

       (d) Technical Assistance.--Section 1701(f) of title I of 
     the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd(f)) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``use up to 5 percent of the funds 
     appropriated under subsection (a) to'' after ``The Attorney 
     General may'';
       (B) by inserting at the end the following: ``In addition, 
     the Attorney General may use up to 5 percent of the funds 
     appropriated under subsections (d), (e), and (f) for 
     technical assistance and training to States, units of local 
     government, Indian tribal governments, and to other public 
     and private entities for those respective purposes,'';
       (2) in paragraph (2), by inserting ``under subsection (a)'' 
     after ``the Attorney General''; and
       (3) in paragraph (3)--
       (A) by striking ``the Attorney General may'' and inserting 
     ``the Attorney General shall'';
       (B) by inserting ``regional community policing institutes'' 
     after ``operation of''; and
       (C) by inserting ``representatives of police labor and 
     management organizations, community residents,'' after 
     ``supervisors,''.
       (e) Technology and Prosecution Programs.--Section 1701 of 
     title I of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3796dd) is amended by--
       (1) striking subsection (k);
       (2) redesignating subsections (f) through (j) as 
     subsections (g) through (k), respectively; and
       (3) striking subsection (e) and inserting the following:
       ``(e) Law Enforcement Technology Program.--Grants made 
     under subsection (a) may be used to assist police 
     departments, in employing professional, scientific, and 
     technological advancements that will help them--
       ``(1) improve police communications through the use of 
     wireless communications, computers, software, videocams, 
     databases, and other hardware and software that allow law 
     enforcement agencies to communicate more effectively across 
     jurisdictional boundaries and effectuate interoperability;
       ``(2) develop and improve access to crime-solving 
     technologies, including DNA analysis, photo enhancement, 
     voice recognition, and other forensic capabilities; and
       ``(3) promote comprehensive crime analysis by utilizing new 
     techniques and technologies, such as crime mapping, that 
     allow law enforcement agencies to use real-time crime and 
     arrest data and other related information, including non-
     criminal justice data, to improve their ability to analyze, 
     predict, and respond proactively to local crime and disorder 
     problems, as well as to engage in regional crime analysis.
       ``(f) Community-Based Prosecution Program.--Grants made 
     under subsection (a) may be used to assist State, local, or 
     tribal prosecutors' offices in the implementation of 
     community-based prosecution programs that build on local 
     community policing efforts. Funds made available under this 
     subsection may be used to--
       ``(1) hire additional prosecutors who will be assigned to 
     community prosecution programs, including (but not limited 
     to) programs that assign prosecutors to handle cases from 
     specific geographic areas, to address specific violent crime 
     and other local crime problems (including intensive illegal 
     gang, gun, and drug enforcement projects and quality of life 
     initiatives), and to address localized violent and other 
     crime problems based on needs identified by local law 
     enforcement agencies, community organizations, and others;
       ``(2) redeploy existing prosecutors to community 
     prosecution programs as described in paragraph (1) of this 
     section by hiring victim and witness coordinators, 
     paralegals, community outreach, and other such personnel; and
       ``(3) establish programs to assist local prosecutors' 
     offices in the implementation of programs that help them 
     identify and respond to priority crime problems in a 
     community with specifically tailored solutions.
     At least 75 percent of the funds made available under this 
     subsection shall be reserved for grants under paragraphs (1) 
     and (2) and of those amounts no more than 10 percent may be 
     used for grants under paragraph (2) and at least 25 percent 
     of the funds shall be reserved for grants under paragraphs 
     (1) and (2) to units of local government with a population of 
     less than 50,000.''.
       (f) Retention Grants.--Section 1703 of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796dd-2) is amended by inserting at the end the following:
       ``(d) Retention Grants.--The Attorney General may use no 
     more than 50 percent of the funds under subsection (a) to 
     award grants targeted specifically for retention of police 
     officers to grantees in good standing, with preference to 
     those that demonstrate financial hardship or severe budget 
     constraint that impacts the entire local budget and may 
     result in the termination of employment for police officers 
     funded under subsection (b)(1).''.
       (g) Hiring Costs.--Section 1704(c) of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3796dd-3(c)) is amended by striking ``$75,000'' and inserting 
     ``$125,000''.
       (h) Definitions.--
       (1) Career law enforcement officer.--Section 1709(1) of 
     title I of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3796dd-8) is amended by inserting after 
     ``criminal laws'' the following: ``including sheriffs' 
     deputies charged with supervising offenders who are released 
     into the community but also engaged in local community 
     policing efforts.''.
       (2) School resource officer.--Section 1709(4) of title I of 
     the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3796dd-8) is amended--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) to serve as a law enforcement liaison with other 
     Federal, State, and local law enforcement and regulatory 
     agencies, to address and document crime and disorder problems 
     including gangs and drug activities, firearms and explosives-
     related incidents, and illegal use and possession of alcohol 
     affecting or occurring in or around an elementary or 
     secondary school;'';
       (B) by striking subparagraph (E) and inserting the 
     following:
       ``(E) to train students in conflict resolution, restorative 
     justice, and crime awareness, and to provide assistance to 
     and coordinate with other officers, mental health 
     professionals, and youth counselors who are responsible for 
     the implementation of prevention/intervention programs within 
     the schools;''; and
       (C) by adding at the end the following:
       ``(H) to work with school administrators, members of the 
     local parent teacher associations, community organizers, law 
     enforcement, fire departments, and emergency medical 
     personnel in the creation, review, and implementation of a 
     school violence prevention plan;
       ``(I) to assist in documenting the full description of all 
     firearms found or taken into custody on school property and 
     to initiate a firearms trace and ballistics examination for 
     each firearm with the local office of the Bureau of Alcohol, 
     Tobacco, and Firearms;
       ``(J) to document the full description of all explosives or 
     explosive devices found or taken into custody on school 
     property and report to the local office of the Bureau of 
     Alcohol, Tobacco, and Firearms; and
       ``(K) to assist school administrators with the preparation 
     of the Department of Education, Annual Report on State 
     Implementation of the Gun-Free Schools Act which tracks the 
     number of students expelled per year for bringing a weapon, 
     firearm, or explosive to school.''.
       (i) Authorization of Appropriations.--Section 1001(a)(11) 
     of title I of the Omnibus Crime Control and Safe Streets Act 
     of 1968 (42 U.S.C. 3793(a)(11)) is amended--
       (1) by amending subparagraph (A) to read as follows:
       ``(A) There are authorized to be appropriated to carry out 
     part Q, to remain available until expended--
       ``(i) $1,150,000,000 for fiscal year 2002;
       ``(ii) $1,150,000,000 for fiscal year 2003;
       ``(iii) $1,150,000,000 for fiscal year 2004;
       ``(iv) $1,150,000,000 for fiscal year 2005;
       ``(v) $1,150,000,000 for fiscal year 2006; and
       ``(vi) $1,150,000,000 for fiscal year 2007.''; and
       (2) in subparagraph (B)--
       (A) by striking ``3 percent'' and inserting ``5 percent'';
       (B) by striking ``85 percent'' and inserting 
     ``$600,000,000''; and
       (C) by striking ``1701(b),'' and all that follows through 
     ``of part Q'' and inserting the following: ``1701 (b) and 
     (c), $350,000,000 to grants for the purposes specified in 
     section 1701(f), and $200,000,000 to grants for the purposes 
     specified in section 1701(g).''.

   Subtitle B--Protecting Federal, State, and Local Law Enforcement 
                       Officers and the Judiciary

     SEC. 1201. EXPANSION OF PROTECTION OF FEDERAL OFFICERS AND 
                   EMPLOYEES FROM MURDER DUE TO THEIR STATUS.

       Section 1114 of title 18, United States Code, is amended--
       (1) by inserting ``or because of the status of the victim 
     as such an officer or employee,'' after ``on account of the 
     performance of official duties,''; and
       (2) by inserting ``or, if the person assisting is an 
     officer or employee of a State or local government, because 
     of the status of the victim as such an officer or employee,'' 
     after ``on account of that assistance,''.

     SEC. 1202. ASSAULTING, RESISTING, OR IMPEDING CERTAIN 
                   OFFICERS OR EMPLOYEES.

       Section 111 of title 18, United States Code, is amended--
       (1) in subsection (a), by striking ``three'' and inserting 
     ``12''; and
       (2) in subsection (b), by striking ``ten'' and inserting 
     ``20''.

     SEC. 1203. INFLUENCING, IMPEDING, OR RETALIATING AGAINST A 
                   FEDERAL OFFICIAL BY THREATENING A FAMILY 
                   MEMBER.

       Section 115(b)(4) of title 18, United States Code, is 
     amended--

[[Page 279]]

       (1) by striking ``five'' and inserting ``10''; and
       (2) by striking ``three'' and inserting ``6''.

     SEC. 1204. MAILING THREATENING COMMUNICATIONS.

       Section 876 of title 18, United States Code, is amended--
       (1) by designating the first 4 undesignated paragraphs as 
     subsections (a) through (d), respectively;
       (2) in subsection (c), as so designated, by adding at the 
     end the following: ``If such a communication is addressed to 
     a United States judge, a Federal law enforcement officer, or 
     an official who is covered by section 1114, the individual 
     shall be fined under this title, imprisoned not more than 10 
     years, or both.''; and
       (3) in subsection (d), as so designated, by adding at the 
     end the following: ``If such a communication is addressed to 
     a United States judge, a Federal law enforcement officer, or 
     an official who is covered by section 1114, the individual 
     shall be fined under this title, imprisoned not more than 10 
     years, or both.''.

     SEC. 1205. AMENDMENT OF THE SENTENCING GUIDELINES FOR 
                   ASSAULTS AND THREATS AGAINST FEDERAL JUDGES AND 
                   CERTAIN OTHER FEDERAL OFFICIALS AND EMPLOYEES.

       (a) In General.--Pursuant to its authority under section 
     994 of title 28, United States Code, the United States 
     Sentencing Commission shall review and amend the Federal 
     sentencing guidelines and the policy statements of the 
     Commission, if appropriate, to provide an appropriate 
     sentencing enhancement for offenses involving influencing, 
     assaulting, resisting, impeding, retaliating against, or 
     threatening a Federal judge, magistrate judge, or any other 
     official described in section 111 or 115 of title 18, United 
     States Code.
       (b) Factors for Consideration.--In carrying out this 
     section, the United States Sentencing Commission shall 
     consider, with respect to each offense described in 
     subsection (a)--
       (1) any expression of congressional intent regarding the 
     appropriate penalties for the offense;
       (2) the range of conduct covered by the offense;
       (3) the existing sentences for the offense;
       (4) the extent to which sentencing enhancements within the 
     Federal sentencing guidelines and the court's authority to 
     impose a sentence in excess of the applicable guideline range 
     are adequate to ensure punishment at or near the maximum 
     penalty for the most egregious conduct covered by the 
     offense;
       (5) the extent to which Federal sentencing guideline 
     sentences for the offense have been constrained by statutory 
     maximum penalties;
       (6) the extent to which Federal sentencing guidelines for 
     the offense adequately achieve the purposes of sentencing as 
     set forth in section 3553(a)(2) of title 18, United States 
     Code;
       (7) the relationship of Federal sentencing guidelines for 
     the offense to the Federal sentencing guidelines for other 
     offenses of comparable seriousness; and
       (8) any other factors that the Commission considers to be 
     appropriate.

     SEC. 1206. KILLING PERSONS AIDING FEDERAL INVESTIGATIONS OR 
                   STATE CORRECTIONAL OFFICERS.

       Section 1121(a)(1) of title 18, United States Code, is 
     amended in the matter preceding subparagraph (A), by 
     inserting ``, State, or joint Federal-State'' after ``a 
     Federal''.

     SEC. 1207. KILLING STATE CORRECTIONAL OFFICERS.

       Section 1121(b)(3) of title 18, United States Code, is 
     amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) the incarcerated person is incarcerated pending an 
     initial appearance, arraignment, trial, or appeal for an 
     offense against the United States.''.

     SEC. 1208. ESTABLISHMENT OF PROTECTIVE FUNCTION PRIVILEGE.

       (a) Findings.--Congress makes the following findings:
       (1) The physical safety of the Nation's top elected 
     officials is a public good of transcendent importance.
       (2) By virtue of the critical importance of the Office of 
     the President, the President and those in direct line of the 
     Presidency are subject to unique and mortal jeopardy--
     jeopardy that in turn threatens profound disruption to our 
     system of representative government and to the security and 
     future of the Nation.
       (3) The physical safety of visiting heads of foreign states 
     and foreign governments is also a matter of paramount 
     importance. The assassination of such a person while on 
     American soil could have calamitous consequences for our 
     foreign relations and national security.
       (4) Given these grave concerns, Congress has provided for 
     the Secret Service to protect the President and those in 
     direct line of the Presidency, and has directed that these 
     officials may not waive such protection. Congress has also 
     provided for the Secret Service to protect visiting heads of 
     foreign states and foreign governments.
       (5) The protective strategy of the Secret Service depends 
     critically on the ability of its personnel to maintain close 
     and unremitting physical proximity to the protectee.
       (6) Secret Service personnel must remain at the side of the 
     protectee on occasions of confidential conversations and, as 
     a result, may overhear top secret discussions, diplomatic 
     exchanges, sensitive conversations, and matters of personal 
     privacy.
       (7) The necessary level of proximity can be maintained only 
     in an atmosphere of complete trust and confidence between the 
     protectee and his or her protectors.
       (8) If a protectee has reason to doubt the confidentiality 
     of actions or conversations taken in sight or hearing of 
     Secret Service personnel, the protectee may seek to push the 
     protective envelope away or undermine it to the point at 
     which it could no longer be fully effective.
       (9) The possibility that Secret Service personnel might be 
     compelled to testify against their protectees could induce 
     foreign nations to refuse Secret Service protection in future 
     state visits, making it impossible for the Secret Service to 
     fulfill its important statutory mission of protecting the 
     life and safety of foreign dignitaries.
       (10) A privilege protecting information acquired by Secret 
     Service personnel while performing their protective function 
     in physical proximity to a protectee will preserve the 
     security of the protectee by lessening the incentive of the 
     protectee to distance Secret Service personnel in situations 
     in which there is some risk to the safety of the protectee.
       (11) Recognition of a protective function privilege for the 
     President and those in direct line of the Presidency, and for 
     visiting heads of foreign states and foreign governments, 
     will promote sufficiently important interests to outweigh the 
     need for probative evidence.
       (12) Because Secret Service personnel retain law 
     enforcement responsibility even while engaged in their 
     protective function, the privilege must be subject to a 
     crime/treason exception.
       (b) Purposes.--The purposes of this Act are--
       (1) to facilitate the relationship of trust and confidence 
     between Secret Service personnel and certain protected 
     officials that is essential to the ability of the Secret 
     Service to protect these officials, and the Nation, from the 
     risk of assassination; and
       (2) to ensure that Secret Service personnel are not 
     precluded from testifying in a criminal investigation or 
     prosecution about unlawful activity committed within their 
     view or hearing.
       (c) Admissibility of Information Acquired by Secret Service 
     Personnel While Performing Their Protective Function.--
       (1) Protective function privilege.--Chapter 203 of title 
     18, United States Code, is amended by inserting after section 
     3056 the following:

     ``Sec. 3056A. Testimony by Secret Service personnel; 
       protective function privilege

       ``(a) Definitions.--In this section:
       ``(1) Protectee.--The term `protectee' means--
       ``(A) the President;
       ``(B) the Vice President (or other officer next in the 
     order of succession to the Office of President);
       ``(C) the President-elect;
       ``(D) the Vice President-elect; and
       ``(E) visiting heads of foreign states or foreign 
     governments who, at the time and place concerned, are being 
     provided protection by the United States Secret Service.
       ``(2) Secret service personnel.--The term `Secret Service 
     personnel' means any officer or agent of the United States 
     Secret Service.
       ``(b) General Rule of Privilege.--Subject to subsection 
     (c), testimony by Secret Service personnel or former Secret 
     Service personnel regarding information affecting a protectee 
     that was acquired during the performance of a protective 
     function in physical proximity to the protectee shall not be 
     received in evidence or otherwise disclosed in any trial, 
     hearing, or other proceeding in or before any court, grand 
     jury, department, officer, agency, regulatory body, or other 
     authority of the United States, a State, or a political 
     subdivision thereof.
       ``(c) Exceptions.--There is no privilege under this 
     section--
       ``(1) with respect to information that, at the time the 
     information was acquired by Secret Service personnel, was 
     sufficient to provide reasonable grounds to believe that a 
     crime had been, was being, or would be committed; or
       ``(2) if the privilege is waived by the protectee or the 
     legal representative of a protectee or deceased protectee.''.
       (2) Technical and conforming amendment.--The analysis for 
     chapter 203 of title 18, United States Code, is amended by 
     inserting after the item relating to section 3056 the 
     following:

``3056A. Testimony by Secret Service personnel; protective function 
              privilege.''.

       (3) Application.--This section and the amendments made by 
     this section shall apply to any proceeding commenced on or 
     after the date of enactment of this section.

[[Page 280]]



   Subtitle C--Disarming Felons and Protecting Children From Violence

                   PART 1--EXTENSION OF PROJECT EXILE

     SEC. 1311. AUTHORIZATION OF FUNDING FOR ADDITIONAL STATE AND 
                   LOCAL GUN PROSECUTORS.

       (a) Grants for State and Local Gun Prosecutors.--Title III 
     of the Violent Crime Control and Law Enforcement Act of 1994 
     is amended by adding at the end the following:

        ``Subtitle Y--Grants for State and Local Gun Prosecutors

     ``SEC. 32501. GRANT AUTHORIZATION.

       ``The Attorney General may award grants to State, Indian 
     tribal, or local prosecutors for the purpose of supporting 
     the creation or expansion of community-based justice programs 
     for the prosecution of firearm-related crimes.

     ``SEC. 32502. USE OF FUNDS.

       ``Grants awarded by the Attorney General under this 
     subtitle shall be used to fund programs for the hiring of 
     prosecutors and related personnel under which those 
     prosecutors and personnel shall utilize an interdisciplinary 
     team approach to prevent, reduce, and respond to firearm-
     related crimes in partnership with communities.

     ``SEC. 32503. APPLICATIONS.

       ``(a) Eligibility.--To be eligible to receive a grant award 
     under this subtitle for a fiscal year, a State, Indian 
     tribal, or local prosecutor, in conjunction with the chief 
     executive officer of the jurisdiction in which the program 
     will be placed, shall submit to the Attorney General an 
     application, in such form and containing such information as 
     the Attorney General may reasonably require.
       ``(b) Requirements.--Each application submitted under this 
     section shall include--
       ``(1) a request for funds for the purposes described in 
     section 32502;
       ``(2) a description of the communities to be served by the 
     grant, including the nature of the firearm-related crime in 
     such communities; and
       ``(3) assurances that Federal funds received under this 
     subtitle shall be used to supplement, not supplant, non-
     Federal funds that would otherwise be available for 
     activities funded under this section.

     ``SEC. 32504. MATCHING REQUIREMENT.

       ``The Federal share of a grant awarded under this subtitle 
     may not exceed 50 percent of the total cost of the program 
     described in the application submitted under section 32503 
     for the fiscal year for which the program receives assistance 
     under this subtitle.

     ``SEC. 32505. AWARD OF GRANTS.

       ``(a) In General.--Except as provided in subsection (b), in 
     awarding grants under this subtitle, the Attorney General 
     shall consider--
       ``(1) the demonstrated need for, and the evidence of the 
     ability of the applicant to provide, the services described 
     in section 32503(b)(2), as described in the application 
     submitted under section 32503;
       ``(2) the extent to which, as reflected in the 1998 Uniform 
     Crime Report of the Federal Bureau of Investigation, there is 
     a high rate of firearm-related crime in the jurisdiction of 
     the applicant, measured either in total or per capita;
       ``(3) the extent to which the jurisdiction of the applicant 
     has experienced an increase in the total or per capita rate 
     of firearm-related crime, as reported in the 3 most recent 
     annual Uniform Crime Reports of the Federal Bureau of 
     Investigation;
       ``(4) the extent to which State and local law enforcement 
     agencies in the jurisdiction of the applicant have pledged to 
     cooperate with Federal officials in responding to the illegal 
     acquisition, distribution, possession, and use of firearms 
     within the jurisdiction; and
       ``(5) The extent to which the jurisdiction of the applicant 
     participates in comprehensive firearm law enforcement 
     strategies, including programs such as the Youth Crime Gun 
     Interdiction Initiative, Project Achilles, Project Disarm, 
     Project Triggerlock, Project Exile, Project Surefire, and 
     Operation Ceasefire.
       ``(b) Indian Tribes.--
       ``(1) Federal grants.--Not less than 5 percent of the 
     amount made available for grants under this subtitle for each 
     fiscal year shall be awarded as grants to Indian tribes.
       ``(2) Grant criteria.--In awarding grants to Indian tribes 
     in accordance with this subsection, the Attorney General 
     shall consider, to the extent practicable, the factors for 
     consideration set forth in subsection (a).
       ``(c) Research and Evaluation.--Of the amount made 
     available for grants under this subtitle for each fiscal 
     year, the Attorney General shall use not less than 1 percent 
     and not more than 3 percent for research and evaluation of 
     the activities carried out with grants awarded under this 
     subtitle.

     ``SEC. 32506. REPORTS.

       ``(a) Report to Attorney General.--Not later than March 1 
     of each fiscal year, each law enforcement agency that 
     receives funds from a grant awarded under this subtitle for 
     that fiscal year shall submit to the Attorney General a 
     report describing the progress achieved in carrying out the 
     grant program for which those funds were received.
       ``(b) Report to Congress.--Beginning not later than October 
     1 of the first fiscal year following the initial fiscal year 
     during which grants are awarded under this subtitle, and not 
     later than October 1 of each fiscal year thereafter, the 
     Attorney General shall submit to Congress a report, which 
     shall contain a detailed statement regarding grant awards, 
     activities of grant recipients, a compilation of statistical 
     information submitted by applicants, and an evaluation of 
     programs established with amounts from grants awarded under 
     this subtitle during the preceding fiscal year.

     ``SEC. 32507. DEFINITIONS.

       ``In this subtitle--
       ``(1) the term `firearm' has the meaning given the term in 
     section 921(a) of title 18, United States Code;
       ``(2) the term `Indian tribe' means a tribe, band, pueblo, 
     nation, or other organized group or community of Indians, 
     including an Alaska Native village (as defined in or 
     established under the Alaska Native Claims Settlement Act (43 
     U.S.C. 1601 et seq.)), that is recognized as eligible for the 
     special programs and services provided by the United States 
     to Indians because of their status as Indians; and
       ``(3) the term `State' means a State, the District of 
     Columbia, the Commonwealth of Puerto Rico, the Commonwealth 
     of the Northern Mariana Islands, American Samoa, Guam, and 
     the United States Virgin Islands.

     ``SEC. 32508. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     subtitle $150,000,000 for fiscal year 2002.''.
       (b) Technical and Conforming Amendment.--The table of 
     contents in section 2 of the Violent Crime Control and Law 
     Enforcement Act of 1994 is amended by inserting after the 
     item relating to subtitle X the following:

        ``Subtitle Y--Grants for State and Local Gun Prosecutors

``Sec. 32501. Grant authorization.
``Sec. 32502. Use of funds.
``Sec. 32503. Applications.
``Sec. 32504. Matching requirement.
``Sec. 32505. Award of grants.
``Sec. 32506. Reports.
``Sec. 32507. Definitions.
``Sec. 32508. Authorization of appropriations.''.

     SEC. 1312. AUTHORIZATION OF FUNDING FOR ADDITIONAL FEDERAL 
                   FIREARMS PROSECUTORS AND GUN ENFORCEMENT TEAMS.

       (a) Additional Federal Firearms Prosecutors.--The Attorney 
     General shall hire 114 additional Federal prosecutors to 
     prosecute violations of Federal firearms laws.
       (b) Gun Enforcement Teams.--
       (1) Establishment.--The Attorney General shall establish in 
     each of the jurisdictions specified in paragraph (3) a gun 
     enforcement team.
       (2) Gun enforcement team requirements.--Each gun 
     enforcement team established under this subsection shall be 
     composed of--
       (A) 1 coordinator, who shall be responsible, with respect 
     to the jurisdiction concerned, for coordinating among 
     Federal, State, and local law enforcement--
       (i) the appropriate forum for the prosecution of crimes 
     relating to firearms; and
       (ii) efforts for the prevention of such crimes; and
       (B) 1 analyst, who shall be responsible, with respect to 
     the jurisdiction concerned, for analyzing data relating to 
     such crimes and recommending law enforcement strategies to 
     reduce such crimes.
       (3) Covered jurisdictions.--The jurisdictions specified in 
     this subsection are not more than 20 jurisdictions designated 
     by the Attorney General for purposes of this subsection as 
     areas having high rates of crimes relating to firearms.
       (c) Authorization of Appropriations.--In addition to any 
     other amounts authorized to be appropriated that may be used 
     for such purpose, there is authorized to be appropriated to 
     carry out this section $15,000,000 for fiscal year 2002.

    PART 2--EXPANSION OF THE YOUTH CRIME GUN INTERDICTION INITIATIVE

     SEC. 1321. YOUTH CRIME GUN INTERDICTION INITIATIVE.

       (a) In General.--
       (1) Expansion of number of cities.--The Secretary of the 
     Treasury shall endeavor to expand the number of cities and 
     counties directly participating in the Youth Crime Gun 
     Interdiction Initiative (in this section referred to as the 
     ``YCGII'') to 75 cities or counties by October 1, 2002, to 
     150 cities or counties by October 1, 2004, and to 250 cities 
     or counties by October 1, 2005.
       (2) Selection.--Cities and counties selected for 
     participation in the YCGII shall be selected by the Secretary 
     of the Treasury and in consultation with Federal, State and 
     local law enforcement officials.
       (b) Identification of Individuals.--
       (1) In general.--The Secretary of the Treasury shall, 
     utilizing the information provided by the YCGII, facilitate 
     the identification and prosecution of individuals illegally 
     trafficking firearms to prohibited individuals.
       (2) Sharing of information.--The Secretary of the Treasury 
     shall share information derived from the YCGII with State and 
     local law enforcement agencies through on-line computer 
     access, as soon as such capability is available.

[[Page 281]]

       (c) Grant Awards.--
       (1) In general.--The Secretary of the Treasury shall award 
     grants (in the form of funds or equipment) to States, cities, 
     and counties for purposes of assisting such entities in the 
     tracing of firearms and participation in the YCGII.
       (2) Use of grant funds.--Grants made under this part shall 
     be used to--
       (A) hire or assign additional personnel for the gathering, 
     submission and analysis of tracing data submitted to the 
     Bureau of Alcohol, Tobacco and Firearms under the YCGII;
       (B) hire additional law enforcement personnel for the 
     purpose of identifying and arresting individuals illegally 
     trafficking firearms; and
       (C) purchase additional equipment, including automatic data 
     processing equipment and computer software and hardware, for 
     the timely submission and analysis of tracing data.

                          PART 3--GUN OFFENSES

     SEC. 1331. GUN BAN FOR DANGEROUS JUVENILE OFFENDERS.

       (a) Definition.--Section 921(a)(20) of title 18, United 
     States Code, is amended--
       (1) by inserting ``(A)'' after ``(20)'';
       (2) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (3) by inserting after subparagraph (A) the following:
       ``(B) For purposes of subsections (d), (g), and (s) of 
     section 922, the term `act of juvenile delinquency' means an 
     adjudication of delinquency based on a finding of the 
     commission of an act by a person prior to his or her 
     eighteenth birthday that, if committed by an adult, would be 
     a serious drug offense or violent felony (as defined in 
     section 3559(c)(2) of this title), on or after the date of 
     enactment of this paragraph.''; and
       (4) by striking ``What constitutes'' through the end and 
     inserting the following: ``What constitutes a conviction of 
     such a crime or an adjudication of juvenile delinquency shall 
     be determined in accordance with the law of the jurisdiction 
     in which the proceedings were held. Any State conviction or 
     adjudication of delinquency which has been expunged or set 
     aside or for which a person has been pardoned or has had 
     civil rights restored by the jurisdiction in which the 
     conviction or adjudication of delinquency occurred shall not 
     be considered a conviction or adjudication of delinquency.
       (b) Prohibition.--Section 922 of title 18, United States 
     Code is amended--
       (1) in subsection (d)--
       (A) by striking ``or'' at the end of paragraph (8);
       (B) by striking the period at the end of paragraph (9) and 
     inserting ``; or''; and
       (C) by inserting after paragraph (9) the following:
       ``(10) who has committed an act of juvenile delinquency.'';
       (2) in subsection (g)--
       (A) by striking ``or'' at the end of paragraph (8);
       (B) by striking the period at the end of paragraph (9) and 
     inserting ``; or''; and
       (C) by inserting after paragraph (9) the following:
       ``(10) who has committed an act of juvenile delinquency.''; 
     and
       (3) in subsection (s)(3)(B)--
       (A) by striking ``and'' at the end of clause (vi);
       (B) by inserting ``and'' after the semicolon at the end of 
     clause (vii); and
       (C) by inserting after clause (vii) the following:
       ``(viii) has not committed an act of juvenile 
     delinquency.''.

     SEC. 1332. IMPROVING FIREARMS SAFETY.

       (a) Secure Gun Storage Device.--Section 921(a) of title 18, 
     United States Code, is amended by adding at the end the 
     following:
       ``(35) Secure gun storage or safety device.--The term 
     `secure gun storage or safety device' means--
       ``(A) a device that, when installed on a firearm, is 
     designed to prevent the firearm from being operated without 
     first deactivating the device;
       ``(B) a device incorporated into the design of the firearm 
     that is designed to prevent the operation of the firearm by 
     anyone not having access to the device; or
       ``(C) a safe, gun safe, gun case, lock box, or other device 
     that is designed to be or can be used to store a firearm and 
     that is designed to be unlocked only by means of a key, a 
     combination, or other similar means.''.
       (b) Certification Required in Application for Dealer's 
     License.--Section 923(d)(1) of title 18, United States Code, 
     is amended--
       (1) in subparagraph (E), by striking ``and'' at the end;
       (2) in subparagraph (F), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(G) in the case of an application to be licensed as a 
     dealer, the applicant certifies that secure gun storage or 
     safety devices will be available at any place in which 
     firearms are sold under the license to persons who are not 
     licensees (subject to the exception that in any case in which 
     a secure gun storage or safety device is temporarily 
     unavailable because of theft, casualty loss, consumer sales, 
     backorders from a manufacturer, or any other similar reason 
     beyond the control of the licensee, the dealer shall not be 
     considered to be in violation of the requirement under this 
     subparagraph to make available such a device).''.
       (c) Revocation of Dealer's License for Failure To Have 
     Secure Gun Storage or Safety Devices Available.--The first 
     sentence of section 923(e) of title 18, United States Code, 
     is amended by inserting before the period at the end the 
     following: ``or fails to have secure gun storage or safety 
     devices available at any place in which firearms are sold 
     under the license to persons who are not licensees (except 
     that in any case in which a secure gun storage or safety 
     device is temporarily unavailable because of theft, casualty 
     loss, consumer sales, backorders from a manufacturer, or any 
     other similar reason beyond the control of the licensee, the 
     dealer shall not be considered to be in violation of the 
     requirement to make available such a device)''.
       (d) Statutory Construction.--Nothing in the amendments made 
     by this section shall be construed--
       (1) as creating a cause of action against any firearms 
     dealer or any other person for any civil liability; or
       (2) as establishing any standard of care.

     SEC. 1333. JUVENILE HANDGUN SAFETY.

       (a) Juvenile Handgun Safety.--Section 924(a)(6) of title 
     18, United States Code, is amended--
       (1) by striking subparagraph (A);
       (2) by redesignating subparagraph (B) as subparagraph (A); 
     and
       (3) in subparagraph (A), as redesignated--
       (A) by striking ``A person other than a juvenile who 
     knowingly'' and inserting ``A person who knowingly''; and
       (B) in clause (i), by striking ``not more than 1 year'' and 
     inserting ``not more than 5 years''.

     SEC. 1334. SERIOUS JUVENILE DRUG OFFENSES AS ARMED CAREER 
                   CRIMINAL PREDICATES.

       Section 924(e)(2)(A) of title 18, United States Code, is 
     amended--
       (1) in clause (i), by striking ``or'' at the end;
       (2) in clause (ii), by adding ``or'' at the end; and
       (3) by adding at the end the following:
       ``(iii) any act of juvenile delinquency that, if committed 
     by an adult, would be an offense described in this 
     paragraph;''.

     SEC. 1335. INCREASED PENALTY FOR TRANSFERRING A FIREARM TO A 
                   MINOR FOR USE IN CRIME OF VIOLENCE OR DRUG 
                   TRAFFICKING CRIME.

       Section 924(h) of title 18, United States Code, is amended 
     by striking ``10 years, fined in accordance with this title, 
     or both'' and inserting ``10 years, and if the transferee is 
     a person who is under 18 years of age, imprisoned for a term 
     of not more than 15 years, fined in accordance with this 
     title, or both''.

     SEC. 1336. INCREASED PENALTY FOR FIREARMS CONSPIRACY.

       Section 924 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(p) Except as otherwise provided in this section, a 
     person who conspires to commit an offense defined in this 
     chapter shall be subject to the same penalties (other than 
     the penalty of death) as those prescribed for the offense the 
     commission of which is the object of the conspiracy.''.

                 Part 4--CLOSING THE GUN SHOW LOOPHOLE

     SEC. 1341. EXTENSION OF BRADY BACKGROUND CHECKS TO GUN SHOWS.

       (a) Findings.--Congress finds that--
       (1) more than 4,400 traditional gun shows are held annually 
     across the United States, attracting thousands of attendees 
     per show and hundreds of Federal firearms licensees and 
     nonlicensed firearms sellers;
       (2) traditional gun shows, as well as flea markets and 
     other organized events, at which a large number of firearms 
     are offered for sale by Federal firearms licensees and 
     nonlicensed firearms sellers, form a significant part of the 
     national firearms market;
       (3) firearms and ammunition that are exhibited or offered 
     for sale or exchange at gun shows, flea markets, and other 
     organized events move easily in and substantially affect 
     interstate commerce;
       (4) in fact, even before a firearm is exhibited or offered 
     for sale or exchange at a gun show, flea market, or other 
     organized event, the gun, its component parts, ammunition, 
     and the raw materials from which it is manufactured have 
     moved in interstate commerce;
       (5) gun shows, flea markets, and other organized events at 
     which firearms are exhibited or offered for sale or exchange, 
     provide a convenient and centralized commercial location at 
     which firearms may be bought and sold anonymously, often 
     without background checks and without records that enable gun 
     tracing;
       (6) at gun shows, flea markets, and other organized events 
     at which guns are exhibited or offered for sale or exchange, 
     criminals and other prohibited persons obtain guns without 
     background checks and frequently use guns that cannot be 
     traced to later commit crimes;
       (7) many persons who buy and sell firearms at gun shows, 
     flea markets, and other organized events cross State lines to 
     attend these events and engage in the interstate 
     transportation of firearms obtained at these events;

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       (8) gun violence is a pervasive, national problem that is 
     exacerbated by the availability of guns at gun shows, flea 
     markets, and other organized events;
       (9) firearms associated with gun shows have been 
     transferred illegally to residents of another State by 
     Federal firearms licensees and nonlicensed firearms sellers, 
     and have been involved in subsequent crimes including drug 
     offenses, crimes of violence, property crimes, and illegal 
     possession of firearms by felons and other prohibited 
     persons; and
       (10) Congress has the power, under the interstate commerce 
     clause and other provisions of the Constitution of the United 
     States, to ensure that criminals and other prohibited persons 
     do not obtain firearms at gun shows, flea markets, and other 
     organized events.
       (b) Definitions.--Section 921(a) of title 18, United States 
     Code, is amended by adding at the end the following:
       ``(35) Gun show.--The term `gun show' means any event--
       ``(A) at which 50 or more firearms are offered or exhibited 
     for sale, transfer, or exchange, if 1 or more of the firearms 
     has been shipped or transported in, or otherwise affects, 
     interstate or foreign commerce; and
       ``(B) at which--
       ``(i) not less than 20 percent of the exhibitors are 
     firearm exhibitors;
       ``(ii) there are not less than 10 firearm exhibitors; or
       ``(iii) 50 or more firearms are offered for sale, transfer, 
     or exchange.
       ``(36) Gun show promoter.--The term `gun show promoter' 
     means any person who organizes, plans, promotes, or operates 
     a gun show.
       ``(37) Gun show vendor.--The term `gun show vendor' means 
     any person who exhibits, sells, offers for sale, transfers, 
     or exchanges 1 or more firearms at a gun show, regardless of 
     whether or not the person arranges with the gun show promoter 
     for a fixed location from which to exhibit, sell, offer for 
     sale, transfer, or exchange 1 or more firearms.''
       (c) Regulation of Firearms Transfers at Gun Shows.--
       (1) In general.--Chapter 44 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 931. Regulation of firearms transfers at gun shows

       ``(a) Registration of Gun Show Promoters.--It shall be 
     unlawful for any person to organize, plan, promote, or 
     operate a gun show unless that person--
       ``(1) registers with the Secretary in accordance with 
     regulations promulgated by the Secretary; and
       ``(2) pays a registration fee, in an amount determined by 
     the Secretary.
       ``(b) Responsibilities of Gun Show Promoters.--It shall be 
     unlawful for any person to organize, plan, promote, or 
     operate a gun show unless that person--
       ``(1) before commencement of the gun show, verifies the 
     identity of each gun show vendor participating in the gun 
     show by examining a valid identification document (as defined 
     in section 1028(d)(1)) of the vendor containing a photograph 
     of the vendor;
       ``(2) before commencement of the gun show, requires each 
     gun show vendor to sign--
       ``(A) a ledger with identifying information concerning the 
     vendor; and
       ``(B) a notice advising the vendor of the obligations of 
     the vendor under this chapter; and
       ``(3) notifies each person who attends the gun show of the 
     requirements of this chapter, in accordance with such 
     regulations as the Secretary shall prescribe; and
       ``(4) maintains a copy of the records described in 
     paragraphs (1) and (2) at the permanent place of business of 
     the gun show promoter for such period of time and in such 
     form as the Secretary shall require by regulation.
       ``(c) Responsibilities of Transferors Other Than 
     Licensees.--
       ``(1) In general.--If any part of a firearm transaction 
     takes place at a gun show, it shall be unlawful for any 
     person who is not licensed under this chapter to transfer a 
     firearm to another person who is not licensed under this 
     chapter, unless the firearm is transferred through a licensed 
     importer, licensed manufacturer, or licensed dealer in 
     accordance with subsection (e).
       ``(2) Criminal background checks.--A person who is subject 
     to the requirement of paragraph (1)--
       ``(A) shall not transfer the firearm to the transferee 
     until the licensed importer, licensed manufacturer, or 
     licensed dealer through which the transfer is made under 
     subsection (e) makes the notification described in subsection 
     (e)(3)(A); and
       ``(B) notwithstanding subparagraph (A), shall not transfer 
     the firearm to the transferee if the licensed importer, 
     licensed manufacturer, or licensed dealer through which the 
     transfer is made under subsection (e) makes the notification 
     described in subsection (e)(3)(B).
       ``(3) Absence of recordkeeping requirements.--Nothing in 
     this section shall permit or authorize the Secretary to 
     impose recordkeeping requirements on any nonlicensed vendor.
       ``(d) Responsibilities of Transferees Other Than 
     Licensees.--
       ``(1) In general.--If any part of a firearm transaction 
     takes place at a gun show, it shall be unlawful for any 
     person who is not licensed under this chapter to receive a 
     firearm from another person who is not licensed under this 
     chapter, unless the firearm is transferred through a licensed 
     importer, licensed manufacturer, or licensed dealer in 
     accordance with subsection (e).
       ``(2) Criminal background checks.--A person who is subject 
     to the requirement of paragraph (1)--
       ``(A) shall not receive the firearm from the transferor 
     until the licensed importer, licensed manufacturer, or 
     licensed dealer through which the transfer is made under 
     subsection (e) makes the notification described in subsection 
     (e)(3)(A); and
       ``(B) notwithstanding subparagraph (A), shall not receive 
     the firearm from the transferor if the licensed importer, 
     licensed manufacturer, or licensed dealer through which the 
     transfer is made under subsection (e) makes the notification 
     described in subsection (e)(3)(B).
       ``(e) Responsibilities of Licensees.--A licensed importer, 
     licensed manufacturer, or licensed dealer who agrees to 
     assist a person who is not licensed under this chapter in 
     carrying out the responsibilities of that person under 
     subsection (c) or (d) with respect to the transfer of a 
     firearm shall--
       ``(1) enter such information about the firearm as the 
     Secretary may require by regulation into a separate bound 
     record;
       ``(2) record the transfer on a form specified by the 
     Secretary;
       ``(3) comply with section 922(t) as if transferring the 
     firearm from the inventory of the licensed importer, licensed 
     manufacturer, or licensed dealer to the designated transferee 
     (although a licensed importer, licensed manufacturer, or 
     licensed dealer complying with this subsection shall not be 
     required to comply again with the requirements of section 
     922(t) in delivering the firearm to the nonlicensed 
     transferor), and notify the nonlicensed transferor and the 
     nonlicensed transferee--
       ``(A) of such compliance; and
       ``(B) if the transfer is subject to the requirements of 
     section 922(t)(1), of any receipt by the licensed importer, 
     licensed manufacturer, or licensed dealer of a notification 
     from the national instant criminal background check system 
     that the transfer would violate section 922 or would violate 
     State law;
       ``(4) not later than 10 days after the date on which the 
     transfer occurs, submit to the Secretary a report of the 
     transfer, which report--
       ``(A) shall be on a form specified by the Secretary by 
     regulation; and
       ``(B) shall not include the name of or other identifying 
     information relating to any person involved in the transfer 
     who is not licensed under this chapter;
       ``(5) if the licensed importer, licensed manufacturer, or 
     licensed dealer assists a person other than a licensee in 
     transferring, at 1 time or during any 5 consecutive business 
     days, 2 or more pistols or revolvers, or any combination of 
     pistols and revolvers totaling 2 or more, to the same 
     nonlicensed person, in addition to the reports required under 
     paragraph (4), prepare a report of the multiple transfers, 
     which report shall be--
       ``(A) prepared on a form specified by the Secretary; and
       ``(B) not later than the close of business on the date on 
     which the transfer occurs, forwarded to--
       ``(i) the office specified on the form described in 
     subparagraph (A); and
       ``(ii) the appropriate State law enforcement agency of the 
     jurisdiction in which the transfer occurs; and
       ``(6) retain a record of the transfer as part of the 
     permanent business records of the licensed importer, licensed 
     manufacturer, or licensed dealer.
       ``(f) Records of Licensee Transfers.--If any part of a 
     firearm transaction takes place at a gun show, each licensed 
     importer, licensed manufacturer, and licensed dealer who 
     transfers 1 or more firearms to a person who is not licensed 
     under this chapter shall, not later than 10 days after the 
     date on which the transfer occurs, submit to the Secretary a 
     report of the transfer, which report--
       ``(1) shall be in a form specified by the Secretary by 
     regulation;
       ``(2) shall not include the name of or other identifying 
     information relating to the transferee; and
       ``(3) shall not duplicate information provided in any 
     report required under subsection (e)(4).
       ``(g) Firearm Transaction Defined.--In this section, the 
     term `firearm transaction'--
       ``(1) includes the offer for sale, sale, transfer, or 
     exchange of a firearm; and
       ``(2) does not include the mere exhibition of a firearm.''.
       (2) Penalties.--Section 924(a) of title 18, United States 
     Code, is amended by adding at the end the following:
       ``(7)(A) Whoever knowingly violates section 931(a) shall be 
     fined under this title, imprisoned not more than 5 years, or 
     both.
       ``(B) Whoever knowingly violates subsection (b) or (c) of 
     section 931, shall be--
       ``(i) fined under this title, imprisoned not more than 2 
     years, or both; and

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       ``(ii) in the case of a second or subsequent conviction, 
     such person shall be fined under this title, imprisoned not 
     more than 5 years, or both.
       ``(C) Whoever willfully violates section 931(d), shall be--
       ``(i) fined under this title, imprisoned not more than 2 
     years, or both; and
       ``(ii) in the case of a second or subsequent conviction, 
     such person shall be fined under this title, imprisoned not 
     more than 5 years, or both.
       ``(D) Whoever knowingly violates subsection (e) or (f) of 
     section 931 shall be fined under this title, imprisoned not 
     more than 5 years, or both.
       ``(E) In addition to any other penalties imposed under this 
     paragraph, the Secretary may, with respect to any person who 
     knowingly violates any provision of section 931--
       ``(i) if the person is registered pursuant to section 
     931(a), after notice and opportunity for a hearing, suspend 
     for not more than 6 months or revoke the registration of that 
     person under section 931(a); and
       ``(ii) impose a civil fine in an amount equal to not more 
     than $10,000.''.
       (2) Technical and conforming amendments.--Chapter 44 of 
     title 18, United States Code, is amended--
       (A) in the chapter analysis, by adding at the end the 
     following:

``931. Regulation of firearms transfers at gun shows.'';

     and
       (B) in the first sentence of section 923(j), by striking 
     ``a gun show or event'' and inserting ``an event''; and
       (d) Inspection Authority.--Section 923(g)(1) is amended by 
     adding at the end the following:
       ``(E) Notwithstanding subparagraph (B), the Secretary may 
     enter during business hours the place of business of any gun 
     show promoter and any place where a gun show is held for the 
     purposes of examining the records required by sections 923 
     and 931 and the inventory of licensees conducting business at 
     the gun show. Such entry and examination shall be conducted 
     for the purposes of determining compliance with this chapter 
     by gun show promoters and licensees conducting business at 
     the gun show and shall not require a showing of reasonable 
     cause or a warrant.''.
       (e) Increased Penalties for Serious Recordkeeping 
     Violations by Licensees.--Section 924(a)(3) of title 18, 
     United States Code, is amended to read as follows:
       ``(3)(A) Except as provided in subparagraph (B), any 
     licensed dealer, licensed importer, licensed manufacturer, or 
     licensed collector who knowingly makes any false statement or 
     representation with respect to the information required by 
     this chapter to be kept in the records of a person licensed 
     under this chapter, or violates section 922(m) shall be fined 
     under this title, imprisoned not more than 1 year, or both.
       ``(B) If the violation described in subparagraph (A) is in 
     relation to an offense--
       ``(i) under paragraph (1) or (3) of section 922(b), such 
     person shall be fined under this title, imprisoned not more 
     than 5 years, or both; or
       ``(ii) under subsection (a)(6) or (d) of section 922, such 
     person shall be fined under this title, imprisoned not more 
     than 10 years, or both.''.
       (f) Increased Penalties for Violations of Criminal 
     Background Check Requirements.--
       (1) Penalties.--Section 924 of title 18, United States 
     Code, is amended--
       (A) in paragraph (5), by striking ``subsection (s) or (t) 
     of section 922'' and inserting ``section 922(s)''; and
       (B) by adding at the end the following:
       ``(8) Whoever knowingly violates section 922(t) shall be 
     fined under this title, imprisoned not more than 5 years, or 
     both.''.
       (2) Elimination of certain elements of offense.--Section 
     922(t)(5) of title 18, United States Code, is amended by 
     striking ``and, at the time'' and all that follows through 
     ``State law''.
       (g) Gun Owner Privacy and Prevention of Fraud and Abuse of 
     System Information.--Section 922(t)(2)(C) of title 18, United 
     States Code, is amended by inserting before the period at the 
     end the following: ``, as soon as possible, consistent with 
     the responsibility of the Attorney General under section 
     103(h) of the Brady Handgun Violence Prevention Act to ensure 
     the privacy and security of the system and to prevent system 
     fraud and abuse, but in no event later than 90 days after the 
     date on which the licensee first contacts the system with 
     respect to the transfer''.
       (h) Effective Date.--This section and the amendments made 
     by this section shall take effect 180 days after the date of 
     enactment of this Act.

Subtitle D--Assistance to States for Prosecuting and Punishing Juvenile 
                 Offenders, and Reducing Juvenile Crime

     SEC. 1401. JUVENILE AND VIOLENT OFFENDER INCARCERATION 
                   GRANTS.

       (a) Grants for Violent and Chronic Juvenile Facilities.--
       (1) Definitions.--In this subsection:
       (A) Co-located facility.--The term ``co-located facility'' 
     means the location of adult and juvenile facilities on the 
     same property in a manner consistent with regulations issued 
     by the Attorney General to ensure that adults and juveniles 
     are substantially segregated.
       (B) Substantially segregated.--The term ``substantially 
     segregated'' means--
       (i) complete sight and sound separation in residential 
     confinement;
       (ii) use of shared direct care and management staff, 
     properly trained and certified by the State to interact with 
     juvenile offenders, if the staff does not interact with adult 
     and juvenile offenders during the same shift; and
       (iii) incidental contact during transportation to court 
     proceedings and other activities in accordance with 
     regulations issued by the Attorney General to ensure 
     reasonable efforts are made to segregate adults and 
     juveniles.
       (C) Violent juvenile offender.--The term ``violent juvenile 
     offender'' means a person under the age of majority pursuant 
     to State law who has been adjudicated delinquent or convicted 
     in adult court of a violent felony as defined in section 
     924(e)(2)(B) of title 18, United States Code.
       (D) Qualifying state.--The term ``qualifying State'' means 
     a State that has submitted, or a State in which an eligible 
     unit of local government has submitted, a grant application 
     that meets the requirements of paragraphs (3) and (5).
       (2) Authority.--
       (A) In general.--The Attorney General may make grants in 
     accordance with this subsection to States, units of local 
     government, or any combination thereof, to assist them in 
     planning, establishing, and operating secure facilities, 
     staff-secure facilities, detention centers, and other 
     correctional programs for violent juvenile offenders.
       (B) Use of amounts.--Grants under this subsection may be 
     used--
       (i) for co-located facilities for adult prisoners and 
     violent juvenile offenders; and
       (ii) only for the construction or operation of facilities 
     in which violent juvenile offenders are substantially 
     segregated from nonviolent juvenile offenders.
       (3) Applications.--
       (A) In general.--The chief executive officer of a State or 
     unit of local government that seeks to receive a grant under 
     this subsection shall submit to the Attorney General an 
     application, in such form and in such manner as the Attorney 
     General may prescribe.
       (B) Contents.--Each application submitted under 
     subparagraph (A) shall provide written assurances that each 
     facility or program funded with a grant under this 
     subsection--
       (i) will provide appropriate educational and vocational 
     training, appropriate mental health services, a program of 
     substance abuse testing, and substance abuse treatment for 
     appropriate juvenile offenders; and
       (ii) will afford juvenile offenders intensive post-release 
     supervision and services.
       (4) Minimum amount.--
       (A) In general.--Except as provided in subparagraph (B), 
     each qualifying State, together with units of local 
     government within the State, shall be allocated for each 
     fiscal year not less than 1.0 percent of the total amount 
     made available in each fiscal year for grants under this 
     subsection.
       (B) Exception.--The United States Virgin Islands, American 
     Samoa, Guam, and the Northern Mariana Islands shall each be 
     allocated 0.2 percent of the total amount made available in 
     each fiscal year for grants under this subsection.
       (5) Performance evaluation.--
       (A) Evaluation components.--
       (i) In general.--Each facility or program funded under this 
     subsection shall contain an evaluation component developed 
     pursuant to guidelines established by the Attorney General.
       (ii) Outcome measures.--The evaluations required by this 
     subsection shall include outcome measures that can be used to 
     determine the effectiveness of the funded programs, including 
     the effectiveness of such programs in comparison with other 
     correctional programs or dispositions in reducing the 
     incidence of recidivism, and other outcome measures.
       (B) Periodic review and reports.--
       (i) Review.--The Attorney General shall review the 
     performance of each grant recipient under this subsection.
       (ii) Reports.--The Attorney General may require a grant 
     recipient to submit to the Office of Justice Programs, 
     Corrections Programs Office the results of the evaluations 
     required under subparagraph (A) and such other data and 
     information as are reasonably necessary to carry out the 
     responsibilities of the Attorney General under this 
     subsection.
       (6) Technical assistance and training.--The Attorney 
     General shall provide technical assistance and training to 
     grant recipients under this subsection to achieve the 
     purposes of this subsection.
       (b) Juvenile Facilities on Tribal Lands.--
       (1) Reservation of funds.--Of amounts made available to 
     carry out this section under section 20108(a)(2)(A) of the 
     Violent Crime Control and Law Enforcement Act of 1994 (42 
     U.S.C. 13708(a)(2)(A)), the Attorney General shall reserve, 
     to carry out this subsection, 0.75 percent for each of fiscal 
     years 2002 through 2005.
       (2) Grants to indian tribes.--Of amounts reserved under 
     paragraph (1), the Attorney

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     General may make grants to Indian tribes or to regional 
     groups of Indian tribes for the purpose of constructing 
     secure facilities, staff-secure facilities, detention 
     centers, and other correctional programs for incarceration of 
     juvenile offenders subject to tribal jurisdiction.
       (3) Applications.--To be eligible to receive a grant under 
     this section, an Indian tribe shall submit to the Attorney 
     General an application in such form and containing such 
     information as the Attorney General may by regulation 
     require.
       (4) Regional groups.--Individual Indian tribes from a 
     geographic region may apply for grants under paragraph (2) 
     jointly for the purpose of building regional facilities.
       (c) Report on Accountability and Performance Measures in 
     Juvenile Corrections Programs.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Attorney General shall, after 
     consultation with the National Institute of Justice and other 
     appropriate governmental and nongovernmental organizations, 
     submit to Congress a report regarding the possible use of 
     performance-based criteria in evaluating and improving the 
     effectiveness of juvenile corrections facilities and 
     programs.
       (2) Contents.--The report required under this subsection 
     shall include an analysis of--
       (A) the range of performance-based measures that might be 
     utilized as evaluation criteria, including measures of 
     recidivism among juveniles who have been incarcerated in 
     facilities or have participated in correctional programs;
       (B) the feasibility of linking Federal juvenile corrections 
     funding to the satisfaction of performance-based criteria by 
     grantees (including the use of a Federal matching mechanism 
     under which the share of Federal funding would vary in 
     relation to the performance of a program or facility);
       (C) whether, and to what extent, the data necessary for the 
     Attorney General to utilize performance-based criteria in the 
     Attorney General's administration of juvenile corrections 
     programs are collected and reported nationally; and
       (D) the estimated cost and feasibility of establishing 
     minimal, uniform data collection and reporting standards 
     nationwide that would allow for the use of performance-based 
     criteria in evaluating juvenile corrections programs and 
     facilities and administering Federal juvenile corrections 
     funds.

     SEC. 1402. CERTAIN PUNISHMENT AND GRADUATED SANCTIONS FOR 
                   YOUTH OFFENDERS.

       (a) Findings and Purposes.--
       (1) Findings.--Congress finds that--
       (A) youth violence constitutes a growing threat to the 
     national welfare requiring immediate and comprehensive action 
     by the Federal Government to reduce and prevent youth 
     violence;
       (B) the behavior of youth who become violent offenders 
     often follows a progression, beginning with aggressive 
     behavior in school, truancy, and vandalism, leading to 
     property crimes and then serious violent offenses;
       (C) the juvenile justice systems in most States are ill-
     equipped to provide meaningful sanctions to minor, nonviolent 
     offenders because most of their resources are dedicated to 
     dealing with more serious offenders;
       (D) in most States, some youth commit multiple, nonviolent 
     offenses without facing any significant criminal sanction;
       (E) the failure to provide meaningful criminal sanctions 
     for first time, nonviolent offenders sends the false message 
     to youth that they can engage in antisocial behavior without 
     suffering any negative consequences and that society is 
     unwilling or unable to restrain that behavior;
       (F) studies demonstrate that interventions during the early 
     stages of a criminal career can halt the progression to more 
     serious, violent behavior; and
       (G) juvenile courts need access to a range of sentencing 
     options so that at least some level of sanction is imposed on 
     all youth offenders, including status offenders, and the 
     severity of the sanctions increase along with the seriousness 
     of the offense.
       (2) Purposes.--The purposes of this section are to 
     provide--
       (A) assistance to State and local juvenile courts to expand 
     the range of sentencing options for first time, nonviolent 
     offenders; and
       (B) a selection of graduated sanctions for more serious 
     offenses.
       (b) Definitions.--In this section:
       (1) First time offender.--The term ``first time offender'' 
     means a juvenile against whom formal charges have not 
     previously been filed in any Federal or State judicial 
     proceeding.
       (2) Nonviolent offender.--The term ``nonviolent offender'' 
     means a juvenile who is charged with an offense that does not 
     involve the use of force against the person of another.
       (3) Status offender.--The term ``status offender'' means a 
     juvenile who is charged with an offense that would not be 
     criminal if committed by an adult (other than an offense that 
     constitutes a violation of a valid court order or a violation 
     of section 922(x) of title 18, United States Code (or similar 
     State law)).
       (c) Grant Authorization.--The Attorney General may make 
     grants in accordance with this section to States, State 
     courts, local courts, units of local government, and Indian 
     tribes, for the purposes of--
       (1) providing juvenile courts with a range of sentencing 
     options such that first time juvenile offenders, including 
     status offenders such as truants, vandals, and juveniles in 
     violation of State or local curfew laws, face at least some 
     level of punishment as a result of their initial contact with 
     the juvenile justice system; and
       (2) increasing the sentencing options available to juvenile 
     court judges so that juvenile offenders receive increasingly 
     severe sanctions--
       (A) as the seriousness of their unlawful conduct increases; 
     and
       (B) for each additional offense.
       (d) Applications.--
       (1) Eligibility.--In order to be eligible to receive a 
     grant under this section, the chief executive of a State, 
     unit of local government, or Indian tribe, or the chief judge 
     of a local court, shall submit an application to the Attorney 
     General in such form and containing such information as the 
     Attorney General may reasonably require.
       (2) Requirements.--Each application submitted in accordance 
     with paragraph (1) shall include--
       (A) a request for a grant to be used for the purposes 
     described in this section;
       (B) a description of the communities to be served by the 
     grant, including the extent of youth crime and violence in 
     those communities;
       (C) written assurances that Federal funds received under 
     this subtitle will be used to supplement, not supplant, non-
     Federal funds that would otherwise be available for 
     activities funded under this subsection;
       (D) a comprehensive plan described in paragraph (3) (in 
     this section referred to as the ``comprehensive plan''); and
       (E) any additional information in such form and containing 
     such information as the Attorney General may reasonably 
     require.
       (3) Implementation plan.--For purposes of paragraph (2), a 
     comprehensive plan shall include--
       (A) an action plan outlining the manner in which the 
     applicant will achieve the purposes described in subsection 
     (c)(1);
       (B) a description of any resources available in the 
     jurisdiction of the applicant to implement the action plan 
     described in subparagraph (A);
       (C) an estimate of the costs of full implementation of the 
     plan; and
       (D) a plan for evaluating the impact of the grant on the 
     jurisdiction's juvenile justice system.
       (e) Grant Awards.--
       (1) Considerations.--In awarding grants under this section, 
     the Attorney General shall consider--
       (A) the ability of the applicant to provide the stated 
     services;
       (B) the level of youth crime, violence, and drug use in the 
     community; and
       (C) to the extent practicable, achievement of an equitable 
     geographic distribution of the grant awards.
       (2) Allocations.--
       (A) In general.--The Attorney General shall allot not less 
     than 0.75 percent of the total amount made available to carry 
     out this section in each fiscal year to applicants in each 
     State from which applicants have applied for grants under 
     this section.
       (B) Indian tribes.--The Attorney General shall allocate not 
     less than 0.75 percent of the total amount made available to 
     carry out this section in each fiscal year to Indian tribes.
       (f) Use of Grant Amounts.--
       (1) In general.--Each grant made under this section shall 
     be used to establish programs that--
       (A) expand the number of judges, prosecutors, and public 
     defenders for the purpose of imposing sanctions on first time 
     juvenile offenders and status offenders and for establishing 
     restorative justice boards involving members of the 
     community;
       (B) provide expanded sentencing options, such as 
     restitution, community service, drug testing and treatment, 
     mandatory job training, curfews, house arrest, mandatory work 
     projects, and boot camps, for status offenders and nonviolent 
     offenders;
       (C) increase staffing for probation officers to supervise 
     status offenders and nonviolent offenders to ensure that 
     sanctions are enforced;
       (D) provide aftercare and supervision for status and 
     nonviolent offenders, such as drug education and drug 
     treatment, vocational training, job placement, and family 
     counseling;
       (E) encourage private sector employees to provide training 
     and work opportunities for status offenders and nonviolent 
     offenders; and
       (F) provide services and interventions for status and 
     nonviolent offenders designed, in tandem with criminal 
     sanctions, to reduce the likelihood of further criminal 
     behavior.
       (2) Prohibition on use of amounts.--
       (A) Definitions.--In this paragraph:
       (i) Alien.--The term ``alien'' has the same meaning as in 
     section 101(a) of the Immigration and Nationality Act (8 
     U.S.C. 1101(a)).
       (ii) Secure detention facility; secure correctional 
     facility.--The terms ``secure

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     detention facility'' and ``secure correctional facility'' 
     have the same meanings as in section 103 of the Juvenile 
     Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 
     5603).
       (B) Prohibition.--No amounts made available under this 
     subtitle may be used for any program that permits the 
     placement of status offenders, alien juveniles in custody, or 
     nonoffender juveniles (such as dependent, abused, or 
     neglected children) in secure detention facilities or secure 
     correctional facilities.
       (g) Grant Limitations.--Not more than 3 percent of the 
     amounts made available to the Attorney General or a grant 
     recipient under this section may be used for administrative 
     purposes.
       (h) Federal Share.--
       (1) In general.--Subject to paragraphs (2) and (3), the 
     Federal share of a grant made under this section may not 
     exceed 90 percent of the total estimated costs of the program 
     described in the comprehensive plan submitted under 
     subsection (d)(3) for the fiscal year for which the program 
     receives assistance under this section.
       (2) Waiver.--The Attorney General may waive, in whole or in 
     part, the requirements of paragraph (1).
       (3) In-kind contributions.--For purposes of paragraph (1), 
     in-kind contributions may constitute any portion of the non-
     Federal share of a grant under this section.
       (i) Report and Evaluation.--
       (1) Report to the attorney general.--Not later than October 
     1, 2002, and October 1 of each year thereafter, each grant 
     recipient under this section shall submit to the Attorney 
     General a report that describes, for the year to which the 
     report relates, any progress achieved in carrying out the 
     comprehensive plan of the grant recipient.
       (2) Evaluation and report to congress.--Not later than 
     March 1, 2003, and March 1 of each year thereafter, the 
     Attorney General shall submit to Congress an evaluation and 
     report that contains a detailed statement regarding grant 
     awards, activities of grant recipients, a compilation of 
     statistical information submitted by grant recipients under 
     this section, and an evaluation of programs established by 
     grant recipients under this section.
       (3) Criteria.--In assessing the effectiveness of the 
     programs established and operated by grant recipients 
     pursuant to this section, the Attorney General shall 
     consider--
       (A) a comparison between the number of first time offenders 
     who received a sanction for criminal behavior in the 
     jurisdiction of the grant recipient before and after 
     initiation of the program;
       (B) changes in the recidivism rate for first time offenders 
     in the jurisdiction of the grant recipient;
       (C) a comparison of the recidivism rates and the 
     seriousness of future offenses of first time offenders in the 
     jurisdiction of the grant recipient that receive a sanction 
     and those who do not;
       (D) changes in truancy rates of the public schools in the 
     jurisdiction of the grant recipient; and
       (E) changes in the arrest rates for vandalism and other 
     property crimes in the jurisdiction of the grant recipient.
       (4) Documents and information.--Each grant recipient under 
     this section shall provide the Attorney General with all 
     documents and information that the Attorney General 
     determines to be necessary to conduct an evaluation of the 
     effectiveness of programs funded under this section.
       (j) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section from the Violent 
     Crime Reduction Trust Fund--
       (1) such sums as may be necessary for each of fiscal years 
     2002 and 2003; and
       (2) $175,000,000 for each of fiscal years 2004 and 2005.

     SEC. 1403. PILOT PROGRAM TO PROMOTE REPLICATION OF RECENT 
                   SUCCESSFUL JUVENILE CRIME REDUCTION STRATEGIES.

       (a) Pilot Program To Promote Replication of Recent 
     Successful Juvenile Crime Reduction Strategies.--
       (1) Establishment.--The Attorney General (or a designee of 
     the Attorney General), in conjunction with the Secretary of 
     the Treasury (or the designee of the Secretary), shall 
     establish a pilot program (in this section referred to as the 
     ``program'') to encourage and support communities that adopt 
     a comprehensive approach to suppressing and preventing 
     violent juvenile crime patterned after successful State 
     juvenile crime reduction strategies.
       (2) Program.--In carrying out the program, the Attorney 
     General shall--
       (A) make and track grants to grant recipients (in this 
     section referred to as ``coalitions'');
       (B) in conjunction with the Secretary of the Treasury, 
     provide for technical assistance and training, data 
     collection, and dissemination of relevant information; and
       (C) provide for the general administration of the program.
       (3) Administration.--Not later than 30 days after the date 
     of enactment of this Act, the Attorney General shall appoint 
     an Administrator (in this section referred to as the 
     ``Administrator'') to carry out the program.
       (4) Program authorization.--To be eligible to receive an 
     initial grant or a renewal grant under this section, a 
     coalition shall meet each of the following criteria:
       (A) Composition.--The coalition shall consist of 1 or more 
     representatives of--
       (i) the local police department or sheriff's department;
       (ii) the local prosecutors' office;
       (iii) the United States Attorney's office;
       (iv) the Federal Bureau of Investigation;
       (v) the Bureau of Alcohol, Tobacco and Firearms;
       (vi) State or local probation officers;
       (vii) religious affiliated or fraternal organizations 
     involved in crime prevention;
       (viii) schools;
       (ix) parents or local grass roots organizations such as 
     neighborhood watch groups; and
       (x) social service agencies involved in crime prevention.
       (B) Other participants.--If possible, in addition to the 
     representatives from the categories listed in subparagraph 
     (A), the coalition shall include--
       (i) representatives from the business community; and
       (ii) researchers who have studied criminal justice and can 
     offer technical or other assistance.
       (C) Coordinated strategy.--A coalition shall submit to the 
     Attorney General, or the Attorney General's designee, a 
     comprehensive plan for reducing violent juvenile crime. To be 
     eligible for consideration, a plan shall--
       (i) ensure close collaboration among all members of the 
     coalition in suppressing and preventing juvenile crime;
       (ii) place heavy emphasis on coordinated enforcement 
     initiatives, such as Federal and State programs that 
     coordinate local police departments, prosecutors, and local 
     community leaders to focus on the suppression of violent 
     juvenile crime involving gangs;
       (iii) ensure that there is close collaboration between 
     police and probation officers in the supervision of juvenile 
     offenders, such as initiatives that coordinate the efforts of 
     parents, school officials, and police and probation officers 
     to patrol the streets and make home visits to ensure that 
     offenders comply with the terms of their probation;
       (iv) ensure that a program is in place to trace all 
     firearms seized from crime scenes or offenders in an effort 
     to identify illegal gun traffickers; and
       (v) ensure that effective crime prevention programs are in 
     place, such as programs that provide after-school safe havens 
     and other opportunities for at-risk youth to escape or avoid 
     gang or other criminal activity, and to reduce recidivism.
       (D) Accountability.--A coalition shall--
       (i) establish a system to measure and report outcomes 
     consistent with common indicators and evaluation protocols 
     established by the Administrator and which receives the 
     approval of the Administrator; and
       (ii) devise a detailed model for measuring and evaluating 
     the success of the plan of the coalition in reducing violent 
     juvenile crime, and provide assurances that the plan will be 
     evaluated on a regular basis to assess progress in reducing 
     violent juvenile crime.
       (5) Grant amounts.--
       (A) In general.--The Administrator may grant to an eligible 
     coalition under this paragraph, an amount not to exceed the 
     amount of non-Federal funds raised by the coalition, 
     including in-kind contributions, for that fiscal year.
       (B) Nonsupplanting requirement.--A coalition seeking funds 
     shall provide reasonable assurances that funds made available 
     under this program to States or units of local government 
     shall be so used as to supplement and increase (but not 
     supplant) the level of the State, local, and other non-
     Federal funds that would in the absence of such Federal funds 
     be made available for programs described in this section, and 
     shall in no event replace such State, local, or other non-
     Federal funds.
       (C) Suspension of grants.--If a coalition fails to continue 
     to meet the criteria set forth in this section, the 
     Administrator may suspend the grant, after providing written 
     notice to the grant recipient and an opportunity to appeal.
       (D) Renewal grants.--Subject to subparagraph (E), the 
     Administrator may award a renewal grant to a grant recipient 
     under this subparagraph for each fiscal year following the 
     fiscal year for which an initial grant is awarded, in an 
     amount not to exceed the amount of non-Federal funds raised 
     by the coalition, including in-kind contributions, for that 
     fiscal year, during the 4-year period following the period of 
     the initial grant.
       (E) Limitation.--The amount of a grant award under this 
     section may not exceed $300,000 for a fiscal year.
       (6) Permitted use of funds.--A coalition receiving funds 
     under this section may expend such Federal funds on any use 
     or program that is contained in the plan submitted to the 
     Administrator.
       (7) Congressional consultation.--Two years after the date 
     of implementation of the program established in this section, 
     the General Accounting Office shall submit a report to 
     Congress reviewing the effectiveness of the program in 
     suppressing and reducing violent juvenile crime in the 
     participating communities. The report shall contain an 
     analysis of each community participating in the

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     program, along with information regarding the plan undertaken 
     in the community, and the effectiveness of the plan in 
     reducing violent juvenile crime. The report shall contain 
     recommendations regarding the efficacy of continuing the 
     program.
       (b) Information Collection and Dissemination With Respect 
     to Coalitions.--
       (1) Coalition information.--For the purpose of audit and 
     examination, the Administrator--
       (A) shall have access to any books, documents, papers, and 
     records that are pertinent to any grant or grant renewal 
     request under this section; and
       (B) may periodically request information from a coalition 
     to ensure that the coalition meets the applicable criteria.
       (2) Reporting.--The Administrator shall, to the maximum 
     extent practicable and in a manner consistent with applicable 
     law, minimize reporting requirements by a coalition and 
     expedite any application for a renewal grant made under this 
     section.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated from the Violent Crime Reduction Trust 
     Fund to carry out this section, $3,000,000 in each of fiscal 
     years 2002, 2003, and 2004.

     SEC. 1404. REIMBURSEMENT OF STATES FOR COSTS OF INCARCERATING 
                   JUVENILE ALIEN OFFENDERS.

       (a) In General.--Section 501 of the Immigration Reform and 
     Control Act of 1986 (8 U.S.C. 1365) is amended--
       (1) in subsection (a), by inserting ``or illegal juvenile 
     alien who has been adjudicated delinquent and committed to a 
     juvenile correctional facility by such State or locality'' 
     before the period;
       (2) in subsection (b), by inserting ``(including any 
     juvenile alien who has been adjudicated delinquent and has 
     been committed to a correctional facility)'' before ``who is 
     in the United States unlawfully''; and
       (3) by adding at the end the following:
       ``(f) Juvenile Alien Defined.--In this section, the term 
     `juvenile alien' means an alien (as that term is defined in 
     section 101(a)(3) of the Immigration and Nationality Act (8 
     U.S.C. 1103)) who has been adjudicated delinquent and 
     committed to a correctional facility by a State or locality 
     as a juvenile offender.''.

     Subtitle E--Ballistics, Law Assistance, and Safety Technology

     SEC. 1501. SHORT TITLE.

       This subtitle may be cited as the ``Ballistics, Law 
     Assistance, and Safety Technology Act'' (``BLAST'').

     SEC. 1502. PURPOSES.

       The purposes of this subtitle are--
       (1) to increase public safety by assisting law enforcement 
     in solving more gun-related crimes and offering prosecutors 
     evidence to link felons to gun crimes through ballistics 
     technology;
       (2) to provide for ballistics testing of all new firearms 
     for sale to assist in the identification of firearms used in 
     crimes;
       (3) to require ballistics testing of all firearms in 
     custody of Federal agencies to assist in the identification 
     of firearms used in crimes; and
       (4) to add ballistics testing to existing firearms 
     enforcement programs.

     SEC. 1503. DEFINITION OF BALLISTICS.

       Section 921(a) of title 18, United States Code, is amended 
     by adding at the end the following:
       ``(35) Ballistics.--The term `ballistics' means a 
     comparative analysis of fired bullets and cartridge casings 
     to identify the firearm from which bullets were discharged, 
     through identification of the unique characteristics that 
     each firearm imprints on bullets and cartridge casings.''.

      SEC. 1504. TEST FIRING AND AUTOMATED STORAGE OF BALLISTICS 
                   RECORDS.

       (a) Amendment.--Section 923 of title 18, United States 
     Code, is amended by adding at the end the following:
       ``(m)(1) In addition to the other licensing requirements 
     under this section, a licensed manufacturer or licensed 
     importer shall--
       ``(A) test fire firearms manufactured or imported by such 
     licensees as specified by the Secretary by regulation;
       ``(B) prepare ballistics images of the fired bullet and 
     cartridge casings from the test fire;
       ``(C) make the records available to the Secretary for entry 
     in a computerized database; and
       ``(D) store the fired bullet and cartridge casings in such 
     a manner and for such a period as specified by the Secretary 
     by regulation.
       ``(2) Nothing in this subsection creates a cause of action 
     against any Federal firearms licensee or any other person for 
     any civil liability except for imposition of a civil penalty 
     under this section.
       ``(3)(A) The Attorney General and the Secretary shall 
     assist firearm manufacturers and importers in complying with 
     paragraph (1) through--
       ``(i) the acquisition, disposition, and upgrades of 
     ballistics equipment and bullet recovery equipment to be 
     placed at or near the sites of licensed manufacturers and 
     importers;
       ``(ii) the hiring or designation of personnel necessary to 
     develop and maintain a database of ballistics images of fired 
     bullets and cartridge casings, research and evaluation;
       ``(iii) providing education about the role of ballistics as 
     part of a comprehensive firearm crime reduction strategy;
       ``(iv) providing for the coordination among Federal, State, 
     and local law enforcement and regulatory agencies and the 
     firearm industry to curb firearm-related crime and illegal 
     firearm trafficking; and
       ``(v) any other steps necessary to make ballistics testing 
     effective.
       ``(B) The Attorney General and the Secretary shall--
       ``(i) establish a computer system through which State and 
     local law enforcement agencies can promptly access ballistics 
     records stored under this subsection, as soon as such a 
     capability is available; and
       ``(ii) encourage training for all ballistics examiners.
       ``(4) Not later than 1 year after the date of enactment of 
     this subsection and annually thereafter, the Attorney General 
     and the Secretary shall submit to the Committee on the 
     Judiciary of the Senate and the Committee on the Judiciary of 
     the House of Representatives a report regarding the impact of 
     this section, including--
       ``(A) the number of Federal and State criminal 
     investigations, arrests, indictments, and prosecutions of all 
     cases in which access to ballistics records provided under 
     this section served as a valuable investigative tool;
       ``(B) the extent to which ballistics records are accessible 
     across jurisdictions; and
       ``(C) a statistical evaluation of the test programs 
     conducted pursuant to section 1506 of the Ballistics, Law 
     Assistance, and State Technology Act.
       ``(5) There is authorized to be appropriated to the 
     Department of Justice and the Department of the Treasury for 
     each of fiscal years 2002 through 2005, $20,000,000 to carry 
     out this subsection, including--
       ``(A) installation of ballistics equipment and bullet 
     recovery equipment;
       ``(B) establishment of sites for ballistics testing;
       ``(C) salaries and expenses of necessary personnel; and
       ``(D) research and evaluation.
       ``(6) The Secretary and the Attorney General shall conduct 
     mandatory ballistics testing of all firearms obtained or in 
     the possession of their respective agencies.''.
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by subsection (a) take effect on the date on 
     which the Attorney General and the Secretary of the Treasury, 
     in consultation with the Board of the National Integrated 
     Ballistics Information Network, certify that the ballistics 
     systems used by the Department of Justice and the Department 
     of the Treasury are sufficiently interoperable to make 
     mandatory ballistics testing of new firearms possible.
       (2) Effective on date of enactment.--Section 923(m)(6) of 
     title 18, United States Code, as added by subsection (a), 
     shall take effect on the date of enactment of this Act.

     SEC. 1505. PRIVACY RIGHTS OF LAW ABIDING CITIZENS.

       Ballistics information of individual guns in any form or 
     database established by this Act may not be used for--
       (1) prosecutorial purposes unless law enforcement officials 
     have a reasonable belief that a crime has been committed and 
     that ballistics information would assist in the investigation 
     of that crime; or
       (2) the creation of a national firearms registry of gun 
     owners.

     SEC. 1506. DEMONSTRATION FIREARM CRIME REDUCTION STRATEGY.

       (a) In General.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of the Treasury and the 
     Attorney General shall establish in the jurisdictions 
     selected under subsection (c), a comprehensive firearm crime 
     reduction strategy that meets the requirements of subsection 
     (b).
       (b) Program Elements.--Each program established under 
     subsection (a) shall, for the jurisdiction concerned--
       (1) provide for ballistics testing, in accordance with 
     criteria set forth by the National Integrated Ballistics 
     Information Network, of all firearms recovered during 
     criminal investigations, in order to--
       (A) identify the types and origins of the firearms;
       (B) identify suspects; and
       (C) link multiple crimes involving the same firearm;
       (2) require that all identifying information relating to 
     firearms recovered during criminal investigations be promptly 
     submitted to the Secretary of the Treasury, in order to 
     identify the types and origins of the firearms and to 
     identify illegal firearms traffickers;
       (3) provide for coordination among Federal, State, and 
     local law enforcement officials, firearm examiners, 
     technicians, laboratory personnel, investigators, and 
     prosecutors in the tracing and ballistics testing of firearms 
     and the investigation and prosecution of firearms-related 
     crimes including illegal firearms trafficking; and
       (4) require analysis of firearm tracing and ballistics data 
     in order to establish trends in firearm-related crime and 
     firearm trafficking.
       (c) Participating Jurisdictions.--

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       (1) In general.--The Secretary of the Treasury and the 
     Attorney General shall select not fewer than 10 jurisdictions 
     for participation in the program under this section.
       (2) Considerations.--In selecting jurisdictions under this 
     subsection, the Secretary of the Treasury and the Attorney 
     General shall give priority to jurisdictions that--
       (A) participate in comprehensive firearm law enforcement 
     strategies, including programs such as the Youth Crime Gun 
     Interdiction Initiative, Project Achilles, Project Disarm, 
     Project Triggerlock, Project Exile, Project Surefire, and 
     Operation Ceasefire;
       (B) draft a plan to share ballistics records with nearby 
     jurisdictions that require ballistics testing of firearms 
     recovered during criminal investigations; and
       (C) pledge to match Federal funds for the expansion of 
     ballistics testing on a one-on-one basis.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated for each of fiscal years 2002 through 
     2005, $20,000,000 to carry out this section, including--
       (1) installation of ballistics equipment; and
       (2) salaries and expenses for personnel (including 
     personnel from the Department of Justice and the Bureau of 
     Alcohol, Tobacco, and Firearms).

           Subtitle F--Offender Reentry and Community Safety

     SEC. 1601. SHORT TITLE.

       This subtitle may be cited as the ``Offender Reentry and 
     Community Safety Act of 2001''.

     SEC. 1602. FINDINGS.

       Congress finds the following:
       (1) There are now nearly 1,900,000 individuals in our 
     country's prisons and jails, including over 140,000 
     individuals under the jurisdiction of the Federal Bureau of 
     Prisons.
       (2) Enforcement of offender violations of conditions of 
     releases has sharply increased the number of offenders who 
     return to prison--while revocations comprised 17 percent of 
     State prison admissions in 1980, they rose to 36 percent in 
     1998.
       (3) Although prisoners generally are serving longer 
     sentences than they did a decade ago, most eventually reenter 
     communities; for example, in 1999, approximately 538,000 
     State prisoners and over 50,000 Federal prisoners, a record 
     number, were returned to American communities. Approximately 
     100,000 State offenders who returned to communities received 
     no supervision whatsoever.
       (4) Historically, two-thirds of returning State prisoners 
     have been rearrested for new crimes within three years, so 
     these individuals pose a significant public safety risk and a 
     continuing financial burden to society.
       (5) A key element to effective post-incarceration 
     supervision is an immediate, predetermined, and appropriate 
     response to violations of the conditions of supervision.
       (6) An estimated 187,000 State and Federal prison inmates 
     have been diagnosed with mental health problems; about 70 
     percent of State prisoners and 57 percent of Federal 
     prisoners have a history of drug use or abuse; and nearly 75 
     percent of released offenders with heroin or cocaine problems 
     return to using drugs within three months if untreated; 
     however, few States link prison mental health treatment 
     programs with those in the return community.
       (7) Between 1987 and 1997, the volume of juvenile 
     adjudicated cases resulting in court-ordered residential 
     placements rose 56 percent. In 1997 alone, there were a total 
     of 163,200 juvenile court-ordered residential placements. The 
     steady increase of youth exiting residential placement has 
     strained the juvenile justice aftercare system, however, 
     without adequate supervision and services, youth are likely 
     to relapse, recidivate, and return to confinement at the 
     public's expense.
       (8) Emerging technologies and multidisciplinary community-
     based strategies present new opportunities to alleviate the 
     public safety risk posed by released prisoners while helping 
     offenders to reenter their communities successfully.

      SEC. 1603. PURPOSES.

       The purposes of this subtitle are to--
       (1) establish demonstration projects in several Federal 
     judicial districts, the District of Columbia, and in the 
     Federal Bureau of Prisons, using new strategies and emerging 
     technologies that alleviate the public safety risk posed by 
     released prisoners by promoting their successful 
     reintegration into the community;
       (2) establish court-based programs to monitor the return of 
     offenders into communities, using court sanctions to promote 
     positive behavior;
       (3) establish offender reentry demonstration projects in 
     the states using government and community partnerships to 
     coordinate cost efficient strategies that ensure public 
     safety and enhance the successful reentry into communities of 
     offenders who have completed their prison sentences;
       (4) establish intensive aftercare demonstration projects 
     that address public safety and ensure the special reentry 
     needs of juvenile offenders by coordinating the resources of 
     juvenile correctional agencies, juvenile courts, juvenile 
     parole agencies, law enforcement agencies, social service 
     providers, and local Workforce Investment Boards; and
       (5) rigorously evaluate these reentry programs to determine 
     their effectiveness in reducing recidivism and promoting 
     successful offender reintegration.

             PART 1--FEDERAL REENTRY DEMONSTRATION PROJECTS

     SEC. 1611. FEDERAL REENTRY CENTER DEMONSTRATION.

       (a) Authority and Establishment of Demonstration Project.--
     From funds made available to carry out this section, the 
     Attorney General, in consultation with the Director of the 
     Administrative Office of the United States Courts, shall 
     establish the Federal Reentry Center Demonstration project. 
     The project shall involve appropriate prisoners from the 
     Federal prison population and shall utilize community 
     corrections facilities, home confinement, and a coordinated 
     response by Federal agencies to assist participating 
     prisoners, under close monitoring and more seamless 
     supervision, in preparing for and adjusting to reentry into 
     the community.
       (b) Project Elements.--The project authorized by subsection 
     (a) shall include--
       (1) a Reentry Review Team for each prisoner, consisting of 
     representatives from the Bureau of Prisons, the United States 
     Probation System, and the relevant community corrections 
     facility, who shall initially meet with the prisoner to 
     develop a reentry plan tailored to the needs of the prisoner 
     and incorporating victim impact information, and will 
     thereafter meet regularly to monitor the prisoner's progress 
     toward reentry and coordinate access to appropriate reentry 
     measures and resources;
       (2) regular drug testing, as appropriate;
       (3) a system of graduated levels of supervision within the 
     community corrections facility to promote community safety, 
     provide incentives for prisoners to complete the reentry 
     plan, including victim restitution, and provide a reasonable 
     method for imposing immediate sanctions for a prisoner's 
     minor or technical violation of the conditions of 
     participation in the project;
       (4) substance abuse treatment and aftercare, mental and 
     medical health treatment and aftercare, vocational and 
     educational training, life skills instruction, conflict 
     resolution skills training, batterer intervention programs, 
     assistance obtaining suitable affordable housing, and other 
     programming to promote effective reintegration into the 
     community as needed;
       (5) to the extent practicable, the recruitment and 
     utilization of local citizen volunteers, including volunteers 
     from the faith-based and business communities, to serve as 
     advisers and mentors to prisoners being released into the 
     community;
       (6) a description of the methodology and outcome measures 
     that will be used to evaluate the program; and
       (7) notification to victims on the status and nature of 
     offenders' reentry plan.
       (c) Probation Officers.--From funds made available to carry 
     out this section, the Director of the Administrative Office 
     of the United States Courts shall assign one or more 
     probation officers from each participating judicial district 
     to the Reentry Demonstration project. Such officers shall be 
     assigned to and stationed at the community corrections 
     facility and shall serve on the Reentry Review Teams.
       (d) Project Duration.--The Reentry Center Demonstration 
     project shall begin not later than 6 months following the 
     availability of funds to carry out this section, and shall 
     last 3 years. The Attorney General may extend the project for 
     a period of up to 6 months to enable participant prisoners to 
     complete their involvement in the project.
       (e) Selection of Districts.--The Attorney General, in 
     consultation with the Judicial Conference of the United 
     States, shall select an appropriate number of Federal 
     judicial districts in which to carry out the Reentry Center 
     Demonstration project.
       (f) Coordination of Projects.--The Attorney General, may, 
     if appropriate, include in the Reentry Center Demonstration 
     project offenders who participated in the Enhanced In-Prison 
     Vocational Assessment and Training Demonstration project 
     established by section 1615 of this Act.

     SEC. 1612. FEDERAL HIGH-RISK OFFENDER REENTRY DEMONSTRATION.

       (a) Authority and Establishment of Demonstration Project.--
     From funds made available to carry out this section, the 
     Director of the Administrative Office of the United States 
     Courts, in consultation with the Attorney General, shall 
     establish the Federal High-Risk Offender Reentry 
     Demonstration project. The project shall involve Federal 
     offenders under supervised release who have previously 
     violated the terms of their release following a term of 
     imprisonment and shall utilize, as appropriate and indicated, 
     community corrections facilities, home confinement, 
     appropriate monitoring technologies, and treatment and 
     programming to promote more effective reentry into the 
     community.
       (b) Project Elements.--The project authorized by subsection 
     (a) shall include--
       (1) participation by Federal prisoners who have previously 
     violated the terms of their release following a term of 
     imprisonment;
       (2) use of community corrections facilities and home 
     confinement that, together with the technology referenced in 
     paragraph (5),

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     will be part of a system of graduated levels of supervision;
       (3) substance abuse treatment and aftercare, mental and 
     medical health treatment and aftercare, vocational and 
     educational training, life skills instruction, conflict 
     resolution skills training, batterer intervention programs, 
     and other programming to promote effective reintegration into 
     the community as appropriate;
       (4) involvement of a victim advocate and the family of the 
     prisoner, if it is safe for the victim(s), especially in 
     domestic violence cases, to be involved;
       (5) the use of monitoring technologies, as appropriate and 
     indicated, to monitor and supervise participating offenders 
     in the community;
       (6) a description of the methodology and outcome measures 
     that will be used to evaluate the program; and
       (7) notification to victims on the status and nature of a 
     prisoner's reentry plan.
       (c) Mandatory Condition of Supervised Release.--In each of 
     the judicial districts in which the demonstration project is 
     in effect, appropriate offenders who are found to have 
     violated a previously imposed term of supervised release and 
     who will be subject to some additional term of supervised 
     release, shall be designated to participate in the 
     demonstration project. With respect to these offenders, the 
     court shall impose additional mandatory conditions of 
     supervised release that each offender shall, as directed by 
     the probation officer, reside at a community corrections 
     facility or participate in a program of home confinement, or 
     both, and submit to appropriate monitoring, and otherwise 
     participate in the project.
       (d) Project Duration.--The Federal High-Risk Offender 
     Reentry Demonstration shall begin not later than six months 
     following the availability of funds to carry out this 
     section, and shall last 3 years. The Director of the 
     Administrative Office of the United States Courts may extend 
     the project for a period of up to six months to enable 
     participating prisoners to complete their involvement in the 
     project.
       (e) Selection of Districts.--The Judicial Conference of the 
     United States, in consultation with the Attorney General, 
     shall select an appropriate number of Federal judicial 
     districts in which to carry out the Federal High-Risk 
     Offender Reentry Demonstration project.

     SEC. 1613. DISTRICT OF COLUMBIA INTENSIVE SUPERVISION, 
                   TRACKING, AND REENTRY TRAINING (DC ISTART) 
                   DEMONSTRATION.

       (a) Authority and Establishment of Demonstration Project.--
     From funds made available to carry out this section, the 
     Trustee of the Court Services and Offender Supervision Agency 
     of the District of Columbia, as authorized by the National 
     Capital Revitalization and Self Government Improvement Act of 
     1997 (Public Law 105-33; 111 Stat. 712) shall establish the 
     District of Columbia Intensive Supervision, Tracking and 
     Reentry Training Demonstration (DC iSTART) project. The 
     project shall involve high risk District of Columbia parolees 
     who would otherwise be released into the community without a 
     period of confinement in a community corrections facility and 
     shall utilize intensive supervision, monitoring, and 
     programming to promote such parolees' successful reentry into 
     the community.
       (b) Project Elements.--The project authorized by subsection 
     (a) shall include--
       (1) participation by appropriate high risk parolees;
       (2) use of community corrections facilities and home 
     confinement;
       (3) a Reentry Review Team that includes a victim witness 
     professional for each parolee which shall meet with the 
     parolee--by video conference or other means as appropriate--
     before the parolee's release from the custody of the Federal 
     Bureau of Prisons to develop a reentry plan that incorporates 
     victim impact information and is tailored to the needs of the 
     parolee and which will thereafter meet regularly to monitor 
     the parolee's progress toward reentry and coordinate access 
     to appropriate reentry measures and resources;
       (4) regular drug testing, as appropriate;
       (5) a system of graduated levels of supervision within the 
     community corrections facility to promote community safety, 
     encourage victim restitution, provide incentives for 
     prisoners to complete the reentry plan, and provide a 
     reasonable method for immediately sanctioning a prisoner's 
     minor or technical violation of the conditions of 
     participation in the project;
       (6) substance abuse treatment and aftercare, mental and 
     medical health treatment and aftercare, vocational and 
     educational training, life skills instruction, conflict 
     resolution skills training, batterer intervention programs, 
     assistance obtaining suitable affordable housing, and other 
     programming to promote effective reintegration into the 
     community as needed and indicated;
       (7) the use of monitoring technologies, as appropriate;
       (8) to the extent practicable, the recruitment and 
     utilization of local citizen volunteers, including volunteers 
     from the faith-based communities, to serve as advisers and 
     mentors to prisoners being released into the community; and
       (9) notification to victims on the status and nature of a 
     prisoner's reentry plan.
       (c) Mandatory Condition of Parole.--For those offenders 
     eligible to participate in the demonstration project, the 
     United States Parole Commission shall impose additional 
     mandatory conditions of parole such that the offender when on 
     parole shall, as directed by the community supervision 
     officer, reside at a community corrections facility or 
     participate in a program of home confinement, or both, submit 
     to electronic and other remote monitoring, and otherwise 
     participate in the project.
       (d) Program Duration.--The District of Columbia Intensive 
     Supervision, Tracking and Reentry Training Demonstration 
     shall begin not later than 6 months following the 
     availability of funds to carry out this section, and shall 
     last 3 years. The Trustee of the Court Services and Offender 
     Supervision Agency of the District of Columbia may extend the 
     project for a period of up to 6 months to enable 
     participating prisoners to complete their involvement in the 
     project.

     SEC. 1614. FEDERAL INTENSIVE SUPERVISION, TRACKING, AND 
                   REENTRY TRAINING (FED ISTART) DEMONSTRATION.

       (a) Authority and Establishment of Demonstration Project.--
     From funds made available to carry out this section, the 
     Director of the Administrative Office of the United States 
     Courts shall establish the Federal Intensive Supervision, 
     Tracking and Reentry Training Demonstration (FED iSTART) 
     project. The project shall involve appropriate high risk 
     Federal offenders who are being released into the community 
     without a period of confinement in a community corrections 
     facility.
       (b) Project Elements.--The project authorized by subsection 
     (a) shall include--
       (1) participation by appropriate high risk Federal 
     offenders;
       (2) significantly smaller caseloads for probation officers 
     participating in the demonstration project;
       (3) substance abuse treatment and aftercare, mental and 
     medical health treatment and aftercare, vocational and 
     educational training, life skills instruction, conflict 
     resolution skills training, batterer intervention programs, 
     assistance obtaining suitable affordable housing, and other 
     programming to promote effective reintegration into the 
     community as needed; and
       (4) notification to victims on the status and nature of a 
     prisoner's reentry plan.
       (c) Program Duration.--The Federal Intensive Supervision, 
     Tracking and Reentry Training Demonstration shall begin not 
     later than 6 months following the availability of funds to 
     carry out this section, and shall last 3 years. The Director 
     of the Administrative Office of the United States Courts may 
     extend the project for a period of up to six months to enable 
     participating prisoners to complete their involvement in the 
     project.
       (d) Selection of Districts.--The Judicial Conference of the 
     United States, in consultation with the Attorney General, 
     shall select an appropriate number of Federal judicial 
     districts in which to carry out the Federal Intensive 
     Supervision, Tracking and Reentry Training Demonstration 
     project.

     SEC. 1615. FEDERAL ENHANCED IN-PRISON VOCATIONAL ASSESSMENT 
                   AND TRAINING DEMONSTRATION.

       (a) Authority and Establishment of Demonstration Project.--
     From funds made available to carry out this section, the 
     Attorney General shall establish the Federal Enhanced In-
     Prison Vocational Assessment and Training Demonstration 
     project in selected institutions. The project shall provide 
     in-prison assessments of prisoners' vocational needs and 
     aptitudes, enhanced work skills development, enhanced release 
     readiness programming, and other components as appropriate to 
     prepare Federal prisoners for release and reentry into the 
     community.
       (b) Program Duration.--The Enhanced In-Prison Vocational 
     Assessment and Training Demonstration shall begin not later 
     than six months following the availability of funds to carry 
     out this section, and shall last 3 years. The Attorney 
     General may extend the project for a period of up to 6 months 
     to enable participating prisoners to complete their 
     involvement in the project.

     SEC. 1616. RESEARCH AND REPORTS TO CONGRESS.

       (a) Attorney General.--Not later than 2 years after the 
     enactment of this Act, the Attorney General shall report to 
     Congress on the progress of the demonstration projects 
     authorized by sections 1611 and 1615. Not later than 1 year 
     after the end of the demonstration projects authorized by 
     sections 1611 and 1615, the Director of the Federal Bureau of 
     Prisons shall report to Congress on the effectiveness of the 
     reentry projects authorized by sections 1611 and 1615 on 
     post-release outcomes and recidivism. The report shall 
     address post-release outcomes and recidivism for a period of 
     3 years following release from custody. The reports submitted 
     pursuant to this section shall be submitted to the Committees 
     on the Judiciary in the House of Representatives and the 
     Senate.
       (b) Administrative Office of the United States Courts.--Not 
     later than 2 years after the enactment of this Act, Director 
     of the Administrative Office of the United States Courts 
     shall report to Congress on the progress of the demonstration 
     projects authorized by sections 1612 and 1614. Not later

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     than 180 days after the end of the demonstration projects 
     authorized by sections 1612 and 1614, the Director of the 
     Administrative Office of the United States Courts shall 
     report to Congress on the effectiveness of the reentry 
     projects authorized by sections 1612 and 1614 on post-release 
     outcomes and recidivism. The report should address post-
     release outcomes and recidivism for a period of 3 years 
     following release from custody. The reports submitted 
     pursuant to this section shall be submitted to the Committees 
     on the Judiciary in the House of Representatives and the 
     Senate.
       (c) DC ISTART.--Not later than 2 years after the enactment 
     of this Act, the Executive Director of the corporation or 
     institute authorized by section 11281(2) of the National 
     Capital Revitalization and Self-Government Improvement Act of 
     1997 (Pub. Law 105-33; 111 Stat. 712) shall report to 
     Congress on the progress of the demonstration project 
     authorized by section 1613 of this Act. Not later than 1 year 
     after the end of the demonstration project authorized by 
     section 1613, the Executive Director of the corporation or 
     institute authorized by section 11281(2) of the National 
     Capital Revitalization and Self-Government Improvement Act of 
     1997 (Pub. Law 105-33; 111 Stat. 712) shall report to 
     Congress on the effectiveness of the reentry project 
     authorized by section 1613 of this Act on post-release 
     outcomes and recidivism. The report shall address post-
     release outcomes and recidivism for a period of three years 
     following release from custody. The reports submitted 
     pursuant to this section shall be submitted to the Committees 
     on the Judiciary in the House of Representatives and the 
     Senate. In the event that the corporation or institute 
     authorized by section 11281(2) of the National Capital 
     Revitalization and Self-Government Improvement Act of 1997 
     (Pub. Law 105-33; 111 Stat. 712) is not in operation 1 year 
     after the enactment of this Act, the Director of the National 
     Institute of Justice shall prepare and submit the reports 
     required by this section and may do so from funds made 
     available to the Court Services and Offender Supervision 
     Agency of the District of Columbia, as authorized by the 
     National Capital Revitalization and Self-Government 
     Improvement Act of 1997 (Pub. Law 105-33; 111 Stat. 712).

     SEC. 1617. DEFINITIONS.

       In this part--
       (1) the term ``appropriate prisoner'' means a person who is 
     considered by prison authorities--
       (A) to pose a medium to high risk of committing a criminal 
     act upon reentering the community, and
       (B) to lack the skills and family support network that 
     facilitate successful reintegration into the community; and
       (2) the term ``appropriate high risk parolees'' means 
     parolees considered by prison authorities--
       (A) to pose a medium to high risk of committing a criminal 
     act upon reentering the community; and
       (B) to lack the skills and family support network that 
     facilitate successful reintegration into the community.

     SEC. 1618. AUTHORIZATION OF APPROPRIATIONS.

       To carry out this part, there are authorized to be 
     appropriated, to remain available until expended, the 
     following amounts:
       (1) To the Federal Bureau of Prisons--
       (A) $1,375,000 for fiscal year 2002;
       (B) $1,110,000 for fiscal year 2003;
       (C) $1,130,000 for fiscal year 2004;
       (D) $1,155,000 for fiscal year 2005; and
       (E) $1,230,000 for fiscal year 2006.
       (2) To the Federal Judiciary--
       (A) $3,380,000 for fiscal year 2002;
       (B) $3,540,000 for fiscal year 2003;
       (C) $3,720,000 for fiscal year 2004;
       (D) $3,910,000 for fiscal year 2005; and
       (E) $4,100,000 for fiscal year 2006.
       (3) To the Court Services and Offender Supervision Agency 
     of the District of Columbia, as authorized by the National 
     Capital Revitalization and Self-Government Improvement Act of 
     1997 (Pub. Law 105-33; 111 Stat. 712)--
       (A) $4,860,000 for fiscal year 2002;
       (B) $4,510,000 for fiscal year 2003;
       (C) $4,620,000 for fiscal year 2004;
       (D) $4,740,000 for fiscal year 2005; and
       (E) $4,860,000 for fiscal year 2006.

                  PART 2--STATE REENTRY GRANT PROGRAMS

     SEC. 1621. AMENDMENTS TO THE OMNIBUS CRIME CONTROL AND SAFE 
                   STREETS ACT OF 1968.

       (a) In General.--Title I of the Omnibus Crime Control and 
     Safe Streets Act of 1968 (42 U.S.C. 3711 et seq.) as amended, 
     is amended by inserting after part CC the following new part:
       ``PART DD--OFFENDER REENTRY AND COMMUNITY SAFETY

     ``SEC. 2951. ADULT OFFENDER STATE AND LOCAL REENTRY 
                   PARTNERSHIPS.

       ``(a) Grant Authorization.--The Attorney General shall make 
     grants of up to $1,000,000 to States, Territories, and Indian 
     tribes, in partnership with units of local government and 
     nonprofit organizations, for the purpose of establishing 
     adult offender reentry demonstration projects. Funds may be 
     expended by the projects for the following purposes:
       ``(1) oversight/monitoring of released offenders;
       ``(2) providing returning offenders with drug and alcohol 
     testing and treatment and mental health assessment and 
     services;
       ``(3) convening community impact panels, victim impact 
     panels or victim impact educational classes;
       ``(4) providing and coordinating the delivery of other 
     community services to offenders such as housing assistance, 
     education, employment training, conflict resolution skills 
     training, batterer intervention programs, and other social 
     services as appropriate; and
       ``(5) establishing and implementing graduated sanctions and 
     incentives.
       ``(b) Submission of Application.--In addition to any other 
     requirements that may be specified by the Attorney General, 
     an application for a grant under this subpart shall--
       ``(1) describe a long-term strategy and detailed 
     implementation plan, including how the jurisdiction plans to 
     pay for the program after the Federal funding ends;
       ``(2) identify the governmental and community agencies that 
     will be coordinated by this project;
       ``(3) certify that there has been appropriate consultation 
     with all affected agencies and there will be appropriate 
     coordination with all affected agencies in the implementation 
     of the program, including existing community corrections and 
     parole; and
       ``(4) describe the methodology and outcome measures that 
     will be used in evaluating the program.
       ``(c) Applicants.--The applicants as designated under 
     subsection (a)--
       ``(1) shall prepare the application as required under 
     subsection (b); and
       ``(2) shall administer grant funds in accordance with the 
     guidelines, regulations, and procedures promulgated by the 
     Attorney General, as necessary to carry out the purposes of 
     this part.
       ``(d) Matching Funds.--The Federal share of a grant 
     received under this title may not exceed 25 percent of the 
     costs of the project funded under this title unless the 
     Attorney General waives, wholly or in part, the requirements 
     of this section.
       ``(e) Reports.--Each entity that receives a grant under 
     this part shall submit to the Attorney General, for each year 
     in which funds from a grant received under this part is 
     expended, a report at such time and in such manner as the 
     Attorney General may reasonably require that contains:
       ``(1) a summary of the activities carried out under the 
     grant and an assessment of whether such activities are 
     meeting the needs identified in the application funded under 
     this part; and
       ``(2) such other information as the Attorney General may 
     require.
       ``(f) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section $40,000,000 in fiscal years 2002 
     and 2003; and such sums as may be necessary for each of the 
     fiscal years 2004, 2005, and 2006.
       ``(2) Limitations.--Of the amount made available to carry 
     out this section in any fiscal year--
       ``(A) not more than 2 percent or less than 1 percent may be 
     used by the Attorney General for salaries and administrative 
     expenses; and
       ``(B) not more than 3 percent or less than 2 percent may be 
     used for technical assistance and training.

     ``SEC. 2952. STATE AND LOCAL REENTRY COURTS.

       ``(a) Grant Authorization.--The Attorney General shall make 
     grants of up to $500,000 to State and local courts or state 
     agencies, municipalities, public agencies, nonprofit 
     organizations, and tribes that have agreements with courts to 
     take the lead in establishing a reentry court. Funds may be 
     expended by the projects for the following purposes:
       ``(1) monitoring offenders returning to the community;
       ``(2) providing returning offenders with drug and alcohol 
     testing and treatment and mental and medical health 
     assessment and services;
       ``(3) convening community impact panels, victim impact 
     panels, or victim impact educational classes;
       ``(4) providing and coordinating the delivery of other 
     community services to offenders, such as housing assistance, 
     education, employment training, conflict resolution skills 
     training, batterer intervention programs, and other social 
     services as appropriate; and
       ``(5) establishing and implementing graduated sanctions and 
     incentives.
       ``(b) Submission of Application.--In addition to any other 
     requirements that may be specified by the Attorney General, 
     an application for a grant under this subpart shall--
       ``(1) describe a long-term strategy and detailed 
     implementation plan, including how the jurisdiction plans to 
     pay for the program after the Federal funding ends;
       ``(2) identify the governmental and community agencies that 
     will be coordinated by this project;
       ``(3) certify that there has been appropriate consultation 
     with all affected agencies, including existing community 
     corrections and parole, and there will be appropriate 
     coordination with all affected agencies in the implementation 
     of the program;
       ``(4) describe the methodology and outcome measures that 
     will be used in evaluation of the program.
       ``(c) Applicants.--The applicants as designated under 
     subsection (a)--

[[Page 290]]

       ``(1) shall prepare the application as required under 
     subsection (b); and
       ``(2) shall administer grant funds in accordance with the 
     guidelines, regulations, and procedures promulgated by the 
     Attorney General, as necessary to carry out the purposes of 
     this part.
       ``(d) Matching Funds.--The Federal share of a grant 
     received under this title may not exceed 25 percent of the 
     costs of the project funded under this title unless the 
     Attorney General waives, wholly or in part, the requirements 
     of this section.
       ``(e) Reports.--Each entity that receives a grant under 
     this part shall submit to the Attorney General, for each year 
     in which funds from a grant received under this part is 
     expended, a report at such time and in such manner as the 
     Attorney General may reasonably require that contains:
       ``(1) a summary of the activities carried out under the 
     grant and an assessment of whether such activities are 
     meeting the needs identified in the application funded under 
     this part; and
       ``(2) such other information as the Attorney General may 
     require.
       ``(f) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section $10,000,000 in fiscal years 2002 
     and 2003, and such sums as may be necessary for each of the 
     fiscal years 2004, 2005, and 2006.
       ``(2) Limitations.--Of the amount made available to carry 
     out this section in any fiscal year--
       ``(A) not more than 2 percent or less than 1 percent may be 
     used by the Attorney General for salaries and administrative 
     expenses; and
       ``(B) not more than 3 percent or less than 2 percent may be 
     used for technical assistance and training.

     ``SEC. 2953. JUVENILE OFFENDER STATE AND LOCAL REENTRY 
                   PROGRAMS.

       ``(a) Grant Authorization.--The Attorney General shall make 
     grants of up to $250,000 to States, in partnership with local 
     units of governments or nonprofit organizations, for the 
     purpose of establishing juvenile offender reentry programs. 
     Funds may be expended by the projects for--
       ``(1) providing returning juvenile offenders with drug and 
     alcohol testing and treatment and mental and medical health 
     assessment and services;
       ``(2) convening victim impact panels, restorative justice 
     panels, or victim impact educational classes for juvenile 
     offenders;
       ``(3) oversight/monitoring of released juvenile offenders; 
     and
       ``(4) providing for the planning of reentry services when 
     the youth is initially incarcerated and coordinating the 
     delivery of community-based services, such as education, 
     conflict resolution skills training, batterer intervention 
     programs, employment training and placement, efforts to 
     identify suitable living arrangements, family involvement and 
     support, and other services.
       ``(b) Submission of Application.--In addition to any other 
     requirements that may be specified by the Attorney General, 
     an application for a grant under this subpart shall--
       ``(1) describe a long-term strategy and detailed 
     implementation plan, including how the jurisdiction plans to 
     pay for the program after the Federal funding ends;
       ``(2) identify the governmental and community agencies that 
     will be coordinated by this project;
       ``(3) certify that there has been appropriate consultation 
     with all affected agencies and there will be appropriate 
     coordination with all affected agencies, including existing 
     community corrections and parole, in the implementation of 
     the program;
       ``(4) describe the methodology and outcome measures that 
     will be used in evaluating the program.
       ``(c) Applicants.--The applicants as designated under 
     subsection (a)--
       ``(1) shall prepare the application as required under 
     subsection (b); and
       ``(2) shall administer grant funds in accordance with the 
     guidelines, regulations, and procedures promulgated by the 
     Attorney General, as necessary to carry out the purposes of 
     this part.
       ``(d) Matching Funds.--The Federal share of a grant 
     received under this title may not exceed 25 percent of the 
     costs of the project funded under this title unless the 
     Attorney General waives, wholly or in part, the requirements 
     of this section.
       ``(e) Reports.--Each entity that receives a grant under 
     this part shall submit to the Attorney General, for each year 
     in which funds from a grant received under this part is 
     expended, a report at such time and in such manner as the 
     Attorney General may reasonably require that contains:
       ``(1) a summary of the activities carried out under the 
     grant and an assessment of whether such activities are 
     meeting the needs identified in the application funded under 
     this part; and
       ``(2) such other information as the Attorney General may 
     require.
       ``(f) Authorization of Appropriations.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this section $5,000,000 in fiscal years 2002 and 
     2003, and such sums as are necessary for each of the fiscal 
     years 2004, 2005, and 2006.
       ``(2) Limitations.--Of the amount made available to carry 
     out this section in any fiscal year--
       ``(A) not more than 2 percent or less than 1 percent may be 
     used by the Attorney General for salaries and administrative 
     expenses; and
       ``(B) not more than 3 percent or less than 2 percent may be 
     used for technical assistance and training.

     ``SEC. 2954. STATE REENTRY PROGRAM RESEARCH, DEVELOPMENT, AND 
                   EVALUATION.

       ``(a) Grant Authorization.--The Attorney General shall make 
     grants to conduct research on a range of issues pertinent to 
     reentry programs, the development and testing of new reentry 
     components and approaches, selected evaluation of projects 
     authorized in the preceding sections, and dissemination of 
     information to the field.
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $5,000,000 in fiscal years 2002 and 2003, and such sums as 
     are necessary to carry out this section in fiscal years 2004, 
     2005, and 2006.''.
       (b) Technical Amendment.--The table of contents of title I 
     of the Omnibus Crime Control and Safe Street Act of 1968 (42 
     U.S.C. 3711 et seq.), as amended, is amended by inserting 
     after the matter relating to part CC the following:

          ``Part DD--Offender Reentry and Community Safety Act

``Sec. 2951. Adult Offender State and Local Reentry Partnerships.
``Sec. 2952. State and Local Reentry Courts.
``Sec. 2953. Juvenile Offender State and Local Reentry Programs.
``Sec. 2954. State Reentry Program Research and Evaluation.''.

           TITLE II--STRENGTHENING THE FEDERAL CRIMINAL LAWS

                  Subtitle A--Combating Gang Violence

         PART 1--ENHANCED PENALTIES FOR GANG-RELATED ACTIVITIES

     SEC. 2101. GANG FRANCHISING.

       Chapter 26 of title 18, United States Code, is amended by 
     adding at the end the following:

     ``SEC. 522. INTERSTATE FRANCHISING OF CRIMINAL STREET GANGS.

       ``(a) Prohibited Act.--Whoever travels in interstate or 
     foreign commerce, or causes another to do so, to recruit, 
     solicit, induce, command, or cause to create, or attempt to 
     create a franchise of a criminal street gang shall be 
     punished in accordance with subsection (c).
       ``(b) Definitions.--In this section:
       ``(1) Criminal street gang.--The term `criminal street 
     gang' has the meaning given that term in section 521.
       ``(2) Franchise.--The term `franchise' means an organized 
     group of individuals related by name, moniker, or other 
     identifier, that engages in coordinated violent crime or drug 
     trafficking activities in interstate or foreign commerce with 
     a criminal street gang in another State.
       ``(c) Penalties.--A person who violates subsection (a) 
     shall be imprisoned for not more than 10 years, fined under 
     this title, or both.''.

     SEC. 2102. ENHANCED PENALTY FOR USE OR RECRUITMENT OF MINORS 
                   IN GANGS.

       (a) In General.--Chapter 26 of title 18, United States 
     Code, as amended by section 2101 of this title, is amended by 
     adding at the end the following:

     ``Sec. 523. Sentencing enhancement for use or recruitment of 
       minors

       ``Pursuant to its authority under section 994(p) of title 
     28, the United States Sentencing Commission shall amend the 
     Federal sentencing guidelines to provide an appropriate 
     enhancement for the use of minors in a criminal street gang 
     and the recruitment of minors in furtherance of the creation 
     of a criminal street gang franchise.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     26 of title 18, United States Code, is amended by adding at 
     the end the following:

``522. Interstate franchising of criminal street gangs.
``523. Sentencing enhancement for use or recruitment of minors.''.

     SEC. 2103. GANG FRANCHISING AS A RICO PREDICATE.

       Section 1961(1) of title 18, United States Code, is 
     amended--
       (1) by striking ``or'' before ``(F)''; and
       (2) by inserting ``, or (G) an offense under section 522 of 
     this title'' before the semicolon at the end.

     SEC. 2104. INCREASE IN OFFENSE LEVEL FOR PARTICIPATION IN 
                   CRIME AS GANG MEMBER.

       (a) Definition of Criminal Street Gang.--In this section, 
     the term ``criminal street gang'' has the same meaning as in 
     section 521(a) of title 18, United States Code.
       (b) Sentencing Enhancement.--Pursuant to its authority 
     under section 994(p) of title 28, United States Code, the 
     United States Sentencing Commission shall amend the Federal 
     sentencing guidelines to provide an appropriate enhancement 
     with respect to any offense committed in connection with, or 
     in furtherance of, the activities of a criminal street gang 
     if the defendant is a member of the criminal street gang at 
     the time of the offense.

[[Page 291]]

       (c) Consistency.--In carrying out this section, the United 
     States Sentencing Commission shall--
       (1) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (2) avoid duplicative punishment for substantially the same 
     offense.

     SEC. 2105. ENHANCED PENALTY FOR DISCHARGE OF FIREARMS IN 
                   RELATION TO COUNTS OF VIOLENCE OR DRUG 
                   TRAFFICKING CRIMES.

       (a) Definitions.--In this section, the terms ``crime of 
     violence'' and ``drug trafficking crime'' have the same 
     meanings as in section 924(c) of title 18, United States 
     Code.
       (b) Sentencing Enhancement.--Pursuant to its authority 
     under section 994(p) of title 28, United States Code, the 
     United States Sentencing Commission shall amend the Federal 
     sentencing guidelines to provide an appropriate sentence 
     enhancement with respect to any defendant who discharges a 
     firearm during or in relation to any crime of violence or any 
     drug trafficking crime.
       (c) Consistency.--In carrying out this section, the United 
     States Sentencing Commission shall--
       (1) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (2) avoid duplicative punishment for substantially the same 
     offense.

     SEC. 2106. PUNISHMENT OF ARSON OR BOMBING AT FACILITIES 
                   RECEIVING FEDERAL FINANCIAL ASSISTANCE.

       Section 844(f)(1) of title 18, United States Code, is 
     amended by inserting ``or any institution or organization 
     receiving Federal financial assistance'' after ``or agency 
     thereof,''.

     SEC. 2107. ELIMINATION OF STATUTE OF LIMITATIONS FOR MURDER.

       (a) In General.--Section 3281 of title 18, United States 
     Code, is amended to read as follows:

     ``Sec. 3281. Capital offenses and Class A felonies involving 
       murder

       ``An indictment for any offense punishable by death or an 
     indictment or information for a Class A felony involving 
     murder (as defined in section 1111 or as defined under 
     applicable State law in the case of an offense under section 
     1963(a) involving racketeering activity described in section 
     1961(1)) may be found at any time without limitation.''.
       (b) Applicability.--The amendment made by subsection (a) 
     applies to any offense for which the applicable statute of 
     limitations had not run as of the date of enactment of this 
     Act.

     SEC. 2108. EXTENSION OF STATUTE OF LIMITATIONS FOR VIOLENT 
                   AND DRUG TRAFFICKING CRIMES.

       (a) In General.--Chapter 213 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 3296. Class A violent and drug trafficking offenses

       ``Except as provided in section 3281, no person shall be 
     prosecuted, tried, or punished for a Class A felony that is a 
     crime of violence or a drug trafficking crime (as that term 
     is defined in section 924(c)) unless the indictment is 
     returned or the information is filed within 10 years after 
     the commission of the offense.''.
       (b) Applicability.--The amendment made by subsection (a) 
     applies to any offense for which the applicable statute of 
     limitations had not run as of the date of enactment of this 
     Act.
       (c) Conforming Amendments.--The chapter analysis for 
     chapter 213 of title 18, United States Code, is amended--
       (1) in the item relating to section 3281, by inserting 
     ``and Class A felonies involving murder'' before the period; 
     and
       (2) by adding at the end the following:

``3296. Class A violent and drug trafficking offenses.''.

     SEC. 2109. INCREASED PENALTIES UNDER THE RICO LAW FOR GANG 
                   AND VIOLENT CRIMES.

       Section 1963(a) of title 18, United States Code, is amended 
     by striking ``or imprisoned not more than 20 years (or for 
     life if the violation is based on a racketeering activity for 
     which the maximum penalty includes life imprisonment), or 
     both,'' and inserting ``or imprisoned not more than the 
     greater of 20 years or the statutory maximum term of 
     imprisonment (other than the penalty of death) applicable to 
     a racketeering activity on which the violation is based, or 
     both,''.

     SEC. 2110. INCREASED PENALTY AND BROADENED SCOPE OF STATUTE 
                   AGAINST VIOLENT CRIMES IN AID OF RACKETEERING.

       Section 1959(a) of title 18, United States Code, is 
     amended--
       (1) by inserting ``or commits any other crime of violence'' 
     before ``or threatens to commit a crime of violence'';
       (2) in paragraph (4), by inserting ``committing any other 
     crime of violence or for'' before ``threatening to commit a 
     crime of violence'', and by striking ``five'' and inserting 
     ``ten'';
       (3) in paragraph (5), by striking ``for not more than ten 
     years'' and inserting ``for any term of years or for life'';
       (4) in paragraph (6), by--
       (A) striking ``or'' before ``assault resulting in serious 
     bodily injury'';
       (B) inserting ``or any other crime of violence'' after 
     ``assault resulting in serious bodily injury''; and
       (C) striking ``three'' and inserting ``10''; and
       (5) by inserting ``(as defined in section 1365 of this 
     title)'' after ``serious bodily injury'' the first place that 
     term appears.

     SEC. 2111. FACILITATING THE PROSECUTION OF CARJACKING 
                   OFFENSES.

       Section 2119 of title 18, United States Code, is amended by 
     striking ``, with the intent to cause death or serious bodily 
     harm''.

     SEC. 2112. FACILITATION OF RICO PROSECUTIONS.

       Section 1962(d) of title 18, United States Code, is amended 
     by adding at the end the following: ``For purposes of this 
     subsection, it is not necessary to establish that the 
     defendant personally committed an act of racketeering 
     activity.''.

     SEC. 2113. ASSAULT AS A RICO PREDICATE.

       Section 1961(1)(A) of title 18, United States Code, is 
     amended by adding after ``extortion,'' ``assault''.

     SEC. 2114. EXPANSION OF DEFINITION OF ``RACKETEERING 
                   ACTIVITY'' TO AFFECT GANGS IN INDIAN COUNTRY.

       Section 1961(1)(A) of title 18, United States Code, is 
     amended by inserting ``or, with respect to an act or threat 
     occurring solely in Indian country, as defined in section 
     1151 of this title, Federal'' after ``chargeable under 
     State''.

     SEC. 2115. INCREASED PENALTIES FOR VIOLENCE IN THE COURSE OF 
                   RIOT OFFENSES.

       Section 2101(a) of title 18, United States Code, is amended 
     by striking ``paragraph--'' and all that follows through the 
     end of the subsection and inserting ``shall be fined under 
     this title--
       ``(i) if death results from such act, be imprisoned for any 
     term of years or for life, or both;
       ``(ii) if serious bodily injury (as defined in section 1365 
     of this title) results from such act, be imprisoned for not 
     more than 20 years, or both; or
       ``(iii) in any other case, be imprisoned for not more than 
     5 years, or both''.

     SEC. 2116. EXPANSION OF FEDERAL JURISDICTION OVER CRIMES 
                   OCCURRING IN PRIVATE PENAL FACILITIES HOUSING 
                   FEDERAL PRISONERS OR PRISONERS FROM OTHER 
                   STATES.

       Section 1791(d)(4) of title 18, United States Code, is 
     amended by inserting before the period at the end the 
     following: ``, including privately owned facilities housing 
     Federal prisoners or prisoners who are serving a term of 
     imprisonment under a commitment order from a State other than 
     the State in which the penal facility is located''.

              PART 2--TARGETING GANG-RELATED GUN OFFENSES

     SEC. 2121. TRANSFER OF FIREARM TO COMMIT A CRIME OF VIOLENCE.

       Section 924(h) of title 18, United States Code, is amended 
     by inserting ``or having reasonable cause to believe'' after 
     ``knowing''.

     SEC. 2122. INCREASED PENALTY FOR KNOWINGLY RECEIVING FIREARM 
                   WITH OBLITERATED SERIAL NUMBER.

       Section 924(a) of title 18, United States Code, is 
     amended--
       (1) in paragraph (1)(B), by striking ``(k),''; and
       (2) in paragraph (2), by inserting ``(k),'' after ``(j),''.

     SEC. 2123. AMENDMENT OF THE SENTENCING GUIDELINES FOR 
                   TRANSFERS OF FIREARMS TO PROHIBITED PERSONS.

       Pursuant to its authority under section 994(p) of title 28, 
     United States Code, the United States Sentencing Commission 
     shall amend the Federal sentencing guidelines to increase the 
     base offense level for offenses subject to section 2K2.1 of 
     those guidelines (Unlawful Receipt, Possession, or Firearms 
     or Ammunitions) to assume that a person who transferred a 
     firearm or ammunition and who knew or had reasonable cause to 
     believe that the transferee was a prohibited person is 
     subject to the same base offense level as the transferee. The 
     amended guidelines shall not require the same offense level 
     for the transferor and transferee to the extent that the 
     transferee's base offense level is subject to an additional 
     increase on the basis of a past criminal conviction of either 
     a crime of violence or a controlled substance offense.

  PART 3--USING AND PROTECTING WITNESSES TO HELP PROSECUTE GANGS AND 
                        OTHER VIOLENT CRIMINALS

     SEC. 2131. INTERSTATE TRAVEL TO ENGAGE IN WITNESS 
                   INTIMIDATION OR OBSTRUCTION OF JUSTICE.

       Section 1952 of title 18, United States Code, is amended--
       (1) by redesignating subsections (b) and (c) as (c) and 
     (d), respectively; and
       (2) by inserting after subsection (a) the following:
       ``(b) Whoever travels in interstate or foreign commerce 
     with intent by bribery, force, intimidation, or threat, 
     directed against any person, to delay or influence the 
     testimony of or prevent from testifying a witness in a State 
     criminal proceeding or by any such means to cause any person 
     to destroy, alter, or conceal a record, document, or other 
     object, with intent to impair the object's integrity or 
     availability for use in such a proceeding, and thereafter 
     engages or endeavors to engage in such conduct, shall--

[[Page 292]]

       ``(1) be fined under this title or imprisoned not more than 
     10 years, or both;
       ``(2) if serious bodily injury (as defined in section 1365) 
     results, be so fined or imprisoned for not more than 20 
     years, or both; and
       ``(3) if death results, be so fined and imprisoned for any 
     term of years or for life, or both, and may be sentenced to 
     death.''.

     SEC. 2132. EXPANDING PRETRIAL DETENTION ELIGIBILITY FOR 
                   SERIOUS GANG AND OTHER VIOLENT CRIMINALS.

       (a) In General.--Section 3142(f)(1) of title 18, United 
     States Code, is amended by adding at the end the following:

     ``For purposes of subparagraph (D), the term `convicted' 
     includes a finding, under Federal or State law, that a person 
     has committed an act of juvenile delinquency;''.
       (b) Offenses.--Section 3156(a)(4) of title 18, United 
     States Code, is amended--
       (1) by striking ``or'' at the end of subparagraph (B);
       (2) by striking the period at the end of subparagraph (C) 
     and inserting ``; or''; and
       (3) by adding at the end the following:

       ``(D) an offense that is a violation of section 842(i)(1) 
     or 922(g)(1) of this title (relating to possession of 
     explosives or firearms by convicted felons).''.
       (c) Factors.--Section 3142(g)(3)(B) of title 18, United 
     States Code, is amended--
       (1) by striking ``the person was on probation'' and 
     inserting ``the person was--
       ``(i) on probation'';
       (2) by striking ``local law; and'' and inserting ``local 
     law; or''; and
       (3) by adding at the end the following:
       ``(ii) was a member of or participated in a criminal street 
     gang or racketeering enterprise; and''.

     SEC. 2133. CONSPIRACY PENALTY FOR OBSTRUCTION OF JUSTICE 
                   OFFENSES INVOLVING VICTIMS, WITNESSES, AND 
                   INFORMANTS.

       Section 1512 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(j) Whoever conspires to commit any offense defined in 
     this section or section 1513 of this title shall be subject 
     to the same penalties as those prescribed for the offense the 
     commission of which was the object of the conspiracy.''.

     SEC. 2134. ALLOWING A REDUCTION OF SENTENCE FOR PROVIDING 
                   USEFUL INVESTIGATIVE INFORMATION ALTHOUGH NOT 
                   REGARDING A PARTICULAR INDIVIDUAL.

       (a) Title 18.--Section 3553(e) of title 18, United States 
     Code, is amended by striking ``substantial assistance in the 
     investigation or prosecution of another person who has 
     committed an offense'' and inserting ``substantial assistance 
     in an investigation of any offense or the prosecution of 
     another person who has committed an offense''.
       (b) Title 28.--Section 994(n) of title 28, United States 
     Code, is amended by striking ``substantial assistance in the 
     investigation or prosecution of another person who has 
     committed an offense'' and inserting ``substantial assistance 
     in an investigation of any offense or the prosecution of 
     another person who has committed an offense''.
       (c) Federal Rules of Criminal Procedure.--Rule 35(b) of the 
     Federal Rules of Criminal Procedure is amended by striking 
     ``substantial assistance in the investigation or prosecution 
     of another person who has committed an offense'' and 
     inserting ``substantial assistance in an investigation of any 
     offense or the prosecution of another person who has 
     committed an offense''.

     SEC. 2135. INCREASING THE PENALTY FOR USING PHYSICAL FORCE TO 
                   TAMPER WITH WITNESSES, VICTIMS, OR INFORMANTS.

       Section 1512 of title 18, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``as provided in 
     paragraph (2)'' and inserting ``as provided in paragraph 
     (3)'';
       (B) by redesignating paragraph (2) as paragraph (3);
       (C) by inserting after paragraph (1) the following:
       ``(2) Whoever uses physical force or the threat of physical 
     force, or attempts to do so, with intent to--
       ``(A) influence, delay, or prevent the testimony of any 
     person in an official proceeding;
       ``(B) cause or induce any person to--
       ``(i) withhold testimony, or withhold a record, document, 
     or other object, from an official proceeding;
       ``(ii) alter, destroy, mutilate, or conceal an object with 
     intent to impair the object's integrity or availability for 
     use in an official proceeding;
       ``(iii) evade legal process summoning that person to appear 
     as a witness, or to produce a record, document, or other 
     object, in an official proceeding; and
       ``(iv) be absent from an official proceeding to which such 
     person has been summoned by legal process; or
       ``(C) hinder, delay, or prevent the communication to a law 
     enforcement officer or judge of the United States of 
     information relating to the commission or possible commission 
     of a Federal offense or a violation of conditions of 
     probation, parole, or release pending judicial proceedings;

     shall be punished as provided in paragraph (3).''; and
       (D) by striking paragraph (3)(B), as redesignated, and 
     inserting the following:
       ``(B) an attempt to murder, the use of physical force, the 
     threat of physical force, or an attempt to do so, 
     imprisonment for not more than 20 years.''; and
       (2) in subsection (b), by striking ``or physical force''.

     SEC. 2136. EXPANSION OF FEDERAL KIDNAPPING OFFENSE TO COVER 
                   WHEN DEATH OF VICTIM OCCURS BEFORE CROSSING 
                   STATE LINE AND WHEN FACILITY IN INTERSTATE 
                   COMMERCE OR THE MAILS ARE USED.

       Section 1201(a) of title 18, United States Code, is 
     amended--
       (1) by inserting before the semicolon at the end of 
     paragraph (1) the following: ``, without regard to whether 
     such person was alive when transported across a State 
     boundary if the person was alive when the transportation 
     began'';
       (2) by striking ``or'' at the end of paragraph (4); and
       (3) by inserting after paragraph (5) the following:
       ``(6) an individual travels in interstate or foreign 
     commerce in furtherance of the offense; or
       ``(7) the mail or a facility in interstate or foreign 
     commerce is used in furtherance of the offense;''.

     SEC. 2137. ASSAULTS OR OTHER CRIMES OF VIOLENCE FOR HIRE.

       Section 1958(a) of title 18, United States Code, is amended 
     by inserting ``or other felony crime of violence against the 
     person'' after ``murder''.

     SEC. 2138. CLARIFICATION OF INTERSTATE THREAT STATUTE TO 
                   COVER THREATS TO KILL.

       Subsections (b) and (c) of section 875 of title 18, United 
     States Code, and the second and third undesignated paragraphs 
     of sections 876 and 877 of title 18, United States Code, are 
     each amended by striking ``any threat to injure'' and 
     inserting ``any threat to kill or injure''.

     SEC. 2139. CONFORMING AMENDMENT TO LAW PUNISHING OBSTRUCTION 
                   OF JUSTICE BY NOTIFICATION OF EXISTENCE OF A 
                   SUBPOENA FOR RECORDS IN CERTAIN TYPES OF 
                   INVESTIGATIONS.

       Section 1510(b)(3)(B) of title 18, United States Code, is 
     amended--
       (1) in clause (i), by striking ``or'' at the end;
       (2) in clause (ii), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(iii) the Controlled Substances Act (21 U.S.C. 801 et 
     seq.), the Controlled Substances Import and Export Act (21 
     U.S.C. 951 et seq.), or section 6050I of the Internal Revenue 
     Code of 1986; and
       ``(iv) section 286, 287, 669, 1001, 1027, 1035, 1341, 1343, 
     1347, 1518, or 1954 relating to a Federal health care 
     offense.''.

                       PART 4--GANG PARAPHERNALIA

     SEC. 2141. STREAMLINING PROCEDURES FOR LAW ENFORCEMENT ACCESS 
                   TO CLONE NUMERIC PAGERS.

       (a) Amendment to Chapter 206.--Chapter 206 of title 18, 
     United States Code, is amended--
       (1) in the chapter heading, by striking ``AND TRAP AND 
     TRACE DEVICES'' and inserting: ``TRAP AND TRACE DEVICES, AND 
     CLONE NUMERIC PAGERS'';
       (2) in section 3121--
       (A) in the section heading, by striking ``and trap and 
     trace device'' and inserting ``, trap and trace device, and 
     clone pager'';
       (B) in subsection (a)--
       (i) by striking ``or a trap and trace device'' each place 
     that term appears and inserting ``, a trap and trace device, 
     or a clone pager'';
       (ii) after ``3123'' by inserting ``or section 3129''; and
       (C) in subsections (b) and (c), by striking ``or trap and 
     trace device'' each place that term appears and inserting ``, 
     a trap and trade device or a cone pager'';
       (3) in section 3124--
       (A) in the section heading, by striking ``or a trap and 
     trace device'' and inserting ``, a trap and trace device, or 
     a clone pager'';
       (B) by redesignating subsections (c) through (f) as 
     subsections (d) through (g), respectively; and
       (C) by inserting after subsection (b) the following:
       ``(c) Clone Pager.--Upon the request of an attorney for the 
     Government or an officer of a law enforcement agency 
     authorized to use a clone pager under this chapter, a 
     provider of a paging service or electronic communication 
     service shall furnish such investigative or law enforcement 
     officer, all information, facilities, and technical 
     assistance necessary to accomplish the use of the clone pager 
     unobtrusively and with a minimum of interference with the 
     services that the person so ordered by the court provides to 
     the subscriber, if such assistance is directed by a court 
     order as provided in section 3129(b)(2) of this chapter.'';
       (4) in section 3125--
       (A) in the section heading, by striking ``and trap and 
     trace device'' and inserting ``, trap and trace device, and 
     clone pager'';
       (B) in subsection (a)--
       (i) by striking ``or trap and trace device'' each place 
     that term appears and inserting ``, a trap and trace device, 
     or a clone pager''; and

[[Page 293]]

       (ii) by striking ``an order approving the installation or 
     use is issued in accordance with section 3123 of this title'' 
     and inserting ``an application is made for an order approving 
     the installation or use in accordance with section 3123 or 
     section 3128 of this title''; and
       (C) in subsection (b), by adding at the end the following: 
     ``In the event such application for the use of a clone pager 
     is denied, or in any other case where the use of the clone 
     pager is terminated without an order having been issued, an 
     inventory shall be served as provided for in section 
     3129(e).'';
       (5) in section 3126--
       (A) in the section heading, by striking ``and trap and 
     trace devices'' and inserting ``, trap and trace devices, and 
     clone pagers''; and
       (B) by striking ``pen register orders and orders for trap 
     and trace devices'' and inserting ``orders for pen registers, 
     trap and trace devices, and clone pagers''; and
       (6) in section 3127--
       (A) in paragraph (2), by striking ``pen register or a trap 
     and trace device'' and inserting ``pen register, a trap and 
     trace device, or a clone pager'';
       (B) by redesignating paragraphs (5) and (6) as paragraphs 
     (6) and (7), respectively; and
       (C) by inserting after paragraph (4) the following:
       ``(5) the term `clone pager' means a numeric display device 
     that receives transmissions intended for another numeric 
     display paging device.''.
       (b) Applications for Orders.--Chapter 206 of title 18, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 3128. Application for an order for use of a clone 
       pager

       ``(a) Application.--(1) An attorney for the Government may 
     apply to a court of competent jurisdiction for an order or an 
     extension of an order under section 3129 of this title 
     authorizing the use of a clone pager.
       ``(2) A State investigative or law enforcement officer may, 
     if authorized by State law, apply to a court of competent 
     jurisdiction of such State for an order or an extension of an 
     order under section 3129 of this title authorizing the use of 
     a clone pager.
       ``(b) Contents of Application.--An application under 
     subsection (a) of this section shall include--
       ``(1) the identify of the attorney for the Government or 
     the State law enforcement or investigative officer making the 
     application and the identify of the law enforcement agency 
     conducting the investigation;
       ``(2) the identify, if known, of the person using the 
     numeric display paging device to be cloned;
       ``(3) a description of the numeric display paging device to 
     be cloned;
       ``(4) the identify, if known, of the person who is the 
     subject of the criminal investigation; and
       ``(5) an affidavit, sworn to before the court of competent 
     jurisdiction, establishing probable cause for belief that 
     information relevant to an ongoing criminal investigation 
     being conducted by that agency will be obtained through use 
     of the clone pager.

     ``Sec. 3129. Issuance of an order for use of a clone pager

       ``(a) In General.--Upon an application made under section 
     3128 of this title, the court shall enter an ex parte order 
     authorizing the use of a clone pager within the jurisdiction 
     of the court if the court finds that the application has 
     established probable cause to believe that information 
     relevant to an ongoing criminal investigation being conducted 
     by that agency will be obtained through use of the clone 
     pager.
       ``(b) Contents of an Order.--An order issued under this 
     section--
       ``(1) shall specify--
       ``(A) the identity, if known, of each individual using the 
     numeric display paging device to be cloned;
       ``(B) the numeric display paging device to be cloned;
       ``(C) the identity, if known, of the person who is the 
     subject of the criminal investigation; and
       ``(D) the offense to which the information likely to be 
     obtained by the clone pager relates; and
       ``(2) shall direct, upon the request of the applicant, the 
     furnishing of information, facilities, and technical 
     assistance necessary to use the clone pager under section 
     3124 of this title.
       ``(c) Time Period and Extensions.--(1) An order issued 
     under this section shall authorize the use of a clone pager 
     for a period not to exceed 30 days.
       ``(2) Extensions of an order referred to in paragraph (1) 
     may be granted, but only upon an application for an order 
     under section 3128 of this title and upon the judicial 
     finding required by subsection (a). The period of extension 
     shall be for a period not to exceed 30 days.
       ``(3) Within a reasonable time after the termination of the 
     period of a clone pager order or any extensions thereof, the 
     applicant shall report to the issuing judge the number of 
     numeric pager messages acquired through the use of the clone 
     pager during such period.
       ``(d) Nondisclosure of Existence of Clone Pager.--An order 
     authorizing the use of a clone pager shall direct that--
       ``(1) the order be sealed until otherwise ordered by the 
     court; and
       ``(2) the person who has been ordered by the court to 
     provide assistance to the applicant not disclose the 
     existence of the clone pager or the existence of the 
     investigation to the listed subscriber, or to any other 
     person, until otherwise ordered by the court.
       ``(e) Notification.--Within a reasonable time but not later 
     than 90 days after the termination of the period of a clone 
     pager order or any extensions thereof, the issuing judge 
     shall cause to be served, on each individual using the 
     numeric display paging device which was cloned, an inventory 
     including notice of--
       ``(1) the fact of the entry of the order or the 
     application;
       ``(2) the date of the entry and the period of clone pager 
     use authorized, or the denial of the application; and
       ``(3) whether or not information was obtained through the 
     use of the clone pager.

     Upon an ex parte showing of good cause, a court of competent 
     jurisdiction may in its discretion postpone the serving of 
     the notice required by this section.''.
       (c) Conforming Amendment.--The analysis for chapter 206 of 
     title 18, United States Code, is amended--
       (1) by striking the item relating to section 3121 and 
     inserting the following:

``3121. General prohibition on pen register, trap and trace device, and 
              clone pager use; exception.'';

       (2) by striking the item relating to section 3124 and 
     inserting the following:

``3124. Assistance in installation and use of a pen register, a trap 
              and trace device, or clone pager.'';

       (3) by striking the item relating to section 3125 and 
     inserting the following:

``3125. Emergency pen register, trap and trace device, and clone pager 
              installation and use.'';

       (4) by striking the item relating to section 3126 and 
     inserting the following:

``3126. Reports concerning pen registers, trap and trace devices, and 
              clone pagers.'';

     and
       (5) by adding at the end the following:

``3128. Application for an order for use of a clone pager.
``3129. Issuance of an order for use of a clone pager.''.

       (d) Conforming Amendments.--
       (1) Section 2511(2)(h) of title 18, United States Code, is 
     amended by striking clause (i) and inserting the following:
       ``(i) to use a pen register, a trap and trace device, or a 
     clone pager (as those terms are defined for the purposes of 
     chapter 206 (relating to pen registers, trap and trace 
     devices, and clone pagers) of this title); or''.
       (2) Section 2510(12) of title 18, United States Code, is 
     amended--
       (A) in subparagraph (C), by striking ``or'' at the end;
       (B) by inserting ``or'' after subparagraph (D); and
       (C) by adding at the end the following:
       ``(E) any transmission made through a clone pager (as 
     defined in section 3127(5) of this title).''.
       (3) Section 705(a) of the Communications Act of 1934 (47 
     U.S.C. 605(a)) is amended by striking ``chapter 119'' and 
     inserting ``chapters 119 and 206''.

     SEC. 2142. SENTENCING ENHANCEMENT FOR USING BODY ARMOR IN 
                   COMMISSION OF A FELONY.

       (a) Definitions.--In this section:
       (1) Body armor.--The term ``body armor'' means any product 
     sold or offered for sale as personal protective body covering 
     intended to protect against gunfire, regardless of whether 
     the product is to be worn alone or is sold as a complement to 
     another product or garment; and
       (2) Law enforcement officer.--The term ``law enforcement 
     officer'' means any officer, agent, or employee of the United 
     States, a State, or a political subdivision of a State, 
     authorized by law or by a government agency to engage in or 
     supervise the prevention, detection, investigation, or 
     prosecution of any violation of criminal law.
       (b) Sentencing Enhancement.--Pursuant to its authority 
     under section 994(p) of title 28, United States Code, the 
     United States Sentencing Commission shall amend the Federal 
     sentencing guidelines to provide an appropriate sentencing 
     enhancement for any offense in which the defendant used body 
     armor.
       (c) Consistency.--In carrying out this section, the United 
     States Sentencing Commission shall--
       (1) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (2) avoid duplicative punishment for substantially the same 
     offense.
       (d) Applicability.--No Federal sentencing guideline 
     amendment made under this section shall apply if the Federal 
     crime in which the body armor is used constitutes a violation 
     of, attempted violation of, or conspiracy to violate the 
     civil rights of a person by a law enforcement officer acting 
     under color of the authority of such law enforcement officer.

[[Page 294]]



     SEC. 2143. SENTENCING ENHANCEMENT FOR USING LASER SIGHTING 
                   DEVICES IN COMMISSION OF A FELONY.

       (a) Definitions.--In this section--
       (1) the term ``firearm'' has the same meaning as in section 
     921 of title 18, United States Code; and
       (2) the term ``laser-sighting device'' includes any device 
     designed to be attached to a firearm that uses technology, 
     such as laser sighting, red-dot-sighting, night sighting, 
     telescopic sighting, or other similarly effective technology, 
     in order to enhance target acquisition.
       (b) Sentencing Enhancement.--Pursuant to its authority 
     under section 994(p) of title 28, United States Code, the 
     United States Sentencing Commission shall amend the Federal 
     sentencing guidelines to provide an appropriate sentencing 
     enhancement for any serious violent felony or serious drug 
     offense, as defined in section 3559 of title 18, United 
     States Code, in which the defendant--
       (1) possessed a firearm equipped with a laser-sighting 
     device; or
       (2) possessed a firearm and the defendant possessed a 
     laser-sighting device (capable of being readily attached to 
     the firearm).
       (c) Consistency.--In carrying out this section, the United 
     States Sentencing Commission shall--
       (1) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (2) avoid duplicative punishment for substantially the same 
     offense.

     SEC. 2144. GOVERNMENT ACCESS TO LOCATION INFORMATION.

       (a) Court Order Required.--Section 2703 of title 18, United 
     States Code, is amended by adding at the end the following:
       ``(g) Requirements for Disclosure of Location 
     Information.--A provider of mobile electronic communication 
     service shall provide to a governmental entity information 
     generated by and disclosing, on a real time basis, the 
     physical location of a subscriber's equipment only if the 
     governmental entity obtains a court order issued upon a 
     finding that there is probable cause to believe that an 
     individual using or possessing the subscriber equipment is 
     committing, has committed, or is about to commit a felony 
     offense.''.
       (b) Conforming Amendment.--Section 2703(c)(1)(B) of title 
     18, United States Code, is amended by inserting ``or wireless 
     location information covered by subsection (g) of this 
     section'' after ``(b) of this section''.

     SEC. 2145. LIMITATION ON OBTAINING TRANSACTIONAL INFORMATION 
                   FROM PEN REGISTERS OR TRAP AND TRACE DEVICES.

       Subsection 3123(a) of title 18, United States Code, is 
     amended to read as follows:
       ``(a) In General.--Upon an application made under section 
     3122, the court may enter an ex parte order--
       ``(1) authorizing the installation and use of a pen 
     register or a trap and trace device within the jurisdiction 
     of the court if the court finds, based on the certification 
     by the attorney for the Government or the State law 
     enforcement or investigative officer, that the information 
     likely to be obtained by such installation and use is 
     relevant to an ongoing criminal investigation; and
       ``(2) directing that the use of the pen register or trap 
     and trace device be conducted in such a way as to minimize 
     the recording or decoding of any electronic or other impulses 
     that are not related to the dialing and signaling information 
     utilized in call processing.''.

                 Subtitle B--Combating Money Laundering

     SEC. 2201. SHORT TITLE.

       This subtitle may be cited as the ``Money Laundering 
     Enforcement Act of 2001''.

     SEC. 2202. ILLEGAL MONEY TRANSMITTING BUSINESSES.

       (a) Civil Forfeiture for Money Transmitting Violation.--
     Section 981(a)(1)(A) of title 18, United States Code, is 
     amended by striking ``or 1957'' and inserting ``, 1957, or 
     1960''.
       (b) Scienter Requirement for Section 1960 Violation.--
     Section 1960 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(c) Scienter Requirement.--For the purposes of proving a 
     violation of this section involving an illegal money 
     transmitting business--
       ``(1) it shall be sufficient for the Government to prove 
     that the defendant knew that the money transmitting business 
     lacked a license required by State law; and
       ``(2) it shall not be necessary to show that the defendant 
     knew that the operation of such a business without the 
     required license was an offense punishable as a felony or 
     misdemeanor under State law.''.

     SEC. 2203. RESTRAINT OF ASSETS OF PERSONS ARRESTED ABROAD.

       Section 981(b) of title 18, United States Code, is amended 
     by adding at the end the following:
       ``(3) Restraint of Assets.--
       ``(A) In general.--If any person is arrested or charged in 
     a foreign country in connection with an offense that would 
     give rise to the forfeiture of property in the United States 
     under this section or under the Controlled Substances Act (21 
     U.S.C. 801 et seq.), the Attorney General may apply to any 
     Federal judge or magistrate judge in the district in which 
     the property is located for an ex parte order restraining the 
     property subject to forfeiture for not more than 30 days, 
     except that the time may be extended for good cause shown at 
     a hearing conducted in the manner provided in Rule 43(e) of 
     the Federal Rules of Civil Procedure.
       ``(B) Application.--An application for a restraining order 
     under subparagraph (A) shall--
       ``(i) set forth the nature and circumstances of the foreign 
     charges and the basis for belief that the person arrested or 
     charged has property in the United States that would be 
     subject to forfeiture; and
       ``(ii) contain a statement that the restraining order is 
     needed to preserve the availability of property for such time 
     as is necessary to receive evidence from the foreign country 
     or elsewhere in support of probable cause for the seizure of 
     the property under this subsection.''.

     SEC. 2204. CIVIL MONEY LAUNDERING JURISDICTION OVER FOREIGN 
                   PERSONS.

       Section 1956(b) of title 18, United States Code, is 
     amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively, and indenting each 
     subparagraph appropriately;
       (2) by striking ``(b) Whoever'' and inserting the 
     following:
       ``(b) Civil Penalties.--
       ``(1) In general.--Whoever''; and
       (3) by adding at the end the following:
       ``(2) Jurisdiction.--For purposes of adjudicating an action 
     filed or enforcing a penalty ordered under this section, the 
     district courts of the United States shall have jurisdiction 
     over any foreign person, including any financial institution 
     authorized under the laws of a foreign country, that commits 
     an offense under subsection (a) involving a financial 
     transaction that occurs in whole or in part in the United 
     States, if service of process upon such foreign person is 
     made in accordance with the Federal Rules of Civil Procedure 
     or the laws of the foreign country in which the foreign 
     person is found.
       ``(3) Satisfaction of judgment.--In any action described in 
     paragraph (2), the court may issue a pretrial restraining 
     order or take any other action necessary to ensure that any 
     bank account or other property held by the defendant in the 
     United States is available to satisfy a judgment under this 
     section.''.

     SEC. 2205. PUNISHMENT OF LAUNDERING MONEY THROUGH FOREIGN 
                   BANKS.

       Section 1956(c)(6) of title 18, United States Code, is 
     amended to read as follows:
       ``(6) the term `financial institution' includes--
       ``(A) any financial institution described in section 
     5312(a)(2) of title 31, or the regulations promulgated 
     thereunder; and
       ``(B) any foreign bank, as defined in section 1(b)(7) of 
     the International Banking Act of 1978 (12 U.S.C. 3101(7));''.

     SEC. 2206. ADDITION OF SERIOUS FOREIGN CRIMES TO LIST OF 
                   MONEY LAUNDERING PREDICATES.

       (a) In General.--Section 1956(c)(7) of title 18, United 
     States Code, is amended--
       (1) in subparagraph (B)--
       (A) by striking clause (ii) and inserting the following:
       ``(ii) any act or acts constituting a crime of violence;''; 
     and
       (B) by adding at the end the following:
       ``(iv) fraud, or any scheme to defraud, committed against a 
     foreign government or foreign governmental entity;
       ``(v) bribery of a public official, or the 
     misappropriation, theft, or embezzlement of public funds by 
     or for the benefit of a public official;
       ``(vi) smuggling or export control violations involving 
     munitions listed in the United States Munitions List or 
     technologies with military applications as defined in the 
     Commerce Control List of the Export Administration 
     Regulations; or
       ``(vii) an offense with respect to which the United States 
     would be obligated by a multilateral treaty either to 
     extradite the alleged offender or to submit the case for 
     prosecution, if the offender were found within the territory 
     of the United States;'';
       (2) in subparagraph (D)--
       (A) by inserting ``section 541 (relating to goods falsely 
     classified),'' before ``section 542'';
       (B) by inserting ``section 922(l) (relating to the unlawful 
     importation of firearms), section 924(m) (relating to 
     firearms trafficking),'' before ``section 956'';
       (C) by inserting ``section 1030 (relating to computer fraud 
     and abuse),'' before ``1032''; and
       (D) by inserting ``any felony violation of the Foreign 
     Agents Registration Act of 1938 (22 U.S.C. 611 et seq.),'' 
     before ``or any felony violation of the Foreign Corrupt 
     Practices Act''; and
       (3) in subparagraph (E), by inserting ``the Clean Air Act 
     (42 U.S.C. 6901 et seq.),'' after ``the Safe Drinking Water 
     Act (42 U.S.C. 300f et seq.),''.

     SEC. 2207. CRIMINAL FORFEITURE FOR MONEY LAUNDERING 
                   CONSPIRACIES.

       Section 982(a)(1) of title 18, United States Code, is 
     amended by inserting ``or a conspiracy to commit any such 
     offense,'' after ``of this title,''.

[[Page 295]]



     SEC. 2208. FUNGIBLE PROPERTY IN FOREIGN BANK ACCOUNTS.

       Section 984(d) of title 18, United States Code, is amended 
     by adding at the end the following:
       ``(3) In this subsection, the term `financial institution' 
     includes a foreign bank, as defined in section 1(b)(7) of the 
     International Banking Act of 1978 (12 U.S.C. 3101(7)).''.

     SEC. 2209. ADMISSIBILITY OF FOREIGN BUSINESS RECORDS.

       (a) In General.--Chapter 163 of title 28, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2467. Foreign records

       ``(a) Definitions.--In this section--
       ``(1) the term `business' includes business, institution, 
     association, profession, occupation, and calling of every 
     kind whether or not conducted for profit;
       ``(2) the term `foreign certification' means a written 
     declaration made and signed in a foreign country by the 
     custodian of a record of regularly conducted activity or 
     another qualified person, that if falsely made, would subject 
     the maker to criminal penalty under the law of that country;
       ``(3) the term `foreign record of regularly conducted 
     activity' means a memorandum, report, record, or data 
     compilation, in any form, of acts, events, conditions, 
     opinions, or diagnoses, maintained in a foreign country; and
       ``(4) the term `official request' means a letter rogatory, 
     a request under an agreement, treaty or convention, or any 
     other request for information or evidence made by a court of 
     the United States or an authority of the United States having 
     law enforcement responsibility, to a court or other authority 
     of a foreign country.
       ``(b) Admissibility.--In a civil proceeding in a court of 
     the United States, including a civil forfeiture proceeding 
     and a proceeding in the United States Claims Court and the 
     United States Tax Court, unless the source of information or 
     the method or circumstances of preparation indicate lack of 
     trustworthiness, a foreign record of regularly conducted 
     activity (or a duplicate of such record), obtained pursuant 
     to an official request, shall not be excluded as evidence by 
     the hearsay rule if a foreign certification, also obtained 
     pursuant to the same official request or subsequent official 
     request that adequately identifies such foreign record, 
     attests that--
       ``(1) the foreign record was made, at or near the time of 
     the occurrence of the matters set forth, by (or from 
     information transmitted by) a person with knowledge of those 
     matters;
       ``(2) the foreign record was kept in the course of a 
     regularly conducted business activity;
       ``(3) the business activity made such a record as a regular 
     practice; and
       ``(4) if the foreign record is not the original, the record 
     is a duplicate of the original.
       ``(c) Foreign Certification.--A foreign certification under 
     this section shall authenticate a record or duplicate 
     described in subsection (b).
       ``(d) Notice.--
       ``(1) In general.--As soon as practicable after a 
     responsive pleading has been filed, a party intending to 
     offer in evidence under this section a foreign record of 
     regularly conducted activity shall provide written notice of 
     that intention to each other party.
       ``(2) Opposition.--A motion opposing admission in evidence 
     of a record under paragraph (1) shall be made by the opposing 
     party and determined by the court before trial. Failure by a 
     party to file such motion before trial shall constitute a 
     waiver of objection to such record, except that the court for 
     cause shown may grant relief from the waiver.''.
       (b) Conforming Amendment.--The analysis for chapter 163 of 
     title 28, United States Code, is amended by adding at the end 
     the following:

``2467. Foreign records.''.

     SEC. 2210. CHARGING MONEY LAUNDERING AS A COURSE OF CONDUCT.

       Section 1956(h) of title 18, United States Code, is 
     amended--
       (1) by striking ``(h) Any person'' and inserting the 
     following:
       ``(h) Conspiracy; Multiple Violations.--
       ``(1) Conspiracy.--Any person''; and
       (2) by adding at the end the following:
       ``(2) Multiple violations.--Any person who commits multiple 
     violations of this section or section 1957 that are part of 
     the same scheme or continuing course of conduct may be 
     charged, at the election of the Government, in a single count 
     in an indictment or information.''.

     SEC. 2211. VENUE IN MONEY LAUNDERING CASES.

       Section 1956 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(i) Venue.--
       ``(1) In general.--Except as provided in paragraph (2), a 
     prosecution for an offense under this section or section 1957 
     may be brought in any district in which the financial or 
     monetary transaction is conducted, or in which a prosecution 
     for the underlying specified unlawful activity could be 
     brought, if the defendant participates in the transfer of the 
     proceeds of the specified unlawful activity from that 
     district to the district where the financial or monetary 
     transaction is conducted.
       ``(2) Exception.--A prosecution for an attempt or 
     conspiracy offense under this section or section 1957 may be 
     brought in the district in which venue would lie for the 
     completed offense under paragraph (1), or in any other 
     district in which an act in furtherance of the attempt or 
     conspiracy took place.''.

     SEC. 2212. TECHNICAL AMENDMENT TO RESTORE WIRETAP AUTHORITY 
                   FOR CERTAIN MONEY LAUNDERING OFFENSES.

       Section 2516(1)(g) of title 18, United States Code, is 
     amended by striking ``of title 31, United States Code 
     (dealing with the reporting of currency transactions)'' and 
     inserting ``or 5324 of title 31 (dealing with the reporting 
     and illegal structuring of currency transactions)''.

     SEC. 2213. CRIMINAL PENALTIES FOR VIOLATIONS OF ANTI-MONEY 
                   LAUNDERING ORDERS.

       (a) Reporting Violations.--Section 5324(a) of title 31, 
     United States Code, is amended--
       (1) in the matter preceding paragraph (1), by inserting ``, 
     or the reporting requirements imposed by an order issued 
     pursuant to section 5326'' after ``any such section''; and
       (2) in each of paragraphs (1) and (2), by inserting ``, or 
     a report required under any order issued pursuant to section 
     5326'' before the semicolon.
       (b) Penalties.--Sections 5321(a)(1), 5322(a), and 5322(b) 
     of title 31, United States Code, are each amended by 
     inserting ``or order issued'' after ``or a regulation 
     prescribed'' each place that term appears.

     SEC. 2214. ENCOURAGING FINANCIAL INSTITUTIONS TO NOTIFY LAW 
                   ENFORCEMENT AUTHORITIES OF SUSPICIOUS FINANCIAL 
                   TRANSACTIONS.

       (a) In General.--Section 2702(b)(6) of title 18, United 
     States Code, is amended--
       (1) by inserting ``or supervisory agency'' after ``a law 
     enforcement agency'';
       (2) in subparagraph (A), by striking ``; and'' and 
     inserting ``and appear to pertain to the commission of the 
     crime; or''; and
       (3) in subparagraph (B), by striking ``appear to pertain to 
     the commission of the crime.'' and inserting ``appear to 
     reveal a suspicious transaction relevant to a possible 
     violation of law or regulation.''
       (b) Definitions.--Section 2711 of title 18, United States 
     Code, is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(3) the terms `suspicious transaction' and `relevant to a 
     possible violation of the law or regulation' shall be 
     interpreted in the same manner as those terms have been 
     interpreted for purposes of section 5318(g) of title 31; and
       ``(4) the term `supervisory agency' has the meaning given 
     the term in section 1101(7) of the Right to Financial Privacy 
     Act of 1978.''.

     SEC. 2215. COVERAGE OF FOREIGN BANK BRANCHES IN THE 
                   TERRITORIES.

       Section 20(9) of title 18, United States Code, is amended 
     by inserting before the period the following: ``, except that 
     for purposes of this section the definition of the term 
     `State' in such Act shall be deemed to include a 
     commonwealth, territory, or possession of the United 
     States''.

     SEC. 2216. CONFORMING STATUTE OF LIMITATIONS AMENDMENT FOR 
                   CERTAIN BANK FRAUD OFFENSES.

       Section 3293 of title 18, United States Code, is amended--
       (1) by inserting ``225,'' after ``215,''; and
       (2) by inserting ``1032,'' before ``1033''.

     SEC. 2217. JURISDICTION OVER CERTAIN FINANCIAL CRIMES 
                   COMMITTED ABROAD.

       Section 1029 of title 18, United States Code, is amended by 
     adding at the end the following:
       ``(h) Jurisdiction Over Certain Financial Crimes Committed 
     Abroad.--Any person who, outside the jurisdiction of the 
     United States, engages in any act that, if committed within 
     the jurisdiction of the United States, would constitute an 
     offense under subsection (a) or (b), shall be subject to the 
     same penalties as if that offense had been committed in the 
     United States, if the act--
       ``(1) involves an access device issued, owned, managed, or 
     controlled by a financial institution, account issuer, credit 
     card system member, or other entity within the jurisdiction 
     of the United States; and
       ``(2) causes, or if completed would have caused, a transfer 
     of funds from or a loss to an entity listed in paragraph 
     (1).''.

     SEC. 2218. KNOWLEDGE THAT THE PROPERTY IS THE PROCEEDS OF A 
                   FELONY.

       Section 1956(c)(1) of title 18, United States Code, is 
     amended by inserting ``, and regardless of whether or not the 
     person knew that the activity constituted a felony'' before 
     the semicolon at the end.

     SEC. 2219. MONEY LAUNDERING TRANSACTIONS; COMMINGLED 
                   ACCOUNTS.

       (a) Section 1956.--Section 1956 of title 18, United States 
     Code, is amended by adding at the end the following:
       ``(i) A transaction, transportation, transmission, or 
     transfer of funds shall be considered for the purposes of 
     this section to be one involving the proceeds of specified 
     unlawful activity, or property represented to be the proceeds 
     of specified unlawful activity, if the transaction, 
     transportation, transmission, or transfer involves--
       ``(1) funds directly traceable to the specified unlawful 
     activity, or represented to be

[[Page 296]]

     directly traceable to the specified unlawful activity;
       ``(2) a bank account in which the proceeds of specified 
     unlawful activity, or property represented to be the proceeds 
     of specified unlawful activity, have been commingled with 
     other funds; or
       ``(3) 2 or more bank accounts, where the proceeds of 
     specified unlawful activity, or property represented to be 
     the proceeds of specified unlawful activity, are deposited 
     into 1 bank account and there is a contemporaneous, related 
     withdrawal from, or debit to, another bank account controlled 
     by the same person, or by a person acting in concert with 
     that person.''.
       (b) Section 1957.--Section 1957(f) of title 18, United 
     States Code, is amended by inserting after paragraph (3) the 
     following:
       ``(4) the term `monetary transaction in criminally derived 
     property that is of a value greater than $10,000' includes--
       ``(A) a monetary transaction involving the transfer, 
     withdrawal, encumbrance or other disposition of more than 
     $10,000 from a bank account in which more than $10,000 in 
     proceeds of specified unlawful activity have been commingled 
     with other funds;
       ``(B) a series of monetary transactions in amounts under 
     $10,000 that exceed $10,000 in the aggregate and that are 
     closely related to each other in terms of time, the identity 
     of the parties involved, the nature of the transactions and 
     the manner in which they are conducted; and
       ``(C) any financial transaction described in section 
     1956(i)(3) that involves more than $10,000 in proceeds of 
     specified unlawful activity.''.
       (c) Technical Amendment.--Section 1956(c)(7)(F) of title 
     18, United States Code, is amended by inserting ``, as 
     defined in section 24'' before the period.

     SEC. 2220. LAUNDERING THE PROCEEDS OF TERRORISM.

       Section 1956(c)(7)(D) of title 18, United States Code, is 
     amended by inserting ``or 2339B'' after ``2339A''.

     SEC. 2221. VIOLATIONS OF SECTION 6050I.

       Sections 981(a)(1)(A) and 982(a)(1) of title 18, United 
     States Code, are amended by inserting ``, or of section 6050I 
     of the Internal Revenue Code of 1986 (26 U.S.C. Sec. 6050I)'' 
     after ``of title 31''.

     SEC. 2222. INCLUDING AGENCIES OF TRIBAL GOVERNMENTS IN THE 
                   DEFINITION OF A FINANCIAL INSTITUTION.

       Section 5312(a)(2)(W) of title 31, United States Code, is 
     amended by striking ``State or local'' and inserting ``State, 
     local or tribal''.

     SEC. 2223. PENALTIES FOR VIOLATIONS OF GEOGRAPHIC TARGETING 
                   ORDERS AND CERTAIN RECORDKEEPING REQUIREMENTS.

       (a) Civil Penalty for Violation of Targeting Order.--
     Section 5321(a)(1) of title 31, United States Code, is 
     amended--
       (1) by inserting ``or order issued'' after ``subchapter or 
     a regulation prescribed''; and
       (2) by inserting A, or willfully violating a regulation 
     prescribed under section 21 of the Federal Deposit Insurance 
     Act or section 123 of Public Law 91-508,'' after ``section 
     5314 and 5315)''.
       (b) Criminal Penalties for Violation of Targeting Order.--
     Section 5322 of title 31, United States Code, is amended--
       (1) in subsection (a)--
       (A) by inserting ``or order issued'' after ``willfully 
     violating this subchapter or a regulation prescribed''; and
       (B) by inserting ``or willfully violating a regulation 
     prescribed under section 21 of the Federal Deposit Insurance 
     Act or section 123 of Public Law 91-508,'' after ``under 
     section 5315 or 5324),'';
       (2) in subsection (b)--
       (A) by inserting ``or order issued'' after ``willfully 
     violating this subchapter or a regulation prescribed''; and
       (B) by inserting ``willfully violating a regulation 
     prescribed under section 21 of the Federal Deposit Insurance 
     Act or section 123 of Public Law 91-508,'' after ``under 
     section 5315 or 5324),'';
       (c) Structuring Transactions To Evade Targeting Order or 
     Certain Recordkeeping Requirements.--Section 5324 of title 
     31, United States Code, is amended--
       (1) in the title by inserting ``or recordkeeping'' after 
     ``reporting''.
       (2) in subsection (a)--
       (A) by inserting a comma after ``shall'';
       (B) by striking ``section--'' and inserting ``section, the 
     reporting or recordkeeping requirements imposed by any order 
     issued under section 5326, or the recordkeeping requirements 
     imposed by any regulation prescribed under section 21 of the 
     Federal Deposit Insurance Act or section 123 of Public Law 
     91-508--'';
       (C) in paragraphs (1) and (2), by inserting ``, to file a 
     report or maintain a record required by any order issued 
     under section 5326, or to maintain a record required pursuant 
     to any regulation prescribed under section 21 of the Federal 
     Deposit Insurance Act or section 123 of Public Law 91-508'' 
     after ``regulation prescribed under any such section'' each 
     place that term appears.

                    Subtitle C--Antidrug Provisions

     SEC. 2301. AMENDMENTS CONCERNING TEMPORARY EMERGENCY 
                   SCHEDULING.

       Section 201(h) of the Controlled Substances Act (21 U.S.C. 
     811(h)) is amended to read as follows:
       ``(h) Temporary Scheduling To Avoid Imminent Hazards to 
     Public Safety.--
       ``(1) In general.--If the Attorney General finds that the 
     control of a substance on a temporary basis is necessary to 
     avoid an imminent hazard to the public safety, the Attorney 
     General may, by order and without regard to the requirements 
     of subsection (b) of this section relating to the Secretary 
     of Health and Human Services, and without regard to the 
     findings required under section 202(b) (21 U.S.C. 812(b)), 
     temporarily schedule such substance in accordance with this 
     subsection if no approval is in effect for the substance 
     under section 505(i) of the Federal Food, Drug, and Cosmetic 
     Act (hereafter in this subsection referred to as the FDC Act) 
     (21 U.S.C. 355(i)).
       ``(A) If the substance is not contained in a drug for which 
     an investigational new drug exemption is in effect under 
     section 505(i) of the FDC Act, the temporary scheduling order 
     shall place such substance in schedule I.
       ``(B) If the substance is contained in a drug for which an 
     investigational new drug exemption is in effect under section 
     505(i) of the FDC Act, the temporary scheduling order shall 
     place such substance in schedule II, subject to the 
     conditions set forth in paragraph (6) of this subsection.
       ``(C) A temporary scheduling order, or order renewing such 
     order, may not take effect before the expiration of thirty 
     days from--
       ``(i) the date of the publication by the Attorney General 
     of a notice in the Federal Register of the intention to issue 
     such order and the grounds upon which such order is to be 
     issued; and
       ``(ii) the date the Attorney General has transmitted the 
     notice required by paragraph (4).
       ``(2) Duration of temporary scheduling; renewal of 
     orders.--
       ``(A) A temporary scheduling order issued under 
     subparagraph (1)(A) of this subsection shall expire at the 
     end of one year from the effective date of the order, except 
     that the Attorney General may, during the pendency of 
     proceedings under subsection (a)(1) of this section with 
     respect to the substance, extend the temporary scheduling 
     order for up to six months.
       ``(B) A temporary scheduling order issued under 
     subparagraph (1)(B) of this subsection shall expire at the 
     end of 18 months from the effective date of the order, except 
     that, if the Attorney General determines that continuation of 
     the temporary scheduling order is necessary to avoid an 
     imminent hazard to the public safety, the Attorney General 
     may issue a renewal order, 30 days prior to expiration of the 
     temporary scheduling order, extending the original order for 
     an additional 18 months, provided the following conditions 
     are met--
       ``(i) an exemption with respect to such substance remains 
     in effect under section 505(i) of the FDC Act; and--
       ``(ii) the holder of such exemption is actively pursuing 
     the clinical investigation of the substance.

     The Secretary shall certify to the Attorney General whether 
     or not each of conditions (i) and (ii) continue to be met no 
     later than 90 days prior to the date on which the temporary 
     scheduling order is scheduled to a expire. As long as both 
     conditions continue to be met, the Attorney General may, 
     every 18 months, continue to issue orders renewing the 
     temporary scheduling of a particular substance. If either of 
     the foregoing conditions are no longer met for a particular 
     substance, the temporary scheduling of that substance may not 
     be renewed and shall expire 12 months after the date on which 
     such condition fails to be met, except that the Attorney 
     General may, during the pendency of proceedings under 
     subsection (a)(l) of this section with respect to the 
     substance, extend the temporary scheduling for an additional 
     six months.
       ``(3) Factors determinative of temporary scheduling.--When 
     issuing an order under paragraph (1), the Attorney General 
     shall be required to consider, with respect to the finding of 
     an imminent hazard to the public safety, only those factors 
     set forth in paragraphs (4), (5), and (6) of subsection (c) 
     of this section, including actual abuse, diversion from 
     legitimate channels, and clandestine importation, 
     manufacture, or distribution.
       ``(4) Consultation with the secretary of health and human 
     services.--The Attorney General shall transmit notice of an 
     order proposed to be issued under paragraph (1) to the 
     Secretary of Health and Human Services. In issuing an order 
     under paragraph (1), the Attorney General shall take into 
     consideration any comments submitted by the Secretary in 
     response to a notice transmitted pursuant to this paragraph.
       ``(5) Effect of permanent scheduling proceedings.--An order 
     issued under paragraph (1) with respect to a substance shall 
     be vacated upon the conclusion of a subsequent rule making 
     proceeding initiated under subsection (a) of this section 
     with respect to such substance.
       ``(6) Special rules applicable to temporarily scheduled 
     investigational drugs.--
       (A) In the case of a substance that is temporarily 
     scheduled under subparagraph (l)(B)

[[Page 297]]

     of this subsection that was controlled under this subchapter 
     prior to its temporary scheduling, any person who 
     manufactures, distributes, dispenses, possesses, or uses such 
     substance within the scope of the exemption under section 
     505(i) of the FDC Act shall be subject to the same 
     requirements of this subchapter that were in effect prior to 
     the temporary scheduling.
       ``(B) In the case of a substance that is temporarily 
     scheduled under subparagraph (l)(B) of this subsection that 
     was not controlled under this subchapter prior to its 
     temporary scheduling, any person who manufactures, 
     distributes, dispenses, possesses, or uses such substance 
     within the scope of the exemption under section 505(i) of the 
     FDC Act shall not be required to comply with the requirements 
     of part C of this subchapter, except as provided in this 
     paragraph--
       ``(i) Such person shall be subject to sections 302, 303, 
     and 304 (21 U.S.C. 822, 823, and 824), relating to 
     registration.
       ``(ii) Compliance with applicable record keeping and 
     reporting requirements of the FDC Act, as determined by the 
     Secretary, shall constitute compliance with section 307 (21 
     U.S.C. 827). A violation of such requirements shall 
     constitute a violation of section 307 and shall subject a 
     violator to applicable penalties under Part D of this 
     subchapter, in addition to any other penalties provided by 
     law. Records or documents required to be kept for such 
     purposes under the FDC Act shall be deemed records or 
     documents required under this subchapter, and places where 
     such records or documents are kept or required to be kept 
     shall be deemed controlled premises for purposes of 
     administrative inspections and warrants under section 510 (21 
     U.S.C. 880).
       ``(iii) A registrant handling an investigational drug that 
     has been temporarily scheduled under this section shall be 
     subject to the requirements established under section 307(f), 
     relating to procedures necessary to insure the security and 
     accountability of controlled substances used in research and 
     to prevent theft or diversion of the drug into illegal 
     channels of distribution.
       ``(C) Each person that is a sponsor of an investigation of 
     a new drug for which a research exemption is in effect under 
     section 505(i) of the FDC Act with respect to such substance 
     shall be required to certify to the Secretary of Health and 
     Human Services, by one month after the effective date of the 
     temporary scheduling order with respect to the substance, and 
     by the end of each succeeding six month period, that such 
     person is able to account for the location and use of all 
     quantities of such substance that are or have been 
     manufactured, distributed, dispensed, possessed, or used 
     under such exemption on or before the date of such 
     certification.
       ``(D) In the case of a substance that is temporarily 
     scheduled under subparagraph (1)(B) of this subsection, the 
     disclosure of the existence of an exemption under section 
     505(i) of the FDC Act with respect to such substance shall 
     not be considered to be disclosure prohibited by section 
     301(j) of the FDC Act or section 1905 of title 18 of the 
     United States Code.
       ``(E) The manufacture, possession, distribution, or use of 
     such substance within the scope of such exception shall not 
     be subject to any requirements or penalty under State or 
     local law more stringent than the provisions of this chapter 
     or other applicable Federal law.
       ``(7) Judicial review.--An order issued under paragraph (1) 
     is not subject to judicial review, except that a renewal 
     order issued under subparagraph (2)(B) of this subsection is 
     subject to judicial review in accordance with section 507 (21 
     U.S.C. 877).''.

     SEC. 2302. AMENDMENT TO REPORTING REQUIREMENT FOR 
                   TRANSACTIONS INVOLVING CERTAIN LISTED 
                   CHEMICALS.

       Section 310(b)(3) of the Controlled Substances Act (21 
     U.S.C. 830(b)(3)) is amended by--
       (1) redesignating subparagraphs (A) and (B) as 
     subparagraphs (B) and (C);
       (2) inserting a new subparagraph (A) as follows:
       ``(A) As used in this section, the term `drug product' 
     means a pharmaceutical substance in dosage form that has been 
     approved under the Food, Drug and Cosmetic Act for 
     distribution in the United States.'';
       (3) in the redesignated (B) by inserting ``or who engages 
     in an export transaction'' after ``nonregulated person''; and
       (4) adding at the end the following--
       ``(D) Except as provided in subparagraph (E), the following 
     distributions to a nonregulated person and the following 
     export transactions shall not be subject to the reporting 
     requirement established in subparagraph (B):
       ``(i) distributions of sample packages of drug products 
     when such packages contain not more than 2 solid dosage units 
     or the equivalent of 2 dosage units in liquid form, not to 
     exceed 10 milliliters of liquid per package, and not more 
     than one package is distributed to an individual or 
     residential address in any 30-day time period;
       ``(ii) distributions of drug products by retail 
     distributors to the extent that such distributions are 
     consistent with the activities authorized for a retail 
     distributor as set out in section 102(46) of this title;
       ``(iii) distributions of drug products to a resident of a 
     Long Term Care Facility (as that term is defined in the 
     regulations of the Attorney General) or distributions of drug 
     products to a Long Term Care Facility for dispensing to or 
     for use by a resident of that facility;
       ``(iv) distributions of drug products pursuant to a valid 
     prescription (as used in this section, the term `valid 
     prescription' is one which is issued for a legitimate medical 
     purpose by individual practitioner licensed by law to 
     administer and prescribe such drugs and acting in the usual 
     course of his/her professional practice);
       ``(v) exports which have been reported to the Attorney 
     General pursuant to section 1004 or 1018 of title III or 
     which are subject to a waiver granted under section 
     1018(e)(2) of title III; and
       ``(vi) any quantity, method or type of distribution or any 
     quantity, method or type of distribution of a specific listed 
     chemical (including specific formulations or drug products) 
     or of a group of listed chemicals (including specific 
     formulations or drug products) which the Attorney General has 
     excluded by regulation from this reporting requirement on the 
     basis that such reporting is not necessary to the enforcement 
     of this title or title III.
       ``(E) The Attorney General may revoke any or all of the 
     exemptions listed in (C) for an individual regulated person 
     if he finds that drug products distributed by that person are 
     being used in violation of this title or title III. The 
     regulated person shall be notified of this revocation, which 
     will be effective upon receipt by the regulated person of 
     such notice, as provided in section 1018(c)(1) of title III 
     and has the right to an expedited hearing as provided in 
     section 1018(c)(2) of title III.''.

     SEC. 2303. DRUG PARAPHERNALIA.

       (a) In General.--Section 422(d) of the Controlled 
     Substances Act (21 U.S.C. 863(d)) is amended by inserting 
     ``packaging,'' after ``concealing,''.
       (b) Determination of Drug Paraphernalia.--Section 422(e)(4) 
     of the Controlled Substances Act (21 U.S.C. 863(e)(4)) is 
     amended by adding the following after ``sale'': ``including, 
     but not limited to, whether the item displays any name brand, 
     insignia or other indicator which is associated with illegal 
     drugs or which is used to advertise or identify an illegal 
     drug''.
       (c) Clerical Amendments.--(1) Section 511(a)(10) of the 
     Controlled Substances Act (21 U.S.C. 881(a)(10)) is amended 
     by striking all after ``as defined in'' and inserting 
     ``section 422 of this title.''.
       (2) Section 422 of the Controlled Substances Act (21 U.S.C. 
     881(a)(10)) is amended--
       (A) by deleting subsection (c); and
       (B) by redesignating subsections (d), (e), and (f) as 
     subsections (c), (d), and (e), respectively.

     SEC. 2304. COUNTERFEIT SUBSTANCES/IMITATION CONTROLLED 
                   SUBSTANCES.

       (a) Section 102(7) of the Controlled Substances Act (21 
     U.S.C. 802(7)) is amended by--
       (1) inserting ``(A)'' after ``(7)'';
       (2) designating the text after ``a controlled substance'' 
     as clause (i);
       (3) inserting ``characteristic,'' after ``number,'';
       (4) striking the period at the end and inserting a 
     semicolon; and
       (5) adding at the end the following:
       ``(ii) which falsely purports or is represented to be a 
     different controlled substance; or
       ``(iii) which is manufactured or designed in such a manner, 
     or is distributed, dispensed, or otherwise transferred under 
     such circumstances, such that a reasonable person would 
     believe that the substance is a different controlled 
     substance.
       ``(B) The term `imitation controlled substance' means a 
     substance, which is not a controlled substance, that is 
     represented (expressly or by implication) to be a controlled 
     substance.
       ``(C) The term `imitation controlled substance' does not 
     include a placebo which is directly applied to the body of a 
     research subject or a patient or which is delivered to a 
     research subject or a person for his own use, by, or pursuant 
     to the order of, a practitioner for a lawful purpose.''.
       (b) Section 102(8) of the Controlled Substances Act (21 
     U.S.C. 802(8)) is amended by inserting ``, an imitation 
     controlled substance,'' after ``controlled substance''.
       (c) Section 102(11) of the Controlled Substances Act (21 
     U.S.C. 802(11)) is amended by--
       (1) inserting ``to deliver an imitation controlled 
     substance or'' after ``controlled substance or'' in the first 
     sentence; and
       (2) inserting ``, an imitation controlled substance,'' 
     after ``controlled substance'' in the second sentence.
       (d) Section 102(44) of the Controlled Substances Act (21 
     U.S.C. 802(44)) is amended by--
       (1) striking ``or'' after ``marihuana,''; and
       (2) inserting ``, anabolic agents, or listed chemicals, or 
     an offense that is punishable by imprisonment for more than 
     one year under any provision of this title or title III'' 
     after ``stimulant substances''.
       (e) Section 401(a) of the Controlled Substances Act (21 
     U.S.C. 841(a)) is amended by--
       (1) striking ``or'' at the end of paragraph (1);

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       (2) striking ``create'' in paragraph (2) and inserting 
     ``manufacture'';
       (3) inserting ``manufacture,'' after ``intent to'' in 
     paragraph (2);
       (4) striking the period at the end of paragraph (2) and 
     inserting ``; or'' ; and
       (5) adding at the end the following paragraph:
       ``(3) to manufacture, distribute, or dispense, or possess 
     with intent to manufacture, distribute or dispense, an 
     imitation controlled substance.''.
       (f) Section 401(b) of the Controlled Substances Act (21 
     U.S.C. 841(b) is amended by redesignating paragraphs (4) 
     through (7) as paragraphs (6) through (9) and inserting after 
     paragraph (3) the following:
       ``(4)(A) In the case of a counterfeit substance, such 
     person shall be sentenced in accordance with this section 
     based on the controlled substance which the counterfeit 
     substance is represented to be or based on the controlled 
     substance which is actually contained in the counterfeit 
     substance, whichever provides the greater sentence.
       ``(B) Paragraph (5)(B) of this subsection may be applied to 
     make a determination that a controlled substance is a 
     counterfeit substance.
       ``(5)(A) In the case of an imitation controlled substance, 
     such person shall be sentenced to a term of imprisonment or a 
     fine, or both, which does not exceed one-half of the maximum 
     term of imprisonment and fine which would apply under this 
     section to the controlled substance which the imitation 
     controlled substance is represented to be. The minimum period 
     of supervised release for such person shall be one-half of 
     that which would apply under this section to the controlled 
     substance which the imitation controlled substance is 
     represented to be.
       ``(B) In the case of a violation of this title or title III 
     involving an imitation controlled substance, the following 
     provisions shall apply:
       ``(i) The trier of fact may consider the following factors 
     in addition to any other factor that may be relevant for 
     purposes of determining whether a substance was an imitation 
     controlled substance. The presence of any two of the 
     following factors shall be prima facie evidence that the 
     substance was an imitation controlled substance; however, the 
     presence of two factors is not required for a determination 
     that a substance is an imitation controlled substance:
       ``(I) The person in control of the substance expressly or 
     impliedly represents that the substance is a controlled 
     substance or has the effect of a controlled substance;
       ``(II) The person in control of the substance expressly or 
     impliedly represents that the substance because of its nature 
     or appearance can be sold, delivered or used as a controlled 
     substance or as a substitute for a controlled substance;
       ``(III) The person in control of the substance utilizes 
     evasive tactics or actions to avoid detection by law 
     enforcement authorities or other authorities such as school 
     authorities;
       ``(IV) The physical appearance of the substance is, or is 
     designed to be, substantially identical to a specific 
     controlled substance. This may be determined by such factors 
     as color, shape, size, markings, taste, odor, consistency, 
     packaging, labeling, or other identifying characteristics;
       ``(V) The substance is packaged or distributed in a manner 
     normally used for the illegal distribution of controlled 
     substances; or
       ``(VI) The distribution or attempted distribution includes 
     an exchange or demand for money or other property as 
     consideration, and the amount of the consideration is 
     substantially greater than the reasonable retail market value 
     of the substance.
       ``(ii) It shall not constitute a defense that the accused 
     believed the imitation controlled substance to actually be a 
     controlled substance.''.
       (g) Section 403 of the Controlled Substances Act (21 U.S.C. 
     843) is amended--
       (1) in paragraph (a)(2), by inserting ``or list I 
     chemical'' after ``controlled substance'' each place it 
     appears;
       (2) in paragraph (a)(3), by inserting ``or a laboratory 
     supply (as defined in section 402(a) of this title)'' after 
     ``controlled substance''; and
       (3) in paragraph (a)(5) by--
       (A) inserting ``or substance'' after ``drug'' both places 
     it appears; and
       (B) inserting ``or an imitation controlled substance'' 
     after ``counterfeit substance''.
       (h) Section 506(a) of the Controlled Substances Act (21 
     U.S.C. 876(a)) is amended by inserting ``, imitation 
     controlled substances,'' after ``controlled substances''.
       (i) Section 509 of the Controlled Substances Act (21 U.S.C. 
     879) is amended by inserting ``imitation controlled 
     substances, or listed chemicals'' after ``controlled 
     substances''.
       (j)(1) Section 511(a) of the Controlled Substances Act (21 
     U.S.C. 881(a)) is amended--
       (A) in paragraph (1), by inserting ``and imitation 
     controlled substances'' after ``controlled substances'';
       (B) in paragraph (2), by inserting ``, imitation controlled 
     substance,'' after ``controlled substance'';
       (C) in paragraph (6), by inserting ``, imitation controlled 
     substance,'' after ``controlled substance''; and
       (D) in paragraph (8), by inserting ``and imitation 
     controlled substances'' after ``controlled substances''.
       (2) Section 607(a)(3) of the Tariff Act of 1930 (19 U.S.C. 
     1607(a)(3)) is amended by inserting ``, imitation controlled 
     substance,'' after ``controlled substance''.
       (3) Section 607(b) of the Tariff Act of 1930 (19 U.S.C. 
     1607(b)) is amended by inserting ``, `imitation controlled 
     substance','' after `` `controlled substance' ''.
       (k) Section 1010(a) of the Controlled Substances Act (21 
     U.S.C. 960(a)) is amended--
       (1) in paragraph (2), by striking ``or'' at the end;
       (2) in paragraph (3), by inserting ``or'' after 
     ``substance,''; and
       (3) by inserting after paragraph (3) the following:
       ``(4) knowingly or intentionally imports or exports a 
     counterfeit substance or an imitation controlled 
     substance,''.
       (l) Section 2516(1)(e) of title 18, United States Code, is 
     amended by inserting ``or a violation of the Controlled 
     Substances Act (21 U.S.C. 801 et seq.) or the Controlled 
     Substances Import and Export Act (21 U.S.C. 851, et seq.)'' 
     after ``United States''.

     SEC. 2305. CONFORMING AMENDMENT CONCERNING MARIJUANA PLANTS.

       Section 1010(b)(4) of the Controlled Substances Import and 
     Export Act (21 U.S.C. 960(b)(4)) is amended by striking 
     ``except in the case of 100 or more marijuana plants'' and 
     inserting ``except in the case of 50 or more marijuana 
     plants''.

     SEC. 2306. SERIOUS JUVENILE DRUG TRAFFICKING OFFENSES AS 
                   ARMED CAREER CRIMINAL ACT PREDICATES.

       Section 924(e)(2)(C) of title 18, United States Code, is 
     amended by inserting ``or serious drug offense'' after 
     ``violent felony''.

     SEC. 2307. INCREASED PENALTIES FOR USING FEDERAL PROPERTY TO 
                   GROW OR MANUFACTURE CONTROLLED SUBSTANCES.

       (a) In General.--Section 401(b)(5) of the Controlled 
     Substances Act (21 U.S.C. 841(b)(5)) is amended to read as 
     follows:
       ``(5) Any person who violates subsection (a) of this 
     section by cultivating or manufacturing a controlled 
     substance on any property in whole or in part owned by or 
     leased to the United States or any department or agency 
     thereof shall be subject to twice the maximum punishment 
     otherwise authorized for the offense.''.
       (b) Sentencing Enhancement.--
       (1) In general.--Pursuant to its authority under section 
     994(p) of title 28, United States Code, the United States 
     Sentencing Commission shall amend the Federal sentencing 
     guidelines to provide an appropriate sentencing enhancement 
     for any offense under section 401(b)(5) of the Controlled 
     Substances Act (21 U.S.C. 841(b)(5)) that occurs on Federal 
     property.
       (2) Consistency.--In carrying out this section, the United 
     States Sentencing Commission shall--
       (A) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (B) avoid duplicative punishment for substantially the same 
     offense.

     SEC. 2308. CLARIFICATION OF LENGTH OF SUPERVISED RELEASE 
                   TERMS IN CONTROLLED SUBSTANCE CASES.

       Subparagraphs (A) through (D) of section 401(b)(1) of the 
     Controlled Substances Act (21 U.S.C. 841(b)(1)) are each 
     amended by striking ``Any sentence'' and inserting 
     ``Notwithstanding section 3583 of title 18, any sentence''.

     SEC. 2309. SUPERVISED RELEASE PERIOD AFTER CONVICTION FOR 
                   CONTINUING CRIMINAL ENTERPRISE.

       Section 848(a) of title 21, United States Code, is amended 
     by adding to the end of the following: ``Any sentence under 
     this paragraph shall, in the absence of such a prior 
     conviction, impose a term of supervised release of not less 
     than 10 years in addition to such term of imprisonment and 
     shall, if there was such a prior conviction, impose a term of 
     supervised release of not less than 15 years in addition to 
     such term of imprisonment.''.

     SEC. 2310. TECHNICAL CORRECTION TO ENSURE COMPLIANCE OF 
                   SENTENCING GUIDELINES WITH PROVISIONS OF ALL 
                   FEDERAL STATUTES.

       Section 994(a) of title 28, United States Code, is amended 
     by striking ``consistent with all pertinent provisions of 
     this title and title 18, United States Code,'' and inserting 
     ``consistent with all pertinent provisions of any Federal 
     statute''.

     SEC. 2311. IMPORT AND EXPORT OF CHEMICALS USED TO PRODUCE 
                   ILLICIT DRUGS.

       (a) Notification Requirements.--Section 1018 of the 
     Controlled Substances Import and Export Act (21 U.S.C. 971) 
     is amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) Each person who proposes to engage in a transaction 
     involving the importation or exportation of a listed chemical 
     which requires advance notification pursuant to the 
     regulations of the Attorney General or the importation or 
     exportation of a tableting machine or an encapsulating 
     machine shall notify the Attorney General of the importation 
     or exportation not later than 15 days before the transaction 
     is to take place in such form and supplying such information 
     as the

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     Attorney General shall require by regulation; in the case of 
     an importation for transfer or transshipment pursuant to 
     section 1004 of this title, such notice will be made as 
     provided in that section.'';
       (2) in subsection (c)(1)--
       (A) by striking the phrase ``(other than a regulated 
     transaction to which the requirement of subsection (a) of 
     this section does not apply by reason of subsection (b) of 
     this section)'';
       (B) by inserting ``, a tableting machine or an 
     encapsulating machine'' after ``a listed chemical''; and
       (C) by inserting ``, tableting machine, or encapsulating 
     machine'' after ``the chemical''; and
       (3) in subsection (e)--
       (A) by redesignating paragraphs (2) and (3) as paragraphs 
     (4) and (5);
       (B) by inserting after paragraph (1) new paragraphs (2) and 
     (3) as follows:
       ``(2) The Attorney General may by regulation require that 
     the 15-day notification requirement of subsection (a) apply 
     to all imports of a listed chemical, regardless of the status 
     of certain importers of that listed chemical as regular 
     importers, if the Attorney General finds that such 
     notification is necessary to support effective chemical 
     diversion control programs or is required by treaty or other 
     international agreement to which the United States is a 
     party.
       ``(3) The Attorney General may require that the 
     notification requirement of subsection (a) for certain 
     importations or exportations, including those subject to 
     section 1004 of this title, include additional information to 
     enable a determination to be made that the listed chemical 
     being imported or exported will be used for a legitimate 
     purpose or when such information is needed to satisfy 
     requirements of the importing or exporting country. The 
     Attorney General will provide notice of these additional 
     requirements specifically identifying the listed chemicals 
     and countries involved.''.
       (b) Transshipment.--Section 1004 of the Controlled 
     Substances Import and Export Act (21 U.S.C. 954) is amended 
     to read as follows:

     ``Sec. 954. Transshipment and in-transit shipment of 
       controlled substances

       ``(a) Notwithstanding sections 952, 953, 957 and 971 of 
     this title, except as provided below--
       ``(1) A controlled substance in schedule I may be imported 
     into the United States--
       ``(A) for transshipment to another country, or
       ``(B) for transference or transshipment from one vessel, 
     vehicle, or aircraft to another vessel, vehicle, or aircraft 
     within the United States for immediate exportation, if and 
     only if (i) evidence is furnished which enables the Attorney 
     General to determine that the substance being so imported, 
     transferred, or transshipped will be used for scientific, 
     medical, or other legitimate purposes in the country of 
     destination, and (ii) it is so imported, transferred, or 
     transshipped with the prior written approval of the Attorney 
     General (which shall be granted or denied within 21 days of 
     the request) based on a determination that the requirements 
     of this section and the applicable subsections of sections 
     952 and 953 have been satisfied.
       ``(2) A controlled substance in schedule II, III, or IV or 
     a listed chemical may be so imported, transferred, or 
     transshipped if and only evidence is furnished which enables 
     the Attorney General to determine that the substance or 
     chemical being so imported, transferred, or transshipped will 
     be used for scientific, medical, or other legitimate purposes 
     in the country of destination and (ii) advance notification 
     is given to the Attorney General not later than 15 days prior 
     to the exportation of the substance or chemical from the 
     foreign port of embarkation (the notification period for 
     imports other than for transfer or transshipment pursuant to 
     section 1002 or 1018 of this title is not affected by this 
     subsection). Such notification shall be in such form and 
     contain such information as the Attorney General may require 
     by regulation.
       ``(b)(1) Any such importation, transfer or transshipment of 
     a controlled substance shall be subject to the applicable 
     subsections of sections 1002 and 1003 of this title. The 
     importation, transfer, transshipment or exportation of any 
     controlled substance may be suspended on the ground that the 
     controlled substance may be diverted to other than 
     scientific, medical or other legitimate purposes.
       ``(2) Any such importation, transfer or transshipment of a 
     listed chemical shall be subject to all the requirements of 
     section 1018 of this title, except that in no case shall the 
     15-day advance notification requirement be waived. The 
     importation, transfer, transshipment or exportation of a 
     listed chemical may be suspended on the ground that the 
     chemical may be diverted to the clandestine manufacture of a 
     controlled substance.
       ``(3) Any such importation, transfer or transshipment of a 
     controlled substance or listed chemical may be suspended if 
     any requirement of subsection (a) is not satisfied. The 
     Attorney General may withdraw a suspension order issued under 
     this paragraph if (A) the requirements of subsection (a) are 
     ultimately satisfied and (B) no grounds exist under 
     paragraphs (1) or (2) of this subsection to suspend the 
     shipment.
       ``(c) The suspension of any exportation of a controlled 
     substance or listed chemical will be subject to the 
     procedures and requirements established in section 1018(c) of 
     this title.
       ``(d) Any shipment of a controlled substance or listed 
     chemical which has been imported or is subject to the 
     jurisdiction of the United States whose importation, 
     transfer, transshipment or exportation has been suspended 
     may, in the discretion of the Attorney General, be placed 
     under seal. No disposition may be made of any such controlled 
     substance or listed chemical until the suspension order 
     becomes final. However, a court, upon application therefor, 
     may at any time order the sale of a perishable controlled 
     substance or listed chemical. Any such order shall require 
     the deposit of the proceeds of the sale with the court. Upon 
     a suspension order becoming final, the shipment may be 
     disposed of as follows, at the discretion of the Attorney 
     General and subject to such conditions as the Attorney 
     General may impose:
       ``(1) The title holder may be allowed to return the 
     shipment to any of the original exporter's facilities in the 
     country of exportation;
       ``(2) The shipment may be exported, subject to the 
     requirements of section 1003 or 1018 of this title, as 
     appropriate, to a new consignee;
       ``(3) The shipment may be surrendered to the Attorney 
     General for appropriate disposition; all costs associated 
     with this disposition will be the responsibility of the title 
     holder, however if there are any proceeds from the 
     disposition, these will be applied to the repayment of the 
     costs and any excess proceeds will be returned to the 
     titleholder;
       ``(4) If sufficient cause exists, the shipment of 
     controlled substances or listed chemicals (or proceeds of 
     sale deposited in court) may be forfeited to the United 
     States pursuant to section 511 of title II and may be 
     disposed of in accordance with that section.
       ``(e) Nothing in this section may be used by any party to 
     defend against a forfeiture action against a shipment of 
     controlled substances or listed chemicals initiated by the 
     United States or by any state. This section does not affect 
     the liability of any party for storage and transportation 
     costs incurred by the Government as a result of the 
     suspension of a shipment.''.
       (c) Penalties.--Section 1010(d) of the Controlled 
     Substances Import and Export Act (21 U.S.C. 960(d)) is 
     amended--
       (1) by redesignating paragraphs (5), (6) and (7) as 
     paragraphs (6), (7) and (8);
       (2) in the redesignated paragraph (6), by striking 
     ``1018(e)(2) or (3)'' and inserting ``1018(e)(4) or (5)'';
       (3) in the redesignated paragraph (7), by inserting ``or 
     violates section 1004 of this title,'' after ``1007 or 1018 
     of this title''; and
       (4) by inserting after paragraph (4) a new paragraph (5) as 
     follows:
       ``(5) imports or exports a listed chemical, with the intent 
     to evade the reporting or recordkeeping requirements of 
     section 1018 applicable to such importation or exportation by 
     falsely representing to the Attorney General that the 
     importation or exportation is not subject to the 15-day 
     advance notification required by section 1018(a) or to any 
     reporting requirements established by the Attorney General 
     pursuant to section 1018(e) (1), (2) or (3) by 
     misrepresenting the actual country of final destination of 
     the listed chemical, or the actual listed chemical being 
     imported or exported; or''.
       (d) Section 1011 of the Controlled Substances Import and 
     Export Act (21 U.S.C. 961) is amended to read as follows:

     ``Sec. 1011. Injunctions

       ``In addition to any other applicable penalty, any person 
     convicted of a felony violation of this title or title II 
     relating to the receipt, distribution, manufacture, 
     importation or exportation of a listed chemical may be 
     enjoined from engaging in any transaction involving a listed 
     chemical for not more than ten years.''.

                   Subtitle D--Deterring Cargo Theft

     SEC. 2351. PUNISHMENT OF CARGO THEFT.

       (a) In General.--Section 659 of title 18, United States 
     Code, is amended--
       (1) by striking ``with intent to convert to his own use'' 
     each place that term appears;
       (2) in the first undesignated paragraph--
       (A) by inserting ``trailer,'' after ``motortruck,'';
       (B) by inserting ``air cargo container,'' after 
     ``aircraft,''; and
       (C) by inserting ``, or from any intermodal container, 
     trailer, container freight station, warehouse, or freight 
     consolidation facility,'' after ``air navigation facility'';
       (3) in the fifth undesignated paragraph, by striking ``one 
     year'' and inserting ``3 years'';
       (4) in the penultimate undesignated paragraph, by inserting 
     after the first sentence the following: ``For purposes of 
     this section, goods and chattel shall be construed to be 
     moving as an interstate or foreign shipment at all points 
     between the point of origin and the final destination (as 
     evidenced by the waybill or other shipping document of the 
     shipment), regardless of any temporary stop while awaiting 
     transshipment or otherwise.''; and
       (5) by adding at the end the following:

[[Page 300]]

       ``It shall be an affirmative defense (on which the 
     defendant bears the burden of persuasion by a preponderance 
     of the evidence) to an offense under this section that the 
     defendant bought, received, or possessed the goods, chattels, 
     money, or baggage at issue with the sole intent to report the 
     matter to an appropriate law enforcement officer or to the 
     owner of the goods, chattels, money, or baggage.''.
       (b) Federal Sentencing Guidelines.--Pursuant to section 994 
     of title 28, United States Code, the United States Sentencing 
     Commission shall review the Federal sentencing guidelines 
     under section 659 of title 18, United States Code, as amended 
     by this section and, upon completion of the review, 
     promulgate amendments to the Federal Sentencing Guidelines to 
     provide appropriate enhancement of the applicable guidelines.

     SEC. 2352. REPORTS TO CONGRESS ON CARGO THEFT.

       The Attorney General shall annually submit to Congress a 
     report, which shall include an evaluation of law enforcement 
     activities relating to the investigation and prosecution of 
     offenses under section 659 of title 18, United States Code, 
     as amended by this subtitle.

     SEC. 2353. ESTABLISHMENT OF ADVISORY COMMITTEE ON CARGO 
                   THEFT.

       (a) Establishment.--
       (1) In general.--There is established a Committee to be 
     known as the Advisory Committee on Cargo Theft (in this 
     section referred to as the ``Committee'').
       (2) Membership.--
       (A) Composition.--The Committee shall be composed of 6 
     members, who shall be appointed by the President, of whom--
       (i) 1 shall be an officer or employee of the Department of 
     Justice;
       (ii) 1 shall be an officer or employee of the Department of 
     Transportation;
       (iii) 1 shall be an officer or employee of the Department 
     of the Treasury; and
       (iv) 3 shall be individuals from the private sector who are 
     experts in cargo security.
       (B) Date.--The appointments of the initial members of the 
     Committee shall be made not later than 30 days after the date 
     of enactment of this Act.
       (3) Period of appointment; vacancies.--Each member of the 
     Committee shall be appointed for the life of the Committee. 
     Any vacancy in the Committee shall not affect its powers, but 
     shall be filled in the same manner as the original 
     appointment.
       (4) Initial meeting.--Not later than 15 days after the date 
     on which all initial members of the Committee have been 
     appointed, the Committee shall hold its first meeting.
       (5) Meetings.--The Committee shall meet, not less 
     frequently than quarterly, at the call of the Chairperson.
       (6) Quorum.--A majority of the members of the Committee 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (7) Chairperson.--The President shall select 1 member of 
     the Committee to serve as the Chairperson of the Committee.
       (b) Duties.--
       (1) Study.--The Committee shall conduct a thorough study 
     of, and develop recommendations with respect to, all matters 
     relating to--
       (A) the establishment of a national computer database for 
     the collection and dissemination of information relating to 
     violations of section 659 of title 18, United States Code (as 
     added by section 3801(a) of this title); and
       (B) the establishment of an office within the Federal 
     Government to promote cargo security and to increase 
     coordination between the Federal Government and the private 
     sector with respect to cargo security.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Committee shall submit to the 
     President and to Congress a report, which shall contain a 
     detailed statement of results of the study and the 
     recommendations of the Committee under paragraph (1).
       (c) Powers.--
       (1) Hearings.--The Committee may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Committee considers advisable to 
     carry out the purposes of this section.
       (2) Information from federal agencies.--The Committee may 
     secure directly from any Federal department or agency such 
     information as the Committee considers necessary to carry out 
     the provisions of this section. Upon request of the 
     Chairperson of the Committee, the head of such department or 
     agency shall furnish such information to the Committee.
       (3) Postal services.--The Committee may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (4) Gifts.--The Committee may accept, use, and dispose of 
     gifts or donations of services or property.
       (d) Personnel Matters.--
       (1) Compensation of members.--
       (A) Non-federal members.--Each member of the Committee who 
     is not an officer or employee of the Federal Government shall 
     be compensated at a rate equal to the daily equivalent of the 
     annual rate of basic pay prescribed for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Committee.
       (B) Federal members.--Each member of the Committee who is 
     an officer or employee of the United States shall serve 
     without compensation in addition to that received for their 
     service as an officer or employee of the United States.
       (2) Travel expenses.--The members of the Committee shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Committee.
       (3) Staff.--
       (A) In general.--The Chairperson of the Committee may, 
     without regard to the civil service laws and regulations, 
     appoint and terminate an executive director and such other 
     additional personnel as may be necessary to enable the 
     Committee to perform its duties. The employment of an 
     executive director shall be subject to confirmation by the 
     Committee.
       (B) Compensation.--The Chairperson of the Committee may fix 
     the compensation of the executive director and other 
     personnel without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of title 5, United States Code, 
     relating to classification of positions and General Schedule 
     pay rates, except that the rate of pay for the executive 
     director and other personnel may not exceed the rate payable 
     for level V of the Executive Schedule under section 5316 of 
     such title.
       (4) Detail of government employees.--Any Federal Government 
     employee may be detailed to the Committee without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (5) Procurement of temporary and intermittent services.--
     The Chairperson of the Committee may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code, at rates for individuals which do not 
     exceed the daily equivalent of the annual rate of basic pay 
     prescribed for level V of the Executive Schedule under 
     section 5316 of such title.
       (e) Termination.--The Committee shall terminate 90 days 
     after the date on which the Committee submits the report 
     under subsection (b)(2).
       (f) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     such sums as may be necessary to the Committee to carry out 
     the purposes of this section.
       (2) Availability.--Any sums appropriated under the 
     authorization contained in this section shall remain 
     available, without fiscal year limitation, until expended.

     SEC. 2354. ADDITION OF ATTEMPTED THEFT AND COUNTERFEITING 
                   OFFENSES TO ELIMINATE GAPS AND INCONSISTENCIES 
                   IN COVERAGE.

       (a) In General.--
       (1) Embezzlement against estate.--Section 153(a) of title 
     18, United States Code, is amended by inserting ``, or 
     attempts so to appropriate, embezzle, spend, or transfer,'' 
     before ``any property''.
       (2) Public money.--Section 641 of title 18, United States 
     Code, is amended by striking ``or'' at the end of the first 
     paragraph and by inserting after such paragraph the 
     following:

     ``Whoever attempts to commit an offense described in the 
     preceding paragraph; or''.
       (3) Theft by bank examiner.--Section 655 of title 18, 
     United States Code, is amended by inserting ``or attempts to 
     steal or so take,'' after ``unlawfully takes,''.
       (4) Theft, embezzlement, or misapplication by bank officer 
     or employee.--Sections 656 and 657 of title 18, United States 
     Code, are each amended--
       (A) by inserting ``, or attempts to embezzle, abstract, 
     purloin, or willfully misapply,'' after ``willfully 
     misapplies''; and
       (B) by inserting ``or attempted to be embezzled, 
     abstracted, purloined, or misapplied'' after ``misapplied''.
       (5) Property mortgaged or pledged to farm credit 
     agencies.--Section 658 of title 18, United States Code, is 
     amended by inserting ``or attempts so to remove, dispose of, 
     or convert,'' before ``any property''.
       (6) Interstate or foreign shipments.--Section 659 of title 
     18, United States Code, is amended--
       (A) in the first and third paragraphs, by inserting ``or 
     attempts to embezzle, steal, or so take or carry away,'' 
     after ``carries away,''; and
       (B) in the fourth paragraph by inserting ``or attempts to 
     embezzle, steal, or so take,'' before ``from any railroad 
     car''.
       (7) Within special maritime and territorial jurisdiction.--
     Section 661 of title 18, United States Code, is amended--
       (A) by inserting ``or attempts so to take and carry away,'' 
     before ``any personal property''; and
       (B) by inserting ``or attempted to be taken'' after 
     ``taken'' each place it appears.
       (8) Theft or embezzlement from employee benefit plans.--
     Section 664 of title 18, United States Code, is amended by 
     inserting ``or attempts to embezzle, steal, or so abstract or 
     convert,'' before ``any of the moneys''.


[[Page 301]]

       (9) Theft or embezzlement from employment and training 
     funds.--Section 665(a) of title 18, United States Code, is 
     amended--
       (A) by inserting ``, or attempts to embezzle, so misapply, 
     steal, or obtain by fraud,'' before ``any of the moneys''; 
     and
       (B) by inserting ``or attempted to be embezzled, 
     misapplied, stolen, or obtained by fraud'' after ``obtained 
     by fraud''.
       (10) Theft or bribery concerning programs receiving federal 
     funds.--Section 666(a)(1)(A) of title 18, United States Code, 
     is amended by inserting ``or attempts to embezzle, steal, 
     obtain by fraud, or so convert or misapply,'' before 
     ``property''.
       (11) False pretenses on high seas.--Section 1025 of title 
     18, United States Code, is amended--
       (A) by inserting ``or attempts to obtain'' after 
     ``obtains''; and
       (B) by inserting ``or attempted to be obtained'' after 
     ``obtained''.
       (12) Embezzlement and theft from indian tribal 
     organizations.--Section 1163 of title 18, United States Code, 
     is amended by inserting ``attempts so to embezzle, steal, 
     convert, or misapply,'' after ``willfully misapplies,''.
       (13) Theft from group establishments on indian lands.--
     Section 1167 (a) and (b) of title 18, United States Code, are 
     each amended by inserting ``or attempts so to abstract, 
     purloin, misapply, or take and carry away,'' before ``any 
     money''.
       (14) Theft by officers and employees of gaming 
     establishments on indian lands.--Section 1168 (a) and (b) of 
     title 18, United States Code, are each amended by inserting 
     ``or attempts so to embezzle, abstract, purloin, misapply, or 
     take and carry away,'' before ``any moneys,''.
       (15) Theft of property used by the postal service.--Section 
     1707 of title 18, United States Code, is amended by inserting 
     ``, or attempts to steal, purloin, or embezzle,'' before 
     ``any property'' and by inserting ``or attempts to 
     appropriate'' after ``appropriates''.
       (16) Theft in receipt of stolen mail matter.--Section 1708 
     of title 18, United States Code, is amended in the second 
     paragraph by inserting ``or attempts to steal, take, or 
     abstract,'' after ``abstracts,'' and by inserting ``, or 
     attempts so to obtain,'' after ``obtains''.
       (17) Theft of mail matter by officer or employee.--Section 
     1709 of title 18, United States Code, is amended--
       (A) by inserting ``or attempts to embezzle'' after 
     ``embezzles''; and
       (B) by inserting ``, or attempts to steal, abstract, or 
     remove,'' after ``removes''.
       (18) Misappropriation of postal funds.--Section 1711 of 
     title 18, United States Code, is amended by inserting ``or 
     attempts to loan, use, pledge, hypothecate, or convert to his 
     own use,'' after ``use''.
       (19) Bank robbery and incidental crimes.--Section 2113(b) 
     of title 18, United States Code, is amended by inserting ``or 
     attempts so to take and carry away,'' before ``any property'' 
     each place it appears.
       (b) Securities Crimes.--
       (1) Possession of tools.--Section 477 of title 18, United 
     States Code, is amended by inserting ``, or attempts so to 
     sell, give, or deliver,'' before ``any such imprint''.
       (2) Uttering counterfeit foreign obligations or 
     securities.--Section 479 of title 18, United States Code, is 
     amended by inserting ``or attempts to utter or pass,'' after 
     ``passes,''.
       (3) Minor coins.--Section 490 of title 18, United States 
     Code, is amended by inserting ``attempts to pass, utter, or 
     sell,'' before ``or possesses''.
       (4) Securities of states and private entities.--Section 
     513(a) of title 18, United States Code, is amended by 
     inserting ``or attempts to utter,'' after ``utters''.

     SEC. 2355. CLARIFICATION OF SCIENTER REQUIREMENT FOR 
                   RECEIVING PROPERTY STOLEN FROM AN INDIAN TRIBAL 
                   ORGANIZATION.

       Section 1163 of title 18, United States Code, is amended in 
     the second paragraph by striking ``so''.

     SEC. 2356. LARCENY INVOLVING POST OFFICE BOXES AND POSTAL 
                   STAMP VENDING MACHINES.

       Section 2115 of title 18, United States Code, is amended--
       (1) by striking ``or'' before ``any building'';
       (2) by inserting ``or any post office box or postal stamp 
     vending machine for the sale of stamps owned by the Postal 
     Service,'' after ``used in whole or in part as a post 
     office,''; and
       (3) by inserting ``or in such box or machine,'' after ``so 
     used''.

     SEC. 2357. EXPANSION OF FEDERAL THEFT OFFENSES TO COVER THEFT 
                   OF VESSELS.

       (a) Vessel Defined.--Section 2311 of title 18, United 
     States Code, is amended by adding at the end the following:
       `` `Vessel' means any watercraft or other contrivance used 
     or designed for transportation or navigation on, under, or 
     immediately above, water.''.
       (b) Transportation of Stolen Vehicles; Sale or Receipt of 
     Stolen Vehicles.--Sections 2312 and 2313 of title 18, United 
     States Code, are each amended by striking ``motor vehicle or 
     aircraft'' and inserting ``motor vehicle, vessel, or 
     aircraft''.

            Subtitle E--Improvements to Federal Criminal Law

                    PART 1--SENTENCING IMPROVEMENTS

     SEC. 2411. APPLICATION OF SENTENCING GUIDELINES TO ALL 
                   PERTINENT STATUTES.

       Section 994(a) of title 28, United States Code, is amended 
     by striking ``consistent with all pertinent provisions of 
     this title and title 18, United States Code,'' and inserting 
     ``consistent with all pertinent provisions of any Federal 
     statute''.

     SEC. 2412. DOUBLING MAXIMUM PENALTY FOR VOLUNTARY 
                   MANSLAUGHTER.

       Section 1112(b) of title 18, United States Code, is amended 
     by striking ``ten years'' and inserting ``20 years''.

     SEC. 2413. AUTHORIZATION OF IMPOSITION OF BOTH A FINE AND 
                   IMPRISONMENT RATHER THAN ONLY EITHER PENALTY IN 
                   CERTAIN OFFENSES.

       (a) Power of Court.--Section 401 of title 18, United States 
     Code, is amended by inserting ``or both,'' after ``fine or 
     imprisonment,''.
       (b) Destruction of Letter Boxes or Mail.--Section 1705 of 
     title 18, United States Code, is amended by inserting ``, or 
     both'' after ``years''.
       (c) Other Sections.--Sections 1916, 2234, and 2235 of title 
     18, United States Code, are each amended by inserting ``, or 
     both'' after ``year''.

     SEC. 2414. ADDITION OF SUPERVISED RELEASE VIOLATION AS 
                   PREDICATES FOR CERTAIN OFFENSES.

       (a) In General.--Sections 1512(a)(1)(C), 1512(b)(3), 
     1512(c)(2), 1513(a)(1)(B), and 1513(b)(2) are each amended by 
     striking ``violation of conditions of probation, parole or 
     release pending judicial proceedings'' and inserting 
     ``violation of conditions of probation, supervised release, 
     parole, or release pending judicial proceedings''.
       (b) Release or Detention of Defendant Pending Trial.--
     Section 3142 of title 18, United States Code, is amended--
       (1) in subsection (d)(1)(A)(iii), by inserting ``, 
     supervised release,'' after ``probation''; and
       (2) in subsection (g)(3)(B), by inserting ``or supervised 
     release'' after ``probation''.

     SEC. 2415. AUTHORITY OF COURT TO IMPOSE A SENTENCE OF 
                   PROBATION OR SUPERVISED RELEASE WHEN REDUCING A 
                   SENTENCE OF IMPRISONMENT IN CERTAIN CASES.

       Section 3582(c)(1)(A) of title 18, United States Code, is 
     amended by inserting ``(and may impose a sentence of 
     probation or supervised release with or without conditions)'' 
     after ``may reduce the term of imprisonment''.

     SEC. 2416. ELIMINATION OF PROOF OF VALUE REQUIREMENT FOR 
                   FELONY THEFT OR CONVERSION OF GRAND JURY 
                   MATERIAL.

       Section 641 of title 18, United States Code, is amended by 
     striking ``but if the value of such property does not exceed 
     the sum of $1,000, he'' and inserting ``but if the value of 
     such property, other than property constituting `matters 
     occurring before the grand jury' within the meaning of Rule 
     6(e) of the Federal Rules of Criminal Procedure, does not 
     exceed the sum of $1,000,''.

     SEC. 2417. INCREASED MAXIMUM CORPORATE PENALTY FOR ANTITRUST 
                   VIOLATIONS.

       (a) Restraint of Trade Among the States.--Section 1 of the 
     Sherman Act (15 U.S.C. 1) is amended by striking 
     ``$10,000,000'' and inserting ``$100,000,000''.
       (b) Monopolizing Trade.--Section 2 of the Sherman Act (15 
     U.S.C. 2) is amended by striking ``$10,000,000'' and 
     inserting ``$100,000,000''.
       (c) Other Restraints.--Section 3 of the Sherman Act (15 
     U.S.C. 3) is amended by striking ``$10,000,000'' and 
     inserting ``$100,000,000''.

     SEC. 2418. AMENDMENT OF FEDERAL SENTENCING GUIDELINES FOR 
                   COUNTERFEIT BEARER OBLIGATIONS OF THE UNITED 
                   STATES.

       (a) In General.--Pursuant to its authority under section 
     994(p) of title 28, United States Code, the United States 
     Sentencing Commission shall review and if appropriate, amend 
     the Federal sentencing guidelines generally to enhance the 
     penalty for offenses involving counterfeit bearer obligation 
     of the United States.
       (b) Factors for Consideration.--In carrying out this 
     section, the Commission shall consider, with respect to the 
     offenses described in subsection (a)--
       (1) whether the base offense level in the current 
     guidelines is adequate to address the serious nature of these 
     offenses and the public interest in protecting the integrity 
     of United States currency, especially in light of recent 
     technological advancements in counterfeiting methods that 
     decrease the cost and increase the availability of such 
     counterfeiting methods to criminals;
       (2) whether the current specific offense characteristic 
     applicable to manufacturing counterfeit obligations fails to 
     take into account the range of offenses in this category; and
       (3) any other factor that the Commission considers to be 
     appropriate.
       (c) Emergency Authority to Sentencing Commission.--The 
     Commission shall promulgate the guidelines or amendments 
     provided for under this section as soon as is practicable in 
     accordance with the procedure set forth in section 21(a) of 
     the Sentencing Act of 1987, as though the authority under 
     that Act had not expired.

[[Page 302]]



        PART 2--ADDITIONAL IMPROVEMENTS TO FEDERAL CRIMINAL LAW

     SEC. 2421. VIOLENCE DIRECTED AT DWELLINGS IN INDIAN COUNTRY.

       Section 1153(a) of title 18, United States Code, is amended 
     by inserting ``or 1363'' after ``section 661''.

     SEC. 2422. CORRECTIONS TO AMBER HAGERMAN CHILD PROTECTION 
                   ACT.

       (a) Aggravated Sexual Abuse.--Section 2241(c) of title 18, 
     United States Code, is amended by striking ``younger than 
     that person'' and inserting ``younger than the person so 
     engaging''.
       (b) Sexual Abuse of a Minor or Ward.--Section 2243(a) of 
     title 18, United States Code, is amended--
       (1) by striking ``Whoever'' and inserting ``Except as 
     provided in section 2241(c) of this title, whoever''; and
       (2) by striking ``crosses a State line with intent to 
     engage in a sexual act with a person who has not attained the 
     age of 12 years, or''.
       (c) Definitions.--Section 2246 of title 18, United States 
     Code, is amended--
       (1) in paragraph (4), by striking the period and inserting 
     a semicolon;
       (2) in paragraph (5), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(6) the term `State' means a State of the United States, 
     the District of Columbia, and any commonwealth, possession, 
     or territory of the United States.''.

     SEC. 2423. ELIMINATION OF ``BODILY HARM'' ELEMENT IN ASSAULT 
                   WITH A DANGEROUS WEAPON OFFENSE.

       Section 113(a)(3) of title 18, United States Code, is 
     amended by striking ``with intent to do bodily harm, and''.

     SEC. 2424. APPEALS FROM CERTAIN DISMISSALS.

       Section 3731 of title 18, United States Code, is amended by 
     inserting ``or any part thereof'' after ``as to any one or 
     more counts''.

     SEC. 2425. AUTHORITY FOR INJUNCTION AGAINST DISPOSAL OF ILL-
                   GOTTEN GAINS FROM VIOLATIONS OF FRAUD STATUTES.

       Section 1345(a)(2) of title 18, United States Code, is 
     amended by inserting ``violation of this chapter or section 
     287, 371 (insofar as such violation involves a conspiracy to 
     defraud the United States or any agency thereof), or 1001 of 
     this title or of a'' after ``as a result of a''.

     SEC. 2426. EXPANSION OF INTERSTATE TRAVEL FRAUD STATUTE TO 
                   COVER INTERSTATE TRAVEL BY PERPETRATOR.

       Section 2314 of title 18, United States Code, is amended in 
     the second undesignated paragraph--
       (1) by inserting ``travels in,'' before ``transports or 
     causes to be transported, or induce any person or persons to 
     travel in''; and
       (2) by inserting a comma after ``transports''.

     SEC. 2427. CLARIFICATION OF SCOPE OF UNAUTHORIZED SELLING OF 
                   MILITARY MEDALS OR DECORATIONS.

       Section 704(b)(2) of title 18, United States Code, is 
     amended by striking ``with respect to a Congressional Medal 
     of Honor''.

     SEC. 2428. AMENDMENT TO SECTION 669 TO CONFORM TO PUBLIC LAW 
                   104-294.

       Section 669 of title 18, United States Code, is amended by 
     striking ``$100'' and inserting ``$1,000''.

     SEC. 2429. EXPANSION OF JURISDICTION OVER CHILD BUYING AND 
                   SELLING OFFENSES.

       Section 2251A(c)(3) of title 18, United States Code, is 
     amended by striking ``in any territory or possession of the 
     United States'' and inserting ``in the special maritime and 
     territorial jurisdiction of the United States or in any 
     commonwealth, territory, or possession of the United 
     States''.

     SEC. 2430. LIMITS ON DISCLOSURE OF WIRETAP ORDERS.

       Section 2518(9) of title 18, United States Code, is amended 
     by inserting ``aggrieved'' before the word ``party'' wherever 
     it appears.

     SEC. 2431. PRISON CREDIT AND AGING PRISONER REFORM.

       (a) Prison Credits in General.--Section 3585(b) of title 
     18, United States Code, is amended to read as follows:
       ``(b) Credit for Prior Custody.--A defendant shall be given 
     credit toward the service of a term of imprisonment for any 
     time spent in official detention prior to the date the 
     sentence commences only if that official detention is as a 
     result of the offense for which the sentence was imposed and 
     has not been--
       ``(1) credited toward another sentence; or
       ``(2) applied in any manner to an undischarged concurrent 
     term of imprisonment.''.
       (b) Good Time Credits for Foreign Prisoners Transferred to 
     the United States.--Section 4105(c) of title 18, United 
     States Code, is amended--
       (1) in paragraph (1), by inserting ``by the Bureau of 
     Prisons and deducted from the sentence imposed by the foreign 
     court'' after ``These credits shall be combined'';
       (2) by redesignating paragraphs (3) and (4) as paragraphs 
     (5) and (6), respectively; and
       (3) by inserting after paragraph (2) the following:
       ``(3) If the term of imprisonment under section 
     4106A(b)(1)(A) is less than or equal to the total sentence 
     imposed and certified by the foreign authorities on the basis 
     of considerations other than the limitation arising under 
     section 4106A(b)(1)(C), the Bureau of Prisons shall calculate 
     credits for satisfactory behavior at the rate provided in 
     section 3624(b) and computed on the basis of the term of 
     imprisonment under section 4106A(b)(1)(A). If the credits 
     calculated under this paragraph produce a release date that 
     is earlier than the release date otherwise determined under 
     this section, the release date calculated under this 
     paragraph shall apply to the transferred offender.
       ``(4) Upon release from imprisonment, the offender shall 
     commence service of any period of supervised release 
     established pursuant to section 4106A(b)(1)(A), and the 
     balance of the foreign sentence remaining at the time of 
     release from prison shall not be reduced by credits for 
     satisfactory behavior, or labor, or any other credit that has 
     been applied to establish the offender's release date.''.
       (c) Conforming Amendment.--Section 4106A(b)(1)(A) of title 
     18, United States Code, is amended by striking ``release 
     date'' and inserting ``term of imprisonment''.
       (d) Expansion of Provision Allowing for Release of 
     Nondangerous Offenders Who Have Served at Least 30 Years in 
     Prison and Are at Least 70 Years Old.--Section 3582(c)(1)(A) 
     of title 18, United States Code, is amended--
       (1) by inserting ``(and may impose a sentence of probation 
     or supervised release with or without conditions)'' after 
     ``may reduce the term of imprisonment'';
       (2) in subparagraph (ii), by inserting ``(other than an 
     offense or offenses under chapter 109A of this title)'' after 
     ``the offense or offenses''; and
       (3) in subparagraph (ii), by striking ``, pursuant to a 
     sentence imposed under section 3559(c),''.

     SEC. 2432. MIRANDA REAFFIRMATION.

       Section 3501 of title 18, United States Code, is amended--
       (1) by striking subsections (a) and (b); and
       (2) by redesignating subsections (c), (d), and (e) as 
     subsections (a), (b), and (c), respectively.

    TITLE III--PROTECTING AMERICANS AND SUPPORTING VICTIMS OF CRIME

                  Subtitle A--Crime Victims Assistance

     SEC. 3101. SHORT TITLE.

       This subtitle may be cited as the ``Crime Victims 
     Assistance Act of 2001''.

                         PART 1--VICTIM RIGHTS

      SEC. 3111. RIGHT TO NOTICE AND TO BE HEARD CONCERNING 
                   DETENTION.

       (a) In General.--Section 3142 of title 18, United States 
     Code, is amended--
       (1) in subsection (g)--
       (A) in paragraph (3), by striking ``and'' at the end;
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) by inserting after paragraph (3) the following:
       ``(4) the views of the victim; and''; and
       (2) by adding at the end the following:
       ``(k) Notice and Right To Be Heard.--
       ``(1) In general.--Subject to paragraph (2), with respect 
     to each hearing under subsection (f)--
       ``(A) before the hearing, the Government shall make 
     reasonable efforts to notify the victim of--
       ``(i) the date and time of the hearing; and
       ``(ii) the right of the victim to be heard on the issue of 
     detention; and
       ``(B) at the hearing, the court shall inquire of the 
     Government whether the victim wishes to be heard on the issue 
     of detention and, if so, shall afford the victim such an 
     opportunity.
       ``(2) Exceptions.--The requirements of paragraph (1) shall 
     not apply to any case in which the Government or the court 
     reasonably believes--
       ``(A) available evidence raises a significant expectation 
     of physical violence or other retaliation by the victim 
     against the defendant; or
       ``(B) identification of the defendant by the victim is a 
     fact in dispute, and no means of verification has been 
     attempted.''.
       (b) Victim Defined.--Section 3156(a) of title 18, United 
     States Code, is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(6) the term `victim'--
       ``(A) means an individual harmed as a result of a 
     commission of an offense involving death or bodily injury to 
     any person, a threat of death or bodily injury to any person, 
     a sexual assault, or an attempted sexual assault; and
       ``(B) includes--
       ``(i) in the case of a victim who is less than 18 years of 
     age or incompetent, the parent or legal guardian of the 
     victim;
       ``(ii) in the case of a victim who is deceased or 
     incapacitated, 1 or more family members designated by the 
     court; and
       ``(iii) any other person appointed by the court to 
     represent the victim.''.

      SEC. 3112. RIGHT TO A SPEEDY TRIAL.

       Section 3161(h)(8)(B) of title 18, United States Code, is 
     amended by adding at the end the following:

[[Page 303]]

       ``(v) The interests of the victim (or the family of a 
     victim who is deceased or incapacitated) in the prompt and 
     appropriate disposition of the case, free from unreasonable 
     delay.''.

      SEC. 3113. RIGHT TO NOTICE AND TO BE HEARD CONCERNING PLEA.

       (a) In General.--Rule 11 of the Federal Rules of Criminal 
     Procedure is amended--
       (1) by redesignating subdivision (h) as subdivision (i); 
     and
       (2) by inserting after subdivision (g) the following:
       ``(h) Rights of Victims.--
       ``(1) Victim defined.--In this subdivision, the term 
     `victim' means an individual harmed as a result of a 
     commission of an offense involving death or bodily injury to 
     any person, a threat of death or bodily injury to any person, 
     a sexual assault, or an attempted sexual assault, and also 
     includes--
       ``(A) in the case of a victim who is less than 18 years of 
     age or incompetent, the parent or legal guardian of the 
     victim;
       ``(B) in the case of a victim who is deceased or 
     incapacitated, 1 or more family members designated by the 
     court; and
       ``(C) any other person appointed by the court to represent 
     the victim.
       ``(2) Notice.--The Government, before a proceeding at which 
     a plea of guilty or nolo contendere is entered, shall make 
     reasonable efforts to notify the victim of--
       ``(A) the date and time of the proceeding;
       ``(B) the elements of the proposed plea or plea agreement;
       ``(C) the right of the victim to attend the proceeding; and
       ``(D) the right of the victim to address the court 
     personally, through counsel, or in writing on the issue of 
     the proposed plea or plea agreement.
       ``(3) Opportunity to be heard.--The court, before accepting 
     a plea of guilty or nolo contendere, shall afford the victim 
     an opportunity to be heard, personally, through counsel, or 
     in writing, on the proposed plea or plea agreement.
       ``(4) Exceptions.--Notwithstanding any other provision of 
     this subdivision--
       ``(A) in any case in which a victim is a defendant in the 
     same or a related case, or in which the Government certifies 
     to the court under seal that affording such victim any right 
     provided under this rule will jeopardize an ongoing 
     investigation, the victim shall not have such right;
       ``(B) a victim who, at the time of a proceeding at which a 
     plea of guilty or nolo contendere is entered, is incarcerated 
     in any Federal, State, or local correctional or detention 
     facility, shall not have the right to appear in person, but, 
     subject to subparagraph (A), shall be afforded a reasonable 
     opportunity to present views or participate by alternate 
     means; and
       ``(C) in any case involving more than 15 victims, the 
     court, after consultation with the Government and the 
     victims, may appoint a number of victims to represent the 
     interests of the victims, except that all victims shall 
     retain the right to submit a written statement under 
     paragraph (2).''.
       (b) Effective Date.--
       (1) In general.--The amendments made by subsection (a) 
     shall become effective as provided in paragraph (3).
       (2) Action by judicial conference.--
       (A) Recommendations.--Not later than 180 days after the 
     date of enactment of this Act, the Judicial Conference of the 
     United States shall submit to Congress a report containing 
     recommendations for amending the Federal Rules of Criminal 
     Procedure to provide enhanced opportunities for victims to be 
     heard on the issue of whether or not the court should accept 
     a plea of guilty or nolo contendere.
       (B) Inapplicability of other law.--Chapter 131 of title 28, 
     United States Code, does not apply to any recommendation made 
     by the Judicial Conference of the United States under this 
     paragraph.
       (3) Congressional action.--Except as otherwise provided by 
     law, if the Judicial Conference of the United States--
       (A) submits a report in accordance with paragraph (2) 
     containing recommendations described in that paragraph, and 
     those recommendations are the same as the amendments made by 
     subsection (a), then the amendments made by subsection (a) 
     shall become effective 30 days after the date on which the 
     recommendations are submitted to Congress under paragraph 
     (2);
       (B) submits a report in accordance with paragraph (2) 
     containing recommendations described in that paragraph, and 
     those recommendations are different in any respect from the 
     amendments made by subsection (a), the recommendations made 
     pursuant to paragraph (2) shall become effective 180 days 
     after the date on which the recommendations are submitted to 
     Congress under paragraph (2), unless an Act of Congress is 
     passed overturning the recommendations; and
       (C) fails to comply with paragraph (2), the amendments made 
     by subsection (a) shall become effective 360 days after the 
     date of enactment of this Act.
       (4) Application.--Any amendment made pursuant to this 
     section (including any amendment made pursuant to the 
     recommendations of the Judicial Conference of the United 
     States under paragraph (2)) shall apply in any proceeding 
     commenced on or after the effective date of the amendment.

      SEC. 3114. ENHANCED PARTICIPATORY RIGHTS AT TRIAL.

       (a) Amendment to Victim Rights Clarification Act.--Section 
     3510 of title 18, United States Code, is amended by adding at 
     the end the following:
       ``(d) Application to Televised Proceedings.--This section 
     applies to any victim viewing proceedings pursuant to section 
     235 of the Antiterrorism and Effective Death Penalty Act of 
     1996 (42 U.S.C. 10608), or any rule issued thereunder.''.
       (b) Amendment to Victims' Rights and Restitution Act of 
     1990.--Section 502(b) of the Victims' Rights and Restitution 
     Act of 1990 (42 U.S.C. 10606(b)) is amended--
       (1) by striking paragraph (4) and inserting the following:
       ``(4) The right to be present at all public court 
     proceedings related to the offense, unless the court 
     determines that testimony by the victim at trial would be 
     materially affected if the victim heard the testimony of 
     other witnesses.''; and
       (2) in paragraph (5), by striking ``attorney'' and 
     inserting ``the attorney''.

      SEC. 3115. RIGHT TO NOTICE AND TO BE HEARD CONCERNING 
                   SENTENCE.

       (a) Enhanced Notice and Consideration of Victims' Views.--
       (1) Imposition of sentence.--Section 3553(a) of title 18, 
     United States Code, is amended--
       (A) in paragraph (6), by striking ``and'' at the end;
       (B) by redesignating paragraph (7) as paragraph (8); and
       (C) by inserting after paragraph (6) the following:
       ``(7) the views of any victims of the offense, if such 
     views are presented to the court; and''.
       (2) Issuance and enforcement of order of restitution.--
     Section 3664(d)(2)(A) of title 18, United States Code is 
     amended--
       (A) by redesignating clauses (v) and (vi) as clauses (vii) 
     and (viii) respectively; and
       (B) by inserting after clause (iv) the following:
       ``(v) the opportunity of the victim to attend the 
     sentencing hearing;
       ``(vi) the opportunity of the victim, personally or through 
     counsel, to make a statement or present any information to 
     the court in relation to the sentence;''.
       (b) Enhanced Participatory Rights.--Rule 32 of the Federal 
     Rules of Criminal Procedure is amended--
       (1) in subdivision (b)--
       (A) by redesignating paragraphs (4), (5), and (6) as 
     paragraphs (5), (6), and (7), respectively;
       (B) by inserting after paragraph (3) the following:
       ``(4) Notice to victim.--The probation officer must, before 
     submitting the presentence report, provide notice to the 
     victim as provided by section 3664(d)(2)(A) of title 18, 
     United States Code.''; and
       (C) in paragraph (5), as redesignated--
       (i) by redesignating subparagraphs (E) through (H) as 
     subparagraphs (F) through (I), respectively; and
       (ii) by inserting after subparagraph (D) the following:
       ``(E) any victim impact statement submitted by a victim to 
     the probation officer;'';
       (2) in subdivision (c)(3), by striking subparagraph (E) and 
     inserting the following:
       ``(E) afford the victim, personally or through counsel, an 
     opportunity to make a statement or present any information in 
     relation to the sentence, including information concerning 
     the extent and scope of the victim's injury or loss, and the 
     impact of the offense on the victim or the family of the 
     victim, except that the court may reasonably limit the number 
     of victims permitted to address the court if the number is so 
     large that affording each victim such right would result in 
     cumulative victim impact information or would unreasonably 
     prolong the sentencing process.''; and
       (3) in subdivision (f)(1)--
       (A) by striking ``the right of allocution under subdivision 
     (c)(3)(E)'' and inserting ``the notice and participatory 
     rights under subdivisions (b)(4) and (c)(3)(E)''; and
       (B) by striking ``if such person or persons are present at 
     the sentencing hearing, regardless of whether the victim is 
     present;''.
       (c) Effective Date.--
       (1) In general.--The amendments made by subsection (b) 
     shall become effective as provided in paragraph (3).
       (2) Action by judicial conference.--
       (A) Recommendations.--Not later than 180 days after the 
     date of enactment of this Act, the Judicial Conference of the 
     United States shall submit to Congress a report containing 
     recommendations for amending the Federal Rules of Criminal 
     Procedure to provide enhanced opportunities for victims to 
     participate during the presentencing and sentencing phase of 
     the criminal process.
       (B) Inapplicability of other law.--Chapter 131 of title 28, 
     United States Code, does not apply to any recommendation made 
     by the Judicial Conference of the United States under this 
     paragraph.
       (3) Congressional action.--Except as otherwise provided by 
     law, if the Judicial Conference of the United States--
       (A) submits a report in accordance with paragraph (2) 
     containing recommendations

[[Page 304]]

     described in that paragraph, and those recommendations are 
     the same as the amendments made by subsection (b), then the 
     amendments made by subsection (b) shall become effective 30 
     days after the date on which the recommendations are 
     submitted to Congress under paragraph (2);
       (B) submits a report in accordance with paragraph (2) 
     containing recommendations described in that paragraph, and 
     those recommendations are different in any respect from the 
     amendments made by subsection (b), the recommendations made 
     pursuant to paragraph (2) shall become effective 180 days 
     after the date on which the recommendations are submitted to 
     Congress under paragraph (2), unless an Act of Congress is 
     passed overturning the recommendations; and
       (C) fails to comply with paragraph (2), the amendments made 
     by subsection (b) shall become effective 360 days after the 
     date of enactment of this Act.
       (4) Application.--Any amendment made pursuant to this 
     section (including any amendment made pursuant to the 
     recommendations of the Judicial Conference of the United 
     States under paragraph (2)) shall apply in any proceeding 
     commenced on or after the effective date of the amendment.

      SEC. 3116. RIGHT TO NOTICE AND TO BE HEARD CONCERNING 
                   SENTENCE ADJUSTMENT.

       (a) In General.--Rule 32.1(a) of the Federal Rules of 
     Criminal Procedure is amended by adding at the end the 
     following:
       ``(3) Notice to victim.--At any hearing pursuant to 
     paragraph (2) involving 1 or more persons who have been 
     convicted of an offense involving death or bodily injury to 
     any person, a threat of death or bodily injury to any person, 
     a sexual assault, or an attempted sexual assault, the 
     Government shall make reasonable efforts to notify the victim 
     of the offense (and the victim of any new charges giving rise 
     to the hearing), of--
       ``(A) the date and time of the hearing; and
       ``(B) the right of the victim to attend the hearing and to 
     address the court regarding whether the terms or conditions 
     of probation or supervised release should be modified.''.
       (b) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     become effective as provided in paragraph (3).
       (2) Action by judicial conference.--
       (A) Recommendations.--Not later than 180 days after the 
     date of enactment of this Act, the Judicial Conference of the 
     United States shall submit to Congress a report containing 
     recommendations for amending the Federal Rules of Criminal 
     Procedure to ensure that reasonable efforts are made to 
     notify victims of violent offenses of any revocation hearing 
     held pursuant to Rule 32.1(a)(2), and to afford such victims 
     an opportunity to participate.
       (B) Inapplicability of other law.--Chapter 131 of title 28, 
     United States Code, does not apply to any recommendation made 
     by the Judicial Conference of the United States under this 
     paragraph.
       (3) Congressional action.--Except as otherwise provided by 
     law, if the Judicial Conference of the United States--
       (A) submits a report in accordance with paragraph (2) 
     containing recommendations described in that paragraph, and 
     those recommendations are the same as the amendment made by 
     subsection (a), then the amendment made by subsection (a) 
     shall become effective 30 days after the date on which the 
     recommendations are submitted to Congress under paragraph 
     (2);
       (B) submits a report in accordance with paragraph (2) 
     containing recommendations described in that paragraph, and 
     those recommendations are different in any respect from the 
     amendment made by subsection (a), the recommendations made 
     pursuant to paragraph (2) shall become effective 180 days 
     after the date on which the recommendations are submitted to 
     Congress under paragraph (2), unless an Act of Congress is 
     passed overturning the recommendations; and
       (C) fails to comply with paragraph (2), the amendment made 
     by subsection (a) shall become effective 360 days after the 
     date of enactment of this Act.
       (4) Application.--Any amendment made pursuant to this 
     section (including any amendment made pursuant to the 
     recommendations of the Judicial Conference of the United 
     States under paragraph (2)) shall apply in any proceeding 
     commenced on or after the effective date of the amendment.

      SEC. 3117. RIGHT TO NOTICE OF RELEASE OR ESCAPE.

       (a) In General.--Subchapter C of chapter 229 of title 18, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 3627. Notice to victims of release or escape of 
       defendants

       ``(a) In General.--The Bureau of Prisons shall ensure that 
     reasonable notice is provided to each victim of an offense 
     for which a person is in custody pursuant to this 
     subchapter--
       ``(1) not less than 30 days before the release of such 
     person under section 3624, assignment of such person to pre-
     release custody under section 3624(c), or transfer of such 
     person under section 3623;
       ``(2) not less than 10 days before the temporary release of 
     such person under section 3622;
       ``(3) not later than 12 hours after discovery that such 
     person has escaped;
       ``(4) not later than 12 hours after the return to custody 
     of such person after an escape; and
       ``(5) at such other times as may be reasonable before any 
     other form of release of such person as may occur.
       ``(b) Applicability.--This section applies to any escape, 
     work release, furlough, or any other form of release from a 
     psychiatric institution or other facility that provides 
     mental or other health services to persons in the custody of 
     the Bureau of Prisons.
       ``(c) Victim Contact Information.--It shall be the 
     responsibility of a victim to notify the Bureau of Prisons, 
     by means of a form to be provided by the Attorney General, of 
     any change in the mailing address of the victim, or other 
     means of contacting the victim, while the defendant is in the 
     custody of the Bureau of Prisons. The Bureau of Prisons shall 
     ensure the confidentiality of any information relating to a 
     victim.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     subchapter C of chapter 229 of title 18, United States Code, 
     is amended by adding at the end the following:

``3627. Notice to victims of release or escape of defendants.''.

      SEC. 3118. RIGHT TO NOTICE AND TO BE HEARD CONCERNING 
                   EXECUTIVE CLEMENCY.

       (a) Notification.--Subchapter C of chapter 229 of title 18, 
     United States Code, is amended by adding after section 3627, 
     as added by section 3117, the following:

     ``Sec. 3628. Notice to victims concerning grant of executive 
       clemency

       ``(a) Definitions.--In this section--
       ``(1) the term `executive clemency'--
       ``(A) means any exercise by the President of the power to 
     grant reprieves and pardons under clause 1 of section 2 of 
     article II of the Constitution of the United States; and
       ``(B) includes any pardon, reprieve, commutation of 
     sentence, or remission of fine; and
       ``(2) the term `victim' has the same meaning given that 
     term in section 503(e) of the Victims' Rights and Restitution 
     Act of 1990 (42 U.S.C. 10607(e)).
       ``(b) Notice of Grant of Executive Clemency.--
       ``(1) If a petition for executive clemency is granted, the 
     Attorney General shall make reasonable efforts to notify any 
     victim of any offense that is the subject of the grant of 
     executive clemency that such grant has been made as soon as 
     practicable after that grant is made.
       ``(2) If a grant of executive clemency will result in the 
     release of any person from custody, notice under paragraph 
     (1) shall be prior to that release from custody, if 
     practicable.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     subchapter C of chapter 229 of title 18, United States Code, 
     is amended by adding at the end the following:

``3628. Notice to victims concerning grant of executive clemency.''.
       (c) Reporting Requirements.--The Attorney General shall 
     submit biannually to the Committees on the Judiciary of the 
     House of Representatives and the Senate a report on executive 
     clemency matters or cases delegated for review or 
     investigation to the Attorney General by the President, 
     including for each year--
       (1) the number of petitions so delegated;
       (2) the number of reports submitted to the President;
       (3) the number of petitions for executive clemency granted 
     and the number denied;
       (4) the name of each person whose petition for executive 
     clemency was granted or denied and the offenses of conviction 
     of that person for which executive clemency was granted or 
     denied; and
       (5) with respect to any person granted executive clemency, 
     the date that any victim of an offense that was the subject 
     of that grant of executive clemency was notified, pursuant to 
     Department of Justice regulations, of a petition for 
     executive clemency, and whether such victim submitted a 
     statement concerning the petition.
       (d) Sense of Congress Concerning the Right of Victims To 
     Notice and To Be Heard Concerning Executive Clemency.--It is 
     the sense of Congress that--
       (1) victims of a crime should be notified about any 
     petition for executive clemency filed by the perpetrators of 
     that crime and provided an opportunity to submit a statement 
     concerning the petition to the President; and
       (2) the Attorney General should promulgate regulations or 
     internal guidelines to ensure that such notification and 
     opportunity to submit a statement are provided.

      SEC. 3119. REMEDIES FOR NONCOMPLIANCE.

       (a) General Limitation.--Any failure to comply with any 
     amendment made by this part shall not give rise to a claim 
     for damages, or any other action against the United States, 
     or any employee of the United States, any court official or 
     officer of the court, or an entity contracting with the 
     United States, or any action seeking a rehearing or other 
     reconsideration of action taken in connection with a 
     defendant.
       (b) Regulations To Ensure Compliance.--
       (1) In general.--Notwithstanding subsection (a), not later 
     than 1 year after the date of enactment of this Act, the 
     Attorney

[[Page 305]]

     General of the United States and the Chairman of the United 
     States Parole Commission shall promulgate regulations to 
     implement and enforce the amendments made by this title.
       (2) Contents.--The regulations promulgated under paragraph 
     (1) shall--
       (A) contain disciplinary sanctions, including suspension or 
     termination from employment, for employees of the Department 
     of Justice (including employees of the United States Parole 
     Commission) who willfully or repeatedly violate the 
     amendments made by this title, or willfully or repeatedly 
     refuse or fail to comply with provisions of Federal law 
     pertaining to the treatment of victims of crime;
       (B) include an administrative procedure through which 
     parties can file formal complaints with the Department of 
     Justice alleging violations of the amendments made by this 
     title;
       (C) provide that a complainant is prohibited from 
     recovering monetary damages against the United States, or any 
     employee of the United States, either in his official or 
     personal capacity; and
       (D) provide that the Attorney General, or the designee of 
     the Attorney General, shall be the final arbiter of the 
     complaint, and there shall be no judicial review of the final 
     decision of the Attorney General by a complainant.

                 PART 2--VICTIM ASSISTANCE INITIATIVES

      SEC. 3121. PILOT PROGRAMS TO ESTABLISH OMBUDSMAN PROGRAMS 
                   FOR CRIME VICTIMS.

       (a) Definitions.--In this section:
       (1) Director.--The term ``Director'' means the Director of 
     the Office of Victims of Crime.
       (2) Office.--The term ``Office'' means the Office for 
     Victims of Crime.
       (3) Qualified private entity.--The term ``qualified private 
     entity'' means a private entity that meets such requirements 
     as the Attorney General, acting through the Director, may 
     establish.
       (4) Qualified unit of state or local government.--The term 
     ``local government'' means a unit of a State or local 
     government, including a State court, that meets such 
     requirements as the Attorney General, acting through the 
     Director, may establish.
       (5) Voice centers.--The term ``VOICE Centers'' means the 
     Victim Ombudsman Information Centers established under the 
     program under subsection (b).
       (b) Pilot Programs.--
       (1) In general.--Not later than 12 months after the date of 
     enactment of this Act, the Attorney General, acting through 
     the Director, shall establish and carry out a program to 
     provide for pilot programs to establish and operate Victim 
     Ombudsman Information Centers in each of the following 
     States:
       (A) Iowa.
       (B) Massachusetts.
       (C) Maryland.
       (D) Vermont.
       (E) Virginia.
       (F) Washington.
       (G) Wisconsin.
       (2) Agreements.--
       (A) In general.--The Attorney General, acting through the 
     Director, shall enter into an agreement with a qualified 
     private entity or unit of State or local government to 
     conduct a pilot program referred to in paragraph (1). Under 
     the agreement, the Attorney General, acting through the 
     Director, shall provide for a grant to assist the qualified 
     private entity or unit of State or local government in 
     carrying out the pilot program.
       (B) Contents of agreement.--The agreement referred to in 
     subparagraph (A) shall specify that--
       (i) the VOICE Center shall be established in accordance 
     with this section; and
       (ii) except with respect to meeting applicable requirements 
     of this section concerning carrying out the duties of a VOICE 
     Center under this section (including the applicable reporting 
     duties under subsection (c) and the terms of the agreement) 
     each VOICE Center shall operate independently of the Office.
       (C) No authority over daily operations.--The Office shall 
     have no supervisory or decisionmaking authority over the day-
     to-day operations of a VOICE Center.
       (c) Objectives.--
       (1) Mission.--The mission of each VOICE Center established 
     under a pilot program under this section shall be to assist a 
     victim of a Federal or State crime to ensure that the 
     victim--
       (A) is fully apprised of the rights of that victim under 
     applicable Federal or State law; and
       (B) is provided the opportunity to participate in the 
     criminal justice process to the fullest extent of the law.
       (2) Duties.--The duties of a VOICE Center shall include--
       (A) providing information to victims of Federal or State 
     crime regarding the right of those victims to participate in 
     the criminal justice process (including information 
     concerning any right that exists under applicable Federal or 
     State law);
       (B) identifying and responding to situations in which the 
     rights of victims of crime under applicable Federal or State 
     law may have been violated;
       (C) attempting to facilitate compliance with Federal or 
     State law referred to in subparagraph (B);
       (D) educating police, prosecutors, Federal and State 
     judges, officers of the court, and employees of jails and 
     prisons concerning the rights of victims under applicable 
     Federal or State law; and
       (E) taking measures that are necessary to ensure that 
     victims of crime are treated with fairness, dignity, and 
     compassion throughout the criminal justice process.
       (d) Oversight.--
       (1) Technical assistance.--The Office may provide technical 
     assistance to each VOICE Center.
       (2) Annual report.--Each qualified private entity or 
     qualified unit of State or local government that carries out 
     a pilot program to establish and operate a VOICE Center under 
     this section shall prepare and submit to the Director, not 
     later than 1 year after the VOICE Center is established, and 
     annually thereafter, a report that--
       (A) describes in detail the activities of the VOICE Center 
     during the preceding year; and
       (B) outlines a strategic plan for the year following the 
     year covered under subparagraph (A).
       (e) Review of Program Effectiveness.--
       (1) GAO study.--Not later than 2 years after the date on 
     which each VOICE Center established under a pilot program 
     under this section is fully operational, the Comptroller 
     General of the United States shall conduct a review of each 
     pilot program carried out under this section to determine the 
     effectiveness of the VOICE Center that is the subject of the 
     pilot program in carrying out the mission and duties 
     described in subsection (c).
       (2) Other studies.--Not later than 2 years after the date 
     on which each VOICE Center established under a pilot program 
     under this section is fully operational, the Attorney 
     General, acting through the Director, shall enter into an 
     agreement with 1 or more private entities that meet such 
     requirements that the Attorney General, acting through the 
     Director, may establish, to study the effectiveness of each 
     VOICE Center established by a pilot program under this 
     section in carrying out the mission and duties described in 
     subsection (c).
       (f) Termination Date.--
       (1) In general.--Except as provided in paragraph (2), a 
     pilot program established under this section shall terminate 
     on the date that is 4 years after the date of enactment of 
     this Act.
       (2) Renewal.--If the Attorney General determines that any 
     of the pilot programs established under this section should 
     be renewed for an additional period, the Attorney General may 
     renew that pilot program for a period not to exceed 2 years.
       (g) Funding.--Notwithstanding any other provision of law, 
     an aggregate amount not to exceed $5,000,000 of the amounts 
     collected pursuant to sections 3729 through 3731 of title 31, 
     United States Code (commonly known as the ``False Claims 
     Act''), may be used by the Director to make grants under 
     subsection (b).

      SEC. 3122. AMENDMENTS TO VICTIMS OF CRIME ACT OF 1984.

       (a) Crime Victims Fund.--Section 1402 of the Victims of 
     Crime Act of 1984 (42 U.S.C. 10601) is amended--
       (1) in subsection (b)--
       (A) in paragraph (3), by striking ``and'' at the end;
       (B) in paragraph (4), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(5) any gifts, bequests, or donations from private 
     entities or individuals.''; and
       (2) in subsection (d)--
       (A) in paragraph (4)--
       (i) in subparagraph (A), by striking ``48.5'' and inserting 
     ``47.5'';
       (ii) in subparagraph (B), by striking ``48.5'' and 
     inserting ``47.5''; and
       (iii) in subparagraph (C), by striking ``3'' and inserting 
     ``5''; and
       (B) in paragraph (5), by adding at the end the following:
       ``(C) Any State that receives supplemental funding to 
     respond to incidents or terrorism or mass violence under this 
     section shall be required to return to the Crime Victims Fund 
     for deposit in the reserve fund, amounts subrogated to the 
     State as a result of third-party payments to victims.''.
       (b) Crime Victim Compensation.--Section 1403 of the Victims 
     of Crime Act of 1984 (42 U.S.C. 10602) is amended--
       (1) in subsection (a)--
       (A) in each of paragraphs (1) and (2), by striking ``40'' 
     and inserting ``60''; and
       (B) in paragraph (3)--
       (i) by striking ``5'' and inserting ``10''; and
       (ii) by inserting ``and evaluation'' after 
     ``administration''; and
       (2) in subsection (b)--
       (A) in paragraph (7), by inserting ``because the identity 
     of the offender was not determined beyond a reasonable doubt 
     in a criminal trial, because criminal charges were not 
     brought against the offender, or'' after ``deny compensation 
     to any victim'';
       (B) by redesignating paragraphs (8) and (9) as paragraphs 
     (9) and (10), respectively; and
       (C) by inserting after paragraph (7) the following:
       ``(8) such program does not discriminate against victims 
     because they oppose the death penalty or disagree with the 
     way the State is prosecuting the criminal case.''.

[[Page 306]]

       (c) Crime Victim Assistance.--Section 1404 of the Victims 
     of Crime Act of 1984 (42 U.S.C. 10603) is amended--
       (1) in subsection (b)(3), by striking ``5'' and inserting 
     ``10'';
       (2) in subsection (c)--
       (A) in paragraph (1)--
       (i) by inserting ``or enter into cooperative agreements'' 
     after ``make grants'';
       (ii) by striking subparagraph (A) and inserting the 
     following:
       ``(A) for demonstration projects, evaluation, training, and 
     technical assistance services to eligible organizations;'';
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(C) training and technical assistance that address the 
     significance of and effective delivery strategies for 
     providing long-term psychological care.''; and
       (B) in paragraph (3)--
       (i) in subparagraph (C), by striking ``and'' at the end;
       (ii) in subparagraph (D), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(E) use funds made available to the Director under this 
     subsection--
       ``(i) for fellowships and clinical internships; and
       ``(ii) to carry out programs of training and special 
     workshops for the presentation and dissemination of 
     information resulting from demonstrations, surveys, and 
     special projects.''; and
       (3) in subsection (d)--
       (A) by striking paragraph (1) and inserting the following:
       ``(1) the term `State' includes--
       ``(A) the District of Columbia, the Commonwealth of Puerto 
     Rico, the United States Virgin Islands, and any other 
     territory or possession of the United States; and
       ``(B) for purposes of a subgrant under subsection (a)(1) or 
     a grant or cooperative agreement under subsection (c)(1), the 
     United States Virgin Islands and any agency of the Government 
     of the District of Columbia or the Federal Government 
     performing law enforcement functions in and on behalf of the 
     District of Columbia.'';
       (B) in paragraph (2)--
       (i) in subparagraph (C), by striking ``and'' at the end; 
     and
       (ii) by adding at the end the following:
       ``(E) public awareness and education and crime prevention 
     activities that promote, and are conducted in conjunction 
     with, the provision of victim assistance; and
       ``(F) for purposes of an award under subsection (c)(1)(A), 
     preparation, publication, and distribution of informational 
     materials and resources for victims of crime and crime 
     victims organizations.'';
       (C) by striking paragraph (4) and inserting the following:
       ``(4) the term `crisis intervention services' means 
     counseling and emotional support including mental health 
     counseling, provided as a result of crisis situations for 
     individuals, couples, or family members following and related 
     to the occurrence of crime;'';
       (D) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (E) by adding at the end the following:
       ``(6) for purposes of an award under subsection (c)(1), the 
     term `eligible organization' includes any--
       ``(A) national or State organization with a commitment to 
     developing, implementing, evaluating, or enforcing victims' 
     rights and the delivery of services;
       ``(B) State agency or unit of local government;
       ``(C) State court;
       ``(D) tribal organization;
       ``(E) organization--
       ``(i) described in section 501(c) of the Internal Revenue 
     Code of 1986; and
       ``(ii) exempt from taxation under section 501(a) of such 
     Code; or
       ``(F) other entity that the Director determines to be 
     appropriate.''.

      SEC. 3123. INCREASED TRAINING FOR LAW ENFORCEMENT OFFICERS 
                   AND COURT PERSONNEL TO RESPOND TO THE NEEDS OF 
                   CRIME VICTIMS.

       Notwithstanding any other provision of law, amounts 
     collected pursuant to sections 3729 through 3731 of title 31, 
     United States Code (commonly known as the ``False Claims 
     Act'') may be used by the Office for Victims of Crime to make 
     grants to States, State courts, units of local government, 
     and qualified private entities, to provide training and 
     information to prosecutors, judges, law enforcement officers, 
     probation officers, and other officers and employees of 
     Federal and State courts to assist them in responding 
     effectively to the needs of victims of crime.

      SEC. 3124. INCREASED RESOURCES TO DEVELOP STATE-OF-THE-ART 
                   SYSTEMS FOR NOTIFYING CRIME VICTIMS OF 
                   IMPORTANT DATES AND DEVELOPMENTS.

       (a) In General.--Subtitle A of title XXIII of the Violent 
     Crime Control and Law Enforcement Act of 1994 (Public Law 
     103-322; 108 Stat. 2077) is amended by adding at the end the 
     following:

     ``SEC. 230103. STATE-OF-THE-ART SYSTEMS FOR NOTIFYING VICTIMS 
                   OF IMPORTANT DATES AND DEVELOPMENTS.

       ``(a) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Office for Victims of 
     Crime of the Department of Justice such sums as may be 
     necessary for grants to Federal, State, and local 
     prosecutors' offices and law enforcement agencies, Federal 
     and State courts, county jails, Federal and State 
     correctional institutions, and qualified private entities, to 
     develop and implement state-of-the-art systems for notifying 
     victims of crime of important dates and developments relating 
     to the criminal proceedings at issue.
       ``(b) False Claims Act.--Notwithstanding any other 
     provision of law, amounts collected pursuant to sections 3729 
     through 3731 of title 31, United States Code (commonly known 
     as the `False Claims Act'), may be used for grants under this 
     section.''.
       (b) Violent Crime Reduction Trust Fund.--Section 310004(d) 
     of the Violent Crime Control and Law Enforcement Act of 1994 
     (42 U.S.C. 14214(d)) is amended--
       (1) in the first paragraph designated as paragraph (15) 
     (relating to the definition of the term ``Federal law 
     enforcement program''), by striking ``and'' at the end;
       (2) in the first paragraph designated as paragraph (16) 
     (relating to the definition of the term ``Federal law 
     enforcement program''), by striking the period at the end and 
     inserting ``; and''; and
       (3) by inserting after the first paragraph designated as 
     paragraph (16) (relating to the definition of the term 
     ``Federal law enforcement program'') the following:
       ``(17) section 230103.''.

       PART 3--VICTIM-OFFENDER PROGRAMS: ``RESTORATIVE JUSTICE''

     SEC. 3131. PILOT PROGRAM AND STUDY ON EFFECTIVENESS OF 
                   RESTORATIVE JUSTICE APPROACH ON BEHALF OF 
                   VICTIMS OF CRIME.

       (a) In General.--Notwithstanding any other provision of 
     law, amounts collected pursuant to sections 3729 through 3731 
     of title 31, United States Code (commonly known as the 
     ``False Claims Act'') and amounts available in the Crime 
     Victims Fund (42 U.S.C. 10601 et seq.), may be used by the 
     Office of Justice Programs of the Department of Justice to 
     make grants to States, State courts, units of local 
     government, tribal governments, and qualified private 
     entities for the establishment of pilot programs that 
     implement balanced and restorative justice models in juvenile 
     court settings.
       (b) Study.--The Office of Justice Programs of the 
     Department of Justice shall conduct a study and report to 
     Congress not later than 2 years after the date of enactment 
     of this Act on the effectiveness of restorative justice 
     models utilized as a part of grants made pursuant to this 
     section.
       (c) Criteria.--The study shall--
       (1) evaluate the success of models already implemented in 
     the States;
       (2) examine such factors as community restoration, victim 
     restoration, offender accountability, offender training, and 
     treatment; and
       (3) contain recommendations of best practices.
       (d) Voluntary Programs.--Any program funded under this 
     section shall be fully voluntary by both the victim and the 
     offender, once the prosecuting agency has determined that the 
     case is appropriate.
       (e) Definition of Balanced and Restorative Justice Model.--
     In this section, the term ``balanced and restorative justice 
     model'' means programs served by the criminal justice system 
     that utilize alternatives to incarceration where the purposes 
     are to--
       (1) protect the community served by the system and 
     agencies;
       (2) ensure accountability of the offender and the system;
       (3) obligate the offender to pay restitution to the victim 
     and/or the community; and
       (4) equip juvenile offenders with the skills needed to live 
     responsibly and productively.
       (f) Authorization.--There are authorized to be appropriated 
     such sums as are necessary to carry out this section.

          Subtitle B--Violence Against Women Act Enhancements

     SEC. 3201. SHELTER SERVICES FOR BATTERED WOMEN AND CHILDREN.

       (a) State Shelter Grants.--Section 303(a)(2)(C) of the 
     Family Violence Prevention and Services Act (42 U.S.C. 
     10402(a)(2)(C)) is amended by striking ``populations 
     underserved because of ethnic, racial, cultural, language 
     diversity or geographic isolation'' and inserting 
     ``populations underserved because of race, ethnicity, age, 
     disability, religion, alienage status, geographic location 
     (including rural isolation), or language barriers, and any 
     other populations determined by the Secretary to be 
     underserved''.
       (b) Secretarial Responsibilities.--Section 305(a) of the 
     Family Violence Prevention and Services Act (42 U.S.C. 
     10404(a)) is amended--
       (1) by striking ``an employee'' and inserting ``1 or more 
     employees'';
       (2) by striking ``of this title.'' and inserting ``of this 
     title, including carrying out evaluation and monitoring under 
     this title.''; and
       (3) by striking ``The individual'' and inserting ``Any 
     individual''.
       (c) Resource Centers.--Section 308 of the Family Violence 
     Prevention and Services Act (42 U.S.C. 10407) is amended--
       (1) in subsection (a)(2), by inserting ``on providing 
     information, training, and technical assistance'' after 
     ``focusing''; and
       (2) in subsection (c), by adding at the end the following:

[[Page 307]]

       ``(8) Providing technical assistance and training to local 
     entities carrying out domestic violence programs that provide 
     shelter, related assistance, or transitional housing 
     assistance.
       ``(9) Improving access to services, information, and 
     training, concerning family violence, within Indian tribes 
     and Indian tribal agencies.
       ``(10) Providing technical assistance and training to 
     appropriate entities to improve access to services, 
     information, and training concerning family violence 
     occurring in underserved populations.''.
       (d) Conforming Amendment.--Section 309(6) of the Family 
     Violence Prevention and Services Act (42 U.S.C. 10408(6)) is 
     amended by striking ``the Virgin Islands, the Northern 
     Mariana Islands, and the Trust Territory of the Pacific 
     Islands'' and inserting ``the United States Virgin Islands, 
     the Commonwealth of the Northern Mariana Islands, and the 
     combined Freely Associated States''.
       (e) Reauthorization.--Section 310 of the Family Violence 
     Prevention and Services Act (42 U.S.C. 10409) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--
       ``(1) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this title 
     $175,000,000 for each of fiscal years 2002 through 2005.
       ``(2) Source of funds.--Amounts made available under 
     paragraph (1) may be appropriated from the Violent Crime 
     Reduction Trust Fund established under section 310001 of the 
     Violent Crime Control and Law Enforcement Act of 1994 (42 
     U.S.C. 14211).'';
       (2) in subsection (b), by striking ``under subsection 
     303(a)'' and inserting ``under section 303(a)'';
       (3) in subsection (c), by inserting ``not more than the 
     lesser of $7,500,000 or'' before ``5''; and
       (4) by adding at the end the following:
       ``(f) Evaluation, Monitoring, and Administration.--Of the 
     amounts appropriated under subsection (a) for each fiscal 
     year, not more than 1 percent shall be used by the Secretary 
     for evaluation, monitoring, and administrative costs under 
     this title.''.
       (f) State Domestic Violence Coalition Grant Activities.--
     Section 311 of the Family Violence Prevention and Services 
     Act (42 U.S.C. 10410) is amended--
       (1) in subsection (a)(4), by striking ``underserved racial, 
     ethnic or language-minority populations'' and inserting 
     ``underserved populations described in section 
     303(a)(2)(C)''; and
       (2) in subsection (c), by striking ``the U.S. Virgin 
     Islands, the Northern Mariana Islands, and the Trust 
     Territory of the Pacific Islands'' and inserting ``the United 
     States Virgin Islands, the Commonwealth of the Northern 
     Mariana Islands, and the Freely Associated States''.

     SEC. 3202. TRANSITIONAL HOUSING ASSISTANCE FOR VICTIMS OF 
                   DOMESTIC VIOLENCE.

       Title III of the Family Violence Prevention and Services 
     Act (42 U.S.C. 10401 et seq.) is amended by adding at the end 
     the following new section:

     ``SEC. 319. TRANSITIONAL HOUSING ASSISTANCE.

       ``(a) In General.--The Secretary shall award grants under 
     this section to carry out programs to provide assistance to 
     individuals, and their dependents--
       ``(1) who are homeless or in need of transitional housing 
     or other housing assistance, as a result of fleeing a 
     situation of domestic violence; and
       ``(2) for whom emergency shelter services are unavailable 
     or insufficient.
       ``(b) Assistance Described.--Assistance provided under this 
     section may include--
       ``(1) short-term housing assistance, including rental or 
     utilities payments assistance and assistance with related 
     expenses, such as payment of security deposits and other 
     costs incidental to relocation to transitional housing, in 
     cases in which assistance described in this paragraph is 
     necessary to prevent homelessness because an individual or 
     dependent is fleeing a situation of domestic violence; and
       ``(2) short-term support services, including payment of 
     expenses and costs associated with transportation and job 
     training referrals, child care, counseling, transitional 
     housing identification and placement, and related services.
       ``(c) Term of Assistance.--An individual or dependent 
     assisted under this section may not receive assistance under 
     this section for a total of more than 12 months.
       ``(d) Reports.--
       ``(1) Report to secretary.--
       ``(A) In general.--An entity that receives a grant under 
     this section shall annually prepare and submit to the 
     Secretary a report describing the number of individuals and 
     dependents assisted, and the types of housing assistance and 
     support services provided, under this section.
       ``(B) Contents.--Each report shall include information on--
       ``(i) the purpose and amount of housing assistance provided 
     to each individual or dependent assisted under this section;
       ``(ii) the number of months each individual or dependent 
     received the assistance;
       ``(iii) the number of individuals and dependents who were 
     eligible to receive the assistance, and to whom the entity 
     could not provide the assistance solely due to a lack of 
     available housing; and
       ``(iv) the type of support services provided to each 
     individual or dependent assisted under this section.
       ``(2) Report to congress.--The Secretary shall annually 
     prepare and submit to the Committee on the Judiciary of the 
     House of Representatives and the Committee on the Judiciary 
     of the Senate a report that contains a compilation of the 
     information contained in reports submitted under paragraph 
     (1).
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated from the Violent Crime 
     Reduction Trust Fund established under section 310001 of the 
     Violent Crime Control and Law Enforcement Act of 1994 (42 
     U.S.C. 14211) to carry out this section--
       ``(1) $25,000,000 for each of fiscal years 2002 through 
     2003; and
       ``(2) $30,000,000 for each of fiscal years 2004 and 
     2005.''.

     SEC. 3203. FAMILY UNITY DEMONSTRATION PROJECT.

       Section 31904(a) of the Family Unity Demonstration Project 
     Act (42 U.S.C. 13883(a)) is amended--
       (1) by striking ``1997'' and inserting ``2002'';
       (2) by striking ``1998'' and inserting ``2003'';
       (3) by striking ``1999'' and inserting ``2004''; and
       (4) by striking ``2000'' and inserting ``2005''.

                       Subtitle C--Senior Safety

     SEC. 3301. SHORT TITLE.

       This subtitle may be cited as the ``Seniors Safety Act of 
     2001''.

     SEC. 3302. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) The number of older Americans is growing both 
     numerically and proportionally in the United States. Since 
     1990, the population of seniors has increased by almost 
     5,000,000, and is now 20.2 percent of the United States 
     population.
       (2) In 1997, 7 percent of victims of serious violent crime 
     were age 50 or older.
       (3) In 1997, 17.7 percent of murder victims were age 55 or 
     older.
       (4) According to the National Crime Victimization Survey, 
     persons aged 50 and older experienced approximately 673,460 
     incidents of violent crime, including rape and sexual 
     assaults, robberies and general assaults, during 1997.
       (5) Older victims of violent crime are almost twice as 
     likely as younger victims to be raped, robbed, or assaulted 
     at or in their own homes.
       (6) Approximately half of Americans who are 50 years old or 
     older feel afraid to walk alone at night in their own 
     neighborhoods.
       (7) Seniors over the age of 50 reportedly account for 37 
     percent of the estimated $40,000,000,000 in losses each year 
     due to telemarketing fraud.
       (8) In 1998, Congress enacted legislation to provide for 
     increased penalties for telemarketing fraud that targets 
     seniors.
       (9) There has not been a comprehensive study of crimes 
     committed against seniors since 1994.
       (10) It has been estimated that approximately 43 percent of 
     those turning 65 can expect to spend some time in a long-term 
     care facility, and approximately 20 percent can expect to 
     spend 5 years or longer in a such a facility.
       (11) In 1997, approximately $82,800,000,000 was spent on 
     nursing home care in the United States and over half of this 
     amount was spent by the medicaid and medicare programs.
       (12) Losses to fraud and abuse in health care reportedly 
     cost the United States an estimated $100,000,000,000 in 1996.
       (13) The Inspector General for the Department of Health and 
     Human Services has estimated that about $12,600,000,000 in 
     improper medicare benefit payments, due to inadvertent 
     mistake, fraud and abuse, were made during fiscal year 1998.
       (14) Incidents of health care fraud and abuse remain high 
     despite awareness of the problem.
       (b) Purposes.--The purposes of this subtitle are to--
       (1) combat nursing home fraud and abuse;
       (2) enhance safeguards for pension plans and health care 
     programs;
       (3) develop strategies for preventing and punishing crimes 
     that target or otherwise disproportionately affect seniors by 
     collecting appropriate data to measure the extent of crimes 
     committed against seniors and determine the extent of 
     domestic and elder abuse of seniors; and
       (4) prevent and deter criminal activity, such as 
     telemarketing fraud, that results in economic and physical 
     harm against seniors and ensure appropriate restitution.

     SEC. 3303. DEFINITIONS.

       In this subtitle--
       (1) the term ``crime'' means any criminal offense under 
     Federal or State law;
       (2) the term ``nursing home'' means any institution or 
     residential care facility defined as such for licensing 
     purposes under State law, or if State law does not employ the 
     term nursing home, the equivalent term or terms as determined 
     by the Secretary of Health and Human Services, pursuant to 
     section 1908(e) of the Social Security Act (42 U.S.C. 
     1396g(e)); and

[[Page 308]]

       (3) the term ``senior'' means an individual who is more 
     than 55 years of age.

                PART 1--COMBATING CRIMES AGAINST SENIORS

     SEC. 3311. ENHANCED SENTENCING PENALTIES BASED ON AGE OF 
                   VICTIM.

       (a) Directive to the United States Sentencing Commission.--
     Pursuant to its authority under section 994(p) of title 28, 
     United States Code, and in accordance with this section, the 
     United States Sentencing Commission shall review and, if 
     appropriate, amend section 3A1.1(a) of the Federal sentencing 
     guidelines to include the age of a crime victim as 1 of the 
     criteria for determining whether the application of a 
     sentencing enhancement is appropriate.
       (b) Requirements.--In carrying out this section, the 
     Commission shall--
       (1) ensure that the Federal sentencing guidelines and the 
     policy statements of the Commission reflect the serious 
     economic and physical harms associated with criminal activity 
     targeted at seniors due to their particular vulnerability;
       (2) consider providing increased penalties for persons 
     convicted of offenses in which the victim was a senior in 
     appropriate circumstances;
       (3) consult with individuals or groups representing 
     seniors, law enforcement agencies, victims organizations, and 
     the Federal judiciary, as part of the review described in 
     subsection (a);
       (4) ensure reasonable consistency with other Federal 
     sentencing guidelines and directives;
       (5) account for any aggravating or mitigating circumstances 
     that may justify exceptions, including circumstances for 
     which the Federal sentencing guidelines provide sentencing 
     enhancements;
       (6) make any necessary conforming changes to the Federal 
     sentencing guidelines; and
       (7) ensure that the Federal sentencing guidelines 
     adequately meet the purposes of sentencing set forth in 
     section 3553(a)(2) of title 18, United States Code.
       (c) Report.--Not later than December 31, 2002, the 
     Commission shall submit to Congress a report on issues 
     relating to the age of crime victims, which shall include--
       (1) an explanation of any changes to sentencing policy made 
     by the Commission under this section; and
       (2) any recommendations of the Commission for retention or 
     modification of penalty levels, including statutory penalty 
     levels, for offenses involving seniors.

     SEC. 3312. STUDY AND REPORT ON HEALTH CARE FRAUD SENTENCES.

       (a) Directive to the United States Sentencing Commission.--
     Pursuant to its authority under section 994(p) of title 28, 
     United States Code, and in accordance with this section, the 
     United States Sentencing Commission shall review and, if 
     appropriate, amend the Federal sentencing guidelines and the 
     policy statements of the Commission with respect to persons 
     convicted of offenses involving fraud in connection with a 
     health care benefit program (as defined in section 24(b) of 
     title 18, United States Code).
       (b) Requirements.--In carrying out this section, the 
     Commission shall--
       (1) ensure that the Federal sentencing guidelines and the 
     policy statements of the Commission reflect the serious harms 
     associated with health care fraud and the need for aggressive 
     and appropriate law enforcement action to prevent such fraud;
       (2) consider providing increased penalties for persons 
     convicted of health care fraud in appropriate circumstances;
       (3) consult with individuals or groups representing victims 
     of health care fraud, law enforcement agencies, the health 
     care industry, and the Federal judiciary as part of the 
     review described in subsection (a);
       (4) ensure reasonable consistency with other Federal 
     sentencing guidelines and directives;
       (5) account for any aggravating or mitigating circumstances 
     that might justify exceptions, including circumstances for 
     which the Federal sentencing guidelines provide sentencing 
     enhancements;
       (6) make any necessary conforming changes to the Federal 
     sentencing guidelines; and
       (7) ensure that the Federal sentencing guidelines 
     adequately meet the purposes of sentencing as set forth in 
     section 3553(a)(2) of title 18, United States Code.
       (c) Report.--Not later than December 31, 2002, the 
     Commission shall submit to Congress a report on issues 
     relating to offenses described in subsection (a), which shall 
     include--
       (1) an explanation of any changes to sentencing policy made 
     by the Commission under this section; and
       (2) any recommendations of the Commission for retention or 
     modification of penalty levels, including statutory penalty 
     levels, for those offenses.

     SEC. 3313. INCREASED PENALTIES FOR FRAUD RESULTING IN SERIOUS 
                   INJURY OR DEATH.

       Sections 1341 and 1343 of title 18, United States Code, are 
     each amended by inserting before the last sentence the 
     following: ``If the violation results in serious bodily 
     injury (as defined in section 1365 of this title), such 
     person shall be fined under this title, imprisoned not more 
     than 20 years, or both, and if the violation results in 
     death, such person shall be fined under this title, 
     imprisoned for any term of years or life, or both.''.

     SEC. 3314. SAFEGUARDING PENSION PLANS FROM FRAUD AND THEFT.

       (a) In General.--Chapter 63 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1348. Fraud in relation to retirement arrangements

       ``(a) Retirement Arrangement Defined.--In this section--
       ``(1) In general.--The term `retirement arrangement' 
     means--
       ``(A) any employee pension benefit plan subject to any 
     provision of title I of the Employee Retirement Income 
     Security Act of 1974;
       ``(B) any qualified retirement plan within the meaning of 
     section 4974(c) of the Internal Revenue Code of 1986;
       ``(C) any medical savings account described in section 220 
     of the Internal Revenue Code of 1986; or
       ``(D) fund established within the Thrift Savings Fund by 
     the Federal Retirement Thrift Investment Board pursuant to 
     subchapter III of chapter 84 of title 5.
       ``(2) Exception for governmental plan.--Such term does not 
     include any governmental plan (as defined in section 3(32) of 
     title I of the Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1002(32))), except as provided in paragraph 
     (1)(D).
       ``(3) Certain arrangements included.--Such term shall 
     include any arrangement that has been represented to be an 
     arrangement described in any subparagraph of paragraph (1) 
     (whether or not so described).
       ``(b) Prohibition and Penalties.--Whoever executes, or 
     attempts to execute, a scheme or artifice--
       ``(1) to defraud any retirement arrangement or other person 
     in connection with the establishment or maintenance of a 
     retirement arrangement; or
       ``(2) to obtain, by means of false or fraudulent pretenses, 
     representations, or promises, any of the money or property 
     owned by, or under the custody or control of, any retirement 
     arrangement or other person in connection with the 
     establishment or maintenance of a retirement arrangement;
     shall be fined under this title, imprisoned not more than 10 
     years, or both.
       ``(c) Enforcement.--
       ``(1) In general.--Subject to paragraph (2), the Attorney 
     General may investigate any violation of and otherwise 
     enforce this section.
       ``(2) Effect on other authority.--Nothing in this 
     subsection may be construed to preclude the Secretary of 
     Labor or the head of any other appropriate Federal agency 
     from investigating a violation of this section in relation to 
     a retirement arrangement subject to title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1001 et 
     seq.) or any other provision of Federal law.''.
       (b) Technical Amendment.--Section 24(a)(1) of title 18, 
     United States Code, is amended by inserting ``1348,'' after 
     ``1347,''.
       (c) Conforming Amendment.--The analysis for chapter 63 of 
     title 18, United States Code, is amended by adding at the end 
     the following:

``1348. Fraud in relation to retirement arrangements.''.

     SEC. 3315. ADDITIONAL CIVIL PENALTIES FOR DEFRAUDING PENSION 
                   PLANS.

       (a) In General.--
       (1) Action by attorney general.--Except as provided in 
     subsection (b)--
       (A) the Attorney General may bring a civil action in the 
     appropriate district court of the United States against any 
     person who engages in conduct constituting an offense under 
     section 1348 of title 18, United States Code, or conspiracy 
     to violate such section 1348; and
       (B) upon proof of such conduct by a preponderance of the 
     evidence, such person shall be subject to a civil penalty in 
     an amount equal to the greatest of--
       (i) the amount of pecuniary gain to that person;
       (ii) the amount of pecuniary loss sustained by the victim; 
     or
       (iii) not more than--

       (I) $50,000 for each such violation in the case of an 
     individual; or
       (II) $100,000 for each violation in the case of a person 
     other than an individual.

       (2) No effect on other remedies.--The imposition of a civil 
     penalty under this subsection does not preclude any other 
     statutory, common law, or administrative remedy available by 
     law to the United States or any other person.
       (b) Exception.--No civil penalty may be imposed pursuant to 
     subsection (a) with respect to conduct involving a retirement 
     arrangement that--
       (1) is an employee pension benefit plan subject to title I 
     of Employee Retirement Income Security Act of 1974; and
       (2) for which the civil penalties may be imposed under 
     section 502 of Employee Retirement Income Security Act of 
     1974 (29 U.S.C. 1132).
       (c) Determination of Penalty Amount.--In determining the 
     amount of the penalty under subsection (a), the district 
     court may consider the effect of the penalty on the violator 
     or other person's ability to--
       (1) restore all losses to the victims; or

[[Page 309]]

       (2) provide other relief ordered in another civil or 
     criminal prosecution related to such conduct, including any 
     penalty or tax imposed on the violator or other person 
     pursuant to the Internal Revenue Code of 1986.''.

     SEC. 3316. PUNISHING BRIBERY AND GRAFT IN CONNECTION WITH 
                   EMPLOYEE BENEFIT PLANS.

       Section 1954 of title 18, United State Code, is amended to 
     read as follows:

     ``Sec. 1954. Bribery and graft in connection with employee 
       benefit plans

       ``(a) Definitions.--In this section--
       ``(1) the term `employee benefit plan' means any employee 
     welfare benefit plan or employee pension benefit plan subject 
     to any provision of title I of the Employee Retirement Income 
     Security Act of 1974;
       ``(2) the terms `employee organization', `administrator', 
     and `employee benefit plan sponsor' mean any employee 
     organization, administrator, or plan sponsor, as defined in 
     title I of the Employment Retirement Income Security Act of 
     1974; and
       ``(3) the term `applicable person' means a person who is--
       ``(A) an administrator, officer, trustee, custodian, 
     counsel, agent, or employee of any employee benefit plan;
       ``(B) an officer, counsel, agent, or employee of an 
     employer or an employer any of whose employees are covered by 
     such plan;
       ``(C) an officer, counsel, agent, or employee of an 
     employee organization any of whose members are covered by 
     such plan;
       ``(D) a person who, or an officer, counsel, agent, or 
     employee of an organization that, provides benefit plan 
     services to such plan; or
       ``(E) a person with actual or apparent influence or 
     decisionmaking authority in regard to such plan.
       ``(b) Bribery and Graft.--Whoever--
       ``(1) being an applicable person, receives or agrees to 
     receive or solicits, any fee, kickback, commission, gift, 
     loan, money, or thing of value, personally or for any other 
     person, because of or with the intent to be corruptly 
     influenced with respect to any action, decision, or duty of 
     that applicable person relating to any question or matter 
     concerning an employee benefit plan;
       ``(2) directly or indirectly, gives or offers, or promises 
     to give or offer, any fee, kickback, commission, gift, loan, 
     money, or thing of value, to any applicable person, because 
     of or with the intent to be corruptly influenced with respect 
     to any action, decision, or duty of that applicable person 
     relating to any question or matter concerning an employee 
     benefit plan; or
       ``(3) attempts to give, accept, or receive any thing of 
     value with the intent to be corruptly influenced in violation 
     of this subsection;
     shall be fined under this title, imprisoned not more than 5 
     years, or both.
       ``(c) Exceptions.--Nothing in this section may be construed 
     to apply to any--
       ``(1) payment to or acceptance by any person of bona fide 
     salary, compensation, or other payments made for goods or 
     facilities actually furnished or for services actually 
     performed in the regular course of his duties as an 
     applicable person; or
       ``(2) payment to or acceptance in good faith by any 
     employee benefit plan sponsor, or person acting on the 
     sponsor's behalf, of any thing of value relating to the 
     sponsor's decision or action to establish, terminate, or 
     modify the governing instruments of an employee benefit plan 
     in a manner that does not violate title I of the Employee 
     Retirement Income Security Act of 1974, or any regulation or 
     order promulgated thereunder, or any other provision of law 
     governing the plan.''.

                 PART 2--PREVENTING TELEMARKETING FRAUD

     SEC. 3321. CENTRALIZED COMPLAINT AND CONSUMER EDUCATION 
                   SERVICE FOR VICTIMS OF TELEMARKETING FRAUD.

       (a) Centralized Service.--
       (1) Requirement.--The Federal Trade Commission shall, after 
     consultation with the Attorney General, establish procedures 
     to--
       (A) log and acknowledge the receipt of complaints by 
     individuals who certify that they have a reasonable belief 
     that they have been the victim of fraud in connection with 
     the conduct of telemarketing (as that term is defined in 
     section 2325 of title 18, United States Code, as amended by 
     section 3322(a) of this Act);
       (B) provide to individuals described in subparagraph (A), 
     and to any other persons, information on telemarketing fraud, 
     including--
       (i) general information on telemarketing fraud, including 
     descriptions of the most common telemarketing fraud schemes;
       (ii) information on means of referring complaints on 
     telemarketing fraud to appropriate law enforcement agencies, 
     including the Director of the Federal Bureau of 
     Investigation, the attorneys general of the States, and the 
     national toll-free telephone number on telemarketing fraud 
     established by the Attorney General; and
       (iii) information, if available, on the number of 
     complaints of telemarketing fraud against particular 
     companies and any record of convictions for telemarketing 
     fraud by particular companies for which a specific request 
     has been made; and
       (C) refer complaints described in subparagraph (A) to 
     appropriate entities, including State consumer protection 
     agencies or entities and appropriate law enforcement 
     agencies, for potential law enforcement action.
       (2) Central location.--The service under the procedures 
     under paragraph (1) shall be provided at and through a single 
     site selected by the Commission for that purpose.
       (3) Commencement.--The Commission shall commence carrying 
     out the service not later than 1 year after the date of 
     enactment of this Act.
       (b) Creation of Fraud Conviction Database.--
       (1) Requirement.--The Attorney General shall establish and 
     maintain a computer database containing information on the 
     corporations and companies convicted of offenses for 
     telemarketing fraud under Federal and State law. The database 
     shall include a description of the type and method of the 
     fraud scheme for which each corporation or company covered by 
     the database was convicted.
       (2) Use of database.--The Attorney General shall make 
     information in the database available to the Federal Trade 
     Commission for purposes of providing information as part of 
     the service under subsection (a).
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 3322. BLOCKING OF TELEMARKETING SCAMS.

       (a) Expansion of Scope of Telemarketing Fraud Subject to 
     Enhanced Criminal Penalties.--Section 2325(1) of title 18, 
     United States Code, is amended by striking ``telephone 
     calls'' and inserting ``wire communications utilizing a 
     telephone service''.
       (b) Blocking or Termination of Telephone Service Associated 
     With Telemarketing Fraud.--
       (1) In general.--Chapter 113A of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2328. Blocking or termination of telephone service

       ``(a) In General.--If a common carrier subject to the 
     jurisdiction of the Federal Communications Commission is 
     notified in writing by the Attorney General, acting within 
     the Attorney General's jurisdiction, that any wire 
     communications facility furnished by such common carrier is 
     being used or will be used by a subscriber for the purpose of 
     transmitting or receiving a wire communication in interstate 
     or foreign commerce for the purpose of executing any scheme 
     or artifice to defraud, or for obtaining money or property by 
     means of false or fraudulent pretenses, representations, or 
     promises, in connection with the conduct of telemarketing, 
     the common carrier shall discontinue or refuse the leasing, 
     furnishing, or maintaining of the facility to or for the 
     subscriber after reasonable notice to the subscriber.
       ``(b) Prohibition on Damages.--No damages, penalty, or 
     forfeiture, whether civil or criminal, shall be found or 
     imposed against any common carrier for any act done by the 
     common carrier in compliance with a notice received from the 
     Attorney General under this section.
       ``(c) Relief.--
       ``(1) In general.--Nothing in this section may be construed 
     to prejudice the right of any person affected thereby to 
     secure an appropriate determination, as otherwise provided by 
     law, in a Federal court, that--
       ``(A) the leasing, furnishing, or maintaining of a facility 
     should not be discontinued or refused under this section; or
       ``(B) the leasing, furnishing, or maintaining of a facility 
     that has been so discontinued or refused should be restored.
       ``(2) Supporting information.--In any action brought under 
     this subsection, the court may direct that the Attorney 
     General present evidence in support of the notice made under 
     subsection (a) to which such action relates.
       ``(d) Definitions.--In this section:
       ``(1) Reasonable notice to the subscriber.--
       ``(A) In general.--The term `reasonable notice to the 
     subscriber', in the case of a subscriber of a common carrier, 
     means any information necessary to provide notice to the 
     subscriber that--
       ``(i) the wire communications facilities furnished by the 
     common carrier may not be used for the purpose of 
     transmitting, receiving, forwarding, or delivering a wire 
     communication in interstate or foreign commerce for the 
     purpose of executing any scheme or artifice to defraud in 
     connection with the conduct of telemarketing; and
       ``(ii) such use constitutes sufficient grounds for the 
     immediate discontinuance or refusal of the leasing, 
     furnishing, or maintaining of the facilities to or for the 
     subscriber.
       ``(B) Included matter.--The term includes any tariff filed 
     by the common carrier with the Federal Communications 
     Commission that contains the information specified in 
     subparagraph (A).
       ``(2) Wire communication.--The term `wire communication' 
     has the meaning given that term in section 2510(1) of this 
     title.
       ``(3) Wire communications facility.--The term `wire 
     communications facility' means any facility (including 
     instrumentalities,

[[Page 310]]

     personnel, and services) used by a common carrier for 
     purposes of the transmission, receipt, forwarding, or 
     delivery of wire communications.''.
       (2) Conforming amendment.--The analysis for that chapter is 
     amended by adding at the end the following:

``2328. Blocking or termination of telephone service.''.

                  PART 3--PREVENTING HEALTH CARE FRAUD

     SEC. 3331. INJUNCTIVE AUTHORITY RELATING TO FALSE CLAIMS AND 
                   ILLEGAL KICKBACK SCHEMES INVOLVING FEDERAL 
                   HEALTH CARE PROGRAMS.

       (a) In General.--Section 1345(a) of title 18, United States 
     Code, is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (B), by striking ``, or'' and inserting 
     a semicolon;
       (B) in subparagraph (C), by striking the period at the end 
     and inserting ``; or''; and
       (C) by inserting after subparagraph (C) the following:
       ``(D) committing or about to commit an offense under 
     section 1128B of the Social Security Act (42 U.S.C. 1320a-
     7b);''; and
       (2) in paragraph (2), by inserting ``a violation of 
     paragraph (1)(D) or'' before ``a banking''.
       (b) Civil Actions.--
       (1) In general.--Section 1128B of the Social Security Act 
     (42 U.S.C. 1320a-7b) is amended by adding at the end the 
     following:
       ``(g) Civil Actions.--
       ``(1) In general.--The Attorney General may bring an action 
     in the appropriate district court of the United States to 
     impose upon any person who carries out any activity in 
     violation of this section with respect to a Federal health 
     care program a civil penalty of not more than $50,000 for 
     each such violation, or damages of 3 times the total 
     remuneration offered, paid, solicited, or received, whichever 
     is greater.
       ``(2) Existence of violation.--A violation exists under 
     paragraph (1) if 1 or more purposes of the remuneration is 
     unlawful, and the damages shall be the full amount of such 
     remuneration.
       ``(3) Procedures.--An action under paragraph (1) shall be 
     governed by--
       ``(A) the procedures with regard to subpoenas, statutes of 
     limitations, standards of proof, and collateral estoppel set 
     forth in section 3731 of title 31, United States Code; and
       ``(B) the Federal Rules of Civil Procedure.
       ``(4) No effect on other remedies.--Nothing in this section 
     may be construed to affect the availability of any other 
     criminal or civil remedy.
       ``(h) Injunctive Relief.--The Attorney General may commence 
     a civil action in an appropriate district court of the United 
     States to enjoin a violation of this section, as provided in 
     section 1345 of title 18, United States Code.''.
       (2) Conforming amendment.--The heading of section 1128B of 
     the Social Security Act (42 U.S.C. 1320a-7b) is amended by 
     inserting ``AND CIVIL'' after ``CRIMINAL''.

     SEC. 3332. AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES.

       Section 3486 of title 18, United States Code, is amended--
       (1) in subsection (a), by inserting ``, or any allegation 
     of fraud or false claims (whether criminal or civil) in 
     connection with a Federal health care program (as defined in 
     section 1128B(f) of the Social Security Act (42 U.S.C. 1320a-
     7b(f))),'' after ``Federal health care offense,''; and
       (2) by adding at the end the following:
       ``(f) Privacy Protection.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     record (including any book, paper, document, electronic 
     medium, or other object or tangible thing) produced pursuant 
     to a subpoena issued under this section that contains 
     personally identifiable health information may not be 
     disclosed to any person, except pursuant to a court order 
     under subsection (e)(1).
       ``(2) Exceptions.--A record described in paragraph (1) may 
     be disclosed--
       ``(A) to an attorney for the government for use in the 
     performance of the official duty of the attorney (including 
     presentation to a Federal grand jury);
       ``(B) to such government personnel (including personnel of 
     a State or subdivision of a State) as are determined to be 
     necessary by an attorney for the government to assist an 
     attorney for the government in the performance of the 
     official duty of that attorney to enforce Federal criminal 
     law;
       ``(C) as directed by a court preliminarily to or in 
     connection with a judicial proceeding; and
       ``(D) as permitted by a court--
       ``(i) at the request of a defendant in an administrative, 
     civil, or criminal action brought by the United States, upon 
     a showing that grounds may exist for a motion to exclude 
     evidence obtained under this section; or
       ``(E) at the request of an attorney for the government, 
     upon a showing that such matters may disclose a violation of 
     State criminal law, to an appropriate official of a State or 
     subdivision of a State for the purpose of enforcing such law.
       ``(3) Manner of court ordered disclosures.--If a court 
     orders the disclosure of any record described in paragraph 
     (1), the disclosure shall be made in such manner, at such 
     time, and under such conditions as the court may direct and 
     shall be undertaken in a manner that preserves the 
     confidentiality and privacy of individuals who are the 
     subject of the record, unless disclosure is required by the 
     nature of the proceedings, in which event the attorney for 
     the government shall request that the presiding judicial or 
     administrative officer enter an order limiting the disclosure 
     of the record to the maximum extent practicable, including 
     redacting the personally identifiable health information from 
     publicly disclosed or filed pleadings or records.
       ``(4) Destruction of records.--Any record described in 
     paragraph (1), and all copies of that record, in whatever 
     form (including electronic) shall be destroyed not later than 
     90 days after the date on which the record is produced, 
     unless otherwise ordered by a court of competent 
     jurisdiction, upon a showing of good cause.
       ``(5) Effect of violation.--Any person who knowingly fails 
     to comply with this subsection may be punished as in contempt 
     of court.
       ``(g) Personally Identifiable Health Information Defined.--
     In this section, the term `personally identifiable health 
     information' means any information, including genetic 
     information, demographic information, and tissue samples 
     collected from an individual, whether oral or recorded in any 
     form or medium, that--
       ``(1) relates to the past, present, or future physical or 
     mental health or condition of an individual, the provision of 
     health care to an individual, or the past, present, or future 
     payment for the provision of health care to an individual; 
     and
       ``(2) either--
       ``(A) identifies an individual; or
       ``(B) with respect to which there is a reasonable basis to 
     believe that the information can be used to identify an 
     individual.''.

     SEC. 3333. EXTENDING ANTIFRAUD SAFEGUARDS TO THE FEDERAL 
                   EMPLOYEE HEALTH BENEFITS PROGRAM.

       Section 1128B(f)(1) of the Social Security Act (42 U.S.C. 
     1320a-7b(f)(1)) is amended by striking ``(other than the 
     health insurance program under chapter 89 of title 5, United 
     States Code)''.

     SEC. 3334. GRAND JURY DISCLOSURE.

       Section 3322 of title 18, United States Code, is amended--
       (1) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (2) by inserting after subsection (b) the following:
       ``(c) Grand Jury Disclosure.--Subject to section 3486(f), 
     upon ex parte motion of an attorney for the government 
     showing that such disclosure would be of assistance to 
     enforce any provision of Federal law, a court may direct the 
     disclosure of any matter occurring before a grand jury during 
     an investigation of a Federal health care offense (as defined 
     in section 24(a) of this title) to an attorney for the 
     government to use in any investigation or civil proceeding 
     relating to fraud or false claims in connection with a 
     Federal health care program (as defined in section 1128B(f) 
     of the Social Security Act (42 U.S.C. 1320a-7b(f))).''.

     SEC. 3335. INCREASING THE EFFECTIVENESS OF CIVIL 
                   INVESTIGATIVE DEMANDS IN FALSE CLAIMS 
                   INVESTIGATIONS.

       Section 3733 of title 31, United States Code, is amended--
       (1) in subsection (a)(1), in the second sentence, by 
     inserting ``, except to the Deputy Attorney General or to an 
     Assistant Attorney General'' before the period at the end; 
     and
       (2) in subsection (i)(2)(C), by adding at the end the 
     following: ``Disclosure of information to a person who brings 
     a civil action under section 3730, or such person's counsel, 
     shall be allowed only upon application to a United States 
     district court showing that such disclosure would assist the 
     Department of Justice in carrying out its statutory 
     responsibilities.''.

         PART 4--PROTECTING THE RIGHTS OF ELDERLY CRIME VICTIMS

     SEC. 3341. USE OF FORFEITED FUNDS TO PAY RESTITUTION TO CRIME 
                   VICTIMS AND REGULATORY AGENCIES.

       Section 981(e) of title 18, United States Code, is 
     amended--
       (1) in each of paragraphs (3), (4), and (5), by striking 
     ``in the case of property referred to in subsection 
     (a)(1)(C)'' and inserting ``in the case of property forfeited 
     in connection with an offense resulting in a pecuniary loss 
     to a financial institution or regulatory agency'';
       (2) by striking paragraph (6) and inserting the following:
       ``(6) as restoration to any victim of the offense giving 
     rise to the forfeiture, including, in the case of a money 
     laundering offense, any offense constituting the underlying 
     specified unlawful activity; or''; and
       (3) in paragraph (7), by striking ``in the case of property 
     referred to in subsection (a)(1)(D)'' and inserting ``in the 
     case of property forfeited in connection with an offense 
     relating to the sale of assets acquired or held by any 
     Federal financial institution or regulatory agency, or person 
     appointed by such agency, as receiver, conservator, or 
     liquidating agent for an financial institution''.

[[Page 311]]



     SEC. 3342. VICTIM RESTITUTION.

       Section 413 of the Controlled Substances Act (21 U.S.C. 
     853) is amended by adding at the end the following:
       ``(r) Victim Restitution.--
       ``(1) Satisfaction of order of restitution.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a defendant may not use property subject to forfeiture under 
     this section to satisfy an order of restitution.
       ``(B) Exception.--If there are 1 or more identifiable 
     victims entitled to restitution from a defendant, and the 
     defendant has no assets other than the property subject to 
     forfeiture with which to pay restitution to the victim or 
     victims, the attorney for the Government may move to dismiss 
     a forfeiture allegation against the defendant before entry of 
     a judgment of forfeiture in order to allow the property to be 
     used by the defendant to pay restitution in whatever manner 
     the court determines to be appropriate if the court grants 
     the motion. In granting a motion under this subparagraph, the 
     court shall include a provision ensuring that costs 
     associated with the identification, seizure, management, and 
     disposition of the property are recovered by the United 
     States.
       ``(2) Restoration of forfeited property.--
       ``(A) In general.--If an order of forfeiture is entered 
     pursuant to this section and the defendant has no assets 
     other than the forfeited property to pay restitution to 1 or 
     more identifiable victims who are entitled to restitution, 
     the Government shall restore the forfeited property to the 
     victims pursuant to subsection (i)(1) once the ancillary 
     proceeding under subsection (n) has been completed and the 
     costs of the forfeiture action have been deducted.
       ``(B) Distribution of property.--On motion of the attorney 
     for the Government, the court may enter any order necessary 
     to facilitate the distribution of any property restored under 
     this paragraph.
       ``(3) Victim defined.--In this subsection, the term 
     `victim'--
       ``(A) means a person other than a person with a legal 
     right, title, or interest in the forfeited property 
     sufficient to satisfy the standing requirements of subsection 
     (n)(2) who may be entitled to restitution from the forfeited 
     funds pursuant to section 9.8 of part 9 of title 28, Code of 
     Federal Regulations (or any successor to that regulation); 
     and
       ``(B) includes any person who is the victim of the offense 
     giving rise to the forfeiture, or of any offense that was 
     part of the same scheme, conspiracy, or pattern of criminal 
     activity, including, in the case of a money laundering 
     offense, any offense constituting the underlying specified 
     unlawful activity.''.

     SEC. 3343. BANKRUPTCY PROCEEDINGS NOT USED TO SHIELD ILLEGAL 
                   GAINS FROM FALSE CLAIMS.

       (a) Certain Actions Not Stayed by Bankruptcy Proceedings.--
       (1) In general.--Notwithstanding any other provision of 
     law, the commencement or continuation of an action under 
     section 3729 of title 31, United States Code, does not 
     operate as a stay under section 105(a) or 362(a)(1) of title 
     11, United States Code.
       (2) Conforming amendment.--Section 362(b) of title 11, 
     United States Code, is amended--
       (A) in paragraph (17), by striking ``or'' at the end;
       (B) in paragraph (18), by striking the period at the end 
     and inserting ``; or''; and
       (C) by adding at the end the following:
       ``(19) the commencement or continuation of an action under 
     section 3729 of title 31.''.
       (b) Certain Debts Not Dischargeable in Bankruptcy.--Section 
     523 of title 11, United States Code, is amended by adding at 
     the end the following:
       ``(f) A discharge under section 727, 1141, 1228(a), 
     1228(b), or 1328(b) does not discharge a debtor from a debt 
     owed for violating section 3729 of title 31.''.
       (c) Repayment of Certain Debts Considered Final.--
       (1) In general.--Chapter 1 of title 11, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 111. False claims

       ``No transfer on account of a debt owed to the United 
     States for violating 3729 of title 31, or under a compromise 
     order or other agreement resolving such a debt may be avoided 
     under section 544, 545, 547, 548, 549, 553(b), or 742(a).''.
       (2) Conforming amendment.--The analysis for chapter 1 of 
     title 11, United States Code, is amended by adding at the end 
     the following:

``111. False claims.''.

     SEC. 3344. FORFEITURE FOR RETIREMENT OFFENSES.

       (a) Criminal Forfeiture.--Section 982(a) of title 18, 
     United States Code, is amended by adding at the end the 
     following:
       ``(9) Criminal Forfeiture.--
       ``(A) In general.--The court, in imposing sentence on a 
     person convicted of a retirement offense, shall order the 
     person to forfeit property, real or personal, that 
     constitutes or that is derived, directly or indirectly, from 
     proceeds traceable to the commission of the offense.
       ``(B) Retirement offense defined.--In this paragraph, the 
     term `retirement offense' means a violation of any of the 
     following provisions of law, if the violation, conspiracy, or 
     solicitation relates to a retirement arrangement (as defined 
     in section 1348 of title 18, United States Code):
       ``(i) Section 664, 1001, 1027, 1341, 1343, 1348, 1951, 
     1952, or 1954 of title 18, United States Code.
       ``(ii) Sections 411, 501, or 511 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1111, 1131, 1141).''.
       (b) Civil Forfeiture.--Section 981(a)(1) of title 18, 
     United States Code, is amended by adding at the end the 
     following:
       ``(G) Any property, real or personal, that constitutes or 
     is derived, directly or indirectly, from proceeds traceable 
     to the commission of a violation of, a criminal conspiracy to 
     violated or solicitation to commit a crime of violence 
     involving a retirement offense (as defined in section 
     982(a)(9)(B)).''.

             Subtitle D--Violent Crime Reduction Trust Fund

     SEC. 3401. EXTENSION OF VIOLENT CRIME REDUCTION TRUST FUND.

       (a) In General.--Section 310001(b) of the Violent Crime 
     Control and Law Enforcement Act of 1994 (42 U.S.C. 14211) is 
     amended by striking paragraphs (1) through (5) and inserting 
     the following:
       ``(1) for fiscal year 2002, $6,169,000,000;
       ``(2) for fiscal year 2003, $6,316,000,000;
       ``(3) for fiscal year 2004, $6,458,000,000; and
       ``(4) for fiscal year 2005, $6,616,000,000.''.
       (b) Discretionary Limits.--Title XXXI of the Violent Crime 
     Control and Law Enforcement Act of 1994 (42 U.S.C. 14211 et 
     seq.) is amended by inserting after section 310001 the 
     following:

     ``SEC. 310002. DISCRETIONARY LIMITS.

       ``For the purposes of allocations made for the 
     discretionary category under section 302(a) of the 
     Congressional Budget Act of 1974 (2 U.S.C. 633(a)), the term 
     `discretionary spending limit' means--
       ``(1) with respect to fiscal year 2002--
       ``(A) for the discretionary category, amounts of budget 
     authority and outlays necessary to adjust the discretionary 
     spending limits to reflect the changes in subparagraph (B) as 
     determined by the Chairman of the Committee on the Budget of 
     the House of Representatives and the Chairman of the 
     Committee on the Budget of the Senate; and
       ``(B) for the violent crime reduction category, 
     $6,169,000,000 in new budget authority and $6,020,000,000 in 
     outlays;
       ``(2) with respect to fiscal year 2003--
       ``(A) for the discretionary category, amounts of budget 
     authority and outlays necessary to adjust the discretionary 
     spending limits to reflect the changes in subparagraph (B) as 
     determined by the Chairman of the Committee on the Budget of 
     the House of Representatives and the Chairman of the 
     Committee on the Budget of the Senate; and
       ``(B) for the violent crime reduction category, 
     $6,316,000,000 in new budget authority and $6,161,000,000 in 
     outlays;
       ``(3) with respect to fiscal year 2004--
       ``(A) for the discretionary category, amounts of budget 
     authority and outlays necessary to adjust the discretionary 
     spending limits to reflect the changes in subparagraph (B) as 
     determined by the Chairman of the Committee on the Budget of 
     the House of Representatives and the Chairman of the 
     Committee on the Budget of the Senate; and
       ``(B) for the violent crime reduction category, 
     $6,459,000,000 in new budget authority and $6,303,000,000 in 
     outlays; and
       ``(4) with respect to fiscal year 2005--
       ``(A) for the discretionary category, amounts of budget 
     authority and outlays necessary to adjust the discretionary 
     spending limits to reflect the changes in subparagraph (B) as 
     determined by the Chairman of the Committee on the Budget of 
     the House of Representatives and the Chairman of the 
     Committee on the Budget of the Senate; and
       ``(B) for the violent crime reduction category, $6,616,000 
     in new budget authority and $6,452,000,000 in outlays;
     as adjusted in accordance with section 251(b) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
     901(b)) and section 314 of the Congressional Budget Act of 
     1974.''.

           TITLE IV--BREAKING THE CYCLE OF DRUGS AND VIOLENCE

  Subtitle A--Drug Courts, Drug Treatment, and Alternative Sentencing

                    PART 1--EXPANSION OF DRUG COURTS

     SEC. 4111. REAUTHORIZATION OF DRUG COURTS PROGRAM.

       (a) Repeal.--Section 114(b)(1)(A) of title I of Public Law 
     104-134 is repealed.
       (b) Reauthorization.--Section 1001(a)(20) of title I of the 
     Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3793(a)(20)) is amended--
       (1) in subparagraph (E), by striking ``and'' at the end;
       (2) in subparagraph (F), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(G) $400,000,000 for fiscal year 2002; and
       ``(H) $400,000,000 for fiscal year 2003.''.

     SEC. 4112. JUVENILE DRUG COURTS.

       Title I of the Omnibus Crime Control and Safe Streets Act 
     of 1968 (42 U.S.C. 3711 et seq.) is amended by inserting 
     after part BB the following:

[[Page 312]]



                     ``PART Z--JUVENILE DRUG COURTS

     ``SEC. 2976. GRANT AUTHORITY.

       ``(a) Appropriate Drug Court Programs.--The Attorney 
     General may make grants to States, State courts, local 
     courts, units of local government, and Indian tribes to 
     establish programs that--
       ``(1) involve continuous early judicial supervision over 
     juvenile offenders, other than violent juvenile offenders 
     with substance abuse, or substance abuse-related problems; 
     and
       ``(2) integrate administration of other sanctions and 
     services, including--
       ``(A) mandatory periodic testing for the use of controlled 
     substances or other addictive substances during any period of 
     supervised release or probation for each participant;
       ``(B) substance abuse treatment for each participant;
       ``(C) diversion, probation, or other supervised release 
     involving the possibility of prosecution, confinement, or 
     incarceration based on noncompliance with program 
     requirements or failure to show satisfactory progress;
       ``(D) programmatic, offender management, and aftercare 
     services such as relapse prevention, health care, education, 
     vocational training, job placement, housing placement, and 
     child care or other family support service for each 
     participant who requires such services;
       ``(E) payment by the offender of treatment costs, to the 
     extent practicable, such as costs for urinalysis or 
     counseling; or
       ``(F) payment by the offender of restitution, to the extent 
     practicable, to either a victim of the offense at issue or to 
     a restitution or similar victim support fund.
       ``(b) Continued Availability of Grant Funds.--Amounts made 
     available under this part shall remain available until 
     expended.

     ``SEC. 2977. PROHIBITION OF PARTICIPATION BY VIOLENT 
                   OFFENDERS.

       ``The Attorney General shall issue regulations and 
     guidelines to ensure that the programs authorized in this 
     part do not permit participation by violent offenders.

     ``SEC. 2978. DEFINITION.

       ``In this part, the term `violent offender' means an 
     individual charged with an offense during the course of 
     which--
       ``(1) the individual carried, possessed, or used a firearm 
     or dangerous weapon;
       ``(2) the death of or serious bodily injury of another 
     person occurred as a direct result of the commission of such 
     offense; or
       ``(3) the individual used force against the person of 
     another.

     ``SEC. 2979. ADMINISTRATION.

       ``(a) Regulatory Authority.--The Attorney General shall 
     issue any regulations and guidelines necessary to carry out 
     this part.
       ``(b) Applications.--In addition to any other requirements 
     that may be specified by the Attorney General, an application 
     for a grant under this part shall--
       ``(1) include a long term strategy and detailed 
     implementation plan;
       ``(2) explain the inability of the applicant to fund the 
     program adequately without Federal assistance;
       ``(3) certify that the Federal support provided will be 
     used to supplement, and not supplant, State, tribal, or local 
     sources of funding that would otherwise be available;
       ``(4) identify related governmental or community 
     initiatives that complement or will be coordinated with the 
     proposal;
       ``(5) certify that there has been appropriate consultation 
     with all affected agencies and that there will be appropriate 
     coordination with all affected agencies in the implementation 
     of the program;
       ``(6) certify that participating offenders will be 
     supervised by one or more designated judges with 
     responsibility for the drug court program;
       ``(7) specify plans for obtaining necessary support and 
     continuing the proposed program following the conclusion of 
     Federal support; and
       ``(8) describe the methodology that will be used in 
     evaluating the program.

     ``SEC. 2980. APPLICATIONS.

       ``To request funds under this part, the chief executive or 
     the chief justice of a State, or the chief executive or chief 
     judge of a unit of local government or Indian tribe shall 
     submit an application to the Attorney General in such form 
     and containing such information as the Attorney General may 
     reasonably require.

     ``SEC. 2981. FEDERAL SHARE.

       ``(a) In General.--The Federal share of a grant made under 
     this part may not exceed 75 percent of the total costs of the 
     program described in the application submitted under section 
     2605 for the fiscal year for which the program receives 
     assistance under this part.
       ``(b) Waiver.--The Attorney General may waive, in whole or 
     in part, the requirement of a matching contribution under 
     subsection (a).
       ``(c) In-Kind Contributions.--In-kind contributions may 
     constitute a portion of the non-Federal share of a grant 
     under this part.

     ``SEC. 2982. DISTRIBUTION OF FUNDS.

       ``(a) Geographical Distribution.--The Attorney General 
     shall ensure that, to the extent practicable, an equitable 
     geographic distribution of grant awards is made.
       ``(b) Indian Tribes.--The Attorney General shall allocate 
     0.75 percent of amounts made available under this subtitle 
     for grants to Indian tribes.

     ``SEC. 2983. REPORT.

       ``A State, Indian tribe, or unit of local government that 
     receives funds under this part during a fiscal year shall 
     submit to the Attorney General, in March of the year 
     following receipt of a grant under this part, a report 
     regarding the effectiveness of programs established pursuant 
     to this part.

     ``SEC. 2984. TECHNICAL ASSISTANCE, TRAINING, AND EVALUATION.

       ``(a) Technical Assistance and Training.--The Attorney 
     General may provide technical assistance and training in 
     furtherance of the purposes of this part.
       ``(b) Evaluations.--In addition to any evaluation 
     requirements that may be prescribed for grantees, the 
     Attorney General may carry out or make arrangements for 
     evaluations of programs that receive support under this part.
       ``(c) Administration.--The technical assistance, training, 
     and evaluations authorized by this section may be carried out 
     directly by the Attorney General, in collaboration with the 
     Secretary of Health and Human Services, or through grants, 
     contracts, or other cooperative arrangements with other 
     entities.

     ``SEC. 2985. UNAWARDED FUNDS.

       ``The Attorney General may reallocate any grant funds that 
     are not awarded for juvenile drug courts under this part for 
     use for other juvenile delinquency and crime prevention 
     initiatives.

     ``SEC. 2986. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     part from the Violent Crime Reduction Trust Fund--
       ``(1) such sums as may be necessary for each of fiscal 
     years 2002 and 2003;
       ``(2) $50,000,000 for fiscal year 2004; and
       ``(3) $50,000,000 for fiscal year 2005.''.

                  PART 2--ZERO TOLERANCE DRUG TESTING

     SEC. 4121. GRANT AUTHORITY.

       The Attorney General may make grants to States and units of 
     local government, State courts, local courts, and Indian 
     tribal governments, acting directly or through agreements 
     with other public or private entities, for programs that 
     support--
       (1) developing and/or implementing comprehensive drug 
     testing policies and practices with regard to criminal 
     justice populations; and
       (2) establishing appropriate interventions to illegal drug 
     use for offender populations. Applicants may choose to submit 
     joint proposals with other eligible criminal justice/court 
     agencies for systemic drug testing and intervention programs; 
     in this case, one organization must be designated as the 
     primary applicant.

     SEC. 4122. ADMINISTRATION.

       (a) Consultation/Coordination.--In carrying out section 
     4121, the Attorney General shall coordinate with the other 
     Justice Department initiatives that address drug testing and 
     interventions in the criminal justice system.
       (b) Guidelines.--The Attorney General may issue guidelines 
     necessary to carry out section 4121.
       (c) Applications.--In addition to any other requirements 
     that may be specified by the Attorney General, an application 
     for a grant under section 4121 shall--
       (1) reflect a comprehensive approach that recognizes the 
     importance of collaboration and a continuum of testing, 
     treatment, and other interventions;
       (2) include a long-term strategy and detailed 
     implementation plan;
       (3) address the applicant's capability to continue the 
     proposed program following the conclusion of Federal support;
       (4) identify related governmental or community initiatives 
     which complement or will be coordinated with the proposal;
       (5) certify that there has been appropriate consultation 
     with affected agencies and key stakeholders throughout the 
     criminal justice system and that there will be continued 
     coordination throughout the implementation of the program; 
     and
       (6) describe the methodology that will be used in 
     evaluating the program.

     SEC. 4123. APPLICATIONS.

       To request funds under section 4121, interested applicants 
     shall submit an application to the Attorney General in such 
     form and containing such information as the Attorney General 
     may reasonably require. Federal funding shall be awarded on a 
     competitive basis based on criteria established by the 
     Attorney General and specified in program guidelines.

     SEC. 4124. FEDERAL SHARE.

       The Federal share of a grant made under section 4121 may 
     not exceed 75 percent of the total cost of the program 
     described in the application submitted for the fiscal year 
     for which the program receives assistance under section 4121, 
     unless the Attorney General waives, wholly or in part, the 
     requirement of a matching contribution under this section. 
     In-kind contributions may constitute a portion of the non-
     federal share of a grant.

     SEC. 4125. GEOGRAPHIC DISTRIBUTION.

       The Attorney General shall ensure that, to the extent 
     practicable, an equitable geographic distribution of grant 
     awards under

[[Page 313]]

     section 4121 is made, with rural and tribal jurisdiction 
     representation.

     SEC. 4126. TECHNICAL ASSISTANCE, TRAINING, AND EVALUATION.

       (a) Technical Assistance and Training.--The Attorney 
     General shall provide technical assistance and training in 
     furtherance of the purposes of section 4121.
       (b) Evaluation.--In addition to any evaluation requirements 
     that may be prescribed for grantees, the Attorney General may 
     carry out or make arrangements for a rigorous evaluation of 
     the programs that receive support under section 4121.
       (c) Administration.--The technical assistance, training, 
     and evaluations authorized by this section may be carried out 
     directly by the Attorney General or through grants, 
     contracts, or cooperative agreements with other entities.

     SEC. 4127. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out 
     sections 4122 through 4126 $75,000,000 for fiscal year 2002 
     and such sums as may be necessary for fiscal years 2003 
     through 2006.

     SEC. 4128. PERMANENT SET-ASIDE FOR RESEARCH AND EVALUATION.

       The Attorney General shall reserve not less than 1 percent 
     and no more than 3 percent of the sums appropriated under 
     section 4127 in each fiscal year for research and evaluation 
     of this program.

     SEC. 4129. ADDITIONAL REQUIREMENTS FOR THE USE OF FUNDS UNDER 
                   THE VIOLENT OFFENDER INCARCERATION AND TRUTH-
                   IN-SENTENCING GRANT PROGRAMS.

       Section 20105(b) of the Violent Crime Control and Law 
     Enforcement Act of 1994 (42 U.S.C. 13705(b)) is amended to 
     read as follows:
       ``(b) Additional Requirements.--
       ``(1) Eligibility for grant.--To be eligible to receive a 
     grant under section 20103 or section 20104, a State shall--
       ``(A) provide assurances to the Attorney General that the 
     State has implemented or will implement not later than 18 
     months after the date of the enactment of this subtitle, 
     policies that provide for the recognition of the rights of 
     crime victims; and
       ``(B) no later than September 1, 2002, have a program of 
     drug testing and intervention for appropriate categories of 
     convicted offenders during periods of incarceration and 
     criminal justice supervision, with sanctions including denial 
     or revocation of release for positive drug tests, consistent 
     with guidelines issued by the Attorney General.
       ``(2) Use of funds.--Funds provided under section 20103 or 
     section 20104 of this subtitle may be applied to the cost of 
     offender drug testing and appropriate intervention programs 
     during periods of incarceration and criminal justice 
     supervision, consistent with guidelines issued by the 
     Attorney General. Further, such funds may be used by the 
     States to pay the costs of providing to the Attorney General 
     a baseline study on their prison drug abuse problem. Such 
     studies shall be consistent with guidelines issued by the 
     Attorney General.
       ``(3) System of sanctions and penalties.--Beginning in 
     fiscal year 2002, and thereafter, States receiving funds 
     pursuant to section 20103 or section 20104 of this subtitle 
     shall have a system of sanctions and penalties that address 
     drug trafficking within and into correctional facilities 
     under their jurisdiction. Such systems shall be in accordance 
     with guidelines issued by the Attorney General. Beginning in 
     fiscal year 2002, and each year thereafter, any State that 
     the Attorney General determines not to be in compliance with 
     the provisions of this paragraph shall have the funds it 
     would have otherwise been eligible to receive under section 
     20103 or section 20104 reduced by 10 percent for each fiscal 
     year for which the Attorney General determines it does not 
     comply. Any funds that are not allocated for failure to 
     comply with this section shall be reallocated to States that 
     comply with this section.''.

                         PART 3--DRUG TREATMENT

     SEC. 4131. DRUG TREATMENT ALTERNATIVE TO PRISON PROGRAMS 
                   ADMINISTERED BY STATE OR LOCAL PROSECUTORS.

       (a) Prosecution Drug Treatment Alternative to Prison 
     Programs.--Title I of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3711 et seq.) is amended by 
     adding at the end the following new part:

  ``PART CC--PROSECUTION DRUG TREATMENT ALTERNATIVE TO PRISON PROGRAMS

     ``SEC. 2901. PROGRAM AUTHORIZED.

       ``(a) In General.--The Attorney General may make grants to 
     State or local prosecutors for the purpose of developing, 
     implementing, or expanding drug treatment alternative to 
     prison programs that comply with the requirements of this 
     part.
       ``(b) Use of Funds.--A State or local prosecutor who 
     receives a grant under this part shall use amounts provided 
     under the grant to develop, implement, or expand the drug 
     treatment alternative to prison program for which the grant 
     was made, which may include payment of the following 
     expenses:
       ``(1) Salaries, personnel costs, equipment costs, and other 
     costs directly related to the operation of the program, 
     including the enforcement unit.
       ``(2) Payments to licensed substance abuse treatment 
     providers for providing treatment to offenders participating 
     in the program for which the grant was made, including 
     aftercare supervision, vocational training, education, and 
     job placement.
       ``(3) Payments to public and nonprofit private entities for 
     providing treatment to offenders participating in the program 
     for which the grant was made.
       ``(c) Federal Share.--The Federal share of a grant under 
     this part shall not exceed 75 percent of the cost of the 
     program.
       ``(d) Supplement and Not Supplant.--Grant amounts received 
     under this part shall be used to supplement, and not 
     supplant, non-Federal funds that would otherwise be available 
     for activities funded under this part.

     ``SEC. 2902. PROGRAM REQUIREMENTS.

       ``A drug treatment alternative to prison program with 
     respect to which a grant is made under this part shall comply 
     with the following requirements:
       ``(1) A State or local prosecutor shall administer the 
     program.
       ``(2) An eligible offender may participate in the program 
     only with the consent of the State or local prosecutor.
       ``(3) Each eligible offender who participates in the 
     program shall, as an alternative to incarceration, be 
     sentenced to or placed with a long term, drug free 
     residential substance abuse treatment provider that is 
     licensed under State or local law.
       ``(4) Each eligible offender who participates in the 
     program shall serve a sentence of imprisonment with respect 
     to the underlying crime if that offender does not 
     successfully complete treatment with the residential 
     substance abuse provider.
       ``(5) Each residential substance abuse provider treating an 
     offender under the program shall--
       ``(A) make periodic reports of the progress of treatment of 
     that offender to the State or local prosecutor carrying out 
     the program and to the appropriate court in which the 
     defendant was convicted; and
       ``(B) notify that prosecutor and that court if that 
     offender absconds from the facility of the treatment provider 
     or otherwise violates the terms and conditions of the 
     program.
       ``(6) The program shall have an enforcement unit comprised 
     of law enforcement officers under the supervision of the 
     State or local prosecutor carrying out the program, the 
     duties of which shall include verifying an offender's 
     addresses and other contacts, and, if necessary, locating, 
     apprehending, and arresting an offender who has absconded 
     from the facility of a residential substance abuse treatment 
     provider or otherwise violated the terms and conditions of 
     the program, and returning such offender to court for 
     sentence on the underlying crime.

     ``SEC. 2903. APPLICATIONS.

       ``(a) In General.--To request a grant under this part, a 
     State or local prosecutor shall submit an application to the 
     Attorney General in such form and containing such information 
     as the Attorney General may reasonably require.
       ``(b) Certifications.--Each such application shall contain 
     the certification of the State or local prosecutor that the 
     program for which the grant is requested shall meet each of 
     the requirements of this part.

     ``SEC. 2904. GEOGRAPHIC DISTRIBUTION.

       ``The Attorney General shall ensure that, to the extent 
     practicable, the distribution of grant awards is equitable 
     and includes State or local prosecutors--
       ``(1) in each State; and
       ``(2) in rural, suburban, and urban jurisdictions.

     ``SEC. 2905. REPORTS AND EVALUATIONS.

       ``For each fiscal year, each recipient of a grant under 
     this part during that fiscal year shall submit to the 
     Attorney General a report regarding the effectiveness of 
     activities carried out using that grant. Each report shall 
     include an evaluation in such form and containing such 
     information as the Attorney General may reasonably require. 
     The Attorney General shall specify the dates on which such 
     reports shall be submitted.

     ``SEC. 2906. DEFINITIONS.

       ``In this part:
       ``(1) Eligible offender.--The term `eligible offender' 
     means an individual who--
       ``(A) has been convicted of, or pled guilty to, or admitted 
     guilt with respect to a crime for which a sentence of 
     imprisonment is required and has not completed such sentence;
       ``(B) has never been convicted of, or pled guilty to, or 
     admitted guilt with respect to, and is not presently charged 
     with, a felony crime of violence or a major drug offense or a 
     crime that is considered a violent felony under State or 
     local law; and
       ``(C) has been found by a professional substance abuse 
     screener to be in need of substance abuse treatment because 
     that offender has a history of substance abuse that is a 
     significant contributing factor to that offender's criminal 
     conduct.
       ``(2) Felony crime of violence.--The term `felony crime of 
     violence' has the meaning given such term in section 
     924(c)(3) of title 18, United States Code.
       ``(3) Major drug offense.--The term `major drug offense' 
     has the meaning given such term in section 36(a) of title 18, 
     United States Code.
       ``(4) State or local prosecutor.--The term `State or local 
     prosecutor' means any

[[Page 314]]

     district attorney, State attorney general, county attorney, 
     or corporation counsel who has authority to prosecute 
     criminal offenses under State or local law.''.
       (b) Authorization of Appropriations.--Section 1001(a) of 
     title I of the Omnibus Crime Control and Safe Street Act of 
     1968 (42 U.S.C. 3793(a)) is amended by adding at the end the 
     following new paragraph:
       ``(24) There are authorized to be appropriated to carry out 
     part CC--
       ``(A) $75,000,000 for fiscal year 2002;
       ``(B) $85,000,000 for fiscal year 2003;
       ``(C) $95,000,000 for fiscal year 2004;
       ``(D) $105,000,000 for fiscal year 2005; and
       ``(E) $125,000,000 for fiscal year 2006.''.

     SEC. 4132. SUBSTANCE ABUSE TREATMENT IN FEDERAL PRISONS 
                   REAUTHORIZATION.

       Section 3621(e)(4) of title 18, United States Code, is 
     amended by striking subparagraph (E) and inserting the 
     following:
       ``(E) $31,000,000 for fiscal year 2002; and
       ``(F) $38,000,000 for fiscal year 2003.''.

     SEC. 4133. RESIDENTIAL SUBSTANCE ABUSE TREATMENT FOR STATE 
                   PRISONERS REAUTHORIZATION

       (a) Reauthorization.--Paragraph (17) of section 1001(a) of 
     title I of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3793(a)(17)) is amended to read as follows:
       ``(17) There are authorized to be appropriated to carry out 
     part S $100,000,000 for fiscal year 2002 and such sums as may 
     be necessary for fiscal years 2003 through 2007.''.
       (b) Use of Residential Substance Abuse Treatment Grants to 
     Provide For Services During and After Incarceration.--Section 
     1901 of title I of the Omnibus Crime Control and Safe Streets 
     Act of 1968 (42 U.S.C. 3796ff) is amended by adding at the 
     end the following:
       ``(c) Additional Use of Funds.--States that demonstrate 
     that they have existing in-prison drug treatment programs 
     that are in compliance with Federal requirements may use 
     funds awarded under this part for treatment and sanctions 
     both during incarceration and after release.''.

     SEC. 4134. DRUG TREATMENT FOR JUVENILES.

       Title V of the Public Health Service Act (42 U.S.C. 290aa 
     et seq.) is amended by adding at the end the following:

         ``PART G--RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES

     ``SEC. 575. RESIDENTIAL TREATMENT PROGRAMS FOR JUVENILES.

       ``(a) In General.--The Director of the Center for Substance 
     Abuse Treatment shall award grants to, or enter into 
     cooperative agreements or contracts, with public and 
     nonprofit private entities for the purpose of providing 
     treatment to juveniles for substance abuse through programs 
     in which, during the course of receiving such treatment the 
     juveniles reside in facilities made available by the 
     programs.
       ``(b) Availability of Services for Each Participant.--A 
     funding agreement for an award under subsection (a) for an 
     applicant is that, in the program operated pursuant to such 
     subsection--
       ``(1) treatment services will be available through the 
     applicant, either directly or through agreements with other 
     public or nonprofit private entities; and
       ``(2) the services will be made available to each person 
     admitted to the program.
       ``(c) Individualized Plan of Services.--A funding agreement 
     for an award under subsection (a) for an applicant is that--
       ``(1) in providing authorized services for an eligible 
     person pursuant to such subsection, the applicant will, in 
     consultation with the juvenile and, if appropriate the parent 
     or guardian of the juvenile, prepare an individualized plan 
     for the provision to the juvenile or young adult of the 
     services; and
       ``(2) treatment services under the plan will include--
       ``(A) individual, group, and family counseling, as 
     appropriate, regarding substance abuse; and
       ``(B) followup services to assist the juvenile or young 
     adult in preventing a relapse into such abuse.
       ``(d) Eligible Supplemental Services.--Grants under 
     subsection (a) may be used to provide an eligible juvenile, 
     the following services:
       ``(1) Hospital referrals.--Referrals for necessary hospital 
     services.
       ``(2) HIV and aids counseling.--Counseling on the human 
     immunodeficiency virus and on acquired immune deficiency 
     syndrome.
       ``(3) Domestic violence and sexual abuse counseling.--
     Counseling on domestic violence and sexual abuse.
       ``(4) Preparation for reentry into society.--Planning for 
     and counseling to assist reentry into society, both before 
     and after discharge, including referrals to any public or 
     nonprofit private entities in the community involved that 
     provide services appropriate for the juvenile.
       ``(e) Minimum Qualifications for Receipt of Award.--
       ``(1) Certification by relevant state agency.--With respect 
     to the principal agency of a State or Indian tribe that 
     administers programs relating to substance abuse, the 
     Director may award a grant to, or enter into a cooperative 
     agreement or contract with, an applicant only if the agency 
     or Indian tribe has certified to the Director that--
       ``(A) the applicant has the capacity to carry out a program 
     described in subsection (a);
       ``(B) the plans of the applicant for such a program are 
     consistent with the policies of such agency regarding the 
     treatment of substance abuse; and
       ``(C) the applicant, or any entity through which the 
     applicant will provide authorized services, meets all 
     applicable State licensure or certification requirements 
     regarding the provision of the services involved.
       ``(2) Status as medicaid provider.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), 
     the Director may make a grant, or enter into a cooperative 
     agreement or contract, under subsection (a) only if, in the 
     case of any authorized service that is available pursuant to 
     the State plan approved under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) for the State 
     involved--
       ``(i) the applicant for the grant, cooperative agreement, 
     or contract will provide the service directly, and the 
     applicant has entered into a participation agreement under 
     the State plan and is qualified to receive payments under 
     such plan; or
       ``(ii) the applicant will enter into an agreement with a 
     public or nonprofit private entity under which the entity 
     will provide the service, and the entity has entered into 
     such a participation agreement plan and is qualified to 
     receive such payments.
       ``(B) Services.--
       ``(i) In general.--In the case of an entity making an 
     agreement pursuant to subparagraph (A)(ii) regarding the 
     provision of services, the requirement established in such 
     subparagraph regarding a participation agreement shall be 
     waived by the Director if the entity does not, in providing 
     health care services, impose a charge or accept reimbursement 
     available from any third party payor, including reimbursement 
     under any insurance policy or under any Federal or State 
     health benefits plan.
       ``(ii) Voluntary donations.--A determination by the 
     Director of whether an entity referred to in clause (i) meets 
     the criteria for a waiver under such clause shall be made 
     without regard to whether the entity accepts voluntary 
     donations regarding the provision of services to the public.
       ``(C) Mental diseases.--
       ``(i) In general.--With respect to any authorized service 
     that is available pursuant to the State plan described in 
     subparagraph (A), the requirements established in such 
     subparagraph shall not apply to the provision of any such 
     service by an institution for mental diseases to an 
     individual who has attained 21 years of age and who has not 
     attained 65 years of age.
       ``(ii) Definition of institution for mental diseases.--In 
     this subparagraph, the term `institution for mental diseases' 
     has the same meaning as in section 1905(i) of the Social 
     Security Act (42 U.S.C. 1396d(i)).
       ``(f) Requirements for Matching Funds.--
       ``(1) In general.--With respect to the costs of the program 
     to be carried out by an applicant pursuant to subsection (a), 
     a funding agreement for an award under such subsection is 
     that the applicant will make available (directly or through 
     donations from public or private entities) non-Federal 
     contributions toward such costs in an amount that--
       ``(A) for the first fiscal year for which the applicant 
     receives payments under an award under such subsection, is 
     not less than $1 for each $9 of Federal funds provided in the 
     award;
       ``(B) for any second such fiscal year, is not less than $1 
     for each $9 of Federal funds provided in the award; and
       ``(C) for any subsequent such fiscal year, is not less than 
     $1 for each $3 of Federal funds provided in the award.
       ``(2) Determination of amount contributed.--Non-Federal 
     contributions required in paragraph (1) may be in cash or in 
     kind, fairly evaluated, including plant, equipment, or 
     services. Amounts provided by the Federal Government, or 
     services assisted or subsidized to any significant extent by 
     the Federal Government, may not be included in determining 
     the amount of such non-Federal contributions.
       ``(g) Outreach.--A funding agreement for an award under 
     subsection (a) for an applicant is that the applicant will 
     provide outreach services in the community involved to 
     identify juveniles who are engaging in substance abuse and to 
     encourage the juveniles to undergo treatment for such abuse.
       ``(h) Accessibility of Program.--A funding agreement for an 
     award under subsection (a) for an applicant is that the 
     program operated pursuant to such subsection will be operated 
     at a location that is accessible to low income juveniles.
       ``(i) Continuing Education.--A funding agreement for an 
     award under subsection (a) is that the applicant involved 
     will provide for continuing education in treatment services 
     for the individuals who will provide treatment in the program 
     to be operated by the applicant pursuant to such subsection.
       ``(j) Imposition of Charges.--A funding agreement for an 
     award under subsection (a) for an applicant is that, if a 
     charge is imposed for the provision of authorized services to 
     or on behalf of an eligible juvenile, such charge--

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       ``(1) will be made according to a schedule of charges that 
     is made available to the public;
       ``(2) will be adjusted to reflect the economic condition of 
     the juvenile involved; and
       ``(3) will not be imposed on any such juvenile whose family 
     has an income of less than 185 percent of the official 
     poverty line, as established by the Director of the Office 
     for Management and Budget and revised by the Secretary in 
     accordance with section 673(2) of the Omnibus Budget 
     Reconciliation Act of 1981 (42 U.S.C. 9902(2)).
       ``(k) Reports to Director.--A funding agreement for an 
     award under subsection (a) is that the applicant involved 
     will submit to the Director a report--
       ``(1) describing the utilization and costs of services 
     provided under the award;
       ``(2) specifying the number of juveniles served, and the 
     type and costs of services provided; and
       ``(3) providing such other information as the Director 
     determines to be appropriate.
       ``(l) Requirement of Application.--The Director may make an 
     award under subsection (a) only if an application for the 
     award is submitted to the Director containing such 
     agreements, and the application is in such form, is made in 
     such manner, and contains such other agreements and such 
     assurances and information as the Director determines to be 
     necessary to carry out this section.
       ``(m) Equitable Allocation of Awards.--In making awards 
     under subsection (a), the Director shall ensure that the 
     awards are equitably allocated among the principal geographic 
     regions of the United States, as well as among Indian tribes, 
     subject to the availability of qualified applicants for the 
     awards.
       ``(n) Duration of Award.--
       ``(1) In general.--The period during which payments are 
     made to an entity from an award under this section may not 
     exceed 5 years.
       ``(2) Approval of director.--The provision of payments 
     described in paragraph (1) shall be subject to--
       ``(A) annual approval by the Director of the payments; and
       ``(B) the availability of appropriations for the fiscal 
     year at issue to make the payments.
       ``(3) No limitation.--This subsection may not be construed 
     to establish a limitation on the number of awards that may be 
     made to an entity under this section.
       ``(o) Evaluations; Dissemination of Findings.--The Director 
     shall, directly or through contract, provide for the conduct 
     of evaluations of programs carried out pursuant to subsection 
     (a). The Director shall disseminate to the States the 
     findings made as a result of the evaluations.
       ``(p) Reports to Congress.--
       ``(1) Initial report.--Not later than October 1, 2002, the 
     Director shall submit to the Committee on the Judiciary of 
     the House of Representatives, and to the Committee on the 
     Judiciary of the Senate, a report describing programs carried 
     out pursuant to this section.
       ``(2) Periodic reports.--
       ``(A) In general.--Not less than biennially after the date 
     described in paragraph (1), the Director shall prepare a 
     report describing programs carried out pursuant to this 
     section during the preceding 2-year period, and shall submit 
     the report to the Administrator for inclusion in the biennial 
     report under section 501(k).
       ``(B) Summary.--Each report under this subsection shall 
     include a summary of any evaluations conducted under 
     subsection (m) during the period with respect to which the 
     report is prepared.
       ``(q) Definitions.--In this section:
       ``(1) Authorized services.--The term `authorized services' 
     means treatment services and supplemental services.
       ``(2) Juvenile.--The term `juvenile' means anyone 18 years 
     of age or younger at the time that of admission to a program 
     operated pursuant to subsection (a).
       ``(3) Eligible juvenile.--The term `eligible juvenile' 
     means a juvenile who has been admitted to a program operated 
     pursuant to subsection (a).
       ``(4) Funding agreement under subsection (a).--The term 
     `funding agreement under subsection (a)', with respect to an 
     award under subsection (a), means that the Director may make 
     the award only if the applicant makes the agreement involved.
       ``(5) Treatment services.--The term `treatment services' 
     means treatment for substance abuse, including the counseling 
     and services described in subsection (c)(2).
       ``(6) Supplemental services.--The term `supplemental 
     services' means the services described in subsection (d).
       ``(r) Authorization of Appropriations.--
       ``(1) In general.--For the purpose of carrying out this 
     section and section 576 there is authorized to be 
     appropriated such sums as may be necessary for fiscal years 
     2002 and 2003. There is authorized to be appropriated from 
     the Violent Crime Reduction Trust Fund $300,000,000 in each 
     of fiscal years 2004 and 2005.
       ``(2) Transfer.--For the purpose described in paragraph 
     (1), in addition to the amounts authorized in such paragraph 
     to be appropriated for a fiscal year, there is authorized to 
     be appropriated for the fiscal year from the special 
     forfeiture fund of the Director of the Office of National 
     Drug Control Policy such sums as may be necessary.
       ``(3) Rule of construction.--The amounts authorized in this 
     subsection to be appropriated are in addition to any other 
     amounts that are authorized to be appropriated and are 
     available for the purpose described in paragraph (1).

     ``SEC. 576. OUTPATIENT TREATMENT PROGRAMS FOR JUVENILES.

       ``(a) Grants.--The Secretary of Health and Human Services, 
     acting through the Director of the Center for Substance Abuse 
     Treatment, shall make grants to establish projects for the 
     outpatient treatment of substance abuse among juveniles.
       ``(b) Prevention.--Entities receiving grants under this 
     section shall engage in activities to prevent substance abuse 
     among juveniles.
       ``(c) Evaluation.--The Secretary of Health and Human 
     Services shall evaluate projects carried out under subsection 
     (a) and shall disseminate to appropriate public and private 
     entities information on effective projects.''.

            PART 4--FUNDING FOR DRUG-FREE COMMUNITY PROGRAMS

     SEC. 4141. EXTENSION OF SAFE AND DRUG-FREE SCHOOLS AND 
                   COMMUNITIES PROGRAM.

       Title IV of the Elementary and Secondary Education Act (20 
     U.S.C. 7104) is amended to read as follows:

                       ``TITLE IV--AUTHORIZATIONS

     ``SEC. 4001. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated for State grants 
     under subpart 1 and national programs under subpart 2, 
     $655,000,000 for fiscal years 2002 and 2003, and $955,000,000 
     for fiscal years 2004 through 2005, of which the following 
     amounts may be appropriated from the Violent Crime Reduction 
     Trust Fund:
       ``(1) $300,000,000 for fiscal year 2004; and
       ``(2) $300,000,000 for fiscal year 2005.''.

     SEC. 4142. SAY NO TO DRUGS COMMUNITY CENTERS.

       (a) Short Title.--This section may be cited as the ``Say No 
     to Drugs Community Centers Act of 2001''.
       (b) Definitions.--In this section--
       (1) Community-based organization.--The term ``community-
     based organization'' means a private, locally initiated 
     organization that--
       (A) is a nonprofit organization, as that term is defined in 
     section 103(23) of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5603(23)); and
       (B) involves the participation, as appropriate, of members 
     of the community and community institutions, including--
       (i) business and civic leaders actively involved in 
     providing employment and business development opportunities 
     in the community;
       (ii) educators;
       (iii) religious organizations (which shall not provide any 
     sectarian instruction or sectarian worship in connection with 
     program activities funded under this subtitle);
       (iv) law enforcement agencies; and
       (v) other interested parties.
       (2) Eligible community.--The term ``eligible community'' 
     means a community--
       (A) identified by an eligible recipient for assistance 
     under this subtitle; and
       (B) an area that meets such criteria as the Attorney 
     General may, by regulation, establish, including criteria 
     relating to poverty, juvenile delinquency, and crime.
       (3) Eligible recipient.--The term ``eligible recipient'' 
     means a community-based organization or public school that 
     has--
       (A) been approved for eligibility by the Attorney General, 
     upon application submitted to the Attorney General in 
     accordance with subsection (e); and
       (B) demonstrated that the projects and activities it seeks 
     to support in an eligible community involve the 
     participation, when feasible and appropriate, of--
       (i) parents, family members, and other members of the 
     eligible community;
       (ii) civic and religious organizations serving the eligible 
     community;
       (iii) school officials and teachers employed at schools 
     located in the eligible community;
       (iv) public housing resident organizations in the eligible 
     community; and
       (v) public and private nonprofit organizations and 
     organizations serving youth that provide education, child 
     protective services, or other human services to low income, 
     at-risk youth and their families.
       (4) Poverty line.--The term ``poverty line'' means the 
     income official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Community Services Block Grant Act 
     (42 U.S.C. 9902(2)) applicable to a family of the size 
     involved.
       (5) Public school.--The term ``public school'' means a 
     public elementary school, as defined in section 1201(i) of 
     the Higher Education Act of 1965 (20 U.S.C. 1141(i)), and a 
     public secondary school, as defined in section 1201(d) of 
     that Act (42 U.S.C. 1141(d)).
       (c) Grant Requirements.--The Attorney General may make 
     grants to eligible recipients, which grants may be used to 
     provide to youth living in eligible communities during after 
     school hours or summer vacations, the following services:

[[Page 316]]

       (1) Rigorous drug prevention education.
       (2) Drug counseling and treatment.
       (3) Academic tutoring and mentoring.
       (4) Activities promoting interaction between youth and law 
     enforcement officials.
       (5) Vaccinations and other basic preventive health care.
       (6) Sexual abstinence education.
       (7) Other activities and instruction to reduce youth 
     violence and substance abuse.
       (d) Location and Use of Amounts.--An eligible recipient 
     that receives a grant under this section--
       (1) shall ensure that the stated program is carried out--
       (A) when appropriate, in the facilities of a public school 
     during nonschool hours; or
       (B) in another appropriate local facility that is--
       (i) in a location easily accessible to youth in the 
     community; and
       (ii) in compliance with all applicable State and local 
     ordinances;
       (2) shall use the grant amounts to provide to youth in the 
     eligible community services and activities that include 
     extracurricular and academic programs that are offered--
       (A) after school and on weekends and holidays, during the 
     school year; and
       (B) as daily full day programs (to the extent available 
     resources permit) or as part day programs, during the summer 
     months;
       (3) shall use not more than 5 percent of the amounts to pay 
     for the administrative costs of the program;
       (4) shall not use such amounts to provide sectarian worship 
     or sectarian instruction; and
       (5) may not use the amounts for the general operating costs 
     of public schools.
       (e) Applications.--
       (1) In general.--Each application to become an eligible 
     recipient shall be submitted to the Attorney General at such 
     time, in such manner, and accompanied by such information, as 
     the Attorney General may reasonably require.
       (2) Contents of application.--Each application submitted 
     pursuant to paragraph (1) shall--
       (A) describe the activities and services to be provided 
     through the program for which the grant is sought;
       (B) contain a comprehensive plan for the program that is 
     designed to achieve identifiable goals for youth in the 
     eligible community;
       (C) describe in detail the drug education and drug 
     prevention programs that will be implemented;
       (D) specify measurable goals and outcomes for the program 
     that will include--
       (i) reducing the percentage of youth in the eligible 
     community that enter the juvenile justice system or become 
     addicted to drugs;
       (ii) increasing the graduation rates, school attendance, 
     and academic success of youth in the eligible community; and
       (iii) improving the skills of program participants;
       (E) contain an assurance that the applicant will use grant 
     amounts received under this subtitle to provide youth in the 
     eligible community with activities and services consistent 
     with subsection (c);
       (F) demonstrate the manner in which the applicant will make 
     use of the resources, expertise, and commitment of private 
     entities in carrying out the program for which the grant is 
     sought;
       (G) include an estimate of the number of youth in the 
     eligible community expected to be served under the program;
       (H) include a description of charitable private resources, 
     and all other resources, that will be made available to 
     achieve the goals of the program;
       (I) contain an assurance that the applicant will comply 
     with any research effort authorized under Federal law, and 
     any investigation by the Attorney General;
       (J) contain an assurance that the applicant will prepare 
     and submit to the Attorney General an annual report regarding 
     any program conducted under this subtitle;
       (K) contain an assurance that the program for which the 
     grant is sought will, to the maximum extent practicable, 
     incorporate services that are provided solely through non-
     Federal private or nonprofit sources; and
       (L) contain an assurance that the applicant will maintain 
     separate accounting records for the program for which the 
     grant is sought.
       (3) Priority.--In determining eligibility under this 
     section, the Attorney General shall give priority to 
     applicants that submit applications that demonstrate the 
     greatest local support for the programs they seek to support.
       (f) Payments; Federal Share; Non-Federal Share.--
       (1) Payments.--The Attorney General shall, subject to the 
     availability of appropriations, provide to each eligible 
     recipient the Federal share of the costs of developing and 
     carrying out programs described in this section.
       (2) Federal share.--The Federal share of the cost of a 
     program under this subtitle shall be not more than--
       (A) 75 percent of the total cost of the program for each of 
     the first 2 years of the duration of a grant;
       (B) 70 percent of the total cost of the program for the 
     third year of the duration of a grant; and
       (C) 60 percent of the total cost of the program for each 
     year thereafter.
       (3) Non-federal share.--
       (A) In general.--The non-Federal share of the cost of a 
     program under this subtitle may be in cash or in kind, fairly 
     evaluated, including plant, equipment, and services. Federal 
     funds made available for the activity of any agency of an 
     Indian tribal government or the Bureau of Indian Affairs on 
     any Indian lands may be used to provide the non-Federal share 
     of the costs of programs or projects funded under this 
     subtitle.
       (B) Special rule.--Not less than 15 percent of the non-
     Federal share of the costs of a program under this subtitle 
     shall be provided from private or nonprofit sources.
       (g) Program Authority.--
       (1) In general.--
       (A) Allocations for states and indian tribes.--
       (i) In general.--In any fiscal year in which the total 
     amount made available to carry out this subtitle is equal to 
     or greater than $20,000,000, from the amount made available 
     to carry out this subtitle, the Attorney General shall 
     allocate not less than 0.75 percent for grants under 
     subparagraph (B) to eligible recipients in each State.
       (ii) Indian tribes.--The Attorney General shall allocate 
     0.75 percent of amounts made available under this subtitle 
     for grants to Indian tribes.
       (B) Grants to community-based organizations and public 
     schools from allocations.--For each fiscal year described in 
     subparagraph (A), the Attorney General may award grants from 
     the appropriate State or Indian tribe allocation determined 
     under subparagraph (A) on a competitive basis to eligible 
     recipients to pay for the Federal share of assisting eligible 
     communities to develop and carry out programs in accordance 
     with this subtitle.
       (C) Reallocation.--If, at the end of a fiscal year 
     described in subparagraph (A), the Attorney General 
     determines that amounts allocated for a particular State or 
     Indian tribe under subparagraph (B) remain unobligated, the 
     Attorney General shall use such amounts to award grants to 
     eligible recipients in another State or Indian tribe to pay 
     for the Federal share of assisting eligible communities to 
     develop and carry out programs in accordance with this 
     subtitle. In awarding such grants, the Attorney General shall 
     consider the need to maintain geographic diversity among 
     eligible recipients.
       (D) Availability of amounts.--Amounts made available under 
     this paragraph shall remain available until expended.
       (2) Other fiscal years.--In any fiscal year in which the 
     amount made available to carry out this subtitle is equal to 
     or less than $20,000,000, the Attorney General may award 
     grants on a competitive basis to eligible recipients to pay 
     for the Federal share of assisting eligible communities to 
     develop and carry out programs in accordance with this 
     subtitle.
       (3) Administrative costs.--The Attorney General may use not 
     more than 3 percent of the amounts made available to carry 
     out this subtitle in any fiscal year for administrative 
     costs, including training and technical assistance.
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section from the Violent 
     Crime Reduction Trust Fund--
       (1) for fiscal year 2002, $125,000,000; and
       (2) for fiscal year 2003, $125,000,000.

     SEC. 4143. DRUG EDUCATION AND PREVENTION RELATING TO YOUTH 
                   GANGS.

       Section 3505 of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 
     11805) is amended to read as follows:

     ``SEC. 3505. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     chapter such sums as may be necessary for each of fiscal 
     years 2002, 2003, 2004, 2005, and 2006.''.

     SEC. 4144. DRUG EDUCATION AND PREVENTION PROGRAM FOR RUNAWAY 
                   AND HOMELESS YOUTH.

       Section 3513 of the Anti-Drug Abuse Act of 1988 (42 U.S.C. 
     11823) is amended to read as follows:

     ``SEC. 3513. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     chapter such sums as may be necessary for each of fiscal 
     years 2002, 2003, 2004, 2005, and 2006.''.

         Subtitle B--Youth Crime Prevention and Juvenile Courts

                 PART 1--GRANTS TO YOUTH ORGANIZATIONS

     SEC. 4211. GRANT PROGRAM.

       The Attorney General may make grants to States, Indian 
     tribes, and national or statewide nonprofit organizations in 
     crime prone areas, such as Boys and Girls Clubs, Police 
     Athletic Leagues, 4-H Clubs, YMCA Big Brothers and Big 
     Sisters, and Kids 'N Kops programs, for the purpose of--
       (1) providing constructive activities to youth during after 
     school hours, weekends, and school vacations;
       (2) providing supervised activities in safe environments to 
     youth in crime prone areas;
       (3) providing antidrug education to prevent drug abuse 
     among youth;

[[Page 317]]

       (4) supporting police officer training and salaries and 
     educational materials to expand D.A.R.E. America's middle 
     school campaign; or
       (5) providing constructive activities to youth in a safe 
     environment through parks and other public recreation areas.

     SEC. 4212. GRANTS TO NATIONAL ORGANIZATIONS.

       (a) Applications.--
       (1) Eligibility.--In order to be eligible to receive a 
     grant under this section, the chief operating officer of a 
     national or statewide community-based organization shall 
     submit an application to the Attorney General in such form 
     and containing such information as the Attorney General may 
     reasonably require.
       (2) Application requirements.--Each application submitted 
     in accordance with paragraph (1) shall include--
       (A) a request for a grant to be used for the purposes 
     described in this subtitle;
       (B) a description of the communities to be served by the 
     grant, including the nature of juvenile crime, violence, and 
     drug use in the communities;
       (C) written assurances that Federal funds received under 
     this subtitle will be used to supplement and not supplant, 
     non-Federal funds that would otherwise be available for 
     activities funded under this subtitle;
       (D) written assurances that all activities will be 
     supervised by an appropriate number of responsible adults;
       (E) a plan for assuring that program activities will take 
     place in a secure environment that is free of crime and 
     drugs; and
       (F) any additional statistical or financial information 
     that the Attorney General may reasonably require.
       (b) Grant Awards.--In awarding grants under this section, 
     the Attorney General shall consider--
       (1) the ability of the applicant to provide the stated 
     services;
       (2) the history and establishment of the applicant in 
     providing youth activities on a national or statewide basis; 
     and
       (3) the extent to which the organizations shall achieve an 
     equitable geographic distribution of the grant awards.

     SEC. 4213. GRANTS TO STATES.

       (a) Applications.--
       (1) In general.--The Attorney General may make grants under 
     this section to States for distribution to units of local 
     government and community-based organizations for the purposes 
     set forth in section 4211.
       (2) Grants.--To request a grant under this section, the 
     chief executive of a State shall submit an application to the 
     Attorney General in such form and containing such information 
     as the Attorney General may reasonably require.
       (3) Application requirements.--Each application submitted 
     in accordance with paragraph (2) shall include--
       (A) a request for a grant to be used for the purposes 
     described in this subtitle;
       (B) a description of the communities to be served by the 
     grant, including the nature of juvenile crime, violence, and 
     drug use in the community;
       (C) written assurances that Federal funds received under 
     this subtitle will be used to supplement and not supplant, 
     non-Federal funds that would otherwise be available for 
     activities funded under this subtitle;
       (D) written assurances that all activities will be 
     supervised by an appropriate number of responsible adults; 
     and
       (E) a plan for assuring that program activities will take 
     place in a secure environment that is free of crime and 
     drugs.
       (b) Grant Awards.--In awarding grants under this section, 
     the State shall consider--
       (1) the ability of the applicant to provide the stated 
     services;
       (2) the history and establishment of the applicant in the 
     community to be served;
       (3) the level of juvenile crime, violence, and drug use in 
     the community;
       (4) the extent to which structured extracurricular 
     activities for youth are otherwise unavailable in the 
     community;
       (5) the need in the community for secure environments for 
     youth to avoid criminal victimization and exposure to crime 
     and illegal drugs;
       (6) to the extent practicable, achievement of an equitable 
     geographic distribution of the grant awards; and
       (7) whether the applicant has an established record of 
     providing extracurricular activities that are generally not 
     otherwise available to youth in the community.
       (c) Allocation.--
       (1) State allocations.--The Attorney General shall allot 
     not less than 0.75 percent of the total amount made available 
     each fiscal year to carry out this section to each State that 
     has applied for a grant under this section.
       (2) Indian tribes.--The Attorney General shall allot not 
     less than 0.75 percent of the total amount made available 
     each fiscal year to carry out this section to Indian tribes, 
     in accordance with the criteria set forth in subsections (a) 
     and (b).
       (3) Remaining amounts.--Of the amount remaining after the 
     allocations under paragraphs (1) and (2), the Attorney 
     General shall allocate to each State an amount that bears the 
     same ratio to the total amount of remaining funds as the 
     population of the State bears to the total population of all 
     States.

     SEC. 4214. ALLOCATION; GRANT LIMITATION.

       (a) Allocation.--Of amounts made available to carry out 
     this part--
       (1) 20 percent shall be for grants to national or statewide 
     organizations under section 4212; and
       (2) 80 percent shall be for grants to States under section 
     4213.
       (b) Grant Limitation.--Not more than 3 percent of the funds 
     made available to the Attorney General or a grant recipient 
     under this subtitle may be used for administrative purposes.

     SEC. 4215. REPORT AND EVALUATION.

       (a) Report to the Attorney General.--Not later than October 
     1, 2002 and October 1 of each year thereafter, each grant 
     recipient under this subtitle shall submit to the Attorney 
     General a report that describes, for the year to which the 
     report relates--
       (1) the activities provided;
       (2) the number of youth participating;
       (3) the extent to which the grant enabled the provision of 
     activities to youth that would not otherwise be available; 
     and
       (4) any other information that the Attorney General 
     requires for evaluating the effectiveness of the program.
       (b) Evaluation and Report to Congress.--Not later than 
     March 1, 2003, and March 1 of each year thereafter, the 
     Attorney General shall submit to Congress an evaluation and 
     report that contains a detailed statement regarding grant 
     awards, activities of grant recipients, a compilation of 
     statistical information submitted by grant recipients under 
     this part, and an evaluation of programs established by grant 
     recipients under this part.
       (c) Criteria.--In assessing the effectiveness of the 
     programs established and operated by grant recipients 
     pursuant to this part, the Attorney General shall consider--
       (1) the number of youth served by the grant recipient;
       (2) the percentage of youth participating in the program 
     charged with acts of delinquency or crime compared to youth 
     in the community at large;
       (3) the percentage of youth participating in the program 
     that uses drugs compared to youth in the community at large;
       (4) the percentage of youth participating in the program 
     that are victimized by acts of crime or delinquency compared 
     to youth in the community at large; and
       (5) the truancy rates of youth participating in the program 
     compared to youth in the community at large.
       (d) Documents and Information.--Each grant recipient under 
     this part shall provide the Attorney General with all 
     documents and information that the Attorney General 
     determines to be necessary to conduct an evaluation of the 
     effectiveness of programs funded under this part.

     SEC. 4216. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated to 
     carry out this part from the Violent Crime Reduction Trust 
     Fund--
       (1) such sums as may be necessary for each of fiscal years 
     2002 and 2003; and
       (2) $125,000,000 for each of fiscal years 2004 and 2005.
       (b) Continued Availability.--Amounts made available under 
     this part shall remain available until expended.

     SEC. 4217. GRANTS TO PUBLIC AND PRIVATE AGENCIES.

       Title II of the Juvenile Justice and Delinquency Prevention 
     Act of 1974 (42 U.S.C. 5611 et seq.) is amended--
       (1) by striking the first part designated as part I;
       (2) by redesignating the second part designated as part I 
     as part M; and
       (3) by inserting after part H the following:

                ``PART I--AFTER SCHOOL CRIME PREVENTION

     ``SEC. 291. GRANTS TO PUBLIC AND PRIVATE AGENCIES FOR 
                   EFFECTIVE AFTER SCHOOL CRIME PREVENTION 
                   PROGRAMS.

       ``(a) In General.--Subject to the availability of 
     appropriations, the Administrator shall make grants in 
     accordance with this section to public and private agencies 
     to fund effective after school juvenile crime prevention 
     programs.
       ``(b) Matching Requirement.--The Administrator may not make 
     a grant to a public or private agency under this section 
     unless that agency agrees that, with respect to the costs to 
     be incurred by the agency in carrying out the program for 
     which the grant is to be awarded, the agency will make 
     available non-Federal contributions in an amount that is not 
     less than a specific percentage of Federal funds provided 
     under the grant, as determined by the Administrator.
       ``(c) Priority.--In making grants under this section, the 
     Administrator shall give priority to funding programs that--
       ``(1) are targeted to high crime neighborhoods or at-risk 
     juveniles;
       ``(2) operate during the period immediately following 
     normal school hours;
       ``(3) provide educational or recreational activities 
     designed to encourage law-abiding conduct, reduce the 
     incidence of criminal activity, and teach juveniles 
     alternatives to crime; and
       ``(4) coordinate with State or local juvenile crime control 
     and juvenile offender accountability programs.
       ``(d) Funding.--There are authorized to be appropriated for 
     grants under this section

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     $250,000,000 for each of fiscal years 2002, 2003, 2004, 2005, 
     and 2006.''.

   PART 2--REAUTHORIZATION OF INCENTIVE GRANTS FOR LOCAL DELINQUENCY 
                          PREVENTION PROGRAMS

     SEC. 4221. INCENTIVE GRANTS FOR LOCAL DELINQUENCY PREVENTION 
                   PROGRAMS.

       Section 506 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5785) is amended to read as 
     follows:

     ``SEC. 506. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     title such sums as may be necessary for each of fiscal years 
     2002, 2003, 2004, 2005, and 2006.''.

     SEC. 4222. RESEARCH, EVALUATION, AND TRAINING.

       Title V of the Juvenile Justice and Delinquency Prevention 
     Act of 1974 (42 U.S.C. 5781 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 507. RESEARCH, EVALUATION, AND TRAINING.

       ``Of the amounts made available by appropriations pursuant 
     to section 506--
       ``(1) 2 percent shall be used by the Administrator for 
     providing training and technical assistance under this title; 
     and
       ``(2) 10 percent shall be used by the Administrator for 
     research, statistics, and evaluation activities carried out 
     in conjunction with the grant programs under this title.''.

                           PART 3--JUMP AHEAD

     SEC. 4231. SHORT TITLE.

       This part may be cited as the ``JUMP Ahead Act of 2001''.

     SEC. 4232. FINDINGS.

       Congress finds that--
       (1) millions of young people in America live in areas in 
     which drug use and violent and property crimes are pervasive;
       (2) unfortunately, many of these same young people come 
     from single parent homes, or from environments in which there 
     is no responsible, caring adult supervision;
       (3) all children and adolescents need caring adults in 
     their lives, and mentoring is an effective way to fill this 
     special need for at-risk children;
       (4) the special bond of commitment fostered by the mutual 
     respect inherent in effective mentoring can be the tie that 
     binds a young person to a better future;
       (5) through a mentoring relationship, adult volunteers and 
     participating youth make a significant commitment of time and 
     energy to develop relationships devoted to personal, 
     academic, or career development and social, artistic, or 
     athletic growth;
       (6) rigorous independent studies have confirmed that 
     effective mentoring programs can significantly reduce and 
     prevent the use of alcohol and drugs by young people, improve 
     school attendance and performance, improve peer and family 
     and peer relationships, and reduce violent behavior;
       (7) since the inception of the Federal JUMP program, dozens 
     of innovative, effective mentoring programs have received 
     funding grants;
       (8) unfortunately, despite the recent growth in public and 
     private mentoring initiatives, it is reported that between 
     5,000,000 and 15,000,000 additional children in the United 
     States could benefit from being matched with a mentor; and
       (9) although great strides have been made in reaching at-
     risk youth since the inception of the JUMP program, millions 
     of vulnerable American children are not being reached, and 
     without an increased commitment to connect these young people 
     to responsible adult role models, our country risks losing an 
     entire generation to drugs, crime, and unproductive lives.

     SEC. 4233. JUVENILE MENTORING GRANTS.

       (a) In General.--Section 288B of the Juvenile Justice and 
     Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) is 
     amended--
       (1) by inserting ``(a) In General.--'' before ``The 
     Administrator shall'';
       (2) by striking paragraph (2) and inserting the following:
       ``(2) are intended to achieve 1 or more of the following 
     goals:
       ``(A) Discourage at-risk youth from--
       ``(i) using illegal drugs and alcohol;
       ``(ii) engaging in violence;
       ``(iii) using guns and other dangerous weapons;
       ``(iv) engaging in other criminal and antisocial behavior; 
     and
       ``(v) becoming involved in gangs.
       ``(B) Promote personal and social responsibility among at-
     risk youth.
       ``(C) Increase at-risk youth's participation in, and 
     enhance the ability of those youth to benefit from, 
     elementary and secondary education.
       ``(D) Encourage at-risk youth participation in community 
     service and community activities.
       ``(E) Provide general guidance to at-risk youth.''; and
       (3) by adding at the end the following:
       ``(b) Amount and Duration.--Each grant under this part 
     shall be awarded in an amount not to exceed a total of 
     $200,000 over a period of not more than 3 years.
       ``(c) Authorization of Appropriations.--There is authorized 
     to be appropriated $50,000,000 for each of fiscal years 2002, 
     2003, 2004, and 2005 to carry out this part.''.

     SEC. 4234. IMPLEMENTATION AND EVALUATION GRANTS.

       (a) In General.--The Administrator of the Office of 
     Juvenile Justice and Delinquency Prevention of the Department 
     of Justice may make grants to national organizations or 
     agencies serving youth, in order to enable those 
     organizations or agencies--
       (1) to conduct a multisite demonstration project, involving 
     between 5 and 10 project sites, that--
       (A) provides an opportunity to compare various mentoring 
     models for the purpose of evaluating the effectiveness and 
     efficiency of those models;
       (B) allows for innovative programs designed under the 
     oversight of a national organization or agency serving youth, 
     which programs may include--
       (i) technical assistance;
       (ii) training; and
       (iii) research and evaluation; and
       (C) disseminates the results of such demonstration project 
     to allow for the determination of the best practices for 
     various mentoring programs;
       (2) to develop and evaluate screening standards for 
     mentoring programs; and
       (3) to develop and evaluate volunteer recruitment 
     techniques and activities for mentoring programs.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated $5,000,000 for each of fiscal years 2002, 
     2003, 2004, and 2005 to carry out this section.

     SEC. 4235. EVALUATIONS; REPORTS.

       (a) Evaluations.--
       (1) In general.--The Attorney General shall enter into a 
     contract with an evaluating organization that has 
     demonstrated experience in conducting evaluations, for the 
     conduct of an ongoing rigorous evaluation of the programs and 
     activities assisted under this Act or under section 228B of 
     the Juvenile Justice and Delinquency Prevention Act of 1974 
     (42 U.S.C. 5667e-2) (as amended by this title).
       (2) Criteria.--The Attorney General shall establish a 
     minimum criteria for evaluating the programs and activities 
     assisted under this Act or under section 228B of the Juvenile 
     Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 
     5667e-2) (as amended by this title), which shall provide for 
     a description of the implementation of the program or 
     activity, and the effect of the program or activity on 
     participants, schools, communities, and youth served by the 
     program or activity.
       (3) Mentoring program of the year.--The Attorney General 
     shall, on an annual basis, based on the most recent 
     evaluation under this subsection and such other criteria as 
     the Attorney General shall establish by regulation--
       (A) designate 1 program or activity assisted under this Act 
     as the ``Juvenile Mentoring Program of the Year''; and
       (B) publish notice of such designation in the Federal 
     Register.
       (b) Reports.--
       (1) Grant recipients.--Each entity receiving a grant under 
     this Act or under section 228B of the Juvenile Justice and 
     Delinquency Prevention Act of 1974 (42 U.S.C. 5667e-2) (as 
     amended by this title) shall submit to the evaluating 
     organization entering into the contract under subsection 
     (a)(1), an annual report regarding any program or activity 
     assisted under this Act or under section 228B of the Juvenile 
     Justice and Delinquency Prevention Act of 1974 (42 U.S.C. 
     5667e-2) (as amended by this title). Each report under this 
     paragraph shall be submitted at such time, in such a manner, 
     and shall be accompanied by such information, as the 
     evaluating organization may reasonably require.
       (2) Comptroller general.--Not later than 4 years after the 
     date of enactment of this Act, the Attorney General shall 
     submit to Congress a report evaluating the effectiveness of 
     grants awarded under this Act and under section 228B of the 
     Juvenile Justice and Delinquency Prevention Act of 1974 (42 
     U.S.C. 5667e-2) (as amended by this title), in--
       (A) reducing juvenile delinquency and gang participation;
       (B) reducing the school dropout rate; and
       (C) improving academic performance of juveniles.

                       PART 4--TRUANCY PREVENTION

     SEC. 4241. SHORT TITLE.

       This part may be cited as the ``Truancy Prevention and 
     Juvenile Crime Reduction Act of 2001''.

     SEC. 4242. FINDINGS.

       Congress makes the following findings:
       (1) Truancy is often the first sign of trouble--the first 
     indicator that a young person is giving up and losing his or 
     her way.
       (2) Many students who become truant eventually drop out of 
     school, and high school drop outs are two and a half times 
     more likely to be on welfare than high school graduates, 
     twice as likely to be unemployed, or if employed, earn lower 
     salaries.
       (3) Truancy is the top-ranking characteristic of 
     criminals--more common than such factors as coming from 
     single-parent families and being abused as children.
       (4) High rates of truancy are linked to high daytime 
     burglary rates and high vandalism.
       (5) As much as 44 percent of violent juvenile crime takes 
     place during school hours.
       (6) As many as 75 percent of children ages 13 to 16 who are 
     arrested and prosecuted for crimes are truants.

[[Page 319]]

       (7) Some cities report as many as 70 percent of daily 
     student absences are unexcused, and the total number of 
     absences in a single city can reach 4,000 per day.
       (8) Society pays a significant social and economic cost due 
     to truancy: only 34 percent of inmates have completed high 
     school education; 17 percent of youth under age 18 entering 
     adult prisons have not completed grade school (8th grade or 
     less), 25 percent completed 10th grade, and 2 percent 
     completed high school.
       (9) Truants and later high school drop outs cost the Nation 
     $240,000,000,000 in lost earnings and foregone taxes over 
     their lifetimes, and the cost of crime control is staggering.
       (10) In many instances, parents are unaware a child is 
     truant.
       (11) Effective truancy prevention, early intervention, and 
     accountability programs can improve school attendance and 
     reduce daytime crime rates.
       (12) There is a lack of targeted funding for effective 
     truancy prevention programs in current law.

     SEC. 4243. GRANTS.

       (a) Definitions.--In this section:
       (1) Eligible partnership.--The term ``eligible 
     partnership'' means a partnership between 1 or more qualified 
     units of local government and 1 or more local educational 
     agencies.
       (2) Local educational agency.--The term ``local educational 
     agency'' has the meaning given the term in section 14101 of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     8801).
       (3) Qualified unit of local government.--The term 
     ``qualified unit of local government'' means a unit of local 
     government that has in effect, as of the date on which the 
     eligible partnership submits an application for a grant under 
     this section, a statute or regulation that meets the 
     requirements of section 223(a)(14) of the Juvenile Justice 
     and Delinquency and Prevention Act of 1974 (42 U.S.C. 
     5633(a)(14)).
       (4) Unit of local government.--The term ``unit of local 
     government'' means any city, county, township, town, borough, 
     parish, village, or other general purpose political 
     subdivision of a State, or any Indian tribe.
       (b) Grant Authority.--The Attorney General, in consultation 
     with the Secretary of Education, shall make grants in 
     accordance with this section on a competitive basis to 
     eligible partnerships to reduce truancy and the incidence of 
     daytime juvenile crime.
       (c) Maximum Amount; Allocation; Renewal.--
       (1) Maximum amount.--The total amount awarded to an 
     eligible partnership under this section in any fiscal year 
     shall not exceed $100,000.
       (2) Allocation.--Not less than 25 percent of each grant 
     awarded to an eligible partnership under this section shall 
     be allocated for use by the local educational agency or 
     agencies participating in the partnership.
       (3) Renewal.--A grant awarded under this section for a 
     fiscal year may be renewed for an additional period of not 
     more than 2 fiscal years.
       (d) Use of Funds.--
       (1) In general.--Grant amounts made available under this 
     section may be used by an eligible partnership to 
     comprehensively address truancy through the use of--
       (A) parental involvement in prevention activities, 
     including meaningful incentives for parental responsibility;
       (B) sanctions, including community service, or drivers' 
     license suspension for students who are habitually truant;
       (C) parental accountability, including fines, teacher-aid 
     duty, or community service;
       (D) in-school truancy prevention programs, including 
     alternative education and in-school suspension;
       (E) involvement of the local law enforcement, social 
     services, judicial, business, and religious communities, and 
     nonprofit organizations;
       (F) technology, including automated telephone notice to 
     parents and computerized attendance system; or
       (G) elimination of 40-day count and other unintended 
     incentives to allow students to be truant after a certain 
     time of school year.
       (2) Model programs.--In carrying out this section, the 
     Attorney General may give priority to funding the following 
     programs and programs that attempt to replicate one or more 
     of the following model programs:
       (A) The Truancy Intervention Project of the Fulton County, 
     Georgia, Juvenile Court.
       (B) The TABS (Truancy Abatement and Burglary Suppression) 
     program of Milwaukee, Wisconsin.
       (C) The Roswell Daytime Curfew Program of Roswell, New 
     Mexico.
       (D) The Stop, Cite and Return Program of Rohnert Park, 
     California.
       (E) The Stay in School Program of New Haven, Connecticut.
       (F) The Atlantic County Project Helping Hand of Atlantic 
     County, New Jersey.
       (G) The THRIVE (Truancy Habits Reduced Increasing Valuable 
     Education) initiative of Oklahoma City, Oklahoma.
       (H) The Norfolk, Virginia project using computer software 
     and data collection.
       (I) The Community Service Early Intervention Program of 
     Marion, Ohio.
       (J) The Truancy Reduction Program of Bakersfield, 
     California.
       (K) The Grade Court program of Farmington, New Mexico.
       (L) Any other model program that the Attorney General 
     determines to be appropriate.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $25,000,000 for 
     each of fiscal years 2002, 2003, and 2004.

     PART 5--JUVENILE CRIME CONTROL AND DELINQUENCY PREVENTION ACT

     SEC. 4251. SHORT TITLE.

       This part may be cited as the ``Juvenile Crime Control and 
     Delinquency Prevention Act of 2001''.

     SEC. 4252. FINDINGS.

       Section 101 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5601) is amended to read as 
     follows:

     ``SEC. 101. FINDINGS.

       ``(a) Congress finds that the juvenile crime problem should 
     be addressed through a 2-track common sense approach that 
     addresses the needs of individual juveniles and society at 
     large by promoting--
       ``(1) quality prevention programs that--
       ``(A) work with juveniles, their families, local public 
     agencies, and community-based organizations, and take into 
     consideration such factors as whether juveniles have ever 
     been the victims of family violence (including child abuse 
     and neglect); and
       ``(B) are designed to reduce risks and develop competencies 
     in at-risk juveniles that will prevent, and reduce the rate 
     of, violent delinquent behavior; and
       ``(2) programs that assist in holding juveniles accountable 
     for their actions, including a system of graduated sanctions 
     to respond to each delinquent act, requiring juveniles to 
     make restitution, or perform community service, for the 
     damage caused by their delinquent acts, and methods for 
     increasing victim satisfaction with respect to the penalties 
     imposed on juveniles for their acts.
       ``(b) Congress must act now to reform this program by 
     focusing on juvenile delinquency prevention programs, as well 
     as programs that hold juveniles accountable for their 
     acts.''.

     SEC. 4253. PURPOSE.

       Section 102 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5602) is amended to read as 
     follows:

     ``SEC. 102. PURPOSES.

       ``The purposes of this title are--
       ``(1) to support State and local programs that prevent 
     juvenile involvement in delinquent behavior;
       ``(2) to assist State and local governments in promoting 
     public safety by encouraging accountability for acts of 
     juvenile delinquency; and
       ``(3) to assist State and local governments in addressing 
     juvenile crime through the provision of technical assistance, 
     research, training, evaluation, and the dissemination of 
     information on effective programs for combating juvenile 
     delinquency.''.

     SEC. 4254. DEFINITIONS.

       Section 103 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5603) is amended--
       (1) in paragraph (3), by striking ``to help prevent 
     juvenile delinquency'' and inserting ``designed to reduce 
     known risk factors for juvenile delinquent behavior, provide 
     activities that build on protective factors for, and develop 
     competencies in, juveniles to prevent, and reduce the rate 
     of, delinquent juvenile behavior'',
       (2) in paragraph (4), by inserting ``title I of'' before 
     ``the Omnibus'' each place it appears,
       (3) in paragraph (7), by striking ``the Trust Territory of 
     the Pacific Islands,'',
       (4) in paragraph (9), by striking ``justice'' and inserting 
     ``crime control'',
       (5) in paragraph (12)(B), by striking ``, of any 
     nonoffender,'',
       (6) in paragraph (13)(B), by striking ``, any 
     nonoffender,'',
       (7) in paragraph (14), by inserting ``drug trafficking,'' 
     after ``assault,'',
       (8) in paragraph (16)--
       (A) in subparagraph (A), by adding ``and'' at the end, and
       (B) by striking subparagraph (C),
       (9) by striking paragraph (17),
       (10) in paragraph (22)--
       (A) by redesignating subparagraphs (i), (ii), and (iii) as 
     subparagraphs (A), (B), and (C), respectively, and
       (B) by striking ``and'' at the end,
       (11) in paragraph (23), by striking the period at the end 
     and inserting a semicolon,
       (12) by redesignating paragraphs (18), (19), (20), (21), 
     (22), and (23) as paragraphs (17) through (22), respectively, 
     and
       (13) by adding at the end the following:
       ``(23) the term `boot camp' means a residential facility 
     (excluding a private residence) at which there are provided--
       ``(A) a highly regimented schedule of discipline, physical 
     training, work, drill, and ceremony characteristic of 
     military basic training.
       ``(B) regular, remedial, special, and vocational education; 
     and
       ``(C) counseling and treatment for substance abuse and 
     other health and mental health problems;
       ``(24) the term `graduated sanctions' means an 
     accountability-based, graduated series of sanctions 
     (including incentives and services)

[[Page 320]]

     applicable to juveniles within the juvenile justice system to 
     hold such juveniles accountable for their actions and to 
     protect communities from the effects of juvenile delinquency 
     by providing appropriate sanctions for every act for which a 
     juvenile is adjudicated delinquent, by inducing their law- 
     abiding behavior, and by preventing their subsequent 
     involvement with the juvenile justice system;
       ``(25) the term `violent crime' means--
       ``(A) murder or nonnegligent manslaughter, forcible rape, 
     or robbery, or
       ``(B) aggravated assault committed with the use of a 
     firearm;
       ``(26) the term `co-located facilities' means facilities 
     that are located in the same building, or are part of a 
     related complex of buildings located on the same grounds; and
       ``(27) the term `related complex of buildings' means 2 or 
     more buildings that share--
       ``(A) physical features, such as walls and fences, or 
     services beyond mechanical services (heating, air 
     conditioning, water and sewer); or
       ``(B) the specialized services that are allowable under 
     section 31.303(e)(3)(i)(C)(3) of title 28 of the Code of 
     Federal Regulations, as in effect on December 10, 1996.''.

     SEC. 4255. NAME OF OFFICE.

       Title II of the Juvenile Justice and Delinquency Prevention 
     Act of 1974 (42 U.S.C. 5611 et seq.) is amended--
       (1) in part A, by striking the part heading and inserting 
     the following:

      ``Part A--Office of Juvenile Crime Control and Delinquency 
                             Prevention'';

       (2) in section 201(a), by striking ``Justice and 
     Delinquency Prevention'' and inserting ``Crime Control and 
     Delinquency Prevention''; and
       (3) in section 299A(c)(2) by striking ``Justice and 
     Delinquency Prevention'' and inserting ``Crime Control and 
     Delinquency Prevention''.

     SEC. 4256. CONCENTRATION OF FEDERAL EFFORT.

       Section 204 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5614) is amended--
       (1) in subsection (a)(1), by striking the last sentence;
       (2) in subsection (b)--
       (A) in paragraph (3), by striking ``and of the 
     prospective'' and all that follows through ``administered'';
       (B) by striking paragraph (5); and
       (C) by redesignating paragraphs (6) and (7) as paragraphs 
     (5) and (6), respectively;
       (3) in subsection (c), by striking ``and reports'' and all 
     that follows through ``this part'', and inserting ``as may be 
     appropriate to prevent the duplication of efforts, and to 
     coordinate activities, related to the prevention of juvenile 
     delinquency'';
       (4) by striking subsection (i); and
       (5) by redesignating subsection (h) as subsection (f).

     SEC. 4257. ALLOCATION.

       Section 222 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5632) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) by striking ``amount, up to $400,000,'' and inserting 
     ``amount up to $400,000'';
       (II) by inserting a comma after ``1992'' the first place it 
     appears;
       (III) by striking ``the Trust Territory of the Pacific 
     Islands,''; and
       (IV) by striking ``amount, up to $100,000,'' and inserting 
     ``amount up to $100,000'';

       (ii) in subparagraph (B)--

       (I) by striking ``(other than part D)'';
       (II) by striking ``or such greater amount, up to $600,000'' 
     and all that follows through ``section 299(a) (1) and (3)'';
       (III) by striking ``the Trust Territory of the Pacific 
     Islands,'';

       (IV) by striking ``amount, up to $100,000,'' and inserting 
     ``amount up to $100,000''; and
       (V) by inserting a comma after ``1992'';

       (B) in paragraph (3) by striking ``allot'' and inserting 
     ``allocate''; and
       (2) in subsection (b) by striking ``the Trust Territory of 
     the Pacific Islands,''.

     SEC. 4258. STATE PLANS.

       Section 223 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5633) is amended--
       (1) in subsection (a)--
       (A) in the second sentence, by striking ``challenge'' and 
     all that follows through ``part E'', and inserting ``, 
     projects, and activities'';
       (B) in paragraph (3)--
       (i) by striking ``, which--'' and inserting ``that--'';
       (ii) in subparagraph (A)--

       (I) by striking ``not less'' and all that follows through 
     ``33'', and inserting ``the attorney general of the State or 
     such other State official who has primary responsibility for 
     overseeing the enforcement of State criminal laws, and'';
       (II) by inserting ``, in consultation with the attorney 
     general of the State or such other State official who has 
     primary responsibility for overseeing the enforcement of 
     State criminal laws'' after ``State'';
       (III) in clause (i), by striking ``or the administration of 
     juvenile justice'' and inserting ``, the administration of 
     juvenile justice, or the reduction of juvenile delinquency'';
       (IV) in clause (ii), by striking ``include--'' and all that 
     follows through the semicolon at the end of subclause (VIII), 
     and inserting the following:

     ``represent a multidisciplinary approach to addressing 
     juvenile delinquency and may include--

       ``(I) individuals who represent units of general local 
     government, law enforcement and juvenile justice agencies, 
     public agencies concerned with the prevention and treatment 
     of juvenile delinquency and with the adjudication of 
     juveniles, representatives of juveniles, or nonprofit private 
     organizations, particularly such organizations that serve 
     juveniles; and
       ``(II) such other individuals as the chief executive 
     officer considers to be appropriate; and''; and
       (V) by striking clauses (iv) and (v);

       (iii) in subparagraph (C), by striking ``justice'' and 
     inserting ``crime control'';
       (iv) in subparagraph (D)--

       (I) in clause (i), by inserting ``and'' at the end; and
       (II) in clause (ii), by striking ``paragraphs'' and all 
     that follows through ``part E'', and inserting ``paragraphs 
     (11), (12), and (13)''; and

       (v) in subparagraph (E), by striking ``title--'' and all 
     that follows through ``(ii)'' and inserting ``title,'';
       (C) in paragraph (5)--
       (i) in the matter preceding subparagraph (A), by striking 
     ``, other than'' and inserting ``reduced by the percentage 
     (if any) specified by the State under the authority of 
     paragraph (25) and excluding'' after ``section 222''; and
       (ii) in subparagraph (C), by striking ``paragraphs (12)(A), 
     (13), and (14)'' and inserting ``paragraphs (11), (12), and 
     (13)'';
       (D) by striking paragraph (6);
       (E) in paragraph (7), by inserting ``, including in rural 
     areas'' before the semicolon at the end;
       (F) in paragraph (8)--
       (i) in subparagraph (A)--

       (I) by striking ``for (i)'' and all that follows through 
     ``relevant jurisdiction'', and inserting ``for an analysis of 
     juvenile delinquency problems in, and the juvenile 
     delinquency control and delinquency prevention needs 
     (including educational needs) of, the State'';

       (II) by striking ``justice'' the second place it appears 
     and inserting ``crime control''; and
       (III) by striking ``of the jurisdiction; (ii)'' and all 
     that follows through the semicolon at the end, and inserting 
     ``of the State; and'';

       (ii) by striking subparagraph (B) and inserting the 
     following:
       ``(B) contain--
       ``(i) a plan for providing needed gender-specific services 
     for the prevention and treatment of juvenile delinquency;
       ``(ii) a plan for providing needed services for the 
     prevention and treatment of juvenile delinquency in rural 
     areas; and
       ``(iii) a plan for providing needed mental health services 
     to juveniles in the juvenile justice system;''; and
       (iii) by striking subparagraphs (C) and (D);
       (G) by striking paragraph (9) and inserting the following:
       ``(9) provide for the coordination and maximum utilization 
     of existing juvenile delinquency programs, programs operated 
     by public and private agencies and organizations, and other 
     related programs (such as education, special education, 
     recreation, health, and welfare programs) in the State;'';
       (H) in paragraph (10)--
       (i) in subparagraph (A), by striking ``, specifically'' and 
     inserting ``including''; and
       (ii) by striking subparagraph (B) and inserting the 
     following:
       ``(B) programs that assist in holding juveniles accountable 
     for their actions, including the use of graduated sanctions 
     and of neighborhood courts or panels that increase victim 
     satisfaction and require juveniles to make restitution for 
     the damage caused by their delinquent behavior;'';
       (iii) in subparagraph (C), by striking ``juvenile justice'' 
     and inserting ``juvenile crime control'';
       (iv) by striking subparagraph (D) and inserting the 
     following:
       ``(D) programs that provide treatment to juvenile offenders 
     who are victims of child abuse or neglect, and to their 
     families, in order to reduce the likelihood that such 
     juvenile offenders will commit subsequent violations of 
     law;'';
       (v) in subparagraph (E)--

       (I) by redesignating clause (ii) as clause (iii); and
       (II) by striking ``juveniles, provided'' and all that 
     follows through ``provides; and'', and inserting the 
     following:

     ``juveniles--
       ``(i) to encourage juveniles to remain in elementary and 
     secondary schools or in alternative learning situations;
       ``(ii) to provide services to assist juveniles in making 
     the transition to the world of work and self-sufficiency; 
     and'';
       (vi) by striking subparagraph (F) and inserting the 
     following:
       ``(F) expanding the use of probation officers--
       ``(i) particularly for the purpose of permitting nonviolent 
     juvenile offenders (including status offenders) to remain at 
     home with

[[Page 321]]

     their families as an alternative to incarceration or 
     institutionalization; and
       ``(ii) to ensure that juveniles follow the terms of their 
     probation;'';
       (vii) by striking subparagraph (G) and inserting the 
     following:
       ``(G) one-on-one mentoring programs that are designed to 
     link at-risk juveniles and juvenile offenders, particularly 
     juveniles residing in high-crime areas and juveniles 
     experiencing educational failure, with responsible adults 
     (such as law enforcement officers, adults working with local 
     businesses, and adults working with community-based 
     organizations and agencies) who are properly screened and 
     trained;'';
       (viii) in subparagraph (H) by striking ``handicapped 
     youth'' and inserting ``juveniles with disabilities'';
       (ix) by striking subparagraph (K) and inserting the 
     following:
       ``(K) boot camps for juvenile offenders;'';
       (x) by striking subparagraph (L) and inserting the 
     following:
       ``(L) community-based programs and services to work with 
     juveniles, their parents, and other family members during and 
     after incarceration in order to strengthen families so that 
     such juveniles may be retained in their homes;'';
       (xi) by striking subparagraph (M) and inserting the 
     following:
       ``(M) other activities (such as court-appointed advocates) 
     that the State determines will hold juveniles accountable for 
     their acts and decrease juvenile involvement in delinquent 
     activities;'';
       (xii) in subparagraph (O)--

       (I) in striking ``cultural'' and inserting ``other''; and
       (II) by striking the period at the end and inserting a 
     semicolon; and

       (xiii) by adding at the end the following:
       ``(P) programs that utilize multidisciplinary interagency 
     case management and information sharing, that enable the 
     juvenile justice and law enforcement agencies, schools, and 
     social service agencies to make more informed decisions 
     regarding early identification, control, supervision, and 
     treatment of juveniles who repeatedly commit violent or 
     serious delinquent acts; and
       ``(Q) programs designed to prevent and reduce hate crimes 
     committed by juveniles.'';
       (I) by striking paragraph (12) and inserting the following:
       ``(12) shall, in accordance with rules issued by the 
     Administrator, provide that--
       ``(A) juveniles who are charged with or who have committed 
     an offense that would not be criminal if committed by an 
     adult, excluding--
       ``(i) juveniles who are charged with or who have committed 
     a violation of section 922(x)(2) of title 18, United States 
     Code, or of a similar State law;
       ``(ii) juveniles who are charged with or who have committed 
     a violation of a valid court order; and
       ``(iii) juveniles who are held in accordance with the 
     Interstate Compact on Juveniles, as enacted by the State;

     shall not be placed in secure detention facilities or secure 
     correctional facilities; and
       ``(B) juveniles--
       ``(i) who are not charged with any offense; and
       ``(ii) who are--

       ``(I) aliens; or
       ``(II) alleged to be dependent, neglected, or abused;

     shall not be placed in secure detention facilities or secure 
     correctional facilities;'';
       (J) by striking paragraph (13) and inserting the following:
       ``(13) provide that--
       ``(A) juveniles alleged to be or found to be delinquent, 
     and juveniles within the purview of paragraph (11), will not 
     be detained or confined in any institution in which they have 
     prohibited physical contact or sustained oral communication 
     (as defined in subparagraphs (D) and (E)) with adults 
     incarcerated because such adults have been convicted of a 
     crime or are awaiting trial on criminal charges;
       ``(B) to the extent practicable, violent juveniles shall be 
     kept separate from nonviolent juveniles;
       ``(C) there is in effect in the State a policy that 
     requires individuals who work with both such juveniles and 
     such adults in colocated facilities have been trained and 
     certified to work with juveniles;
       ``(D) the term `prohibited physical contact'--
       ``(i) means--

       ``(I) any physical contact between a juvenile and an adult 
     inmate; and
       ``(II) proximity that provides an opportunity for physical 
     contact between a juvenile and an adult inmate; and

       ``(ii) does not include--

       ``(I) communication that is accidental or incidental;
       ``(II) sounds or noises that cannot reasonably be 
     considered to be speech; or

       ``(III) does not include supervised proximity between a 
     juvenile and an adult inmate that is brief and incidental or 
     accidental; and
       ``(E) the term `sustained oral communication' means the 
     imparting or interchange of speech by or between an adult 
     inmate and a juvenile;''.
       (K) by striking paragraph (14) and inserting the following:
       ``(14) provide that no juvenile will be detained or 
     confined in any jail or lockup for adults except--
       ``(A) juveniles who are accused of nonstatus offenses and 
     who are detained in such jail or lockup for a period not to 
     exceed 6 hours--
       ``(i) for processing or release;
       ``(ii) while awaiting transfer to a juvenile facility; or
       ``(iii) in which period such juveniles make a court 
     appearance;
       ``(B) juveniles who are accused of nonstatus offenses, who 
     are awaiting an initial court appearance that will occur 
     within 48 hours after being taken into custody (excluding 
     Saturdays, Sundays, and legal holidays), and who are detained 
     or confined in a jail or lockup--
       ``(i) in which--

       ``(I) such juveniles do not have prohibited physical 
     contact or sustained oral communication (as defined in 
     subparagraphs (D) and (E) of paragraph (13)) with adults 
     incarcerated because such adults have been convicted of a 
     crime or are awaiting trial on criminal charges;
       ``(II) to the extent practicable, violent juveniles shall 
     be kept separate from nonviolent juveniles; and
       ``(III) there is in effect in the State a policy that 
     requires individuals who work with both such juveniles and 
     such adults in co-located facilities have been trained and 
     certified to work with juveniles; and

       ``(ii) that--

       ``(I) is located outside a metropolitan statistical area 
     (as defined by the Director of the Office of Management and 
     Budget) and has no existing acceptable alternative placement 
     available; or
       ``(II) is located where conditions of distance to be 
     traveled or the lack of highway, road, or transportation do 
     not allow for court appearances within 48 hours after being 
     taken into custody (excluding Saturdays, Sundays, and legal 
     holidays) so that a brief (not to exceed an additional 48 
     hours) delay is excusable; or
       ``(III) is located where conditions of safety exist (such 
     as severe adverse, life-threatening weather conditions that 
     do not allow for reasonably safe travel), in which case the 
     time for an appearance may be delayed until 24 hours after 
     the time that such conditions allow for reasonable safe 
     travel;'';

       (L) in paragraph (15)--
       (i) by striking ``paragraph (12)(A), paragraph (13), and 
     paragraph (14)'' and inserting ``paragraphs (11), (12), and 
     (13)''; and
       (ii) by striking ``paragraph (12)(A) and paragraph (13)'' 
     and inserting ``paragraphs (11) and (12)'';
       (M) in paragraph (16) by striking ``mentally, emotionally, 
     or physically handicapping conditions'' and inserting 
     ``disability'';
       (N) by striking paragraph (19) and inserting the following:
       ``(19) provide assurances that--
       ``(A) any assistance provided under this Act will not cause 
     the displacement (including a partial displacement, such as a 
     reduction in the hours of nonovertime work, wages, or 
     employment benefits) of any currently employed employee;
       ``(B) activities assisted under this Act will not impair an 
     existing collective bargaining relationship, contract for 
     services, or collective bargaining agreement; and
       ``(C) no such activity that would be inconsistent with the 
     terms of a collective bargaining agreement shall be 
     undertaken without the written concurrence of the labor 
     organization involved;'';
       (O) by striking paragraph (23) and inserting the following:
       ``(23) address juvenile delinquency prevention efforts and 
     system improvement efforts designed to reduce, without 
     establishing or requiring numerical standards or quotas, the 
     disproportionate number of juvenile members of minority 
     groups, who come into contact with the juvenile justice 
     system;'';
       (P) by striking paragraph (24) and inserting the following:
       ``(24) provide that if a juvenile is taken into custody for 
     violating a valid court order issued for committing a status 
     offense--
       ``(A) an appropriate public agency shall be promptly 
     notified that such juvenile is held in custody for violating 
     such order;
       ``(B) not later than 24 hours after the juvenile is taken 
     into custody and during which the juvenile is so held, an 
     authorized representative of such agency shall interview, in 
     person, such juvenile; and
       ``(C) not later than 48 hours after the juvenile is taken 
     into custody and during which the juvenile is so held--
       ``(i) such representative shall submit an assessment to the 
     court that issued such order, regarding the immediate needs 
     of such juvenile; and
       ``(ii) such court shall conduct a hearing to determine--

       ``(I) whether there is reasonable cause to believe that 
     such juvenile violated such order; and

       ``(II) the appropriate placement of such juvenile pending 
     disposition of the violation alleged;'';

       (Q) in paragraph (25) by striking the period at the end and 
     inserting a semicolon;

[[Page 322]]

       (R) by redesignating paragraphs (7) through (25) as 
     paragraphs (6) through (24), respectively; and
       (S) by adding at the end the following:
       ``(25) specify a percentage (if any), not to exceed 5 
     percent, of funds received by the State under section 222 
     (other than funds made available to the state advisory group 
     under section 222(d)) that the State will reserve for 
     expenditure by the State to provide incentive grants to units 
     of general local government that reduce the caseload of 
     probation officers within such units.''; and
       (2) by striking subsection (c) and inserting the following:
       ``(c) If a State fails to comply with any applicable 
     requirement of paragraph (11), (12), (13), or (22) of 
     subsection (a) in any fiscal year beginning after September 
     30, 1999, then the amount allocated to such State for the 
     subsequent fiscal year shall be reduced by not to exceed 12.5 
     percent for each such paragraph with respect to which the 
     failure occurs, unless the Administrator determines that the 
     State--
       ``(1) has achieved substantial compliance with such 
     applicable requirements with respect to which the State was 
     not in compliance; and
       ``(2) has made, through appropriate executive or 
     legislative action, an unequivocal commitment to achieving 
     full compliance with such applicable requirements within a 
     reasonable time.''; and
       (3) in subsection (d)--
       (A) by striking ``allotment'' and inserting ``allocation''; 
     and
       (B) by striking ``subsection (a) (12)(A), (13), (14) and 
     (23)'' each place it appears and inserting ``paragraphs (11), 
     (12), (13), and (22) of subsection (a)''.

     SEC. 4259. JUVENILE DELINQUENCY PREVENTION BLOCK GRANT 
                   PROGRAM.

       Title II of the Juvenile Justice and Delinquency Prevention 
     Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting 
     after part I, as added by section 4217 of this title, the 
     following:

     ``PART J--JUVENILE DELINQUENCY PREVENTION BLOCK GRANT PROGRAM

     ``SEC. 292. AUTHORITY TO MAKE GRANTS.

       ``The Administrator may make grants to eligible States, 
     from funds allocated under section 292A, for the purpose of 
     providing financial assistance to eligible entities to carry 
     out projects designed to prevent juvenile delinquency, 
     including--
       ``(1) projects that assist in holding juveniles accountable 
     for their actions, including the use of neighborhood courts 
     or panels that increase victim satisfaction and require 
     juveniles to make restitution, or perform community service, 
     for the damage caused by their delinquent acts;
       ``(2) projects that provide treatment to juvenile offenders 
     who are victims of child abuse or neglect, and to their 
     families, in order to reduce the likelihood that such 
     juvenile offenders will commit subsequent violations of law;
       ``(3) educational projects or supportive services for 
     delinquent or other juveniles--
       ``(A) to encourage juveniles to remain in elementary and 
     secondary schools or in alternative learning situations in 
     educational settings;
       ``(B) to provide services to assist juveniles in making the 
     transition to the world of work and self-sufficiency;
       ``(C) to assist in identifying learning difficulties 
     (including learning disabilities);
       ``(D) to prevent unwarranted and arbitrary suspensions and 
     expulsions;
       ``(E) to encourage new approaches and techniques with 
     respect to the prevention of school violence and vandalism;
       ``(F) which assist law enforcement personnel and juvenile 
     justice personnel to more effectively recognize and provide 
     for learning-disabled and other disabled juveniles; or
       ``(G) which develop locally coordinated policies and 
     programs among education, juvenile justice, and social 
     service agencies;
       ``(4) projects which expand the use of probation officers--
       ``(A) particularly for the purpose of permitting nonviolent 
     juvenile offenders (including status offenders) to remain at 
     home with their families as an alternative to incarceration 
     or institutionalization; and
       ``(B) to ensure that juveniles follow the terms of their 
     probation;
       ``(5) one-on-one mentoring projects that are designed to 
     link at-risk juveniles and juvenile offenders who did not 
     commit serious crime, particularly juveniles residing in 
     high-crime areas and juveniles experiencing educational 
     failure, with responsible adults (such as law enforcement 
     officers, adults working with local businesses, and adults 
     working for community-based organizations and agencies) who 
     are properly screened and trained;
       ``(6) community-based projects and services (including 
     literacy and social service programs) which work with 
     juvenile offenders, including those from families with 
     limited English-speaking proficiency, their parents, their 
     siblings, and other family members during and after 
     incarceration of the juvenile offenders, in order to 
     strengthen families, to allow juvenile offenders to be 
     retained in their homes, and to prevent the involvement of 
     other juvenile family members in delinquent activities;
       ``(7) projects designed to provide for the treatment of 
     juveniles for dependence on or abuse of alcohol, drugs, or 
     other harmful substances;
       ``(8) projects which leverage funds to provide scholarships 
     for postsecondary education and training for low-income 
     juveniles who reside in neighborhoods with high rates of 
     poverty, violence, and drug-related crimes;
       ``(9) projects which provide for an initial intake 
     screening of each juvenile taken into custody--
       ``(A) to determine the likelihood that such juvenile will 
     commit a subsequent offense; and
       ``(B) to provide appropriate interventions, including 
     mental health services and substance abuse treatment, to 
     prevent such juvenile from committing subsequent offenses;
       ``(10) projects (including school- or community-based 
     projects) that are designed to prevent, and reduce the rate 
     of, the participation of juveniles in gangs that commit 
     crimes (particularly violent crimes), that unlawfully use 
     firearms and other weapons, or that unlawfully traffic in 
     drugs and that involve, to the extent practicable, families 
     and other community members (including law enforcement 
     personnel and members of the business community) in the 
     activities conducted under such projects;
       ``(11) comprehensive juvenile justice and delinquency 
     prevention projects that meet the needs of juveniles through 
     the collaboration of the many local service systems juveniles 
     encounter, including schools, courts, law enforcement 
     agencies, child protection agencies, mental health agencies, 
     welfare services, health care agencies, and private nonprofit 
     agencies offering services to juveniles;
       ``(12) to develop, implement, and support, in conjunction 
     with public and private agencies, organizations, and 
     businesses, projects for the employment of juveniles and 
     referral to job training programs (including referral to 
     Federal job training programs);
       ``(13) delinquency prevention activities which involve 
     youth clubs, sports, recreation and parks, peer counseling 
     and teaching, the arts, leadership development, community 
     service, volunteer service, before- and after-school 
     programs, violence prevention activities, mediation skills 
     training, camping, environmental education, ethnic or 
     cultural enrichment, tutoring, and academic enrichment;
       ``(14) family strengthening activities, such as mutual 
     support groups for parents and their children;
       ``(15) programs that encourage social competencies, 
     problem-solving skills, and communication skills, youth 
     leadership, and civic involvement;
       ``(16) programs that focus on the needs of young girls at-
     risk of delinquency or status offenses; and
       ``(17) other activities that are likely to prevent juvenile 
     delinquency.

     ``SEC. 292A. ALLOCATION.

       ``Funds appropriated to carry out this part shall be 
     allocated among eligible States as follows:
       ``(1) 0.75 percent shall be allocated to each State.
       ``(2) Of the total amount remaining after the allocation 
     under paragraph (1), there shall be allocated to each State 
     as follows:
       ``(A) 50 percent of such amount shall be allocated 
     proportionately based on the population that is less than 18 
     years of age in the eligible States.
       ``(B) 50 percent of such amount shall be allocated 
     proportionately based on the annual average number of arrests 
     for serious crimes committed in the eligible States by 
     juveniles during the then most recently completed period of 3 
     consecutive calendar years for which sufficient information 
     is available to the Administrator.

     ``SEC. 292B. ELIGIBILITY OF STATES.

       ``(a) Application.--To be eligible to receive a grant under 
     section 292, a State shall submit to the Administrator an 
     application that contains the following:
       ``(1) An assurance that the State will use--
       ``(A) not more than 5 percent of such grant, in the 
     aggregate, for--
       ``(i) the costs incurred by the State to carry out this 
     part; and
       ``(ii) to evaluate, and provide technical assistance 
     relating to, projects and activities carried out with funds 
     provided under this part; and
       ``(B) the remainder of such grant to make grants under 
     section 292C.
       ``(2) An assurance that, and a detailed description of how, 
     such grant will support, and not supplant State and local 
     efforts to prevent juvenile delinquency.
       ``(3) An assurance that such application was prepared after 
     consultation with and participation by community-based 
     organizations, and organizations in the local juvenile 
     justice system, that carry out programs, projects, or 
     activities to prevent juvenile delinquency.
       ``(4) An assurance that each eligible entity described in 
     section 292C(a) that receives an initial grant under section 
     292 to carry out a project or activity shall also receive an 
     assurance from the State that such entity will receive from 
     the State, for the subsequent fiscal year to carry out such 
     project or activity, a grant under such section in an amount

[[Page 323]]

     that is proportional, based on such initial grant and on the 
     amount of the grant received under section 292 by the State 
     for such subsequent fiscal year, but that does not exceed the 
     amount specified for such subsequent fiscal year in such 
     application as approved by the State.
       ``(5) Such other information and assurances as the 
     Administrator may reasonably require by rule.
       ``(b) Approval of Applications.--
       ``(1) Approval required.--Subject to paragraph (2), the 
     Administrator shall approve an application, and amendments to 
     such application submitted in subsequent fiscal years, that 
     satisfy the requirements of subsection (a).
       ``(2) Limitation.--The Administrator may not approve such 
     application (including amendments to such application) for a 
     fiscal year unless--
       ``(A)(i) the State submitted a plan under section 223 for 
     such fiscal year; and
       ``(ii) such plan is approved by the Administrator for such 
     fiscal year; or
       ``(B) the Administrator waives the application of 
     subparagraph (A) to such State for such fiscal year, after 
     finding good cause for such a waiver.

     ``SEC. 292C. GRANTS FOR LOCAL PROJECTS.

       ``(a) Selection From Among Applications.--
       ``(1) In general.--Using a grant received under section 
     292, a State may make grants to eligible entities whose 
     applications are received by the State in accordance with 
     subsection (b) to carry out projects and activities described 
     in section 292.
       ``(2) For purposes of making grants under this section, the 
     State shall give special consideration to eligible entities 
     that--
       ``(A) propose to carry out such projects in geographical 
     areas in which there is--
       ``(i) a disproportionately high level of serious crime 
     committed by juveniles; or
       ``(ii) a recent rapid increase in the number of nonstatus 
     offenses committed by juveniles;
       ``(B)(i) agreed to carry out such projects or activities 
     that are multidisciplinary and involve 2 or more eligible 
     entities; or
       ``(ii) represent communities that have a comprehensive plan 
     designed to identify at-risk juveniles and to prevent or 
     reduce the rate of juvenile delinquency, and that involve 
     other entities operated by individuals who have a 
     demonstrated history of involvement in activities designed to 
     prevent juvenile delinquency; and
       ``(C) the amount of resources (in cash or in kind) such 
     entities will provide to carry out such projects and 
     activities.
       ``(b) Receipt of Applications.--
       ``(1) In general.--Subject to paragraph (2), a unit of 
     general local government shall submit to the State 
     simultaneously all applications that are--
       ``(A) timely received by such unit from eligible entities; 
     and
       ``(B) determined by such unit to be consistent with a 
     current plan formulated by such unit for the purpose of 
     preventing, and reducing the rate of, juvenile delinquency in 
     the geographical area under the jurisdiction of such unit.
       ``(2) Direct submission to state.--If an application 
     submitted to such unit by an eligible entity satisfies the 
     requirements specified in subparagraphs (A) and (B) of 
     paragraph (1), such entity may submit such application 
     directly to the State.

     ``SEC. 292D. ELIGIBILITY OF ENTITIES.

       ``(a) Eligibility.--Subject to subsections (b) and except 
     as provided in subsection (c), to be eligible to receive a 
     grant under section 292C, a community-based organization, 
     local juvenile justice system officials (including 
     prosecutors, police officers, judges, probation officers, 
     parole officers, and public defenders), local education 
     authority (as defined in section 14101 of the Elementary and 
     Secondary Education Act of 1965 and including a school within 
     such authority), nonprofit private organization, unit of 
     general local government, or social service provider, and or 
     other entity with a demonstrated history of involvement in 
     the prevention of juvenile delinquency, shall submit to a 
     unit of general local government an application that contains 
     the following:
       ``(1) An assurance that such applicant will use such grant, 
     and each such grant received for the subsequent fiscal year, 
     to carry out throughout a 2-year period a project or activity 
     described in reasonable detail, and of a kind described in 1 
     or more of paragraphs (1) through (14) of section 292 as 
     specified in, such application.
       ``(2) A statement of the particular goals such project or 
     activity is designed to achieve, and the methods such entity 
     will use to achieve, and assess the achievement of, each of 
     such goals.
       ``(3) A statement identifying the research (if any) such 
     entity relied on in preparing such application.
       ``(b) Review and Submission of Applications.--Except as 
     provided in subsection (c), an entity shall not be eligible 
     to receive a grant under section 292C unless--
       ``(1) such entity submits to a unit of general local 
     government an application that--
       ``(A) satisfies the requirements specified in subsection 
     (a); and
       ``(B) describes a project or activity to be carried out in 
     the geographical area under the jurisdiction of such unit; 
     and
       ``(2) such unit determines that such project or activity is 
     consistent with a current plan formulated by such unit for 
     the purpose of preventing, and reducing the rate of, juvenile 
     delinquency in the geographical area under the jurisdiction 
     of such unit.
       ``(c) Limitation.--If an entity that receives a grant under 
     section 292C to carry out a project or activity for a 2-year 
     period, and receives technical assistance from the State or 
     the Administrator after requesting such technical assistance 
     (if any), fails to demonstrate, before the expiration of such 
     2-year period, that such project or such activity has 
     achieved substantial success in achieving the goals specified 
     in the application submitted by such entity to receive such 
     grants, then such entity shall not be eligible to receive any 
     subsequent grant under such section to continue to carry out 
     such project or activity.''.

     SEC. 4260. RESEARCH; EVALUATION; TECHNICAL ASSISTANCE; 
                   TRAINING.

       Title II of the Juvenile Justice and Delinquency Prevention 
     Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting 
     after part J, as added by section 4259 of this title, the 
     following:

     ``PART K--RESEARCH; EVALUATION; TECHNICAL ASSISTANCE; TRAINING

     ``SEC. 293. RESEARCH AND EVALUATION; STATISTICAL ANALYSES; 
                   INFORMATION DISSEMINATION.

       ``(a) Research and Evaluation.--(1) The Administrator may--
       ``(A) plan and identify, after consultation with the 
     Director of the National Institute of Justice, the purposes 
     and goals of all agreements carried out with funds provided 
     under this subsection; and
       ``(B) make agreements with the National Institute of 
     Justice or, subject to the approval of the Assistant Attorney 
     General for the Office of Justice Programs, with another 
     Federal agency authorized by law to conduct research or 
     evaluation in juvenile justice matters, for the purpose of 
     providing research and evaluation relating to--
       ``(i) the prevention, reduction, and control of juvenile 
     delinquency and serious crime committed by juveniles;
       ``(ii) the link between juvenile delinquency and the 
     incarceration of members of the families of juveniles;
       ``(iii) successful efforts to prevent first-time minor 
     offenders from committing subsequent involvement in serious 
     crime;
       ``(iv) successful efforts to prevent recidivism;
       ``(v) the juvenile justice system;
       ``(vi) juvenile violence; and
       ``(vii) other purposes consistent with the purposes of this 
     title and title I.
       ``(2) The Administrator shall ensure that an equitable 
     amount of funds available to carry out paragraph (1)(B) is 
     used for research and evaluation relating to the prevention 
     of juvenile delinquency.
       ``(b) Statistical Analyses.--The Administrator may--
       ``(1) plan and identify, after consultation with the 
     Director of the Bureau of Justice Statistics, the purposes 
     and goals of all agreements carried out with funds provided 
     under this subsection; and
       ``(2) make agreements with the Bureau of Justice 
     Statistics, or subject to the approval of the Assistant 
     Attorney General for the Office of Justice Programs, with 
     another Federal agency authorized by law to undertake 
     statistical work in juvenile justice matters, for the purpose 
     of providing for the collection, analysis, and dissemination 
     of statistical data and information relating to juvenile 
     delinquency and serious crimes committed by juveniles, to the 
     juvenile justice system, to juvenile violence, and to other 
     purposes consistent with the purposes of this title and title 
     I.
       ``(c) Competitive Selection Process.--The Administrator 
     shall use a competitive process, established by rule by the 
     Administrator, to carry out subsections (a) and (b).
       ``(d) Implementation of Agreements.--A Federal agency that 
     makes an agreement under subsections (a)(1)(B) and (b)(2) 
     with the Administrator may carry out such agreement directly 
     or by making grants to or contracts with public and private 
     agencies, institutions, and organizations.
       ``(e) Information Dissemination.--The Administrator may--
       ``(1) review reports and data relating to the juvenile 
     justice system in the United States and in foreign nations 
     (as appropriate), collect data and information from studies 
     and research into all aspects of juvenile delinquency 
     (including the causes, prevention, and treatment of juvenile 
     delinquency) and serious crimes committed by juveniles;
       ``(2) establish and operate, directly or by contract, a 
     clearinghouse and information center for the preparation, 
     publication, and dissemination of information relating to 
     juvenile delinquency, including State and local prevention 
     and treatment programs, plans, resources, and training and 
     technical assistance programs; and
       ``(3) make grants and contracts with public and private 
     agencies, institutions, and organizations, for the purpose of 
     disseminating information to representatives and personnel of 
     public and private agencies, including practitioners in 
     juvenile justice, law enforcement, the courts, corrections, 
     schools, and

[[Page 324]]

     related services, in the establishment, implementation, and 
     operation of projects and activities for which financial 
     assistance is provided under this title.

     ``SEC. 293A. TRAINING AND TECHNICAL ASSISTANCE.

       ``(a) Training.--The Administrator may--
       ``(1) develop and carry out projects for the purpose of 
     training representatives and personnel of public and private 
     agencies, including practitioners in juvenile justice, law 
     enforcement, courts, corrections, schools, and related 
     services, to carry out the purposes specified in section 102; 
     and
       ``(2) make grants to and contracts with public and private 
     agencies, institutions, and organizations for the purpose of 
     training representatives and personnel of public and private 
     agencies, including practitioners in juvenile justice, law 
     enforcement, courts, corrections, schools, and related 
     services, to carry out the purposes specified in section 102.
       ``(b) Technical Assistance.--The Administrator may--
       ``(1) develop and implement projects for the purpose of 
     providing technical assistance to representatives and 
     personnel of public and private agencies and organizations, 
     including practitioners in juvenile justice, law enforcement, 
     courts, corrections, schools, and related services, in the 
     establishment, implementation, and operation of programs, 
     projects, and activities for which financial assistance is 
     provided under this title; and
       ``(2) make grants to and contracts with public and private 
     agencies, institutions, and organizations, for the purpose of 
     providing technical assistance to representatives and 
     personnel of public and private agencies, including 
     practitioners in juvenile justice, law enforcement, courts, 
     corrections, schools, and related services, in the 
     establishment, implementation, and operation of programs, 
     projects, and activities for which financial assistance is 
     provided under this title.''.

     SEC. 4261. DEMONSTRATION PROJECTS.

       Title II of the Juvenile Justice and Delinquency Prevention 
     Act of 1974 (42 U.S.C. 5611 et seq.) is amended by inserting 
     after part K, as added by section 4260 of this title, the 
     following:

    ``PART L--DEVELOPING, TESTING, AND DEMONSTRATING PROMISING NEW 
                        INITIATIVES AND PROGRAMS

     ``SEC. 294. GRANTS AND PROJECTS.

       ``(a) Authority To Make Grants.--The Administrator may make 
     grants to and contracts with States, units of general local 
     government, Indian tribal governments, public and private 
     agencies, organizations, and individuals, or combinations 
     thereof, to carry out projects for the development, testing, 
     and demonstration of promising initiatives and programs for 
     the prevention, control, or reduction of juvenile 
     delinquency. The Administrator shall ensure that, to the 
     extent reasonable and practicable, such grants are made to 
     achieve an equitable geographical distribution of such 
     projects throughout the United States.
       ``(b) Use of Grants.--A grant made under subsection (a) may 
     be used to pay all or part of the cost of the project for 
     which such grant is made.

     ``SEC. 294A. GRANTS FOR TECHNICAL ASSISTANCE.

       ``The Administrator may make grants to and contracts with 
     public and private agencies, organizations, and individuals 
     to provide technical assistance to States, units of general 
     local government, Indian tribal governments, local private 
     entities or agencies, or any combination thereof, to carry 
     out the projects for which grants are made under section 261.

     ``SEC. 294B. ELIGIBILITY.

       ``To be eligible to receive a grant made under this part, a 
     public or private agency, Indian tribal government, 
     organization, institution, individual, or combination thereof 
     shall submit an application to the Administrator at such 
     time, in such form, and containing such information as the 
     Administrator may reasonable require by rule.

     ``SEC. 294C. REPORTS.

       ``Recipients of grants made under this part shall submit to 
     the Administrator such reports as may be reasonably requested 
     by the Administrator to describe progress achieved in 
     carrying the projects for which such grants are made.''.

     SEC. 4262. AUTHORIZATION OF APPROPRIATIONS.

       Section 299 of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5671) is amended--
       (1) by striking subsection (e); and
       (2) by striking subsections (a) and (b), and inserting the 
     following:
       ``(a) Authorization of Appropriations for Title II.--
       ``(1) In general.--There are authorized to be appropriated 
     to carry out this title such sums as may be appropriate for 
     fiscal years 2002, 2003, and 2004.
       ``(2) Allocation.--Of the amount made available for each 
     fiscal year to carry out this title not more than 5 percent 
     shall be available to carry out part A.

     SEC. 4263. ADMINISTRATIVE AUTHORITY.

       Section 299A(d) of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5672) is amended by 
     striking ``as are consistent with the purpose of this Act'' 
     and inserting ``only to the extent necessary to ensure that 
     there is compliance with the specific requirements of this 
     title or to respond to requests for clarification and 
     guidance relating to such compliance''.

     SEC. 4264. USE OF FUNDS.

       Section 299C of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5674) is amended--
       (1) in subsection (a)--
       (A) by striking ``may be used for'';
       (B) in paragraph (1), by inserting ``may be used for'' 
     after ``(1)''; and
       (C) by striking paragraph (2) and inserting the following:
       ``(2) may not be used for the cost of construction of any 
     short- or long-term facilities for adult or juvenile 
     offenders, except not more than 15 percent of the funds 
     received under this title by a State for a fiscal year may be 
     used for the purpose of renovating or replacing juvenile 
     facilities.'';
       (2) by striking subsection (b); and
       (3) by redesignating subsection (c) as subsection (b).

     SEC. 4265. LIMITATION ON USE OF FUNDS.

       Part M of title II of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as 
     redesignated by section 4217 of this title, is amended by 
     adding at the end the following:

     ``SEC. 299F. LIMITATION ON USE OF FUNDS.

       ``None of the funds made available to carry out this title 
     may be used to advocate for, or support, the unsecured 
     release of juveniles who are charged with a violent crime.''.

     SEC. 4266. RULES OF CONSTRUCTION.

       Part M of title II of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended 
     by section 4265 of this title, is amended by adding at the 
     end the following:

     ``SEC. 299G. RULES OF CONSTRUCTION.

       ``Nothing in this title or title I may be construed--
       ``(1) to prevent financial assistance from being awarded 
     through grants under this title to any otherwise eligible 
     organization; or
       ``(2) to modify or affect any Federal or State law relating 
     to collective bargaining rights of employees.''.

     SEC. 4267. LEASING SURPLUS FEDERAL PROPERTY.

       Part M of title II of the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended 
     by section 4266 of this title, is amended by adding at the 
     end the following:

     ``SEC. 299H. LEASING SURPLUS FEDERAL PROPERTY.

       ``The Administrator may receive surplus Federal property 
     (including facilities) and may lease such property to States 
     and units of general local government for use in or as 
     facilities for juvenile offenders, or for use in or as 
     facilities for delinquency prevention and treatment 
     activities.''.

     SEC. 4268. ISSUANCE OF RULES.

       Part M of title II or the Juvenile Justice and Delinquency 
     Prevention Act of 1974 (42 U.S.C. 5671 et seq.), as amended 
     by section 4267 of this title, is amended by adding at the 
     end the following:

     ``SEC. 299I. ISSUANCE OF RULES.

       ``The Administrator shall issue rules to carry out this 
     title, including rules that establish procedures and methods 
     for making grants and contracts, and distributing funds 
     available, to carry out this title.''.

     SEC. 4269. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Technical Amendments.--The Juvenile Justice and 
     Delinquency Prevention Act of 1974 (42 U.S.C. 5601 et seq.) 
     is amended--
       (1) in section 202(b), by striking ``prescribed for GS-18 
     of the General Schedule by section 5332'' and inserting 
     ``payable under section 5376'';
       (2) in section 221(b)(2), by striking the last sentence; 
     and
       (3) in section 299D, by striking subsection (d).
       (b) Conforming Amendments.--
       (1) Title 5.--Section 5315 of title 5, United States Code, 
     is amended by striking ``Office of Juvenile Justice and 
     Delinquency Prevention'' and inserting ``Office of Juvenile 
     Crime Control and Delinquency Prevention''.
       (2) Title 18.--Section 4351(b) of title 18, United States 
     Code, is amended by striking ``Office of Juvenile Justice and 
     Delinquency Prevention'' and inserting ``Office of Juvenile 
     Crime Control and Delinquency Prevention''.
       (3) Title 39.--Subsections (a)(1) and (c) of section 3220 
     of title 39, United States Code, is amended by striking 
     ``Office of Juvenile Justice and Delinquency Prevention'' 
     each place it appears and inserting ``Office of Juvenile 
     Crime Control and Delinquency Prevention''.
       (4) Social security act.--Section 463(f) of the Social 
     Security Act (42 U.S.C. 663(f)) is amended by striking 
     ``Office of Juvenile Justice and Delinquency Prevention'' and 
     inserting ``Office of Juvenile Crime Control and Delinquency 
     Prevention''.
       (5) Omnibus crime control and safe streets act of 1968.--
     Sections 801(a), 804, 805, and 813 of title I of the Omnibus 
     Crime Control and Safe Streets Act of 1968 (42 U.S.C. 
     3712(a), 3782, 3785, 3786, 3789i) are each amended by 
     striking ``Office of Juvenile Justice and Delinquency 
     Prevention'' each place it appears and inserting ``Office of 
     Juvenile Crime Control and Delinquency Prevention''.

[[Page 325]]

       (6) Victims of child abuse act of 1990.--The Victims of 
     Child Abuse Act of 1990 (42 U.S.C. 13001 et seq.) is 
     amended--
       (A) in section 214(b)(1), by striking ``262, 293, and 296 
     of subpart II of title II'' and inserting ``299B and 299E'';
       (B) in section 214A(c)(1), by striking ``262, 293, and 296 
     of subpart II of title II'' and inserting ``299B and 299E'';
       (C) in sections 217 and 222, by striking ``Office of 
     Juvenile Justice and Delinquency Prevention'' each place it 
     appears and inserting ``Office of Juvenile Crime Control and 
     Delinquency Prevention''; and
       (D) in section 223(c), by striking ``section 262, 293, and 
     296'' and inserting ``sections 262, 299B, and 299E''.
       (7) Missing children's assistance.--The Missing Children's 
     Assistance Act (42 U.S.C. 5771 et seq.) is amended--
       (A) in section 403(2), by striking ``Justice and 
     Delinquency Prevention'' and inserting ``Crime Control and 
     Delinquency Prevention''; and
       (B) in subsections (a)(5)(E) and (b)(1)(B) of section 404, 
     by striking ``section 313'' and inserting ``section 331''.
       (8) Crime control act of 1990.--The Crime Control Act of 
     1990 (42 U.S.C. 13001 et seq.) is amended--
       (A) in section 217(c)(1), by striking ``sections 262, 293, 
     and 296 of subpart II of title II'' and inserting ``sections 
     299B and 299E''; and
       (B) in section 223(c), by striking ``section 262, 293, and 
     296 of title II'' and inserting ``sections 299B and 299E''.

     SEC. 4270. REFERENCES.

       In any Federal law (excluding this Act and the Acts amended 
     by this Act), Executive order, rule, regulation, order, 
     delegation of authority, grant, contract, suit, or document--
       (1) a reference to the Office of Juvenile Justice and 
     Delinquency Prevention shall be deemed to include a reference 
     to the Office of Juvenile Crime Control and Delinquency 
     Prevention, and
       (2) a reference to the National Institute for Juvenile 
     Justice and Delinquency Prevention shall be deemed to include 
     a reference to Office of Juvenile Crime Control and 
     Delinquency Prevention.

             PART 6--LOCAL GUN VIOLENCE PREVENTION PROGRAMS

     SEC. 4271. COMPETITIVE GRANTS FOR CHILDREN'S FIREARM SAFETY 
                   EDUCATION.

       (a) Purposes.--The purposes of this section are--
       (1) to award grants to assist local educational agencies, 
     in consultation with community groups and law enforcement 
     agencies, to educate children about preventing gun violence; 
     and
       (2) to assist communities in developing partnerships 
     between public schools, community organizations, law 
     enforcement, and parents in educating children about 
     preventing gun violence.
       (b) Definitions.--In this section:
       (1) Local educational agency.--The term ``local educational 
     agency'' has the same meaning given such term in section 
     14101 of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 8801).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (3) State.--The term ``State'' means each of the 50 States, 
     the District of Columbia, the Commonwealth of Puerto Rico, 
     Guam, American Samoa, the Commonwealth of the Northern 
     Mariana Islands, and the United States Virgin Islands.
       (c) Allocation of Competitive Grants.--
       (1) Grants by the secretary.--For any fiscal year in which 
     the amount appropriated to carry out this section does not 
     equal or exceed $50,000,000, the Secretary of Education may 
     award competitive grants described under subsection (d).
       (2) Grants by the states.--For any fiscal year in which the 
     amount appropriated to carry out this section exceeds 
     $50,000,000, the Secretary shall make allotments to State 
     educational agencies pursuant to paragraph (3) to award 
     competitive grants described in subsection (d).
       (3) Formula.--Except as provided in paragraph (4), funds 
     appropriated to carry out this section shall be allocated 
     among the States as follows:
       (A) Minors.--75 percent of such amount shall be allocated 
     proportionately based upon the population that is less than 
     18 years of age in the State.
       (B) Incarcerated minors.--25 percent of such amount shall 
     be allocated proportionately based upon the population that 
     is less than 18 years of age in the State that is 
     incarcerated.
       (4) Minimum allotment.--Of the amounts appropriated to 
     carry out this section, 0.50 percent shall be allocated to 
     each State.
       (d) Authorization of Competitive Grants.--The Secretary or 
     the State educational agency, as the case may be, may award 
     grants to eligible local educational agencies for the 
     purposes of educating children about preventing gun violence, 
     in accordance with the following:
       (1) Assurances.--
       (A) Amount of funds distributed.--The Secretary or the 
     State educational agency, as the case may be, shall ensure 
     that not less than 90 percent of the funds allotted under 
     this section are distributed to local educational agencies.
       (B) Distribution.--In awarding the grants, the Secretary or 
     the State educational agency, as the case may be, shall 
     ensure, to the maximum extent practicable--
       (i) an equitable geographic distribution of grant awards;
       (ii) an equitable distribution of grant awards among 
     programs that serve public elementary school students, public 
     secondary school students, and a combination of both; and
       (iii) that urban, rural and suburban areas are represented 
     within the grants that are awarded.
       (2) Priority.--In awarding grants under this section, the 
     Secretary or the State educational agency, as the case may 
     be, shall give priority to a local educational agency that--
       (A) coordinates with other Federal, State, and local 
     programs that educate children about personal health, safety, 
     and responsibility, including programs carried out under the 
     Safe and Drug-Free Schools and Communities Act of 1994 (20 
     U.S.C. 7101 et seq.);
       (B) serves a population with a high incidence of students 
     found in possession of a weapon on school property or 
     students suspended or expelled for bringing a weapon onto 
     school grounds or engaging in violent behavior on school 
     grounds; and
       (C) forms a partnership that includes not less than 1 local 
     educational agency working in consultation with not less than 
     1 public or private nonprofit agency or organization with 
     experience in violence prevention or 1 local law enforcement 
     agency.
       (3) Peer review; consultation.--
       (A) In general.--
       (i) Peer review by panel.--Before grants are awarded, the 
     Secretary shall submit grant applications to a peer review 
     panel for evaluation.
       (ii) Composition of panel.--The panel shall be composed of 
     not less than 1 representative from a local educational 
     agency, State educational agency, a local law enforcement 
     agency, and a public or private nonprofit organization with 
     experience in violence prevention.
       (B) Consultation.--The Secretary shall submit grant 
     applications to the Attorney General for consultation.
       (e) Eligible Grant Recipients.--
       (1) In general.--Except as provided in paragraph (2), an 
     eligible grant recipient is a local educational agency that 
     may work in partnership with 1 or more of the following:
       (A) A public or private nonprofit agency or organization 
     with experience in violence prevention.
       (B) A local law enforcement agency.
       (C) An institution of higher education.
       (2) Exception.--A State educational agency may, with the 
     approval of a local educational agency, submit an application 
     on behalf of such local educational agency or a consortium of 
     such agencies.
       (f) Local Applications; Reports.--
       (1) Applications.--Each local educational agency that 
     wishes to receive a grant under this section shall submit an 
     application to the Secretary and the State educational agency 
     that includes--


       (A) a description of the proposed activities to be funded 
     by the grant and how each activity will further the goal of 
     educating children about preventing gun violence;
       (B) how the program will be coordinated with other programs 
     that educate children about personal health, safety, and 
     responsibility, including programs carried out under the Safe 
     and Drug-Free Schools and Communities Act of 1994 (20 U.S.C. 
     7101 et seq.); and
       (C) the age and number of children that the programs will 
     serve.
       (2) Reports.--Each local educational agency that receives a 
     grant under this section shall submit a report to the 
     Secretary and to the State educational agency not later than 
     18 months after the grant is awarded and submit an additional 
     report to the Secretary and to the State not later than 36 
     months after the grant is awarded. Each report shall include 
     information regarding--
       (A) the activities conducted to educate children about gun 
     violence;
       (B) how the program will continue to educate children about 
     gun violence in the future; and
       (C) how the grant is being coordinated with other Federal, 
     State, and local programs that educate children about 
     personal health, safety, and responsibility, including 
     programs carried out under the Safe and Drug-Free Schools and 
     Communities Act of 1994 (20 U.S.C. 7101 et seq.).
       (g) Authorized Activities.--
       (1) Required activities.--Grants authorized under 
     subsection (d) shall be used for the following activities:
       (A) Supporting existing programs that educate children 
     about personal health, safety, and responsibility, including 
     programs carried out under the Safe and Drug-Free Schools and 
     Communities Act of 1994 (20 U.S.C. 7101 et seq.).
       (B) Educating children about the effects of gun violence.
       (C) Educating children to identify dangerous situations in 
     which guns are involved and how to avoid and prevent such 
     situations.
       (D) Educating children how to identify threats and other 
     indications that their

[[Page 326]]

     peers are in possession of a gun and may use a gun, and what 
     steps they can take in such situations.
       (E) Developing programs to give children access to adults 
     to whom they can report, in a confidential manner, any 
     problems relating to guns.
       (2) Permissible activities.--Grants authorized under 
     subsection (d) may be used for the following:
       (A) Encouraging schoolwide programs and partnerships that 
     involve teachers, students, parents, administrators, other 
     staff, and members of the community in reducing gun incidents 
     in public elementary and secondary schools.
       (B) Establishing programs that assist parents in helping 
     educate their children about firearm safety and the 
     prevention of gun violence.
       (C) Providing ongoing professional development for public 
     school staff and administrators to identify the causes and 
     effects of gun violence and risk factors and student behavior 
     that may result in gun violence, including training sessions 
     to review and update school crisis response plans and school 
     policies for preventing the presence of guns on school 
     grounds and facilities.
       (D) Providing technical assistance for school psychologists 
     and counselors to provide timely counseling and evaluations, 
     in accordance with State and local laws, of students who 
     possess a weapon on school grounds.
       (E) Improving security on public elementary and secondary 
     school campuses to prevent outside persons from entering 
     school grounds with firearms.
       (F) Assisting public schools and communities in developing 
     crisis response plans when firearms are found on school 
     campuses and when gun-related incidents occur.
       (h) State Applications; Activities and Reports.--
       (1) State applications.--
       (A) Contents.--Each State desiring to receive funds under 
     this section shall, through its State educational agency, 
     submit an application to the Secretary of Education at such 
     time and in such manner as the Secretary shall require. Such 
     application shall describe--
       (i) the manner in which funds under this section for State 
     activities and competitive grants will be used to fulfill the 
     purposes of this section;
       (ii) the manner in which the activities and projects 
     supported by this section will be coordinated with other 
     State and Federal education, law enforcement, and juvenile 
     justice programs, including the Safe and Drug-Free Schools 
     and Communities Act of 1994 (20 U.S.C. 7101 et seq.);
       (iii) the manner in which States will ensure an equitable 
     geographic distribution of grant awards; and
       (iv) the criteria which will be used to determine the 
     impact and effectiveness of the funds used pursuant to this 
     section.
       (B) Form.--A State educational agency may submit an 
     application to receive a grant under this section under 
     paragraph (1) or as an amendment to the application the State 
     educational agency submits under the Safe and Drug-Free 
     Schools and Communities Act of 1994 (20 U.S.C. 7101 et seq.).
       (2) State activities.--Of appropriated amounts allocated to 
     the States under subsection (c)(2), the State educational 
     agency may reserve not more than 10 percent for activities to 
     further the goals of this section, including--
       (A) providing technical assistance to eligible grant 
     recipients in the State;
       (B) performing ongoing research into the causes of gun 
     violence among children and methods to prevent gun violence 
     among children; and
       (C) providing ongoing professional development for public 
     school staff and administrators to identify the causes and 
     indications of gun violence.
       (3) State reports.--Each State receiving an allotment under 
     this section shall submit a report to the Secretary and to 
     the Committees on Health, Education, Labor, and Pensions and 
     the Judiciary of the Senate and the Committees on Education 
     and the Workforce and the Judiciary of the House of 
     Representatives, not later than 12 months after receipt of 
     the grant award and shall submit an additional report to 
     those committees not later than 36 months after receipt of 
     the grant award. Each report shall include information 
     regarding--
       (A) the progress of local educational agencies that 
     received a grant award under this section in the State in 
     educating children about firearms;
       (B) the progress of State activities under paragraph (1) to 
     advance the goals of this section; and
       (C) how the State is coordinating funds allocated under 
     this section with other State and Federal education, law 
     enforcement, and juvenile justice programs, including the 
     Safe and Drug-Free Schools and Communities Act of 1994 (20 
     U.S.C. 7101 et seq.).
       (i) Supplement Not Supplant.--A State or local educational 
     agency shall use funds received under this section only to 
     supplement the amount of funds that would, in the absence of 
     such Federal funds, be made available from non-Federal 
     sources for reducing gun violence among children and 
     educating children about firearms, and not to supplant such 
     funds.
       (j) Displacement.--A local educational agency that receives 
     a grant award under this section shall ensure that persons 
     hired to carry out the activities under this section do not 
     displace persons already employed.
       (k) Home Schools.--Nothing in this section shall be 
     construed to affect home schools.
       (l) Authorization of Appropriations.--There are authorized 
     to be appropriated for this section $60,000,000 for each of 
     fiscal years 2002, 2003, and 2004.

     SEC. 4272. DISSEMINATION OF BEST PRACTICES VIA THE INTERNET.

       (a) Model Dissemination.--The Secretary of Education shall 
     include on the Internet site of the Department of Education a 
     description of programs that receive grants under section 
     4271.
       (b) Grant Program Notification.--The Secretary shall 
     publicize the competitive grant program through its Internet 
     site, publications, and public service announcements.

     SEC. 4273. GRANT PRIORITY FOR TRACING OF GUNS USED IN CRIMES 
                   BY JUVENILES.

       Section 517 of the Omnibus Crime Control and Safe Streets 
     Act of 1968 (42 U.S.C. 3763) is amended by adding at the end 
     the following:
       ``(c) Priority.--In awarding discretionary grants under 
     section 511 to public agencies to undertake law enforcement 
     initiatives relating to gangs, or relating to juveniles who 
     are involved or at risk of involvement in gangs, the Director 
     shall give priority to a public agency that includes in its 
     application a description of strategies or programs of that 
     public agency (either in effect or proposed) that provide 
     cooperation between Federal, State, and local law enforcement 
     authorities, through the use of firearms and ballistics 
     identification systems, to disrupt illegal sale or transfer 
     of firearms to or between juveniles through tracing the 
     sources of guns used in crime that were provided to 
     juveniles.''.
                                  ____


 21st Century Law Enforcement, Crime Prevention, and Victim Assistance 
                    Act--Section-by-Section Analysis


Title I: supporting Law Enforcement and the Effective Administration of 
                                Justice

              Subtitle A. Support for Community Personnel

       Sec. 1101. 21st century community policing initiative. 
     Extends COPS program through FY2007. Authorizes funds for up 
     to 50,000 police officers, 10,000 additional prosecutors, and 
     10,000 indigent defense attorneys. Authorizes $350 million 
     annually for new law enforcement technology designed to 
     improve police communications and promote comprehensive crime 
     analysis.

   Subtitle B. Protecting Federal, State, and Local Law Enforcement 
                       Officers and the Judiciary

       Sec. 1201. Expansion of protection of Federal officers and 
     employees from murder due to their status. Clarifies that it 
     is a crime to murder a Federal employee because of his or her 
     status, as well as because of his or her performance of 
     official duties, and that the same protection applies to a 
     State or local government employee who is assisting a Federal 
     official.
       Sec. 1202. Assaulting, resisting, or impeding certain 
     officers or employees. Increases the maximum penalties for 
     simple assault (from 1 to 3 years) and other assaults (from 
     10 to 20 years) on Federal officials acting in performance of 
     their official duties, or persons acting in concert with a 
     Federal employee.
       Sec. 1203. Influencing, impeding, or retaliating against a 
     Federal official by threatening or injuring a family member. 
     Increases the maximum penalties for actual or attempted 
     influencing, impeding, or retaliating against a Federal 
     official by threatening a family member of the employee, from 
     5 to 10 years, and from 3 to 6 years if the threat is to 
     commit an assault.
       Sec. 1204. Mailing threatening communications. Increases 
     the maximum penalties from 5 to 10 years for threats of 
     injury or kidnaping of any person mailed to a Federal judge, 
     and from 3 to 6 years for extortionate threats to Federal 
     judges.
       Sec. 1205. Amendment of the sentencing guidelines for 
     assaults and threats against Federal judges and certain other 
     Federal officials and employees. Directs the United States 
     Sentencing Commission to amend the Sentencing Guidelines to 
     enhance penalties for assaults and threats against Federal 
     judges and other Federal officials and employees engaged in 
     their official duties.
       Sec. 1206. Killing persons aiding Federal investigations or 
     State correctional officers. Provides that the killing of a 
     person working with Federal officials in a State or joint 
     Federal-State investigation shall be a crime, just as is a 
     killing in conjunction with a Federal investigation.
       Sec. 1207. Killing State correctional officers. Clarifies 
     that Federal criminal penalties regarding assaults by 
     prisoners apply where the person committing the offense was 
     incarcerated prior to a finding of guilt, including pending 
     an initial appearance, arraignment, trial, or appeal.
       Sec. 1208. Establishment of protective function privilege. 
     Establishes a privilege against testimony by Secret Service 
     officers

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     charged with protecting the President, those in direct line 
     for the Presidency, and visiting foreign heads of state.

                   Part 1. Extension of Project Exile

       Sec. 1311. Authorization of funding for additional State 
     and local gun prosecutors. Authorizes $150,000,000 in FY2002 
     to hire additional local and State prosecutors to expand the 
     Project Exile program in high gun-crime areas. Requires 
     interdisciplinary team approach to prevent, reduce, and 
     respond to firearm related crimes in partnership with 
     communities.
       Sec. 1312. Authorization of funding for additional Federal 
     firearms prosecutors and gun enforcement teams. Authorizes 
     the Attorney General to hire 114 additional Federal 
     prosecutors to prosecute violations of Federal firearms in up 
     to 20 jurisdictions designated as high crime areas. 
     Authorizes $15,000,000 for FY2002.

    Part 2. Expansion of the Youth Crime Gun Interdiction Initiative

       Sec. 1321. Youth Crime Gun Interdiction Initiative. Directs 
     the Secretary of the Treasury to expand participation in the 
     Youth Crime Gun Interdiction Initiative (``YCGII''). 
     Authorizes grants to States and localities for purposes of 
     assisting them in the tracing of firearms and participation 
     in the YCGII.

                          Part 3. Gun Offenses

       Sec. 1331. Gun ban for dangerous juvenile offenders. 
     Prohibits juveniles adjudged delinquent for serious drug 
     offenses or violent felonies from receiving or possessing a 
     firearm, and makes it a crime for any person to sell or 
     provide a firearm to someone they have reason to believe has 
     been adjudged delinquent. This section applies only 
     prospectively, and access to firearms may be restored under 
     State restoration of rights provisions, but only if such 
     restoration is on a case-by-case, rather than automatic 
     basis.
       Sec. 1332. Improving firearms safety. Requires gun dealers 
     to have secure gun storage devices available for sale, 
     including any device or attachment to prevent a gun's use by 
     one not having regular access to the firearm, or a lockable 
     safe or storage box.
       Sec. 1333. Juvenile handgun safety. Increases the maximum 
     penalty for transferring a handgun to a juvenile or for a 
     juvenile to unlawfully possess a handgun from 1 to 5 years.
       Sec. 1334. Serious juvenile drug offenses as armed career 
     criminal predicates. Permits the use of an adjudication of 
     juvenile delinquency for a serious drug trafficking offense 
     as a predicate offense for determining whether a defendant 
     falls within the Armed Career Criminal Act. That act provides 
     additional penalties for armed criminals with a proven record 
     of serious crimes involving drugs and violence.
       Sec. 1335. Increased penalty for transferring a firearm to 
     a minor for use in crime of violence or drug trafficking 
     crime. Increases the maximum penalty for providing a firearm 
     to a juvenile that one knows will be used in a serious crime 
     from 10 to 15 years.
       Sec. 1336. Increased penalty for firearms conspiracy. 
     Subjects conspirators to the same penalties as are provided 
     for the underlying firearm offenses in 18 U.S.C. Sec. 924.

                 Part 4. Closing the Gun Show Loophole

       Sec. 1341. Extension of Brady background checks to gun 
     shows. Eliminates the gun show loopholes by requiring 
     criminal background checks on all gun sales at gun shows; 
     clarifies that gun sellers and buyers are not subject to 
     penalties unless they knowingly attempt to circumvent the 
     background checks; and amends the Brady law to prevent the 
     Federal government from keeping records on qualified 
     purchasers for more than 90 days.

Subtitle D. Assistance to States for Prosecuting and Punishing Juvenile 
                 Offenders, and Reducing Juvenile Crime

       Sec. 1401. Juvenile and violent offender incarceration 
     grants. Authorizes the Attorney General to make grants to 
     States, local governments, or any combination thereof, to 
     assist them in planning, establishing, and operating secure 
     facilities, staff-secure facilities, detention centers, and 
     other correctional programs for violent juvenile offenders.
       Sec. 1402. Certain punishment and graduated sanctions for 
     youth offenders. Authorizes the Attorney General to make 
     grants for the purposes of: (1) providing juvenile courts 
     with a range of sentencing options such that first time 
     juvenile offenders face some level of punishment as a result 
     of their initial contact with the juvenile justice system; 
     and (2) increasing the sentencing options available to 
     juvenile court judges. Authorizes appropriations through 
     FY2005.
       Sec. 1403. Pilot program to promote replication of recent 
     successful juvenile crime reduction strategies. Directs the 
     Attorney General to establish a pilot program to encourage 
     and support communities that adopt a comprehensive approach 
     to suppressing and preventing violent juvenile crime 
     patterned after successful State juvenile crime reduction 
     strategies. Authorities appropriations through FY2004.
       Sec. 1404. Reimbursement of States for costs of 
     incarcerating juvenile alien offenders. Amends: (1) the 
     Immigration Reform and Control Act of 1986 to provide for the 
     reimbursement of States for the costs of incarcerating 
     juvenile alien offenders; and (2) the Illegal Immigration 
     Reform and Immigrant Reform and Immigrant Responsibility Act 
     of 1996 to require that the annual report on criminal aliens 
     include additional details on illegal juvenile aliens.

     Subtitle E. Ballistics, Law Assistance, and Safety Technology

       Sec. 1501. Short title. This subtitle may be cited as the 
     ``Ballistics, Law Assistance, and Safety Technology Act'' 
     (``BLAST'').
       Sec. 1502. Purposes. Statement of legislative purposes.
       Sec. 1511. Definition of ballistics. Defines terms used in 
     this subtitle.
       Sec. 1512. Test firing and automated storage of ballistics 
     records. Requires a licensed manufacturer or importer to test 
     fire firearms, prepare ballistics images, make records 
     available to the Secretary of the Treasury for entry in a 
     computerized database, and store the fired bullet and 
     cartridge casings. Directs the Attorney General and the 
     Secretary to assist firearm manufacturers and importers in 
     complying. Specifies that nothing herein creates a cause of 
     action against any Federal firearms licensee or any other 
     person for any civil liability except for imposition of a 
     civil penalty under this section.
       Sec. 1513. Privacy rights of law abiding citizens. 
     Prohibits the use of ballistics information of individual 
     guns for (1) prosecutorial purposes, unless law enforcement 
     officials have a reasonable belief that crime has been 
     committed and that ballistics information would assist in the 
     investigation of that crime, or (2) the creation of a 
     national firearms registry of gun owners.
       Sec. 1514. Demonstration firearm crime reduction strategy. 
     Directs the Secretary and the Attorney General to establish 
     in the jurisdiction selected a comprehensive firearm crime 
     reduction strategy. Requires the Secretary and the Attorney 
     General to select not fewer than ten jurisdictions for 
     participation in the program. Sets forth provisions regarding 
     selection criteria.

           Subtitle F. Offender Reentry and Community Safety

       Section 1601. Short title. This subtitle may be cited as 
     the ``Offender Reentry and Community Safety Act of 2001.''
       Section 1602. Findings. Legislative findings in support of 
     this subtitle.
       Section 1603. Purposes. Statement of legislative purposes.

             Part 1. Federal Reentry Demonstration Projects

       Section 1611. Federal Reentry Center Demonstration. 
     Establishes the Federal Reentry Center Demonstration project 
     to assist participating prisoners, under close monitoring, in 
     preparing for and adjusting to reentry into the community; 
     details project duration and selection of districts in which 
     to carry out programs.
       Section 1612. Federal High-Risk Offender Reentry 
     Demonstration. Establishes the Federal High-Risk Offender 
     Reentry Demonstration project. Uses community corrections 
     facilities and appropriate monitoring technologies to promote 
     effective reentry into the community; notifies victims of 
     prisoner reentry; details project duration and selection of 
     districts in which to carry out programs.
       Section 1613. District of Columbia Intensive Supervision, 
     Tracking, and Reentry Training (DC iSTART) Demonstration. 
     Establishes the District of Columbia Intensive Supervision, 
     Tracking and Reentry Training Demonstration (DC iSTART) 
     project. Uses intensive supervision to promote high risk 
     parolees' successful reentry into the community.
       Section 1614. Federal Intensive Supervision, Tracking, and 
     Reentry Training (FED iSTART) Demonstration. Establishes the 
     Federal Intensive Supervision, Tracking and Reentry Training 
     Demonstration (FED iSTART) project. Uses intensive 
     supervision to promote high risk parolees' successful reentry 
     into the community.
       Section 1615. Federal Enhanced In-Prison Vocational 
     Assessment and Training Demonstration. Establishes Federal 
     Enhanced In-Prison Vocational Assessment and Training 
     Demonstration project to provide in-prison assessment of 
     prisoners' vocational needs, development, and release 
     readiness, and other programs to prepare Federal prisoners 
     for reentry into the community.
       Section 1616. Research and reports to Congress. Defines 
     requirements for reporting on the effectiveness of the 
     programs established in this subtitle.
       Section 1617., Definitions. Defines terms used in this 
     subtitle.
       Section 1618. Authorization of appropriations. Authorizes 
     appropriations through FY2006.

                  Part 2. State Reentry Grant Programs

       Section 1621. Amendments to the Omnibus Crime Control and 
     Safe Streets Act of 1968. Establishes adult offender reentry 
     demonstration projects; State and local reentry courts; 
     juvenile offender State and local reentry programs; and State 
     reentry program research, development, and evaluation.

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           Title II: Strengthening the Federal Criminal Laws

                  Subtitle A. Combating Gang Violence

         Part 1. Enhanced Penalties for Gang Related Activities

       Sec. 2101. Gang franchising. Prohibits travel in interstate 
     commerce to create or promote a franchise of a criminal 
     street gang, with penalty of up to 10 years in prison for a 
     violation.
       Sec. 2102. Enhanced penalties for use or recruitment of 
     minors in gangs. Requires the United States Sentencing 
     Commission to provide for enhanced penalties for those who 
     use or recruit minors in a criminal street gang franchise.
       Sec. 2103. Gang franchising as a RICO predicate. Makes gang 
     franchising a predicate crime for a RICO prosecution.
       Sec. 2104. Increase in offense level for participating in 
     crime as a gang member. Requires the United States Sentencing 
     Commission to provide an enhanced penalty for street gang 
     members who commit crimes as a member of the gang.
       Sec. 2105. Enhanced penalty for discharge of a firearm in 
     relation to counts of violence or drug trafficking crimes. 
     Requires the United States Sentencing Commission to provide 
     for an enhanced penalty for any defendant who discharges a 
     firearm during the course of a crime of violence or a drug 
     offense.
       Sec. 2106. Punishment of arson or bombings at facilities 
     receiving Federal financial assistance. Sets penalties for 
     arson or bombings a facilities of any institution or 
     organization receiving Federal financial assistance.
       Sec. 2107. Elimination of statute of limitations for 
     murder. Eliminates the Federal statute of limitations for 
     Federal crimes involving murder regardless of whether the 
     crime carries the death penalty. Lifts the statute of 
     limitation, for example, on RICO offenses involving murder.
       Sec. 2108. Extension of statute of limitations for violent 
     and drug trafficking crimes. Extends to 10 years the statute 
     of limitations for Class A felonies involving drug 
     trafficking and crimes of violence.
       Sec. 2109. Increased penalties under the RICO law for gang 
     and violent crimes. Raises the maximum term of imprisonment 
     for a violation of RICO to 20 years or life imprisonment.
       Sec. 2110. Increased penalty and broadened scope of statute 
     against violent crimes in aid of racketeering. Expands the 
     scope of anti-racketeering laws by including as violations 
     not only threats of violence in aid of racketeering, but also 
     actual acts of violence. Increases maximum penalty for 
     conspiracy to kidnap or murder in aid of racketeering from 10 
     years to life imprisonment; raises maximum penalty for other 
     actual or attempted crimes of violence in aid of racketeering 
     from 5 to 10 years.
       Sec. 2111. Facilitating the prosecution of carjacking 
     offenses. Eliminates requirement that prosecutors prove that 
     a defendant actually intended to cause death or serious 
     bodily injury, as opposed, for example, to using a firearm 
     ``merely'' to threaten the car owner.
       Sec. 2112. Facilitation of RICO prosecutions. Eliminates 
     requirement that prosecutors prove that each defendant 
     committed two specific acts of racketeering activity. Brings 
     RICO conspiracy law into line with general conspiracy law.
       Sec. 2113. Assault as a RICO predicate. Makes an assault a 
     predicate offense for purposes of the RICO statute
       Sec. 2114. Expansion of definition of ``racketeering 
     activity'' to affect gangs in Indian country. Expands the 
     definition of racketeering activity to include acts or 
     threats committed solely in Indian Country.
       Sec. 2115. Increased penalties for violence in the course 
     of riot offenses. Changes the current 5 year maximum penalty 
     for violence in the course of a riot to a maximum of life 
     imprisonment where death results, or 20 years where serious 
     bodily injury results.
       Sec. 2116. Expansion of Federal jurisdiction over crimes 
     occurring in private penal facilities housing Federal 
     prisoners or prisoners from other States. Expands the 
     definition of prisons under chapter 87 of Title 18 to 
     include, in addition to Federal prisons, private facilities 
     used to house Federal prisoners or for interstate housing of 
     prisoners.

              Part 2. Targeting Gang-Related Gun Offenses

       Sec. 2121. Transfer of firearm to commit a crime of 
     violence. Increases the ability of prosecutors to punish 
     those who facilitate crimes of violence by providing firearms 
     to criminals. Specifies that it is a crime for a person to 
     transfer a weapon to another when the person has ``reason to 
     know'', or actual knowledge, that the recipient of the weapon 
     will use it to commit a crime of violence.
       Sec. 2122. Increased penalty for knowingly receiving 
     firearm with obliterated serial number. Increases from 5 to 
     10 years the maximum penalty for receiving a firearm with an 
     obliterated serial number, makes the maximum penalty the same 
     as for receiving a firearm known to be stolen.
       Sec. 2123. Amendment of sentencing guidelines for transfers 
     of firearms to prohibited persons. Directs the United States 
     Sentencing commission to enhance penalties for the transfer 
     of a firearm to a person whom the defendant has reasonable 
     cause to believe is prohibited from possessing the firearm.

  Part 3. Using and Protecting Witnesses to Help Prosecute Gangs and 
                        Other Violent Criminals

       Sec. 2131. Interstate travel to engage in witness 
     intimidation or obstruction of justice. Adds witness bribery, 
     witness intimidation, obstruction of justice, and related 
     conduct in State criminal proceedings to the list of 
     predicates under the Travel Act.
       Sec. 2132. Expanding pretrial detention eligibility for 
     serious gang and other violent criminals. Protects witnesses 
     by expanding eligibility for pretrial detention of gang 
     members likely to harm or intimidate a witness. Allows a 
     court to (1) consider any adjudication of juvenile 
     delinquency in determining the number of prior convictions of 
     a defendant; (2) treat prior convictions for crimes of 
     possession of explosives or firearms as ``crimes of 
     violence''; and (3) consider membership in a criminal street 
     gang as a factor.
       Sec. 2133. Conspiracy penalty for obstruction of justice 
     offenses involving victims, witnesses, and informants. Makes 
     a conspiracy to intimidate a witness or to obstruct justice a 
     separate crime punishable by up to the amount of the 
     contemplated crime, as opposed to the five year maximum under 
     the existing general conspiracy statute.
       Sec. 2134. Allowing a reduction in sentence for providing 
     useful investigative information although not regarding a 
     particular individual. Clarifies the criminal code and the 
     Federal Rules of Criminal Procedure provisions dealing with 
     reduced sentences in return for cooperation investigation, as 
     opposed to an investigation focused on a particular person.
       Sec. 2135. Increasing the penalty for using physical force 
     to tamper with witnesses, victims or informants. Amends the 
     witness tampering statute to include not only killing or 
     attempting to kill a witness, but also any use or attempted 
     use of physical force to deter a witness, and efforts to 
     delay testimony by witnesses or to alter or destroy 
     documents.
       Sec. 2136. Expansion of Federal kidnaping offense to cover 
     when death of victim occurs before crossing State line and 
     when facility in interstate commerce or the mails are used. 
     Expands the Federal kidnaping offense to cover situations 
     where the death of the victim occurs before the crossing of 
     any State line, and situations where a facility in interstate 
     commerce or the mails is used, to make clear that the Federal 
     courts have jurisdiction over such cases.
       Sec. 2137. Assaults or other crimes of violence for hire. 
     Includes, in addition to murder for hire connected to 
     interstate commerce, all felony crimes of violence against 
     persons under such circumstances as Federal crimes.
       Sec. 2138. Clarification of interstate threats statute to 
     cover threats to kill. Clarifies the interstate threats 
     statute covers threats to kill as well as threats merely to 
     injure.
       Sec. 2139. Conforming amendment to law punishing 
     obstruction of justice by notification of existence of 
     subpoena for records in certain types of investigations. 
     Expands the list of predicate crimes under the Federal 
     obstruction of justice statute to include the Controlled 
     Substances Act, the Controlled Substances Import and Export 
     Act, and the Internal Revenue Code.

                       Part 4. Gang Paraphernalia

       Sec. 2141. Streamlining procedures for law enforcement 
     access to clone numeric pagers. Allows the use of clone 
     pagers (devices used to capture numbers sent to another 
     pager) with consent or on application to a court.
       Sec. 2142. Sentencing enhancement for using body armor in 
     commission of a felony. Requires the Sentencing Commission to 
     adopt an appropriate sentencing enhancement for crimes 
     committed by persons wearing body armor, and provides an 
     exception where the crime is committed by a police officer, 
     who often wears such armor in the course of official duties.
       Sec. 2143. Sentencing enhancement for using laser sighting 
     devices in commission of a felony. Requires the Sentencing 
     Commission to adopt an appropriate sentencing enhancement for 
     the use or possession of a laser sighting device in the 
     commission of a felony.
       Sec. 2144. Government access to location information. 
     Provides that a mobile electronic communications service is 
     to provide the real-time physical location of a customer's 
     cell phone only upon a court order finding probable cause 
     connecting the subscriber to a felony.
       Sec. 2145. Limitation on obtaining transactional 
     information from pen registers or trap and trace devices. 
     Provides that ex parte orders for the use of pen registers or 
     trap and trace devices are to direct that the devices be used 
     so as to minimize the interception of information other than 
     that involved in processing the call (i.e. telephone 
     numbers).

                 Subtitle B. Combating Money Laundering

       Sec. 2201. Short title. This subtitle may be cited as the 
     ``Money Laundering Enforcement Act of 2001''.
       Sec. 2202. Illegal money transmitting businesses. Provides 
     that a defendant need only know that a money transmitting 
     business

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     lacked a license required by the State law, not that the 
     operation of the business without the license was a criminal 
     violation of State law. Therefore, a prosecutor does not have 
     to provide actual knowledge of State law.
       Sec. 2203. Restraint of assets of persons arrested a 
     abroad. Responds to the ease with which money can be 
     transferred from country to country by electronic means, and 
     provides for temporary seizure of property held within the 
     Unites States when a person has been arrested or charged in a 
     foreign country.
       Sec. 2204. Civil money laundering jurisdiction over foreign 
     persons.. Provides ``long arm'' jurisdiction over foreign 
     banks engaged in money laundering that have accounts in the 
     United States, so that the foreign bank cannot claim that it 
     lacks the minimum contacts with the United States for in 
     personam jurisdiction.
       Sec. 2205. Punishment of laundering money through foreign 
     banks. Amends civil money laundering provisions to include 
     foreign as well as domestic banks in the definition of 
     ``financial institutions''.
       Sec. 2206. Addition of serious foreign crimes to list of 
     money laundering predicates. Expands the list of money 
     laundering ``specified unlawful activity,'' or crimes for 
     which money laundering prosecutions can be brought. Includes 
     the following foreign crimes as predictes for a money 
     laundering prosecution: (1) all crimes of violence not 
     currently covered; (2) fraud against a foreign government; 
     (3) bribery of or theft by a foreign official; (4) smuggling 
     weapons; and (5) any other offense for which the United 
     States would extradite the defendant.
       Sec. 2207. Criminal forfeiture for money laundering 
     conspiracies.. Makes a conspiracy to commit an existing 
     forfeiture crime a separate criminal violation.
       Sec. 2208. Fungible property in foreign bank accounts. 
     Amends fungible property provisions to make them applicable 
     to all forfeitures (e.g., drug violations as well as money 
     laundering violations) and to foreign and domestic banks. 
     Extends the term for bringing fungible property actions from 
     one year to two years. Makes clear that the time runs from 
     the arrest or seizure.
       Sec. 2209. Admissibility of foreign business records. 
     Provides that foreign records are admissible in civil 
     proceedings in the same way that they currently are 
     admissible in criminal proceedings.
       Sec. 2210. Charging money laundering as a course of 
     conduct. Allows prosecutors to charge a continuing scheme to 
     violate the money laundering statutes as a single count in an 
     indictment, as an alternative to the present requirement that 
     prosecutors charge each transaction as a separate count.
       Sec. 2211. Venue in money laundering cases. Establishes 
     that a money laundering prosecution can be brought in any 
     district in which the transaction is conducted, where a 
     prosecution for the underlying specified unlawful activity 
     could be brought, or where an act in any conspiracy took 
     place.
       Sec. 2212. Technical amendment to restore wiretap authority 
     for certain money laundering offenses. Restores Federal 
     authority to obtain wiretaps in cases involving illegal 
     structuring of currency transactions.
       Sec. 2213. Criminal penalties for violations of anti-money 
     laundering orders. Clarifies that criminal penalties apply to 
     violations of Department of Treasury ``geographic targeting 
     orders'' (temporary orders in enforcement of the Bank Secrecy 
     Act). Violations occur where there are false reports or 
     failures to make required reports.
       Sec. 2214. Encouraging financial institution to notify law 
     enforcement of suspicious financial transactions. Expands the 
     definition of financial institutions which may, without civil 
     liability, report suspicious financial transactions to law 
     enforcement officials. Expanded definition includes 
     electronics communications services that facilitate 
     international transfer.
       Sec. 2215. Coverage of foreign bank branches in the 
     territories. Expands the definition of ``State'' to include 
     commonwealths, territories, and possessions of the United 
     States for purposes of the International Banking Act of 1978.
       Sec. 2216. Conforming statute of limitations amendment for 
     certain bank fraud offenses. Technical amendment to conform 
     section number references.
       Sec. 2217. Jurisdiction over certain financial crimes 
     committee abroad. Clarifies United States' jurisdiction over 
     access device fraud (credit card, debit card and 
     telecommunications fraud) where the fraud has an effect on an 
     entity within the United States.
       Sec. 2218. Knowledge that property is the process of a 
     felony. Clarifies the law regarding a defendant's knowledge 
     of the source of money in a money laundering transactions. 
     Although the offense must in fact be a felony, it is not 
     necessary that the defendant be aware that the legislature 
     has so classified the offense.
       Sec. 2219. Money laundering transactions; commingled 
     accounts. Clarifies the requirement in 18 U.S.A. Sec. 1957 
     that the monetary transaction involve more than $10,000 in 
     criminally derived property. Discusses the impact on money 
     laundering cases of commingled accounts which contain clean 
     money and money in criminally derived property.
       Sec. 2220. Laundering the process of terrorism. Corrects an 
     omission in the Antiterrorism and Effective Death Penalty Act 
     of 1996 by making it an offense to launder money which was 
     raised for the material support of a foreign terrorist 
     organization. Current law makes it an offense to raise such 
     funds but not to launder the same.
       Sec. 2221. Violations of sections 6050I. Requires any trade 
     or business receiving more than $10,000 in cash to report the 
     transaction to the IRS on Form 8300. Violations of the Form 
     8300 requirement will be treated the same as CTR and CMIR 
     violations for forfeiture purposes.
       Sec. 2222. Including agencies of tribal governments in the 
     definition of a financial institution. Prevent tribes from 
     offering ``off-shore banking'' on Indian reservations by 
     forming tribal banks that may conceal deposit records from 
     the Federal Government. Clarifies present law to state that 
     the BSA and money laundering statues apply to banks owned or 
     operated by Indian tribes.
       Sec. 2223. Penalties for violations of geographic targeting 
     orders and certain record keeping requirements. Correct 
     ambiguity regarding reporting under the Bank Secrecy Act 
     (BSA). Eliminates doubt concerning the applicability of 
     reporting provisions in reports required by GTOs issued under 
     31 U.S.C. Sec. 5326.

                    Subtitle C. Antidrug Provisions

       Sec. 2301. Amendments concerning temporary emergency 
     scheduling. Authorizes the Attorney General to schedule 
     controlled substances on an emergency basis when that 
     substance proses an immediate threat to health and/or public 
     safety. Provides protections for legitimate researchers.
       Sec. 2302. Amendment to reporting requirement for 
     transactions involving certain listed chemicals. Allows 
     reporting of certain transactions involving ephedrine, 
     pseudoephedrine and phenylpropanolamine to be exempted from 
     reporting requirements with no negative impact on law 
     enforcement goals.
       Sec. 2303. Drug paraphernalia. Adds ``packaging'' to the 
     list of uses included in the definition of ``drug 
     paraphernalia'' in the Controlled Substances Act (21 U.S.C. 
     Sec. 863(d)). Facilitates prosecution of those who 
     manufacture packaging materials, sell them, and possess them.
       Sec. 2304. Counterfeit substances/imitation controlled 
     substances. Expands the definition of counterfeit substance. 
     ``Counterfeit substance'' applies to any controlled substance 
     which is represented to be or which imitates another 
     controlled substance regardless of whether that controlled 
     substance is of licit or illicit origin. Adds a new 
     definition for imitation controlled substances.
       Sec. 2305. Conforming amendment concerning marijuana 
     plants. Corrects an inconsistency in the penalties relating 
     to marijuana plants that exists between 21 U.S.C. Sec. 841(b) 
     and 21 U.S.C. Sec. 960(b). The former statute applies to 
     domestic controlled substance trafficking violations and the 
     latter to controlled substance importation offenses. The 
     correction would make identical the number of marijuana 
     plants cited in the provisions.
       Sec. 2306. Serious juvenile drug trafficking offenses as 
     armed career criminal act predicates. Permits the use of an 
     adjudication of juvenile delinquency based on a serious drug 
     trafficking offense as a predicate offense under the Armed 
     Career Criminal Act (ACCA), 18 U.S.C. Sec. 924(c)(2)(A). The 
     ACCA targets for a lengthy period of at least 15 years' 
     imprisonment those felons found in unlawful possession of a 
     firearm who have proven records of involvement in serious 
     acts of misconduct involving drugs or violence.
       Sec. 2307. Increased penalties for using Federal property 
     to grow or manufacture controlled substances. Increases the 
     penalty for cultivating or manufacturing a controlled 
     substance on Federally owned or leased land. Federal law 
     enforcement agencies believe that the use of Federal lands 
     for cultivating and manufacturing controlled substances has 
     increased because there is no possibility that the land will 
     be forfeited as is the case if the cultivation or manufacture 
     took place on private property.
       Sec. 2308. Clarification of length of supervised release 
     terms in controlled substance cases. Resolves a conflict in 
     the circuits as to the permissible length of supervised 
     release terms in controlled substance cases.
       Sec. 2309. Supervised release period after conviction for 
     continuing criminal enterprise. Provides a mandatory minimum 
     period of 10 years of supervised release after a conviction 
     for participation in a continuing criminal enterprise where 
     there is no prior conviction, and a minimum of 15 years where 
     there has been a prior conviction.
       Sec. 2310. Technical correction to ensure compliance of 
     sentencing guidelines with provisions of all Federal 
     statutes. Ensures that sentencing guidelines promulgated by 
     the United States Sentencing Commission are consistent with 
     the provisions of all Federal statutes.
       Sec. 2311. Import and export of chemicals used to produce 
     illicit drugs. Authorizes the Drug Enforcement Administration 
     to require that exporters of certain listed chemicals to drug 
     producing areas of the world document to DEA the ultimate 
     consignee and use of

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     the listed chemical Clarifies DEA's authority to require 
     advance notification of imports and exports including 
     identifying the importer in the country of destination.

                   Subtitle D. Deterring Cargo Theft

       Sec. 2351. Punishment of cargo theft. Clarifies Federal 
     statute governing thefts of vehicles normally used in 
     interstate commerce to include trailers, motortrucks, and air 
     cargo containers; and freight warehouses and transfer 
     stations. Makes such a theft a felony punishable by three 
     (not one) years in prison. Provides for appropriate 
     amendments to the Sentencing Guidelines.
       Sec. 2352. Reports to Congress on cargo theft. Mandates 
     annual reports by the Attorney General to evaluate and 
     identify further means of combating cargo theft.
       Sec. 2353. Establishment of Advisory Committee on cargo 
     theft. Establishes a six-member Advisory Committee on Cargo 
     Theft with representatives of the Departments of Justice, 
     Treasury and Transportation, and three experts from the 
     private sector. Committee will hold hearing and submit a 
     report within one year with detailed recommendations on cargo 
     security.
       Sec. 2354. Addition of attempted theft and counterfeiting 
     offenses to eliminate gaps and inconsistencies in coverage. 
     Amends 22 statutes to clarify that attempt to embezzle funds 
     or counterfeit is a crime, just as is actual embezzlement or 
     counterfeiting.
       Sec. 2355. Clarification of scienter requirement for 
     receiving property stolen from an Indian tribal organization. 
     Provides that it is a crime to receive, conceal or retain 
     property stolen from a tribal organization if one knows that 
     the property has been stolen, even if one did not know that 
     it had been stolen from a tribal organization.
       Sec. 2356. Larceny involving post office boxes and postal 
     stamp vending machines. Clarifies that it is a crime to steal 
     from a post office box or stamp vending machine irrespective 
     of whether it is in a building used by the Postal Service.
       Sec. 2357. Expansion of Federal theft offenses to cover 
     theft of vessels. Expands Federal law covering the 
     transportation of stolen vehicles to include watercraft.

            Subtitle E. Improvements to Federal Criminal Law

                    Part 1. Sentencing Improvements

       Sec. 2411. Application of sentencing guidelines to all 
     pertinent statutes. Clarifies that the rules and regulations 
     promulgated by the United States Sentencing Commission are 
     required to be consistent with all pertinent Federal 
     statutes, not just the Federal criminal statues within titles 
     18 and 28 of the United States Code.
       Sec. 2412. Doubling maximum penalty for voluntary 
     manslaughter. Increases the maximum penalty for voluntary 
     manslaughter within the special maritime and territorial 
     jurisdiction of the United States from 10 to 20 years. Brings 
     it in line with related Federal penalties and the higher 
     penalty for voluntary manslaughter in many States.
       Sec. 2413. Authorization of imposition of both a fine and 
     imprisonment rather than only either penalty in certain 
     offenses. Provides a uniform rule allowing both fine and 
     imprisonment in all criminal statutes. Addresses drafting 
     errors that have resulted in five Federal criminal statues, 
     18 U.S.C. Sec. 401 (criminal contempt), 18 U.S.C. Sec. 1705 
     (destruction of letter boxes), 18 U.S.C. Sec. 1916 
     (unauthorized employment or disposition of lapsed 
     appropriations), 18 U.S.C. Sec. 2234 (willfully exceeding 
     search warrant) and 18 U.S.C. Sec. 2235 (maliciously 
     procuring search warrant), where the court can impose either 
     a fine or imprisonment, but not both.
       Sec. 2414. Addition of supervised release violation as 
     predicate for certain offenses. Adds supervised release to 
     various statutes which now relate only to probation or 
     parole. Violation of supervised release could serve as a 
     predicate offense in the same ways a violation of probation 
     or parole currently does.
       Sec. 2415. Authority of court to impose a sentence of 
     probation or supervised release when reducing a sentence of 
     imprisonment in certain cases. Allows a court to impose 
     conditions of parole or supervised release (such as home 
     confinement) where a prisoner has a terminal illness that is 
     contagious.
       Sec. 2416. Elimination of proof of value requirement for 
     felony theft or conversion of grand jury material. Eliminates 
     the $1,000 felony threshold for thefts of government property 
     under 18 U.S.C. Sec. 641 where the material stolen is grand 
     jury material.
       Sec. 2417. Increased maximum corporate penalty for 
     antitrust violations. Increases the maximum statutory fine 
     for corporations convicted of criminal antitrust violations 
     from the current Sherman Act maximum of $10,000,000 to a new 
     maximum of $100,000,000.
       Sec. 2418. Amendment of Federal sentencing guidelines for 
     counterfeit bearer obligations of the United States. Directs 
     the United States Sentencing Commission to amend the 
     Sentencing Guidelines to enhance penalties for counterfeiting 
     offenses, to address the recent increase of computer-
     generated counterfeit U.S. currency produced by inkjet 
     printers and color copiers.

        Part 2. Additional Improvements to Federal Criminal Law

       Sec. 2421. Violence directed at dwellings in Indian 
     country. Allows the prosecution of Indians as well as non-
     Indians who commit acts of violence directed against 
     dwellings on Indian reservations. Such crimes currently are 
     not among those specifically listed as prosecutable in the 
     Major Crimes Act.
       Sec. 2422. Correction to Amber Hagerman Child Protection 
     Act. Corrects drafting errors in the Amber Hagerman Child 
     Protection Act (a bill regarding the crossing of State lines 
     to engage in sex with a child under 12). Expands penalties 
     for engaging in forcible sex with children ages 12 to 16.
       Sec. 2423. Elimination of ``bodily harm'' element in 
     assault with a dangerous weapon offense. Eliminates voluntary 
     intoxication as a defense in the case of a person accused of 
     committing assault with a deadly weapon in the special 
     maritime and territorial jurisdiction of the United States.
       Sec. 2424. Appeals from certain dismissals. Clarifies that 
     the government appeal statute authorizes appeal by the United 
     States whenever a court dismisses any part of an indictment 
     or information, so long as the appeal is consistent with the 
     Double Jeopardy Clause. The decision to appeal is to be made 
     by the Solicitor General.
       Sec. 2425. Authority for injunction against disposal of 
     ill-gotten gains from violations of fraud statutes. Allows 
     injunctions for fraud when a person is disposing of or about 
     to dispose of property obtained not only as a result of bank 
     fraud, but also as a result of violations of general anti-
     fraud statutes: a false statement under 18 U.S.C. Sec. 1001, 
     a false claim under 18 U.S.C. Sec. 287, or a conspiracy to 
     defraud the United States or violate the law under 18 U.S.C. 
     Sec. 371.
       Sec. 2426. Expansion of interstate travel fraud statute to 
     cover interstate travel by perpetrator. Closes a gap in the 
     interstate travel fraud statute to cover situations where the 
     perpetrator travels in interstate commerce, in addition to 
     situations where the perpetrator transports or causes others 
     to travel in interstate commerce.
       Sec. 2427. Clarification scope of unauthorized selling of 
     military medals or decorations. Clarifies that the 
     prohibition against the unauthorized selling of military 
     decorations also covers a person who ``trades, barters or 
     exchanges for . . . value.''
       Sec. 2428. Amendment to section 669 to conform to Public 
     Law 104-294. Changes the threshold amount for a felony 
     involving health care fraud from $100 to $1,000.
       Sec. 2429. Expansion of jurisdiction over child buying and 
     selling offenses. Expands Federal jurisdiction over child 
     buying and selling statutes to cover, in addition to any 
     territory or possession of the United States, the special 
     maritime and territorial jurisdiction of the United States, 
     and commonwealths and possessions of the United States.
       Sec. 2430. Limits on disclosure of wiretap orders. Provides 
     that only an ``aggrieved party'' may have access to Title III 
     applications and orders for wiretaps. Only such aggrieved 
     persons have standing to seek suppression of the resulting 
     intercepted communications.
       Sec. 2431. Prison credit and aging prisoner reform. 
     Eliminates inappropriate accrual of custody credit and avoids 
     the resulting unwarranted disparities in time served by 
     Federal offenders. Eliminates disparities in the treatment of 
     foreign and domestic prisoners with respect to ``good time 
     credits''. Permits certain non-dangerous Federal prisoners 
     over the age of 70 to be released after they have served at 
     least 30 years in custody, upon approval of the Bureau of 
     Prisons and a Federal court.
       Sec. 2432. Miranda reaffirmation. Repeals 18 U.S.C. 
     Sec. 3501, which purported to overturn the Supreme Court's 
     Miranda decision; the Court has held Sec. 3501 to be 
     unconstitutional.


    Title III: Protecting Americans and Supporting Victims of Crime

                  Subtitle A. Crime Victims Assistance

       Sec. 3101. Short title. This subtitle may be cited as the 
     ``Crime Victims Assistance Act of 2001''.

                         Part 1. Victim Rights

       Sec. 3111. Right to notice and to be heard concerning 
     detention. Require the government to make reasonable efforts 
     to notify victims of upcoming detention hearings and of their 
     right to attend and address the court. Where identification 
     of the defendant remains at issue, provides flexibility to 
     the presiding judge to protect the integrity of the 
     identification.
       Sec. 3112. Right to a speedy trial. Require courts to take 
     into account the interests of the victim in the prompt and 
     appropriate disposition of the case.
       Sec. 3113. Right to notice and to be heard concerning plea. 
     Require the government to make reasonable efforts to notify 
     victims of upcoming plea hearings and of their right to 
     attend and address the court.
       Sec. 3114. Enhanced participatory rights at trial. Extends 
     the Victim Rights Clarification Act to apply to televised 
     proceedings. Amends the Victims' Rights and Restitution Act 
     of 1990 to strengthen the right of crime victims to be 
     present at court proceedings, including trials.
       Sec. 3115. Right to notice and to be heard concerning 
     sentence. Directs courts to consider the views of victims in 
     imposing sentence, and requires probation officers to notify 
     victims of their right to attend sentencing proceedings and 
     address the court.

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       Sec. 3116. Right to notice and to be heard concerning 
     sentence adjustment. Directs the government to make 
     reasonable efforts to notify victims of upcoming hearings 
     concerning revocation or modification of probation or 
     supervised release and of their right to attend and address 
     the court.
       Sec. 3117. Right to notice of release or escape. Requires 
     the Bureau of Prisons to ensure victims reasonable notice of 
     an offender's release or escape from custody. Specifically 
     clarifies victim's rights to notification of an offender's 
     release or escape from a psychiatric institution.
       Sec. 3118. Right to notice and to be heard concerning 
     executive clemency. Requires the Attorney General to make 
     reasonable efforts to notify victims of the grant of 
     executive clemency, and to report to Congress concerning 
     executive clemency matters delegated for review or 
     investigation to the Attorney General.
       Sec. 3119. Remedies for noncompliance. Establishes a 
     mechanism for addressing violations of the newly created 
     statutory rights of crime victims.

                 Part 2. Victim Assistance Initiatives

       Sec. 3121. Pilot programs to establish ombudsman programs 
     for crime victims. Authorizes the establishment of pilot 
     programs to operate Victim Ombudsman Information Centers in 
     seven States, which would provide information to victims 
     concerning their right to participate in the criminal justice 
     process, identify and respond to violations of victims' 
     rights, and educate public officials concerning the rights of 
     victims. Authorizes the use of up to $5 million of False 
     Claims Act funds to make grants for these pilot programs.
       Sec. 3122. Amendments to Victims of Crime Act of 1984. 
     Provides for improvements in Federal support for victim 
     assistance and compensation under the Victims of Crime Act. 
     Includes changes in the sources of funding to the Crime 
     Victims Fund and increases the minimum threshold for the 
     annual grant to victim compensation programs.
       Sec. 3123. Increased training for law enforcement and court 
     personnel to respond to the needs of crime victims. 
     Authorizes the use of False Claims Act funds to make grants 
     to provide victim-related training.
       Sec. 3124. Increased resources to develop state-of-the-art 
     systems for notifying crime victims of important dates and 
     developments. Authorizes grants for the development of crime 
     victim notification systems, using False Claims Act funds and 
     amounts available in the Violent Crime Reduction Trust Fund.

       Part 3. Victim-Offender Programs: ``Restorative Justice''

       Sec. 3131. Pilot program and study of restorative justice 
     approach on behalf of victims of crime. Authorizes grants for 
     pilot programs in restorative justice in juvenile court 
     settings. Includes a study of existing programs. Requires 
     that participation in pilot programs be voluntary.

          Subtitle B. Violence Against Women Act Enhancements

       Sec. 3201. Shelter services for battered women and 
     children. Provides assistance to local entities that provide 
     shelter or transitional housing assistance to victims of 
     domestic violence. Provides means to improve access to 
     information on family violence within underserved 
     populations. Reauthorizes funding for the Family Violence 
     Prevention and Services Act at a level of $175,000,000 
     through FY 2005.
       Sec. 3202. Transitional housing assistance for victims of 
     domestic violence. Provides grants to those in need of 
     housing assistance as a result of fleeing a family violence 
     situation. Funding includes assistance with rent, utilities, 
     transportation, and child care.
       Sec. 3203. Family unity demonstration project. Extends the 
     Family Unity Demonstration Project through FY 2005.

                       Subtitle C. Senior Safety

       Sec. 3301. Short title. This subtitle may be cited as the 
     ``Seniors Safety Act of 2001''.
       Sec. 3302. Finding and purposes. Legislative findings in 
     support of this subtitle, and statement of legislative 
     purposes.
       Sec. 3303. Definitions. Defines terms used in this 
     subtitle.

                Part 1. Combating Crimes Against Seniors

       Sec. 3311. Enhanced sentencing penalties based on age of 
     victim. Directs the U.S. Sentencing Commission to review and, 
     if appropriate, amend the sentencing guidelines to include 
     age as one of the criteria for determining whether a 
     sentencing enhancement is appropriate. Encourages such review 
     to reflect the economic and physical harms associated with 
     criminal activity targeted at seniors and consider providing 
     increased penalties for offenses where the victim was a 
     senior.
       Sec. 3312. Study and report on health care fraud sentences. 
     Directs the U.S. Sentencing Commission to review and, if 
     appropriate, amend the sentencing guidelines applicable to 
     health care fraud offenses. Encourages such review to reflect 
     the serious harms associated with health care fraud and the 
     need for law enforcement to prevent such fraud, and to 
     consider enhanced penalties for persons convicted of health 
     care fraud.
       Sec. 3313. Increased penalties for fraud resulting in 
     serious injury or death. Increases the penalties under the 
     mail fraud statute and the wire fraud statute for fraudulent 
     schemes that result in serious injury or death. The maximum 
     penalty if serious bodily harm occurred would be up to twenty 
     years; if a death occurred, the maximum penalty would be a 
     life sentence.
       Sec. 3314. Safeguarding pension plans from fraud and theft. 
     Punishes, with up to 10 years' imprisonment, the act of 
     defrauding retirement arrangements, or obtaining by means of 
     false or fraudulent pretenses money or property of any 
     retirement arrangement.
       Sec. 3315. Additional civil penalties for defrauding 
     pension plans. Authorizes the Attorney General to bring a 
     civil action for retirement fraud, with penalties up to 
     $50,000 for an individual or $100,000 for an organization, or 
     the amount of the gain to the offender or loss to the victim, 
     whichever is greatest.
       Sec. 3316. Punishing bribery and graft in connection with 
     employee benefit plans. Increases the maximum penalty for 
     bribery and graft in connection with the operation of an 
     employee benefit plan from 3 to 5 years' imprisonment. 
     Broadens existing law to cover corrupt attempts to give or 
     accept bribery or graft payments, and to proscribe bribery or 
     graft payments to persons exercising de facto influence or 
     control over employee benefit plans.

                 Part 2. Preventing Telemarketing Crime

       Sec. 3321. Centralized complaint and consumer education 
     service for victims of telemarketing fraud. Directs the 
     Federal Trade Commission (FTC) to establish a central 
     information clearinghouse for victims of telemarketing fraud 
     and procedures for logging in complaints of telemarketing 
     fraud victims, providing information on telemarketing fraud 
     schemes, referring complaints to appropriate law enforcement 
     officials, and providing complaint or prior conviction 
     information. Directs the Attorney General to establish a 
     database of telemarketing fraud convictions secured against 
     corporations or companies, for uses described above.
       Sec. 3322. Blocking of telemarketing scams. Clarifies that 
     telemarketing fraud schemes executed using cellular telephone 
     services are subject to the enhanced penalties for such fraud 
     under 18 U.S.C. Sec. 2326. Authorizes termination of 
     telephone service used to carry on telemarketing fraud. 
     Requires telephone companies, upon notification in writing 
     from the Department of Justice that a particular phone number 
     is being used to engage in fraudulent telemarketing or other 
     fraudulent conduct, and after notice to the customer, to 
     terminate the subscriber's telephone service.

                  Part 3. Preventing Health Care Fraud

       Sec. 3331. Injunctive authority relating to false claims 
     and illegal kickback schemes involving Federal health care 
     programs. Authorizes the Attorney General to take immediate 
     action to halt illegal health care fraud kickback schemes 
     under the Social Security Act. Attorney General may seek a 
     civil penalty of up to $50,000 per violation, or three times 
     the remuneration, whichever is greater, for each offense 
     under this section with respect to a Federal health care 
     program.
       Sec. 3332. Authorized investigative demand procedures. 
     Authorizes the Attorney General to issue administrative 
     subpoenas to investigate civil health care fraud cases. 
     Provides privacy safeguards for personally identifiable 
     health information that may be obtained in response to an 
     administrative subpoena and divulged in the course of a 
     Federal investigation.
       Sec. 3333. Extending antifraud safeguards to the Federal 
     employees health benefits program. Removes the anti-fraud 
     exemption for the Federal Employee Health Benefits Act 
     (FEHB), thereby extending anti-fraud and anti-kickback 
     safeguards applicable to the Medicare and Medicaid program to 
     the FEHB. Allows the Attorney General to use the same civil 
     enforcement tools to fight fraud perpetrated against the FEHB 
     program as are available to other Federal health care 
     programs, and to recover civil penalties against persons or 
     entities engaged in illegal kickback schemes.
       Sec. 3334. Grand jury disclosure. Authorizes Federal 
     prosecutors to seek a court order to share grand jury 
     information regarding health care offenses with other Federal 
     prosecutors for use in civil proceedings or investigations 
     relating to fraud or false claims in connection with any 
     Federal health care program. Permits grand jury information 
     regarding health care offenses to be shared with Federal 
     civil prosecutors, only after ex parte court review and a 
     finding that the information would assist in enforcement of 
     Federal laws or regulations.
       Sec. 3335. Increasing the effectiveness of civil 
     investigative demands in false claims investigations. 
     Authorizes the Attorney General to delegate authority to 
     issue civil investigative demands to the Deputy Attorney 
     General or an Assistant Attorney General. Authorizes whistle-
     blowers who have brought qui tam actions under the False 
     Claims Act to seek permission from a district court to obtain 
     information disclosed to the Justice Department in response 
     to civil investigative demands.

         Part 4. Protecting the Rights of Elderly Crime Victims

       Sec. 3341. Use of forfeited funds to pay restitution to 
     crime victims and regulatory

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     agencies. Authorizes the use of forfeited funds to pay 
     restitution to crime victims and regulatory agencies.
       Sec. 3342. Victim restitution. Allows the government to 
     move to dismiss forfeiture proceedings to allow the defendant 
     to use the property subject to forfeiture for the payment of 
     restitution to victims. If forfeiture proceedings are 
     complete, Government may return the forfeited property so it 
     may be used for restitution.
       Sec. 3343. Bankruptcy proceedings not used to shield 
     illegal gains from false claims. Allows an action under the 
     False Claims Act despite concurrent bankruptcy proceedings. 
     Prohibits discharge of debts resulting from judgments or 
     settlements in Medicare and Medicaid fraud cases. Provides 
     that no debt owed for a violation of the False Claims Act or 
     other agreement may be avoided under bankruptcy provisions.
       Sec. 3344. Forfeiture for retirement offenses. Requires the 
     forfeiture of proceeds of a criminal retirement offense. 
     Permits the civil forfeiture of proceeds from a criminal 
     retirement offense.

             Subtitle D. Violent Crime Reduction Trust Fund

       Sec. 3401. Extension of Violent Crime Reduction Trust Fund. 
     Extends funding for the Violent Crime Control and Law 
     Enforcement Act of 1994 through FY2005.


           Title IV: Breaking the Cycle of Drugs and Violence

  Subtitle A. Drug Courts, Drug Treatment, and Alternative sentencing

                    Part 1. Expansion of Drug Courts

       Sec. 4111. Reauthorization of drug courts program. 
     Authorizes appropriations for the Drug Courts Program for 
     FY2002 and FY2003 at $400,000,000 each year.
       Sec. 4112. Juvenile drug courts. Authorizes grants to 
     States, State and local courts, and Indian tribes, to 
     establish programs for juveniles adjudicated delinquent for 
     non-violent crimes who have substance abuse problems. 
     Programs must include drug testing, drug treatment, and 
     aftercare services such as relapse prevention and vocational 
     training. Authorizes appropriations through FY2005 from the 
     Violent Crime Reduction Trust Fund.

                  Part 2. Zero Tolerance Drug Testing

       Sec. 4121. Grant authority. Authorizes grants to States and 
     localities for programs supporting comprehensive drug testing 
     of criminal justice populations, and to establish appropriate 
     interventions to illegal drug use for offender populations.
       Sec. 4122. Administration. Instructs Attorney General to 
     coordinate with the other Justice Department initiatives that 
     address drug testing and interventions in the criminal 
     justice system.
       Sec. 4123. Applications. Instructs potential applicants on 
     the process of requesting such grants, which are to be 
     awarded on a competitive basis.
       Sec. 4124. Federal share. The Federal share of a grant made 
     under this part may not exceed 75 percent of the total cost 
     of the program.
       Sec. 4125. Geographic distribution. The Attorney General 
     shall ensure that, to the extent practicable, an equitable 
     geographic distribution of grant awards is made, with rural 
     and tribal jurisdiction representation.
       Sec. 4126. Technical assistance, training, and evaluation. 
     The Attorney General shall provide technical assistance and 
     training in furtherance of the purposes of this part.
       Sec. 4127. Authorization of appropriations. Authorizes 
     $75,000,000 for FY2002 and such sums as are necessary for 
     FY2003 through FY2006.
       Sec. 4128. Permanent set-aside for research and evaluation. 
     The Attorney General shall set aside between 1 and 3 percent 
     of the sums appropriated under section 4127 for research and 
     evaluation of this program.
       Sec. 4129. Additional requirements for the use of funds 
     under the violent offender incarceration and truth-in-
     sentencing grant programs. Requires that States receiving 
     grants under the Violent Offender Incarceration and Truth-In-
     Sentencing grant programs (VOI/TIS) adopt a system of 
     controlled substance testing and interventions. Permits use 
     of VOI/TIS funds for such testing. Adds other conditions for 
     receipt of funding under the VOI/TIS program.

                         Part 3. Drug Treatment

       Sec. 4131. Drug treatment alternative to prison programs 
     administered by State or local prosecutors. Authorizes the 
     Attorney General to make grants to State or local prosecutors 
     to implement or expand drug treatment alternative to prison 
     programs. Authorizes appropriations through FY2006.
       Sec. 4132. Substance abuse treatment in Federal prisons 
     reauthorization. Authorizes funding for substance abuse 
     treatment in Federal prisons for FY2002 and FY2003.
       Sec. 4133. Residential substance abuse treatment for State 
     prisoners reauthorization. Authorizes appropriations for 
     residential substance abuse treatment for State prisoners 
     through FY2007. Allows States to offer treatment during 
     incarceration and after release.
       Sec. 4134. Drug treatment for juveniles. Allows the 
     Director of the Center for Substance Abuse to make grants to 
     public and private nonprofit entities to provide residential 
     drug treatment programs for juveniles. Authorizes 
     appropriations through FY2005.

            Part 4. Funding for Drug Free Community Programs

       Sec. 4141. Extension of safe and drug-free schools and 
     community programs. Extends funding for the Safe and Drug-
     Free Schools and Communities Program through FY2005, at 
     $655,000,000 for FY2002 and FY2003, and $955,000,000 for 
     FY2004 and FY2005.
       Sec. 4142. Say No to Drugs community centers. Authorizes 
     grants for the provision of drug prevention services to youth 
     living in eligible communities during after-school hours or 
     summer vacations. Authorizes $125,000,000 for each of FY2002 
     and FY2003 from the Violent Crime Reduction Trust Fund.
       Sec. 4143. Drug education and prevention relating to youth 
     gangs. Extends funding under the Anti-Drug Abuse Act of 1988 
     through FY2006.
       Sec. 4144. Drug education and prevention program for 
     runaway and homeless youth. Extends funding under the Anti-
     Drug Abuse Act of 1988 through FY2006.

         Subtitle B--Youth Crime Prevention and Juvenile Courts

                 Part 1--Grants to Youth Organizations

       Sec. 4211. Grant program. Establishes a grant program for 
     provision of (1) constructive activities for youth during 
     critical time periods; (2) supervised activities in a safe 
     environment; (3) anti-drug education; (4) anti-drug police 
     efforts; or (5) a safe environment for activities in parks 
     and other public recreation areas.
       Sec. 4212. Grants to national organizations. Establishes 
     application requirements and evaluation criteria for awarding 
     grants to national and statewide organizations.
       Sec. 4213. Grants to States. Establishes application 
     requirements and evaluation criteria for awarding grants to 
     States.
       Sec. 4214. Allocation; grant limitation. Allocates funds 
     under this subtitle: 20 percent shall go to national and 
     statewide organizations; 80 percent shall go to States.
       Sec. 4215. Report and evaluation. Defines reporting 
     requirements and establishes criteria by which the Attorney 
     General shall evaluate the funded programs.
       Sec. 4216. Authorization of appropriations. Authorizes 
     appropriation of such sums as may be necessary for FY2002 and 
     FY2003, and $125,000,000 for each of FY2004 and FY2005.
       Sec. 4217. Grants to public and private agencies. 
     Authorizes grants to public and private agencies to fund 
     effective after school juvenile crime prevention programs.

   Part 2. Reauthorization of Incentive Grants for Local Delinquency 
                          Prevention Programs

       Sec. 4221. Incentive grants for local delinquency 
     prevention programs. Reauthorizes incentive grants for local 
     delinquency prevention programs through FY2006.
       Sec. 4222. Research, evaluation, and training. Allocates a 
     portion of the amounts appropriated for incentive grants for 
     local delinquency programs to research, evaluation and 
     training.

                           Part 3. JUMP Ahead

       Sec. 4231. Short title. This part may be cited as the 
     ``JUMP Ahead Act of 2001''.
       Sec. 4232. Findings. Legislative findings in support of 
     this part.
       Sec. 4233. Juvenile mentoring grants. Amends the Juvenile 
     Justice and Delinquency Prevention Act of 1973 (JJDPA) to 
     include a list of the intended goals of mentoring grants. 
     Each grant is limited to a total of $200,000 over a period 
     not more than three years. Authorizes $50,000,000 for each of 
     FY2002 through FY2005.
       Sec. 4234. Implementation and evaluation grants. Authorizes 
     grants to national organizations or agencies to improve youth 
     mentoring programs. Authorizes $5,000,000 for each of FY2002 
     through FY2005.
       Sec. 4235. Evaluations; reports. Directs the Attorney 
     General to evaluate the programs and activities assisted 
     under this part or under the JJDPA. Requires each grant 
     recipient to report annually to the evaluating organization 
     on any program or activity so assisted.

                       Part 4. Truancy Prevention

       Sec. 4241. Short title. This part may be cited as the 
     ``Truancy Prevention and Juvenile Crime Reduction Act of 
     2001''.
       Sec. 4242. Findings. Legislative findings in support of 
     this part.
       Sec. 4243. Grants. Authorizes grants to eligible 
     partnerships to reduce truancy and daytime juvenile crime. 
     Authorizes $25,000,000 for each of FY2002 through FY2004.

     Part 5. Juvenile Crime Control and Delinquency Prevention Act

       Sec. 4251. Short title. This part may be cited as the 
     ``Juvenile Crime Control and Delinquency Prevention Act of 
     2001''.
       Sec. 4252. Findings. Legislative findings in support of 
     this part.
       Sec. 4253. Purpose. Statement of legislative purpose.
       Sec. 4254. Definitions. Defines terms used in this part.
       Sec. 4255. Name of office. Redesignated the Office of 
     Juvenile and Delinquency Prevention as the Office of Juvenile 
     Crime Control and Delinquency Prevention.
       Sec. 4256. Concentration of Federal effort. Modifies 
     provisions of the JJDPA regarding annual submission of 
     juvenile delinquency development statements and the contents 
     of such reports.

[[Page 333]]

       Sec. 4257. Allocation. Makes certain technical amendments 
     to the allocation formulas.
       Sec. 4258. State plans. Modifies JJDPA requirements 
     regarding State plans. Defines who shall serve on State 
     advisory groups. Requires State plans to provide services in 
     rural areas, offer mental health services, and address 
     gender-specific needs. Defines projects to which funds may be 
     applied. Revises State plan requirements regarding limits on 
     the placement of juveniles in secure detention or 
     correctional facilities.
       Sec. 4259. Juvenile delinquency prevention block grant 
     program. Authorizes grants to eligible States to carry out 
     projects designed to prevent juvenile delinquency. Delineates 
     the manner in which funding shall be allocated between 
     States. Defines requirements under which States must consider 
     applications.
       Sec. 4260. Research; evaluation; technical assistance; 
     training. Authorizes the Administrator to undertake specified 
     activities regarding research, evaluation, technical 
     assistance, and training. Permits Federal agencies to carry 
     out projects directly or by making grants to or contracts 
     with public and private agencies, institutions, and 
     organizations.
       Sec. 4261. Demonstration projects. Authorizes the 
     Administrator to fund initiatives for the prevention, 
     control, or reduction of juvenile delinquency.
       Sec. 4262. Authorization of appropriations. Authorizes 
     appropriations for specified programs under the JJDPA for 
     FY2002 through FY2004.
       Sec. 4263. Administrative authority. Limits the 
     Administrator's authority to establish rules, regulations and 
     procedures to those necessary for the exercise of the 
     function of the office and to ensure compliance with the 
     requirements of the title.
       Sec. 4264. Use of funds. Prohibits the use of funds for the 
     construction of short or long-term juvenile or adult offender 
     facilities; allows up to 15 percent of funds from a State's 
     allocation for replacement or renovation of juvenile 
     facilities.
       Sec. 4265. Limitation on use of funds. Prohibits the use of 
     funds under this part for advocacy or support for the 
     unsecured release of juvenile charged with violent crimes.
       Sec. 4266. Rules of construction. The JJDPA shall not be 
     construed (1) to prevent financial assistance from being 
     awarded through grants under the JJDPA to any otherwise 
     eligible organization, or (2) to modify or affect any Federal 
     or State law relating to collective bargaining rights.
       Sec. 4267. Leasing surplus Federal property. Authorizes the 
     Administrator to lease surplus Federal property to States and 
     localities for use as facilities for juveniles offenders; 
     issues rules for making grants and contracts, and 
     distributing funds available, to carry out the JJDPA.
       Sec. 4268. Issuance of rules. Authorizes the Administrator 
     to issue such rules as are necessary to carry out this part.
       Sec. 4269. Technical and conforming amendments. Makes 
     technical and conforming amendments to the JJDPA and other 
     laws.
       Sec. 4270. References. Any reference to the Office of 
     Juvenile Justice and Delinquency Prevention shall be deemed 
     to include a reference to the Office of Juvenile Crime 
     Control and Delinquency Prevention.

             Part 6. Local Gun Violence Prevention Program

       Sec. 4271. Competitive grants for children's firearm safety 
     education. Authorizes competitive grants to eligible local 
     educational agencies to educate children about prevention 
     violence. Authorizes $60,000,000 for each of FY2002 and 
     FY2004.
       Sec. 4272. Dissemination of best practices via the 
     Internet. Requires the Secretary of Education to post details 
     of programs that receive grants on the Department's Internet 
     site, and to publicize the program on its Internet site and 
     in its publications.
       Sec. 4273. Grant priority for tracing guns used in crimes 
     by juveniles. Requires the Bureau of Justice Assistance to 
     give priority to grant applications that include coordinated 
     enforcement strategies to trace firearms and disrupt illegal 
     firearms sales to or among juveniles.

  Mr. LEAHY. I am pleased today to join Senator Daschle and other 
Democratic Senators in introducing the 21st Century Law Enforcement, 
Crime Prevention, and Victims Assistance Act. This comprehensive crime 
bill builds on prior Democratic crime initiatives, including the 
landmark Violent Crime Control and Law Enforcement Act of 1994, that 
have substantially reduced the Nations' serious crime rates.
  Our current Attorney General, Janet Reno, has helped us all make 
unprecedented strides in combating violent crime, protecting women's 
rights, protecting crime victims rights and reducing violence against 
women. The Nation's serious crime rates have declined for an 
unprecedented eight straight years. Murder rates have fallen to their 
lowest levels in three decades, and since 1994, violent crimes by 
juveniles and the juvenile arrest rates for serious crimes have also 
declined. Our outgoing Attorney General must be commended for greatly 
improving the effectiveness of our law enforcement coordination 
efforts, federal law enforcement assistance efforts and for extending 
the reach of those efforts into rural areas.
  The 21st Century Law Enforcement, Crime Prevention, and Victims 
Assistance Act is designed to keep our Nation's crime rates moving in 
the right direction--downward. The Nation's serious crime rates are now 
at their lowest level since 1973, the first year the national crime 
victimization survey was conducted. We are proud of the significant 
reduction in crime rates, but we must not become complacent. Too many 
Americans still encounter violence in their neighborhoods, workplaces, 
and unfortunately, even in their homes. This bill would ensure that the 
crime rates continue their downward trend next year, the year after, 
and beyond.
  We should be able to enact this bill, without partisan or ideological 
controversy. We have tried to avoid the easy rhetoric about crime that 
some have to offer in this crucial area of public policy. Instead, we 
have crafted a bill that could actually make a difference.
  The 21st Century Law Enforcement, Crime Prevention, and Victims 
Assistance Act targets violent crime in our schools, combats gang 
violence, cracks down on the sale and use of illegal drugs, enhances 
the rights of crime victims, fights crime against America's senior 
citizens, and provides meaningful assistance to law enforcement 
officers in the battle against street crime. The bill represents an 
important next step in the continuing effort by Senate Democrats to 
enact tough yet balanced reforms to our criminal justice system.
  I should note that the bill contains no new death penalties and no 
new or increased mandatory minimum sentences. We can be tough without 
imposing the death penalty, and we can ensure swift and certain 
punishment without removing all discretion from the judge at 
sentencing.
  Title I of the bill deals with proposals for supporting Federal, 
State and local law enforcement and promoting the effective 
administration of justice. this title extends the COPS program through 
fiscal year 2007, authorizing funding to deploy up to 50,000 additional 
police officers, 10,000 additional prosecutors, and 10,000 indigent 
defense attorneys in the coming years. The bill also extends Project 
Exile, the Department of Justice's gun violence reduction initiative 
designed to prosecute felons who unlawfully possess firearms, and the 
Youth Crime Gun Interdiction Initiative, the national program to 
disrupt the illegal supply of firearms to juveniles by tracing the guns 
that are used in crimes, and it includes a provision sponsored by 
Senator Biden to authorize grants to alleviate the public safety risk 
posed by released prisoners by promoting their successful reintegration 
into society.
  Other important initiatives are included to protect children from 
violence, including violence resulting from the misuse of guns. 
Americans want concrete proposals to reduce the risk of such incidents 
recurring. At the same time, we must preserve adults' rights to use 
guns for legitimate purposes, such as home protection, hunting and for 
sport. Title I of the bill imposes a prospective gun ban for juveniles 
convicted or adjudicated delinquent for violent crimes. It also 
requires revocation of a firearms dealer's license for failing to have 
secure gun storage or safety devices available for sale with firearms. 
The bill enhances the penalties for certain firearm laws involving 
juveniles. In addition, the bill would close the gun show loophole by 
requiring criminal background checks on all gun sales at gun shows.
  This title of the bill also recognizes that law enforcement officers 
put their lives on the line every day. According to the FBI, over 1,000 
officers have been killed in the line of duty since 1980. The 21st 
Century Law Enforcement, Crime Prevention, and Victims Assistance Act 
establishes new crimes and increases penalties for killing Federal 
officers and persons working with Federal officers, including in their 
work

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with Federal prisoners, and for retaliation against Federal officials 
by threatening or injuring their family members. The bill enhances the 
penalty for assaults and threats against Federal judges and other 
federal officials engaged in their official duties.
  A significant problem that arose during Special Prosecutor Kenneth 
Starr's investigation of president Clinton was the loss of 
confidentiality that had previously attached to the important work of 
the U.S. Secret Service. The Departments of Justice and Treasury and 
even a former Republican President advise that the safety of future 
Presidents may be jeopardized by forcing U.S. Secret Service agents to 
breach the confidentiality they need to do their job by testifying 
before a grant jury. I trust the Secret Service on this issue; they are 
the experts with the mission of protecting the lives of the President 
and other high-level official and visiting dignitaries. I also have 
confidence in the judgment of former President Bush, who has written, 
``I feel very strongly that [Secret Service] agents should not be made 
to appear in court to discuss that which they might or might not have 
seen or heard.''
  Title I of the 21st Century Law Enforcement, Crime Prevention, and 
Victims Assistance Act provides a reasonable and limited protective 
function privilege so future Secret Service agents are able to maintain 
the confidentiality they say they need to protect the lives of the 
President, Vice President and visiting heads of state.
  Title II of the bill is aimed at strengthening the Federal criminal 
laws. This part of the bill cracks down on gangs by making the 
interstate ``franchising'' of street gangs a crime. It would also 
increase penalties for crimes during which the convicted felon wears 
protective body armor or uses ``laser-sighting'' devices to commit the 
crime, and doubles the maximum criminal penalties for using or 
threatening physical violence against witnesses and contains other 
provisions designed to facilitate the use and protection of witnesses 
to help prosecute gangs and other violent criminals.
  Title II of the bill also details provisions for combating money 
laundering. Crime increasingly has an international face, from drug 
kingpins to millionaire terrorists, like Osama bin Laden. The money 
laundering provisions of this bill hit these international criminals 
where it hurts most--in the pocketbook.
  These provisions would provide important tools not just to combat 
international terrorism but drug trafficking as well. We must have 
interdiction, we must have treatment programs; we must tell kids to say 
``No'' to drugs. But we have to do more, and taking the profit away 
from international drug lords is an effective weapon. This Democratic 
crime bill would strengthen these laws.
  Title II also contains important initiatives to deter cargo thefts, 
enhance the maximum penalties for voluntary manslaughter, felony theft 
or conversion of grand jury material, counterfeiting, and certain 
antitrust violations committed by corporations.
  Title III of the bill is intended to increase the rights of victims 
within the criminal justice system. The criminal is only half of the 
equation. This bill guarantees the rights of crime victims. All States 
recognize victims' rights in some form, but they often lack the 
training and resources to make those rights a reality. This title 
provides a model Bill of Rights for crime victims in the Federal 
system, and makes available to the States grants for victim-related 
training and state-of-the art notification systems. In addition, this 
title would authorize grants for pilot programs to operate Victim 
Ombudsman Information Centers in seven States, and to study the 
effectiveness of the restorative justice approach for victims. It would 
also provide assistance for shelters and transitional housing for 
victims of domestic violence. In short, this title would help make 
victims' rights a reality.
  This title of the bill also includes a number of provisions to 
improve the safety and security of older Americans. During the 1990s, 
while overall crime rates dropped throughout the nation, the rate of 
crime against seniors remained constant. In addition to the increased 
vulnerability of some seniors to violent crime, older Americans are 
increasingly targeted by swindlers looking to take advantage of them 
through telemarketing schemes, pension fraud, and health care fraud. We 
must strengthen the hand of law enforcement to combat those criminals 
who plunder the savings that older Americans have worked their 
lifetimes to earn. The 21st Century Law Enforcement, Crime Prevention, 
and Victims Assistance Act tries to do exactly that, through a 
comprehensive package of proposals to establish new protections and 
increase penalties for a wide variety of crimes against seniors.
  Title IV of the bill outlines a number of prevention and alternative 
sentencing programs that are critical to further reducing juvenile 
crime. These programs include grants to youth organizations and ``Say 
No to Drugs'' Community Centers, and grants to promote drug testing and 
drug treatment, as well as reauthorization of the Safe and Drug-Free 
Schools and Communities Program, the Anti-Drug Abuse Programs, and the 
Local Deliquency Prevention Programs. Additional sections include a 
program suggested by Senator Bingaman to establish a competitive grant 
program to reduce truancy, with priority given to efforts to replicate 
successful programs.
  The bill would also reauthorize the Juvenile Justice and Deliquency 
Prevention Act and create a new juvenile justice block grant program, 
retaining the four core protections for youth in the juvenile justice 
system while adopting greater flexibility for rural areas.
  In recent years, the Senate Republicans have tried to gut these core 
protections in their juvenile crime bills. This Democratic crime bill 
puts ideology aside, and follows the advice of numerous child advocacy 
experts--including the Children's Defense Fund, National Collaboration 
for Youth, Youth Law Center and National Network for Youth--who believe 
these key protections must be preserved in order to protect juveniles 
who have been arrested or detained. These core protections ensure that 
juveniles are not housed with adults, do not have verbal or physical 
contact with adult inmates, and any disproportionate confinement of 
minority youth is addressed by the States. If these protections are 
abolished, many more youth may end up committing suicide or being 
released with serious physical or emotional scars.
  The 21st Century Law Enforcement, Crime Prevention, and Victims 
Assistance Act is a comprehensive and realistic set of proposals for 
assisting local enforcement, preventing crime, protecting our children 
and senior citizens, and assisting the victims of crime. I look forward 
to working on a bipartisan basis for passage of as much of this bill as 
possible during the 107th Congress.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Dodd, Mr. Lieberman, Mr. Dorgan, 
        Mr. Durbin, Mr. Biden, Mrs. Boxer, Mrs. Clinton, Mr. Corzine, 
        Mr. Harkin, Mr. Johnson, Mr. Kennedy, Mr. Leahy, Ms. Mikulski, 
        Mr. Rockefeller, Mr. Sarbanes, and Mr. Schumer):
  S. 17. A bill to amend the Federal Election Campaign Act of 1971 to 
provide bipartisan campaign reform; to the Committee on Rules and 
Administration.


                  federal elections reform act of 2001

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

                                 S. 17

       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 ``Federal 
     Elections Reform Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

            TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE

Sec. 101. Soft money of political parties.

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Sec. 102. Increased contribution limits for State committees of 
              political parties and aggregate contribution limit for 
              individuals.
Sec. 103. Reporting requirements.

           TITLE II--INDEPENDENT AND COORDINATED EXPENDITURES

Sec. 201. Definitions.
Sec. 202. Express advocacy determined without regard to background 
              music.
Sec. 203. Civil penalty.
Sec. 204. Reporting requirements for certain independent expenditures.
Sec. 205. Independent versus coordinated expenditures by party.
Sec. 206. Coordination with candidates.

                         TITLE III--DISCLOSURE

Sec. 301. Audits.
Sec. 302. Reporting requirements for contributions of $50 or more.
Sec. 303. Use of candidates' names.
Sec. 304. Prohibition of false representation to solicit contributions.
Sec. 305. Campaign advertising.

                        TITLE IV--MISCELLANEOUS

Sec. 401. Codification of Beck decision.
Sec. 402. Use of contributed amounts for certain purposes.
Sec. 403. Limit on congressional use of the franking privilege.
Sec. 404. Prohibition of fundraising on Federal property.
Sec. 405. Penalties for violations.
Sec. 406. Strengthening foreign money ban.
Sec. 407. Prohibition of contributions by minors.
Sec. 408. Expedited procedures.
Sec. 409. Initiation of enforcement proceeding.
Sec. 410. Protecting equal participation of eligible voters in 
              campaigns and elections.
Sec. 411. Penalty for violation of prohibition against foreign 
              contributions.
Sec. 412. Expedited court review of certain alleged violations of 
              Federal Election Campaign Act of 1971.
Sec. 413. Conspiracy to violate presidential campaign spending limits.
Sec. 414. Deposit of certain contributions and donations in Treasury 
              account.
Sec. 415. Establishment of a clearinghouse of information on political 
              activities within the Federal Election Commission.
Sec. 416. Enforcement of spending limit on presidential and vice 
              presidential candidates who receive public financing.
Sec. 417. Clarification of right of nationals of the United States to 
              make political contributions.
Sec. 418. Prohibiting use of White House meals and accommodations for 
              political fundraising.
Sec. 419. Prohibition against acceptance or solicitation to obtain 
              access to certain Federal government property.
Sec. 420. Requiring national parties to reimburse at cost for use of 
              Air Force One for political fundraising.
Sec. 421. Enhancing enforcement of campaign finance law.
Sec. 422. Ban on coordination of soft money for issue advocacy by 
              presidential candidates receiving public financing.
Sec. 423. Requirement that names of passengers on Air Force One and Air 
              Force Two be made available through the Internet.

            TITLE V--ELECTION ADMINISTRATION AND TECHNOLOGY

Sec. 501. Findings.

Subtitle A--Establishment of Commission on Voting Rights and Procedures

Sec. 511. Establishment.
Sec. 512. Membership of the Commission.
Sec. 513. Duties of the Commission.
Sec. 514. Powers of the Commission.
Sec. 515. Personnel matters.
Sec. 516. Termination of the Commission.
Sec. 517. Authorization of appropriations for the Commission.

                       Subtitle B--Grant Program

Sec. 521. Establishment of grant program.
Sec. 522. Authorized activities.
Sec. 523. General policies and criteria.
Sec. 524. Submission of State plans.
Sec. 525. Approval of State plans.
Sec. 526. Federal matching funds.
Sec. 527. Audits and examinations.
Sec. 528. Reports.
Sec. 529. State defined.
Sec. 530. Authorization of appropriations.

                       Subtitle C--Miscellaneous

Sec. 541. Relationship to other laws.

                       TITLE VI--MILITARY VOTING

Sec. 601. Short title.
Sec. 602. Guarantee of residency.
Sec. 603. State responsibility to guarantee military voting rights.

TITLE VII--SEVERABILITY; CONSTITUTIONALITY; EFFECTIVE DATE; REGULATIONS

Sec. 701. Severability.
Sec. 702. Review of constitutional issues.
Sec. 703. Effective date.
Sec. 704. Regulations.

            TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE

     SEC. 101. SOFT MONEY OF POLITICAL PARTIES.

       (a) In General.--Title III of the Federal Election Campaign 
     Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 323. SOFT MONEY OF POLITICAL PARTIES.

       ``(a) National Committees.--
       ``(1) In general.--A national committee of a political 
     party (including a national congressional campaign committee 
     of a political party) and any officers or agents of such 
     party committees, shall not solicit, receive, or direct to 
     another person a contribution, donation, or transfer of 
     funds, or spend any funds, that are not subject to the 
     limitations, prohibitions, and reporting requirements of this 
     Act.
       ``(2) Applicability.--This subsection shall apply to an 
     entity that is directly or indirectly established, financed, 
     maintained, or controlled by a national committee of a 
     political party (including a national congressional campaign 
     committee of a political party), or an entity acting on 
     behalf of a national committee, and an officer or agent 
     acting on behalf of any such committee or entity.
       ``(b) State, District, and Local Committees.--
       ``(1) In general.--An amount that is expended or disbursed 
     by a State, district, or local committee of a political party 
     (including an entity that is directly or indirectly 
     established, financed, maintained, or controlled by a State, 
     district, or local committee of a political party and an 
     officer or agent acting on behalf of such committee or 
     entity) for Federal election activity shall be made from 
     funds subject to the limitations, prohibitions, and reporting 
     requirements of this Act.
       ``(2) Federal election activity.--
       ``(A) In general.--The term `Federal election activity' 
     means--
       ``(i) voter registration activity during the period that 
     begins on the date that is 120 days before the date a 
     regularly scheduled Federal election is held and ends on the 
     date of the election;
       ``(ii) voter identification, get-out-the-vote activity, or 
     generic campaign activity conducted in connection with an 
     election in which a candidate for Federal office appears on 
     the ballot (regardless of whether a candidate for State or 
     local office also appears on the ballot); and
       ``(iii) a communication that refers to a clearly identified 
     candidate for Federal office (regardless of whether a 
     candidate for State or local office is also mentioned or 
     identified) and is made for the purpose of influencing a 
     Federal election (regardless of whether the communication is 
     express advocacy).
       ``(B) Excluded activity.--The term `Federal election 
     activity' does not include an amount expended or disbursed by 
     a State, district, or local committee of a political party 
     for--
       ``(i) campaign activity conducted solely on behalf of a 
     clearly identified candidate for State or local office, 
     provided the campaign activity is not a Federal election 
     activity described in subparagraph (A);
       ``(ii) a contribution to a candidate for State or local 
     office, provided the contribution is not designated or used 
     to pay for a Federal election activity described in 
     subparagraph (A);
       ``(iii) the costs of a State, district, or local political 
     convention;
       ``(iv) the costs of grassroots campaign materials, 
     including buttons, bumper stickers, and yard signs, that name 
     or depict only a candidate for State or local office;
       ``(v) the non-Federal share of a State, district, or local 
     party committee's administrative and overhead expenses (but 
     not including the compensation in any month of an individual 
     who spends more than 20 percent of the individual's time on 
     Federal election activity) as determined by a regulation 
     promulgated by the Commission to determine the non-Federal 
     share of a State, district, or local party committee's 
     administrative and overhead expenses; and
       ``(vi) the cost of constructing or purchasing an office 
     facility or equipment for a State, district or local 
     committee.
       ``(c) Fundraising Costs.--An amount spent by a national, 
     State, district, or local committee of a political party, by 
     an entity that is established, financed, maintained, or 
     controlled by a national, State, district, or local committee 
     of a political party, or by an agent or officer of any such 
     committee or entity, to raise funds that are used, in whole 
     or in part, to pay the costs of a Federal election activity 
     shall be made from funds subject to the limitations, 
     prohibitions, and reporting requirements of this Act.
       ``(d) Tax-Exempt Organizations.--A national, State, 
     district, or local committee of a political party (including 
     a national congressional campaign committee of a political 
     party), an entity that is directly or indirectly established, 
     financed, maintained, or controlled by any such national, 
     State, district, or local committee or its agent, and an 
     officer or agent acting on behalf of any such party committee 
     or entity, shall not solicit any funds for, or make or direct 
     any donations to, an organization that is described in 
     section 501(c) of the Internal Revenue Code of 1986 and 
     exempt from taxation under section 501(a) of such Code (or 
     has submitted an

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     application to the Commissioner of the Internal Revenue 
     Service for determination of tax-exemption under such 
     section).
       ``(e) Candidates.--
       ``(1) In general.--A candidate, individual holding Federal 
     office, agent of a candidate or individual holding Federal 
     office, or an entity directly or indirectly established, 
     financed, maintained or controlled by or acting on behalf of 
     one or more candidates or individuals holding Federal office, 
     shall not--
       ``(A) solicit, receive, direct, transfer, or spend funds in 
     connection with an election for Federal office, including 
     funds for any Federal election activity, unless the funds are 
     subject to the limitations, prohibitions, and reporting 
     requirements of this Act; or
       ``(B) solicit, receive, direct, transfer, or spend funds in 
     connection with any election other than an election for 
     Federal office or disburse funds in connection with such an 
     election unless the funds--
       ``(i) are not in excess of the amounts permitted with 
     respect to contributions to candidates and political 
     committees under paragraphs (1) and (2) of section 315(a); 
     and
       ``(ii) are not from sources prohibited by this Act from 
     making contributions with respect to an election for Federal 
     office.
       ``(2) State law.--Paragraph (1) does not apply to the 
     solicitation, receipt, or spending of funds by an individual 
     who is a candidate for a State or local office in connection 
     with such election for State or local office if the 
     solicitation, receipt, or spending of funds is permitted 
     under State law for any activity other than a Federal 
     election activity.
       ``(3) Fundraising events.--Notwithstanding paragraph (1), a 
     candidate may attend, speak, or be a featured guest at a 
     fundraising event for a State, district, or local committee 
     of a political party.''.
       (b) Definition of Generic Campaign Activity.--Section 301 
     of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et 
     seq.) (as amended by section 201(b)) is further amended by 
     adding at the end the following:
       ``(21) Generic campaign activity.--The term `generic 
     campaign activity' means an activity that promotes a 
     political party and does not promote a candidate or non-
     Federal candidate.''.

     SEC. 102. INCREASED CONTRIBUTION LIMITS FOR STATE COMMITTEES 
                   OF POLITICAL PARTIES AND AGGREGATE CONTRIBUTION 
                   LIMIT FOR INDIVIDUALS.

       (a) Contribution Limit for State Committees of Political 
     Parties.--Section 315(a)(1) of the Federal Election Campaign 
     Act of 1971 (2 U.S.C. 441a(a)(1)) is amended--
       (1) in subparagraph (B), by striking ``or'' at the end;
       (2) in subparagraph (C)--
       (A) by inserting ``(other than a committee described in 
     subparagraph (D))'' after ``committee''; and
       (B) by striking the period at the end and inserting ``; 
     or''; and
       (3) by adding at the end the following:
       ``(D) to a political committee established and maintained 
     by a State committee of a political party in any calendar 
     year that, in the aggregate, exceed $10,000.''.
       (b) Aggregate Contribution Limit for Individual.--Section 
     315(a)(3) of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 441a(a)(3)) is amended by striking ``$25,000'' and 
     inserting ``$30,000''.

     SEC. 103. REPORTING REQUIREMENTS.

       (a) Reporting Requirements.--Section 304 of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 434), as amended by 
     section 204, is amended by inserting after subsection (f) the 
     following:
       ``(g) Political Committees.--
       ``(1) National and congressional political committees.--The 
     national committee of a political party, any national 
     congressional campaign committee of a political party, and 
     any subordinate committee of either, shall report all 
     receipts and disbursements during the reporting period.
       ``(2) Other political committees to which section 323 
     applies.--In addition to any other reporting requirements 
     applicable under this Act, a political committee (not 
     described in paragraph (1)) to which section 323(b)(1) 
     applies shall report all receipts and disbursements made for 
     activities described in paragraphs (2)(A) and (2)(B)(v) of 
     section 323(b).
       ``(3) Itemization.--If a political committee has receipts 
     or disbursements to which this subsection applies from any 
     person aggregating in excess of $200 for any calendar year, 
     the political committee shall separately itemize its 
     reporting for such person in the same manner as required in 
     paragraphs (3)(A), (5), and (6) of subsection (b).
       ``(4) Reporting periods.--Reports required to be filed 
     under this subsection shall be filed for the same time 
     periods required for political committees under subsection 
     (a).''.
       (b) Building Fund Exception to the Definition of 
     Contribution.--Section 301(8)(B) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 431(8)(B)) is amended--
       (1) by striking clause (viii); and
       (2) by redesignating clauses (ix) through (xv) as clauses 
     (viii) through (xiv), respectively.

           TITLE II--INDEPENDENT AND COORDINATED EXPENDITURES

     SEC. 201. DEFINITIONS.

       (a) Definition of Independent Expenditure.--Section 301 of 
     the Federal Election Campaign Act (2 U.S.C. 431) is amended 
     by striking paragraph (17) and inserting the following:
       ``(17) Independent expenditure.--
       ``(A) In general.--The term `independent expenditure' means 
     an expenditure by a person--
       ``(i) for a communication that is express advocacy; and
       ``(ii) that is not coordinated activity or is not provided 
     in coordination with a candidate or a candidate's agent or a 
     person who is coordinating with a candidate or a candidate's 
     agent.''.
       (b) Definition of Express Advocacy.--Section 301 of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 431) is 
     amended by adding at the end the following:
       ``(20) Express advocacy.--
       ``(A) In general.--The term `express advocacy' means a 
     communication that advocates the election or defeat of a 
     candidate by--
       ``(i) containing a phrase such as `vote for', `re-elect', 
     `support', `cast your ballot for', `(name of candidate) for 
     Congress', `(name of candidate) in 1997', `vote against', 
     `defeat', `reject', or a campaign slogan or words that in 
     context can have no reasonable meaning other than to advocate 
     the election or defeat of one or more clearly identified 
     candidates;
       ``(ii) referring to one or more clearly identified 
     candidates in a paid advertisement that is transmitted 
     through radio or television within 60 calendar days preceding 
     the date of an election of the candidate and that appears in 
     the State in which the election is occurring, except that 
     with respect to a candidate for the office of Vice President 
     or President, the time period is within 60 calendar days 
     preceding the date of a general election; or
       ``(iii) expressing unmistakable and unambiguous support for 
     or opposition to one or more clearly identified candidates 
     when taken as a whole and with limited reference to external 
     events, such as proximity to an election.
       ``(B) Voting record and voting guide exception.--The term 
     `express advocacy' does not include a communication which is 
     in printed form or posted on the Internet that--
       ``(i) presents information solely about the voting record 
     or position on a campaign issue of one or more candidates 
     (including any statement by the sponsor of the voting record 
     or voting guide of its agreement or disagreement with the 
     record or position of a candidate), so long as the voting 
     record or voting guide when taken as a whole does not express 
     unmistakable and unambiguous support for or opposition to one 
     or more clearly identified candidates;
       ``(ii) is not coordinated activity or is not made in 
     coordination with a candidate, political party, or agent of 
     the candidate or party, or a candidate's agent or a person 
     who is coordinating with a candidate or a candidate's agent, 
     except that nothing in this clause may be construed to 
     prevent the sponsor of the voting guide from directing 
     questions in writing to a candidate about the candidate's 
     position on issues for purposes of preparing a voter guide or 
     to prevent the candidate from responding in writing to such 
     questions; and
       ``(iii) does not contain a phrase such as `vote for', `re-
     elect', `support', `cast your ballot for', `(name of 
     candidate) for Congress', `(name of candidate) in (year)', 
     `vote against', `defeat', or `reject', or a campaign slogan 
     or words that in context can have no reasonable meaning other 
     than to urge the election or defeat of one or more clearly 
     identified candidates.''.
       (c) Definition of Expenditure.--Section 301(9)(A) of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 431(9)(A)) is 
     amended--
       (1) in clause (i), by striking ``and'' at the end;
       (2) in clause (ii), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(iii) a payment made by a political committee for a 
     communication that--
       ``(I) refers to a clearly identified candidate; and
       ``(II) is for the purpose of influencing a Federal election 
     (regardless of whether the communication is express 
     advocacy).''.

     SEC. 202. EXPRESS ADVOCACY DETERMINED WITHOUT REGARD TO 
                   BACKGROUND MUSIC.

       Section 301(20) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 431(20)), as added by section 201(b), is 
     amended by adding at the end the following new subparagraph:
       ``(C) Background music.--In determining whether any 
     communication by television or radio broadcast constitutes 
     express advocacy for purposes of this Act, there shall not be 
     taken into account any background music not including lyrics 
     used in such broadcast.''.

     SEC. 203. CIVIL PENALTY.

       Section 309 of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 437g) is amended--
       (1) in subsection (a)--
       (A) in paragraph (4)(A)--
       (i) in clause (i), by striking ``clause (ii)'' and 
     inserting ``clauses (ii) and (iii)''; and
       (ii) by adding at the end the following:
       ``(iii) If the Commission determines by an affirmative vote 
     of 4 of its members that there is probable cause to believe 
     that a person has made a knowing and willful violation

[[Page 337]]

     of section 304(c), the Commission shall not enter into a 
     conciliation agreement under this paragraph and may institute 
     a civil action for relief under paragraph (6)(A).''; and
       (B) in paragraph (6)(B), by inserting ``(except an action 
     instituted in connection with a knowing and willful violation 
     of section 304(c))'' after ``subparagraph (A)''; and
       (2) in subsection (d)(1)--
       (A) in subparagraph (A), by striking ``Any person'' and 
     inserting ``Except as provided in subparagraph (D), any 
     person''; and
       (B) by adding at the end the following:
       ``(D) In the case of a knowing and willful violation of 
     section 304(c) that involves the reporting of an independent 
     expenditure, the violation shall not be subject to this 
     subsection.''.

     SEC. 204. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT 
                   EXPENDITURES.

       Section 304 of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 434) is amended--
       (1) in subsection (c)(2), by striking the undesignated 
     matter after subparagraph (C);
       (2) by redesignating paragraph (3) of subsection (c) as 
     subsection (e); and
       (3) by inserting after subsection (e), as redesignated by 
     paragraph (2), the following:
       ``(f) Time for Reporting Certain Expenditures.--
       ``(1) Expenditures aggregating $1,000.--
       ``(A) Initial report.--A person (including a political 
     committee) that makes or contracts to make independent 
     expenditures aggregating $1,000 or more after the 20th day, 
     but more than 24 hours, before the date of an election shall 
     file a report describing the expenditures within 24 hours 
     after that amount of independent expenditures has been made.
       ``(B) Additional reports.--After a person files a report 
     under subparagraph (A), the person shall file an additional 
     report within 24 hours after each time the person makes or 
     contracts to make independent expenditures aggregating an 
     additional $1,000 with respect to the same election as that 
     to which the initial report relates.
       ``(2) Expenditures aggregating $10,000.--
       ``(A) Initial report.--A person (including a political 
     committee) that makes or contracts to make independent 
     expenditures aggregating $10,000 or more at any time up to 
     and including the 20th day before the date of an election 
     shall file a report describing the expenditures within 48 
     hours after that amount of independent expenditures has been 
     made.
       ``(B) Additional reports.--After a person files a report 
     under subparagraph (A), the person shall file an additional 
     report within 48 hours after each time the person makes or 
     contracts to make independent expenditures aggregating an 
     additional $10,000 with respect to the same election as that 
     to which the initial report relates.
       ``(3) Place of filing; contents.--A report under this 
     subsection--
       ``(A) shall be filed with the Commission; and
       ``(B) shall contain the information required by subsection 
     (b)(6)(B)(iii), including the name of each candidate whom an 
     expenditure is intended to support or oppose.''.

     SEC. 205. INDEPENDENT VERSUS COORDINATED EXPENDITURES BY 
                   PARTY.

       Section 315(d) of the Federal Election Campaign Act (2 
     U.S.C. 441a(d)) is amended--
       (1) in paragraph (1), by striking ``and (3)'' and inserting 
     ``, (3), and (4)''; and
       (2) by adding at the end the following:
       ``(4) Independent Versus Coordinated Expenditures by 
     Party.--
       ``(A) In general.--On or after the date on which a 
     political party nominates a candidate, a committee of the 
     political party shall not make both expenditures under this 
     subsection and independent expenditures (as defined in 
     section 301(17)) with respect to the candidate during the 
     election cycle.
       ``(B) Certification.--Before making a coordinated 
     expenditure under this subsection with respect to a 
     candidate, a committee of a political party shall file with 
     the Commission a certification, signed by the treasurer of 
     the committee, that the committee has not and shall not make 
     any independent expenditure with respect to the candidate 
     during the same election cycle.
       ``(C) Application.--For the purposes of this paragraph, all 
     political committees established and maintained by a national 
     political party (including all congressional campaign 
     committees) and all political committees established and 
     maintained by a State political party (including any 
     subordinate committee of a State committee) shall be 
     considered to be a single political committee.
       ``(D) Transfers.--A committee of a political party that 
     submits a certification under subparagraph (B) with respect 
     to a candidate shall not, during an election cycle, transfer 
     any funds to, assign authority to make coordinated 
     expenditures under this subsection to, or receive a transfer 
     of funds from, a committee of the political party that has 
     made or intends to make an independent expenditure with 
     respect to the candidate.''.

     SEC. 206. COORDINATION WITH CANDIDATES.

       (a) Definition of Coordination With Candidates.--
       (1) Section 301(8).--Section 301(8) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 431(8)) is amended--
       (A) in subparagraph (A)--
       (i) by striking ``or'' at the end of clause (i);
       (ii) by striking the period at the end of clause (ii) and 
     inserting ``; or''; and
       (iii) by adding at the end the following:
       ``(iii) coordinated activity (as defined in subparagraph 
     (C)).''; and
       (B) by adding at the end the following:
       ``(C) Coordinated activity.--The term `coordinated 
     activity' means anything of value provided by a person in 
     coordination with a candidate, an agent of the candidate, or 
     the political party of the candidate or its agent for the 
     purpose of influencing a Federal election (regardless of 
     whether the value being provided is a communication that is 
     express advocacy) in which such candidate seeks nomination or 
     election to Federal office, and includes any of the 
     following:
       ``(i) A payment made by a person in cooperation, 
     consultation, or concert with, at the request or suggestion 
     of, or pursuant to any general or particular understanding 
     with a candidate, the candidate's authorized committee, the 
     political party of the candidate, or an agent acting on 
     behalf of a candidate, authorized committee, or the political 
     party of the candidate.
       ``(ii) A payment made by a person for the production, 
     dissemination, distribution, or republication, in whole or in 
     part, of any broadcast or any written, graphic, or other form 
     of campaign material prepared by a candidate, a candidate's 
     authorized committee, or an agent of a candidate or 
     authorized committee (not including a communication described 
     in paragraph (9)(B)(i) or a communication that expressly 
     advocates the candidate's defeat).
       ``(iii) A payment made by a person based on information 
     about a candidate's plans, projects, or needs provided to the 
     person making the payment by the candidate or the candidate's 
     agent who provides the information with the intent that the 
     payment be made.
       ``(iv) A payment made by a person if, in the same election 
     cycle in which the payment is made, the person making the 
     payment is serving or has served as a member, employee, 
     fundraiser, or agent of the candidate's authorized committee 
     in an executive or policymaking position.
       ``(v) A payment made by a person if the person making the 
     payment has served in any formal policy making or advisory 
     position with the candidate's campaign or has participated in 
     formal strategic or formal policymaking discussions (other 
     than any discussion treated as a lobbying contact under the 
     Lobbying Disclosure Act of 1995 in the case of a candidate 
     holding Federal office or as a similar lobbying activity in 
     the case of a candidate holding State or other elective 
     office) with the candidate's campaign relating to the 
     candidate's pursuit of nomination for election, or election, 
     to Federal office, in the same election cycle as the election 
     cycle in which the payment is made.
       ``(vi) A payment made by a person if, in the same election 
     cycle, the person making the payment retains the professional 
     services of any person that has provided or is providing 
     campaign-related services in the same election cycle to a 
     candidate (including services provided through a political 
     committee of the candidate's political party) in connection 
     with the candidate's pursuit of nomination for election, or 
     election, to Federal office, including services relating to 
     the candidate's decision to seek Federal office, and the 
     person retained is retained to work on activities relating to 
     that candidate's campaign.
       ``(vii) A payment made by a person who has directly 
     participated in fundraising activities with the candidate or 
     in the solicitation or receipt of contributions on behalf of 
     the candidate.
       ``(viii) A payment made by a person who has communicated 
     with the candidate or an agent of the candidate (including a 
     communication through a political committee of the 
     candidate's political party) after the declaration of 
     candidacy (including a pollster, media consultant, vendor, 
     advisor, or staff member acting on behalf of the candidate), 
     about advertising message, allocation of resources, 
     fundraising, or other campaign matters related to the 
     candidate's campaign, including campaign operations, 
     staffing, tactics, or strategy.
       ``(ix) The provision of in-kind professional services or 
     polling data (including services or data provided through a 
     political committee of the candidate's political party) to 
     the candidate or candidate's agent.
       ``(x) A payment made by a person who has engaged in a 
     coordinated activity with a candidate described in clauses 
     (i) through (ix) for a communication that clearly refers to 
     the candidate or the candidate's opponent and is for the 
     purpose of influencing that candidates's election (regardless 
     of whether the communication is express advocacy).
       ``(D) Professional services.--For purposes of subparagraph 
     (C), the term `professional services' means polling, media 
     advice, fundraising, campaign research or direct mail (except 
     for mailhouse services solely for the distribution of voter 
     guides as defined in section 301(20)(B)) services in support 
     of a candidate's pursuit of nomination for election, or 
     election, to Federal office.
       ``(E) Aggregation.--For purposes of subparagraph (C), all 
     political committees established and maintained by a national 
     political party (including all congressional

[[Page 338]]

     campaign committees) and all political committees established 
     and maintained by a State political party (including any 
     subordinate committee of a State committee) shall be 
     considered to be a single political committee.''.
       (2) Section 315(a)(7).--Section 315(a)(7) of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 441a(a)(7)) is 
     amended by striking subparagraph (B) and inserting the 
     following:
       ``(B) a coordinated activity, as described in section 
     301(8)(C), shall be considered to be a contribution to the 
     candidate, and in the case of a limitation on expenditures, 
     shall be treated as an expenditure by the candidate; and''.
       (b) Meaning of Contribution or Expenditure for the Purposes 
     of Section 316.--Section 316(b)(2) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441b(b)) is amended by 
     striking ``shall include'' and inserting ``includes a 
     contribution or expenditure, as those terms are defined in 
     section 301, and also includes''.

                         TITLE III--DISCLOSURE

     SEC. 301. AUDITS.

       (a) Random Audits.--Section 311(b) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 438(b)) is amended--
       (1) by striking ``(b) The Commission'' and inserting the 
     following:
       ``(b) Audits.--
       ``(1) In general.--The Commission''; and
       (2) by adding at the end the following:
       ``(2) Random audits.--
       ``(A) In general.--Notwithstanding paragraph (1), the 
     Commission may conduct random audits and investigations to 
     ensure voluntary compliance with this Act. The selection of 
     any candidate for a random audit or investigation shall be 
     based on criteria adopted by a vote of at least four members 
     of the Commission.
       ``(B) Limitation.--The Commission shall not conduct an 
     audit or investigation of a candidate's authorized committee 
     under subparagraph (A) until the candidate is no longer a 
     candidate for the office sought by the candidate in an 
     election cycle.
       ``(C) Applicability.--This paragraph does not apply to an 
     authorized committee of a candidate for President or Vice 
     President subject to audit under section 9007 or 9038 of the 
     Internal Revenue Code of 1986.''.
       (b) Extension of Period During Which Campaign Audits May Be 
     Begun.--Section 311(b) of the Federal Election Campaign Act 
     of 1971 (2 U.S.C. 438(b)) is amended by striking ``6 months'' 
     and inserting ``12 months''.

     SEC. 302. REPORTING REQUIREMENTS FOR CONTRIBUTIONS OF $50 OR 
                   MORE.

       Section 304(b)(3)(A) of the Federal Election Campaign Act 
     at 1971 (2 U.S.C. 434(b)(3)(A) is amended--
       (1) by striking ``$200'' and inserting ``$50''; and
       (2) by striking the semicolon and inserting ``, except that 
     in the case of a person who makes contributions aggregating 
     at least $50 but not more than $200 during the calendar year, 
     the identification need include only the name and address of 
     the person;''.

     SEC. 303. USE OF CANDIDATES' NAMES.

       Section 302(e) of the Federal Election Campaign Act of 1971 
     (2 U.S.C. 432(e)) is amended by striking paragraph (4) and 
     inserting the following:
       ``(4) Name of committee.--
       ``(A) Authorized committee.--The name of each authorized 
     committee shall include the name of the candidate who 
     authorized the committee under paragraph (1).
       ``(B) Other political committees.--A political committee 
     that is not an authorized committee shall not--
       ``(i) include the name of any candidate in its name; or
       ``(ii) except in the case of a national, State, or local 
     party committee, use the name of any candidate in any 
     activity on behalf of the committee in such a context as to 
     suggest that the committee is an authorized committee of the 
     candidate or that the use of the candidate's name has been 
     authorized by the candidate.''.

     SEC. 304. PROHIBITION OF FALSE REPRESENTATION TO SOLICIT 
                   CONTRIBUTIONS.

       Section 322 of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 441h) is amended--
       (1) by inserting after ``Sec. 322.'' the following: ``(a) 
     In General.--''; and
       (2) by adding at the end the following:
       ``(b) Solicitation of Contributions.--No person shall 
     solicit contributions by falsely representing himself or 
     herself as a candidate or as a representative of a candidate, 
     a political committee, or a political party.''.

     SEC. 305. CAMPAIGN ADVERTISING.

       Section 318 of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 441d) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``Whenever'' and inserting ``Whenever a 
     political committee makes a disbursement for the purpose of 
     financing any communication through any broadcasting station, 
     newspaper, magazine, outdoor advertising facility, mailing, 
     or any other type of general public political advertising, or 
     whenever'';
       (ii) by striking ``an expenditure'' and inserting ``a 
     disbursement''; and
       (iii) by striking ``direct''; and
       (B) in paragraph (3), by inserting ``and permanent street 
     address'' after ``name''; and
       (2) by adding at the end the following:
       ``(c) Specification.-- Any printed communication described 
     in subsection (a) shall--
       ``(1) be of sufficient type size to be clearly readable by 
     the recipient of the communication;
       ``(2) be contained in a printed box set apart from the 
     other contents of the communication; and
       ``(3) be printed with a reasonable degree of color contrast 
     between the background and the printed statement.
       ``(d) Additional Requirements.--
       ``(1) Audio statement.--
       ``(A) Candidate.--Any communication described in paragraphs 
     (1) or (2) of subsection (a) which is transmitted through 
     radio or television shall include, in addition to the 
     requirements of that paragraph, an audio statement by the 
     candidate that identifies the candidate and states that the 
     candidate has approved the communication.
       ``(B) Other persons.--Any communication described in 
     paragraph (3) of subsection (a) which is transmitted through 
     radio or television shall include, in addition to the 
     requirements of that paragraph, in a clearly spoken manner, 
     the following statement: `________ is responsible for the 
     content of this advertisement.' (with the blank to be filled 
     in with the name of the political committee or other person 
     paying for the communication and the name of any connected 
     organization of the payor). If transmitted through 
     television, the statement shall also appear in a clearly 
     readable manner with a reasonable degree of color contrast 
     between the background and the printed statement, for a 
     period of at least 4 seconds.''.
       ``(2) Television.--If a communication described in 
     paragraph (1)(A) is transmitted through television, the 
     communication shall include, in addition to the audio 
     statement under paragraph (1), a written statement that--
       ``(A) appears at the end of the communication in a clearly 
     readable manner with a reasonable degree of color contrast 
     between the background and the printed statement, for a 
     period of at least 4 seconds; and
       ``(B) is accompanied by a clearly identifiable photographic 
     or similar image of the candidate.''.

                        TITLE IV--MISCELLANEOUS

     SEC. 401. CODIFICATION OF BECK DECISION.

       Section 8 of the National Labor Relations Act (29 U.S.C. 
     158) is amended by adding at the end the following:
       ``(h) Nonunion Member Payments to Labor Organization.--
       ``(1) In general.--It shall be an unfair labor practice for 
     any labor organization which receives a payment from an 
     employee pursuant to an agreement that requires employees who 
     are not members of the organization to make payments to such 
     organization in lieu of organization dues or fees not to 
     establish and implement the objection procedure described in 
     paragraph (2).
       ``(2) Objection procedure.--The objection procedure 
     required under paragraph (1) shall meet the following 
     requirements:
       ``(A) The labor organization shall annually provide to 
     employees who are covered by such agreement but are not 
     members of the organization--
       ``(i) reasonable personal notice of the objection 
     procedure, a list of the employees eligible to invoke the 
     procedure, and the time, place, and manner for filing an 
     objection; and
       ``(ii) reasonable opportunity to file an objection to 
     paying for organization expenditures supporting political 
     activities unrelated to collective bargaining, including but 
     not limited to the opportunity to file such objection by 
     mail.
       ``(B) If an employee who is not a member of the labor 
     organization files an objection under the procedure in 
     subparagraph (A), such organization shall--
       ``(i) reduce the payments in lieu of organization dues or 
     fees by such employee by an amount which reasonably reflects 
     the ratio that the organization's expenditures supporting 
     political activities unrelated to collective bargaining bears 
     to such organization's total expenditures; and
       ``(ii) provide such employee with a reasonable explanation 
     of the organization's calculation of such reduction, 
     including calculating the amount of organization expenditures 
     supporting political activities unrelated to collective 
     bargaining.
       ``(3) Definition.--In this subsection, the term 
     `expenditures supporting political activities unrelated to 
     collective bargaining' means expenditures in connection with 
     a Federal, State, or local election or in connection with 
     efforts to influence legislation unrelated to collective 
     bargaining.''.

     SEC. 402. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES.

       Title III of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 431 et seq.) is amended by striking section 313 and 
     inserting the following:

     ``SEC. 313. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES.

       ``(a) Permitted Uses.--A contribution accepted by a 
     candidate, and any other amount received by an individual as 
     support for activities of the individual as a holder of 
     Federal office, may be used by the candidate or individual--
       ``(1) for expenditures in connection with the campaign for 
     Federal office of the candidate or individual;

[[Page 339]]

       ``(2) for ordinary and necessary expenses incurred in 
     connection with duties of the individual as a holder of 
     Federal office;
       ``(3) for contributions to an organization described in 
     section 170(c) of the Internal Revenue Code of 1986; or
       ``(4) for transfers to a national, State, or local 
     committee of a political party.
       ``(b) Prohibited Use.--
       ``(1) In general.--A contribution or amount described in 
     subsection (a) shall not be converted by any person to 
     personal use.
       ``(2) Conversion.--For the purposes of paragraph (1), a 
     contribution or amount shall be considered to be converted to 
     personal use if the contribution or amount is used to fulfill 
     any commitment, obligation, or expense of a person that would 
     exist irrespective of the candidate's election campaign or 
     individual's duties as a holder of Federal officeholder, 
     including--
       ``(A) a home mortgage, rent, or utility payment;
       ``(B) a clothing purchase;
       ``(C) a noncampaign-related automobile expense;
       ``(D) a country club membership;
       ``(E) a vacation or other noncampaign-related trip;
       ``(F) a household food item;
       ``(G) a tuition payment;
       ``(H) admission to a sporting event, concert, theater, or 
     other form of entertainment not associated with an election 
     campaign; and
       ``(I) dues, fees, and other payments to a health club or 
     recreational facility.''.

     SEC. 403. LIMIT ON CONGRESSIONAL USE OF THE FRANKING 
                   PRIVILEGE.

       Section 3210(a)(6) of title 39, United States Code, is 
     amended by striking subparagraph (A) and inserting the 
     following:
       ``(A) A Member of Congress shall not mail any mass mailing 
     as franked mail during the 180-day period which ends on the 
     date of the general election for the office held by the 
     Member or during the 90-day period which ends on the date of 
     any primary election for that office, unless the Member has 
     made a public announcement that the Member will not be a 
     candidate for reelection during that year or for election to 
     any other Federal office.''.

     SEC. 404. PROHIBITION OF FUNDRAISING ON FEDERAL PROPERTY.

       Section 607 of title 18, United States Code, is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Prohibition.--
       ``(1) In general.--It shall be unlawful for any person to 
     solicit or receive a donation of money or other thing of 
     value in connection with a Federal, State, or local election 
     from a person who is located in a room or building occupied 
     in the discharge of official duties by an officer or employee 
     of the United States. An individual who is an officer or 
     employee of the Federal Government, including the President, 
     Vice President, and Members of Congress, shall not solicit a 
     donation of money or other thing of value in connection with 
     a Federal, State, or local election while in any room or 
     building occupied in the discharge of official duties by an 
     officer or employee of the United States, from any person.
       ``(2) Penalty.--A person who violates this section shall be 
     fined not more than $5,000, imprisoned more than 3 years, or 
     both.''; and
       (2) in subsection (b), by inserting ``or Executive Office 
     of the President'' after ``Congress''.

     SEC. 405. PENALTIES FOR VIOLATIONS.

       (a) Increased Penalties.--Section 309(a) of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended--
       (1) in paragraphs (5)(A), (6)(A), and (6)(B), by striking 
     ``$5,000'' and inserting ``$10,000''; and
       (2) in paragraphs (5)(B) and (6)(C), by striking ``$10,000 
     or an amount equal to 200 percent'' and inserting ``$20,000 
     or an amount equal to 300 percent''.
       (b) Equitable Remedies.--Section 309(a)(5)(A) of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(5)) 
     is amended by striking the period at the end and inserting 
     ``, and may include equitable remedies or penalties, 
     including disgorgement of funds to the Treasury or community 
     service requirements (including requirements to participate 
     in public education programs).''.

     SEC. 406. STRENGTHENING FOREIGN MONEY BAN.

       (a) In General.--Section 319 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441e) is amended--
       (1) by striking the heading and inserting the following: 
     ``contributions and donations by foreign nationals''; and
       (2) by striking subsection (a) and inserting the following:
       ``(a) Prohibition.--It shall be unlawful for--
       ``(1) a foreign national, directly or indirectly, to make--
       ``(A) a donation of money or other thing of value, or to 
     promise expressly or impliedly to make a donation, in 
     connection with a Federal, State, or local election; or
       ``(B) a contribution or donation to a committee of a 
     political party; or
       ``(2) a person to solicit, accept, or receive such a 
     contribution or donation from a foreign national.''.
       (b) Prohibiting Use of Willful Blindness as Defense Against 
     Charge of Violating Foreign Contribution Ban.--
       (1) In general.--Section 319 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441e) is amended--
       (A) by redesignating subsection (b) as subsection (c); and
       (B) by inserting after subsection (a) the following new 
     subsection:
       ``(b) Prohibiting Use of Willful Blindness Defense.--It 
     shall not be a defense to a violation of subsection (a) that 
     the defendant did not know that the contribution originated 
     from a foreign national if the defendant should have known 
     that the contribution originated from a foreign national, 
     except that the trier of fact may not find that the defendant 
     should have known that the contribution originated from a 
     foreign national solely because of the name of the 
     contributor.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply with respect to violations occurring on or after 
     the date of enactment of this Act.

     SEC. 407. PROHIBITION OF CONTRIBUTIONS BY MINORS.

       Title III of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 431 et seq.), as amended by section 101, is amended by 
     adding at the end the following:

     ``SEC. 324. PROHIBITION OF CONTRIBUTIONS BY MINORS.

       ``An individual who is 17 years old or younger shall not 
     make a contribution to a candidate or a contribution or 
     donation to a committee of a political party.''.

     SEC. 408. EXPEDITED PROCEDURES.

       (a) In General.--Section 309(a) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended by adding 
     at the end the following:
       ``(13) Expedited procedure.--
       ``(A) In general.--If the complaint in a proceeding was 
     filed within 60 days preceding the date of a general 
     election, the Commission may take action described in this 
     subparagraph.
       ``(B) Clear and convincing evidence exists.--If the 
     Commission determines, on the basis of facts alleged in the 
     complaint and other facts available to the Commission, that 
     there is clear and convincing evidence that a violation of 
     this Act has occurred, is occurring, or is about to occur, 
     the Commission may order expedited proceedings, shortening 
     the time periods for proceedings under paragraphs (1), (2), 
     (3), and (4) as necessary to allow the matter to be resolved 
     in sufficient time before the election to avoid harm or 
     prejudice to the interests of the parties.
       ``(C) Complaint without merit.--If the Commission 
     determines, on the basis of facts alleged in the complaint 
     and other facts available to the Commission, that the 
     complaint is clearly without merit, the Commission may--
       ``(i) order expedited proceedings, shortening the time 
     periods for proceedings under paragraphs (1), (2), (3), and 
     (4) as necessary to allow the matter to be resolved in 
     sufficient time before the election to avoid harm or 
     prejudice to the interests of the parties; or
       ``(ii) if the Commission determines that there is 
     insufficient time to conduct proceedings before the election, 
     summarily dismiss the complaint.''.
       (b) Referral to Attorney General.--Section 309(a)(5) of the 
     Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)(5)) 
     is amended by striking subparagraph (C) and inserting the 
     following:
       ``(C) Referral to attorney general.--The Commission may at 
     any time, by an affirmative vote of at least 4 of its 
     members, refer a possible violation of this Act or chapter 95 
     or 96 of the Internal Revenue Code of 1986, to the Attorney 
     General of the United States, without regard to any 
     limitation set forth in this section.''.

     SEC. 409. INITIATION OF ENFORCEMENT PROCEEDING.

       Section 309(a)(2) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 437g(a)(2)) is amended by striking ``reason to 
     believe that'' and inserting ``reason to investigate 
     whether''.

     SEC. 410. PROTECTING EQUAL PARTICIPATION OF ELIGIBLE VOTERS 
                   IN CAMPAIGNS AND ELECTIONS.

       Title III of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 431 et seq.), as amended by sections 101 and 407, is 
     amended by adding at the end the following:

     ``SEC. 325. PROTECTING EQUAL PARTICIPATION OF ELIGIBLE VOTERS 
                   IN CAMPAIGNS AND ELECTIONS.

       ``(a) In General.--Nothing in this Act may be construed to 
     prohibit any individual eligible to vote in an election for 
     Federal office from making contributions or expenditures in 
     support of a candidate for such an election (including 
     voluntary contributions or expenditures made through a 
     separate segregated fund established by the individual's 
     employer or labor organization) or otherwise participating in 
     any campaign for such an election in the same manner and to 
     the same extent as any other individual eligible to vote in 
     an election for such office.
       ``(b) No Effect on Geographic Restrictions on 
     Contributions.--Subsection (a) may not be construed to affect 
     any restriction under this title regarding the portion of

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     contributions accepted by a candidate from persons residing 
     in a particular geographic area.''.

     SEC. 411. PENALTY FOR VIOLATION OF PROHIBITION AGAINST 
                   FOREIGN CONTRIBUTIONS.

       (a) In General.--Section 319 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441e), as amended by section 
     406(b), is amended--
       (1) by redesignating subsection (c) as subsection (d); and
       (2) by inserting after subsection (b) the following:
       ``(c) Penalty.--
       ``(1) In general.--Except as provided in paragraph (2), 
     notwithstanding any other provision of this title, any person 
     who violates subsection (a) shall be sentenced to a term of 
     imprisonment which may not be more than 10 years, fined in an 
     amount not to exceed $1,000,000, or both.
       ``(2) Exception.--Paragraph (1) shall not apply with 
     respect to any violation of subsection (a) arising from a 
     contribution or donation made by an individual who is 
     lawfully admitted for permanent residence (as defined in 
     section 101(a)(22) of the Immigration and Nationality 
     Act).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to violations occurring on or after 
     the date of enactment of this Act.

     SEC. 412. EXPEDITED COURT REVIEW OF CERTAIN ALLEGED 
                   VIOLATIONS OF FEDERAL ELECTION CAMPAIGN ACT OF 
                   1971.

       (a) In General.--Section 309 of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 437g) is amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following new 
     subsection:
       ``(d) Private Action.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, if a candidate (or the candidate's authorized 
     committee) believes that a violation described in paragraph 
     (2) has been committed with respect to an election during the 
     90-day period preceding the date of the election, the 
     candidate or committee may institute a civil action on behalf 
     of the Commission for relief (including injunctive relief) 
     against the alleged violator in the same manner and under the 
     same terms and conditions as an action instituted by the 
     Commission under subsection (a)(6), except that the court 
     involved shall issue a decision regarding the action as soon 
     as practicable after the action is instituted and to the 
     greatest extent possible issue the decision prior to the date 
     of the election involved.
       ``(2) Violations.--A violation described in this paragraph 
     is a violation of this Act or of chapter 95 or chapter 96 of 
     the Internal Revenue Code of 1986 relating to--
       ``(A) whether a contribution is in excess of an applicable 
     limit or is otherwise prohibited under this Act; or
       ``(B) whether an expenditure is an independent expenditure 
     under section 301(17).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to elections occurring after the 
     date of enactment of this Act.

     SEC. 413. CONSPIRACY TO VIOLATE PRESIDENTIAL CAMPAIGN 
                   SPENDING LIMITS.

       (a) In General.--Section 9003 of the Internal Revenue Code 
     of 1986 (relating to condition for eligibility for payments) 
     is amended by adding at the end the following:
       ``(f) Prohibiting Conspiracy To Violate Limits.--
       ``(1) Violation of limits described.--If a candidate for 
     election to the office of President or Vice President who 
     receives amounts from the Presidential Election Campaign Fund 
     under chapter 95 or 96 of the Internal Revenue Code of 1986, 
     or the agent of such a candidate, seeks to avoid the spending 
     limits applicable to the candidate under such chapter or 
     under the Federal Election Campaign Act of 1971 by 
     soliciting, receiving, transferring, or directing funds from 
     any source other than such Fund for the direct or indirect 
     benefit of such candidate's campaign, such candidate or agent 
     shall be fined not more than $1,000,000, or imprisoned for a 
     term of not more than 3 years, or both.
       ``(2) Conspiracy to violate limits defined.--If two or more 
     persons conspire to commit a violation described in paragraph 
     (1), and one or more of such persons do any act to effect the 
     object of the conspiracy, each shall be fined not more than 
     $1,000,000, or imprisoned for a term of not more than 3 
     years, or both.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to elections occurring on or after 
     the date of enactment of this Act.

     SEC. 414. DEPOSIT OF CERTAIN CONTRIBUTIONS AND DONATIONS IN 
                   TREASURY ACCOUNT.

       (a) In General.--Title III of the Federal Election Campaign 
     Act of 1971 (2 U.S.C. 431 et seq.), as amended by sections 
     101, 407, and 410, is amended by adding at the end the 
     following:

     ``SEC. 326. TREATMENT OF CERTAIN CONTRIBUTIONS AND DONATIONS 
                   RETURNED TO DONORS.

       ``(a) Transfer to Commission.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, if a political committee intends to return any 
     contribution or donation given to the political committee, 
     the committee shall transfer the contribution or donation to 
     the Commission if--
       ``(A) the contribution or donation is in an amount equal to 
     or greater than $500 (other than a contribution or donation 
     returned within 60 days of receipt by the committee); or
       ``(B) the contribution or donation was made in violation of 
     section 315, 316, 317, 319, 320, or 325 (other than a 
     contribution or donation returned within 30 days of receipt 
     by the committee).
       ``(2) Information included with transferred contribution or 
     donation.--A political committee shall include with any 
     contribution or donation transferred under paragraph (1)--
       ``(A) a request that the Commission return the contribution 
     or donation to the person making the contribution or 
     donation; and
       ``(B) information regarding the circumstances surrounding 
     the making of the contribution or donation and any opinion of 
     the political committee concerning whether the contribution 
     or donation may have been made in violation of this Act.
       ``(3) Establishment of escrow account.--
       ``(A) In general.--The Commission shall establish a single 
     interest-bearing escrow account for deposit of amounts 
     transferred under paragraph (1).
       ``(B) Disposition of amounts received.--On receiving an 
     amount from a political committee under paragraph (1), the 
     Commission shall--
       ``(i) deposit the amount in the escrow account established 
     under subparagraph (A); and
       ``(ii) notify the Attorney General and the Commissioner of 
     the Internal Revenue Service of the receipt of the amount 
     from the political committee.
       ``(C) Use of interest.--Interest earned on amounts in the 
     escrow account established under subparagraph (A) shall be 
     applied or used for the same purposes as the donation or 
     contribution on which it is earned.
       ``(4) Treatment of returned contribution or donation as a 
     complaint.--The transfer of any contribution or donation to 
     the Commission under this section shall be treated as the 
     filing of a complaint under section 309(a).
       ``(b) Use of Amounts Placed in Escrow To Cover Fines and 
     Penalties.--The Commission or the Attorney General may 
     require any amount deposited in the escrow account under 
     subsection (a)(3) to be applied toward the payment of any 
     fine or penalty imposed under this Act or title 18, United 
     States Code, against the person making the contribution or 
     donation.
       ``(c) Return of Contribution or Donation After Deposit in 
     Escrow.--
       ``(1) In general.--The Commission shall return a 
     contribution or donation deposited in the escrow account 
     under subsection (a)(3) to the person making the contribution 
     or donation if--
       ``(A) within 180 days after the date the contribution or 
     donation is transferred, the Commission has not made a 
     determination under section 309(a)(2) that the Commission has 
     reason to investigate whether that the making of the 
     contribution or donation was made in violation of this Act; 
     or
       ``(B)(i) the contribution or donation will not be used to 
     cover fines, penalties, or costs pursuant to subsection (b); 
     or
       ``(ii) if the contribution or donation will be used for 
     those purposes, that the amounts required for those purposes 
     have been withdrawn from the escrow account and subtracted 
     from the returnable contribution or donation.
       ``(2) No effect on status of investigation.--The return of 
     a contribution or donation by the Commission under this 
     subsection shall not be construed as having an effect on the 
     status of an investigation by the Commission or the Attorney 
     General of the contribution or donation or the circumstances 
     surrounding the contribution or donation, or on the ability 
     of the Commission or the Attorney General to take future 
     actions with respect to the contribution or donation.''.
       (b) Amounts Used To Determine Amount of Penalty for 
     Violation.--Section 309(a) of the Federal Election Campaign 
     Act of 1971 (2 U.S.C. 437g(a)) is amended by inserting after 
     paragraph (9) the following:
       ``(10) Amount of donation.--For purposes of determining the 
     amount of a civil penalty imposed under this subsection for 
     violations of section 326, the amount of the donation 
     involved shall be treated as the amount of the contribution 
     involved.''.
       (c) Disgorgement Authority.--Section 309 of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 437g), as amended by 
     section 412(a), is amended by adding at the end the 
     following:
       ``(f) Deposit in Escrow.--Any conciliation agreement, civil 
     action, or criminal action entered into or instituted under 
     this section may require a person to forfeit to the Treasury 
     any contribution, donation, or expenditure that is the 
     subject of the agreement or action for transfer to the 
     Commission for deposit in accordance with section 326.''.
       (d) Effective Date.--The amendments made by subsections (a) 
     and (b) shall apply to contributions or donations refunded on 
     or after the date of enactment of this Act, without regard to 
     whether the Federal Election

[[Page 341]]

     Commission or Attorney General has issued regulations to 
     carry out section 326 of the Federal Election Campaign Act of 
     1971 (as added by subsection (a)) by such date.

     SEC. 415. ESTABLISHMENT OF A CLEARINGHOUSE OF INFORMATION ON 
                   POLITICAL ACTIVITIES WITHIN THE FEDERAL 
                   ELECTION COMMISSION.

       (a) Establishment.--There shall be established within the 
     Federal Election Commission a clearinghouse of public 
     information regarding the political activities of foreign 
     principals and agents of foreign principals. The information 
     comprising this clearinghouse shall include only the 
     following:
       (1) All registrations and reports filed pursuant to the 
     Lobbying Disclosure Act of 1995 (2 U.S.C. 1601 et seq.) 
     during the preceding 5-year period.
       (2) All registrations and reports filed pursuant to the 
     Foreign Agents Registration Act (22 U.S.C. 611 et seq.) 
     during the preceding 5-year period.
       (3) The listings of public hearings, hearing witnesses, and 
     witness affiliations printed in the Congressional Record 
     during the preceding 5-year period.
       (4) Public information disclosed pursuant to the rules of 
     the Senate or the House of Representatives regarding 
     honoraria, the receipt of gifts, travel, and earned and 
     unearned income.
       (5) All reports filed pursuant to title I of the Ethics in 
     Government Act of 1978 (5 U.S.C. App.) during the preceding 
     5-year period.
       (6) All public information filed with the Federal Election 
     Commission pursuant to the Federal Election Campaign Act of 
     1971 (2 U.S.C. 431 et seq.) during the preceding 5-year 
     period.
       (b) Disclosure of Other Information Prohibited.--The 
     disclosure by the clearinghouse, or any officer or employee 
     thereof, of any information other than that set forth in 
     subsection (a) is prohibited, except as otherwise provided by 
     law.
       (c) Director of Clearinghouse.--
       (1) Duties.--The clearinghouse shall have a Director, who 
     shall administer and manage the responsibilities and all 
     activities of the clearinghouse. In carrying out such duties, 
     the Director shall--
       (A) develop a filing, coding, and cross-indexing system to 
     carry out the purposes of this section (which shall include 
     an index of all persons identified in the reports, 
     registrations, and other information comprising the 
     clearinghouse);
       (B) notwithstanding any other provision of law, make copies 
     of registrations, reports, and other information comprising 
     the clearinghouse available for public inspection and 
     copying, beginning not later than 30 days after the 
     information is first available to the public, and permit 
     copying of any such registration, report, or other 
     information by hand or by copying machine or, at the request 
     of any person, furnish a copy of any such registration, 
     report, or other information upon payment of the cost of 
     making and furnishing such copy, except that no information 
     contained in such registration or report and no such other 
     information shall be sold or used by any person for the 
     purpose of soliciting contributions or for any profit-making 
     purpose; and
       (C) not later than 150 days after the date of enactment of 
     this Act and at any time thereafter, to prescribe, in 
     consultation with the Comptroller General, such rules, 
     regulations, and forms, in conformity with the provisions of 
     chapter 5 of title 5, United States Code, as are necessary to 
     carry out the provisions of this section in the most 
     effective and efficient manner.
       (2) Appointment.--The Director shall be appointed by the 
     Federal Election Commission.
       (3) Term of service.--The Director shall serve a single 
     term of a period of time determined by the Commission, but 
     not to exceed 5 years.
       (d) Penalties for Disclosure of Information.--Any person 
     who discloses information in violation of subsection (b), and 
     any person who sells or uses information for the purpose of 
     soliciting contributions or for any profit-making purpose in 
     violation of subsection (c)(1)(B), shall be imprisoned for a 
     period of not more than 1 year, or fined in the amount 
     provided in title 18, United States Code, or both.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to conduct 
     the activities of the clearinghouse.
       (f) Foreign Principal.--In this section, the term ``foreign 
     principal'' shall have the same meaning given the term 
     ``foreign national'' under section 319 of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 441e), as in effect 
     as of the date of enactment of this Act.

     SEC. 416. ENFORCEMENT OF SPENDING LIMIT ON PRESIDENTIAL AND 
                   VICE PRESIDENTIAL CANDIDATES WHO RECEIVE PUBLIC 
                   FINANCING.

       (a) In General.--Section 9003 of the Internal Revenue Code 
     of 1986, as amended by section 413, is amended by adding at 
     the end the following:
       ``(g) Illegal Solicitation of Soft Money.--No candidate for 
     election to the office of President or Vice President may 
     receive amounts from the Presidential Election Campaign Fund 
     under this chapter or chapter 96 unless the candidate 
     certifies that the candidate shall not solicit any funds for 
     the purposes of influencing such election, including any 
     funds used for an independent expenditure under the Federal 
     Election Campaign Act of 1971, unless the funds are subject 
     to the limitations, prohibitions, and reporting requirements 
     of the Federal Election Campaign Act of 1971.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to elections occurring on or after 
     the date of the enactment of this Act.

     SEC. 417. CLARIFICATION OF RIGHT OF NATIONALS OF THE UNITED 
                   STATES TO MAKE POLITICAL CONTRIBUTIONS.

       Section 319(d)(2) of the Federal Election Campaign Act of 
     1971 (2 U.S.C. 441e(d)(2)), as amended by sections 506(b) and 
     511(a), is further amended by inserting after ``United 
     States'' the following: ``or a national of the United States 
     (as defined in section 101(a)(22) of the Immigration and 
     Nationality Act)''.

     SEC. 418. PROHIBITING USE OF WHITE HOUSE MEALS AND 
                   ACCOMMODATIONS FOR POLITICAL FUNDRAISING.

       (a) In General.--Chapter 29 of title 18, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 612. Prohibiting use of meals and accommodations at 
       White House for political fundraising

       ``(a) It shall be unlawful for any person to provide or 
     offer to provide any meals or accommodations at the White 
     House in exchange for any money or other thing of value, or 
     as a reward for the provision of any money or other thing of 
     value, in support of any political party or the campaign for 
     electoral office of any candidate.
       ``(b) Any person who violates this section shall be fined 
     under this title or imprisoned not more than 3 years, or 
     both.
       ``(c) For purposes of this section, any official residence 
     or retreat of the President (including private residential 
     areas and the grounds of such a residence or retreat) shall 
     be treated as part of the White House.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     29 of title 18, United States Code, is amended by adding at 
     the end the following new item:

``612. Prohibiting use of meals and accommodations at White House for 
              political fundraising.''.

     SEC. 419. PROHIBITION AGAINST ACCEPTANCE OR SOLICITATION TO 
                   OBTAIN ACCESS TO CERTAIN FEDERAL GOVERNMENT 
                   PROPERTY.

       (a) In General.--Chapter 11 of title 18, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 226. Acceptance or solicitation to obtain access to 
       certain Federal Government property

       ``Whoever solicits or receives anything of value in 
     consideration of providing a person with access to Air Force 
     One, Marine One, Air Force Two, Marine Two, the White House, 
     or the Vice President's residence, shall be fined under this 
     title, or imprisoned not more than one year, or both.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     11 of title 18, United States Code, is amended by adding at 
     the end the following new item:

``226. Acceptance or solicitation to obtain access to certain Federal 
              Government property.''.

     SEC. 420. REQUIRING NATIONAL PARTIES TO REIMBURSE AT COST FOR 
                   USE OF AIR FORCE ONE FOR POLITICAL FUNDRAISING.

       Title III of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 431 et seq.), as amended by sections 101, 407, 410, 
     and 415, is amended by adding at the end the following:

     ``SEC. 327. REIMBURSEMENT BY POLITICAL PARTIES FOR USE OF AIR 
                   FORCE ONE FOR POLITICAL FUNDRAISING.

       ``(a) In General.--If the President, Vice President, or the 
     head of any executive department (as defined in section 101 
     of title 5, United States Code) uses Air Force One for 
     transportation for any travel which includes a fundraising 
     event for the benefit of any political committee of a 
     national political party, such political committee shall 
     reimburse the Federal Government for the fair market value of 
     the transportation of the individual involved, based on the 
     cost of an equivalent commercial chartered flight.
       ``(b) Air Force One Defined.--In subsection (a), the term 
     `Air Force One' means the airplane operated by the Air Force 
     which has been specially configured to carry out the mission 
     of transporting the President.''.

     SEC. 421. ENHANCING ENFORCEMENT OF CAMPAIGN FINANCE LAW.

       (a) Mandatory Imprisonment for Criminal Conduct.--Section 
     309(e)(1)(A) of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 437g(e)(1)(A)), as redesignated by section 412, is 
     amended--
       (1) in the first sentence, by striking ``shall be fined, or 
     imprisoned for not more than one year, or both'' and 
     inserting ``shall be imprisoned for not fewer than 1 year and 
     not more than 10 years''; and
       (2) by striking the second sentence.
       (b) Concurrent Authority of Attorney General To Bring 
     Criminal Actions.--Section 309(e) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 437g(d)), as so redesignated, 
     is amended by adding at the end the following:
       ``(4) Attorney general action.--In addition to the 
     authority to bring cases referred

[[Page 342]]

     pursuant to subsection (a)(5), the Attorney General may at 
     any time bring a criminal action for a violation of this Act 
     or of chapter 95 or chapter 96 of the Internal Revenue Code 
     of 1986.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to actions brought with respect to 
     elections occurring after January 2001.

     SEC. 422. BAN ON COORDINATION OF SOFT MONEY FOR ISSUE 
                   ADVOCACY BY PRESIDENTIAL CANDIDATES RECEIVING 
                   PUBLIC FINANCING.

       (a) In General.--Section 9003 of the Internal Revenue Code 
     of 1986, as amended by section 416, is amended by adding at 
     the end the following:
       ``(h) Ban on Coordination of Soft Money for Issue 
     Advocacy.--
       ``(1) In general.--No candidate for election to the office 
     of President or Vice President who is certified to receive 
     amounts from the Presidential Election Campaign Fund under 
     this chapter or chapter 96 may coordinate the expenditure of 
     any funds for issue advocacy with any political party unless 
     the funds are subject to the limitations, prohibitions, and 
     reporting requirements of the Federal Election Campaign Act 
     of 1971.
       ``(2) Issue advocacy defined.--In this section, the term 
     `issue advocacy' means any activity carried out for the 
     purpose of influencing the consideration or outcome of any 
     Federal legislation or the issuance or outcome of any Federal 
     regulations, or educating individuals about candidates for 
     election for Federal office or any Federal legislation, law, 
     or regulations (without regard to whether the activity is 
     carried out for the purpose of influencing any election for 
     Federal office).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to elections occurring on or after 
     the date of the enactment of this Act.

     SEC. 423. REQUIREMENT THAT NAMES OF PASSENGERS ON AIR FORCE 
                   ONE AND AIR FORCE TWO BE MADE AVAILABLE THROUGH 
                   THE INTERNET.

       (a) In General.--The President shall make available through 
     the Internet the name of any non-Government person who is a 
     passenger on an aircraft designated as Air Force One or Air 
     Force Two not later than 30 days after the date that the 
     person is a passenger on such aircraft.
       (b) Exception.--Subsection (a) shall not apply in a case in 
     which the President determines that compliance with such 
     subsection would be contrary to the national security 
     interests of the United States. In any such case, not later 
     than 30 days after the date that the person whose name will 
     not be made available through the Internet was a passenger on 
     the aircraft, the President shall submit to the chairman and 
     ranking member of the Permanent Select Committee on 
     Intelligence of the House of Representatives and of the 
     Select Committee on Intelligence of the Senate--
       (1) the name of the person; and
       (2) the justification for not making such name available 
     through the Internet.
       (c) Definition of Person.--As used in this section, the 
     term ``non-Government person'' means a person who is not an 
     officer or employee of the United States, a member of the 
     Armed Forces, or a Member of Congress.

            TITLE V--ELECTION ADMINISTRATION AND TECHNOLOGY

     SEC. 501. FINDINGS.

       Congress makes the following findings:
       (1) The right to vote is a fundamental and incontrovertible 
     right under the Constitution.
       (2) There is a need for Congress to encourage and enable 
     every eligible American to vote by reaffirming that the right 
     to vote is a fundamental right under the Constitution.
       (3) There is a need for Congress to encourage and enable 
     every eligible American to vote by reaffirming that the 
     United States is a democratic government ``of the people, by 
     the people and for the people'' where every vote counts.
       (4) There is a need for Congress to encourage and enable 
     every eligible American to vote by eliminating procedural and 
     technological obstacles to voting.
       (5) State governments have already begun to examine ways to 
     improve the administration of elections and to modernize 
     mechanisms and machinery for voting.
       (6) Congress has authority under section 5 of the 
     Fourteenth Amendment to the Constitution of the United States 
     to enact legislation to address the equal protection 
     violations that may be caused by our current, outdated voting 
     system.
       (7) Congress has an obligation to ensure that the necessary 
     resources are available to States and localities to improve 
     election technology and election administration and to ensure 
     the integrity of the democratic elections process.

Subtitle A--Establishment of Commission on Voting Rights and Procedures

     SEC. 511. ESTABLISHMENT.

       There is established the Commission on Voting Rights and 
     Procedures (in this subtitle referred to as the 
     ``Commission'').

     SEC. 512. MEMBERSHIP OF THE COMMISSION.

       (a) Number and Appointment.--The Commission shall be 
     composed of 12 members of whom--
       (1) 6 members shall be appointed by the President;
       (2) 3 members shall be appointed by the Minority Leader of 
     the Senate (or, if the Minority Leader is a member of the 
     same political party as the President, by the Majority Leader 
     of the Senate); and
       (3) 3 members shall be appointed by the Minority Leader of 
     the House of Representatives (or, if the Minority Leader is a 
     member of the same political party as the President, by the 
     Majority Leader of the House of Representatives).
       (b) Qualifications.--Each member appointed under subsection 
     (a) shall be chosen on the basis of--
       (1) experience with, and knowledge of--
       (A) election law;
       (B) election technology;
       (C) Federal, State, or local election administration;
       (D) the United States Constitution; or
       (E) the history of the United States; and
       (2) integrity, impartiality, and good judgment.
       (c) Period of Appointment; Vacancies.--
       (1) Period of appointment.--Each member shall be appointed 
     for the life of the Commission.
       (2) Vacancies.--
       (A) In general.--A vacancy in the Commission shall not 
     affect its powers.
       (B) Manner of replacement.--A vacancy on the Commission 
     shall be filled in the same manner which the original 
     appointment was made and shall be subject to any conditions 
     which applied with respect to the original appointment not 
     later than 60 days after the date of the vacancy.
       (d) Chairperson; Vice Chairperson.--
       (1) In general.--The Commission shall elect a chairperson 
     and vice chairperson from among its members.
       (2) Political affiliation.--The chairperson and vice 
     chairperson may not be affiliated with the same political 
     party.
       (e) Date of Appointment.--The appointments of the members 
     of the Commission shall be made not later than 45 days after 
     the date of enactment of this Act.
       (f) Meetings.--
       (1) In general.--The Commission shall meet at the call of 
     the chairperson.
       (2) Initial meeting.--Not later than 20 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold its first meeting.
       (3) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (g) Voting.--Each action of the Commission shall be 
     approved by a majority vote of members. Each member shall 
     have 1 vote.

     SEC. 513. DUTIES OF THE COMMISSION.

       (a) Study.--
       (1) In general.--The Commission shall conduct a thorough 
     study of--
       (A) election technology and systems;
       (B) designs of ballots and the uniformity of ballots;
       (C) access to polling places, including matters relating to 
     access for individuals with disabilities and other 
     individuals with particular needs;
       (D) voter registration and maintenance of voter rolls, 
     including the use of provisional voting and standards for 
     reenfranchisement of voters;
       (E) alternative voting methods;
       (F) accuracy of voting, election procedures, and election 
     technology;
       (G) voter education;
       (H) training election personnel and volunteers;
       (I)(i) implementation of title I of the Uniformed and 
     Overseas Absentee Voting Act (42 U.S.C. 1973ff et seq.), and 
     the amendments made by title II of that Act, by--
       (I) the Secretary of Defense;
       (II) each other Federal Government official having a 
     responsibility under that Act; and
       (III) each State; and
       (ii) whether any legislative or administrative action is 
     necessary to provide a meaningful opportunity to register to 
     vote in, and vote in, elections for Federal office (as 
     defined in paragraph (3) of section 107 of that Act (42 
     U.S.C. 1973ff-6)) for--
       (I) each absent uniformed services voter (as defined in 
     paragraph (1) of such section); and
       (II) each overseas voter (as defined in paragraph (5) of 
     such section) to register to vote and vote in elections for 
     Federal office);
       (J) the feasibility and advisability of establishing the 
     date on which elections for Federal office (as so defined) 
     are held as a Federal or State holiday; and
       (K)(i) how the Federal Government can, on a permanent 
     basis, best provide ongoing assistance to State and local 
     authorities to improve the administration of Federal 
     elections; and
       (ii) whether an existing or a new Federal agency should 
     provide such assistance.
       (2) Website.--For purposes of conducting the study under 
     this subsection, the Commission shall establish an Internet 
     website to facilitate public comment and participation.
       (b) Recommendations.--
       (1) Recommendations of best practices in voting and 
     election administration.--The Commission shall develop 
     recommendations with respect to the matters studied under 
     subsection (a) that identify those methods of

[[Page 343]]

     voting and administering elections studied by the Commission 
     that would--
       (A) be most convenient, accessible, and easy to use for 
     voters in Federal elections, including voters with 
     disabilities, absent uniformed services voters, overseas 
     voters, and other voters with special needs;
       (B) yield the broadest participation and most accurate 
     results in Federal elections;
       (C) be the most resource-efficient and cost-effective for 
     use in Federal elections; and
       (D) be the most effective means of ensuring security in 
     Federal elections.
       (2) Recommendations for providing assistance in federal 
     elections.--The Commission shall develop recommendations with 
     respect to the matters studied under subsection (a)(1)(K) on 
     how the Federal Government can, on a permanent basis, best 
     provide ongoing assistance to State and local authorities to 
     improve the administration of Federal elections, and identify 
     whether an existing or a new Federal agency should provide 
     such assistance.
       (3) Recommendations for voter participation in federal 
     elections.--The Commission shall develop recommendations with 
     respect to the matters studied under subsection (a) on 
     methods--
       (A) to increase voter registration;
       (B) to increase the accuracy of voter rolls;
       (C) to improve voter education; and
       (D) to improve the training of election personnel and 
     volunteers.
       (c) Reports.--
       (1) Interim reports.--Not later than the date on which the 
     Commission submits the final report under paragraph (2), the 
     Commission may submit to the President and Congress such 
     interim reports as a majority of the members of the 
     Commission determine appropriate.
       (2) Final report.--
       (A) In general.--Not later than one year after the date of 
     enactment of this Act, the Commission shall submit to the 
     President and Congress a final report that has received the 
     approval of a majority of the members of the Commission.
       (B) Content.--The final report shall contain--
       (i) a detailed statement of the findings and conclusions of 
     the Commission on the matters studied under subsection (a);
       (ii) a detailed statement of the recommendations developed 
     under subsection (b); and
       (iii) any dissenting or minority opinions of the members of 
     the Commission.

     SEC. 514. POWERS OF THE COMMISSION.

       (a) Hearings.--The Commission or, at its direction, any 
     subcommittee or member of the Commission, may, for the 
     purpose of carrying out this subtitle--
       (1) hold such hearings, sit and act at such times and 
     places, take such testimony, receive such evidence, 
     administer such oaths; and
       (2) require, by subpoena or otherwise, the attendance and 
     testimony of such witnesses and the production of such books, 
     records, correspondence, memoranda, papers, documents, tapes, 
     and materials as the Commission or such subcommittee or 
     member considers advisable.
       (b) Issuance and Enforcement of Subpoenas.--
       (1) Issuance.--Any subpoena issued under subsection (a) 
     shall be issued by the chairperson and vice chairperson of 
     the Commission acting jointly. Each subpoena shall bear the 
     signature of the chairperson of the Commission and shall be 
     served by any person or class of persons designated by the 
     chairperson for that purpose.
       (2) Enforcement.--In the case of contumacy or failure to 
     obey a subpoena issued under subsection (a), the United 
     States district court for the judicial district in which the 
     subpoenaed person resides, is served, or may be found may 
     issue an order requiring such person to appear at any 
     designated place to testify or to produce documentary or 
     other evidence. Any failure to obey the order of the court 
     may be punished by the court as a contempt of that court.
       (c) Witness Allowances and Fees.--Section 1821 of title 28, 
     United States Code, shall apply to witnesses requested or 
     subpoenaed to appear at any hearing of the Commission. The 
     per diem and mileage allowances for witnesses shall be paid 
     from funds available to pay the expenses of the Commission.
       (d) Information From Federal Agencies.--The Commission may 
     secure directly from any Federal department or agency such 
     information as the Commission considers necessary to carry 
     out this subtitle. Upon request of the chairperson and vice 
     chairperson of the Commission acting jointly, the head of 
     such department or agency shall furnish such information to 
     the Commission.
       (e) Postal Services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (f) Administrative Support Services.--Upon the request of 
     the chairperson and vice chairperson of the Commission acting 
     jointly, the Administrator of the General Services 
     Administration shall provide to the Commission, on a 
     reimbursable basis, the administrative support services that 
     are necessary to enable the Commission to carry out its 
     duties under this subtitle.
       (g) Gifts and Donations.--The Commission may accept, use, 
     and dispose of gifts or donations of services or property to 
     carry out this subtitle.

     SEC. 515. PERSONNEL MATTERS.

       (a) Compensation of Members.--Each member of the Commission 
     who is not an officer or employee of the Federal Government 
     shall be compensated at a rate equal to the daily equivalent 
     of the annual rate of basic pay prescribed for level IV of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Commission. All members of the Commission who are 
     officers or employees of the United States shall serve 
     without compensation in addition to that received for their 
     services as officers or employees of the United States.
       (b) Travel Expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Commission.
       (c) Staff.--
       (1) In general.--The chairperson and vice chairperson of 
     the Commission, acting jointly, may, without regard to the 
     civil service laws and regulations, appoint and terminate an 
     executive director and such other additional personnel as may 
     be necessary to enable the Commission to perform its duties. 
     The employment of an executive director shall be subject to 
     confirmation by the Commission.
       (2) Compensation.--The chairperson and vice chairperson of 
     the Commission, acting jointly, may fix the compensation of 
     the executive director and other personnel without regard to 
     chapter 51 and subchapter III of chapter 53 of title 5, 
     United States Code, relating to classification of positions 
     and General Schedule pay rates, except that the rate of pay 
     for the executive director and other personnel may not exceed 
     the rate payable for level V of the Executive Schedule under 
     section 5316 of such title.
       (d) Detail of Government Employees.--Any Federal Government 
     employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (e) Procurement of Temporary and Intermittent Services.--
     The chairperson and vice chairperson of the Commission, 
     acting jointly, may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.

     SEC. 516. TERMINATION OF THE COMMISSION.

       The Commission shall terminate 45 days after the date on 
     which the Commission submits its final report under section 
     513(c)(2).

     SEC. 517. AUTHORIZATION OF APPROPRIATIONS FOR THE COMMISSION.

       (a) In General.--There are authorized to be appropriated 
     such sums as may be necessary to carry out the purposes of 
     this subtitle.
       (b) Availability.--Any sums appropriated under the 
     authorization contained in this section shall remain 
     available, without fiscal year limitation, until expended.

                       Subtitle B--Grant Program

     SEC. 521. ESTABLISHMENT OF GRANT PROGRAM.

       The Attorney General, subject to the general policies and 
     criteria established under section 523, in consultation with 
     the Federal Election Commission, is authorized to make grants 
     to States to pay the Federal share of the costs of the 
     activities described in section 522.

     SEC. 522. AUTHORIZED ACTIVITIES.

       A State may use payments received under this subtitle to--
       (1) improve or replace voting equipment or technology;
       (2) implement new election administration procedures, such 
     as ``same-day'' voter registration procedures;
       (3) educate voters concerning voting procedures, voting 
     rights, or voting technology and train election personnel; 
     and
       (4) upon completion of the final report under section 
     513(c), implement recommendations contained in such report.

     SEC. 523. GENERAL POLICIES AND CRITERIA.

       (a) General Policies.--The Attorney General shall establish 
     general policies with respect to the approval of State plans, 
     awarding of grants, and the use of assistance made available 
     under this subtitle.
       (b) Criteria.--
       (1) In general.--The Attorney General shall establish 
     criteria with respect to the approval of State plans 
     submitted under section 524, including the requirements under 
     paragraph (2).
       (2) Requirements for approval.--The Attorney General shall 
     not approve a State plan unless the plan provides for each of 
     the following:
       (A) Uniform standards within the State for election 
     administration and technology.
       (B) Accuracy of the records of eligible voters in the State 
     to ensure that legally registered voters appear in such 
     records and

[[Page 344]]

     prevent any purging of such records to remove illegal voters 
     that results in the elimination of legal voters as well.
       (C) Voting accessibility standards that ensure--
       (i) compliance with the Voting Accessibility for the 
     Elderly and Handicapped Act (42 U.S.C. 1973ee et seq.);
       (ii) compliance with the Voting Rights Act of 1965 (42 
     U.S.C. 1971 et seq.); and
       (iii) that absent uniformed service voters and their 
     dependents have a meaningful opportunity to exercise their 
     voting rights as citizens of the United States.
       (D) Voter education programs regarding methodology and 
     procedures for participating in elections and training 
     programs for election personnel and volunteers.
       (c) Consultation.--In establishing the general policies and 
     criteria under this section, the Attorney General shall 
     consult with the Federal Election Commission.

     SEC. 524. SUBMISSION OF STATE PLANS.

       (a) In General.--Subject to subsection (c), the chief 
     executive officer of each State that desires to receive a 
     grant under this subtitle shall submit a State plan to the 
     Attorney General at such time, in such manner, and 
     accompanied by such additional information as the Attorney 
     General, in consultation with the Federal Election 
     Commission, may reasonably require.
       (b) Contents.--Each State plan submitted under subsection 
     (a) shall--
       (1) describe the activities for which assistance under this 
     subtitle is sought;
       (2) provide evidence that the State meets the general 
     policies and criteria established by the Attorney General 
     under section 523;
       (3) provide assurances that the State will pay the non-
     Federal share of the activities for which assistance is 
     sought from non-Federal sources; and
       (4) provide such additional assurances as the Attorney 
     General, in consultation with the Federal Election 
     Commission, determines to be essential to ensure compliance 
     with the requirements of this subtitle.
       (c) Available for Review and Comment.--A State submitting a 
     State plan under this section shall make such State plan 
     publicly available for review and comment prior to 
     submission.

     SEC. 525. APPROVAL OF STATE PLANS.

       The Attorney General, in consultation with the Federal 
     Election Commission, shall approve State plans in accordance 
     with the general policies and criteria established under 
     section 523.

     SEC. 526. FEDERAL MATCHING FUNDS.

       (a) Payments.--The Attorney General shall pay to each State 
     having a State plan approved under section 525 the Federal 
     share of the cost of the activities described in the State 
     plan.
       (b) Federal Share.--
       (1) In general.--Subject to paragraph (2), for purposes of 
     subsection (a), the Federal share shall be 80 percent.
       (2) Waiver.--The Attorney General may specify a Federal 
     share greater than 80 percent if the State agrees to comply 
     with such terms and conditions as the Attorney General may 
     prescribe.
       (c) Non-Federal Share.--The non-Federal share of payments 
     under this subtitle may be in cash or in kind fairly 
     evaluated, including planned equipment or services.

     SEC. 527. AUDITS AND EXAMINATIONS.

       (a) Recordkeeping Requirement.--Each recipient of a grant 
     under this subtitle shall keep such records as the Attorney 
     General, in consultation with the Federal Election 
     Commission, shall prescribe.
       (b) Audit and Examination.--
       (1) Authority.--Subject to paragraph (2), the Attorney 
     General and the Comptroller General of the United States, or 
     any authorized representative of the Attorney General or the 
     Comptroller General, shall have access to any record of a 
     recipient of a grant under this subtitle that the Attorney 
     General or the Comptroller General determines may be related 
     to a grant received under this subtitle for the purpose of 
     conducting an audit or examination.
       (2) Expiration of authority.--The authority of the Attorney 
     General and the Comptroller General to conduct an audit or 
     examination under this subsection with respect to the 
     recipient of a grant under this subtitle shall expire on the 
     date that is 3 years after the date on which the activity for 
     which a State plan is approved under section 524 concludes.

     SEC. 528. REPORTS.

       (a) Reports to Congress.--Not later than January 31, 2003, 
     and each year thereafter, the Attorney General shall submit 
     to the President and Congress a report on the program under 
     this subtitle for the preceding year. Each report shall set 
     forth the following:
       (1) A description and analysis of any activities funded by 
     a grant awarded under this subtitle.
       (2) Any recommendation for legislative or administrative 
     action that the Attorney General considers appropriate.
       (b) Reports to the Attorney General.--The Attorney General 
     shall require in each grant awarded under this subtitle that 
     the recipient of such grant submit to the Attorney General, 
     under a schedule established by the Attorney General, such 
     information as the Attorney General considers appropriate to 
     submit reports under subsection (a).

     SEC. 529. STATE DEFINED.

       In this subtitle, the term ``State'' means each of the 
     several States, the District of Columbia, the Commonwealth of 
     Puerto Rico, American Samoa, Guam, and the United States 
     Virgin Islands.

     SEC. 530. AUTHORIZATION OF APPROPRIATIONS.

       (a) Authorization.--
       (1) In general.--There are authorized to be appropriated to 
     the Department of Justice--
       (A) $500,000,000 for fiscal year 2002;
       (B) such amounts as necessary for each of fiscal years 
     2003, 2004, 2005, and 2006.
       (2) Use of amounts.--Amounts appropriated under paragraph 
     (1) shall be for the purpose of--
       (A) awarding grants under this subtitle; and
       (B) paying for the costs of administering the program to 
     award such grants.
       (3) Federal election commission.--There are authorized to 
     be appropriated for each of fiscal years 2002, 2003, 2004, 
     2005, and 2006 such amounts as necessary to the Federal 
     Election Commission for the purpose of consultation with the 
     Attorney General under this subtitle.
       (b) Limitation.--Not more than 1 percent of any sums 
     appropriated under paragraph (1) of subsection (a) may be 
     used to pay for the administrative costs described in 
     paragraph (2)(B) of such subsection.
       (c) Supplemental Appropriations.--There are authorized to 
     be appropriated as supplemental appropriations for fiscal 
     year 2001 such sums as the Department of Justice and the 
     Federal Election Commission consider necessary to carry out 
     the provisions of this subtitle.

                       Subtitle C--Miscellaneous

     SEC. 541. RELATIONSHIP TO OTHER LAWS.

       Nothing in this title may be construed to authorize, 
     require, or supersede conduct prohibited under the following 
     laws, or otherwise affect such laws:
       (1) The National Voter Registration Act of 1993 (42 U.S.C. 
     1973gg et seq.).
       (2) The Voting Rights Act of 1965 (42 U.S.C. 1971 et seq.).
       (3) The Voting Accessibility for the Elderly and 
     Handicapped Act (42 U.S.C. 1973ee et seq.).
       (4) The Uniformed and Overseas Citizens Absentee Voting Act 
     (42 U.S.C. 1973ff et seq.).
       (5) The Federal Election Campaign Act of 1971 (2 U.S.C. 431 
     et seq.).

                       TITLE VI--MILITARY VOTING

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Military Voting Rights Act 
     of 2001''.

     SEC. 602. GUARANTEE OF RESIDENCY.

       Article VII of the Soldiers' and Sailors' Civil Relief Act 
     of 1940 (50 U.S.C. 590 et seq.) is amended by adding at the 
     end the following:
       ``Sec. 704. (a) For purposes of voting for an office of the 
     United States or of a State, a person who is absent from a 
     State in compliance with military or naval orders shall not, 
     solely by reason of that absence--
       ``(1) be deemed to have lost a residence or domicile in 
     that State;
       ``(2) be deemed to have acquired a residence or domicile in 
     any other State; or
       ``(3) be deemed to have become resident in or a resident of 
     any other State.
       ``(b) In this section, the term `State' includes a 
     territory or possession of the United States, a political 
     subdivision of a State, territory, or possession, and the 
     District of Columbia.''.

     SEC. 603. STATE RESPONSIBILITY TO GUARANTEE MILITARY VOTING 
                   RIGHTS.

       (a) Registration and Balloting.--Section 102 of the 
     Uniformed and Overseas Citizens Absentee Voting Act (42 
     U.S.C. 1973ff-1) is amended--
       (1) by inserting ``(a) Elections for Federal Offices.--'' 
     before ``Each State shall--''; and
       (2) by adding at the end the following:
       ``(b) Elections for State and Local Offices.--Each State 
     shall--
       ``(1) permit absent uniformed services voters to use 
     absentee registration procedures and to vote by absentee 
     ballot in general, special, primary, and run-off elections 
     for State and local offices; and
       ``(2) accept and process, with respect to any election 
     described in paragraph (1), any otherwise valid voter 
     registration application from an absent uniformed services 
     voter if the application is received by the appropriate State 
     election official not less than 30 days before the 
     election.''.
       (b) Conforming Amendment.--The heading for title I of such 
     Act is amended by striking out ``FOR FEDERAL OFFICE''.

TITLE VII--SEVERABILITY; CONSTITUTIONALITY; EFFECTIVE DATE; REGULATIONS

     SEC. 701. SEVERABILITY.

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

[[Page 345]]



     SEC. 702. REVIEW OF CONSTITUTIONAL ISSUES.

       An appeal may be taken directly to the Supreme Court of the 
     United States from any final judgment, decree, or order 
     issued by any court ruling on the constitutionality of any 
     provision of this Act or amendment made by this Act.

     SEC. 703. EFFECTIVE DATE.

       Except as otherwise provided in this Act, this Act and the 
     amendments made by this Act shall take effect upon the 
     expiration of the 90-day period which begins on the date of 
     the enactment of this Act.

     SEC. 704. REGULATIONS.

       The Federal Election Commission shall prescribe any 
     regulations required to carry out this Act and the amendments 
     made by this Act not later than 45 days after the date of the 
     enactment of this Act.
                                 ______
                                 
      Mr. DASCHLE (for himself, Mr. Dodd, Mr. Kennedy, Mrs. Murray, Mr. 
        Wellstone, Mrs. Clinton, Mr. Sarbanes, Mr. Rockefeller, Mr. 
        Schumer, Mrs. Boxer, Mr. Johnson, Mr. Corzine, and Mr. Breaux):
  S. 18. A bill to increase the availability and affordability of 
quality child care and early learning services, to amend the Family and 
Medical Leave Act of 1993 to expand the scope of the Act, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.


                        right start act of 2001

  Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       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 ``Right Start Act of 2001''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

               TITLE I--INVESTING IN HEAD START PROGRAMS

Sec. 101. Authorization of appropriations.

               TITLE II--INVESTING IN QUALITY CHILD CARE

Sec. 201. Authorization of appropriations.

           TITLE III--PROMOTING EARLY LEARNING OPPORTUNITIES

Sec. 301. Amendments to the Early Learning Opportunities Act.

           TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE

                 Subtitle A--Dependent Care Tax Credit

Sec. 401. Expanding the dependent care tax credit.
Sec. 402. Minimum credit allowed for stay-at-home parents.
Sec. 403. Credit made refundable.

        Subtitle B--Incentives for Employer-Provided Child Care

Sec. 411. Allowance of credit for employer expenses for child care 
              assistance.

              TITLE V--EXPANDING FAMILY AND MEDICAL LEAVE

    Subtitle A--Family Income to Respond to Significant Transitions

Sec. 501. Short title.
Sec. 502. Purposes. 
Sec. 503. Definitions.
Sec. 504. Demonstration projects.
Sec. 505. Evaluations and reports.
Sec. 506. Authorization of appropriations.

                 Subtitle B--Family Friendly Workplaces

Sec. 511. Short title.
Sec. 512. Coverage of employees.

                      Subtitle C--Time for Schools

Sec. 521. Short title.
Sec. 522. General requirements for leave.
Sec. 523. School involvement leave for civil service employees.
Sec. 524. Effective date.

          Subtitle D--Employment Protection for Battered Women

Sec. 531. Entitlement to leave for addressing domestic violence for 
              non-Federal employees.
Sec. 532. Entitlement to leave for addressing domestic violence for 
              Federal employees.
Sec. 533. Existing leave usable for domestic violence.

               TITLE I--INVESTING IN HEAD START PROGRAMS

     SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Section 639(a) of the Head Start Act (42 
     U.S.C. 9834(a)) is amended by striking ``such sums'' and all 
     that follows and inserting the following: ``$6,500,000,000 
     for fiscal year 2002, $7,000,000,000 for fiscal year 2003, 
     $7,750,000,000 for fiscal year 2004, $8,500,000,000 for 
     fiscal year 2005, and $9,750,000,000 for fiscal year 2006.''.
       (b) Conforming Amendments.--
       (1) Reservations.--Paragraphs (1) and (3) of section 639(b) 
     of the Head Start Act (42 U.S.C. 9834(b)) are amended by 
     striking ``2003'' and inserting ``2006''.
       (2) Distribution.--Paragraphs (3)(A)(i)(I) and (6)(A) of 
     section 640(a) of the Head Start Act (42 U.S.C. 9835(a)) are 
     amended by striking ``fiscal year 2003'' and inserting ``each 
     of fiscal years 2003 through 2006''.

               TITLE II--INVESTING IN QUALITY CHILD CARE

     SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

       (a) Child Care and Development Block Grant Act of 1990.--
     Section 658B of the Child Care and Development Block Grant 
     Act of 1990 (42 U.S.C. 9858) is amended by striking 
     ``$1,000,000,000'' and all that follows and inserting 
     ``$2,076,000,000 for fiscal year 2002, $2,109,000,000 for 
     fiscal year 2003, $2,571,000,000 for fiscal year 2004, 
     $3,051,000,000 for fiscal year 2005, and $3,766,000,000 for 
     fiscal year 2006.''.
       (b) Social Security Act Funding for Child Care.--Section 
     418(a)(3) of the Social Security Act (42 U.S.C. 618(a)(3)) is 
     amended--
       (1) in subparagraph (E), by striking ``; and'';
       (2) in subparagraph (F), by striking the period and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(G) $2,870,000,000 for fiscal year 2002;
       ``(H) $2,936,000,000 for fiscal year 2003;
       ``(I) $3,861,000,000 for fiscal year 2004;
       ``(J) $4,821,000,000 for fiscal year 2005; and
       ``(K) $3,766,000,000 for fiscal year 2006.''.

           TITLE III--PROMOTING EARLY LEARNING OPPORTUNITIES

     SEC. 301. AMENDMENTS TO THE EARLY LEARNING OPPORTUNITIES ACT.

       Section 805 of the Early Learning Opportunities Act, as 
     enacted by title VIII of the Departments of Labor, Health and 
     Human Services, and Education, and Related Agencies 
     Appropriations Act, 2001 (as enacted into law by section 
     1(a)(1) of Public Law 106-554) is amended--
       (1) in the matter preceding paragraph (1), by inserting ``, 
     and there are appropriated,''; and
       (2) by striking paragraphs (1) through (4) and inserting 
     the following:
       ``(1) $750,000,000 for fiscal year 2002;
       ``(2) $1,000,000,000 for fiscal year 2003;
       ``(3) $1,500,000,000 for fiscal year 2004;
       ``(4) $2,000,000,000 for fiscal year 2005; and
       ``(5) $2,500,000,000 for fiscal year 2006.''.

           TITLE IV--SUPPORTING FAMILY CHOICES IN CHILD CARE

                 Subtitle A--Dependent Care Tax Credit

     SEC. 401. EXPANDING THE DEPENDENT CARE TAX CREDIT.

       (a) Percentage of Employment-Related Expenses Determined by 
     Taxpayer Status.--Section 21(a)(2) of the Internal Revenue 
     Code of 1986 (defining applicable percentage) is amended to 
     read as follows:
       ``(2) Applicable percentage defined.--For purposes of 
     paragraph (1), the term `applicable percentage' means--
       ``(A) except as provided in subparagraph (B), 50 percent 
     reduced (but not below 20 percent) by 1 percentage point for 
     each $1,000, or fraction thereof, by which the taxpayers's 
     adjusted gross income for the taxable year exceeds $30,000, 
     and
       ``(B) in the case of employment-related expenses described 
     in subsection (e)(11), 50 percent reduced (but not below 
     zero) by 1 percentage point for each $800, or fraction 
     thereof, by which the taxpayers's adjusted gross income for 
     the taxable year exceeds $30,000.''.
       (b) Inflation Adjustment for Allowable Expenses.--Section 
     21(c) of the Internal Revenue Code of 1986 (relating to 
     dollar limit on amount creditable) is amended by striking 
     ``The amount determined'' and inserting ``In the case of any 
     taxable year beginning after 2002, each dollar amount 
     referred to in paragraphs (1) and (2) shall be increased by 
     an amount equal to such dollar amount multiplied by the cost-
     of-living adjustment determined under section 1(f)(3) for the 
     calendar year in which the taxable year begins, by 
     substituting `calendar year 2001' for `calendar year 1992' in 
     subparagraph (B) thereof. If any dollar amount after being 
     increased under the preceding sentence is not a multiple of 
     $10, such dollar amount shall be rounded to the nearest 
     multiple of $10. The amount determined''.
       (c) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2001.

     SEC. 402. MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME PARENTS.

       (a) In General.--Section 21(e) of the Internal Revenue Code 
     of 1986 (relating to special rules) is amended by adding at 
     the end the following:
       ``(11) Minimum credit allowed for stay-at-home parents.--
     Notwithstanding subsection (d), in the case of any taxpayer 
     with one or more qualifying individuals described in 
     subsection (b)(1)(A) under the age of 1 at any time during 
     the taxable year, such taxpayer shall be deemed to have 
     employment-related expenses with respect to such qualifying 
     individuals in an amount equal to the sum of--
       ``(A) $90 for each month in such taxable year during which 
     at least one of such qualifying individuals is under the age 
     of 1, and
       ``(B) the amount of employment-related expenses otherwise 
     incurred for such qualifying individuals for the taxable year 
     (determined under this section without regard to this 
     paragraph).''.

[[Page 346]]

       (b) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2001.

     SEC. 403. CREDIT MADE REFUNDABLE.

       (a) In General.--Part IV of subchapter A of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to credits 
     against tax) is amended--
       (1) by redesignating section 35 as section 36, and
       (2) by redesignating section 21 as section 35.
       (b) Advance Payment of Credit.--Chapter 25 of such Code 
     (relating to general provisions relating to employment taxes) 
     is amended by inserting after section 3507 the following:

     ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

       ``(a) General Rule.--Except as otherwise provided in this 
     section, every employer making payment of wages with respect 
     to whom a dependent care eligibility certificate is in effect 
     shall, at the time of paying such wages, make an additional 
     payment equal to such employee's dependent care advance 
     amount.
       ``(b) Dependent Care Eligibility Certificate.--For purposes 
     of this title, a dependent care eligibility certificate is a 
     statement furnished by an employee to the employer which--
       ``(1) certifies that the employee will be eligible to 
     receive the credit provided by section 35 for the taxable 
     year,
       ``(2) certifies that the employee reasonably expects to be 
     an applicable taxpayer for the taxable year,
       ``(3) certifies that the employee does not have a dependent 
     care eligibility certificate in effect for the calendar year 
     with respect to the payment of wages by another employer,
       ``(4) states whether or not the employee's spouse has a 
     dependent care eligibility certificate in effect,
       ``(5) states the number of qualifying individuals in the 
     household maintained by the employee, and
       ``(6) estimates the amount of employment-related expenses 
     for the calendar year.
       ``(c) Dependent Care Advance Amount.--
       ``(1) In general.--For purposes of this title, the term 
     `dependent care advance amount' means, with respect to any 
     payroll period, the amount determined--
       ``(A) on the basis of the employee's wages from the 
     employer for such period,
       ``(B) on the basis of the employee's estimated employment-
     related expenses included in the dependent care eligibility 
     certificate, and
       ``(C) in accordance with tables provided by the Secretary.
       ``(2) Advance amount tables.--The tables referred to in 
     paragraph (1)(C) shall be similar in form to the tables 
     prescribed under section 3402 and, to the maximum extent 
     feasible, shall be coordinated with such tables and the 
     tables prescribed under section 3507(c).
       ``(d) Other Rules.--For purposes of this section, rules 
     similar to the rules of subsections (d) and (e) of section 
     3507 shall apply.
       ``(e) Definitions.--For purposes of this section, terms 
     used in this section which are defined in section 35 shall 
     have the respective meanings given such terms by section 
     35.''.
       (c) Conforming Amendments.--
       (1) Section 35(a)(1) of such Code, as redesignated by 
     paragraph (1), is amended by striking ``chapter'' and 
     inserting ``subtitle''.
       (2) Section 35(e) of such Code, as so redesignated and 
     amended by subsection (c), is amended by adding at the end 
     the following:
       ``(12) Coordination with advance payments and minimum 
     tax.--Rules similar to the rules of subsections (g) and (h) 
     of section 32 shall apply for purposes of this section.''.
       (3) Sections 23(f)(1) and 129(a)(2)(C) of such Code are 
     each amended by striking ``section 21(e)'' and inserting 
     ``section 35(e)''.
       (4) Section 129(b)(2) of such Code is amended by striking 
     ``section 21(d)(2)'' and inserting ``section 35(d)(2)''.
       (5) Section 129(e)(1) of such Code is amended by striking 
     ``section 21(b)(2)'' and inserting ``section 35(b)(2)''.
       (6) Section 213(e) of such Code is amended by striking 
     ``section 21'' and inserting ``section 35''.
       (7) Section 995(f)(2)(C) of such Code is amended by 
     striking ``and 34'' and inserting ``34, and 35''.
       (8) Section 6211(b)(4)(A) of such Code is amended by 
     striking ``and 34'' and inserting ``, 34, and 35''.
       (9) Section 6213(g)(2)(H) of such Code is amended by 
     striking ``section 21'' and inserting ``section 35''.
       (10) Section 6213(g)(2)(L) of such Code is amended by 
     striking ``section 21, 24, or 32'' and inserting ``section 
     24, 32, or 35''.
       (11) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 of such Code is amended by striking 
     the item relating to section 35 and inserting the following:

``Sec. 35. Expenses for household and dependent care services necessary 
              for gainful employment.
``Sec. 36. Overpayments of tax.''.

       (12) The table of sections for subpart A of such part IV is 
     amended by striking the item relating to section 21.
       (13) The table of sections for chapter 25 of such Code is 
     amended by adding after the item relating to section 3507 the 
     following:

``Sec. 3507A. Advance payment of dependent care credit.''.

       (14) Section 1324(b)(2) of title 31, United States Code, is 
     amended by striking ``or'' before ``enacted'' and by 
     inserting before the period at the end ``, or from section 35 
     of such Code''.
       (d) Effective Date.--The amendments made by this section 
     apply to taxable years beginning after December 31, 2001.

        Subtitle B--Incentives for Employer-Provided Child Care

     SEC. 411. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD 
                   CARE ASSISTANCE.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by adding at the end the 
     following:

     ``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to the sum 
     of--
       ``(1) 25 percent of the qualified child care expenditures, 
     and
       ``(2) 10 percent of the qualified child care resource and 
     referral expenditures,
     of the taxpayer for such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $150,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--
       ``(A) In general.--The term `qualified child care 
     expenditure' means any amount paid or incurred--
       ``(i) to acquire, construct, rehabilitate, or expand 
     property--

       ``(I) which is to be used as part of a qualified child care 
     facility of the taxpayer,
       ``(II) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(III) which does not constitute part of the principal 
     residence (within the meaning of section 121) of the taxpayer 
     or any employee of the taxpayer,

       ``(ii) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees, to scholarship programs, and to the 
     providing of increased compensation to employees with higher 
     levels of child care training,
       ``(iii) under a contract with a qualified child care 
     facility to provide child care services to employees of the 
     taxpayer, or
       ``(iv) to reimburse an employee for expenses for child care 
     which enables the employee to be gainfully employed including 
     expenses related to--

       ``(I) day care and before and after school care,
       ``(II) transportation associated with such care, and
       ``(III) before and after school and holiday programs 
     including educational and recreational programs and camp 
     programs.

       ``(B) Fair market value.--The term `qualified child care 
     expenditures' shall not include expenses in excess of the 
     fair market value of such care.
       ``(2) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including the licensing of the facility as a 
     child care facility.
     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 121) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--
       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) if the facility is the principal trade or business 
     of the taxpayer, at least 30 percent of the enrollees of such 
     facility are dependents of employees of the taxpayer, and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(3) Qualified child care resource and referral 
     expenditure.--The term `qualified child care resource and 
     referral expenditure' means any amount paid or incurred under 
     a contract to provide child care resource and referral 
     services to an employee of the taxpayer.
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--

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       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer described in subsection (c)(1)(A) with respect to 
     such facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

                                                         The applicable
                                                              recapture
                                    ``If the recapture evpercentage is:
    Years 1-3....................................................100   
    Year 4........................................................85   
    Year 5........................................................70   
    Year 6........................................................55   
    Year 7........................................................40   
    Year 8........................................................25   
    Years 9 and 10................................................10   
    Years 11 and thereafter........................................0.  

       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the taxable year in which the 
     qualified child care facility is placed in service by the 
     taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If, during any taxable year, 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.''.
       (b) Conforming Amendments.--
       (1) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended by striking ``plus'' at the end of paragraph (12), by 
     striking the period at the end of paragraph (13) and 
     inserting ``, plus'', and by adding at the end the following:
       ``(14) the employer-provided child care credit determined 
     under section 45E.''.
       (2) Subsection (d) of section 39 of such Code is amended by 
     adding at the end the following new paragraph:
       ``(10) No carryback of employer-provided child care credit 
     before january 1, 2002.--No portion of the unused business 
     credit for any taxable year which is attributable to the 
     credit under section 45E may be carried back to a taxable 
     year ending before January 1, 2002.''.
       (3) Subsection (c) of section 196 of such Code is amended 
     by striking ``and'' at the end of paragraph (8), by striking 
     the period at the end of paragraph (9) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(10) the employer-provided child care credit determined 
     under section 45E(a).''.
       (4) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     at the end the following:

``Sec. 45E. Employer-provided child care credit.''.

       (5) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (26), by striking the period 
     at the end of paragraph (27) and inserting ``, and'', and by 
     adding at the end the following:
       ``(28) in the case of a facility with respect to which a 
     credit was allowed under section 45E, to the extent provided 
     in section 45E(f)(1).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

              TITLE V--EXPANDING FAMILY AND MEDICAL LEAVE

    Subtitle A--Family Income to Respond to Significant Transitions

     SEC. 501. SHORT TITLE.

       This subtitle may be cited as the ``Family Income to 
     Respond to Significant Transitions Insurance Act''.

     SEC. 502. PURPOSES.

       The purposes of this subtitle are--
       (1) to establish a demonstration program that supports the 
     efforts of States and political subdivisions to provide 
     partial or full wage replacement, often referred to as FIRST 
     insurance, to new parents so that the new parents are able to 
     spend time with a new infant or newly adopted child, and to 
     other employees; and
       (2) to learn about the most effective mechanisms for 
     providing the wage replacement assistance.

     SEC. 503. DEFINITIONS.

       In this subtitle:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor, acting after consultation with the Secretary of 
     Health and Human Services.
       (2) Son or daughter; state.--The terms ``son or daughter'' 
     and ``State'' have the meanings given the terms in section 
     101 of the Family and Medical Leave Act of 1993 (29 U.S.C. 
     2611).

     SEC. 504. DEMONSTRATION PROJECTS.

       (a) Grants.--The Secretary shall make grants to eligible 
     entities to pay for the Federal share of the cost of carrying 
     out projects that assist families by providing, through 
     various mechanisms, wage replacement for eligible individuals 
     that are responding to caregiving needs resulting from the 
     birth or adoption of a son or daughter or other family 
     caregiving needs. The Secretary shall make the grants for 
     periods of 5 years.
       (b) Eligible Entities.--To be eligible to receive a grant 
     under this section, an entity shall be a State or political 
     subdivision of a State.
       (c) Use of Funds.--
       (1) In general.--An entity that receives a grant under this 
     section may use the funds made available through the grant to 
     provide partial or full wage replacement as described in 
     subsection (a) to eligible individuals--
       (A) directly;
       (B) through an insurance program, such as a State temporary 
     disability insurance program or the State unemployment 
     compensation benefit program;
       (C) through a private disability or other insurance plan, 
     or another mechanism provided by a private employer; or
       (D) through another mechanism.
       (2) Administrative costs.--No entity may use more than 10 
     percent of the total funds made available through the grant 
     during the 5-year period of the grant to pay for the 
     administrative costs relating to a project described in 
     subsection (a).
       (d) Eligible Individuals.--To be eligible to receive wage 
     replacement under subsection (a), an individual shall--
       (1) meet such eligibility criteria as the eligible entity 
     providing the wage replacement may specify in an application 
     described in subsection (e); and
       (2) be--
       (A) an individual who is taking leave, under the Family and 
     Medical Leave Act of 1993 (29 U.S.C. 2601 et seq.), other 
     Federal, State, or local law, or a private plan, for a reason 
     described in subparagraph (A) or (B) of section 102(a)(1) of 
     the Family and Medical Leave Act of 1993 (29 U.S.C. 
     2612(a)(1));

[[Page 348]]

       (B) at the option of the eligible entity, an individual 
     who--
       (i) is taking leave, under that Act, other Federal, State, 
     or local law, or a private plan, for a reason described in 
     subparagraph (C) or (D) of section 102(a)(1) of the Family 
     and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1)); or
       (ii) leaves employment because the individual has elected 
     to care for a son or daughter under age 1; or
       (C) at the option of the eligible entity, an individual 
     with other characteristics specified by the eligible entity 
     in an application described in subsection (e).
       (e) Application.--To be eligible to receive a grant under 
     this section, an entity shall submit an application to the 
     Secretary, at such time, in such manner, and containing such 
     information as the Secretary may require, including, at a 
     minimum--
       (1) a plan for the project to be carried out with the 
     grant;
       (2) information demonstrating that the applicant consulted 
     representatives of employers and employees, including labor 
     organizations, in developing the plan;
       (3) estimates of the costs and benefits of the project;
       (4)(A) information on the number and type of families to be 
     covered by the project, and the extent of such coverage in 
     the area served under the grant; and
       (B) information on any criteria or characteristics that the 
     entity will use to determine whether an individual is 
     eligible for wage replacement under subsection (a), as 
     described in paragraphs (1) and (2)(C) of subsection (d);
       (5) if the project will expand on State and private systems 
     of wage replacement for eligible individuals, information on 
     the manner in which the project will expand on the systems;
       (6) information demonstrating the manner in which the wage 
     replacement assistance provided through the project will 
     assist families in which an individual takes leave as 
     described in subsection (d)(1); and
       (7) an assurance that the applicant will participate in 
     efforts to evaluate the effectiveness of the project.
       (f) Selection Criteria.--In selecting entities to receive 
     grants for projects under this section, the Secretary shall--
       (1) take into consideration--
       (A) the scope of the proposed projects;
       (B) the cost-effectiveness, feasibility, and financial 
     soundness of the proposed projects;
       (C) the extent to which the proposed projects would expand 
     access to wage replacement in response to family caregiving 
     needs, particularly for low-wage employees, in the area 
     served by the grant; and
       (D) the benefits that would be offered to families and 
     children through the proposed projects; and
       (2) to the extent feasible, select entities proposing 
     projects that utilize diverse mechanisms, including expansion 
     of State unemployment compensation benefit programs, and 
     establishment or expansion of State temporary disability 
     insurance programs, to provide the wage replacement.
       (g) Federal Share.--
       (1) In general.--The Federal share of the cost described in 
     subsection (a) shall be--
       (A) 50 percent for the first year of the grant period;
       (B) 40 percent for the second year of that period;
       (C) 30 percent for the third year of that period; and
       (D) 20 percent for each subsequent year.
       (2) Non-federal share.--The non-Federal share of the cost 
     may be in cash or in kind, fairly evaluated, including plant, 
     equipment, and services and may be provided from State, 
     local, or private sources, or Federal sources other than this 
     subtitle.
       (h) Supplement Not Supplant.--Funds appropriated pursuant 
     to the authority of this subtitle shall be used to supplement 
     and not supplant other Federal, State, and local public funds 
     and private funds expended to provide wage replacement.
       (i) Effect on Existing Rights.--Nothing in this subtitle 
     shall be construed to supersede, preempt, or otherwise 
     infringe on the provisions of any collective bargaining 
     agreement or any employment benefit program or plan that 
     provides greater rights to employees than the rights 
     established under this subtitle.

     SEC. 505. EVALUATIONS AND REPORTS.

       (a) Available Funds.--The Secretary shall use not more than 
     2 percent of the funds made available under section 5 to 
     carry out this section.
       (b) Evaluations.--The Secretary shall, directly or by 
     contract, evaluate the effectiveness of projects carried out 
     with grants made under section 5, including conducting--
       (1) research relating to the projects, including research 
     comparing--
       (A) the scope of the projects, including the type of 
     insurance or other wage replacement mechanism used, the 
     method of financing used, the eligibility requirements, the 
     level of the wage replacement benefit provided (such as the 
     percentage of salary replaced), and the length of the benefit 
     provided, for the projects;
       (B) the utilization of the projects, including the 
     characteristics of individuals who benefit from the projects, 
     particularly low-wage workers, and factors that determine the 
     ability of eligible individuals to obtain wage replacement 
     through the projects; and
       (C) the costs of and savings achieved by the projects, 
     including the cost-effectiveness of the projects and their 
     benefits for children and families;
       (2) analysis of the overall need for wage replacement; and
       (3) analysis of the impact of the projects on the overall 
     availability of wage replacement.
       (c) Reports.--
       (1) Initial report.--Not later than 3 years after the 
     beginning of the grant period for the first grant made under 
     section 5, the Secretary shall prepare and submit to Congress 
     a report that contains information resulting from the 
     evaluations conducted under subsection (b).
       (2) Subsequent reports.--Not later than 4 years after the 
     beginning of that grant period, and annually thereafter, the 
     Secretary shall prepare and submit to Congress a report that 
     contains--
       (A) information resulting from the evaluations conducted 
     under subsection (b); and
       (B) usage data for the demonstration projects, for the most 
     recent year for which data are available.

     SEC. 506. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     subtitle $400,000,000 for fiscal year 2002 and such sums as 
     may be necessary for each subsequent fiscal year.

                 Subtitle B--Family Friendly Workplaces

     SEC. 511. SHORT TITLE.

       This subtitle may be cited as the ``Family and Medical 
     Leave Fairness Act of 2001''.

     SEC. 512. COVERAGE OF EMPLOYEES.

       Paragraphs (2)(B)(ii) and (4)(A)(i) of section 101 of the 
     Family and Medical Leave Act of 1993 (29 U.S.C. 
     2611(2)(B)(ii) and (4)(A)(i)) are amended by striking ``50'' 
     each place it appears and inserting ``25''.

                      Subtitle C--Time for Schools

     SEC. 521. SHORT TITLE.

       This subtitle may be cited as the ``Time for Schools Act of 
     2001''.

     SEC. 522. GENERAL REQUIREMENTS FOR LEAVE.

       (a) Entitlement to Leave.--Section 102(a) of the Family and 
     Medical Leave Act of 1993 (29 U.S.C. 2612(a)) is amended by 
     adding at the end the following:
       ``(3) Entitlement to school involvement leave.--
       ``(A) In general.--Subject to section 103(f), an eligible 
     employee shall be entitled to a total of 24 hours of leave 
     during any 12-month period to participate in an academic 
     activity of a school of a son or daughter of the employee, 
     such as a parent-teacher conference or an interview for a 
     school, or to participate in literacy training under a family 
     literacy program.
       ``(B) Definitions.--In this paragraph:
       ``(i) Family literacy program.--The term `family literacy 
     program' means a program of services that are of sufficient 
     intensity in terms of hours, and of sufficient duration, to 
     make sustainable changes in a family and that integrate all 
     of the following activities:

       ``(I) Interactive literacy activities between parents and 
     their sons and daughters.
       ``(II) Training for parents on how to be the primary 
     teacher for their sons and daughters and full partners in the 
     education of their sons and daughters.
       ``(III) Parent literacy training.
       ``(IV) An age-appropriate education program for sons and 
     daughters.

       ``(ii) Literacy.--The term `literacy', used with respect to 
     an individual, means the ability of the individual to speak, 
     read, and write English, and compute and solve problems, at 
     levels of proficiency necessary--

       ``(I) to function on the job, in the family of the 
     individual, and in society;
       ``(II) to achieve the goals of the individual; and
       ``(III) to develop the knowledge potential of the 
     individual.

       ``(iii) School.--The term `school' means an elementary 
     school or secondary school (as such terms are defined in 
     section 14101 of the Elementary and Secondary Education Act 
     of 1965 (20 U.S.C. 8801)), a Head Start program assisted 
     under the Head Start Act (42 U.S.C. 9831 et seq.), and a 
     child care facility operated by a provider who meets the 
     applicable State or local government licensing, 
     certification, approval, or registration requirements, if 
     any.
       ``(4) Limitation.--No employee may take more than a total 
     of 12 workweeks of leave under paragraphs (1) and (3) during 
     any 12-month period.''.
       (b) Schedule.--Section 102(b)(1) of such Act (29 U.S.C. 
     2612(b)(1)) is amended by inserting after the second sentence 
     the following: ``Leave under subsection (a)(3) may be taken 
     intermittently or on a reduced leave schedule.''.
       (c) Substitution of Paid Leave.--Section 102(d)(2)(A) of 
     such Act (29 U.S.C. 2612(d)(2)(A)) is amended by inserting 
     before the period the following: ``, or for leave provided 
     under subsection (a)(3) for any part of the 24-hour period of 
     such leave under such subsection''.
       (d) Notice.--Section 102(e) of such Act (29 U.S.C. 2612(e)) 
     is amended by adding at the end the following:
       ``(3) Notice for school involvement leave.--In any case in 
     which the necessity

[[Page 349]]

     for leave under subsection (a)(3) is foreseeable, the 
     employee shall provide the employer with not less than 7 
     days' notice, before the date the leave is to begin, of the 
     employee's intention to take leave under such subsection. If 
     the necessity for the leave is not foreseeable, the employee 
     shall provide such notice as is practicable.''.
       (e) Certification.--Section 103 of such Act (29 U.S.C. 
     2613) is amended by adding at the end the following:
       ``(f) Certification for School Involvement Leave.--An 
     employer may require that a request for leave under section 
     102(a)(3) be supported by a certification issued at such time 
     and in such manner as the Secretary may by regulation 
     prescribe.''.

     SEC. 523. SCHOOL INVOLVEMENT LEAVE FOR CIVIL SERVICE 
                   EMPLOYEES.

       (a) Entitlement to Leave.--Section 6382(a) of title 5, 
     United States Code, is amended by adding at the end the 
     following:
       ``(3)(A) Subject to section 6383(f), an employee shall be 
     entitled to a total of 24 hours of leave during any 12-month 
     period to participate in an academic activity of a school of 
     a son or daughter of the employee, such as a parent-teacher 
     conference or an interview for a school, or to participate in 
     literacy training under a family literacy program.
       ``(B) In this paragraph:
       ``(i) The term `family literacy program' means a program of 
     services that are of sufficient intensity in terms of hours, 
     and of sufficient duration, to make sustainable changes in a 
     family and that integrate all of the following activities:
       ``(I) Interactive literacy activities between parents and 
     their sons and daughters.
       ``(II) Training for parents on how to be the primary 
     teacher for their sons and daughters and full partners in the 
     education of their sons and daughters.
       ``(III) Parent literacy training.
       ``(IV) An age-appropriate education program for sons and 
     daughters.
       ``(ii) The term `literacy', used with respect to an 
     individual, means the ability of the individual to speak, 
     read, and write English, and compute and solve problems, at 
     levels of proficiency necessary--
       ``(I) to function on the job, in the family of the 
     individual, and in society;
       ``(II) to achieve the goals of the individual; and
       ``(III) to develop the knowledge potential of the 
     individual.
       ``(iii) The term `school' means an elementary school or 
     secondary school (as such terms are defined in section 14101 
     of the Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 8801)), a Head Start program assisted under the Head 
     Start Act (42 U.S.C. 9831 et seq.), and a child care facility 
     operated by a provider who meets the applicable State or 
     local government licensing, certification, approval, or 
     registration requirements, if any.
       ``(4) No employee may take more than a total of 12 
     workweeks of leave under paragraphs (1) and (3) during any 
     12-month period.''.
       (b) Schedule.--Section 6382(b)(1) of such title is amended 
     by inserting after the second sentence the following: ``Leave 
     under subsection (a)(3) may be taken intermittently or on a 
     reduced leave schedule.''.
       (c) Substitution of Paid Leave.--Section 6382(d) of such 
     title is amended by inserting before ``, except'' the 
     following: ``, or for leave provided under subsection (a)(3) 
     any of the employee's accrued or accumulated annual leave 
     under subchapter I for any part of the 24-hour period of such 
     leave under such subsection''.
       (d) Notice.--Section 6382(e) of such title is amended by 
     adding at the end the following:
       ``(3) In any case in which the necessity for leave under 
     subsection (a)(3) is foreseeable, the employee shall provide 
     the employing agency with not less than 7 days' notice, 
     before the date the leave is to begin, of the employee's 
     intention to take leave under such subsection. If the 
     necessity for the leave is not foreseeable, the employee 
     shall provide such notice as is practicable.''.
       (e) Certification.--Section 6383 of such title is amended 
     by adding at the end the following:
       ``(f) An employing agency may require that a request for 
     leave under section 6382(a)(3) be supported by a 
     certification issued at such time and in such manner as the 
     Office of Personnel Management may by regulation 
     prescribe.''.

     SEC. 524. EFFECTIVE DATE.

       This subtitle takes effect 120 days after the date of 
     enactment of this Act.

          Subtitle D--Employment Protection for Battered Women

     SEC. 531. ENTITLEMENT TO LEAVE FOR ADDRESSING DOMESTIC 
                   VIOLENCE FOR NON-FEDERAL EMPLOYEES.

       (a) Definitions.--Section 101 of the Family and Medical 
     Leave Act of 1993 (29 U.S.C. 2611) is amended by adding at 
     the end the following:
       ``(14) Addressing domestic violence and its effects.--The 
     term `addressing domestic violence and its effects' means--
       ``(A) being unable to attend or perform work due to an 
     incident of domestic violence;
       ``(B) seeking medical attention for or recovering from 
     injuries caused by domestic violence;
       ``(C) seeking legal assistance or remedies, including 
     communicating with the police or an attorney, or 
     participating in any legal proceeding, related to domestic 
     violence;
       ``(D) obtaining services from a domestic violence shelter 
     or program or rape crisis center as a result of domestic 
     violence;
       ``(E) obtaining psychological counseling related to 
     experiences of domestic violence;
       ``(F) participating in safety planning and other actions to 
     increase safety from future domestic violence, including 
     temporary or permanent relocation; and
       ``(G) participating in any other activity necessitated by 
     domestic violence that must be undertaken during the hours of 
     employment involved.
       ``(15) Domestic violence.--The term `domestic violence' 
     means domestic violence, and dating violence, as such terms 
     are defined in section 2105 of the Omnibus Crime Control and 
     Safe Streets Act of 1968 (42 U.S.C. 3796hh-4).''.
       (b) Leave Requirement.--Section 102 of the Family and 
     Medical Leave Act of 1993 (29 U.S.C. 2612) is amended--
       (1) in subsection (a)(1), by adding at the end the 
     following:
       ``(E) In order to care for the son, daughter, or parent of 
     the employee, if such son, daughter, or parent is addressing 
     domestic violence and its effects.
       ``(F) Because the employee is addressing domestic violence 
     and its effects, which make the employee unable to perform 
     the functions of the position of such employee.'';
       (2) in subsection (b), by adding at the end the following:
       ``(3) Domestic violence.--Leave under subparagraph (E) or 
     (F) of subsection (a)(1) may be taken by an eligible employee 
     intermittently or on a reduced leave schedule. The taking of 
     leave intermittently or on a reduced leave schedule pursuant 
     to this paragraph shall not result in a reduction in the 
     total amount of leave to which the employee is entitled under 
     subsection (a) beyond the amount of leave actually taken.''; 
     and
       (3) in subsection (d)(2)(B), by striking ``(C) or (D)'' and 
     inserting ``(C), (D), (E), or (F)''.
       (c) Certification.--Section 103 of the Family and Medical 
     Leave Act of 1993 (29 U.S.C. 2613), as amended by section 
     522(e), is further amended--
       (1) in the title of the section, by inserting before the 
     period the following: ``; CONFIDENTIALITY''; and
       (2) by adding at the end the following:
       ``(g) Domestic Violence.--In determining if an employee 
     meets the requirements of subparagraph (E) or (F) of section 
     102(a)(1), the employer of an employee may require the 
     employee to provide--
       ``(1) a written statement describing the domestic violence 
     and its effects;
       ``(2) documentation of the domestic violence involved, such 
     as a police or court record, or documentation from a shelter 
     worker, an employee of a domestic violence program, an 
     attorney, a member of the clergy, or a medical or other 
     professional, from whom the employee has sought assistance in 
     addressing domestic violence and its effects; or
       ``(3) other corroborating evidence, such as a statement 
     from any other individual with knowledge of the circumstances 
     that provide the basis for the claim of domestic violence, or 
     physical evidence of domestic violence, such as a photograph, 
     torn or bloody clothing, or any other damaged property.
       ``(h) Confidentiality.--All evidence provided to the 
     employer under subsection (g) of domestic violence 
     experienced by an employee or the son, daughter, or parent of 
     an employee, including a statement of an employee, any other 
     documentation or corroborating evidence, and the fact that an 
     employee has requested leave for the purpose of addressing, 
     or caring for a son, daughter, or parent who is addressing, 
     domestic violence and its effects, shall be retained in the 
     strictest confidence by the employer, except to the extent 
     that disclosure is requested, or consented to, by the 
     employee for the purpose of--
       ``(1) protecting the safety of the employee or a family 
     member or co-worker of the employee; or
       ``(2) assisting in documenting domestic violence for a 
     court or agency.''.

     SEC. 532. ENTITLEMENT TO LEAVE FOR ADDRESSING DOMESTIC 
                   VIOLENCE FOR FEDERAL EMPLOYEES.

       (a) Definitions.--Section 6381 of title 5, United States 
     Code, is amended--
       (1) at the end of paragraph (5), by striking ``and'';
       (2) in paragraph (6), by striking the period and inserting 
     a semicolon; and
       (3) by adding at the end the following:
       ``(7) the term `addressing domestic violence and its 
     effects' has the meaning given the term in section 101 of the 
     Family and Medical Leave Act of 1993 (29 U.S.C. 2611); and
       ``(8) the term `domestic violence' means domestic violence, 
     and dating violence, as such terms are defined in section 
     2105 of the Omnibus Crime Control and Safe Streets Act of 
     1968 (42 U.S.C. 3796hh-4).''.
       (b) Leave Requirement.--Section 6382 of title 5, United 
     States Code, is amended--
       (1) in subsection (a)(1), by adding at the end the 
     following:
       ``(E) In order to care for the son, daughter, or parent of 
     the employee, if such son, daughter, or parent is addressing 
     domestic violence and its effects.

[[Page 350]]

       ``(F) Because the employee is addressing domestic violence 
     and its effects, which make the employee unable to perform 
     the functions of the position of such employee.'';
       (2) in subsection (b), by adding at the end the following:
       ``(3) Domestic violence.--Leave under subparagraph (E) or 
     (F) of subsection (a)(1) may be taken by an employee 
     intermittently or on a reduced leave schedule. The taking of 
     leave intermittently or on a reduced leave schedule pursuant 
     to this paragraph shall not result in a reduction in the 
     total amount of leave to which the employee is entitled under 
     subsection (a) beyond the amount of leave actually taken.''; 
     and
       (3) in subsection (d), by striking ``(C), or (D)'' and 
     inserting ``(C), (D), (E), or (F)''.
       (c) Certification.--Section 6383 of title 5, United States 
     Code, as amended by section 523(e), is further amended--
       (1) in the title of the section, by adding at the end the 
     following: ``; CONFIDENTIALITY''; and
       (2) by adding at the end the following:
       ``(g) In determining if an employee meets the requirements 
     of subparagraph (E) or (F) of section 6382(a)(1), the 
     employing agency of an employee may require the employee to 
     provide--
       ``(1) a written statement describing the domestic violence 
     and its effects;
       ``(2) documentation of the domestic violence involved, such 
     as a police or court record, or documentation from a shelter 
     worker, an employee of a domestic violence program, an 
     attorney, a member of the clergy, or a medical or other 
     professional, from whom the employee has sought assistance in 
     addressing domestic violence and its effects; or
       ``(3) other corroborating evidence, such as a statement 
     from any other individual with knowledge of the circumstances 
     that provide the basis for the claim of domestic violence, or 
     physical evidence of domestic violence, such as a photograph, 
     torn or bloody clothing, or other damaged property.
       ``(h) All evidence provided to the employing agency under 
     subsection (g) of domestic violence experienced by an 
     employee or the son, daughter, or parent of an employee, 
     including a statement of an employee, any other documentation 
     or corroborating evidence, and the fact that an employee has 
     requested leave for the purpose of addressing, or caring for 
     a son, daughter, or parent who is addressing, domestic 
     violence and its effects, shall be retained in the strictest 
     confidence by the employing agency, except to the extent that 
     disclosure is requested, or consented to, by the employee for 
     the purpose of--
       ``(1) protecting the safety of the employee or a family 
     member or co-worker of the employee; or
       ``(2) assisting in documenting domestic violence for a 
     court or agency.''.

     SEC. 533. EXISTING LEAVE USABLE FOR DOMESTIC VIOLENCE.

       (a) Definitions.--In this section:
       (1) Addressing domestic violence and its effects.--The term 
     ``addressing domestic violence and its effects'' has the 
     meaning given the term in section 101 of the Family and 
     Medical Leave Act of 1993 (29 U.S.C. 2611), as amended in 
     section 531(a).
       (2) Employee.--The term ``employee'' means any person 
     employed by an employer. In the case of an individual 
     employed by a public agency, such term means an individual 
     employed as described in section 3(e) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 203(e)).
       (3) Employer.--The term ``employer''--
       (A) means any person engaged in commerce or in any industry 
     or activity affecting commerce who employs individuals, if 
     such person is also subject to the Family and Medical Leave 
     Act of 1993 (29 U.S.C. 2601 et seq.) or to any provision of a 
     State or local law, collective bargaining agreement, or 
     employment benefits program or plan, addressing paid or 
     unpaid leave from employment (including family, medical, 
     sick, annual, personal, or similar leave); and
       (B) includes any person acting directly or indirectly in 
     the interest of an employer in relation to any employee, and 
     includes a public agency, who is subject to a law, agreement, 
     program, or plan described in subparagraph (A), but does not 
     include any labor organization (other than when acting as an 
     employer) or anyone acting in the capacity of officer or 
     agent of such labor organization.
       (4) Employment benefits.--The term ``employment benefits'' 
     has the meaning given the term in section 101 of the Family 
     and Medical Leave Act of 1993 (29 U.S.C. 2611).
       (5) Parent; son or daughter.--The terms ``parent'' and 
     ``son or daughter'' have the meanings given the terms in 
     section 101 of the Family and Medical Leave Act of 1993 (29 
     U.S.C. 2611).
       (6) Public agency.--The term ``public agency'' has the 
     meaning given the term in section 3 of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 203).


       (b) Use of Existing Leave.--An employee who is entitled to 
     take paid or unpaid leave (including family, medical, sick, 
     annual, personal, or similar leave) from employment, pursuant 
     to State or local law, a collective bargaining agreement, or 
     an employment benefits program or plan, shall be permitted to 
     use such leave for the purpose of addressing domestic 
     violence and its effects, or for the purpose of caring for a 
     son or daughter or parent of the employee, if such son or 
     daughter or parent is addressing domestic violence and its 
     effects.
       (c) Certification.--In determining whether an employee 
     qualifies to use leave as described in subsection (b), an 
     employer may require a written statement, documentation of 
     domestic violence, or corroborating evidence consistent with 
     section 103(g) of the Family and Medical Leave Act of 1993 
     (29 U.S.C. 2613(g)), as amended by section 531(c).
       (d) Confidentiality.--All evidence provided to the employer 
     under subsection (c) of domestic violence experienced by an 
     employee or the son or daughter or parent of the employee, 
     including a statement of an employee, any other documentation 
     or corroborating evidence, and the fact that an employee has 
     requested leave for the purpose of addressing, or caring for 
     a son or daughter or parent who is addressing, domestic 
     violence and its effects, shall be retained in the strictest 
     confidence by the employer, except to the extent that 
     disclosure is requested, or consented to, by the employee for 
     the purpose of--
       (1) protecting the safety of the employee or a family 
     member or co-worker of the employee; or
       (2) assisting in documenting domestic violence for a court 
     or agency.
       (e) Prohibited Acts.--
       (1) Interference with rights.--
       (A) Exercise of rights.--It shall be unlawful for any 
     employer to interfere with, restrain, or deny the exercise of 
     or the attempt to exercise, any right provided under this 
     section.
       (B) Discrimination.--It shall be unlawful for any employer 
     to discharge or in any other manner discriminate against an 
     individual for opposing any practice made unlawful by this 
     section.
       (2) Interference with proceedings or inquiries.--It shall 
     be unlawful for any person to discharge or in any other 
     manner discriminate against any individual because such 
     individual--
       (A) has filed any charge, or had instituted or caused to be 
     instituted any proceeding, under or related to this section;
       (B) has given, or is about to give, any information in 
     connection with any inquiry or proceeding relating to any 
     right provided under this section; or
       (C) has testified, or is about to testify, in any inquiry 
     or proceeding relating to any right provided under this 
     section.
       (f) Enforcement.--
       (1) Public enforcement.--The Secretary of Labor shall have 
     the powers set forth in subsections (b), (c), (d), and (e) of 
     section 107 of the Family and Medical Leave Act of 1993 (29 
     U.S.C. 2617) for the purpose of public agency enforcement of 
     any alleged violation of subsection (e) against any employer.
       (2) Private enforcement.--The remedies and procedures set 
     forth in section 107(a) of the Family and Medical Leave Act 
     of 1993 (29 U.S.C. 2617(a)) shall be the remedies and 
     procedures pursuant to which an employee may initiate a legal 
     action against an employer for alleged violations of 
     subsection (e).
       (3) References.--For purposes of paragraph (1) and (2), 
     references in section 107 of the Family and Medical Leave Act 
     of 1993 to section 105 of such Act shall be considered to be 
     references to subsection (e).
       (4) Employer liability under other laws.--Nothing in this 
     section shall be construed to limit the liability of an 
     employer to an employee for harm suffered relating to the 
     employee's experience of domestic violence pursuant to any 
     other Federal or State law, including a law providing for a 
     legal remedy.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Kennedy, Mr. Lieberman, Mr. 
        Leahy, Mr. Biden, Mr. Feingold, Mr. Schumer, Mr. Durbin, Mr. 
        Akaka, Mrs. Boxer, Mr. Breaux, Mrs. Clinton, Mr. Corzine, Mr. 
        Dayton, Mr. Edwards, Mr. Harkin, Mr. Levin, Ms. Mikulski, Mr. 
        Rockefeller, and Mr. Wyden):
  S. 19. A bill to protect the civil rights of all Americans, and for 
other purposes; to the Committee on the Judiciary.


             protecting civil rights for all americans act

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

                                 S. 19

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Protecting 
     Civil Rights for All Americans Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

[[Page 351]]

         TITLE I--LOCAL LAW ENFORCEMENT ENHANCEMENT ACT OF 2001

Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Definition of hate crime.
Sec. 104. Support for criminal investigations and prosecutions by State 
              and local law enforcement officials.
Sec. 105. Grant program.
Sec. 106. Authorization for additional personnel to assist State and 
              local law enforcement.
Sec. 107. Prohibition of certain hate crime acts.
Sec. 108. Duties of Federal sentencing commission.
Sec. 109. Statistics.
Sec. 110. Severability.

                TITLE II--TRAFFIC STOPS STATISTICS STUDY

Sec. 201. Short title.
Sec. 202. Attorney General to conduct study.
Sec. 203. Grant program.
Sec. 204. Limitation on use of data.
Sec. 205. Definitions.
Sec. 206. Authorization of appropriations.

             TITLE III--SUPPORTING INDIGENT REPRESENTATION

Sec. 301. Findings.
Sec. 302. Authorization of appropriations.

 TITLE IV--GENETIC NONDISCRIMINATION IN HEALTH INSURANCE AND EMPLOYMENT

Subtitle A--Prohibition of Health Insurance Discrimination on the Basis 
                   of Predictive Genetic Information

Sec. 401. Amendments to Employee Retirement Income Security Act of 
              1974.
Sec. 402. Amendments to the Public Health Service Act.
Sec. 403. Amendments to Internal Revenue Code of 1986.
Sec. 404. Amendments to title XVIII of the Social Security Act relating 
              to medigap.

 Subtitle B--Prohibition of Employment Discrimination on the Basis of 
                     Predictive Genetic Information

Sec. 411. Definitions.
Sec. 412. Employer practices.
Sec. 413. Employment agency practices.
Sec. 414. Labor organization practices.
Sec. 415. Training programs.
Sec. 416. Maintenance and disclosure of predictive genetic information.
Sec. 417. Civil action.
Sec. 418. Construction.
Sec. 419. Authorization of appropriations.
Sec. 420. Effective date.

                 TITLE V--EMPLOYMENT NONDISCRIMINATION

Sec. 501. Short title.
Sec. 502. Purposes.
Sec. 503. Definitions.
Sec. 504. Discrimination prohibited.
Sec. 505. Retaliation and coercion prohibited.
Sec. 506. Benefits.
Sec. 507. Collection of statistics prohibited.
Sec. 508. Quotas and preferential treatment prohibited.
Sec. 509. Religious exemption.
Sec. 510. Nonapplication to members of the Armed Forces; veterans' 
              preferences.
Sec. 511. Construction.
Sec. 512. Enforcement.
Sec. 513. State and Federal immunity.
Sec. 514. Attorneys' fees.
Sec. 515. Posting notices.
Sec. 516. Regulations.
Sec. 517. Relationship to other laws.
Sec. 518. Severability.
Sec. 519. Effective date.

              TITLE VI--PROMOTING CIVIL RIGHTS ENFORCEMENT

Sec. 601. Establishment of the National Task Force on Violence Against 
              Health Care Providers.
Sec. 602. Increase in funding for enforcing civil rights laws.

         TITLE I--LOCAL LAW ENFORCEMENT ENHANCEMENT ACT OF 2001

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Local Law Enforcement 
     Enhancement Act of 2001''.

     SEC. 102. FINDINGS.

       Congress makes the following findings:
       (1) The incidence of violence motivated by the actual or 
     perceived race, color, religion, national origin, gender, 
     sexual orientation, or disability of the victim poses a 
     serious national problem.
       (2) Such violence disrupts the tranquility and safety of 
     communities and is deeply divisive.
       (3) State and local authorities are now and will continue 
     to be responsible for prosecuting the overwhelming majority 
     of violent crimes in the United States, including violent 
     crimes motivated by bias. These authorities can carry out 
     their responsibilities more effectively with greater Federal 
     assistance.
       (4) Existing Federal law is inadequate to address this 
     problem.
       (5) The prominent characteristic of a violent crime 
     motivated by bias is that it devastates not just the actual 
     victim and the victim's family and friends, but frequently 
     savages the community sharing the traits that caused the 
     victim to be selected.
       (6) Such violence substantially affects interstate commerce 
     in many ways, including--
       (A) by impeding the movement of members of targeted groups 
     and forcing such members to move across State lines to escape 
     the incidence or risk of such violence; and
       (B) by preventing members of targeted groups from 
     purchasing goods and services, obtaining or sustaining 
     employment or participating in other commercial activity.
       (7) Perpetrators cross State lines to commit such violence.
       (8) Channels, facilities, and instrumentalities of 
     interstate commerce are used to facilitate the commission of 
     such violence.
       (9) Such violence is committed using articles that have 
     traveled in interstate commerce.
       (10) For generations, the institutions of slavery and 
     involuntary servitude were defined by the race, color, and 
     ancestry of those held in bondage. Slavery and involuntary 
     servitude were enforced, both prior to and after the adoption 
     of the 13th amendment to the Constitution of the United 
     States, through widespread public and private violence 
     directed at persons because of their race, color, or 
     ancestry, or perceived race, color, or ancestry. Accordingly, 
     eliminating racially motivated violence is an important means 
     of eliminating, to the extent possible, the badges, 
     incidents, and relics of slavery and involuntary servitude.
       (11) Both at the time when the 13th, 14th, and 15th 
     amendments to the Constitution of the United States were 
     adopted, and continuing to date, members of certain religious 
     and national origin groups were and are perceived to be 
     distinct ``races''. Thus, in order to eliminate, to the 
     extent possible, the badges, incidents, and relics of 
     slavery, it is necessary to prohibit assaults on the basis of 
     real or perceived religions or national origins, at least to 
     the extent such religions or national origins were regarded 
     as races at the time of the adoption of the 13th, 14th, and 
     15th amendments to the Constitution of the United States.
       (12) Federal jurisdiction over certain violent crimes 
     motivated by bias enables Federal, State, and local 
     authorities to work together as partners in the investigation 
     and prosecution of such crimes.
       (13) The problem of crimes motivated by bias is 
     sufficiently serious, widespread, and interstate in nature as 
     to warrant Federal assistance to States and local 
     jurisdictions.

     SEC. 103. DEFINITION OF HATE CRIME.

       In this title, the term ``hate crime'' has the same meaning 
     as in section 280003(a) of the Violent Crime Control and Law 
     Enforcement Act of 1994 (28 U.S.C. 994 note).

     SEC. 104. SUPPORT FOR CRIMINAL INVESTIGATIONS AND 
                   PROSECUTIONS BY STATE AND LOCAL LAW ENFORCEMENT 
                   OFFICIALS.

       (a) Assistance Other Than Financial Assistance.--
       (1) In general.--At the request of a law enforcement 
     official of a State or Indian tribe, the Attorney General may 
     provide technical, forensic, prosecutorial, or any other form 
     of assistance in the criminal investigation or prosecution of 
     any crime that--
       (A) constitutes a crime of violence (as defined in section 
     16 of title 18, United States Code);
       (B) constitutes a felony under the laws of the State or 
     Indian tribe; and
       (C) is motivated by prejudice based on the victim's race, 
     color, religion, national origin, gender, sexual orientation, 
     or disability or is a violation of the hate crime laws of the 
     State or Indian tribe.
       (2) Priority.--In providing assistance under paragraph (1), 
     the Attorney General shall give priority to crimes committed 
     by offenders who have committed crimes in more than 1 State 
     and to rural jurisdictions that have difficulty covering the 
     extraordinary expenses relating to the investigation or 
     prosecution of the crime.
       (b) Grants.--
       (1) In general.--The Attorney General may award grants to 
     assist State, local, and Indian law enforcement officials 
     with the extraordinary expenses associated with the 
     investigation and prosecution of hate crimes. In implementing 
     the grant program, the Office of Justice Programs shall work 
     closely with the funded jurisdictions to ensure that the 
     concerns and needs of all affected parties, including 
     community groups and schools, colleges, and universities, are 
     addressed through the local infrastructure developed under 
     the grants.
       (2)  Application.--
       (A) In general.--Each State desiring a grant under this 
     subsection shall submit an application to the Attorney 
     General at such time, in such manner, and accompanied by or 
     containing such information as the Attorney General shall 
     reasonably require.
       (B) Date for submission.--Applications submitted pursuant 
     to subparagraph (A) shall be submitted during the 60-day 
     period beginning on a date that the Attorney General shall 
     prescribe.
       (C) Requirements.--A State or political subdivision of a 
     State or tribal official applying for assistance under this 
     subsection shall--
       (i) describe the extraordinary purposes for which the grant 
     is needed;

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       (ii) certify that the State, political subdivision, or 
     Indian tribe lacks the resources necessary to investigate or 
     prosecute the hate crime;
       (iii) demonstrate that, in developing a plan to implement 
     the grant, the State, political subdivision, or tribal 
     official has consulted and coordinated with nonprofit, 
     nongovernmental victim services programs that have experience 
     in providing services to victims of hate crimes; and
       (iv) certify that any Federal funds received under this 
     subsection will be used to supplement, not supplant, non-
     Federal funds that would otherwise be available for 
     activities funded under this subsection.
       (3) Deadline.--An application for a grant under this 
     subsection shall be approved or disapproved by the Attorney 
     General not later than 30 business days after the date on 
     which the Attorney General receives the application.
       (4) Grant amount.--A grant under this subsection shall not 
     exceed $100,000 for any single jurisdiction within a 1 year 
     period.
       (5) Report.--Not later than December 31, 2002, the Attorney 
     General shall submit to Congress a report describing the 
     applications submitted for grants under this subsection, the 
     award of such grants, and the purposes for which the grant 
     amounts were expended.
       (6) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this subsection $5,000,000 
     for each of fiscal years 2002 and 2003.

     SEC. 105. GRANT PROGRAM.

       (a) Authority To Make Grants.--The Office of Justice 
     Programs of the Department of Justice shall award grants, in 
     accordance with such regulations as the Attorney General may 
     prescribe, to State and local programs designed to combat 
     hate crimes committed by juveniles, including programs to 
     train local law enforcement officers in identifying, 
     investigating, prosecuting, and preventing hate crimes.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 106. AUTHORIZATION FOR ADDITIONAL PERSONNEL TO ASSIST 
                   STATE AND LOCAL LAW ENFORCEMENT.

       There are authorized to be appropriated to the Department 
     of the Treasury and the Department of Justice, including the 
     Community Relations Service, for fiscal years 2002, 2003, and 
     2004 such sums as are necessary to increase the number of 
     personnel to prevent and respond to alleged violations of 
     section 249 of title 18, United States Code (as added by this 
     title).

     SEC. 107. PROHIBITION OF CERTAIN HATE CRIME ACTS.

       (a) In General.--Chapter 13 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 249. Hate crime acts

       ``(a) In General.--
       ``(1) Offenses involving actual or perceived race, color, 
     religion, or national origin.--Whoever, whether or not acting 
     under color of law, willfully causes bodily injury to any 
     person or, through the use of fire, a firearm, or an 
     explosive or incendiary device, attempts to cause bodily 
     injury to any person, because of the actual or perceived 
     race, color, religion, or national origin of any person--
       ``(A) shall be imprisoned not more than 10 years, fined in 
     accordance with this title, or both; and
       ``(B) shall be imprisoned for any term of years or for 
     life, fined in accordance with this title, or both, if--
       ``(i) death results from the offense; or
       ``(ii) the offense includes kidnaping or an attempt to 
     kidnap, aggravated sexual abuse or an attempt to commit 
     aggravated sexual abuse, or an attempt to kill.
       ``(2) Offenses involving actual or perceived religion, 
     national origin, gender, sexual orientation, or disability.--
       ``(A) In general.--Whoever, whether or not acting under 
     color of law, in any circumstance described in subparagraph 
     (B), willfully causes bodily injury to any person or, through 
     the use of fire, a firearm, or an explosive or incendiary 
     device, attempts to cause bodily injury to any person, 
     because of the actual or perceived religion, national origin, 
     gender, sexual orientation, or disability of any person--
       ``(i) shall be imprisoned not more than 10 years, fined in 
     accordance with this title, or both; and
       ``(ii) shall be imprisoned for any term of years or for 
     life, fined in accordance with this title, or both, if--

       ``(I) death results from the offense; or
       ``(II) the offense includes kidnaping or an attempt to 
     kidnap, aggravated sexual abuse or an attempt to commit 
     aggravated sexual abuse, or an attempt to kill.

       ``(B) Circumstances described.--For purposes of 
     subparagraph (A), the circumstances described in this 
     subparagraph are that--
       ``(i) the conduct described in subparagraph (A) occurs 
     during the course of, or as the result of, the travel of the 
     defendant or the victim--

       ``(I) across a State line or national border; or
       ``(II) using a channel, facility, or instrumentality of 
     interstate or foreign commerce;

       ``(ii) the defendant uses a channel, facility, or 
     instrumentality of interstate or foreign commerce in 
     connection with the conduct described in subparagraph (A);
       ``(iii) in connection with the conduct described in 
     subparagraph (A): the defendant employs a firearm, explosive 
     or incendiary device, or other weapon that has traveled in 
     interstate or foreign commerce; or
       ``(iv) the conduct described in subparagraph (A)--

       ``(I) interferes with commercial or other economic activity 
     in which the victim is engaged at the time of the conduct; or
       ``(II) otherwise affects interstate or foreign commerce.

       ``(b) Certification Requirement.--No prosecution of any 
     offense described in this subsection may be undertaken by the 
     United States, except under the certification in writing of 
     the Attorney General, the Deputy Attorney General, the 
     Associate Attorney General, or any Assistant Attorney General 
     specially designated by the Attorney General that--
       ``(1) he or she has reasonable cause to believe that the 
     actual or perceived race, color, religion, national origin, 
     gender, sexual orientation, or disability of any person was a 
     motivating factor underlying the alleged conduct of the 
     defendant; and
       ``(2) he or his designee or she or her designee has 
     consulted with State or local law enforcement officials 
     regarding the prosecution and determined that--
       ``(A) the State does not have jurisdiction or does not 
     intend to exercise jurisdiction;
       ``(B) the State has requested that the Federal Government 
     assume jurisdiction;
       ``(C) the State does not object to the Federal Government 
     assuming jurisdiction; or
       ``(D) the verdict or sentence obtained pursuant to State 
     charges left demonstratively unvindicated the Federal 
     interest in eradicating bias-motivated violence.
       ``(c) Definitions.--In this section--
       ``(1) the term `explosive or incendiary device' has the 
     meaning given the term in section 232 of this title; and
       ``(2) the term `firearm' has the meaning given the term in 
     section 921(a) of this title.''.
       (b) Technical and Conforming Amendment.--The analysis for 
     chapter 13 of title 18, United States Code, is amended by 
     adding at the end the following:

``249. Hate crime acts.''.

     SEC. 108. DUTIES OF FEDERAL SENTENCING COMMISSION.

       (a) Amendment of Federal Sentencing Guidelines.--Pursuant 
     to its authority under section 994 of title 28, United States 
     Code, the United States Sentencing Commission shall study the 
     issue of adult recruitment of juveniles to commit hate crimes 
     and shall, if appropriate, amend the Federal sentencing 
     guidelines to provide sentencing enhancements (in addition to 
     the sentencing enhancement provided for the use of a minor 
     during the commission of an offense) for adult defendants who 
     recruit juveniles to assist in the commission of hate crimes.
       (b) Consistency With Other Guidelines.--In carrying out 
     this section, the United States Sentencing Commission shall--
       (1) ensure that there is reasonable consistency with other 
     Federal sentencing guidelines; and
       (2) avoid duplicative punishments for substantially the 
     same offense.

     SEC. 109. STATISTICS.

       Subsection (b)(1) of the first section of the Hate Crimes 
     Statistics Act (28 U.S.C. 534 note) is amended by inserting 
     ``gender,'' after ``race,''.

     SEC. 110. SEVERABILITY.

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

                TITLE II--TRAFFIC STOPS STATISTICS STUDY

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Traffic Stops Statistics 
     Study Act of 2001''.

     SEC. 202. ATTORNEY GENERAL TO CONDUCT STUDY.

       (a) Study.--
       (1) In general.--The Attorney General shall conduct a 
     nationwide study of stops for traffic violations by law 
     enforcement officers.
       (2) Initial analysis.--The Attorney General shall perform 
     an initial analysis of existing data, including complaints 
     alleging and other information concerning traffic stops 
     motivated by race and other bias.
       (3) Data collection.--After completion of the initial 
     analysis under paragraph (2), the Attorney General shall then 
     gather the following data on traffic stops from a nationwide 
     sample of jurisdictions, including jurisdictions identified 
     in the initial analysis:
       (A) The traffic infraction alleged to have been committed 
     that led to the stop.
       (B) Identifying characteristics of the driver stopped, 
     including the race, gender, ethnicity, and approximate age of 
     the driver.

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       (C) Whether immigration status was questioned, immigration 
     documents were requested, or an inquiry was made to the 
     Immigration and Naturalization Service with regard to any 
     person in the vehicle.
       (D) The number of individuals in the stopped vehicle.
       (E) Whether a search was instituted as a result of the stop 
     and whether consent was requested for the search.
       (F) Any alleged criminal behavior by the driver that 
     justified the search.
       (G) Any items seized, including contraband or money.
       (H) Whether any warning or citation was issued as a result 
     of the stop.
       (I) Whether an arrest was made as a result of either the 
     stop or the search and the justification for the arrest.
       (J) The duration of the stop.
       (b) Reporting.--Not later than 120 days after the date of 
     enactment of this Act, the Attorney General shall report the 
     results of its initial analysis to Congress, and make such 
     report available to the public, and identify the 
     jurisdictions for which the study is to be conducted. Not 
     later than 2 years after the date of the enactment of this 
     Act, the Attorney General shall report the results of the 
     data collected under this title to Congress, a copy of which 
     shall also be published in the Federal Register.

     SEC. 203. GRANT PROGRAM.

       In order to complete the study described in section 202, 
     the Attorney General may provide grants to law enforcement 
     agencies to collect and submit the data described in section 
     202 to the appropriate agency as designated by the Attorney 
     General.

     SEC. 204. LIMITATION ON USE OF DATA.

       Information released pursuant to section 202 shall not 
     reveal the identity of any individual who is stopped or any 
     law enforcement officer involved in a traffic stop.

     SEC. 205. DEFINITIONS.

       In this title:
       (1) Law enforcement agency.--The term ``law enforcement 
     agency'' means an agency of a State or political subdivision 
     of a State, authorized by law or by a Federal, State, or 
     local government agency to engage in or supervise the 
     prevention, detection, or investigation of violations of 
     criminal laws, or a federally recognized Indian tribe.
       (2) Indian tribe.--The term ``Indian tribe'' means any 
     Indian or Alaska Native tribe, band, nation, pueblo, village, 
     or community that the Secretary of the Interior acknowledges 
     to exist as an Indian tribe.

     SEC. 206. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary to carry out this title.

             TITLE III--SUPPORTING INDIGENT REPRESENTATION

     SEC. 301. FINDINGS.

       Congress finds the following:
       (1) There is a need to encourage equal access for 
     individuals to the system of justice in the United States.
       (2) There is a need to encourage the provision of high 
     quality legal assistance for persons who would otherwise be 
     unable to afford legal counsel.
       (3) Legal Services Corporation programs serve clients with 
     cases concerning housing, family law, income maintenance, 
     consumer issues, and employment.
       (4) For years the Federal resources available to the Legal 
     Services Corporation have eroded. Nearly half of all people 
     who applied for assistance from local Legal Services 
     Corporation programs have been turned away in recent years.
       (5) Congress must adequately fund Legal Services 
     Corporation programs to preserve the strength of the 
     programs.

     SEC. 302. AUTHORIZATION OF APPROPRIATIONS.

       Section 1010(a) of the Legal Services Corporation Act (42 
     U.S.C. 2996i(a)) is amended to read as follows:
       ``(a) There are authorized to be appropriated for the 
     purpose of carrying out the activities of the Corporation, 
     $400,000,000 for fiscal year 2002.''.

 TITLE IV--GENETIC NONDISCRIMINATION IN HEALTH INSURANCE AND EMPLOYMENT

Subtitle A--Prohibition of Health Insurance Discrimination on the Basis 
                   of Predictive Genetic Information

     SEC. 401. AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY 
                   ACT OF 1974.

       (a) Prohibition of Health Insurance Discrimination on the 
     Basis of Genetic Services or Predictive Genetic 
     Information.--
       (1) No enrollment restriction for genetic services.--
     Section 702(a)(1)(F) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1182(a)(1)(F)) is amended by 
     inserting before the period ``(or information about a request 
     for or the receipt of genetic services by such individual or 
     family member of such individual)''.
       (2) No discrimination in group rate based on predictive 
     genetic information.--
       (A) In general.--Subpart B of Part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 714. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE 
                   BASIS OF PREDICTIVE GENETIC INFORMATION.

       ``A group health plan, and a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, shall not deny eligibility to a group or 
     adjust premium or contribution rates for a group on the basis 
     of predictive genetic information concerning an individual in 
     the group (or information about a request for or the receipt 
     of genetic services by such individual or family member of 
     such individual).''.
       (B) Conforming amendments.--
       (i) Section 702(b)(2)(A) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1182(b)) is amended to read 
     as follows:
       ``(A) to restrict the amount that an employer may be 
     charged for coverage under a group health plan, except as 
     provided in section 714; or''.
       (ii) Section 732(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by 
     striking ``section 711'' and inserting ``subsections 
     (a)(1)(F), (b) (with respect to cases relating to genetic 
     information or information about a request or receipt of 
     genetic services by an individual or family member of such 
     individual), (c), (d), (e), (f), or (g) of section 702, 
     section 711 and section 714''.
       (b) Limitations on Genetic Testing and on Collection and 
     Disclosure of Predictive Genetic Information.--Section 702 of 
     the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1182) is amended by adding at the end the following:
       ``(c) Genetic Testing.--
       ``(1) Limitation on requesting or requiring genetic 
     testing.--A group health plan, or a health insurance issuer 
     offering health insurance coverage in connection with a group 
     health plan, shall not request or require an individual or a 
     family member of such individual to undergo a genetic test.
       ``(2) Rule of construction.--Nothing in this part shall be 
     construed to limit the authority of a health care 
     professional, who is providing treatment with respect to an 
     individual and who is employed by a group health plan or a 
     health insurance issuer, to request that such individual or 
     family member of such individual undergo a genetic test. Such 
     a health care professional shall not require that such 
     individual or family member undergo a genetic test.
       ``(d) Collection of Predictive Genetic Information.--Except 
     as provided in subsections (f) and (g), a group health plan, 
     or a health insurance issuer offering health insurance 
     coverage in connection with a group health plan, shall not 
     request, require, collect, or purchase predictive genetic 
     information concerning an individual (or information about a 
     request for or the receipt of genetic services by such 
     individual or family member of such individual).
       ``(e) Disclosure of Predictive Genetic Information.--A 
     group health plan, or a health insurance issuer offering 
     health insurance coverage in connection with a group health 
     plan, shall not disclose predictive genetic information about 
     an individual (or information about a request for or the 
     receipt of genetic services by such individual or family 
     member of such individual) to--
       ``(1) any entity that is a member of the same controlled 
     group as such issuer or plan sponsor of such group health 
     plan;
       ``(2) any other group health plan or health insurance 
     issuer or any insurance agent, third party administrator, or 
     other person subject to regulation under State insurance 
     laws;
       ``(3) the Medical Information Bureau or any other person 
     that collects, compiles, publishes, or otherwise disseminates 
     insurance information;
       ``(4) the individual's employer or any plan sponsor; or
       ``(5) any other person the Secretary may specify in 
     regulations.
       ``(f) Information for Payment for Genetic Services.--
       ``(1) In general.--With respect to payment for genetic 
     services conducted concerning an individual or the 
     coordination of benefits, a group health plan, or a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan, may request that the 
     individual provide the plan or issuer with evidence that such 
     services were performed.
       ``(2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to--
       ``(A) permit a group health plan or health insurance issuer 
     to request (or require) the results of the services referred 
     to in such paragraph; or
       ``(B) require that a group health plan or health insurance 
     issuer make payment for services described in such paragraph 
     where the individual involved has refused to provide evidence 
     of the performance of such services pursuant to a request by 
     the plan or issuer in accordance with such paragraph.
       ``(g) Information for Payment of Other Claims.--With 
     respect to the payment of claims for benefits other than 
     genetic services, a group health plan, or a health insurance 
     issuer offering group health insurance coverage in connection 
     with a group health plan, may request that an individual 
     provide predictive genetic information so long as such 
     information--
       ``(1) is used solely for the payment of a claim;

[[Page 354]]

       ``(2) is limited to information that is directly related to 
     and necessary for the payment of such claim and the claim 
     would otherwise be denied but for the predictive genetic 
     information; and
       ``(3) is used only by an individual (or individuals) within 
     such plan or issuer who needs access to such information for 
     purposes of payment of a claim.
       ``(h) Rules of Construction.--
       ``(1) Collection or disclosure authorized by individual.--
     The provisions of subsections (d) (regarding collection) and 
     (e) shall not apply to an individual if the individual (or 
     legal representative of the individual) provides prior, 
     knowing, voluntary, and written authorization for the 
     collection or disclosure of predictive genetic information.
       ``(2) Disclosure for health care treatment.--Nothing in 
     this section shall be construed to limit or restrict the 
     disclosure of predictive genetic information from a health 
     care provider to another health care provider for the purpose 
     of providing health care treatment to the individual 
     involved.
       ``(i) Definitions.--In this section:
       ``(1) Controlled group.--The term `controlled group' means 
     any group treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986.
       ``(2) Group health plan, health insurance issuer.--The 
     terms `group health plan' and `health insurance issuer' 
     include a third party administrator or other person acting 
     for or on behalf of such plan or issuer.''.
       (c) Enforcement.--Section 502 (29 U.S.C. 1132) is amended 
     by adding at the end the following:
       ``(n) Violation of Genetic Discrimination or Genetic 
     Disclosure Provisions.--In any action under this section 
     against any administrator of a group health plan, or health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan (including any third 
     party administrator or other person acting for or on behalf 
     of such plan or issuer) alleging a violation of subsection 
     (a)(1)(F), (b) (with respect to cases relating to genetic 
     information or information about a request or receipt of 
     genetic services by an individual or family member of such 
     individual), (c), (d), (e), (f), or (g) of section 702, or 
     section 714, the court may award any appropriate legal or 
     equitable relief. Such relief may include a requirement for 
     the payment of attorney's fees and costs, including the costs 
     of expert witnesses.
       ``(o) Civil Penalty.--The monetary provisions of section 
     308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) 
     shall apply for purposes of the Secretary enforcing the 
     provisions referred to in subsection (n), except that any 
     such relief awarded shall be paid only into the general fund 
     of the Treasury.''.
       (d) Preemption.--Section 731 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1191) is amended--
       (1) in subsection (a)(1), by inserting ``or (e)'' after 
     ``subsection (b)''; and
       (2) by adding at the end the following:
       ``(e) Special Rule in Case of Genetic Information.--With 
     respect to group health insurance coverage offered by a 
     health insurance issuer, the provisions of this part relating 
     to genetic information (including information about a request 
     for or the receipt of genetic services by an individual or a 
     family member of such individual) shall not be construed to 
     supersede any provision of State law which establishes, 
     implements, or continues in effect a standard, requirement, 
     or remedy that more completely--
       ``(1) protects the confidentiality of genetic information 
     (including information about a request for or the receipt of 
     genetic services by an individual or a family member of such 
     individual) or the privacy of an individual or a family 
     member of the individual with respect to genetic information 
     (including information about a request for or the receipt of 
     genetic services by an individual or a family member of such 
     individual) than does this part; or
       ``(2) prohibits discrimination on the basis of genetic 
     information than does this part.''.
       (e) Definitions.--Section 733(d) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1191b(d)) is amended 
     by adding at the end the following:
       ``(5) Family member.--The term `family member' means with 
     respect to an individual--
       ``(A) the spouse of the individual;
       ``(B) a dependent child of the individual, including a 
     child who is born to or placed for adoption with the 
     individual; or
       ``(C) any other individuals related by blood to the 
     individual or to the spouse or child described in 
     subparagraph (A) or (B).
       ``(6) Genetic information.--The term `genetic information' 
     means information about genes, gene products, or inherited 
     characteristics that may derive from an individual or a 
     family member of such individual (including information about 
     a request for or the receipt of genetic services by such 
     individual or family member of such individual).
       ``(7) Genetic services.--The term `genetic services' means 
     health services, including genetic tests, provided to obtain, 
     assess, or interpret genetic information for diagnostic and 
     therapeutic purposes, and for genetic education and 
     counseling.
       ``(8) Genetic test.--The term `genetic test' means the 
     analysis of human DNA, RNA, chromosomes, proteins, and 
     certain metabolites in order to detect genotypes, mutations, 
     or chromosomal changes.
       ``(9) Predictive genetic information.--
       ``(A) In general.--The term `predictive genetic 
     information' means--
       ``(i) information about an individual's genetic tests;
       ``(ii) information about genetic tests of family members of 
     the individual; or
       ``(iii) information about the occurrence of a disease or 
     disorder in family members.
       ``(B) Limitations.--The term `predictive genetic 
     information' shall not include--
       ``(i) information about the sex or age of the individual;
       ``(ii) information about chemical, blood, or urine analyses 
     of the individual, unless these analyses are genetic tests; 
     or
       ``(iii) information about physical exams of the individual, 
     and other information relevant to determining the current 
     health status of the individual.''.
       (f) Amendment Concerning Supplemental Excepted Benefits.--
     Section 732(c)(3) of the Employee Retirement Income Security 
     Act of 1974 (29 U.S.C. 1191a(c)(3)) is amended by inserting 
     ``, other than the requirements of subsections (a)(1)(F), (b) 
     (in cases relating to genetic information or information 
     about a request for or the receipt of genetic services by an 
     individual or a family member of such individual), (c), (d), 
     (e), (f) and (g) of section 702 and section 714,'' after 
     ``The requirements of this part''.
       (g) Effective Date.--
       (1) In general.--Except as provided in this section, this 
     section and the amendments made by this section shall apply 
     with respect to group health plans for plan years beginning 
     after October 1, 2002.
       (2) Special rule for collective bargaining agreements.--In 
     the case of a group health plan maintained pursuant to one or 
     more collective bargaining agreements between employee 
     representatives and one or more employers ratified before the 
     date of the enactment of this Act, this section and the 
     amendments made by this section shall not apply to plan years 
     beginning before the later of--
       (A) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act), or
       (B) October 1, 2002.

     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement of the amendments made by this section shall not 
     be treated as a termination of such collective bargaining 
     agreement.

     SEC. 402. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

       (a) Amendments Relating to the Group Market.--
       (1) Prohibition of health insurance discrimination on the 
     basis of predictive genetic information or genetic 
     services.--
       (A) No enrollment restriction for genetic services.--
     Section 2702(a)(1)(F) of the Public Health Service Act (42 
     U.S.C. 300gg-1(a)(1)(F)) is amended by inserting before the 
     period the following: ``(or information about a request for 
     or the receipt of genetic services by an individual or a 
     family member of such individual)''.
       (B) No discrimination in group rate based on predictive 
     genetic information.--
       (i) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service (42 U.S.C. 300gg-4 et seq.) is amended 
     by adding at the end the following:

     ``SEC. 2707. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE 
                   BASIS OF PREDICTIVE GENETIC INFORMATION.

       ``A group health plan, and a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, shall not deny eligibility to a group or 
     adjust premium or contribution rates for a group on the basis 
     of predictive genetic information concerning an individual in 
     the group (or information about a request for or the receipt 
     of genetic services by such individual or family member of 
     such individual).''.
       (ii) Conforming amendments.--

       (I) Section 2702(b)(2)(A) of the Public Health Service Act 
     (42 U.S.C. 300gg-1(b)(2)(A)) is amended to read as follows:

       ``(A) to restrict the amount that an employer may be 
     charged for coverage under a group health plan, except as 
     provided in section 2707; or''.

       (II) Section 2721(a) of the Public Health Service Act (42 
     U.S.C. 300gg-21(a)) is amended by inserting ``(other than 
     subsections (a)(1)(F), (b) (with respect to cases relating to 
     genetic information or information about a request or receipt 
     of genetic services by an individual or family member of such 
     individual), (c), (d), (e), (f), or (g) of section 2702 and 
     section 2707)'' after ``subparts 1 and 3''.

       (2) Limitations on genetic testing and on collection and 
     disclosure of predictive genetic information.--Section 2702 
     of the Public Health Service Act (42 U.S.C. 300gg-1) is 
     amended by adding at the end the following:

[[Page 355]]

       ``(c) Genetic Testing.--
       ``(1) Limitation on requesting or requiring genetic 
     testing.--A group health plan, or a health insurance issuer 
     offering health insurance coverage in connection with a group 
     health plan, shall not request or require an individual or a 
     family member of such individual to undergo a genetic test.
       ``(2) Rule of construction.--Nothing in this title shall be 
     construed to limit the authority of a health care 
     professional, who is providing treatment with respect to an 
     individual and who is employed by a group health plan or a 
     health insurance issuer, to request that such individual or 
     family member of such individual undergo a genetic test. Such 
     a health care professional shall not require that such 
     individual or family member undergo a genetic test.
       ``(d) Collection of Predictive Genetic Information.--Except 
     as provided in subsections (f) and (g), a group health plan, 
     or a health insurance issuer offering health insurance 
     coverage in connection with a group health plan, shall not 
     request, require, collect, or purchase predictive genetic 
     information concerning an individual (or information about a 
     request for or the receipt of genetic services by such 
     individual or family member of such individual).
       ``(e) Disclosure of Predictive Genetic Information.--A 
     group health plan, or a health insurance issuer offering 
     health insurance coverage in connection with a group health 
     plan, shall not disclose predictive genetic information about 
     an individual (or information about a request for or the 
     receipt of genetic services by such individual or family 
     member of such individual) to--
       ``(1) any entity that is a member of the same controlled 
     group as such issuer or plan sponsor of such group health 
     plan;
       ``(2) any other group health plan or health insurance 
     issuer or any insurance agent, third party administrator, or 
     other person subject to regulation under State insurance 
     laws;
       ``(3) the Medical Information Bureau or any other person 
     that collects, compiles, publishes, or otherwise disseminates 
     insurance information;
       ``(4) the individual's employer or any plan sponsor; or
       ``(5) any other person the Secretary may specify in 
     regulations.
       ``(f) Information for Payment for Genetic Services.--
       ``(1) In general.--With respect to payment for genetic 
     services conducted concerning an individual or the 
     coordination of benefits, a group health plan, or a health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan, may request that the 
     individual provide the plan or issuer with evidence that such 
     services were performed.
       ``(2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to--
       ``(A) permit a group health plan or health insurance issuer 
     to request (or require) the results of the services referred 
     to in such paragraph; or
       ``(B) require that a group health plan or health insurance 
     issuer make payment for services described in such paragraph 
     where the individual involved has refused to provide evidence 
     of the performance of such services pursuant to a request by 
     the plan or issuer in accordance with such paragraph.
       ``(g) Information for Payment of Other Claims.--With 
     respect to the payment of claims for benefits other than 
     genetic services, a group health plan, or a health insurance 
     issuer offering group health insurance coverage in connection 
     with a group health plan, may request that an individual 
     provide predictive genetic information so long as such 
     information--
       ``(1) is used solely for the payment of a claim;
       ``(2) is limited to information that is directly related to 
     and necessary for the payment of such claim and the claim 
     would otherwise be denied but for the predictive genetic 
     information; and
       ``(3) is used only by an individual (or individuals) within 
     such plan or issuer who needs access to such information for 
     purposes of payment of a claim.
       ``(h) Rules of Construction.--
       ``(1) Collection or disclosure authorized by individual.--
     The provisions of subsections (d) (regarding collection) and 
     (e) shall not apply to an individual if the individual (or 
     legal representative of the individual) provides prior, 
     knowing, voluntary, and written authorization for the 
     collection or disclosure of predictive genetic information.
       ``(2) Disclosure for health care treatment.--Nothing in 
     this section shall be construed to limit or restrict the 
     disclosure of predictive genetic information from a health 
     care provider to another health care provider for the purpose 
     of providing health care treatment to the individual 
     involved.
       ``(i) Definitions.--In this section:
       ``(1) Controlled group.--The term `controlled group' means 
     any group treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986.
       ``(2) Group health plan, health insurance issuer.--The 
     terms `group health plan' and `health insurance issuer' 
     include a third party administrator or other person acting 
     for or on behalf of such plan or issuer.''.
       (3) Definitions.--Section 2791(d) of the Public Health 
     Service Act (42 U.S.C. 300gg-91(d)) is amended by adding at 
     the end the following new paragraphs:
       ``(15) Family member.--The term `family member' means with 
     respect to an individual--
       ``(A) the spouse of the individual;
       ``(B) a dependent child of the individual, including a 
     child who is born to or placed for adoption with the 
     individual; and
       ``(C) all other individuals related by blood to the 
     individual or the spouse or child described in subparagraph 
     (A) or (B).
       ``(16) Genetic information.--The term `genetic information' 
     means information about genes, gene products, or inherited 
     characteristics that may derive from an individual or a 
     family member of such individual (including information about 
     a request for or the receipt of genetic services by such 
     individual or family member of such individual).
       ``(17) Genetic services.--The term `genetic services' means 
     health services, including genetic tests, provided to obtain, 
     assess, or interpret genetic information for diagnostic and 
     therapeutic purposes, and for genetic education and 
     counselling.
       ``(18) Genetic test.--The term `genetic test' means the 
     analysis of human DNA, RNA, chromosomes, proteins, and 
     certain metabolites in order to detect genotypes, mutations, 
     or chromosomal changes.
       ``(19) Predictive genetic information.--
       ``(A) In general.--The term `predictive genetic 
     information' means--
       ``(i) information about an individual's genetic tests;
       ``(ii) information about genetic tests of family members of 
     the individual; or
       ``(iii) information about the occurrence of a disease or 
     disorder in family members.
       ``(B) Limitations.--The term `predictive genetic 
     information' shall not include--
       ``(i) information about the sex or age of the individual;
       ``(ii) information about chemical, blood, or urine analyses 
     of the individual, unless these analyses are genetic tests; 
     or
       ``(iii) information about physical exams of the individual, 
     and other information relevant to determining the current 
     health status of the individual.''.
       (b) Amendment Relating to the Individual Market.--The first 
     subpart 3 of part B of title XXVII of the Public Health 
     Service Act (42 U.S.C. 300gg-51 et seq.) is amended--
       (1) by redesignating such subpart as subpart 2; and
       (2) by adding at the end the following:

     ``SEC. 2753. PROHIBITION OF HEALTH INSURANCE DISCRIMINATION 
                   AGAINST INDIVIDUALS ON THE BASIS OF PREDICTIVE 
                   GENETIC INFORMATION.

       ``(a) In Eligibility To Enroll.--A health insurance issuer 
     offering health insurance coverage in the individual market 
     shall not establish rules for eligibility to enroll in 
     individual health insurance coverage that are based on 
     predictive genetic information concerning the individual (or 
     information about a request for or the receipt of genetic 
     services by such individual or family member of such 
     individual).
       ``(b) In Premium Rates.--A health insurance issuer offering 
     health insurance coverage in the individual market shall not 
     adjust premium rates on the basis of predictive genetic 
     information concerning an individual (or information about a 
     request for or the receipt of genetic services by such 
     individual or family member of such individual).

     ``SEC. 2754. LIMITATIONS ON GENETIC TESTING AND ON COLLECTION 
                   AND DISCLOSURE OF PREDICTIVE GENETIC 
                   INFORMATION.

       ``(a) Genetic Testing.--
       ``(1) Limitation on requesting or requiring genetic 
     testing.--A health insurance issuer offering health insurance 
     coverage in the individual market shall not request or 
     require an individual or a family member of such individual 
     to undergo a genetic test.
       ``(2) Rule of construction.--Nothing in this title shall be 
     construed to limit the authority of a health care 
     professional, who is providing treatment with respect to an 
     individual and who is employed by a group health plan or a 
     health insurance issuer, to request that such individual or 
     family member of such individual undergo a genetic test. Such 
     a health care professional shall not require that such 
     individual or family member undergo a genetic test.
       ``(b) Collection of Predictive Genetic Information.--Except 
     as provided in subsections (d) and (e), a health insurance 
     issuer offering health insurance coverage in the individual 
     market shall not request, require, collect, or purchase 
     predictive genetic information concerning an individual (or 
     information about a request for or the receipt of genetic 
     services by such individual or family member of such 
     individual).
       ``(c) Disclosure of Predictive Genetic Information.--A 
     health insurance issuer offering health insurance coverage in 
     the individual market shall not disclose predictive genetic 
     information about an individual (or information about a 
     request for or the receipt of genetic services by such 
     individual or family member of such individual) to--
       ``(1) any entity that is a member of the same controlled 
     group as such issuer or plan sponsor of such group health 
     plan;
       ``(2) any other group health plan or health insurance 
     issuer or any insurance agent,

[[Page 356]]

     third party administrator, or other person subject to 
     regulation under State insurance laws;
       ``(3) the Medical Information Bureau or any other person 
     that collects, compiles, publishes, or otherwise disseminates 
     insurance information;
       ``(4) the individual's employer or any plan sponsor; or
       ``(5) any other person the Secretary may specify in 
     regulations.
       ``(d) Information for Payment for Genetic Services.--
       ``(1) In general.--With respect to payment for genetic 
     services conducted concerning an individual or the 
     coordination of benefits, a health insurance issuer offering 
     health insurance coverage in the individual market may 
     request that the individual provide the plan or issuer with 
     evidence that such services were performed.
       ``(2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to--
       ``(A) permit a health insurance issuer to request (or 
     require) the results of the services referred to in such 
     paragraph; or
       ``(B) require that a health insurance issuer make payment 
     for services described in such paragraph where the individual 
     involved has refused to provide evidence of the performance 
     of such services pursuant to a request by the plan or issuer 
     in accordance with such paragraph.
       ``(e) Information for Payment of Other Claims.--With 
     respect to the payment of claims for benefits other than 
     genetic services, a health insurance issuer offering health 
     insurance coverage in the individual market may request that 
     an individual provide predictive genetic information so long 
     as such information--
       ``(1) is used solely for the payment of a claim;
       ``(2) is limited to information that is directly related to 
     and necessary for the payment of such claim and the claim 
     would otherwise be denied but for the predictive genetic 
     information; and
       ``(3) is used only by an individual (or individuals) within 
     such plan or issuer who needs access to such information for 
     purposes of payment of a claim.
       ``(f) Rules of Construction.--
       ``(1) Collection or disclosure authorized by individual.--
     The provisions of subsections (c) (regarding collection) and 
     (d) shall not apply to an individual if the individual (or 
     legal representative of the individual) provides prior, 
     knowing, voluntary, and written authorization for the 
     collection or disclosure of predictive genetic information.
       ``(2) Disclosure for health care treatment.--Nothing in 
     this section shall be construed to limit or restrict the 
     disclosure of predictive genetic information from a health 
     care provider to another health care provider for the purpose 
     of providing health care treatment to the individual 
     involved.
       ``(g) Definitions.--In this section:
       ``(1) Controlled group.--The term `controlled group' means 
     any group treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986.
       ``(2) Group health plan, health insurance issuer.--The 
     terms `group health plan' and `health insurance issuer' 
     include a third party administrator or other person acting 
     for or on behalf of such plan or issuer.''.
       (c) Enforcement.--
       (1) Group plans.--Section 2722 of the Public Health Service 
     Act (42 U.S.C. 300gg-22) is amended by adding at the end the 
     following:
       ``(c) Violation of Genetic Discrimination or Genetic 
     Disclosure Provisions.--In any action under this section 
     against any administrator of a group health plan, or health 
     insurance issuer offering group health insurance coverage in 
     connection with a group health plan (including any third 
     party administrator or other person acting for or on behalf 
     of such plan or issuer) alleging a violation of subsections 
     (a)(1)(F), (b) (with respect to cases relating to genetic 
     information or information about a request or receipt of 
     genetic services by an individual or family member of such 
     individual), (c), (d), (e), (f), or (g) of section 2702 and 
     section 2707 the court may award any appropriate legal or 
     equitable relief. Such relief may include a requirement for 
     the payment of attorney's fees and costs, including the costs 
     of expert witnesses.
       ``(d) Civil Penalty.--The monetary provisions of section 
     308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) 
     shall apply for purposes of the Secretary enforcing the 
     provisions referred to in subsection (c), except that any 
     such relief awarded shall be paid only into the general fund 
     of the Treasury.''.
       (2) Individual plans.--Section 2761 of the Public Health 
     Service Act (42 U.S.C. 300gg-45) is amended by adding at the 
     end the following:
       ``(c) Violation of Genetic Discrimination or Genetic 
     Disclosure Provisions.--In any action under this section 
     against any health insurance issuer offering health insurance 
     coverage in the individual market (including any other person 
     acting for or on behalf of such issuer) alleging a violation 
     of sections 2753 and 2754 the court in which the action is 
     commenced may award any appropriate legal or equitable 
     relief. Such relief may include a requirement for the payment 
     of attorney's fees and costs, including the costs of expert 
     witnesses.
       ``(d) Civil Penalty.--The monetary provisions of section 
     308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) 
     shall apply for purposes of the Secretary enforcing the 
     provisions referred to in subsection (c), except that any 
     such relief awarded shall be paid only into the general fund 
     of the Treasury.''.
       (d) Preemption.--
       (1) Group market.--Section 2723 of the Public Health 
     Service Act (42 U.S.C. 300gg-23) is amended--
       (A) in subsection (a)(1), by inserting ``or (e)'' after 
     ``subsection (b)''; and
       (B) by adding at the end the following:
       ``(e) Special Rule in Case of Genetic Information.--With 
     respect to group health insurance coverage offered by a 
     health insurance issuer, the provisions of this part relating 
     to genetic information (including information about a request 
     for or the receipt of genetic services by an individual or a 
     family member of such individual) shall not be construed to 
     supersede any provision of State law which establishes, 
     implements, or continues in effect a standard, requirement, 
     or remedy that more completely--
       ``(1) protects the confidentiality of genetic information 
     (including information about a request for or the receipt of 
     genetic services by an individual or a family member of such 
     individual) or the privacy of an individual or a family 
     member of the individual with respect to genetic information 
     (including information about a request for or the receipt of 
     genetic services by an individual or a family member of such 
     individual); or
       ``(2) prohibits discrimination on the basis of genetic 
     information than does this part.''.
       (2) Individual market.--Section 2762 of the Public Health 
     Service Act (42 U.S.C. 300gg-46) is amended--
       (A) in subsection (a), by inserting ``and except as 
     provided in subsection (c),'' after ``Subject to subsection 
     (b),''; and
       (B) by adding at the end the following:
       ``(c) Special Rule in Case of Genetic Information.--With 
     respect to individual health insurance coverage offered by a 
     health insurance issuer, the provisions of this part (or part 
     C insofar as it applies to this part) relating to genetic 
     information (including information about a request for or the 
     receipt of genetic services by an individual or a family 
     member of such individual) shall not be construed to 
     supersede any provision of State law (as defined in section 
     2723(d)) which establishes, implements, or continues in 
     effect a standard, requirement, or remedy that more 
     completely--
       ``(1) protects the confidentiality of genetic information 
     (including information about a request for or the receipt of 
     genetic services of an individual or a family member of such 
     individual) or the privacy of an individual or a family 
     member of the individual with respect to genetic information 
     (including information about a request for or the receipt of 
     genetic services by an individual or a family member of such 
     individual) than does this part (or part C insofar as it 
     applies to this part); or
       ``(2) prohibits discrimination on the basis of genetic 
     information than does this part (or part C insofar as it 
     applies to this part).''.
       (e) Elimination of Option of Non-Federal Governmental Plans 
     To Be Excepted From Requirements Concerning Genetic 
     Information.--Section 2721(b)(2) of the Public Health Service 
     Act (42 U.S. C. 300gg-21(b)(2)) is amended--
       (1) in subparagraph (A), by striking ``If the plan 
     sponsor'' and inserting ``Except as provided in subparagraph 
     (D), if the plan sponsor''; and
       (2) by adding at the end the following:
       ``(D) Election not applicable to requirements concerning 
     genetic information.--The election described in subparagraph 
     (A) shall not be available with respect to the provisions of 
     subsections (a)(1)(F), (c), (d), (e), (f), and (g) of section 
     2702 and section 2707, and the provisions of section 2702(b) 
     to the extent that they apply to genetic information (or 
     information about a request for or the receipt of genetic 
     services by an individual or a family member of such 
     individual).''.
       (f) Amendment Concerning Supplemental Excepted Benefits.--
       (1) Group market.--Section 2721(d)(3) of the Public Health 
     Service Act (42 U.S.C. 300gg-23(d)(3)) is amended by 
     inserting ``, other than the requirements of subsections 
     (a)(1)(F), (b) (in cases relating to genetic information or 
     information about a request for or the receipt of genetic 
     services by an individual or a family member of such 
     individual)), (c), (d), (e), (f) and (g) of section 2702 and 
     section 2707,'' after ``The requirements of this part''.
       (2) Individual market.--Section 2763(b) of the Public 
     Health Service Act (42 U.S.C. 300gg-47(b)) is amended--
       (A) by striking ``The requirements of this part'' and 
     inserting the following:
       ``(1) In general.--Except as provided in paragraph (2), the 
     requirements of this part''; and
       (B) by adding at the end the following:
       ``(2) Limitation.--The requirements of sections 2753 and 
     2754 shall apply to excepted benefits described in section 
     2791(c)(4).''.

[[Page 357]]

       (g) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to--
       (A) group health plans, and health insurance coverage 
     offered in connection with group health plans, for plan years 
     beginning; and
       (B) health insurance coverage offered, sold, issued, 
     renewed, in effect, or operated in the individual market, 
     after;
     October 1, 2002.
       (2) Special rule for collective bargaining agreements.--In 
     the case of a group health plan maintained pursuant to one or 
     more collective bargaining agreements between employee 
     representatives and one or more employers ratified before the 
     date of the enactment of this Act, the amendments made by 
     this section shall not apply to plan years beginning before 
     the later of--
       (A) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act); or
       (B) October 1, 2002.
     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement of the amendments made by this section shall not 
     be treated as a termination of such collective bargaining 
     agreement.

     SEC. 403. AMENDMENTS TO INTERNAL REVENUE CODE OF 1986.

       (a) Prohibition of Health Insurance Discrimination on the 
     Basis of Genetic Services or Predictive Genetic 
     Information.--
       (1) No enrollment restriction for genetic services.--
     Section 9802(a)(1)(F) of the Internal Revenue Code of 1986 
     (relating to eligibility to enroll) is amended by inserting 
     before the period ``(or information about a request for or 
     the receipt of genetic services by such individual or family 
     member of such individual)''.
       (2) No discrimination in group rate based on predictive 
     genetic information.--
       (A) In general.--Subchapter B of chapter 100 of such Code 
     (relating to other requirements) is amended by adding at the 
     end the following:

     ``SEC. 9813. PROHIBITING DISCRIMINATION AGAINST GROUPS ON THE 
                   BASIS OF PREDICTIVE GENETIC INFORMATION.

       ``A group health plan shall not deny eligibility to a group 
     or adjust premium or contribution rates for a group on the 
     basis of predictive genetic information concerning an 
     individual in the group (or information about a request for 
     or the receipt of genetic services by such individual or 
     family member of such individual).''.
       (B) Conforming amendments.--
       (i) Section 9802(b)(2)(A) of such Code is amended to read 
     as follows:
       ``(A) to restrict the amount that an employer may be 
     charged for coverage under a group health plan, except as 
     provided in section 9813; or''.
       (ii) Section 9831(a) of such Code (relating to exception 
     for certain plans) is amended by inserting ``(other than 
     subsection (a)(1)(F), (b) (with respect to cases relating to 
     genetic information or information about a request for or 
     receipt of genetic services by an individual or family member 
     of such individual), (d) (e), (f), (g) or (h) of section 9802 
     or section 9813)'' after ``chapter''.
       (iii) The table of sections for subchapter B of chapter 100 
     of such Code is amended by adding at the end the following 
     new item:

``Sec. 9813. Prohibiting discrimination against groups on the basis of 
              predictive genetic information.''.
       (b) Limitations on Genetic Testing and on Collection and 
     Disclosure of Predictive Genetic Information.--Section 9802 
     of the Internal Revenue Code of 1986 (relating to prohibiting 
     discrimination against individual participants and 
     beneficiaries based on health status) is amended by adding at 
     the end the following new subsections:
       ``(d) Genetic Testing.--
       ``(1) Limitation on requesting or requiring genetic 
     testing.--A group health plan shall not request or require an 
     individual or a family member of such individual to undergo a 
     genetic test.
       ``(2) Rule of construction.--Nothing in this chapter shall 
     be construed to limit the authority of a health care 
     professional, who is providing treatment with respect to an 
     individual and who is employed by a group health plan, to 
     request that such individual or family member of such 
     individual undergo a genetic test. Such a health care 
     professional shall not require that such individual or family 
     member undergo a genetic test.
       ``(e) Collection of Predictive Genetic Information.--Except 
     as provided in subsections (g) and (h), a group health plan 
     shall not request, require, collect, or purchase predictive 
     genetic information concerning an individual (or information 
     about a request for or the receipt of genetic services by 
     such individual or family member of such individual).
       ``(f) Disclosure of Predictive Genetic Information.--A 
     group health plan shall not disclose predictive genetic 
     information about an individual (or information about a 
     request for or the receipt of genetic services by such 
     individual or family member of such individual) to--
       ``(1) any entity that is a member of the same controlled 
     group as such issuer or plan sponsor of such group health 
     plan,
       ``(2) any other group health plan or health insurance 
     issuer or any insurance agent, third party administrator, or 
     other person subject to regulation under State insurance 
     laws,
       ``(3) the Medical Information Bureau or any other person 
     that collects, compiles, publishes, or otherwise disseminates 
     insurance information,
       ``(4) the individual's employer or any plan sponsor, or
       ``(5) any other person the Secretary may specify in 
     regulations.
       ``(g) Information for Payment for Genetic Services.--
       ``(1) In general.--With respect to payment for genetic 
     services conducted concerning an individual or the 
     coordination of benefits, a group health plan may request 
     that the individual provide the plan with evidence that such 
     services were performed.
       ``(2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to--
       ``(A) permit a group health plan to request (or require) 
     the results of the services referred to in such paragraph, or
       ``(B) require that a group health plan make payment for 
     services described in such paragraph where the individual 
     involved has refused to provide evidence of the performance 
     of such services pursuant to a request by the plan in 
     accordance with such paragraph.
       ``(h) Information for Payment of Other Claims.--With 
     respect to the payment of claims for benefits other than 
     genetic services, a group health plan may request that an 
     individual provide predictive genetic information so long as 
     such information--
       ``(1) is used solely for the payment of a claim,
       ``(2) is limited to information that is directly related to 
     and necessary for the payment of such claim and the claim 
     would otherwise be denied but for the predictive genetic 
     information, and
       ``(3) is used only by an individual within such plan or 
     issuer who needs access to such information for purposes of 
     payment of a claim.
       ``(i) Rules of Construction.--
       ``(1) Collection or disclosure authorized by individual.--
     The provisions of subsections (e) (regarding collection) and 
     (f) shall not apply to an individual if the individual (or 
     legal representative of the individual) provides prior, 
     knowing, voluntary, and written authorization for the 
     collection or disclosure of predictive genetic information.
       ``(2) Disclosure for health care treatment.--Nothing in 
     this section shall be construed to limit or restrict the 
     disclosure of predictive genetic information from a health 
     care provider to another health care provider for the purpose 
     of providing health care treatment to the individual 
     involved.
       ``(j) Definitions.--In this section:
       ``(1) Controlled group.--The term `controlled group' means 
     any group treated as a single employer under subsections (b), 
     (c), (m), or (o) of section 414.
       ``(2) Group health plan, health insurance issuer.--The 
     terms `group health plan' and `health insurance issuer' 
     include a third party administrator or other person acting 
     for or on behalf of such plan or issuer.
       ``(k) Violation of Genetic Discrimination or Genetic 
     Disclosure Provisions.--In any action under this section 
     against any administrator of a group health plan (including 
     any third party administrator or other person acting for or 
     on behalf of such plan) alleging a violation of subsection 
     (a)(1)(F), (b) (with respect to cases relating to genetic 
     information or information about a request or receipt of 
     genetic services by an individual or family member of such 
     individual), (d), (e), (f), (g) or (h) or section 9813, the 
     court may award any appropriate legal or equitable relief. 
     Such relief may include a requirement for the payment of 
     attorney's fees and costs, including the costs of expert 
     witnesses.
       ``(l) Civil Penalty.--The monetary provisions of section 
     308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) 
     shall apply for purposes of the Secretary enforcing the 
     provisions referred to in subsection (k), except that any 
     such relief awarded shall be paid only into the general fund 
     of the Treasury.''.
       (c) Definitions.--Section 9832(d) of the Internal Revenue 
     Code of 1986 (relating to other definitions) is amended by 
     adding at the end the following new paragraphs:
       ``(6) Family member.--The term `family member' means with 
     respect to an individual--
       ``(A) the spouse of the individual,
       ``(B) a dependent child of the individual, including a 
     child who is born to or placed for adoption with the 
     individual, or
       ``(C) any other individuals related by blood to the 
     individual or to the spouse or child described in 
     subparagraph (A) or (B).
       ``(7) Genetic information.--The term `genetic information' 
     means information about genes, gene products, or inherited 
     characteristics that may derive from an individual or a 
     family member of such individual (including information about 
     a request for or the receipt of genetic services by such 
     individual or family member of such individual).

[[Page 358]]

       ``(8) Genetic services.--The term `genetic services' means 
     health services, including genetic tests, provided to obtain, 
     assess, or interpret genetic information for diagnostic and 
     therapeutic purposes, and for genetic education and 
     counseling.
       ``(9) Genetic test.--The term `genetic test' means the 
     analysis of human DNA, RNA, chromosomes, proteins, and 
     certain metabolites in order to detect genotypes, mutations, 
     or chromosomal changes.
       ``(10) Predictive genetic information.--
       ``(A) In general.--The term `predictive genetic 
     information' means--
       ``(i) information about an individual's genetic tests,
       ``(ii) information about genetic tests of family members of 
     the individual, or
       ``(iii) information about the occurrence of a disease or 
     disorder in family members.
       ``(B) Limitations.--The term `predictive genetic 
     information' shall not include--
       ``(i) information about the sex or age of the individual,
       ``(ii) information about chemical, blood, or urine analyses 
     of the individual, unless these analyses are genetic tests, 
     or
       ``(iii) information about physical exams of the individual, 
     and other information relevant to determining the current 
     health status of the individual.''.
       (d) Effective Date.--
       (1) In general.--Except as provided in this section, this 
     section and the amendments made by this section shall apply 
     with respect to group health plans for plan years beginning 
     after October 1, 2002.
       (2) Special rule for collective bargaining agreements.--In 
     the case of a group health plan maintained pursuant to one or 
     more collective bargaining agreements between employee 
     representatives and one or more employers ratified before the 
     date of the enactment of this Act, this section and the 
     amendments made by this section shall not apply to plan years 
     beginning before the later of--
       (A) the date on which the last of the collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of the enactment of this Act), or
       (B) October 1, 2002.
     For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement of the amendments made by this section shall not 
     be treated as a termination of such collective bargaining 
     agreement.

     SEC. 404. AMENDMENTS TO TITLE XVIII OF THE SOCIAL SECURITY 
                   ACT RELATING TO MEDIGAP.

       (a) Nondiscrimination.--
       (1) In general.--Section 1882(s)(2) of the Social Security 
     Act (42 U.S.C. 1395ss(s)(2)) is amended by adding at the end 
     the following:
       ``(E)(i) An issuer of a medicare supplemental policy shall 
     not deny or condition the issuance or effectiveness of the 
     policy, and shall not discriminate in the pricing of the 
     policy (including the adjustment of premium rates) of an 
     eligible individual on the basis of predictive genetic 
     information concerning the individual (or information about a 
     request for, or the receipt of, genetic services by such 
     individual or family member of such individual).
       ``(ii) For purposes of clause (i), the terms `family 
     member', `genetic services', and `predictive genetic 
     information' shall have the meanings given such terms in 
     subsection (v).''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply with respect to a policy for policy years 
     beginning after October 1, 2002.
       (b) Limitations on Genetic Testing and on Collection and 
     Disclosure of Predictive Genetic Information.--
       (1) In general.--Section 1882 of the Social Security Act 
     (42 U.S.C. 1395ss) is amended by adding at the end the 
     following:
       ``(v) Limitations on Genetic Testing and on Collection and 
     Disclosure of Predictive Genetic Information.--
       ``(1) Genetic testing.--
       ``(A) Limitation on requesting or requiring genetic 
     testing.--An issuer of a medicare supplemental policy shall 
     not request or require an individual or a family member of 
     such individual to undergo a genetic test.
       ``(B) Rule of construction.--Nothing in this title shall be 
     construed to limit the authority of a health care 
     professional, who is providing treatment with respect to an 
     individual and who is employed by an issuer of a medicare 
     supplemental policy, to request that such individual or 
     family member of such individual undergo a genetic test. Such 
     a health care professional shall not require that such 
     individual or family member undergo a genetic test.
       ``(2) Collection of predictive genetic information.--Except 
     as provided in paragraphs (4) and (5), an issuer of a 
     medicare supplemental policy shall not request, require, 
     collect, or purchase predictive genetic information 
     concerning an individual (or information about a request for 
     or the receipt of genetic services by such individual or 
     family member of such individual).
       ``(3) Disclosure of predictive genetic information.--An 
     issuer of a medicare supplemental policy shall not disclose 
     predictive genetic information about an individual (or 
     information about a request for or the receipt of genetic 
     services by such individual or family member of such 
     individual) to--
       ``(A) any entity that is a member of the same controlled 
     group as such issuer;
       ``(B) any issuer of a medicare supplemental policy, group 
     health plan or health insurance issuer, or any insurance 
     agent, third party administrator, or other person subject to 
     regulation under State insurance laws;
       ``(C) the Medical Information Bureau or any other person 
     that collects, compiles, publishes, or otherwise disseminates 
     insurance information;
       ``(D) the individual's employer or any plan sponsor; or
       ``(E) any other person the Secretary may specify in 
     regulations.
       ``(4) Information for payment for genetic services.--
       ``(A) In general.--With respect to payment for genetic 
     services conducted concerning an individual or the 
     coordination of benefits, an issuer of a medicare 
     supplemental policy may request that the individual provide 
     the issuer with evidence that such services were performed.
       ``(B) Rule of construction.--Nothing in subparagraph (A) 
     shall be construed to--
       ``(i) permit an issuer to request (or require) the results 
     of the services referred to in such subparagraph; or
       ``(ii) require that an issuer make payment for services 
     described in such subparagraph where the individual involved 
     has refused to provide evidence of the performance of such 
     services pursuant to a request by the issuer in accordance 
     with such subparagraph.
       ``(5) Information for payment of other claims.--With 
     respect to the payment of claims for benefits other than 
     genetic services, an issuer of a medicare supplemental policy 
     may request that an individual provide predictive genetic 
     information so long as such information--
       ``(A) is used solely for the payment of a claim;
       ``(B) is limited to information that is directly related to 
     and necessary for the payment of such claim and the claim 
     would otherwise be denied but for the predictive genetic 
     information; and
       ``(C) is used only by an individual (or individuals) within 
     such issuer who needs access to such information for purposes 
     of payment of a claim.
       ``(6) Rules of construction.--
       ``(A) Collection or disclosure authorized by individual.--
     The provisions of paragraphs (2) (regarding collection) and 
     (3) shall not apply to an individual if the individual (or 
     legal representative of the individual) provides prior, 
     knowing, voluntary, and written authorization for the 
     collection or disclosure of predictive genetic information.
       ``(B) Disclosure for health care treatment.--Nothing in 
     this section shall be construed to limit or restrict the 
     disclosure of predictive genetic information from a health 
     care provider to another health care provider for the purpose 
     of providing health care treatment to the individual 
     involved.
       ``(7) Violation of genetic discrimination or genetic 
     disclosure provisions.--In any action under this subsection 
     against any administrator of a medicare supplemental policy 
     (including any third party administrator or other person 
     acting for or on behalf of such policy) alleging a violation 
     of this subsection, the court may award any appropriate legal 
     or equitable relief. Such relief may include a requirement 
     for the payment of attorney's fees and costs, including the 
     costs of expert witnesses.
       ``(8) Civil penalty.--The monetary provisions of section 
     308(b)(2)(C) of Public Law 101-336 (42 U.S.C. 12188(b)(2)(C)) 
     shall apply for purposes of the Secretary enforcing the 
     provisions of this subsection, except that any such relief 
     awarded shall be paid only into the general fund of the 
     Treasury.
       ``(9) Special rule in case of genetic information.--This 
     subsection (relating to genetic information or information 
     about a request for, or the receipt of, genetic services by 
     an individual or a family member of such individual) shall 
     not be construed to supersede any provision of State law 
     which establishes, implements, or continues in effect a 
     standard, requirement, or remedy that more completely--
       ``(A) protects the confidentiality of genetic information 
     (including information about a request for, or the receipt 
     of, genetic services by an individual or a family member of 
     such individual) or the privacy of an individual or a family 
     member of the individual with respect to genetic information 
     (including information about a request for, or the receipt 
     of, genetic services by an individual or a family member of 
     such individual) than does this subsection; or
       ``(B) prohibits discrimination on the basis of genetic 
     information than does this subsection.
       ``(10) Definitions.--In this subsection:
       ``(A) Controlled group.--The term `controlled group' means 
     any group treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986.
       ``(B) Family member.--The term `family member' means with 
     respect to an individual--
       ``(i) the spouse of the individual;

[[Page 359]]

       ``(ii) a dependent child of the individual, including a 
     child who is born to or placed for adoption with the 
     individual; or
       ``(iii) any other individuals related by blood to the 
     individual or to the spouse or child described in clause (i) 
     or (ii).
       ``(C) Genetic information.--The term `genetic information' 
     means information about genes, gene products, or inherited 
     characteristics that may derive from an individual or a 
     family member of such individual (including information about 
     a request for, or the receipt of, genetic services by such 
     individual or family member of such individual).
       ``(D) Genetic services.--The term `genetic services' means 
     health services, including genetic tests, provided to obtain, 
     assess, or interpret genetic information for diagnostic and 
     therapeutic purposes, and for genetic education and 
     counseling.
       ``(E) Genetic test.--The term `genetic test' means the 
     analysis of human DNA, RNA, chromosomes, proteins, and 
     certain metabolites in order to detect genotypes, mutations, 
     or chromosomal changes.
       ``(F) Issuer of a medicare supplemental policy.--The term 
     `issuer of a medicare supplemental policy' includes a third-
     party administrator or other person acting for or on behalf 
     of such issuer.
       ``(G) Predictive genetic information.--
       ``(i) In general.--The term `predictive genetic 
     information' means--

       ``(I) information about an individual's genetic tests;
       ``(II) information about genetic tests of family members of 
     the individual; or
       ``(III) information about the occurrence of a disease or 
     disorder in family members.

       ``(ii) Limitations.--The term `predictive genetic 
     information' shall not include--

       ``(I) information about the sex or age of the individual;
       ``(II) information about chemical, blood, or urine analyses 
     of the individual, unless these analyses are genetic tests; 
     or
       ``(III) information about physical exams of the individual, 
     and other information relevant to determining the current 
     health status of the individual.''.

       (2) Conforming amendment.--Section 1882(o) of the Social 
     Security Act (42 U.S.C. 1395ss(o)) is amended by adding at 
     the end the following:
       ``(4) The issuer of the medicare supplemental policy 
     complies with subsection (s)(2)(E) and subsection (v).''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply with respect to an issuer of a medicare 
     supplemental policy for policy years beginning after October 
     1, 2002.
       (c) Transition Provisions.--
       (1) In general.--If the Secretary of Health and Human 
     Services identifies a State as requiring a change to its 
     statutes or regulations to conform its regulatory program to 
     the changes made by this section, the State regulatory 
     program shall not be considered to be out of compliance with 
     the requirements of section 1882 of the Social Security Act 
     due solely to failure to make such change until the date 
     specified in paragraph (4).
       (2) NAIC standards.--If, not later than June 30, 2002, the 
     National Association of Insurance Commissioners (in this 
     subsection referred to as the ``NAIC'') modifies its NAIC 
     Model Regulation relating to section 1882 of the Social 
     Security Act (referred to in such section as the 1991 NAIC 
     Model Regulation, as subsequently modified) to conform to the 
     amendments made by this section, such revised regulation 
     incorporating the modifications shall be considered to be the 
     applicable NAIC model regulation (including the revised NAIC 
     model regulation and the 1991 NAIC Model Regulation) for the 
     purposes of such section.
       (3) Secretary standards.--If the NAIC does not make the 
     modifications described in paragraph (2) within the period 
     specified in such paragraph, the Secretary of Health and 
     Human Services shall, not later than October 1, 2002, make 
     the modifications described in such paragraph and such 
     revised regulation incorporating the modifications shall be 
     considered to be the appropriate regulation for the purposes 
     of such section.
       (4) Date specified.--
       (A) In general.--Subject to subparagraph (B), the date 
     specified in this paragraph for a State is the earlier of--
       (i) the date the State changes its statutes or regulations 
     to conform its regulatory program to the changes made by this 
     section, or
       (ii) October 1, 2002.
       (B) Additional legislative action required.--In the case of 
     a State which the Secretary identifies as--
       (i) requiring State legislation (other than legislation 
     appropriating funds) to conform its regulatory program to the 
     changes made in this section, but
       (ii) having a legislature which is not scheduled to meet in 
     2002 in a legislative session in which such legislation may 
     be considered,
     the date specified in this paragraph is the first day of the 
     first calendar quarter beginning after the close of the first 
     legislative session of the State legislature that begins on 
     or after July 1, 2002. For purposes of the previous sentence, 
     in the case of a State that has a 2-year legislative session, 
     each year of such session shall be deemed to be a separate 
     regular session of the State legislature.

 Subtitle B--Prohibition of Employment Discrimination on the Basis of 
                     Predictive Genetic Information

     SEC. 411. DEFINITIONS.

       In this subtitle:
       (1) Employee; employer; employment agency; labor 
     organization; member.--The terms ``employee'', ``employer'', 
     ``employment agency'', and ``labor organization'' have the 
     meanings given such terms in section 701 of the Civil Rights 
     Act of 1964 (42 U.S.C. 2000e), except that the terms 
     ``employee'' and ``employer'' shall also include the meanings 
     given such terms in section 717 of the Civil Rights Act of 
     1964 (42 U.S.C. 2000e-16). The terms ``employee'' and 
     ``member'' include an applicant for employment and an 
     applicant for membership in a labor organization, 
     respectively.
       (2) Family member.--The term ``family member'' means with 
     respect to an individual--
       (A) the spouse of the individual;
       (B) a dependent child of the individual, including a child 
     who is born to or placed for adoption with the individual; or
       (C) any other individuals related by blood to the 
     individual or to the spouse or child described in 
     subparagraph (A) or (B).
       (3) Genetic monitoring.--The term ``genetic monitoring'' 
     means the periodic examination of employees to evaluate 
     acquired modifications to their genetic material, such as 
     chromosomal damage or evidence of increased occurrence of 
     mutations, that may have developed in the course of 
     employment due to exposure to toxic substances in the 
     workplace, in order to identify, evaluate, and respond to the 
     effects of or control adverse environmental exposures in the 
     workplace.
       (4) Genetic services.--The term ``genetic services'' means 
     health services, including genetic tests, provided to obtain, 
     assess, or interpret genetic information for diagnostic and 
     therapeutic purposes, and for genetic education and 
     counseling.
       (5) Genetic test.--The term ``genetic test'' means the 
     analysis of human DNA, RNA, chromosomes, proteins, and 
     certain metabolites in order to detect genotypes, mutations, 
     or chromosomal changes.
       (6) Predictive genetic information.--
       (A) In general.--The term ``predictive genetic 
     information'' means--
       (i) information about an individual's genetic tests;
       (ii) information about genetic tests of family members of 
     the individual; or
       (iii) information about the occurrence of a disease or 
     disorder in family members.
       (B) Limitations.--The term ``predictive genetic 
     information'' shall not include--
       (i) information about the sex or age of the individual;
       (ii) information about chemical, blood, or urine analyses 
     of the individual, unless these analyses are genetic tests; 
     or
       (iii) information about physical exams of the individual, 
     and other information relevant to determining the current 
     health status of the individual.

     SEC. 412. EMPLOYER PRACTICES.

       (a) In General.--It shall be an unlawful employment 
     practice for an employer--
       (1) to fail or refuse to hire or to discharge any 
     individual, or otherwise to discriminate against any 
     individual with respect to the compensation, terms, 
     conditions, or privileges of employment of the individual, 
     because of predictive genetic information with respect to the 
     individual (or information about a request for or the receipt 
     of genetic services by such individual or family member of 
     such individual;
       (2) to limit, segregate, or classify the employees of the 
     employer in any way that would deprive or tend to deprive any 
     individual of employment opportunities or otherwise adversely 
     affect the status of the individual as an employee, because 
     of predictive genetic information with respect to the 
     individual, or information about a request for or the receipt 
     of genetic services by such individual or family member of 
     such individual; or
       (3) to request, require, collect or purchase predictive 
     genetic information with respect to an individual or a family 
     member of the individual except--
       (A) where used for genetic monitoring of biological effects 
     of toxic substances in the workplace, but only if--
       (i) the employee has provided prior, knowing, voluntary, 
     and written authorization;
       (ii) the employee is informed of individual monitoring 
     results;
       (iii) the monitoring conforms to any genetic monitoring 
     regulations that may be promulgated by the Secretary of Labor 
     pursuant to the Occupational Safety and Health Act of 1970 
     (29 U.S.C. 651 et seq.) or the Federal Mine Safety and Health 
     Act of 1977 (30 U.S.C. 801 et seq.); and
       (iv) the employer, excluding any licensed health care 
     professional that is involved in the genetic monitoring 
     program, receives the results of the monitoring only in 
     aggregate terms that do not disclose the identity of specific 
     employees; or
       (B) where genetic services are offered by the employer and 
     the employee provides prior, knowing, voluntary, and written 
     authorization, and only the employee or family member of such 
     employee receives the results of such services.
       (b) Limitation.--In the case of predictive genetic 
     information to which subparagraph

[[Page 360]]

     (A) or (B) of subsection (a)(3) applies, such information may 
     not be used in violation of paragraph (1) or (2) of 
     subsection (a).

     SEC. 413. EMPLOYMENT AGENCY PRACTICES.

       It shall be an unlawful employment practice for an 
     employment agency--
       (1) to fail or refuse to refer for employment, or otherwise 
     to discriminate against, any individual because of predictive 
     genetic information with respect to the individual (or 
     information about a request for or the receipt of genetic 
     services by such individual or family member of such 
     individual);
       (2) to limit, segregate, or classify individuals or fail or 
     refuse to refer for employment any individual in any way that 
     would deprive or tend to deprive any individual of employment 
     opportunities or would limit the employment opportunities or 
     otherwise adversely affect the status of the individual as an 
     employee, because of predictive genetic information with 
     respect to the individual (or information about a request for 
     or the receipt of genetic services by such individual or 
     family member of such individual);
       (3) to request, require, collect or purchase predictive 
     genetic information with respect to an individual (or 
     information about a request for or the receipt of genetic 
     services by such individual or family member of such 
     individual); or
       (4) to cause or attempt to cause an employer to 
     discriminate against an individual in violation of this 
     subtitle.

     SEC. 414. LABOR ORGANIZATION PRACTICES.

       It shall be an unlawful employment practice for a labor 
     organization--
       (1) to exclude or to expel from the membership of the 
     organization, or otherwise to discriminate against, any 
     individual because of predictive genetic information with 
     respect to the individual (or information about a request for 
     or the receipt of genetic services by such individual or 
     family member of such individual);
       (2) to limit, segregate, or classify the members of the 
     organization, or fail or refuse to refer for employment any 
     individual, in any way that would deprive or tend to deprive 
     any individual of employment opportunities, or would limit 
     the employment opportunities or otherwise adversely affect 
     the status of the individual as an employee, because of 
     predictive genetic information with respect to the individual 
     (or information about a request for or the receipt of genetic 
     services by such individual or family member of such 
     individual);
       (3) to request, require, collect or purchase predictive 
     genetic information with respect to an individual (or 
     information about a request for or the receipt of genetic 
     services by such individual or family member of such 
     individual); or
       (4) to cause or attempt to cause an employer to 
     discriminate against an individual in violation of this 
     subtitle.

     SEC. 415. TRAINING PROGRAMS.

       It shall be an unlawful employment practice for any 
     employer, labor organization, or joint labor-management 
     committee controlling apprenticeship or other training or 
     retraining, including on-the-job training programs--
       (1) to discriminate against any individual because of 
     predictive genetic information with respect to the individual 
     (or information about a request for or the receipt of genetic 
     services by such individual), in admission to, or employment 
     in, any program established to provide apprenticeship or 
     other training or retraining;
       (2) to limit, segregate, or classify the members of the 
     organization, or fail or refuse to refer for employment any 
     individual, in any way that would deprive or tend to deprive 
     any individual of employment opportunities, or would limit 
     the employment opportunities or otherwise adversely affect 
     the status of the individual as an employee, because of 
     predictive genetic information with respect to the individual 
     (or information about a request for or receipt of genetic 
     services by such individual or family member of such 
     individual);
       (3) to request, require, collect or purchase predictive 
     genetic information with respect to an individual (or 
     information about a request for or receipt of genetic 
     services by such individual or family member of such 
     individual); or
       (4) to cause or attempt to cause an employer to 
     discriminate against an individual in violation of this 
     subtitle.

     SEC. 416. MAINTENANCE AND DISCLOSURE OF PREDICTIVE GENETIC 
                   INFORMATION.

       (a) Maintenance of Predictive Genetic Information.--If an 
     employer possesses predictive genetic information about an 
     employee (or information about a request for or receipt of 
     genetic services by such employee or family member of such 
     employee), such information shall be treated or maintained as 
     part of the employee's confidential medical records.
       (b) Disclosure of Predictive Genetic Information.--An 
     employer shall not disclose predictive genetic information 
     (or information about a request for or receipt of genetic 
     services by such employee or family member of such employee) 
     except--
       (1) to the employee who is the subject of the information 
     at the request of the employee;
       (2) to an occupational or other health researcher if the 
     research is conducted in compliance with the regulations and 
     protections provided for under part 46 of title 45, Code of 
     Federal Regulations;
       (3) under legal compulsion of a Federal court order, except 
     that if the court order was secured without the knowledge of 
     the individual to whom the information refers, the employer 
     shall provide the individual with adequate notice to 
     challenge the court order unless the court order also imposes 
     confidentiality requirements; and
       (4) to government officials who are investigating 
     compliance with this Act if the information is relevant to 
     the investigation.

     SEC. 417. CIVIL ACTION.

       (a) In General.--One or more employees, members of a labor 
     organization, or participants in training programs may bring 
     an action in a Federal or State court of competent 
     jurisdiction against an employer, employment agency, labor 
     organization, or joint labor-management committee or training 
     program who commits a violation of this subtitle.
       (b) Enforcement by the Equal Employment Opportunity 
     Commission.--The powers, remedies, and procedures set forth 
     in sections 705, 706, 707, 709, 710, and 717 of the Civil 
     Rights Act of 1964 (42 U.S.C. 2000e-4, 2000e-5, 2000e-6, 
     2000e-8, 2000e-9, and 2000e-16) shall be the powers, 
     remedies, and procedures provided to the Equal Employment 
     Opportunity Commission to enforce this subtitle. The 
     Commission may promulgate regulations to implement these 
     powers, remedies, and procedures.
       (c) Remedy.--A Federal or State court may award any 
     appropriate legal or equitable relief under this section. 
     Such relief may include a requirement for the payment of 
     attorney's fees and costs, including the costs of experts.

     SEC. 418. CONSTRUCTION.

       Nothing in this subtitle shall be construed to--
       (1) limit the rights or protections of an individual under 
     the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 
     et seq.), including coverage afforded to individuals under 
     section 102 of such Act;
       (2) limit the rights or protections of an individual under 
     the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.);
       (3) limit the rights or protections of an individual under 
     any other Federal or State statute that provides equal or 
     greater protection to an individual than the rights accorded 
     under this Act;
       (4) apply to the Armed Forces Repository of Specimen 
     Samples for the Identification of Remains; or
       (5) limit the statutory or regulatory authority of the 
     Occupational Safety and Health Administration or the Mine 
     Safety and Health Administration to promulgate or enforce 
     workplace safety and health laws and regulations.

     SEC. 419. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary to carry out this subtitle.

     SEC. 420. EFFECTIVE DATE.

       This subtitle shall become effective on October 1, 2002.

                 TITLE V--EMPLOYMENT NONDISCRIMINATION

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Employment Non-
     Discrimination Act of 2001''.

     SEC. 502. PURPOSES.

       The purposes of this title are--
       (1) to provide a comprehensive Federal prohibition of 
     employment discrimination on the basis of sexual orientation;
       (2) to provide meaningful and effective remedies for 
     employment discrimination on the basis of sexual orientation; 
     and
       (3) to invoke congressional powers, including the powers to 
     enforce the 14th amendment to the Constitution and to 
     regulate interstate commerce, in order to prohibit employment 
     discrimination on the basis of sexual orientation.

     SEC. 503. DEFINITIONS.

       In this title:
       (1) Commission.--The term ``Commission'' means the Equal 
     Employment Opportunity Commission.
       (2) Covered entity.--The term ``covered entity'' means an 
     employer, employment agency, labor organization, or joint 
     labor-management committee.
       (3) Employer.--The term ``employer'' means--
       (A) a person engaged in an industry affecting commerce (as 
     defined in section 701(h) of the Civil Rights Act of 1964 (42 
     U.S.C. 2000e(h))) who has 15 or more employees (as defined in 
     section 701(f) of such Act (42 U.S.C. 2000e(f)) for each 
     working day in each of 20 or more calendar weeks in the 
     current or preceding calendar year, and any agent of such a 
     person, but does not include a bona fide private membership 
     club (other than a labor organization) that is exempt from 
     taxation under section 501(c) of the Internal Revenue Code of 
     1986;
       (B) an employing authority to which section 302(a)(1) of 
     the Government Employee Rights Act of 1991 (2 U.S.C. 
     1202(a)(1)) applies;
       (C) an employing office, as defined in section 101 of the 
     Congressional Accountability Act of 1995 (2 U.S.C. 1301) or 
     section 401 of title 3, United States Code; or

[[Page 361]]

       (D) an entity to which section 717(a) of the Civil Rights 
     Act of 1964 (42 U.S.C. 2000e-16(a)) applies.
       (4) Employment agency.--The term ``employment agency'' has 
     the meaning given the term in section 701(c) of the Civil 
     Rights Act of 1964 (42 U.S.C. 2000e(c)).
       (5) Employment or an employment opportunity.--Except as 
     provided in section 510(a)(1), the term ``employment or an 
     employment opportunity'' includes job application procedures, 
     referral for employment, hiring, advancement, discharge, 
     compensation, job training, a term, condition, or privilege 
     of union membership, or any other term, condition, or 
     privilege of employment, but does not include the service of 
     a volunteer for which the volunteer receives no compensation.
       (6) Labor organization.--The term ``labor organization'' 
     has the meaning given the term in section 701(d) of the Civil 
     Rights Act of 1964 (42 U.S.C. 2000e(d)).
       (7) Person.--The term ``person'' has the meaning given the 
     term in section 701(a) of the Civil Rights Act of 1964 (42 
     U.S.C. 2000e(a)).
       (8) Religious organization.--The term ``religious 
     organization'' means--
       (A) a religious corporation, association, or society; or
       (B) a school, college, university, or other educational 
     institution or institution of learning, if--
       (i) the institution is in whole or substantial part 
     controlled, managed, owned, or supported by a religion, 
     religious corporation, association, or society; or
       (ii) the curriculum of the institution is directed toward 
     the propagation of a religion.
       (9) Sexual orientation.--The term ``sexual orientation'' 
     means homosexuality, bisexuality, or heterosexuality, whether 
     the orientation is real or perceived.
       (10) State.--The term ``State'' has the meaning given the 
     term in section 701(i) of the Civil Rights Act of 1964 (42 
     U.S.C. 2000e(i)).

     SEC. 504. DISCRIMINATION PROHIBITED.

       (a) Employer Practices.--It shall be an unlawful employment 
     practice for an employer--
       (1) to fail or refuse to hire or to discharge any 
     individual, or otherwise to discriminate against any 
     individual with respect to the compensation, terms, 
     conditions, or privileges of employment of the individual, 
     because of such individual's sexual orientation; or
       (2) to limit, segregate, or classify the employees or 
     applicants for employment of the employer in any way that 
     would deprive or tend to deprive any individual of employment 
     opportunities or otherwise adversely affect the status of the 
     individual as an employee, because of such individual's 
     sexual orientation.
       (b) Employment Agency Practices.--It shall be an unlawful 
     employment practice for an employment agency to fail or 
     refuse to refer for employment, or otherwise to discriminate 
     against, any individual because of the sexual orientation of 
     the individual or to classify or refer for employment any 
     individual on the basis of the sexual orientation of the 
     individual.
       (c) Labor Organization Practices.--It shall be an unlawful 
     employment practice for a labor organization--
       (1) to exclude or to expel from its membership, or 
     otherwise to discriminate against, any individual because of 
     the sexual orientation of the individual;
       (2) to limit, segregate, or classify its membership or 
     applicants for membership, or to classify or fail or refuse 
     to refer for employment any individual, in any way that would 
     deprive or tend to deprive any individual of employment 
     opportunities, or would limit such employment opportunities 
     or otherwise adversely affect the status of the individual as 
     an employee or as an applicant for employment, because of 
     such individual's sexual orientation; or
       (3) to cause or attempt to cause an employer to 
     discriminate against an individual in violation of this 
     section.
       (d) Training Programs.--It shall be an unlawful employment 
     practice for any employer, labor organization, or joint 
     labor-management committee controlling apprenticeship or 
     other training or retraining, including on-the-job training 
     programs, to discriminate against any individual because of 
     the sexual orientation of the individual in admission to, or 
     employment in, any program established to provide 
     apprenticeship or other training.
       (e) Association.--An unlawful employment practice described 
     in any of subsections (a) through (d) shall be considered to 
     include an action described in that subsection, taken against 
     an individual based on the sexual orientation of a person 
     with whom the individual associates or has associated.
       (f) Disparate Impact.--Notwithstanding any other provision 
     of this title, the fact that an employment practice has a 
     disparate impact, as the term ``disparate impact'' is used in 
     section 703(k) of the Civil Rights Act of 1964 (42 U.S.C. 
     2000e-2(k)), on the basis of sexual orientation does not 
     establish a prima facie violation of this title.

     SEC. 505. RETALIATION AND COERCION PROHIBITED.

       (a) Retaliation.--A covered entity shall not discriminate 
     against an individual because such individual opposed any act 
     or practice prohibited by this title or because such 
     individual made a charge, assisted, testified, or 
     participated in any manner in an investigation, proceeding, 
     or hearing under this title.
       (b) Coercion.--A person shall not coerce, intimidate, 
     threaten, or interfere with any individual in the exercise or 
     enjoyment of, or on account of such individual's having 
     exercised, enjoyed, or assisted in or encouraged the exercise 
     or enjoyment of, any right granted or protected by this 
     title.

     SEC. 506. BENEFITS.

       This title does not apply to the provision of employee 
     benefits to an individual for the benefit of the domestic 
     partner of such individual.

     SEC. 507. COLLECTION OF STATISTICS PROHIBITED.

       The Commission shall not collect statistics on sexual 
     orientation from covered entities, or compel the collection 
     of such statistics by covered entities.

     SEC. 508. QUOTAS AND PREFERENTIAL TREATMENT PROHIBITED.

       (a) Quotas.--A covered entity shall not adopt or implement 
     a quota on the basis of sexual orientation.
       (b) Preferential Treatment.--A covered entity shall not 
     give preferential treatment to an individual on the basis of 
     sexual orientation.
       (c) Orders and Consent Decrees.--Notwithstanding any other 
     provision of this title, an order or consent decree entered 
     for a violation of this title may not include a quota, or 
     preferential treatment to an individual, based on sexual 
     orientation.

     SEC. 509. RELIGIOUS EXEMPTION.

       (a) In General.--Except as provided in subsection (b), this 
     title shall not apply to a religious organization.
       (b) Unrelated Business Taxable Income.--This title shall 
     apply to employment or an employment opportunity for an 
     employment position of a covered entity that is a religious 
     organization if the duties of the position pertain solely to 
     activities of the organization that generate unrelated 
     business taxable income subject to taxation under section 
     511(a) of the Internal Revenue Code of 1986.

     SEC. 510. NONAPPLICATION TO MEMBERS OF THE ARMED FORCES; 
                   VETERANS' PREFERENCES.

       (a) Armed Forces.--
       (1) Employment or an employment opportunity.--In this 
     title, the term ``employment or an employment opportunity'' 
     does not apply to the relationship between the United States 
     and members of the Armed Forces.
       (2) Armed forces.--In paragraph (1), the term ``Armed 
     Forces'' means the Army, Navy, Air Force, Marine Corps, and 
     Coast Guard.
       (b) Veterans' Preferences.--This title does not repeal or 
     modify any Federal, State, territorial, or local law creating 
     a special right or preference concerning employment or an 
     employment opportunity for a veteran.

     SEC. 511. CONSTRUCTION.

       Nothing in this title shall be construed to prohibit a 
     covered entity from enforcing rules regarding nonprivate 
     sexual conduct, if the rules of conduct are designed for, and 
     uniformly applied to, all individuals regardless of sexual 
     orientation.

     SEC. 512. ENFORCEMENT.

       (a) Enforcement Powers.--With respect to the administration 
     and enforcement of this title in the case of a claim alleged 
     by an individual for a violation of this title--
       (1) the Commission shall have the same powers as the 
     Commission has to administer and enforce--
       (A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 
     2000e et seq.); or
       (B) sections 302 and 304 of the Government Employee Rights 
     Act of 1991 (2 U.S.C. 1202 and 1220);
     in the case of a claim alleged by such individual for a 
     violation of such title, or of section 302(a)(1) of the 
     Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)), 
     respectively;
       (2) the Librarian of Congress shall have the same powers as 
     the Librarian of Congress has to administer and enforce title 
     VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) 
     in the case of a claim alleged by such individual for a 
     violation of such title;
       (3) the Board (as defined in section 101 of the 
     Congressional Accountability Act of 1995 (2 U.S.C. 1301)) 
     shall have the same powers as the Board has to administer and 
     enforce the Congressional Accountability Act of 1995 (2 
     U.S.C. 1301 et seq.) in the case of a claim alleged by such 
     individual for a violation of section 201(a)(1) of such Act 
     (2 U.S.C. 1311(a)(1));
       (4) the Attorney General shall have the same powers as the 
     Attorney General has to administer and enforce--
       (A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 
     2000e et seq.); or
       (B) sections 302 and 304 of the Government Employee Rights 
     Act of 1991 (2 U.S.C. 1202 and 1220);
     in the case of a claim alleged by such individual for a 
     violation of such title, or of section 302(a)(1) of the 
     Government Employee Rights Act of 1991 (2 U.S.C. 1202(a)(1)), 
     respectively;
       (5) the President, the Commission, and the Merit Systems 
     Protection Board shall have

[[Page 362]]

     the same powers as the President, the Commission, and the 
     Board, respectively, have to administer and enforce chapter 5 
     of title 3, United States Code, in the case of a claim 
     alleged by such individual for a violation of section 411 of 
     such title;
       (6) a court of the United States shall have the same 
     jurisdiction and powers as the court has to enforce--
       (A) title VII of the Civil Rights Act of 1964 (42 U.S.C. 
     2000e et seq.) in the case of a claim alleged by such 
     individual for a violation of such title;
       (B) sections 302 and 304 of the Government Employee Rights 
     Act of 1991 (2 U.S.C. 1202 and 1220) in the case of a claim 
     alleged by such individual for a violation of section 
     302(a)(1) of such Act (2 U.S.C. 1202(a)(1));
       (C) the Congressional Accountability Act of 1995 (2 U.S.C. 
     1301 et seq.) in the case of a claim alleged by such 
     individual for a violation of section 201(a)(1) of such Act 
     (2 U.S.C. 1311(a)(1)); and
       (D) chapter 5 of title 3, United States Code, in the case 
     of a claim alleged by such individual for a violation of 
     section 411 of such title.
       (b) Procedures and Remedies.--The procedures and remedies 
     applicable to a claim alleged by an individual for a 
     violation of this title are--
       (1) the procedures and remedies applicable for a violation 
     of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e 
     et seq.) in the case of a claim alleged by such individual 
     for a violation of such title;
       (2) the procedures and remedies applicable for a violation 
     of section 302(a)(1) of the Government Employee Rights Act of 
     1991 (2 U.S.C. 1202(a)(1)) in the case of a claim alleged by 
     such individual for a violation of such section;
       (3) the procedures and remedies applicable for a violation 
     of section 201(a)(1) of the Congressional Accountability Act 
     of 1995 (2 U.S.C. 1311(a)(1)) in the case of a claim alleged 
     by such individual for a violation of such section; and
       (4) the procedures and remedies applicable for a violation 
     of section 411 of title 3, United States Code, in the case of 
     a claim alleged by such individual for a violation of such 
     section.
       (c) Other Applicable Provisions.--With respect to a claim 
     alleged by a covered employee (as defined in section 101 of 
     the Congressional Accountability Act of 1995 (2 U.S.C. 1301)) 
     for a violation of this title, title III of the Congressional 
     Accountability Act of 1995 (2 U.S.C. 1381 et seq.) shall 
     apply in the same manner as such title applies with respect 
     to a claim alleged by such a covered employee for a violation 
     of section 201(a)(1) of such Act (2 U.S.C. 1311(a)(1)).
       (d) Prohibition of Affirmative Action--Notwithstanding any 
     other provision of this section, affirmative action for a 
     violation of this title may not be imposed. Nothing in this 
     section shall prevent the granting of relief to any 
     individual who suffers a violation of such individual's 
     rights provided in this title.

     SEC. 513. STATE AND FEDERAL IMMUNITY.

       (a) State Immunity.--A State shall not be immune under the 
     11th amendment to the Constitution from an action in a 
     Federal court of competent jurisdiction for a violation of 
     this title.
       (b) Remedies Against the United States and the States.--
     Notwithstanding any other provision of this title, in an 
     action or administrative proceeding against the United States 
     or a State for a violation of this title, remedies (including 
     remedies at law and in equity, and interest) are available 
     for the violation to the same extent as the remedies are 
     available for a violation of title VII of the Civil Rights 
     Act of 1964 (42 U.S.C. 2000e et seq.) by a private entity, 
     except that--
       (1) punitive damages are not available; and
       (2) compensatory damages are available to the extent 
     specified in section 1977A(b) of the Revised Statutes (42 
     U.S.C. 1981a(b)).

     SEC. 514. ATTORNEYS' FEES.

       Notwithstanding any other provision of this title, in an 
     action or administrative proceeding for a violation of this 
     title, an entity described in section 512(a) (other than 
     paragraph (4) of such section), in the discretion of the 
     entity, may allow the prevailing party, other than the 
     Commission or the United States, a reasonable attorney's fee 
     (including expert fees) as part of the costs. The Commission 
     and the United States shall be liable for the costs to the 
     same extent as a private person.

     SEC. 515. POSTING NOTICES.

       A covered entity who is required to post notices described 
     in section 711 of the Civil Rights Act of 1964 (42 U.S.C. 
     2000e-10) shall post notices for employees, applicants for 
     employment, and members, to whom the provisions specified in 
     section 512(b) apply, that describe the applicable provisions 
     of this title in the manner prescribed by, and subject to the 
     penalty provided under, section 711 of the Civil Rights Act 
     of 1964.

     SEC. 516. REGULATIONS.

       (a) In General.--Except as provided in subsections (b), 
     (c), and (d), the Commission shall have authority to issue 
     regulations to carry out this title.
       (b) Librarian of Congress.--The Librarian of Congress shall 
     have authority to issue regulations to carry out this title 
     with respect to employees of the Library of Congress.
       (c) Board.--The Board referred to in section 512(a)(3) 
     shall have authority to issue regulations to carry out this 
     title, in accordance with section 304 of the Congressional 
     Accountability Act of 1995 (2 U.S.C. 1384), with respect to 
     covered employees, as defined in section 101 of such Act (2 
     U.S.C. 1301).
       (d) President.--The President shall have authority to issue 
     regulations to carry out this title with respect to covered 
     employees, as defined in section 401 of title 3, United 
     States Code.

     SEC. 517. RELATIONSHIP TO OTHER LAWS.

       This title shall not invalidate or limit the rights, 
     remedies, or procedures available to an individual claiming 
     discrimination prohibited under any other Federal law or any 
     law of a State or political subdivision of a State.

     SEC. 518. SEVERABILITY.

       If any provision of this title, or the application of the 
     provision to any person or circumstance, is held to be 
     invalid, the remainder of this title and the application of 
     the provision to any other person or circumstance shall not 
     be affected by the invalidity.

     SEC. 519. EFFECTIVE DATE.

       This title shall take effect 60 days after the date of 
     enactment of this Act and shall not apply to conduct 
     occurring before the effective date.

              TITLE VI--PROMOTING CIVIL RIGHTS ENFORCEMENT

     SEC. 601. ESTABLISHMENT OF THE NATIONAL TASK FORCE ON 
                   VIOLENCE AGAINST HEALTH CARE PROVIDERS.

       (a) Establishment.--There is established in the Department 
     of Justice a National Task Force on Violence Against Health 
     Care Providers (referred to in this section as the ``task 
     force'').
       (b) Composition.--The task force shall be composed on one 
     or more individuals from--
       (1) the Department of Justice;
       (2) the Federal Bureau of Investigation;
       (3) the United States Marshals Service;
       (4) the Bureau of Alcohol, Tobacco, and Firearms; and
       (5) the United States Postal Inspection Service.
       (c) Chairman.--The task force shall be chaired by the 
     Assistant Attorney General for Civil Rights.
       (d) Powers and Duties.--The task force shall--
       (1) coordinate the national investigation and prosecution 
     of incidents of violence and other unlawful acts directed 
     against reproductive health care providers, with a focus on 
     connections that may exist between individuals involved in 
     such unlawful activity;
       (2) serve as a clearinghouse of information, for use by 
     investigators and prosecutors, relating to acts of violence 
     against reproductive health care providers;
       (3) make available security information and recommendations 
     to enhance the safety and protection of reproductive health 
     care providers;
       (4) provide training to Federal, State, and local law 
     enforcement on issues relating to clinic violence; and
       (5) support Federal civil investigation and litigation of 
     violence and other unlawful acts directed at reproductive 
     health care providers.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated $1,000,000 for each fiscal year to carry 
     out this section.

     SEC. 602. INCREASE IN FUNDING FOR ENFORCING CIVIL RIGHTS 
                   LAWS.

       (a) Increase in Funding.--There are authorized to be 
     appropriated for fiscal year 2002 for each of the agencies 
     described in subsection (b) an amount equal to 105 percent of 
     the amount appropriated for fiscal year 2001.
       (b) Agencies.--The agencies referred to in subsection (a) 
     (with the increase and total amount authorized for fiscal 
     year 2002) are as follows:
       (1) Equal Employment Opportunity Commission (an increase of 
     $15,200,000 from fiscal year 2001 to $319,200,000 for fiscal 
     year 2002).
       (2) Department of Justice: Civil Rights Division (an 
     increase of $4,600,000 from fiscal year 2001 to $96,600,000 
     for fiscal year 2002).
       (3) Education: Office of Civil Rights (an increase of 
     $3,800,000 from fiscal year 2001 to $79,800,000 for fiscal 
     year 2002).
       (4) Department of Labor: Office of Federal Contract 
     Compliance (an increase of $3,800,000 from fiscal year 2001 
     to $79,800,000 for fiscal year 2002).
       (5) Department of Labor: Civil Rights Center (an increase 
     of $300,000 from fiscal year 2001 to $6,300,000 for fiscal 
     year 2002).
       (6) Housing and Urban Development: Fair Housing Activities 
     Grants (an increase of $2,300,000 from fiscal year 2001 to 
     $48,300,000 for fiscal year 2002).
       (7) Health and Human Services: Office for Civil Rights (an 
     increase of $1,400,000 from fiscal year 2001 to $29,400,000 
     for fiscal year 2002).
       (8) Agriculture: Civil Rights Programs (an increase of 
     $1,000,000 from fiscal year 2001 to $21,000,000 for fiscal 
     year 2002).
       (9) Transportation: Office of Civil Rights (an increase of 
     $400,000 from fiscal year 2001 to $8,400,000 for fiscal year 
     2002).
       (10) Environmental Protection Agency: Office of Civil 
     Rights (an increase of $250,000

[[Page 363]]

     from fiscal year 2001 to $5,250,000 for fiscal year 2002).
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Harkin, Mr. Leahy, Mr. Johnson, 
        Mr. Baucus, Mr. Rockefeller, Mr. Kohl, Mr. Sarbanes, Mr. 
        Wellstone, Mr. Dorgan, Mr. Durbin, Mr. Conrad, Mr. Kerry, Mrs. 
        Carnahan, Mr. Dayton, Mr. Kennedy, and Mr. Akaka):
  S. 20. A bill to enhance fair and open competition in the production 
and sale of agricultural commodities, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.


       securing a future for independent agriculture act of 2001

  Mr. DASCHLE. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
       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 ``Securing a 
     Future for Independent Agriculture Act of 2001''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1. Short title; table of contents.

 TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS

                        Subtitle A--Definitions

Sec. 101. Definitions.

         Subtitle B--Protection from Anticompetitive Practices

Sec. 111. Prohibitions against unfair practices in transactions 
              involving agricultural commodities.
Sec. 112. Reports of the Secretary on potential unfair practices.
Sec. 113. Report on corporate structure.
Sec. 114. Mandatory funding for staff.
Sec. 115. General Accounting Office study.

                     Subtitle C--Contract Fairness

Sec. 121. Obligation of good faith.
Sec. 122. Disclosure of risks and readability requirements under 
              agricultural contracts.
Sec. 123. Right of contract producers to cancel production contracts.
Sec. 124. Prohibition of confidentiality provisions.
Sec. 125. Production contract liens.
Sec. 126. Production contracts involving investment requirements.
Sec. 127. Producer rights.
Sec. 128. Mediation.

                Subtitle D--Agricultural Fair Practices

Sec. 131. Agricultural fair practices.

                       Subtitle E--Implementation

Sec. 141. Relationship to State law.
Sec. 142. Regulations.
Sec. 143. Implementation plan.
Sec. 144. Effective date.

     TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND

Sec. 201. National Rural Cooperative and Business Equity Fund.

                 TITLE III--COUNTRY OF ORIGIN LABELING

Sec. 301. Country of origin labeling.

         TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION

Sec. 401. Loan rates for marketing assistance loans.
Sec. 402. Term of loans.
Sec. 403. Application.

                      TITLE V--FARMLAND PROTECTION

Sec. 501. Farmland protection program.

                         TITLE VI--CIVIL RIGHTS

Sec. 601. Sense of Congress on participation of socially disadvantaged 
              groups in Department of Agriculture programs.

 TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS

                        Subtitle A--Definitions

     SEC. 101. DEFINITIONS.

       In this title:
       (1) Active contractor.--The term ``active contractor'' 
     means a person (including a processor) that (in accordance 
     with a production contract) owns, or will own, an 
     agricultural commodity that is produced by a contract 
     producer.
       (2) Agricultural commodity.--The term ``agricultural 
     commodity'' has the meaning given the term in section 102 of 
     the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
       (3) Agricultural contract.--The term ``agricultural 
     contract'' means a marketing contract or a production 
     contract.
       (4) Agricultural cooperative.--The term ``agricultural 
     cooperative'' means an association of persons engaged in the 
     production, marketing, or processing of an agricultural 
     commodity that meets the requirements of the Act entitled 
     ``An Act to authorize association of producers of 
     agricultural products'' (commonly known as the ``Capper-
     Volstead Act'') (7 U.S.C. 291 et seq).
       (5) Broker.--The term ``broker'' means any person engaged 
     in the business of negotiating sales and purchases of any 
     agricultural commodity in interstate or foreign commerce for 
     or on behalf of the vendor or the purchaser, except that no 
     person shall be considered a broker if the person's sales of 
     such agricultural commodities are not in excess of $1,000,000 
     per year.
       (6) Capital investment.--The term ``capital investment'' 
     means an investment in--
       (A) a structure, such as a building or manure storage 
     structure; or
       (B) machinery or equipment associated with producing an 
     agricultural commodity that has a useful life of more than 1 
     year.
       (7) Commission merchant.--The term ``commission merchant'' 
     means any person engaged in the business of receiving in 
     interstate or foreign commerce any agricultural commodity for 
     sale, on commission, or for or on behalf of another person, 
     except that no person shall be considered a commission 
     merchant if the person's sales of such agricultural 
     commodities are not in excess of $1,000,000 per year.
       (8) Contract input.--
       (A) In general.--The term ``contract input'' means an 
     agricultural commodity or an organic or synthetic substance 
     or compound that is used to produce an agricultural 
     commodity.
       (B) Inclusions.--The term ``contract input'' includes 
     livestock, plants, agricultural seeds, semen or eggs for 
     breeding stock, fertilizers, soil conditioners, and 
     pesticides.
       (9) Contract livestock facility.--The term ``contract 
     livestock facility'' means a facility in which livestock or a 
     product of live livestock is produced under a production 
     contract by a contract producer.
       (10) Contract producer.--The term ``contract producer'' 
     means a producer that produces an agricultural commodity 
     under a production contract.
       (11) Contractor.--The term ``contractor'' means a person 
     that is an active contractor or a passive contractor.
       (12) Covered person.--The term ``covered person'' means a 
     dealer, processor, commission merchant, and broker.
       (13) Crop.--The term ``crop'' means an agricultural 
     commodity produced from a plant.
       (14) Dealer.--The term ``dealer'' means--
       (A) any person (except an agricultural cooperative) engaged 
     in the business of buying, selling, or marketing agricultural 
     commodities in wholesale or jobbing quantities, as determined 
     by the Secretary, in interstate or foreign commerce, except 
     that--
       (i) no person shall be considered a dealer with respect to 
     sales or marketing of any agricultural commodity of that 
     person's own production if the sales or marketing of such 
     agricultural commodities do not exceed $10,000,000 per year; 
     and
       (ii) no person shall be considered a dealer who buys, 
     sells, or markets less than $1,000,000 per year of such 
     agricultural commodities; and
       (B) an agricultural cooperative that sells or markets 
     agricultural commodities of its members' own production if 
     the agricultural cooperative sells or markets more than 
     $1,000,000 of its members' production per year of such 
     agricultural commodities.
       (15) Investment requirement.--The term ``investment 
     requirement'' means a provision in a production contract that 
     requires a contract producer to make a capital investment 
     associated with producing an agricultural commodity subject 
     to the production contract.
       (16) Livestock.--The term ``livestock'' means beef cattle, 
     dairy cattle, swine, sheep, or poultry.
       (17) Marketing contract.--The term ``marketing contract'' 
     means a written agreement between a processor and a producer 
     for the purchase of an agricultural commodity grown or raised 
     by the producer.
       (18) Passive contractor.--The term ``passive contractor'' 
     means a person that--
       (A) provides a management service to a contract producer; 
     and
       (B) does not own an agricultural commodity that is produced 
     by the contract producer under a production contract.
       (19) Processor.--
       (A) In general.--The term ``processor'' means--
       (i) any person (other than an agricultural cooperative) 
     engaged in the business of handling, preparing, or 
     manufacturing (including slaughtering) an agricultural 
     commodity or the products of an agricultural commodity for 
     sale or marketing in interstate or foreign commerce for human 
     consumption; and
       (ii) an agricultural cooperative that handles, prepares, or 
     manufactures (including slaughtering) agricultural 
     commodities of its members' own production.
       (B) Exclusions.--The term ``processor'' does not include--
       (i) any person (other than an agricultural cooperative) 
     with respect to the handling, preparing, or manufacturing 
     (including slaughtering) of an agricultural commodity that 
     was produced by the person if the gross revenue derived by 
     the person from the sales or marketing of the agricultural 
     commodity is less than $10,000,000 per year; and
       (ii) any agricultural cooperative that handles, prepares, 
     or manufactures (including

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     slaughtering) an agricultural commodity if the gross revenue 
     derived by the person from the sales or marketing of the 
     agricultural commodity is less than $1,000,000 per year.
       (20) Produce.--The term ``produce'' means--
       (A) to provide feed or services relating to the care and 
     feeding of livestock, including milking dairy cattle and 
     storing raw milk; and
       (B) to provide for planting, raising, harvesting, and 
     storing a crop, including preparing soil for planting and 
     applying a fertilizer, soil conditioner, or pesticide to a 
     crop.
       (21) Producer.--
       (A) In general.--The term ``producer'' means a person that 
     produces an agricultural commodity.
       (B) Exclusions.--The term ``producer'' does not include--
       (i) a commercial fertilizer or pesticide applicator;
       (ii) a feed supplier; or
       (iii) a veterinarian.
       (22) Production contract.--
       (A) In general.--The term ``production contract'' means a 
     written agreement that provides for--
       (i) the production of an agricultural commodity by a 
     contract producer; or
       (ii) the provision of a management service relating to the 
     production of an agricultural commodity by a contract 
     producer.
       (B) Inclusions.--The term ``production contract'' 
     includes--
       (i) a contract between an active contractor and a contract 
     producer for the production of an agricultural commodity;
       (ii) a contract between an active contractor and a passive 
     contractor for the provision of a management service to a 
     contract producer in the production of an agricultural 
     commodity; and
       (iii) a contract between a passive contractor and a 
     contract producer if--

       (I) the production contract provides for a management 
     service furnished by the passive contractor to the contract 
     producer in the production of an agricultural commodity; and
       (II) the passive contractor has a contractual relationship 
     with the active contractor involving the production of the 
     agricultural commodity.

       (23) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.

         Subtitle B--Protection from Anticompetitive Practices

     SEC. 111. PROHIBITIONS AGAINST UNFAIR PRACTICES IN 
                   TRANSACTIONS INVOLVING AGRICULTURAL 
                   COMMODITIES.

       (a) Prohibitions.--It shall be unlawful in, or in 
     connection with, any transaction in interstate or foreign 
     commerce for any covered person or contractor--
       (1) to engage in or use any unfair, unreasonable, unjustly 
     discriminatory, or deceptive practice or device in the 
     marketing, receiving, purchasing, sale, or contracting for 
     the production of any agricultural commodity;
       (2) to make or give any undue or unreasonable preference or 
     advantage to any particular person or locality or subject any 
     particular person or locality to any undue or unreasonable 
     disadvantage in connection with any transaction involving any 
     agricultural commodity;
       (3) to make any false or misleading statement in connection 
     with any transaction involving any agricultural commodity 
     that is purchased or received in interstate or foreign 
     commerce, or involving any production contract, or to fail, 
     without reasonable cause, to perform any specification or 
     duty, express or implied, arising out of any undertaking in 
     connection with any such transaction or production contract;
       (4) to retaliate against or disadvantage, or to conspire to 
     retaliate against or disadvantage, any person because of 
     statements or information lawfully provided by the person to 
     any person (including to the Secretary or to a law 
     enforcement agency) regarding alleged improper actions or 
     violations of law by the covered person or contractor (unless 
     the statements or information are determined to be libelous 
     or slanderous under applicable State law) involving any 
     agricultural commodity;
       (5) to include as part of any new or renewed agreement or 
     contract a right of first refusal, or to make any sale or 
     transaction contingent on the granting of a right of first 
     refusal, involving any agricultural commodity, before the 
     date that is 180 days after the study required under section 
     115 is complete; or
       (6) to offer different prices contemporaneously for 
     agricultural commodities of like grade and quality (except 
     agricultural commodities covered by the Perishable 
     Agricultural Commodities Act, 1930 (7 U.S.C. 499a et seq.)), 
     unless--
       (A) the agricultural commodity is purchased in a public 
     market through a competitive bidding process or under similar 
     conditions that provide opportunities for multiple 
     competitors to seek to acquire the agricultural commodity;
       (B) the premium or discount reflects the actual cost of 
     acquiring an agricultural commodity prior to processing; or
       (C) the Secretary has determined that such types of offers 
     do not have a discriminatory impact against small volume 
     producers of agricultural commodities.
       (b) Violations.--
       (1) Complaints.--Whenever the Secretary has reason to 
     believe that any covered person or contractor has violated 
     subsection (a), the Secretary shall cause a complaint in 
     writing to be served on the covered person or contractor, 
     stating the charges in that respect, and requiring the 
     covered person or contractor to attend and testify at a 
     hearing to be held not earlier than 30 days after the service 
     of the complaint.
       (2) Hearing.--
       (A) In general.--The Secretary may hold hearings, sign and 
     issue subpoenas, administer oaths, examine witnesses, receive 
     evidence, and require the attendance and testimony of 
     witnesses and the production of such accounts, records, and 
     memoranda, as the Secretary considers necessary, for the 
     determination of the existence of any violation of this 
     section.
       (B) Right to hearing.--A covered person or contractor may 
     request a hearing if the covered person or contractor is 
     subject to penalty for unfair conduct under this section.
       (C) Respondents rights.--During a hearing, the covered 
     person or contractor shall be given, pursuant to regulations 
     promulgated by the Secretary, the opportunity--
       (i) to be informed of the evidence against the covered 
     person or contractor;
       (ii) to cross-examine witnesses; and
       (iii) to present evidence.
       (D) Hearing limitation.--The issues of any hearing held or 
     requested under this section shall be limited in scope to 
     matters directly related to the purpose for which the hearing 
     was held or requested.
       (3) Report of finding and penalties.--
       (A) In general.--If, after a hearing, the Secretary finds 
     that the covered person or contractor has violated subsection 
     (a), the Secretary shall make a report in writing that states 
     the findings of fact and includes an order requiring the 
     covered person or contractor to cease and desist from 
     continuing the violation.
       (B) Civil penalty.--The Secretary may assess a civil 
     penalty in an amount not to exceed $100,000 for each 
     violation of subsection (a).
       (4) Temporary injunction and finality and appealability of 
     an order.--
       (A) Temporary injunction.--At any time after a complaint is 
     filed under paragraph (1), the court, on application of the 
     Secretary, may issue a temporary injunction, restraining to 
     the extent the court considers proper, the covered person or 
     contractor and the officers, directors, agents, and employees 
     of the covered person or contractor from violating subsection 
     (a).
       (B) Appealability of an order.--An order issued pursuant to 
     this subsection shall be final and conclusive unless within 
     30 days after service of the order, the covered person or 
     contractor petitions to appeal the order to the court of 
     appeals for the circuit in which the covered person or 
     contractor resides or has its principal place of business or 
     the District of Columbia Circuit Court of Appeals.
       (C) Delivery of petition.--
       (i) In general.--The clerk of the court shall immediately 
     cause a copy of the petition filed under subparagraph (B) to 
     be delivered to the Secretary.
       (ii) Record.--On receipt of the petition, the Secretary 
     shall file in the court the record of the proceedings under 
     this subsection.
       (D) Penalty for failure to obey an order.--
       (i) In general.--Any covered person or contractor that 
     fails to obey any order of the Secretary issued under this 
     section after the order, or the order as modified, has been 
     sustained by the court or has otherwise become final, shall 
     be fined not less than $5,000 and not more than $100,000 for 
     each offense.
       (ii) Separate offenses.--Each day during which the failure 
     continues shall be considered a separate offense.
       (5) Records.--
       (A) In general.--Each covered person or contractor shall 
     maintain for a period of not less than 5 years accounts, 
     records, and memoranda (including marketing agreements, 
     forward contracts, and formula pricing arrangements) that 
     fully and correctly disclose all transactions involved in the 
     business of the covered person or contractor, including the 
     true ownership of the business.
       (B) Failure to keep records or allow the secretary to 
     inspect records.--Failure to keep, or allow the Secretary to 
     inspect records as required by this paragraph shall 
     constitute an unfair practice in violation of subsection 
     (a)(1).
       (C) Inspection of records.--The Secretary shall have the 
     right to inspect such accounts, records, and memoranda 
     (including marketing agreements, forward contracts, and 
     formula pricing arrangements) of any covered person or 
     contractor as may be material to the investigation of any 
     alleged violation of this section or for the purpose of 
     investigating the business conduct or practices of an 
     organization with respect to the covered person or 
     contractor.
       (c) Compensation for Injury.--
       (1) Establishment of the family farmer and rancher claims 
     commission.--
       (A) In general.--The Secretary shall appoint 3 individuals 
     to a commission to be

[[Page 365]]

     known as the ``Family Farmer and Rancher Claims Commission'' 
     (referred to in this subsection as the ``Commission'') to 
     review claims of family farmers and ranchers that have 
     suffered financial damages as a result of any violation of 
     this section as determined by the Secretary pursuant to 
     subsection (b)(3).
       (B) Term of service.--
       (i) In general.--Each member of the Commission shall serve 
     3-year terms which may be renewed.
       (ii) Initial members.--The initial members of the 
     Commission may be appointed for a period of less than 3 
     years, as determined by the Secretary.
       (2) Review of claims.--
       (A) Submission of claims.--A family farmer or rancher 
     damaged as a result of a violation of this section, as 
     determined by the Secretary pursuant to subsection (b)(3), 
     may preserve the right to claim financial damages under this 
     section by filing a claim pursuant to regulations promulgated 
     by the Secretary.
       (B) Determination.--Based on a review of the claim, the 
     Commission shall determine the amount of damages to be paid, 
     if any, as a result of the violation.
       (C) Review.--The decisions of the Commission under this 
     paragraph shall not be subject to judicial review except to 
     determine that the amount of damages to be paid is consistent 
     with the published regulations of the Secretary that 
     establish the criteria for implementing this subsection.
       (3) Funding.--
       (A) In general.--Funds collected from civil penalties 
     pursuant to this section shall--
       (i) be transferred to a special fund in the Treasury;
       (ii) be made available to the Secretary without further Act 
     of appropriation; and
       (iii) remain available until expended to pay the expenses 
     of the Commission and claims described in this subsection.
       (B) Authorization of appropriation.--In addition to the 
     funds described in subparagraph (A), there are authorized to 
     be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 112. REPORTS OF THE SECRETARY ON POTENTIAL UNFAIR 
                   PRACTICES.

       (a) Filing Premerger Notices With the Secretary.--No 
     covered person, operator of a warehouse used to store 
     agricultural commodities, or other agriculture-related 
     business shall merge or acquire, directly or indirectly, any 
     voting securities or assets of any other covered person, 
     operator of a warehouse used to store agricultural 
     commodities, or other agriculture-related business unless 
     both persons (or in the case of a tender offer, the acquiring 
     person) file notification pursuant to rules promulgated by 
     the Secretary, if--
       (1) any voting securities or assets of the covered person, 
     operator of a warehouse used to store agricultural 
     commodities, or other agriculture-related business with 
     annual net sales or total assets of $10,000,000 or more are 
     being acquired by a covered person, operator of a warehouse 
     used to store agricultural commodities, or other agriculture-
     related business that has total assets or annual net sales of 
     $100,000,000 or more; or
       (2) any voting securities or assets of a covered person, 
     operator of a warehouse used to store agricultural 
     commodities, or other agriculture-related business with 
     annual net sales, or total assets, of $100,000,000 or more 
     are being acquired by any covered person, operator of a 
     warehouse used to store agricultural commodities, or 
     agriculture-related business with annual net sales or total 
     assets of $10,000,000 or more, if, as a result of the 
     acquisition, the acquiring person would hold an aggregate 
     total amount of the voting securities and assets of the 
     acquired person in excess of $50,000,000.
       (b) Review by the Secretary.--
       (1) In general.--Except as provided in paragraph (2), the 
     Secretary may conduct a review of any merger or acquisition 
     described in subsection (a).
       (2) Exception.--The Secretary shall conduct a review of any 
     merger or acquisition described in subsection (a) on a 
     request from a member of Congress.
       (c) Access to Records.--The Secretary may request any 
     information, including any testimony, documentary material, 
     or related information, from a covered person, operator of a 
     warehouse used to store agricultural commodities, or other 
     agriculture-related business, pertaining to any merger or 
     acquisition of any covered person, operator of a warehouse 
     used to store agricultural commodities, or other agriculture-
     related business.
       (d) Purpose of Review.--
       (1) Findings.--In conducting the review under subsection 
     (a), the Secretary shall make findings concerning whether the 
     merger or acquisition could--
       (A) be significantly detrimental to the present or future 
     viability of family farms or ranches or rural communities in 
     the areas affected by the merger or acquisition, pursuant to 
     standards established by the Secretary; or
       (B) lead to a violation of section 111(a).
       (2) Remedies.--The review may include a determination of 
     possible remedies regarding how the parties of the merger or 
     acquisition may take steps to modify their operations to 
     address the findings described in paragraph (1).
       (e) Report of Review.--
       (1) Preliminary report.--After conducting the review 
     required under subsection (b), the Secretary shall issue a 
     preliminary report to the parties of the merger or 
     acquisition and the Attorney General or the Federal Trade 
     Commission, as appropriate, which shall include findings and 
     a description of any remedies described in subsection (d)(2).
       (2) Final report.--After affording the parties described in 
     paragraph (1) an opportunity for a hearing regarding the 
     findings and any proposed remedies in the preliminary report, 
     the Secretary shall issue a final report to the President and 
     the Attorney General or the Federal Trade Commission, as 
     appropriate, with respect to the merger or acquisition.
       (f) Implementation of the Report.--Not later than 120 days 
     after the issuance of a final report described in subsection 
     (e)(2), the parties to the merger or acquisition affected by 
     the report shall--
       (1) make changes to their operations or structure to comply 
     with the findings and implement any suggested remedy or any 
     agreed-on alternative remedy; and
       (2) file a response demonstrating the compliance or 
     implementation.
       (g) Confidentiality of Information.--
       (1) In general.--Subject to paragraph (2), information used 
     by the Secretary to conduct the review required under this 
     section provided by a party to the merger or acquisition 
     under review or by a government agency shall be treated by 
     the Secretary as confidential information pursuant to section 
     1770 of the Food Security Act of 1985 (7 U.S.C. 2276).
       (2) Party to hearing.--The Secretary may share any such 
     information with the Attorney General, the Federal Trade 
     Commission, and a party seeking a hearing pursuant to 
     subsection (e)(2) with respect to information relating to the 
     party.
       (3) Report.--Subject to paragraph (1), the report issued 
     under subsection (e) shall be available to the public.
       (h) Civil Penalties.--
       (1) Original penalty.--
       (A) In general.--After affording the parties an opportunity 
     for a hearing, the Secretary may assess a civil penalty in an 
     amount not to exceed $300,000 for the failure of a person to 
     comply with the requirements of subsection (a) or (f).
       (B) Issue.--Any such hearing shall be limited to the issue 
     of the amount of the civil penalty.
       (2) Additional penalty.--
       (A) In general.--If after being assessed a civil penalty 
     under paragraph (1) a person continues to fail to meet the 
     requirements of subsection (a) or (f), the Secretary may, 
     after affording the parties an opportunity for a hearing, 
     assess a further civil penalty in an amount not to exceed 
     $100,000 for each day the person continues the violation.
       (B) Issue.--Any such hearing shall be limited to the issue 
     of the additional civil penalty assessed under this 
     paragraph.

     SEC. 113. REPORT ON CORPORATE STRUCTURE.

       (a) In General.--
       (1) Report.--A covered person with annual sales in excess 
     of $100,000,000 shall annually file with the Secretary a 
     report that describes, with respect to both domestic and 
     foreign activities, the strategic alliances, ownership in 
     other agribusiness firms or agribusiness-related firms, joint 
     ventures, subsidiaries, brand names, and interlocking boards 
     of directors with other corporations, representatives, and 
     agents that lobby Congress on behalf of the covered person, 
     as determined by the Secretary.
       (2) Contracts.--Paragraph (1) shall not apply to a 
     contract.
       (b) Civil Penalties.--
       (1) Original penalty.--
       (A) In general.--After affording the parties an opportunity 
     for a hearing, the Secretary may assess a civil penalty in an 
     amount not to exceed $100,000 for the failure of a person to 
     comply with this section.
       (B) Issue.--Any such hearing shall be limited to the issue 
     of the amount of the civil penalty
       (2) Additional penalty.--
       (A) In general.--If after being assessed a civil penalty in 
     accordance with paragraph (1) a person continues to fail to 
     meet the requirements of this section, the Secretary may, 
     after affording the parties an opportunity for a hearing, 
     assess a further civil penalty in an amount not to exceed 
     $100,000 for each day the person continues the violation.
       (B) Issue.--Any such hearing shall be limited to the amount 
     of the additional civil penalty assessed under this 
     paragraph.

     SEC. 114. MANDATORY FUNDING FOR STAFF.

       (a) In General.--Out of the funds in the Treasury not 
     otherwise appropriated, the Secretary of Treasury shall 
     provide to the Secretary of Agriculture $7,000,000 for each 
     of fiscal years 2002 through 2006, to hire, train, and 
     provide for additional staff to carry out additional 
     responsibilities under this subtitle, including a Special 
     Counsel on Fair Markets and Rural Opportunity, additional 
     attorneys for the Office of General Counsel, investigators, 
     economists, and support staff.
       (b) Availability.--The sums shall be--

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       (1) made available to the Secretary without further Act of 
     appropriation; and
       (2) in addition to funds otherwise made available to the 
     Secretary for the purposes described in subsection (a).

     SEC. 115. GENERAL ACCOUNTING OFFICE STUDY.

       Not later than 1 year after the date of enactment of this 
     Act, the Comptroller General of the United States, in 
     consultation with the Attorney General, the Secretary, the 
     Federal Trade Commission, the National Association of 
     Attorney's General, and other persons, shall--
       (1) study competition in the domestic farm economy with a 
     special focus on--
       (A) protecting family farms and ranches and rural 
     communities; and
       (B) the potential for monopsony and oligopsony nationally 
     and regionally; and
       (2) provide a report to the appropriate committees of 
     Congress on--
       (A) the correlation between increases in the gap between--
       (i) retail consumer food prices;
       (ii) the prices paid to farmers and ranchers; and
       (iii) any increases in concentration among processors, 
     manufacturers, or other firms that buy from farmers and 
     ranchers;
       (B) the extent to which the use of formula pricing, 
     marketing agreements, forward contracting, and production 
     contracts tend to give processors, agribusinesses, and other 
     buyers of agricultural commodities unreasonable market power 
     over producers or suppliers in local markets;
       (C) whether the granting of process patents relating to 
     biotechnology research affecting agriculture during the past 
     20 years has tended to overly restrict related biotechnology 
     research or has tended to overly limit competition in the 
     biotechnology industries that affect agriculture in a manner 
     that is contrary to the public interest, or could do so in 
     the future;
       (D) whether acquisitions of companies that own 
     biotechnology patents and seed patents by multinational 
     companies have the potential for reducing competition in the 
     United States and unduly increasing the market power of the 
     multinational companies;
       (E) whether existing processors or agribusinesses have 
     disproportionate market power and if competition could be 
     increased if the processors or agribusinesses were required 
     to divest assets to ensure that they do not exert the 
     disproportionate market power over local markets;
       (F) the extent of increase in concentration in milk 
     processing, procurement and handling, and the potential risks 
     from that increase in concentration on--
       (i) the economic well-being of dairy farmers;
       (ii) the school lunch program; and
       (iii) other Federal nutrition programs;
       (G) the impact of mergers, acquisitions, and joint ventures 
     among dairy cooperatives on dairy farmers, including impacts 
     on both members and nonmembers of the merging cooperatives;
       (H) the impact of the significant increase in the use of 
     stock as the primary means of effectuating mergers and 
     acquisitions by large companies;
       (I) the increase in the number and size of mergers or 
     acquisitions in the United States and whether some of the 
     mergers or acquisitions would have taken place if the merger 
     or acquisition had to be consummated primarily with cash, 
     other assets, or borrowing; and
       (J) whether agricultural producers typically appear to 
     derive any benefits (such as higher prices for their products 
     or any other advantages) from right-of-first-refusal 
     provisions contained in purchase contracts or other deals 
     with agribusiness purchasers of the products.

                     Subtitle C--Contract Fairness

     SEC. 121. OBLIGATION OF GOOD FAITH.

       An agricultural contract shall carry an obligation of good 
     faith (as defined in applicable State law provisions of the 
     Uniform Commercial Code) on all parties to the agricultural 
     contract with respect to the performance and enforcement of 
     the agricultural contract.

     SEC. 122. DISCLOSURE OF RISKS AND READABILITY REQUIREMENTS 
                   UNDER AGRICULTURAL CONTRACTS.

       (a) Readability and Understandability.--
       (1) In general.--An agricultural contract shall be readable 
     and understandable, in that the agricultural contract--
       (A) shall be printed in legible type;
       (B) shall be appropriately divided into captioned sections; 
     and
       (C) shall be written in clear and coherent language using 
     words and grammar that are understandable by a person of 
     average intelligence, education, and experience within the 
     agricultural industry.
       (2) Effect.--Paragraph (1) does not preclude the use of--
       (A) a particular word, phrase, provision, or form of 
     agreement that is specifically required, recommended, or 
     endorsed by a Federal or State law (including a regulation); 
     or
       (B) a technical term that is used to describe the service 
     or property that is the subject of the agricultural contract, 
     if the term is customarily used by producers in the ordinary 
     course of business in connection with the service or property 
     described.
       (b) Disclosure Statement Requirement.--An agricultural 
     contract shall--
       (1) be accompanied by a clear written disclosure statement 
     describing the material risks faced by the producer if the 
     producer enters into the agricultural contract; and
       (2) disclose (in a manner consistent with subsection (a)), 
     provisions of the agricultural contract relating to--
       (A) duration;
       (B) termination;
       (C) renegotiation standards;
       (D) responsibility for environmental damage;
       (E) factors to be used in determining payment;
       (F) responsibility for obtaining and complying with 
     Federal, State, and local permits;
       (G) in the case of a production contract, the right of the 
     producer to cancel the production contract in accordance with 
     section 123; and
       (H) any other terms that the Secretary determines are 
     appropriate for disclosure.
       (c) Cover Sheet Requirement.--An agricultural contract 
     entered into, amended, or renewed after the date of enactment 
     of this Act shall contain as the first page, or first page of 
     text if it is preceded by a title page, a cover sheet that 
     complies with subsection (a) and contains the following:
       (1) A brief statement that the agricultural contract is a 
     legal contract between the parties to the agricultural 
     contract.
       (2) The following statement: ``READ YOUR CONTRACT 
     CAREFULLY. This cover sheet provides only a brief summary of 
     your contract. This cover sheet is not the contract, and only 
     the terms of the actual contract are legally binding. The 
     contract itself sets forth, in detail, the rights and 
     obligations of both you and the contractor or processor. IT 
     IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT 
     CAREFULLY.''.
       (3) A written disclosure of risks in accordance with 
     subsection (b).
       (4) In the case of a production contract, a statement 
     describing, in plain language, the right of the producer to 
     cancel the production contract in accordance with section 
     123.
       (5) An index of the major provisions of the agricultural 
     contract and the pages on which the provisions appear, 
     including--
       (A) the name of each party to the agricultural contract;
       (B) the definitions section of the agricultural contract;
       (C) the provisions governing termination, cancellation, 
     renewal, and amendment of the agricultural contract by either 
     party;
       (D) the duties and obligations of each party; and
       (E) provisions subject to change in the agricultural 
     contract.
       (d) Review by Secretary.--
       (1) Submission to secretary.--A contractor may submit an 
     agricultural contract to the Secretary for review to 
     determine whether the agricultural contract complies with 
     this section.
       (2) Action by secretary.--The Secretary shall--
       (A) in determining whether an agricultural contract or 
     cover sheet is readable, in accordance with subsection (a), 
     consider--
       (i) the simplicity of the sentence structure;
       (ii) the extent to which commonly used and understood words 
     are employed;
       (iii) the extent to which esoteric legal terms are avoided;
       (iv) the extent to which references to other sections or 
     provisions of the agricultural contract are minimized;
       (v) the extent to which clear definitions are used; and
       (vi) any additional factors relevant to the readability or 
     understandability of the agricultural contract; and
       (B) after reviewing the agricultural contract--
       (i) certify that the agricultural contract complies with 
     this section;
       (ii) decline to certify that the agricultural contract 
     complies with this section and provide specific reasons for 
     declining to certify the agricultural contract; or
       (iii) decline to review the agricultural contract because--

       (I) the compliance of the agricultural contract with this 
     section is subject to pending litigation; or
       (II) the agricultural contract is not subject to this 
     section.

       (3) Judicial review.--An action of the Secretary under this 
     subsection shall not be subject to judicial review.
       (4) Certification.--
       (A) In general.--An agricultural contract certified under 
     this subsection shall be considered to comply with 
     subsections (a), (b), and (c).
       (B) No approval of legality or legal effect.--Certification 
     of an agricultural contract under this subsection shall not 
     constitute an approval of the legality or legal effect of the 
     agricultural contract.
       (C) Effect of approval; constructive approval.--If the 
     Secretary certifies an agricultural contract under this 
     subsection--
       (i) the agricultural contract shall be considered to be in 
     compliance with subsections (a), (b), and (c); and
       (ii) the remedies provided under subsection (e) shall not 
     be available.
       (D) Timing.--To the maximum extent practicable, the 
     Secretary shall make a decision

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     on the certification of an agricultural contract not later 
     than 30 days after receipt of the agricultural contract.
       (5) Effect of disapproval.--If the Secretary disapproves 
     the certification of an agricultural contract, the 
     agricultural contract shall be void.
       (6) Effect of failure to submit agricultural contract.--The 
     failure to submit an agricultural contract to the Secretary 
     for review under this subsection shall not be considered to 
     be a lack of good faith or to raise a presumption that the 
     agricultural contract violates this section.
       (e) Remedies for Violations.--In addition to applicable 
     remedies provided under State law, a court reviewing an 
     agricultural contract that is not certified under subsection 
     (d) may change the terms of the agricultural contract, or 
     limit a provision of the agricultural contract, to avoid an 
     unfair result if--
       (1) the court finds--
       (A) a material provision of the agricultural contract 
     violates subsection (a), (b), or (c);
       (B) the violation reasonably caused the producer to be 
     substantially confused about any of the rights, obligations, 
     or remedies of any party to the agricultural contract; and
       (C) the violation has caused or is likely to cause 
     financial detriment to the producer; and
       (2) the claim is brought before the obligations of any 
     party to the agricultural contract have been fully performed.
       (f) Limitations on Producer Actions.--
       (1) In general.--A violation of this section--
       (A) shall not entitle a producer to withhold performance of 
     an otherwise valid contractual obligation when bringing a 
     claim for relief under this section; and
       (B) is not a defense to a claim arising from the breach of 
     an agricultural contract by a producer.
       (2) Actual damages.--A producer may recover actual damages 
     caused by a violation of this section only if the violation 
     reasonably caused the producer to fail to understand a right, 
     obligation, or remedy under the agricultural contract.
       (g) Statute of Limitations.--A claim that an agricultural 
     contract violates this section shall be made not later than 6 
     years after the date on which the agricultural contract is 
     executed by the producer.

     SEC. 123. RIGHT OF CONTRACT PRODUCERS TO CANCEL PRODUCTION 
                   CONTRACTS.

       (a) In General.--A contract producer may cancel a 
     production contract by mailing a cancellation notice to the 
     contractor not later than the later of--
       (1) the date that is 3 business days after the date on 
     which the production contract is executed; or
       (2) any cancellation date specified in the production 
     contract.
       (b) Disclosure.--A production contract shall clearly 
     disclose--
       (1) the right of the contract producer to cancel the 
     production contract;
       (2) the method by which the contract producer may cancel 
     the production contract; and
       (3) the deadline for canceling the production contract.

     SEC. 124. PROHIBITION OF CONFIDENTIALITY PROVISIONS.

       (a) Prohibition.--Any provision of an agricultural contract 
     that provides that information contained in the agricultural 
     contract (other than a trade secret to which section 552 of 
     title 5, United States Code, applies) is confidential shall 
     be void.
       (b) Form.--A confidentiality provision described in 
     subsection (a) shall be void regardless of whether the 
     provision is--
       (1) express or implied;
       (2) oral or written;
       (3) required or conditional; or
       (4) contained in the agricultural contract, another 
     agricultural contract, or in a related document, policy, or 
     agreement.
       (c) Other Provisions.--This section shall not affect other 
     provisions of an agricultural contract or a related document, 
     policy, or agreement that can be given effect without the 
     voided provision.
       (d) Disclosure of Information.--This subsection does not 
     require a party to an agricultural contract to disclose 
     information in the agricultural contract to any other person.

     SEC. 125. PRODUCTION CONTRACT LIENS.

       (a) Definition of Lien Starting Date.--In this section, the 
     term ``lien starting date'' means--
       (1) in the case of an annual crop, the date on which the 
     annual crop is planted;
       (2) in the case of a perennial crop, the starting date on 
     which the perennial crop is subject to a production contract;
       (3) in the case of livestock, the date on which the 
     livestock arrive at the contract livestock facility; and
       (4) in the case of milk or any other product of live 
     livestock, the date on which the milk or other product is 
     produced.
       (b) Liens.--In the case of a production contract that 
     provides for producing an agricultural commodity by a 
     contract producer, the contract producer shall have a lien in 
     the amount owed to the contract producer under the production 
     contract on--
       (1)(A) the agricultural commodity until the agricultural 
     commodity is sold or processed (including slaughtered) by the 
     contractor; and
       (B) the cash proceeds of the sale of the agricultural 
     commodity, including any cash provided as part of the sale; 
     and
       (2) any property of the contractor that may be subject to a 
     security interest as provided in applicable State law 
     provisions based on Article 9 of the Uniform Commercial Code.
       (c) Lien Period.--A lien for the production of an 
     agricultural commodity under this section shall apply during 
     the period--
       (1) beginning on the lien starting date; and
       (2) ending 1 year after the agricultural commodity is no 
     longer under the control of the contract producer.
       (d) Central Filing System.--The Secretary shall establish a 
     central filing system for the purposes of perfecting liens 
     under this section and providing notice of the liens to the 
     public.
       (e) Perfecting Liens.--To perfect a lien for the production 
     of an agricultural commodity under this section, a contract 
     producer shall--
       (1) not later than 45 days after the lien starting date, 
     file with the Secretary a lien statement on a form prescribed 
     by the Secretary that includes--
       (A) an estimate of the amount owed under the production 
     contract;
       (B) the lien starting date;
       (C) the estimated duration of the period during which the 
     agricultural commodity will be under the control of the 
     contract producer;
       (D) the name of the party to the production contract whose 
     agricultural commodity is produced under the production 
     contract;
       (E) a description of the location of the contract 
     operation, by State, county, and township; and
       (F) the printed name and signature of the person filing the 
     form; and
       (2) pay a filing fee in an amount determined by the 
     Secretary, not to exceed $10.00.
       (f) Priority of Lien.--A lien created under this section 
     shall be superior to, and have priority over, any conflicting 
     lien or security interest in the agricultural commodity, 
     including a lien or security interest that was perfected 
     prior to the creation of the lien under this section.
       (g) Enforcement.--
       (1) Control.--Before an agricultural commodity leaves the 
     control of a contract producer, the contract producer may 
     foreclose a lien created under this section in the manner 
     provided for the foreclosure of a secured transaction under 
     applicable State law provisions based on Article 9 of the 
     Uniform Commercial Code.
       (2) Post-control.--After an agricultural commodity leaves 
     the control of the contract producer, the contract producer 
     may enforce the lien in the manner provided under applicable 
     State law provisions based Article 9 of the Uniform 
     Commercial Code.
       (h) Election of Other Remedies.--In lieu of obtaining a 
     lien under this section, a contract producer described in 
     subsection (b) may seek to collect funds due under a 
     production contract in accordance with--
       (1) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et 
     seq.); or
       (2) the Perishable Agricultural Commodities Act, 1930 (7 
     U.S.C. 499a et seq.).

     SEC. 126. PRODUCTION CONTRACTS INVOLVING INVESTMENT 
                   REQUIREMENTS.

       (a) Applicability.--This section applies only to a 
     production contract between a contract producer and a 
     contractor if the production contract requires the contract 
     producer, together with any other production contract between 
     the same parties, to make a capital investment of $100,000 or 
     more.
       (b) Restrictions on Contract Termination.--Except as 
     provided in subsection (d), a contractor shall not terminate 
     or fail to renew a production contract until the contractor--
       (1) provides the contract producer with written notice of 
     the intention of the contractor to terminate or not renew the 
     production contract at least 90 days before the effective 
     date of the termination or nonrenewal; and
       (2) reimburses the contract producer for damages (based on 
     the value of the remaining useful life of the structures, 
     machinery, equipment, or other capital investment items) 
     incurred due to the termination, cancellation, or nonrenewal 
     of the production contract.
       (c) Breach of Investment Requirements.--
       (1) In general.--Except as provided in subsection (d), a 
     contractor shall not terminate or fail to renew a production 
     contract with a contract producer that materially breaches a 
     production contract, including the investment requirements of 
     a production contract, until--
       (A) the contractor provides the contract producer with a 
     written notice of termination or nonrenewal, including a list 
     of complaints alleging causes for the breach, at least 45 
     days before the effective date of the termination or 
     nonrenewal; and
       (B) the contract producer fails to remedy each cause of the 
     breach alleged in the list of complaints provided in the 
     notice not later than 30 days after receipt of the notice.
       (2) Civil actions.--An effort by a contract producer to 
     remedy a cause of an alleged breach shall not be considered 
     to be an admission of a breach in a civil action.

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       (d) Exceptions.--A contractor may terminate or decline to 
     renew a production contract in accordance with applicable law 
     without notice or remedy as required in subsections (b) and 
     (c) if the basis for the termination or nonrenewal is--
       (1) a voluntary abandonment of the contractual relationship 
     by the contract producer, such as a complete failure of the 
     performance of a contract producer under the production 
     contract; or
       (2) the conviction of a contract producer of an offense of 
     fraud or theft committed against the contractor.
       (e) Penalty.--If a contractor terminates or fails to renew 
     a production contract other than as provided in this section, 
     the contractor shall pay the contract producer the value of 
     the remaining useful life of the structures, machinery, 
     equipment, or other capital investment items.

     SEC. 127. PRODUCER RIGHTS.

       (a) In General.--It shall be unlawful, in or in connection 
     with any transaction in interstate or foreign commerce, for 
     any covered person or contractor to take an action to coerce, 
     intimidate, disadvantage, retaliate against, or discriminate 
     against any producer because the producer exercises, or 
     attempts to exercise, the right of the producer--
       (1)(A) to enter into a membership agreement or marketing 
     contract with an agricultural cooperative, a processor, or 
     another producer; and
       (B) to exercise contractual rights under the membership 
     agreement or marketing contract;
       (2) to lawfully provide statements or information to the 
     Secretary, a Federal or State law enforcement agency, or any 
     other entity or person regarding improper actions or 
     violations of law by a covered person or contractor under 
     this subtitle, unless the statements or information are 
     determined to be libelous or slanderous under applicable 
     State law;
       (3) to cancel a production contract in accordance with 
     section 123;
       (4) to disclose the terms of an agricultural contract under 
     section 124;
       (5) to file, continue, terminate, or enforce a lien under 
     section 125; and
       (6) to enforce other protections provided by this subtitle 
     or other Federal or State law (including regulations).
       (b) Waivers.--Any provision of an agricultural contract 
     that waives a producer's right described in subsection (a), 
     or an obligation of a covered person or contractor 
     established by this subtitle, shall be void and 
     unenforceable.
       (c) Violations.--Section 111(b) shall apply to a violation 
     of this section.

     SEC. 128. MEDIATION.

       (a) Mediation.--
       (1) In general.--An agricultural contract shall provide for 
     resolution of disputes concerning the agricultural contract 
     by mediation.
       (2) Mediation by secretary or state mediation service.--If 
     there is a dispute involving an agricultural contract, either 
     party to the agricultural contract may make a written request 
     to the Secretary for mediation services by the Secretary or 
     by a designated State mediation service to facilitate 
     resolution of the dispute.
       (3) Hearing.--The parties to the agricultural contract 
     shall receive a release from the mediation services described 
     in paragraph (2) before the dispute may be heard by a court.
       (b) No Arbitration of Future Controversy.--A provision in 
     an agricultural contract submitting to arbitration a future 
     controversy arising between a producer and a covered person 
     or contractor shall be void.

                Subtitle D--Agricultural Fair Practices

     SEC. 131. AGRICULTURAL FAIR PRACTICES.

       The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 
     et seq.) is amended to read as follows:

     ``SECTION 1. SHORT TITLE.

       ``This Act may be cited as the `Agricultural Fair Practices 
     Act of 1967'.

     ``SEC. 2. FINDINGS AND PURPOSE.

       ``(a) Findings.--Congress finds that--
       ``(1) agricultural products are produced in the United 
     States by many individual farmers and ranchers scattered 
     throughout the various States of the United States;
       ``(2) agricultural products in fresh or processed form move 
     in large part in the channels of interstate and foreign 
     commerce, and agricultural products that do not move in the 
     channels directly burden or affect interstate commerce;
       ``(3) the efficient production and marketing of 
     agricultural products by farmers and ranchers is of vital 
     concern to the welfare of farmers and ranchers and to the 
     general economy of the United States;
       ``(4) because agricultural products are produced by 
     numerous individual farmers and ranchers, the marketing and 
     bargaining position of individual farmers and ranchers will 
     be adversely affected unless farmers and ranchers are free to 
     join together voluntarily in cooperative organizations as 
     authorized by law; and
       ``(5) interference with the right described in paragraph 
     (4) is contrary to the public interest and adversely affects 
     the free and orderly flow of goods in interstate and foreign 
     commerce.
       ``(b) Purpose.--The purpose of this Act is to establish 
     standards of fair practices required of handlers for dealings 
     in agricultural products.

     ``SEC. 3. DEFINITIONS.

       ``In this Act:
       ``(1) Accredited association.--The term `accredited 
     association' means an association of producers accredited by 
     the Secretary in accordance with section 6.
       ``(2) Association of producers.--
       ``(A) In general.--The term `association of producers' 
     means an association of producers of agricultural products 
     that engages in the marketing of agricultural products or of 
     agricultural services described in paragraph (6)(B).
       ``(B) Inclusions.--The term `association of producers' 
     includes--
       ``(i) a cooperative association (as defined in section 
     15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)); 
     and
       ``(ii) an association described in the first section of the 
     Act entitled `An Act to authorize association of producers of 
     agricultural products' (commonly known as the `Capper-
     Volstead Act') (7 U.S.C. 291).
       ``(3) Bargain; bargaining.--The terms `bargain' and 
     `bargaining' refers to the performance of the mutual 
     obligation of a handler and an accredited association to meet 
     at reasonable times and for reasonable periods of time for 
     the purpose of negotiating in good faith with respect to the 
     price, terms of sale, compensation for products produced or 
     services rendered under contract, or other provisions 
     relating to the products marketed, or the services rendered, 
     by the members of the accredited association or by the 
     accredited association as agent for the members.
       ``(4) Designated handler.--The term `designated handler' 
     means a handler that is designated in accordance with section 
     6.
       ``(5) Handler.--
       ``(A) In general.--The term `handler' means any person 
     engaged in the business or practice of--
       ``(i) acquiring agricultural products from producers or 
     associations of producers for processing or sale;
       ``(ii) grading, packaging, handling, storing, or processing 
     agricultural products received from producers or associations 
     of producers;
       ``(iii) contracting or negotiating contracts or other 
     arrangements, written or oral, with or on behalf of producers 
     or associations of producers with respect to the production 
     or marketing of any agricultural product; or
       ``(iv) acting as an agent or broker for a handler in the 
     performance of any function or act described in clause (i), 
     (ii), or (iii).
       ``(B) Exclusions.--The term ``handler'' does not include--
       ``(i) any person (other than an agricultural cooperative) 
     engaged in a business or practice described in subparagraph 
     (A) if the gross revenue derived by the person from the 
     business or activity is less than $10,000,000 per year; or
       ``(ii) any agricultural cooperative engaged in a business 
     or practice described in subparagraph (A) if the gross 
     revenue derived by the person from the business or activity 
     is less than $1,000,000 per year.
       ``(6) Producer.--
       ``(A) In general.--The term `producer' means a person 
     engaged in the production of agricultural products as a 
     farmer, planter, rancher, dairyman, poultryman, or fruit, 
     vegetable, or nut grower.
       ``(B) Inclusions.--The term `producer' includes a person 
     that contributes labor, production management, facilities, or 
     other services for the production of an agricultural product.
       ``(7) Person.--The term `person' includes an individual, 
     partnership, corporation, and association.
       ``(8) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.

     ``SEC. 4. PROHIBITED PRACTICES.

       ``It shall be unlawful for any handler knowingly to, or 
     knowingly to permit any employee or agent to--
       ``(1) interfere with, restrain, or coerce any producer in 
     the exercise of the right of the producer to join and belong 
     to, or to refrain from joining or belonging to, an 
     association of producers, or to refuse to deal with any 
     producer because of the exercise of the right of the producer 
     to join and belong to the association;
       ``(2) discriminate against any producer with respect to 
     price, quantity, quality, or other terms of purchase, 
     acquisition, or other handling of an agricultural product 
     because of the membership of the producer in, or the contract 
     of the producer with, an association of producers;
       ``(3) coerce or intimidate any producer to enter into, 
     maintain, breach, cancel, or terminate a membership agreement 
     or marketing contract with an association of producers or a 
     contract with a handler;
       ``(4) pay or loan money, give any thing of value, or offer 
     any other inducement or reward to a producer for refusing to 
     or ceasing to belong to an association of producers;
       ``(5) make false reports about the finances, management, or 
     activities of an association of producers or handlers;
       ``(6) conspire, combine, agree, or arrange with any other 
     person to do, or aid or abet the performance of, any act made 
     unlawful by this Act;
       ``(7) refuse to bargain in good faith with an accredited 
     association, if the handler is a designated handler; or

[[Page 369]]

       ``(8) dominate or interfere with the formation or 
     administration of any association of producers or to 
     contribute financial or other support to an association of 
     producers.

     ``SEC. 5. BARGAINING IN GOOD FAITH.

       ``(a) Clarification of Obligation.--
       ``(1) In general.--The obligation of a designated handler 
     to bargain in good faith shall apply with respect to an 
     accredited association and the products or services for which 
     the accredited association is accredited to bargain.
       ``(2) Agreements or concessions.--The good faith bargaining 
     required between a handler and an accredited association 
     shall not require either party to agree to a proposal or to 
     make a concession.
       ``(b) Extension of Same Terms to Accredited Association.--
       ``(1) In general.--If a designated handler purchases a 
     product or service from producers under terms more favorable 
     to the producers than the terms negotiated with an accredited 
     association for the same type of product or service, the 
     handler shall offer the same terms to the accredited 
     association.
       ``(2) Violations.--Failure to extend the same terms to the 
     accredited association shall be considered to be a violation 
     of section 4(g).
       ``(3) Factors.--In comparing terms, the Secretary shall 
     consider--
       ``(A) the stipulated purchase price;
       ``(B) any bonuses, premiums, hauling, or loading 
     allowances;
       ``(C) reimbursement of expenses;
       ``(D) payment for special services of any character that 
     may be paid by the handler; and
       ``(E) any amounts paid or agreed to be paid by the handler 
     for any designated purpose other than payment of the purchase 
     price.
       ``(c) Mediation.--The Secretary may provide mediation 
     services with respect to bargaining between an accredited 
     association and a designated handler at the request of the 
     accredited association or designated handler.

     ``SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF 
                   HANDLERS.

       ``(a) Accreditation Petition.--
       ``(1) In general.--An association of producers seeking 
     accreditation to bargain on behalf of producers of an 
     agricultural product or service shall submit to the Secretary 
     a petition for accreditation.
       ``(2) Content.--The petition shall--
       ``(A) specify each agricultural product or service for 
     which the association seeks accreditation to bargain on 
     behalf of producers;
       ``(B) designate the handlers, individually, by production 
     or marketing area, or by some other appropriate general 
     classification, with whom the association seeks to be 
     accredited to bargain; and
       ``(C) contain such other information and documents as may 
     be required by the Secretary.
       ``(b) Notice of Petition; Proceedings.--
       ``(1) In general.--On receiving a petition under subsection 
     (a) and any supporting material, the Secretary shall provide 
     notice of the petition to all handlers designated in the 
     petition under subsection (a)(2)(B).
       ``(2) Individual handlers.--The Secretary shall provide 
     personal notice under this subsection to a handler that has 
     been designated individually.
       ``(3) General classifications.--The Secretary shall provide 
     notice through the Federal Register to handlers that have 
     been designated by production or marketing area or by some 
     other general classification.
       ``(4) Opportunity to respond.--The association of producers 
     seeking accreditation and the handlers shall have an 
     opportunity to submit written evidence, views, and arguments 
     to the Secretary.
       ``(5) Proceedings.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the Secretary may conduct an informal proceeding on the 
     petition.
       ``(B) Formal hearings.--The Secretary shall hold a formal 
     hearing for the reception of testimony and evidence if the 
     Secretary finds that there are substantial unresolved issues 
     of material fact.
       ``(c) Issuance of Accreditation Order.--On the petition of 
     an association of producers, the Secretary may issue an order 
     designating the association of producers as an accredited 
     association for the purposes of this Act if the Secretary 
     determines that--
       ``(1) under the charter documents or bylaws of the 
     association, the accredited association is owned and 
     controlled by producers;
       ``(2) the association has contracts, binding under State 
     law, with the members of the association empowering the 
     association to sell or negotiate terms of sale of the 
     products or services of the members;
       ``(3) the association represents a sufficient number of 
     producers, or the members of the association produce a 
     sufficient quantity of agricultural products or render a 
     sufficient level of services, to enable the association to 
     function as an effective agent for producers in bargaining 
     with designated handlers;
       ``(4) the functions of the association include acting as 
     principal or agent for the members of the association in 
     negotiations with handlers for prices and other terms of 
     trade with respect to the production, sale, and marketing of 
     products or services of the members; and
       ``(5) the association is acting in good faith with respect 
     to the members of the association and is complying with this 
     Act.
       ``(d) Notification of Accreditation Order.--
       ``(1) In general.--The Secretary shall notify the 
     petitioning association of producers, and each handler to be 
     designated as part of the petition, of the decision of the 
     Secretary regarding the petition and provide a concise 
     statement of the basis for the decision.
       ``(2) Other associations.--The Secretary shall provide 
     notice of an accreditation of an association to all other 
     associations that have been accredited to bargain with 
     respect to the product or service with any of the designated 
     handlers of the association.
       ``(e) Annual Report.--Each accredited association shall 
     submit to the Secretary an annual report in such form and 
     including such information as the Secretary by regulation may 
     require to enable the Secretary to determine whether the 
     association is meeting the standards for accreditation.
       ``(f) Loss of Accreditation.--
       ``(1) In general.--If the Secretary determines that an 
     accredited association has ceased to meet the standards for 
     accreditation under subsection (c), the Secretary shall--
       ``(A) notify the association of the manner in which the 
     association is deficient in maintaining the standards for 
     accreditation; and
       ``(B) allow the association a reasonable period of time to 
     answer or correct the deficiencies.
       ``(2) Hearing.--After providing notice and a corrective 
     period in accordance with paragraph (1), if the Secretary is 
     not satisfied that the association is in compliance with 
     subsection (c), the Secretary shall--
       ``(A) notify the association of the continued deficiencies; 
     and
       ``(B) hold a hearing to consider the revocation of 
     accreditation.
       ``(3) Revocation.--If, based on the evidence submitted at 
     the hearing, the Secretary finds that the association has 
     ceased to maintain the standards for accreditation, the 
     Secretary shall revoke the accreditation of the association.
       ``(g) Amendment.--
       ``(1) In general.--At the option of the Secretary or on the 
     petition of an accredited association or a designated 
     handler, the Secretary may amend an accreditation order with 
     respect to the product or service specified in the 
     accreditation order.
       ``(2) Notice.--The Secretary shall provide--
       ``(A) notice of any proposed amendment and the reasons for 
     the amendment to all accredited associations and handlers 
     that would be directly affected by the amendment; and
       ``(B) an opportunity for a public hearing.
       ``(3) Authority.--After providing notice and an opportunity 
     for a hearing in accordance with paragraph (2), the Secretary 
     may amend the accreditation order if the Secretary finds that 
     the amendment will be conducive to more effective bargaining 
     and orderly marketing by the accredited association of the 
     product or services of the members of the accredited 
     association.

     ``SEC. 7. ASSIGNMENT OF ASSOCIATION DUES AND FEES.

       ``(a) In General.--A producer of an agricultural product or 
     service may execute, as a clause in a sales contract or in 
     another written instrument, an assignment of dues or fees to, 
     or the deduction of a sum to be retained by, an association 
     of producers authorized by contract to represent the 
     producer, under which assignment a handler shall--
       ``(1) deduct a portion of the amount to be paid for 
     products or services of the producer under a growing 
     contract; and
       ``(2) pay, on behalf of the producer, the portion over to 
     the association as dues or fees or a sum to be retained by 
     the association.
       ``(b) Duty of Handler.--After a handler receives notice 
     from a producer of an assignment under subsection (a), the 
     handler shall--
       ``(1) deduct the amount authorized by the assignment from 
     the amount paid for any agricultural product sold by the 
     producer or for any service rendered under any growing 
     contract; and
       ``(2) on payment to producers for the product or service, 
     pay the amount over to the association or the assignee of the 
     association.

     ``SEC. 8. POWERS OF SECRETARY.

       ``(a) Records and Information.--
       ``(1) Maintenance.--The Secretary may require any person 
     covered by this Act to establish and maintain such records, 
     make such reports, and provide such other information as the 
     Secretary may reasonably require to carry out this Act.
       ``(2) Access.--The Secretary and any officer or employee of 
     the Department of Agriculture, on presentation of credentials 
     and a warrant or such other order of a court--
       ``(A) shall have a right of entry to, on, or through any 
     premises in which records required to be maintained under 
     paragraph (1) are located; and
       ``(B) may at reasonable times have access to and copy any 
     records that any person is required to maintain or that 
     relate to any matter under this Act under investigation or in 
     question.

[[Page 370]]

       ``(b) Complaints.--If the Secretary has reason to believe 
     (whether through investigation or petition by any person) 
     that any person has violated this Act, the Secretary shall 
     cause a complaint to be served on the person--
       ``(1) stating the reasons for the alleged violation of this 
     Act; and
       ``(2) requiring the person to attend and testify at a 
     hearing to be held not earlier than 30 days after the date of 
     service of the complaint.
       ``(c) Hearing.--
       ``(1) In general.--The Secretary may hold hearings, sign 
     and issue subpoenas, administer oaths, examine witnesses, 
     receive evidence, and require the attendance and testimony of 
     witnesses and the production of such accounts, records, and 
     memoranda, as the Secretary considers necessary to determine 
     whether a violation of this Act has occurred.
       ``(2) Right to hearing.--A person may request a hearing if 
     the person is subject to a penalty under this Act.
       ``(3) Respondents' rights.--During a hearing, the person 
     complained of shall be given, in accordance with regulations 
     promulgated by the Secretary, the opportunity--
       ``(A) to be informed of the evidence against the person;
       ``(B) to cross-examine witnesses; and
       ``(C) to present evidence.
       ``(4) Hearing limitation.--The issues at any hearing held 
     or requested under this section shall be limited in scope to 
     matters directly related to the purpose for which the hearing 
     was held or requested.
       ``(d) Report of Finding and Penalties.--
       ``(1) In general.--If, after a hearing, the Secretary finds 
     that a person has violated this Act, the Secretary shall 
     make, and provide to the person, a written report that states 
     the findings of fact and includes an order requiring the 
     person to cease and desist from committing the violation.
       ``(2) Civil penalty.--The Secretary may assess a civil 
     penalty not to exceed $100,000 for each violation of this 
     Act.
       ``(e) Injunctions; Finality and Appealability of an 
     Order.--
       ``(1) Injunctions.--At any time after a complaint is served 
     on a person under subsection (b), the court, on application 
     of the Secretary, may issue an injunction, restraining to the 
     extent the court determines to be appropriate, the person and 
     the officers, directors, agents, and employees of the person 
     from violating this Act.
       ``(2) Appealability of an order.--An order issued under 
     this section shall be final and conclusive unless, within 30 
     days after service of the order, the affected handler 
     petitions to appeal the order to the United States court of 
     appeals for the circuit in which the handler resides or has 
     its principal place of business or the United States Court of 
     Appeals for the District of Columbia Circuit.
       ``(3) Delivery of petition.--
       ``(A) In general.--The clerk of the court shall immediately 
     cause a copy of any petition filed under paragraph (2) to be 
     delivered to the Secretary.
       ``(B) Record.--On receipt of the petition, the Secretary 
     shall file in the court the record of the proceedings under 
     this section.
       ``(4) Penalty for failure to obey an order.--
       ``(A) In general.--Any person that fails to obey an order 
     of the Secretary issued under this section after the order 
     becomes final shall be fined not less than $5,000 and not 
     more than $100,000 for each offense.
       ``(B) Separate offenses.--Each day during which the failure 
     continues shall be considered to be a separate offense.

     ``SEC. 9. ENFORCEMENT.

       ``(a) Civil Actions by Aggrieved Persons.--
       ``(1) Preventive relief.--Whenever any handler has engaged 
     or there are reasonable grounds to believe that any handler 
     is about to engage in any act or practice prohibited by this 
     Act, a civil action for preventive relief, including an 
     application for a permanent or temporary injunction, 
     restraining order, or other order, may be instituted by the 
     person aggrieved.
       ``(2) Attorney's fees.--In any action commenced under 
     paragraph (1), the court may allow the prevailing party a 
     reasonable attorney's fee as part of the costs.
       ``(3) Security.--The court may provide that no restraining 
     order or preliminary injunction shall issue unless security 
     is provided by the applicant, in such sum as the court 
     determines to be appropriate, for the payment of such costs 
     and damages as may be incurred or suffered by any party that 
     is found to have been wrongfully enjoined or restrained.
       ``(b) Civil Actions by Injured Persons.--
       ``(1) In general.--Any person injured in the business or 
     property of the person by reason of any violation of, or 
     combination or conspiracy to violate, this Act may--
       ``(A) sue for the violation in the appropriate United 
     States district court without respect to the amount in 
     controversy; and
       ``(B) recover damages sustained.
       ``(2) Attorney's fees.--In any action commenced under 
     paragraph (1), the court may allow the prevailing party a 
     reasonable attorney's fee as part of the costs.
       ``(3) Limitation on actions.--Any action to enforce any 
     cause of action under this subsection shall be barred unless 
     commenced within 2 years after the cause of action occurred.
       ``(c) Jurisdiction of District Courts.--
       ``(1) In general.--A United States district court shall 
     have jurisdiction over an action brought under this section.
       ``(2) Limitations.--No action may be commenced under 
     subsection (a) or (b)--
       ``(A) prior to 60 days after the plaintiff has given notice 
     of the alleged violation to the Secretary through a petition 
     under section 8(b); or
       ``(B) if the Secretary has commenced and is diligently 
     prosecuting an action (administrative or judicial) dealing 
     with the same violation to require compliance with the Act.
       ``(d) Judicial Review.--An order of the Secretary with 
     respect to which review could have been obtained under 
     section 8(e)(2) shall not be subject to judicial review in 
     any proceeding for enforcement under this section.

     ``SEC. 10. PREEMPTION.

       ``(a) In General.--Except as expressly provided in this 
     Act, this Act does not invalidate the provisions of any State 
     law dealing with the same subject as this Act.
       ``(b) State Courts.--This Act shall not deprive a State 
     court of jurisdiction under a State law dealing with the same 
     subject as this Act.''.

                       Subtitle E--Implementation

     SEC. 141. RELATIONSHIP TO STATE LAW.

       (a) In General.--Except as expressly provided in this 
     title, this title does not invalidate any provision of State 
     law dealing with the same subject as this title.
       (b) State Courts.--This title does not deprive a State 
     court of jurisdiction under a State law dealing with the same 
     subject as this title.

     SEC. 142. REGULATIONS.

       The Secretary shall promulgate such regulations as are 
     appropriate to carry out this title and the amendments made 
     by this title.

     SEC. 143. IMPLEMENTATION PLAN.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary and the Attorney General shall develop and 
     implement a plan to enable the Secretary, where appropriate, 
     to file civil actions, including temporary injunctions, to 
     enforce orders issued by the Secretary under this title and 
     the Agricultural Fair Practices Act of 1967 (as amended by 
     section 131).

     SEC. 144. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     title and the amendments made by this title take effect on 
     the date of enactment of this Act.
       (b) Agricultural Contracts.--
       (1) In general.--Except as provided in paragraph (2), 
     subtitle C applies to an agricultural contract in force on or 
     after the date of enactment of this Act, regardless of the 
     date on which the agricultural contract is executed.
       (2) Exceptions.--Sections 122, 123, 126, 127(a)(5), and 
     128(a) shall apply only to an agricultural contract that is 
     executed or substantively amended after the date of enactment 
     of this Act.
     TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND

     SEC. 201. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY 
                   FUND.

       The Consolidated Farm and Rural Development Act (7 U.S.C. 
     1921 et seq.) is amended by adding at the end the following:
   ``Subtitle F--National Rural Cooperative and Business Equity Fund

     ``SEC. 391A. SHORT TITLE.

       ``This subtitle may be cited as the `National Rural 
     Cooperative and Business Equity Fund Act'.

     ``SEC. 391B. PURPOSE.

       ``The purpose of this subtitle is to revitalize rural 
     communities and enhance farm income through sustainable rural 
     business development by providing Federal funds and credit 
     enhancements to a private equity fund in order to encourage 
     investments by institutional and noninstitutional investors 
     for the benefit of rural America.

     ``SEC. 391C. DEFINITIONS.

       ``In this subtitle:
       ``(1) Authorized private investor.--The term `authorized 
     private investor' means an individual, legal entity, or 
     affiliate or subsidiary of an individual or legal entity 
     that--
       ``(A) is eligible to receive a loan guarantee under this 
     title;
       ``(B) is eligible to receive a loan guarantee under the 
     Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.);
       ``(C) is created under the National Consumer Cooperative 
     Bank Act (12 U.S.C. 3011 et seq.);
       ``(D) is an insured depository institution; or
       ``(E) is determined by the Fund to be an appropriate 
     investor in the Fund.
       ``(2) Board.--The term `Board' means the board of directors 
     of the Fund established under section 391G.
       ``(3) Fund.--The term `Fund' means the National Rural 
     Cooperative and Business Equity Fund established under 
     section 391D.
       ``(4) Group of similar investors.--The term `group of 
     similar investors' means any 1 of the following:
       ``(A) Insured depository institutions with total assets of 
     more than $250,000,000.

[[Page 371]]

       ``(B) Insured depository institutions with total assets 
     equal to or less than $250,000,000.
       ``(C) Farm Credit System institutions under the Farm Credit 
     Act of 1971 (12 U.S.C. 2001 et seq.).
       ``(D) Cooperative financial institutions (other than Farm 
     Credit System institutions).
       ``(E) Authorized private investors, other than those 
     described in subparagraphs (A) through (D).
       ``(F) Other nonprofit organizations, including credit 
     unions.
       ``(5) Insured depository institution.--The term `insured 
     depository institution' means any bank or savings association 
     the deposits of which are insured under the Federal Deposit 
     Insurance Act (12 U.S.C. 1811 et seq.).
       ``(6) Rural area.--The term `rural area' means an area that 
     is located--
       ``(A) outside a standard metropolitan statistical area; or
       ``(B) within a community that has a population of 50,000 
     individuals or fewer.
       ``(7) Rural business.--The term `rural business' means a 
     rural cooperative, a value-added agricultural enterprise, or 
     any other business located or locating in a rural area.

     ``SEC. 391D. ESTABLISHMENT OF THE FUND.

       ``(a) In General.--
       ``(1) Authority to establish.--A group of authorized 
     private investors may establish, as a non-Federal entity 
     under State law, and manage a fund to be known as the 
     `National Rural Cooperative and Business Equity Fund', to 
     raise and provide equity capital to rural businesses.
       ``(2) Composition of group.--The group of authorized 
     private investors referred to in paragraph (1) shall be 
     composed, to the maximum extent practicable, of 
     representatives of a majority of groups of similar investors.
       ``(b) Purposes.--The purposes of the Fund shall be--
       ``(1) to strengthen the economy of rural areas;
       ``(2) to further sustainable rural business development;
       ``(3) to encourage start-up rural businesses, increased 
     opportunities for small and minority-owned rural businesses, 
     and the formation of new rural businesses;
       ``(4) to enhance rural employment opportunities;
       ``(5) to provide equity capital to rural businesses that 
     have been unable to obtain equity capital; and
       ``(6) to leverage non-Federal funds for rural businesses.
       ``(c) Articles of Incorporation and By-Laws.--The articles 
     of incorporation and by-laws of the Fund shall set forth 
     purposes of the Fund that are consistent with subsection (b).

     ``SEC. 391E. INVESTMENT IN THE FUND.

       ``(a) In General.--The Secretary, using funds of the 
     Commodity Credit Corporation, shall--
       ``(1) subject to subsection (b)(1), make available to the 
     Fund $50,000,000 for each of fiscal years 2001 through 2003;
       ``(2) subject to subsection (c), guarantee 50 percent of 
     each investment made by an authorized private investor in the 
     Fund; and
       ``(3) subject to subsection (d), guarantee the repayment of 
     principal to authorized private investors in debentures 
     issued by the Fund.
       ``(b) Private Investment.--
       ``(1) Matching requirement.--Under subsection (a)(1), the 
     Secretary shall make an amount available to the Fund only 
     after an equal amount has been invested in the Fund by 
     authorized private investors in accordance with this subtitle 
     and the terms and conditions set forth in the by-laws of the 
     Fund.
       ``(2) Investments by insured depository institutions.--
     Investments in the Fund by an insured depository institution 
     shall be considered part of the record of the insured 
     depository institution for meeting the credit needs of its 
     entire community for the purposes of Federal law.
       ``(c) Guarantee of Private Investments.--
       ``(1) In general.--The Secretary shall guarantee, under 
     terms and conditions determined by the Secretary, 50 percent 
     of any loss of the principal of an investment made in the 
     Fund by an authorized private investor.
       ``(2) Maximum total guarantee.--The aggregate liability of 
     the Secretary with respect to all guarantees under paragraph 
     (1) shall not apply to more than $300,000,000 in private 
     investments.
       ``(3) Redemption of guarantee.--
       ``(A) Date.--An authorized private investor in the Fund may 
     redeem a guarantee under paragraph (1), with respect to the 
     total investments in the Fund and the total losses of the 
     authorized private investor as of the date of redemption--
       ``(i) on the date that is 5 years after the date of 
     incorporation of the Fund; or
       ``(ii) annually thereafter.
       ``(B) Effect of redemption.--On redemption of a guarantee 
     under subparagraph (A)--
       ``(i) the shares in the Fund of the authorized private 
     investor shall be redeemed; and
       ``(ii) the authorized private investor shall be prohibited 
     from making any future investment in the Fund.
       ``(d) Debt.--
       ``(1) In general.--The Fund may, at the discretion of the 
     Board, raise additional capital through the issuance of 
     debentures and through other means determined to be 
     appropriate by the Board.
       ``(2) Guarantee of debt by secretary.--
       ``(A) In general.--The Secretary may guarantee 100 percent 
     of the principal of, and accrued interest on, debentures 
     issued by the Fund that are approved by the Secretary.
       ``(B) Maximum debt guaranteed by secretary.--The 
     outstanding value of debentures issued by the Fund and 
     guaranteed by the Secretary shall not exceed the lesser of--
       ``(i) the amount equal to twice the value of the assets 
     held by the Fund; or
       ``(ii) $500,000,000.
       ``(C) Recapture of guarantee payments.--If the Secretary 
     makes a payment on a debenture issued by the Fund as a result 
     of a guarantee of the Secretary under this paragraph, the 
     Secretary shall have priority over other creditors for 
     repayment of the debenture.
       ``(3) Authorized private investors.--An authorized private 
     investor may purchase debentures and other securities issued 
     by the Fund.

     ``SEC. 391F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.

       ``(a) Investments.--
       ``(1) In general.--
       ``(A) Types.--Subject to subparagraphs (B) and (C), the 
     Fund may--
       ``(i) make equity investments in an entity that meets the 
     requirements of paragraph (6) and such other requirements as 
     the Board may establish; and
       ``(ii) extend credit to such an entity in--

       ``(I) the form of mezzanine debt or subordinated debt; or
       ``(II) any other form of quasi-equity.

       ``(B) Limitation on equity investments.--After the initial 
     equity investment in an entity described in subparagraph 
     (A)(i), the Fund may not make additional equity investments 
     in the entity if the additional equity investments would 
     result in the Fund owning more than 30 percent of the equity 
     of the entity.
       ``(C) Limitation on nonequity investments.--Except in the 
     case of a project to assist a rural cooperative, the total 
     amount of nonequity investments described in subparagraph 
     (A)(ii) that may be provided by the Fund shall not exceed 20 
     percent of the total investments of the Fund in the project.
       ``(2) Procedures.--The Fund shall implement procedures to 
     ensure that--
       ``(A) the financing arrangements of the Fund meet the 
     Fund's primary focus of providing equity capital; and
       ``(B) the Fund does not compete with conventional sources 
     of credit.
       ``(3) Diversity of projects.--The Fund--
       ``(A) shall seek to make equity investments in a variety of 
     viable projects, with a significant share of investments--
       ``(i) in smaller projects in rural communities of diverse 
     sizes; and
       ``(ii) in cooperative and noncooperative enterprises; and
       ``(B) shall be managed in such a way as to diversify the 
     risks to the Fund among a variety of projects.
       ``(4) Limitation on rural businesses assisted.--The Fund 
     shall not invest in any rural business that is primarily 
     retail in nature (as determined by the Board), other than a 
     purchasing cooperative.
       ``(5) Interest rate limitations.--Returns on investments in 
     and by the Fund and returns on the extension of credit by 
     participants in projects assisted by the Fund, shall not be 
     subject to any State or Federal law establishing a maximum 
     allowable interest rate.
       ``(6) Requirements for recipients.--
       ``(A) Other investments.--Any recipient of amounts from the 
     Fund shall make or obtain a significant investment from a 
     source of capital other than the Fund.
       ``(B) Sponsorship.--Rural business investment projects to 
     be considered for an equity investment from the Fund shall be 
     sponsored by a regional, State, or local sponsoring or 
     endorsing organization such as--
       ``(i) a financial institution;
       ``(ii) a development organization; or
       ``(iii) any other established entity engaging or assisting 
     in rural business development, including a rural cooperative.
       ``(b) Technical Assistance.--The Board shall use not less 
     than 1 percent of the net earnings of the Fund to provide 
     technical assistance to rural businesses seeking an equity 
     investment from the Fund.
       ``(c) Annual Audit.--
       ``(1) In general.--The Board shall authorize an annual 
     audit of the financial statements of the Fund by a nationally 
     recognized auditing firm using generally accepted auditing 
     procedures.
       ``(2) Availability of audit results.--The results of the 
     audit required by paragraph (1) shall be made available to 
     investors in the Fund.
       ``(d) Annual Report.--The Board shall prepare and make 
     available to the public an annual report that--
       ``(1) describes the projects funded with amounts from the 
     Fund;
       ``(2) specifies the recipients of amounts from the Fund;
       ``(3) specifies the co-investors in all projects that 
     receive amounts from the Fund; and

[[Page 372]]

       ``(4) meets the reporting requirements, if any, of the 
     State under the law of which the Fund is established.
       ``(e) Other Authorities.--The Board may exercise such other 
     authorities as are necessary to carry out this subtitle.

     ``SEC. 391G. GOVERNANCE OF THE FUND.

       ``(a) In General.--The Fund shall be governed by a board of 
     directors that represents all of the authorized private 
     investors in the Fund and the Federal Government and that 
     consists of--
       ``(1) the Secretary or a designee;
       ``(2) 2 members who are appointed by the Secretary and are 
     not Federal employees, including--
       ``(A) 1 member with expertise in venture capital 
     investment; and
       ``(B) 1 member with expertise in cooperative development;
       ``(3) 8 members who are elected by the authorized private 
     investors with investments in the Fund; and
       ``(4) 1 member who is appointed by the Board and who is a 
     community banker from an insured depository institution with 
     total assets equal to or less than $250,000,000.
       ``(b) Limitation on Voting Control.--No individual investor 
     or group of similar investors may control more than 25 
     percent of the votes on the Board.''.
                 TITLE III--COUNTRY OF ORIGIN LABELING

     SEC. 301. COUNTRY OF ORIGIN LABELING.

       The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et 
     seq.) is amended by adding at the end the following:
                ``Subtitle C--Country of Origin Labeling

     ``SEC. 271. DEFINITIONS.

       ``In this subtitle:
       ``(1) Beef.--The term `beef' means meat produced from 
     cattle (including veal).
       ``(2) Covered commodity.--The term `covered commodity' 
     means--
       ``(A) muscle cuts of beef, lamb, and pork;
       ``(B) ground beef, ground lamb, and ground pork; and
       ``(C) a perishable agricultural commodity.
       ``(3) Food service establishment.--The term `food service 
     establishment' means a restaurant, cafeteria, lunch room, 
     food stand, saloon, tavern, bar, lounge, or other similar 
     facility operated as an enterprise engaged in the business of 
     selling food to the public.
       ``(4) Lamb.--The term `lamb' means meat, other than mutton, 
     produced from sheep.
       ``(5) Packer.--The term `packer' has the meaning given the 
     term in section 201 of the Packers and Stockyards Act, 1921 
     (7 U.S.C. 191).
       ``(6) Perishable agricultural commodity; retailer.--The 
     terms `perishable agricultural commodity' and `retailer' have 
     the meanings given the terms in section 1(b) of the 
     Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 
     499a(b)).
       ``(7) Pork.--The term `pork' means meat produced from hogs.
       ``(8) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture, acting through the Agricultural Marketing 
     Service.

     ``SEC. 272. NOTICE OF COUNTRY OF ORIGIN.

       ``(a) In General.--
       ``(1) Requirement.--Except as provided in subsection (b), a 
     retailer of a covered commodity shall inform consumers, at 
     the final point of sale of the covered commodity to 
     consumers, of the country of origin of the covered commodity.
       ``(2) United states country of origin.--A retailer of a 
     covered commodity (other than a perishable agricultural 
     commodity) may designate the covered commodity as having a 
     United States country of origin only if the covered commodity 
     is exclusively from an animal that is exclusively born, 
     raised, and slaughtered in the United States.
       ``(b) Exemption for Food Service Establishments.--
     Subsection (a) shall not apply to a covered commodity if the 
     covered commodity is--
       ``(1) prepared or served in a food service establishment; 
     and
       ``(2)(A) offered for sale or sold at the food service 
     establishment in normal retail quantities; or
       ``(B) served to consumers at the food service 
     establishment.
       ``(c) Method of Notification.--
       ``(1) In general.--The information required by subsection 
     (a) may be provided to consumers by means of a label, stamp, 
     mark, placard, or other clear and visible sign on the covered 
     commodity or on the package, display, holding unit, or bin 
     containing the commodity at the final point of sale to 
     consumers.
       ``(2) Labeled commodities.--If the covered commodity is 
     already individually labeled for retail sale regarding 
     country of origin by the packer, importer, or another person, 
     the retailer shall not be required to provide any additional 
     information to comply with this section.
       ``(d) Audit Verification System.--The Secretary may require 
     by regulation that any person that prepares, stores, handles, 
     or distributes a covered commodity for retail sale maintain a 
     verifiable recordkeeping audit trail that will permit the 
     Secretary to ensure compliance with the regulations 
     promulgated under section 274.
       ``(e) Information.--A packer and any other person engaged 
     in the business of supplying a covered commodity to a 
     retailer shall provide information to the retailer indicating 
     the country of origin of the covered commodity.

     ``SEC. 273. ENFORCEMENT.

       ``Section 253 shall apply to a violation of this subtitle.

     ``SEC. 274. REGULATIONS.

       ``(a) In General.--The Secretary shall promulgate such 
     regulations as are necessary to carry out this subtitle.
       ``(b) Partnerships With States.--In promulgating the 
     regulations, the Secretary shall, to the maximum extent 
     practicable, enter into partnerships with States with 
     enforcement infrastructure to carry out this subtitle.

     ``SEC. 275. APPLICATION.

       ``This subtitle shall apply to the retail sale of a covered 
     commodity beginning on the date that is 180 days after the 
     date of the enactment of this subtitle.''.
         TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION

     SEC. 401. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

       Section 132 of the Agricultural Market Transition Act (7 
     U.S.C. 7232) is amended to read as follows:

     ``SEC. 132. LOAN RATES FOR MARKETING ASSISTANCE LOANS.

       ``(a) Wheat.--The loan rate for a marketing assistance loan 
     under section 131 for wheat shall be based on 80 percent of 
     the average full economic cost of production per bushel 
     (based on yield per planted acre), as determined by the 
     Secretary, for the immediately preceding 3 crops of wheat.
       ``(b) Feed Grains.--
       ``(1) Corn.--The loan rate for a marketing assistance loan 
     under section 131 for corn shall be based on 80 percent of 
     the average full economic cost of production per bushel 
     (based on yield per planted acre), as determined by the 
     Secretary, for the immediately preceding 3 crops of corn.
       ``(2) Other feed grains.--
       ``(A) In general.--Subject to subparagraph (B), the loan 
     rate for a marketing assistance loan under section 131 for 
     grain sorghum, barley, and oats, individually, shall be 
     established at such level as the Secretary determines is fair 
     and reasonable in relation to the rate that loans are made 
     available for corn, taking into consideration the feeding 
     value of the commodity in relation to corn.
       ``(B) Basis.--The loan rate for a marketing assistance loan 
     under section 131 for grain sorghum, barley, and oats, 
     individually, shall be based on 80 percent of the average 
     full economic cost of production per bushel (based on yield 
     per planted acre), as determined by the Secretary, for the 
     immediately preceding 3 crops of grain sorghum, barley, and 
     oats, respectively.
       ``(c) Upland Cotton.--The loan rate for a marketing 
     assistance loan under section 131 for upland cotton shall be 
     based on 80 percent of the average full economic cost of 
     production per bushel (based on yield per planted acre), as 
     determined by the Secretary, for the immediately preceding 3 
     crops of upland cotton.
       ``(d) Extra Long Staple Cotton.--The loan rate for a 
     marketing assistance loan under section 131 for extra long 
     staple cotton shall be based on 80 percent of the average 
     full economic cost of production per bushel (based on yield 
     per planted acre), as determined by the Secretary, for the 
     immediately preceding 3 crops of extra long staple cotton.
       ``(e) Rice.--The loan rate for a marketing assistance loan 
     under section 131 for rice shall be based on 80 percent of 
     the average full economic cost of production per bushel 
     (based on yield per planted acre), as determined by the 
     Secretary, for the immediately preceding 3 crops of rice.
       ``(f) Oilseeds.--
       ``(1) Soybeans.--The loan rate for a marketing assistance 
     loan under section 131 for soybeans shall be based on 80 
     percent of the average full economic cost of production per 
     bushel (based on yield per planted acre), as determined by 
     the Secretary, for the immediately preceding 3 crops of 
     soybeans.
       ``(2) Sunflower seed, canola, rapeseed, safflower, mustard 
     seed, and flaxseed.--The loan rate for a marketing assistance 
     loan under section 131 for sunflower seed, canola, rapeseed, 
     safflower, mustard seed, and flaxseed, individually, shall be 
     based on 80 percent of the average full economic cost of 
     production per bushel (based on yield per planted acre), as 
     determined by the Secretary, for the immediately preceding 3 
     crops of sunflower seed, canola, rapeseed, safflower, mustard 
     seed, and flaxseed, respectively.
       ``(3) Other oilseeds.--The loan rates for a marketing 
     assistance loan under section 131 for other oilseeds shall be 
     established at such level as the Secretary determines is fair 
     and reasonable in relation to the loan rate available for 
     soybeans, except in no event shall the rate for the oilseeds 
     (other than cottonseed) be less than the rate established for 
     soybeans on a per-pound basis for the same crop.''.

     SEC. 402. TERM OF LOANS.

       Section 133 of the Agriculture Market Transition Act (7 
     U.S.C. 7233) is amended to read as follows:

     ``SEC. 133. TERM OF LOANS.

       ``(a) Term of Loan.--In the case of each loan commodity, a 
     marketing assistance

[[Page 373]]

     loan under section 131 shall have a term of 20 months 
     beginning on the first day of the first month after the month 
     in which the loan is made.
       ``(b) Extensions Authorized.--The Secretary may extend the 
     term of a marketing assistance loan for any loan 
     commodity.''.

     SEC. 403. APPLICATION.

       This title and the amendments made by this title shall 
     apply to each of the 2001 and 2002 crops of a loan commodity 
     (as defined in section 102 of the Agricultural Market 
     Transition Act (7 U.S.C. 7202).
                      TITLE V--FARMLAND PROTECTION

     SEC. 501. FARMLAND PROTECTION PROGRAM.

       Section 388 of the Federal Agriculture Improvement and 
     Reform Act of 1996 (16 U.S.C. 3830 note; Public Law 104-127) 
     is amended to read as follows:

     ``SEC. 388. FARMLAND PROTECTION PROGRAM.

       ``(a) Definition of Eligible Entity.--In this section, the 
     term `eligible entity' means--
       ``(1) any agency of any State or local government, or 
     federally recognized Indian tribe; and
       ``(2) any organization that--
       ``(A) is organized for, and at all times since its 
     formation has been operated principally for, 1 or more of the 
     conservation purposes specified in clause (i), (ii), or (iii) 
     of section 170(h)(4)(A) of the Internal Revenue Code of 1986;
       ``(B) is an organization described in section 501(c)(3) of 
     the Code that is exempt from taxation under section 501(a) of 
     the Code; and
       ``(C)(i) is described in section 509(a)(2) of the Code of; 
     or
       ``(ii) is described in section 509(a)(3) of the Code and is 
     controlled by an organization described in section 509(a)(2) 
     of the Code.
       ``(b) Authority.--The Secretary of Agriculture shall 
     establish and carry out a farmland protection program under 
     which the Secretary shall provide grants to eligible 
     entities, to provide the Federal share of the cost of 
     purchasing conservation easements or other interests in land 
     with prime, unique, or other productive soil for the purpose 
     of protecting topsoil by limiting nonagricultural uses of the 
     land.
       ``(c) Federal Share.--The Federal share of the cost of 
     purchasing a conservation easement or other interest 
     described in subsection (b) shall be not more than 50 
     percent.
       ``(d) Title; Enforcement.--Title to a conservation easement 
     or other interest described in subsection (b) may be held, 
     and the conservation requirements of the easement or interest 
     enforced, by any eligible entity.
       ``(e) State Certification.--The attorney general of the 
     State in which land is located shall take such actions as are 
     necessary to ensure that a conservation easement or other 
     interest under this section is in a form that is sufficient 
     to achieve the conservation purpose of the farmland 
     protection program established under this section, the law of 
     the State, and the terms and conditions of any grant made by 
     the Secretary under this section.
       ``(f) Conservation Plan.--Any land for which a conservation 
     easement or other interest is purchased under this section 
     shall be subject to the requirements of a conservation plan 
     to the extent that the plan does not negate or adversely 
     affect the restrictions contained in any easement.
       ``(g) Technical Assistance.--The Secretary may use not more 
     than 10 percent of the amount that is made available for a 
     fiscal year under subsection (h) to provide technical 
     assistance to carry out this section.
       ``(h) Funding.--For each fiscal year, the Secretary shall 
     use not more than $250,000,000 of the funds of the Commodity 
     Credit Corporation to carry out this section.''.
                         TITLE VI--CIVIL RIGHTS

     SEC. 601. SENSE OF CONGRESS ON PARTICIPATION OF SOCIALLY 
                   DISADVANTAGED GROUPS IN DEPARTMENT OF 
                   AGRICULTURE PROGRAMS.

       It is the sense of Congress that the Secretary of 
     Agriculture should take such actions as are necessary to 
     ensure, to the maximum extent practicable, that members of 
     socially disadvantaged groups (as defined in section 355(e) 
     of the Consolidated Farm and Rural Development Act (7 U.S.C. 
     2003(e))--
       (1) are informed of the eligibility requirements to 
     participate in programs of the Department of Agriculture; and
       (2) receive technical support and assistance from the 
     Department to participate in the programs.

  Mr. HARKIN. I am pleased to cosponsor this legislation introduced by 
the Democratic leader, Senator Daschle. The bill contains a number of 
important features that constitute a strong start for our work toward a 
new farm bill.
  In particular, I want to call attention to the provisions in this 
bill that will address directly the rapid changes occurring in the 
structure of our food and agriculture industry and the impact those 
changes are having on America's farm and ranch families and rural 
communities. This bill will give USDA new authority to deal with 
economic concentration and consolidation in agriculture: to prevent 
mergers and acquisitions that damage farmers and rural communities and 
to prevent and take enforcement action against anti-competitive and 
unfair practices in dealings by agribusinesses with farmers.
  The legislation also incorporates legislation I introduced in the 
previous Congress to establish new protections for agricultural 
producers who are involved in contracting arrangements with 
agribusiness processors and to establish new protections that will 
enhance the ability of agricultural producers to form associations to 
bargain effectively with processors and buyers of agricultural 
products.
  I am also pleased that this bill incorporates my legislation to 
create a new fund that will spur new equity capital investment in rural 
areas. The legislation has the support of a wide range of the key 
interested parties in providing and boosting financing and business 
investment in rural America. Clearly, if rural America is to grow, and 
if agricultural producers are to develop new value-added businesses, 
there will have to be increased levels of equity capital investment in 
agricultural processing and other businesses. This bill will go a long 
way in putting more investment capital into rural communities.
  This bill also makes a strong start toward improving the shortcomings 
of the commodity program provisions of the current farm bill. We have 
all observed the critical need for emergency assistance packages to 
shore up the Freedom to Farm bill over the past several years. But our 
farm families and rural communities need a predictable and dependable 
system of farm income protection. This bill would provide for loan 
rates that are more realistic in light of current production costs in 
order to improve the farm income protection. It focuses on providing 
better assistance when it is needed, rather than simply making 
additional fixed payments regardless of actual market conditions.
  As I said, I believe the marketing assistance loan rate provisions in 
this bill are a strong start. We recognize that under the current 
formula, even without the existing loan rate caps, the marketing loan 
rates would have declined quite substantially as market prices suffered 
in recent years. That means a less effective system of farm income 
protection. However, further work and discussion on loan rate formulas 
and program details will be necessary as we work further on the next 
farm bill. In particular, it is important that the relative loan rates 
among the various commodities are in balance. Of course, that is the 
main objective of these provisions: to bring other loan rates into 
reasonable equivalence with the loan rates for oilseeds. But we do not 
want to create any new inequality while trying to address what is now 
felt to be an imbalance.
  It is also important for us to contemplate the consequences of any 
changes in loan rates that we may ultimately enact, including any 
impacts on production levels and patterns, and impacts on the relative 
benefits under the program for family-size farms in comparison with 
those for much larger operations. For that reason I believe that there 
must be some restriction or limitation on the quantity of production 
that is eligible for higher loan rates. Otherwise, I am concerned that 
we are providing only a small amount of help to family-size farms, but 
far more to their larger and already better capitalized neighbors 
simply because those larger farms are producing larger quantities of 
loan-eligible commodities. Similarly, if the loan rate is increased for 
every unit of production of a given commodity on every farm, no matter 
how large, we must consider the incentives for higher production that 
will be put into markets that are in surplus.
  The commodity provisions are, of course, only one part of a 
comprehensive approach to a new farm bill. I very strongly believe that 
the next farm bill should include a new program of incentives for farm 
and ranch conservation practices. In this way we will improve farm 
income while also enhancing conservation of natural resources for our 
children and succeeding generations. I am not proposing a substitute 
for existing conservation programs, nor am I

[[Page 374]]

proposing to abandon commodity and farm income protection programs. But 
I believe that we can accomplish a great deal by adding to our farm 
policy a new conservation incentive program.
  Again, I am pleased to cosponsor this bill and look forward to 
working with my colleagues to work further together on crafting a new 
farm bill.
                                 ______
                                 
      By Mr. HAGEL (for himself, Ms. Landrieu, Mr. Breaux, Mr. DeWine, 
        Mrs. Hutchison, Mr. Nelson of Nebraska, Mr. Smith of Oregon, 
        and Mr. Thomas):
  S. 22. A bill to amend the Federal Election Campaign Act of 1971 to 
provide meaningful campaign finance reform through requiring better 
reporting, decreasing the role of soft money, and increasing individual 
contribution limits, and for other purposes; to the Committee on Rules 
and Administration.


          open and accountable campaign financing act of 2001

  Mr. HAGEL. Mr. President, today, I join several of my colleagues, 
including the Presiding Officer, in introducing the Open and 
Accountable Campaign Financing Act of 2001, S. 22. I am pleased to be 
joined by not only the Presiding Officer, my new colleague from 
Nebraska, but also by Senators Landrieu, Breaux, DeWine, Hutchison, 
Smith of Oregon, and Thomas, in introducing this legislation today.
  I also want to acknowledge the two Senators who have led the fight on 
campaign finance reform over the years--John McCain and Russ Feingold. 
Their commitment to this issue and leadership has elevated the debate 
on this very important part of our democratic system. They deserve 
recognition and they deserve credit.
  Mr. President, S. 22 has three primary components, as you know. 
First, it expands and codifies disclosure for candidates, political 
parties and all organizations and individuals who participate in the 
political process.
  Second, it caps and regulates soft money donations to the National 
political parties.
  Third, it increases hard money contribution limits and then indexes 
these limits to inflation for future years.
  Our Federal campaign finance system is broken. As all of us know, in 
politics, as in life, perception is an important dynamic of reality. 
The American people's perception of the integrity of our political 
system is directly connected to their confidence in the system. 
Americans see a political system controlled by special interests and 
those able to pump in millions of unaccountable dollars.
  As our citizens become demoralized and detached because they feel 
they are powerless, they lower their expectations and standards for 
government and our officeholders. As a result, the American people are 
losing confidence in our system. They are losing trust in their elected 
officials. We need to fix the system.
  The Senate will engage in an open, honest and wide-ranging debate on 
campaign finance reform this year, as it should be.
  The debate must be thoughtful, factual and deliberate. Any 
legislative action will have immense consequences for our political 
system and all who participate in it. S. 22 represents a strong, 
bipartisan foundation from which consensus can be built and real 
campaign finance reform can be established.
  Our bill is imperfect. It does not address all of the issues. It does 
not have all of the answers. But it is a genuine attempt to bring about 
real reforms, including greater disclosure and more accountability. 
Greater disclosure, I believe, is the heart of campaign finance reform. 
We should not fear an educated and informed body politic. We should 
encourage it.
  In recent years, so-called independent groups and individuals have 
played an increasingly dominant role in the political process launching 
late TV blitzes, moving poll numbers in the final weeks and days of a 
campaign, and then disappearing without the public ever knowing who 
they were and how much they spent for or against the candidate.
  There are several provisions in S. 22 that will increase the 
disclosure of campaign financing and election activity. But the most 
significant is the provision affecting what information is made public 
regarding political broadcast ads, especially ads referred to as issue 
advocacy ads.
  Issue advocacy adds generally refer to a Federal candidate and his or 
her positions on issues, but since the ads do not expressly advocate 
the election or defeat of a Federal candidate, they don't trigger the 
reporting and disclosure requirements of the Federal Election Campaign 
Act. Even though these ads don't expressly advocate for or against any 
candidate, many people consider the clear intent of these ads, which is 
to influence the outcome of elections.
  Our legislation addresses the problems associated with the disclosure 
of these issue ads by requiring disclosure of the relevant information 
at the broadcast stations who broadcast these ads both on radio and TV.
  Currently, broadcast stations must comply with Federal communications 
regulations requiring them to place in their public file information on 
ads run by Federal candidates and political parties. This includes a 
record of the times the spots are scheduled to air, the overall amount 
of time purchased, and at what rates, and the names of the officers of 
the organization placing the ad.
  However, presently, there is no requirement that any of this 
information be placed in the public file for political ads run by 
independent organizations or individuals. Our legislation will codify 
these regulations and expand them to cover all political broadcast ads 
without violating anyone's constitutional rights. Under this bill, the 
American public and the media will know who is buying these ads and how 
much they are spending for the ads.
  Also, let me make clear one thing this provision does not do. It does 
not require organizations to identify individual donors or provide 
membership lists. It preserves a reasonable balance between the 
public's right to know and the privacy rights of members and donors.
  In addition to increased disclosure, this legislation regulates and 
caps soft money donations. It limits individuals, independent 
organizations, corporations, and unions, to an aggregate of $60,000 per 
year in soft money contributions to the national political parties. 
These donations are disclosed at the Federal Election Commission.
  We already have constitutionally tested limits on hard money. 
Political parties have to deal with this. These contributions are 
reported from the political parties and from the candidates and their 
campaigns. We should look at placing limits on soft money contributions 
as well.
  This legislation also adjusts the hard money, or Federal 
contributions, that are already fully disclosed to and regulated by the 
Federal Election Commission.
  Currently, an individual contribution limit is now set at $1,000. 
That limit was originally set in 1974. Our legislation would move that 
current $1,000 limit to $3,000 per candidate per election. Indexed to 
inflation, today a 1974 $1,000 contribution is worth $3,000. In future 
years, all individual limits would be indexed to inflation. This would 
have a positive effect on the system because more campaign money would 
go directly to the candidates, where there is the most disclosure and 
accountability.
  Any legislation to reform America's campaign finance system needs to 
reverse the sharply rising trend of moneys going outside the reportable 
system toward unaccountable, independent groups and individuals who do 
not report, who are not required to report or disclose. That trend has 
been more and more away from the candidates in the political parties.
  We must also ensure that any campaign finance reform genuinely 
improves the system and doesn't result in unintended consequences that 
actually make it worse. The challenge in reforming our campaign finance 
system to do so without infringing upon the constitutional rights of 
Americans to freely express themselves under the

[[Page 375]]

first amendment and the guarantees of equal protection under the law in 
the fifth amendment.
  Any effort, no matter how well-intentioned, that doesn't pass 
constitutional muster will be an effort in futility, adding further to 
the erosion of public confidence in our system. Congress has an 
opportunity this year to pass a relevant and responsible campaign 
finance reform bill that the President will sign.
  My colleagues and I will be fully engaged in this debate this year 
with the ultimate goal of making our campaign finance system more open 
and accountable--the essence of any reform.
                                 ______
                                 
      Mr. LOTT (for Mr. Specter):
  S. 23. A bill to promote a new urban agenda, and for other purposes; 
to the Committee on Finance.


                    the new urban agenda act of 2001

  Mr. SPECTER. Mr. President. I have sought recognition to introduce 
legislation that will address the plight of our nation's cities. With 
80 percent of the U.S. population living in metropolitan areas, there 
is an urgent need to improve our urban economies and the quality of 
life for the millions of Americans who live and work in cities. By 
simply making our cities an appealing place to live, work, and visit, 
urban areas can rebound to the vibrant economic centers they once were.
  There is a common perception that most urban areas are abandoned and 
stripped of their resources, burdened with poverty and crime. However, 
cities have a wealth of resources available to not only the urban 
dweller, but to cultural centers, business hubs, and some of the finest 
educational and medical institutions. The real problem is that we do 
not draw upon these riches or strive to better coordinate them to serve 
people, especially those in need.
  My proposal, the ``New Urban Agenda Act of 2001,'' is based on 
legislation which I have endeavored to enact into law since the 103rd 
Congress. The bill constitutes an effort to give our cities some much-
needed attention, but reflects the federal budgetary constraints which 
govern our actions in Congress. This bill, based in significant part on 
suggestions by Former Philadelphia Mayor Edward G. Rendell and the 
League of Cities as well as current Philadelphia Mayor John Street and 
Pittsburgh Mayor Tom Murphy, offers aid to the cities while containing 
federal expenditures and re-instituting important cost-effective tax 
breaks.
  Urban areas remain integral to America's greatness as centers of 
commerce, industry, education, health care, and culture. Yet urban 
areas, particularly the inner cities which tend to have a 
disproportionate share of our nation's poor, also have special needs 
which must be recognized. We must develop ways of aiding our cities 
that do not require either new taxes or more government bureaucracy.
  With that in mind, I am pleased that Congress recognized and included 
an initiative to aid our cities in the fiscal year 2001 Omnibus 
Appropriations Act. This initiative provides important incentives for 
businesses to invest and locate in our nation's cities by stimulating 
new private capital investments in economically distressed communities, 
expanding empowerment zones, increasing the low income housing tax 
credit, creating new market venture capital firms, and creating 40 
Renewal Communities, which will provide additional key incentives to 
spur investment. I am particularly pleased that a close variation of a 
provision from my Urban Agenda bill was included as part of this 
initiative, which will provide a 60 percent exclusion for capital gains 
tax purposes for any gain resulting from targeted investments in small 
businesses located in urban empowerment zones, enterprise communities, 
or enterprise zones. A targeted capital gain will serve as a catalyst 
for job creation and economic growth in our cities by encouraging 
additional private investment in our urban areas. While all of these 
initiatives are an important first step in assisting our cities, I 
believe that there is still more that needs to be accomplished to 
revitalize America's metropolitan areas.
  If we are to address many of the serious social issues that we face--
unemployment, drug abuse, juvenile violence, welfare dependency, and 
other pressing issues--we cannot give up on our cities. We must 
continue to develop new strategies for dealing with the problems of 
urban America. The days of creating ``Great Society'' federal aid 
programs are clearly past, but that is no excuse for the national 
government to ignore the problems of the cities.
  As a Philadelphia resident, I have first-hand knowledge of the 
growing problems that plague our cities. I have long supported a 
variety of programs to assist our cities, such as increased funding for 
Community Development Block Grants and legislation to establish 
enterprise and empowerment zones. To encourage similar efforts, in 
April 1994, I hosted my Senate Republican colleagues on a visit to 
explore urban problems in my hometown. We talked with people who wanted 
to obtain work, but had discovered few opportunities. We saw a 
crumbling infrastructure and its impact on residents and businesses. We 
were reminded of the devastating effect that the loss of inner city 
businesses and jobs has had on our neighborhoods. What my Republican 
colleagues saw in Philadelphia is the urban rule across our country, 
not the exception.


  There are many who do not know of city life, who are far removed from 
the cities and would not be expected to have any key interest in what 
goes on in the big cities of America. I cite my own boyhood experience 
illustratively: Born in Wichita, Kansas, raised in Russell, a small 
town of 5,000 people on the plains of Kansas, where there is not much 
detailed knowledge of what goes on in Philadelphia, Pennsylvania, or 
other big cities like Los Angeles, San Francisco, New York, Miami, 
Pittsburgh, Dallas, Detroit or Chicago.
  Those big cities are alien to many in America. But there is a growing 
understanding that the problems of big cities contribute significantly 
to the general problems affecting our nation as a whole and have an 
economic impact, at the very least, on our small towns. For rural 
America to prosper, we need to make sure that urban America prospers 
and vice-versa. For example, if cities had more economic growth, taxes 
could be reduced on all Americans at the federal and state level 
because revenues would increase and social welfare spending would be 
reduced.
  There is indeed a domino effect from our cities to rural communities 
throughout the country. Lately, we have witnessed this in the violent 
behavior of adolescents. School violence, juvenile crime and drug abuse 
are no longer endemic to urban living. Take the Bloods and the Crips 
gangs from Los Angeles, California, and similar gangs; that are all 
over America. They are in Lancaster, Pennsylvania; Des Moines, Iowa; 
Portland, Oregon; Jackson, Mississippi, Racine, Wisconsin; and 
Martinsburg, West Virginia. They are literally everywhere, big city and 
small city alike. Additionally, while drug abuse among teens has 
historically been viewed solely as an inner city problem, recent 
statistics indicate that teen drug abuse in the suburbs is an 
increasing epidemic. According to an October 10, 1999 Philadelphia 
Inquirer article, in the seven county Philadelphia suburbs, the rate of 
youths in treatment for heroin jumped from 77 to 84 per 100,000 people 
between 1995 and 1998. In the Baltimore suburbs, 25 percent of teens 
admitted to drug treatment centers used heroin compared to 17 percent 
in inner city Baltimore.
  In the U.S. Department of Housing and Urban Development's 2000 report 
on the ``State of the Cities,'' findings show that large urban schools 
still deal with a higher concentration of violence, and the data only 
represents crimes which were serious enough to report to the police. An 
estimated 3 million crimes each year are committed in or near the 
nation's 85,000 public schools. During the 1996-97 school year alone, 
one-fifth of public high schools and middle schools reported at least 
one violent crime, such as murder, rape or robbery. More than half 
reported less serious crimes. Homicide is now the third leading cause 
of death for children age 10 to 14. For more than a decade it has been 
the

[[Page 376]]

leading cause of death among minority youth between the ages of 15 and 
24. The School District of Philadelphia's most recent report on school 
violence shows that in the 1994-1995 academic year, students, teachers 
and administrators were the victims of 2,147 reported criminal 
incidents, up by almost 100% from the previous year. These included 
assault, robbery, rape, and students being stabbed or even shot. The 
school district also reported troubling news about abysmal attendance 
rates. On any given day, more than one in every four students are 
absent.
  In an effort to seriously address the problem of youth violence, 
during the summer of 1999, I convened three extensive roundtable 
discussions with experts from the Department of Education, Health and 
Human Services, Labor and Justice, who administer programs targeted at 
children from prenatal to age seventeen. On June 7, 1999, I chaired a 
discussion session on at-risk youth as part of the White House 
Conference on Mental Health. As a result of these meeting, $911 million 
in fiscal year 2000 and $1.6 billion in fiscal year 2001 have been 
reallocated across government agencies to tackle the problem of youth 
violence, focusing on the Safe and Drug Free Schools Program, mental 
health services for children, character education, and literacy 
programs. These programs pick up on the conclusion that Surgeon General 
Koop made in 1982--that juvenile violence is a national health problem.
  I am pleased to note that the HUD 2000 ``State of the cities'' report 
found that the national poverty rate declined from 13.7% in 1996 to 
12.7% in 1998. Encouragingly, the poverty rate also decreased in 
central cities during this same period from 19.6% to 18.5%. However, 
despite the dramatic record of job gains, one in eight cities still 
faces high unemployment and significant population loss or high poverty 
rates. The report further found that the overall poverty rate in the 
cities remains twice that of the suburbs. In fact, there are 67 large 
cities that have an unemployment rate of 50% or higher than the U.S. 
rate. These facts emphasize the need for more efforts to be focused on 
strengthening our inner city businesses which, in turn, will boost 
local economies and serve to provide more jobs, reduce poverty and, 
hopefully, reduce crime.
  To facilitate economic development and job creation in the United 
States, I supported the Balanced Budget Act of 1995, which contained 
such provisions as the Job Training Partnership Act and the Targeted 
Job Tax Credit. As Congress put the final touches on that legislation, 
I circulated a joint letter with several Senators to then-Majority 
Leader Dole and Speaker Gingrich which recommended several new urban 
initiatives to spur job creation and economic growth in our cities such 
as a targeted capital gains exclusion, commercial revitalization tax 
credit, historic rehabilitation tax credit, and child care credit. In 
1998, I introduced the ``Job Preparation and Retention Training Act,'' 
which was included in the Workforce Development act of 1998. My 
legislation authorized funding for States to enroll long-term welfare 
dependents into a training program to provide the necessary skills to 
locate and maintain gainful and unsubsidized employment.
  A number of jobs are becoming available in the high tech industry and 
high tech growth is a substantial contributor to recent economic gains 
in cities. According to the HUD 2000 ``State of the Cities'' report, 
high tech jobs account for 27% of new employment in cities. However, 
there is anew digital divide in high tech jobs between cities and 
suburbs. High tech job growth in suburbs is 30% faster than that of 
cities. In effort to bridge the digital divide, I was an original 
cosponsor with Senator Biden of the ``Kids 2000'' legislation, which 
would authorize $120 million to build computer technology centers in 
Boys and Girls Clubs nationwide and allow the funds to be used to pay 
for computer teachers, who are crucial to the success of this 
initiative. The federal funds would be complemented by donations from 
private sources. I have also been supportive of collaborative efforts 
like PowerUp, founded by America Online (AOL) Chief Executive Steve 
Case, which joins non-profit organizations, major corporations, and 
Federal agencies to help close the digital divide. The goal of this 
initiative is to help ensure that America's underserved youth acquire 
the skills, experiences, and resources they need to succeed in the 
digital age. Initiatives like Kids 2000 and PowerUp are steps in the 
right direction to provide American children with the skills necessary 
to compete in an increasingly technologically-advanced workforce. These 
initiatives offer training for those segments of the American 
population which currently have no opportunity to learn these 
technology-based skills, and thus offer extraordinary employment and 
earning possibilities.
  Each day, small business owners question whether they should remain 
in the city because they fear for the safety of their children, their 
employees, and, ultimately, their businesses. I have personally met and 
spoken with shop owners in the University City section of Philadelphia 
who tell me that they look desperately for reasons to stay, but it gets 
harder and harder.
  I have long supported efforts to encourage the growth of small 
business, as small businesses provide the bulk of the jobs in this 
country. To that end, I am again introducing legislation to provide 
targeted tax incentives for investing in small minority or women-owned 
businesses called ``Minority and Women Capital Formation Act.'' Many 
minority entrepreneurs, for instance, have told me that they are 
dedicated to staying in the cities to continue to provide employment 
opportunities, but continue to face difficulty in obtaining the 
necessary capital. My legislation would help remove the capital access 
barriers, thereby enabling these entrepreneurs to grow their businesses 
and payrolls.
  The economic problems our cities are facing are not easy to deal with 
or answer. Municipal leaders stress many of the same concerns that 
business people have voiced. Additionally, in a report by the National 
League of Cities entitled ``City Fiscal Conditions in 1996,'' municipal 
officials from 381 cities answered questions on the economic state of 
their cities. The report found that 21.7 percent of responding cities 
reduced municipal employment and 18.5 percent had frozen municipal 
employment due to state budgetary problems. Nearly six out of ten 
cities raised or imposed new taxes or user fees during the past twelve 
months.
  These numbers are of concern to me and I believe they highlight the 
need for federal legislation to enhance the ability of cities to 
achieve competitive economic status. An added concern is that city 
managers are forced to balance cuts in services or enact higher taxes. 
Neither choice is easy, and it often counteracts municipal efforts to 
retain residents or businesses.
  One issue in particular that is hurting many cities is the erosion of 
their tax bases, evidenced particularly by middle-class flight to the 
suburbs. Mr. Ronald Waiters, professor of Political Science at Howard 
University, in testimony before the Senate Banking Committee, stated 
that in 1950, 23 percent of Americans lived outside central cities; by 
1998, that number rose to 46 percent. The District of Columbia's 
population loss is among the worst in the nation, with a quarter of its 
population relocating to the suburbs since the 1970s. This trend of 
shrinking urban populations gives no sign of ending. Middle-class 
families continue to leave for the suburbs where there are typically 
better public services. According to the September 2000 General 
Accounting Office Report on Community Development, over 50 percent of 
U.S. cities reported that an inadequate tax base for supporting schools 
and services was among their top four growth related challenges. As 
America's cities struggle with the exodus of residents, businesses and 
industry, city, residents who remain are faced with problems ranging 
from increased tax burdens and lesser services to dwindling economic 
opportunities, leading to welfare dependence and unemployment 
assistance.
  The September 2000 General Accounting Office Report on Community 
Development also found that of the 2000 cities surveyed, 83 percent 
reported that

[[Page 377]]

revitalizing their downtown areas was their top priority. The federal 
government has attempted to revitalize our ailing urban infrastructure 
by providing federal funding for transit and sewer systems, roads and 
bridges. As a member of the Transportation Appropriations Subcommittee, 
I have been a strong supporter of public transit, which provides 
critically needed transportation services in urban areas. Transit helps 
cities meet clean air standards, reduce traffic congestion, and allows 
disadvantaged persons access to jobs. Federal assistance for urban 
areas, however, has become increasingly scarce as we grapple with the 
nation's deficit and debt. Therefore, we must find alternatives to 
reinvigorate out nation's cities so they can once again become 
economically productive areas providing promising opportunities for 
residents and neighboring areas. To address the need for reliable 
transportation systems in our nation's cities and to provide access to 
jobs for city residents, I introduced reverse commute and jobs access 
legislation, which was successfully included in the 1998 ``TEA-21'' 
highway and transit reauthorization bill. The bill authorized over five 
years access-to-jobs transit grants targeted at low-income individuals. 
Up to $10 million per year may be used for reverse commute projects to 
move individuals from cities to suburban job centers.
  In addition to support for infrastructure, I believe there are many 
other opportunities for Congress to assist America's urban areas. Over 
the past few years, I have worked with Former Mayor Ed Rendell to 
develop a legislative package which contains many good ideas. I have 
taken many of these suggestions and have since added and revised 
provisions to take into account new developments at the federal, state 
and local levels to create the ``New Urban Agenda Act of 2001.''
  First, recognizing that the federal government is the nation's 
largest purchaser of goods and services, my legislation would require 
that no less than 15 percent of federal government purchases be made 
from businesses and industries within designated urban Empowerment 
Zones, Enterprise Communities and Renewal Communities. Similarly, my 
bill would require that no less than 15 percent of foreign aid funds be 
redeemed through purchases of products manufactured in urban 
Empowerment Zones, Enterprise Communities and Renewal Communities. The 
General Services Administration would be required to submit to Congress 
its assessment of the extent to which federal agencies are committed to 
this policy, and in general, economic revitalization in distressed 
urban areas.
  The second major provision of this bill would commit the federal 
government to play an active role in restoring the economic health of 
our cities by encouraging the location, or relocation, of all federal 
facilities in urban areas. To accomplish this, all federal agencies 
would be required to prepare and submit to the President an Urban 
Impact Statement detailing the impact that relocation or downsizing 
decisions would have on the affected city. Presidential approval would 
be required to place a federal facility outside an urban area, or to 
downsize a city-based agency.
  The third critical component of this bill would revive and expand 
federal tax incentives that were eliminated or restricted in the Tax 
Relief Act of 1986. Until there is passage of legislation on the flat 
tax, which would provide benefits superior to all targeted tax breaks, 
I believe America's cities should have the advantages of such tax 
benefits. These provisions offer meaningful incentives to businesses to 
invest in our cities. I am calling for the restoration of the Historic 
Rehabilitation Tax Credit which supports inner city revitalization 
projects. According to the September 2000 GAO Report on Community 
Development, 32 percent of cities and 22 percent of counties surveyed 
strongly supported the extension of federal tax benefits to the 
rehabilitation of historic residential properties. The City of 
Philadelphia reports that there were 8,640 construction jobs involved 
in 356 projects in Philadelphia from 1978 to 1985 stimulated by the 
Historic Rehabilitation Tax Credit, which was eliminated in 1986. In 
Chicago, 302 projects prior to 1985 generated $524 million in 
investment and created 20,695 jobs. In St. Louis, 849 projects 
generated $653 million in investment and created 27,735 jobs. 
Nationally, according to National Park Service estimates for the 16 
years before the 1986 Act, the Historic Rehabilitation Tax Credit 
stimulated $16 billion in private investment for the rehabilitation of 
24,656 buildings and the creation of 125,306 homes which included 
23,377 low and moderate income housing units. The 1986 Tax Act 
dramatically reduced the pool of private investment capital available 
for rehabilitation projects. In Philadelphia, projects dropped from 356 
to 11 by 1988 from 1985 levels. During the same period, investments 
dropped 46 percent in Illinois and 92 percent in St. Louis.
  Another tool is to expand the authorization of commercial industrial 
development bonds. Under the Tax Reform Act of 1986, authorization for 
commercial industrial bonds was permitted to expire. Consequently, 
private investment in cities declined. For instance, according to the 
City of Philadelphia, from 1986--the last year commercial development 
bonds were permitted--to 1987, the total number of city-supported 
projects in Philadelphia was reduced by more than half.
  Industrial development or private activity bonds encourage private 
investment by allowing, under certain circumstances, tax-exempt status 
for projects where more than 10 percent of the bond proceeds are used 
for private business purposes. The availability of tax-exempt 
commercial industrial development bonds will encourage private 
investment in cities, particularly the construction of sports, 
convention and trade show facilities; parking facilities owned and 
operated by the private sector; air and water pollution facilities 
owned and operated by the private sector and industrial parks. My bill 
would also increase the small issue exemption, which provides a way to 
help finance private activity in the building of manufacturing 
facilities from $10 million to $50 million to allow increased private 
investment in our cities.
  A minor change in the federal tax code related to arbitrage rebates 
on municipal bond interest earnings could also free additional capital 
for infrastructure and economic development by cities. Currently, 
municipalities are required to rebate to the federal government any 
arbitrage--a financial term meaning interest earned in excess of 
interest paid on the debt--earned from the issuance of tax-free 
municipal bonds. I understand that compliance, or the cost for 
consultants to perform the complicated rebate calculations, is actually 
costing municipalities more than the actual rebate owed to the 
government. This bill would allow cities to keep the arbitrage earned 
so that they can use it to fund city projects and for other necessary 
purposes.
  A fourth provision of this legislation provides needed reforms to 
regulations and the financial challenges to obtaining affordable 
housing. My proposal provides language to study streamlining federal 
housing program assistance to urban areas into a block grant form so 
that municipal agencies can better serve local residents. Safe, clean, 
and affordable housing is not widely available to most low income 
families. According to the National Housing Law Project, in 1996, only 
one in four families was eligible to receive HUD assistance with a 
waiting period up to five years. This provision of the bill steers the 
Secretary of Housing and Urban Development to take a hard look at these 
conditions and determine what works and what does not in federally-
subsidized housing and to consider alternatives that will provide 
suitable homes for America's families.
  I believe that as a nation we should work toward providing 
individuals and their families with more opportunities for home 
ownership which stabilizes a community and restores our cities. Urban 
home ownership, including middle-income home ownership, lags behind the 
suburbs. According to the Harvard University Joint Center for Housing 
Studies, city residents of all income levels are less likely to own a

[[Page 378]]

home than suburban residents with similar incomes. I hear time and time 
again from families starting out that they move out to the suburbs for 
better schools, because central cities lack the property tax base to 
provide a quality education. Home ownership is key to saving our 
cities, both socially and economically. A 1998 Fannie Mae national 
housing survey indicated that even though home ownership rates 
continued to increase in the late 1990s, six in every ten renters said 
that buying a home was a very important priority, if not their number-
one priority in life. Yet for so many families financial barriers make 
that dream unattainable. That is why my legislation includes two 
provisions to restore the American dream of home ownership.
  First, my bill would amend the National Affordable Housing Act and 
the Community Development Block Act of 1974 to make municipal employees 
such as policemen, firemen, maintenance workers and teachers eligible 
for home ownership assistance. Municipal employees and teachers 
contribute to the health, safety and vitality of the communities in 
which they serve. However, escalating rent and housing prices due to 
the booming technology market and rising salaries have made it 
particularly difficult for teachers, police officers and city workers 
to live where they work. In a growing number of metropolitan areas, 
home buyers who make the median income in their region cannot afford 
its median-priced housing, and therefore, must live outside the 
community in which they work, resulting in longer commutes. According 
to the September 2000 GAO Report, the shortage of funding for 
affordable housing in urban areas has forced people to move to the 
fringes of metropolitan areas, where housing is typically less 
expensive. This provision would seek to remedy this situation by 
providing communities with the tools needed to increase home ownership 
opportunities for those who form the backbone of our cities and who are 
an integral component of our commitment to revitalize our urban areas.
  Second, my bill would provide a tax credit for income-eligible 
individuals and families to purchase homes in distressed areas. In the 
1999 Taxpayer Relief Act, Congress approved such a tax credit for home 
buyers in the District of Columbia. While single family home sales can 
be attributed to a multitude of factors, such as historically low 
interest rates and a strong economy, it is important to note some 
interesting statistics related to home ownership since enactment of the 
tax credit in the District of Columbia. The Home Purchase Assistance 
Program through the District of Columbia's Office of Housing and 
Community Development helped 410 families purchase homes. Further, a 
group called the ``Washington Partners for Home ownership,'' a 
collaboration of realtors, banks, community and faith-based 
organizations, set a goal last year to create 1,000 new homeowners in 
the District of Columbia for each of the next three years. Remarkably, 
the Washington Partners reached that goal before the end of the first 
year. I believe that this country will reap extraordinary benefits if 
we expand such a credit on a national basis, as I propose in the ``New 
Urban Agenda Act of 2001.''
  I believe that the revitalization of cities will require social and 
economic facets, but is also imperative that our cities are safe and 
clean. This last component of my bill helps urban areas to address 
their unique environmental challenges and reforms Superfund law. First, 
the legislation authorizes a federal brownfields program to help clean 
up idle or underused industrial and commercial facilities and waives 
federal liability for persons who fully comply with a state cleanup 
plan to clean sites in urban and other areas pursuant to state law, 
provided that the site is not listed or proposed to be listed on the 
National Priorities List. The Environmental Protection Agency currently 
operates this pilot program under general authority provided by the 
Superfund law. My legislation would make this a permanent program and 
substantially increase the funding levels to a $100 million authorized 
level for Fiscal Year 2002, $105 million for Fiscal Year 2003, and $110 
million for Fiscal Year 2004. The EPA could expend funds to identify 
and examine potential idle or underused Brownfield sites and to provide 
grants to States and local governments of up to $200,000 per site to 
put them back to productive use. One such grant has been used to great 
success to Pittsburgh Mayor Tom Murphy, and I hope this provision will 
generate additional success stories of redeveloping urban brownfields.
  The Brownfields Program allows sites with minor levels of toxic waste 
to be cleaned up by State and local governments with federal and other 
funding sources. Companies and individuals who are interested in 
developing land into industrial, commercial, recreational, or 
residential use are often reluctant to purchase property with any level 
of toxic waste because of a fear of being saddled with cleanup 
liability under the Superfund law. Through expanded Brownfields grants, 
cleanup at such sites will be expedited and will encourage 
redevelopment of otherwise unusable property.
  My bill would also waive federal liability for persons who fully 
comply with a state cleanup plan to clean sites in urban or other areas 
pursuant to state law, providing that the site is not listed or 
proposed to be listed on the National Priorities List. Many states, 
including Pennsylvania, have developed their own toxic waste cleanup 
programs and have done good work to clean up many of these sites. 
Pennsylvania Governor Tom Ridge has developed an extensive plan, where 
contaminated sites are made safe based on sound science by returning 
the site to productive use through the development of uniform cleanup 
standards, by creating a set of standardized review procedures, by 
releasing owners and developers from liability who fully comply with 
the state cleanup standards and procedures, and by providing financial 
assistance. However, the efforts of states like Pennsylvania are often 
stifled because the federal government has not been willing to work 
with the States to release owners and developers from liability, even 
when they fully comply with the state plans.
  This section of my bill only applies to sites that are not on the 
National Priorities List. These are sites that the state has identified 
for which the state has created a comprehensive cleanup plan. If the 
federal government has concerns with the cleanup procedure or the 
safety of the site, then the government has full authority to place 
that site on the National Priority List. The plans, like that developed 
by Governor Ridge, deal with sites not controlled by the Superfund law. 
By not allowing the individual states to take the initiative to clean 
up these sites, and by not providing a waiver for federal liability to 
those who fully comply with the procedures and standards of the state 
cleanup, the federal government impedes the efforts of the states to 
work to clean up their own sites. This provision takes a significant 
step toward encouraging states to take the responsibility for their 
toxic waste sites and to encourage the effective cleanup of these sites 
in our nation's urban areas.
  Mr. President, we must take a comprehensive approach to reversing 
urban decay. My bill seeks to accomplish this by requiring increased 
federal and foreign aid purchases operating in urban zones, a restoring 
of the issuance of tax free industrial development bonds, facilitating 
home ownership in urban areas, and providing regulatory relief to 
redevelop brownfield sites. As one of a handful of United States 
Senators who lives in a big city, I have a special understanding of 
both the problems and the promise of urban America. I am committed to a 
new urban agenda which relies on market forces, not a welfare state, 
for urban revitalization. While the issues facing our nation's cities 
are indeed difficult, working together with my colleagues I believe we 
can fashion a strong plan of action to help cities face their pressing 
problems.
  I ask unanimous consent that my bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

[[Page 379]]



                                 S. 23

       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 ``New Urban 
     Agenda Act of 2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

Sec. 101. Federal purchases from businesses in empowerment zones, 
              enterprise communities, and renewal communities.
Sec. 102. Minimum allocation of foreign assistance for purchase of 
              certain United States goods.
Sec. 103. Preference for location of manufacturing outreach centers in 
              urban areas.
Sec. 104. Preference for construction and improvement of Federal 
              facilities in distressed urban areas.
Sec. 105. Definitions.

    TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT

Sec. 201. Treatment of rehabilitation credit under passive activity 
              limitations.
Sec. 202. Rehabilitation credit allowed to offset portion of 
              alternative minimum tax.
Sec. 203. Commercial industrial development bonds.
Sec. 204. Increase in amount of qualified small issue bonds permitted 
              for facilities to be used by related principal users.
Sec. 205. Simplification of arbitrage interest rebate waiver.
Sec. 206. Qualified residential rental project bonds partially exempt 
              from State volume cap.
Sec. 207. Expansion of qualified wages subject to work opportunity 
              credit.
Sec. 208. Homebuyer credit for empowerment zones, enterprise 
              communities, and renewal communities.

             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

Sec. 301. Block grant study.
Sec. 302. Homeownership for municipal employees.
Sec. 303. Community development.

          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

Sec. 401. Release from liability of persons that fulfill requirements 
              of State and local law.
Sec. 402. Brownfield program.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) cities in the United States have been facing an 
     economic downhill trend in the past several years; and
       (2) a new approach to help such cities prosper is 
     necessary.
       (b) Purposes.--It is the purpose of this Act to--
       (1) provide various incentives for the economic growth of 
     cities in the United States;
       (2) provide an economic agenda designed to reverse current 
     urban economic trends; and
       (3) revitalize the jobs and tax base of such cities without 
     significant new Federal outlays.

       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

     SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN EMPOWERMENT 
                   ZONES, ENTERPRISE COMMUNITIES, AND RENEWAL 
                   COMMUNITIES.

       (a) Requirements.--The Office of Federal Procurement Policy 
     Act (41 U.S.C. 401 et seq.) is amended by adding at the end 
     the following new section:


     ``purchases from businesses in empowerment zones, enterprise 
                  communities, and renewal communities

       ``Sec. 40. (a) Minimum Purchase Requirement.--Not less than 
     15 percent of the total amount expended by executive agencies 
     for the purchase of goods in a fiscal year shall be expended 
     for the purchase of goods from businesses located in 
     empowerment zones, enterprise communities, or renewal 
     communities.
       ``(b) Recycled Products.--To the maximum extent practicable 
     consistent with applicable law, the head of an executive 
     agency shall purchase recycled products that meet the needs 
     of the executive agency from businesses located in 
     empowerment zones, enterprise communities, or renewal 
     communities.
       ``(c) Regulations.--The Federal Acquisition Regulation 
     shall include provisions that ensure the attainment of the 
     minimum purchase requirement set out in subsection (a).
       ``(d) Definitions.--In this section:
       ``(1) The term `empowerment zone' means a zone designated 
     as an empowerment zone pursuant to subchapter U of chapter 1 
     of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et 
     seq.).
       ``(2) The term `enterprise community' means a community 
     designated as an enterprise community pursuant to subchapter 
     U of chapter 1 of the Internal Revenue Code of 1986 (26 
     U.S.C. 1391 et seq.).
       ``(3) The term `renewal community' means a community 
     designated as a renewal community pursuant to subchapter X of 
     chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 
     1400E et seq.).''.
       (b) GSA Assessment.--(1) Not later than December 31, 2001, 
     the Administrator of General Services shall submit to 
     Congress, in writing, the Administrator's assessment of the 
     extent to which executive agencies are committed, by policy 
     and practice, to encouraging and supporting economic renewal 
     in empowerment zones, enterprise communities, and renewal 
     communities.
       (2) In this subsection, the term ``executive agency'' has 
     the meaning given such term in section 4(1) of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403(1)).
       (c) Effective Date.--Section 40 of the Office of Federal 
     Procurement Policy Act, as added by subsection (a), shall 
     take effect on the date of enactment of this Act and shall 
     apply with respect to fiscal years beginning after September 
     30, 2001.
       (d) Conforming Amendment.--The table of contents in section 
     1(b) of the Office of Federal Procurement Policy Act is 
     amended by adding at the end the following new item:

``Sec. 40. Purchases from businesses in empowerment zones, enterprise 
              communities, and renewal communities.''.

     SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE FOR 
                   PURCHASE OF CERTAIN UNITED STATES GOODS.

       (a) Allocation of Assistance.--Notwithstanding any other 
     provision of law, effective beginning with fiscal year 2002, 
     not less than 15 percent of United States assistance provided 
     in a fiscal year shall be provided in the form of credits 
     which may only be used for the purchase of United States 
     goods produced, manufactured, or assembled in empowerment 
     zones, enterprise communities, or renewal communities within 
     the United States.
       (b) United States Assistance.--As used in this section, the 
     term ``United States assistance'' means--
       (1) any assistance under the Foreign Assistance Act of 1961 
     (22 U.S.C. 2151 et seq.);
       (2) sales or financing of sales under the Arms Export 
     Control Act (22 U.S.C. 2751 et seq.); and
       (3) assistance and other activities under the Support for 
     East European Democracy (SEED) Act of 1989 (22 U.S.C. 5401 et 
     seq.).

     SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTURING OUTREACH 
                   CENTERS IN URBAN AREAS.

       (a) Designation.--In designating an organization as a 
     manufacturing outreach center under subsection (c)(11) of 
     section 5 of the Stevenson-Wydler Technology Innovation Act 
     of 1980 (15 U.S.C. 3704), the Secretary of Commerce shall, to 
     the maximum extent practicable, designate organizations that 
     are located in empowerment zones, enterprise communities, or 
     renewal communities.
       (b) Financial Assistance.--In utilizing a competitive, 
     merit-based review process to determine the manufacturing 
     outreach centers to which to provide financial assistance 
     under such section, the Secretary shall give such additional 
     preference to centers located in empowerment zones, 
     enterprise communities, and renewal communities as the 
     Secretary determines appropriate in order to ensure the 
     continuing existence of such centers in such zones and 
     communities.

     SEC. 104. PREFERENCE FOR CONSTRUCTION AND IMPROVEMENT OF 
                   FEDERAL FACILITIES IN DISTRESSED URBAN AREAS.

       (a) Definitions.--In this section:
       (1) Distressed urban area.--The term ``distressed urban 
     area'' means a city having a population of more than 100,000 
     that, as determined by the Secretary of Housing and Urban 
     Development, meets the qualifications for making an urban 
     development action grant to a community experiencing severe 
     economic distress established for large cities and urban 
     counties under subpart G of part 570 of title 24, Code of 
     Federal Regulations (as in effect on April 1, 1998).
       (2) Executive agency.--The term ``Federal agency'' means an 
     Executive agency (as defined in section 105 of title 5, 
     United States Code).
       (3) Facility.--The term ``facility'' means any place where 
     employees of a Federal agency are regularly employed.
       (b) Preference.--Notwithstanding any other provision of 
     law, in determining the location for the construction of a 
     new facility of an Executive agency, in determining to 
     improve an existing facility, or in determining the location 
     to which to relocate functions of an Executive agency, the 
     head of the Federal agency making the determination shall 
     make best efforts to construct or improve the facility or to 
     relocate the functions in a distressed urban area.
       (c) Urban Impact Statement.--A determination to construct a 
     new facility of an Executive agency, to improve an existing 
     facility, or to relocate the functions of an Executive agency 
     shall not be made until the head of the Executive agency 
     making the determination submits to the President a report 
     that--
       (1) in the case of a facility to be constructed--
       (A) identifies at least 1 distressed urban area that would 
     be an appropriate location for the facility;

[[Page 380]]

       (B) describes the costs and benefits arising from the 
     construction and use of the facility in the distressed urban 
     area, including the effects of the construction and use on 
     the rate of unemployment in the distressed urban area; and
       (C) describes the effect on the economy of the area of the 
     closure or consolidation, if any, of facilities located in 
     the distressed urban area during the 10-year period ending on 
     the date of the report, including the number of Federal and 
     non-Federal employment positions terminated in the distressed 
     urban area as a result of the closure or consolidation;
       (2) in the case of a facility to be improved that is not 
     located in a distressed urban area--
       (A) identifies at least 1 facility located in a distressed 
     urban area that would serve as an appropriate alternative 
     location for the facility;
       (B) describes the costs and benefits arising from the 
     improvement and use of the facility located in the distressed 
     urban area as an alternative location for the facility to be 
     improved, including the effect of the improvement and use of 
     the facility on the rate of unemployment in the distressed 
     urban area; and
       (C) describes the effect on the economy of the distressed 
     urban area of the closure or consolidation, if any, of 
     facilities located in the distressed urban area during the 
     10-year period ending on the date of the report, including 
     the number of Federal and non-Federal employment positions 
     terminated in the distressed urban area as a result of the 
     closure or consolidation;
       (3) in the case of a facility to be improved that is 
     located in a distressed urban area--
       (A) describes the costs and benefits arising from the 
     improvement and continuing use of the facility in the 
     distressed urban area, including the effect of the 
     improvement and continuing use on the rate of unemployment in 
     the distressed urban area; and
       (B) describes the effect on the economy of the distressed 
     urban area of the closure or consolidation, if any, of 
     facilities located in the distressed urban area during the 
     10-year period ending on the date of the report, including 
     the number of Federal and non-Federal employment positions 
     terminated in the distressed urban area as a result of the 
     closure or consolidation; or
       (4) in the case of a relocation of functions--
       (A) identifies at least 1 distressed urban area that would 
     serve as an appropriate location for the carrying out of the 
     functions;
       (B) describes the costs and benefits arising from carrying 
     out the functions in the distressed urban area, including the 
     effect of carrying out the functions on the rate of 
     unemployment in the distressed urban area; and
       (C) describes the effect on the economy of the distressed 
     urban area of the closure or consolidation, if any, of 
     facilities located in the distressed urban area during the 
     10-year period ending on the date of the report, including 
     the number of Federal and non-Federal employment positions 
     terminated in the distressed urban area as a result of such 
     closure or consolidation.
       (d) Applicability to Department of Defense Facilities.--The 
     requirements set forth in subsections (b) and (c) shall not 
     apply to a determination to construct or improve a facility 
     of the Department of Defense, or to relocate any functions of 
     the Department of Defense, if the President determines that 
     the waiver of the application of the requirements to that 
     facility or relocation is in the national interest.

     SEC. 105. DEFINITIONS.

       As used in this title:
       (1) The term ``empowerment zone'' means a zone designated 
     as an empowerment zone pursuant to subchapter U of chapter 1 
     of the Internal Revenue Code of 1986 (26 U.S.C. 1391 et 
     seq.).
       (2) The term ``enterprise community'' means a community 
     designated as an enterprise community pursuant to subchapter 
     U of chapter 1 of the Internal Revenue Code of 1986 (26 
     U.S.C. 1391 et seq.).
       (3) The term ``renewal community'' means a community 
     designated as a renewal community pursuant to subchapter X of 
     chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 
     1400E et seq.).

    TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT

     SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE 
                   ACTIVITY LIMITATIONS.

       (a) General Rule.--Paragraphs (2) and (3) of section 469(i) 
     of the Internal Revenue Code of 1986 (relating to $25,000 
     offset for rental real estate activities) are amended to read 
     as follows:
       ``(2) Dollar limitations.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the aggregate amount to which paragraph (1) 
     applies for any taxable year shall not exceed $25,000, 
     reduced (but not below zero) by 50 percent of the amount (if 
     any) by which the adjusted gross income of the taxpayer for 
     the taxable year exceeds $100,000.
       ``(B) Phaseout not applicable to low-income housing 
     credit.--In the case of the portion of the passive activity 
     credit for any taxable year which is attributable to any 
     credit determined under section 42--
       ``(i) subparagraph (A) shall not apply, and
       ``(ii) paragraph (1) shall not apply to the extent that the 
     deduction equivalent of such portion exceeds--

       ``(I) $25,000, reduced by
       ``(II) the aggregate amount of the passive activity loss 
     (and the deduction equivalent of any passive activity credit 
     which is not so attributable and is not attributable to the 
     rehabilitation credit determined under section 47) to which 
     paragraph (1) applies after the application of subparagraph 
     (A).

       ``(C) $55,500 limit for rehabilitation credits.--In the 
     case of the portion of the passive activity credit for any 
     taxable year which is attributable to the rehabilitation 
     credit determined under section 47--
       ``(i) subparagraph (A) shall not apply, and
       ``(ii) paragraph (1) shall not apply to the extent that the 
     deduction equivalent of such portion exceeds--

       ``(I) $55,500, reduced by
       ``(II) the aggregate amount of the passive activity loss 
     (and the deduction equivalent of any passive activity credit 
     which is not so attributable) to which paragraph (1) applies 
     for the taxable year after the application of subparagraphs 
     (A) and (B).

       ``(3) Adjusted gross income.--For purposes of paragraph 
     (2)(A), adjusted gross income shall be determined without 
     regard to--
       ``(A) any amount includable in gross income under section 
     86,
       ``(B) any amount excludable from gross income under section 
     135, 911, 931, or 933,
       ``(C) any amount allowable as a deduction under section 
     219, and
       ``(D) any passive activity loss.''.
       (b) Conforming Amendments.--
       (1) Subparagraph (B) of section 469(i)(4) of the Internal 
     Revenue Code of 1986 is amended to read as follows:
       ``(B) Reduction for surviving spouse's exemption.--For 
     purposes of subparagraph (A), the $25,000 amounts under 
     paragraphs (2)(A) and (2)(B)(ii) and the $55,500 amount under 
     paragraph (2)(C)(ii) shall each be reduced by the amount of 
     the exemption under paragraph (1) (determined without regard 
     to the reduction contained in paragraph (2)(A)) which is 
     allowable to the surviving spouse of the decedent for the 
     taxable year ending with or within the taxable year of the 
     estate.''.
       (2) Subparagraph (A) of section 469(i)(5) of such Code is 
     amended by striking clauses (i), (ii), and (iii) and 
     inserting the following new clauses:
       ``(i) `$12,500' for `$25,000' in subparagraphs (A) and 
     (B)(ii) of paragraph (2),
       ``(ii) `$50,000' for `$100,000' in paragraph (2)(A)'', and
       ``(iii) `$27,750' for `$55,500' in paragraph (2)(C)(ii).''.
       (3) The subsection heading for subsection (i) of section 
     469 of such Code is amended by striking ``$25,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service on or after the 
     date of enactment of this Act, in taxable years ending on or 
     after such date.

     SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Section 38(c) of the Internal Revenue Code 
     of 1986 (relating to limitation based on amount of tax) is 
     amended by redesignating paragraph (3) as paragraph (4) and 
     by inserting after paragraph (2) the following new paragraph:
       ``(3) Rehabilitation investment credit may offset portion 
     of minimum tax.--
       ``(A) In general.--In the case of the rehabilitation 
     investment tax credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to such credit, and
       ``(ii) for purposes of applying paragraph (1) to such 
     credit--

       ``(I) the tentative minimum tax under subparagraph (A) 
     thereof shall be reduced by the minimum tax offset amount 
     determined under subparagraph (B) of this paragraph, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the 
     rehabilitation investment tax credit).

       ``(B) Minimum tax offset amount.--For purposes of 
     subparagraph (A)(ii)(I), the minimum tax offset amount is an 
     amount equal to--
       ``(i) in the case of a taxpayer not described in clause 
     (ii), the lesser of--

       ``(I) 25 percent of the tentative minimum tax for the 
     taxable year, or
       ``(II) $20,000, or

       ``(ii) in the case of a C corporation other than a closely 
     held C corporation (as defined in section 469(j)(1)), 5 
     percent of the tentative minimum tax for the taxable year.
       ``(C) Rehabilitation investment tax credit.--For purposes 
     of this paragraph, the term `regular investment tax credit' 
     means the portion of the credit under subsection (a) which is 
     attributable to the credit determined under section 47.''.
       (b) Conforming Amendment.--Section 38(d) of the Internal 
     Revenue Code of 1986 (relating to components of investment 
     credit) is amended by adding at the end the following new 
     paragraph:
       ``(4) Special rule for rehabilitation credit.--
     Notwithstanding paragraphs (1) and

[[Page 381]]

     (2), the rehabilitation investment tax credit (as defined in 
     subsection (c)(2)(C)) shall be treated as used last.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT BONDS.

       (a) Facility Bonds.--
       (1) In general.--Subsection (a) of section 142 of the 
     Internal Revenue Code of 1986 (relating to exempt facility 
     bond) is amended by striking ``or'' at the end of paragraph 
     (11), by striking the period at the end of paragraph (12) and 
     inserting a comma, and by adding at the end the following new 
     paragraphs:
       ``(13) sports facilities,
       ``(14) convention or trade show facilities,
       ``(15) freestanding parking facilities,
       ``(16) air or water pollution control facilities, or
       ``(17) industrial parks.''.
       (2) Industrial parks defined.--Section 142 of such Code is 
     amended by adding at the end the following new subsection:
       ``(k) Industrial Parks.--A facility shall be treated as 
     described in subsection (a)(17) only if all of the property 
     to be financed by the net proceeds of the issue--
       ``(1) is--
       ``(A) land, and
       ``(B) water, sewage, drainage, or similar facilities, or 
     transportation, power, or communication facilities incidental 
     to the use of such land as an industrial park, and
       ``(2) is not structures or buildings (other than with 
     respect to facilities described in paragraph (1)(B)).''.
       (3) Conforming amendments.--
       (A) Section 147(c) of such Code (relating to limitation on 
     use for land acquisition) is amended by adding at the end the 
     following new paragraph:
       ``(4) Special rule for industrial parks.--In the case of a 
     bond described in section 142(a)(17), paragraph (1)(A) shall 
     be applied by substituting `50 percent' for `25 percent'.''.
       (B) Section 147(e) of such Code (relating to no portion of 
     bonds may be issued for skyboxes, airplanes, gambling 
     establishments, etc.) is amended by striking ``A private 
     activity bond'' and inserting ``Except in the case of a bond 
     described in section 142(a)(13), a private activity bond''.
       (b) Small Issue Bonds.--Section 144(a)(12) of the Internal 
     Revenue Code of 1986 (relating to termination of qualified 
     small issue bonds) is amended--
       (1) by striking ``any bond'' in subparagraph (A)(i) and 
     inserting ``any bond described in subparagraph (B)'',
       (2) by striking ``a bond'' in subparagraph (A)(ii) and 
     inserting ``a bond described in subparagraph (B)'', and
       (3) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) Bonds for farming purposes.--A bond is described in 
     this subparagraph if it is issued as part of an issue 95 
     percent or more of the net proceeds of which are to be used 
     to provide any land or property not in accordance with 
     section 147(c)(2).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 2000.

     SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL ISSUE BONDS 
                   PERMITTED FOR FACILITIES TO BE USED BY RELATED 
                   PRINCIPAL USERS.

       (a) In General.--Clause (i) of section 144(a)(4)(A) of the 
     Internal Revenue Code of 1986 (relating to $10,000,000 limit 
     in certain cases) is amended by striking ``$10,000,000'' and 
     inserting ``$50,000,000''.
       (b) Clerical Amendment.--The heading of paragraph (4) of 
     section 144(a) of the Internal Revenue Code of 1986 is 
     amended by striking ``$10,000,000'' and inserting 
     ``$50,000,000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) obligations issued after the date of enactment of this 
     Act, and
       (2) capital expenditures made after such date with respect 
     to obligations issued on or before such date.

     SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST REBATE WAIVER.

       (a) In General.--Clause (ii) of section 148(f)(4)(C) of the 
     Internal Revenue Code of 1986 (relating to exception from 
     rebate for certain proceeds to be used to finance 
     construction expenditures) is amended to read as follows:
       ``(ii) Spending requirement.--The spending requirement of 
     this clause is met if 100 percent of the available 
     construction proceeds of the construction issue are spent for 
     the governmental purposes of the issue within the 3-year 
     period beginning on the date the bonds are issued.''.
       (b) Conforming Amendments.--
       (1) Clause (iii) of section 148(f)(4)(C) of the Internal 
     Revenue Code of 1986 (relating to exception for reasonable 
     retainage) is repealed.
       (2) Subclause (II) of section 148(f)(4)(C)(vi) of such Code 
     (relating to available construction proceeds) is amended by 
     striking ``2-year period'' and inserting ``3-year period''.
       (3) Subclause (I) of section 148(f)(4)(C)(vii) of such Code 
     (relating to election to pay penalty in lieu of rebate) is 
     amended by striking ``, with respect to each 6-month period 
     after the date the bonds were issued,'' and ``, as of the 
     close of such 6-month period,''.
       (4) Clause (viii) of section 148(f)(4)(C) of such Code 
     (relating to election to terminate 1\1/2\ percent penalty) is 
     amended by striking ``to any 6-month period'' in the matter 
     preceding subclause (I).
       (5) Clause (ii) of section 148(c)(2)(C) of such Code 
     (relating to bonds used to provide construction financing) is 
     amended by striking ``2 years'' and inserting ``3 years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of enactment of 
     this Act.

     SEC. 206. QUALIFIED RESIDENTIAL RENTAL PROJECT BONDS 
                   PARTIALLY EXEMPT FROM STATE VOLUME CAP.

       (a) In General.--Section 146(g) of the Internal Revenue 
     Code of 1986 (relating to exception for certain bonds) is 
     amended by striking ``and'' at the end of paragraph (3), by 
     striking the period at the end of paragraph (4) and inserting 
     ``, and'', and by inserting after paragraph (4) the following 
     new paragraph:
       ``(5) 75 percent of any exempt facility bond issued as part 
     of an issue described in section 142(a)(7) (relating to 
     qualified residential rental projects).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of enactment of 
     this Act.

     SEC. 207. EXPANSION OF QUALIFIED WAGES SUBJECT TO WORK 
                   OPPORTUNITY CREDIT.

       (a) Increase in Percentage.--Section 51(a) of the Internal 
     Revenue Code of 1986 (relating to determination of amount) is 
     amended by striking ``40 percent'' and inserting ``50 
     percent''.
       (b) First 3 Years of Wages Subject to Credit.--Section 51 
     of the Internal Revenue Code of 1986 (relating to amount of 
     credit) is amended--
       (1) in subsections (a) and (b)(3), by striking ``first-
     year''; and
       (2) in subsection (b)--
       (A) by striking paragraphs (1) and (2) and inserting the 
     following new paragraph:
       ``(1) In general.--The term `qualified wages' means the 
     wages paid or incurred by the employer during the taxable 
     year--
       ``(A) with respect to an individual who is a member of a 
     targeted group, and
       ``(B) attributable to service rendered by such individual 
     during the 3-year period beginning with the day the 
     individual begins work for the employer.''; and
       (B) by redesignating paragraph (3) as paragraph (2).
       (b) Effective Date.--The amendments made by this section 
     shall apply to individuals who begin work for the employer 
     after the date of enactment of this Act.

     SEC. 208. HOMEBUYER CREDIT FOR EMPOWERMENT ZONES, ENTERPRISE 
                   COMMUNITIES, AND RENEWAL COMMUNITIES.

       (a) In General.--Part II of subchapter U of chapter 1 of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new section:

     ``SEC. 1395. HOMEBUYER CREDIT.

       ``(a) Allowance of Credit.--In the case of an individual 
     who purchases a principal residence in an empowerment zone or 
     enterprise community during any taxable year, there shall be 
     allowed as a credit against the tax imposed by this chapter 
     for the taxable year an amount equal to so much of the 
     purchase price of the residence as does not exceed $5,000.
       ``(b) Limitations.--
       ``(1) Limitation based on modified adjusted gross income.--
       ``(A) In general.--The amount allowable as a credit under 
     subsection (a) (determined without regard to this subsection 
     and subsection (d)) for the taxable year shall be reduced 
     (but not below zero) by the amount which bears the same ratio 
     to the credit so allowable as--
       ``(i) the excess (if any) of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $70,000 ($110,000 in the case of a joint return), 
     bears to

       ``(ii) $20,000.
       ``(B) Modified adjusted gross income.--For purposes of 
     subparagraph (A), the term `modified adjusted gross income' 
     means the adjusted gross income of the taxpayer for the 
     taxable year increased by any amount excluded from gross 
     income under section 911, 931, or 933.
       ``(2) Purchase price limitation.--A credit shall not be 
     allowed under subsection (a) with respect to the purchase of 
     a residence the purchase price of which exceeds $225,000.
       ``(c) Principal Residence.--For purposes of this section, 
     the term `principal residence' has the same meaning as when 
     used in section 121.
       ``(d) Carryover of Credit.--If the credit allowable under 
     subsection (a) exceeds the limitation imposed by section 
     26(a) for such taxable year reduced by the sum of the credits 
     allowable under subpart A of part IV of subchapter A (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such taxable year.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Allocation of dollar limitation.--
       ``(A) Married individuals filing separately.--In the case 
     of a married individual filing a separate return, subsection 
     (a) shall be applied by substituting `$2,500' for `$5,000'.

[[Page 382]]

       ``(B) Other taxpayers.--If 2 or more individuals who are 
     not married purchase a principal residence, the amount of the 
     credit allowed under subsection (a) shall be allocated among 
     such individuals in such manner as the Secretary may 
     prescribe, except that the total amount of the credits 
     allowed to all such individuals shall not exceed $5,000.
       ``(2) Purchase.--
       ``(A) In general.--The term `purchase' means any 
     acquisition, but only if--
       ``(i) the property is not acquired from a person whose 
     relationship to the person acquiring it would result in the 
     disallowance of losses under section 267 or 707(b) (but, in 
     applying section 267 (b) and (c) for purposes of this 
     section, paragraph (4) of section 267(c) shall be treated as 
     providing that the family of an individual shall include only 
     his spouse, ancestors, and lineal descendants), and
       ``(ii) the basis of the property in the hands of the person 
     acquiring it is not determined--

       ``(I) in whole or in part by reference to the adjusted 
     basis of such property in the hands of the person from whom 
     acquired, or
       ``(II) under section 1014(a) (relating to property acquired 
     from a decedent).

       ``(B) Construction.--A residence which is constructed by 
     the taxpayer shall be treated as purchased by the taxpayer on 
     the date the taxpayer first occupies such residence.
       ``(3) Purchase price.--The term `purchase price' means the 
     adjusted basis of the principal residence on the date such 
     residence is purchased.
       ``(f) Reporting.--If the Secretary requires information 
     reporting under section 6045 by a person described in 
     subsection (e)(2) thereof to verify the eligibility of 
     taxpayers for the credit allowable by this section, the 
     exception provided by section 6045(e)(5) shall not apply.
       ``(g) Credit Treated as Nonrefundable Personal Credit.--For 
     purposes of this title, the credit allowed by this section 
     shall be treated as a credit allowable under subpart A of 
     part IV of subchapter A of this chapter.
       ``(h) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to the 
     purchase of any residence, the basis of such residence shall 
     be reduced by the amount of the credit so allowed.
       ``(i) Application of Section.--This section shall apply to 
     property purchased after December 31, 2001, and before 
     January 1, 2005.''.
       (b) Application to Renewal Communities.--Part III of 
     subchapter X of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following new section:

     ``SEC. 1400K. HOMEBUYER CREDIT.

       ``For purposes of section 1395, a renewal community shall 
     be treated as an empowerment zone.''.
       (c) Conforming Amendments.--
       (1) Part II of subchapter U of chapter 1 of the Internal 
     Revenue Code of 1986 is amended to read as follows:

      ``PART II--INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE 
                            COMMUNITIES.''.

       (2) The table of parts of subchapter U of chapter 1 of such 
     Code is amended to read as follows:

``Part II. Incentives for empowerment zones and enterprise 
              communities.''.
       (3) The table of sections of part II of subchapter U of 
     chapter 1 of such Code is amended by adding at the end the 
     following new item:

``Sec. 1395. Homebuyer credit.''.
       (4) The table of sections of part III of subchapter X of 
     chapter 1 of such Code is amended by adding at the end the 
     following new item:

``Sec. 1400K. Homebuyer credit.''.

             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

     SEC. 301. BLOCK GRANT STUDY.

       (a) Study.--
       (1) In general.--The Secretary of Housing and Urban 
     Development shall conduct a study regarding--
       (A) the feasibility of consolidating existing public and 
     low-income housing programs under the United States Housing 
     Act of 1937 into a comprehensive block grant system of 
     Federal aid that--
       (i) provides assistance on an annual basis;
       (ii) maximizes funding certainty and flexibility; and
       (iii) minimizes paperwork and delay; and
       (B) the possibility of administering future public and low-
     income housing programs under the United States Housing Act 
     of 1937 in accordance with such a block grant system.
       (2) Public housing/section 8 moving to work 
     demonstration.--In conducting the study described in 
     paragraph (1), the Secretary of Housing and Urban Development 
     shall consider data from and assessments of the demonstration 
     program conducted under section 204 of the Omnibus 
     Consolidated Rescissions and Appropriations Act of 1996 
     (Public Law 104-134, 110 Stat. 1321).
       (b) Report to Comptroller General.--Not later than 18 
     months after the date of enactment of this Act, the Secretary 
     of Housing and Urban Development shall submit to the 
     Comptroller General of the United States a report that 
     includes--
       (1) the results of the study conducted under subsection 
     (a); and
       (2) any recommendations for legislation.
       (c) Report to Congress.--Not later than 24 months after the 
     date of enactment of this Act, the Comptroller General of the 
     United States shall submit to the Congress a report that 
     includes--
       (1) an analysis of the report submitted under subsection 
     (b); and
       (2) any recommendations for legislation.

     SEC. 302. HOMEOWNERSHIP FOR MUNICIPAL EMPLOYEES.

       (a) Eligible Activities.--Section 215(b)(2) of the 
     Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
     12745(b)(2)) is amended to read as follows:
       ``(2) is the principal residence of an owner who--
       ``(A) is a member of a family that qualifies as a low-
     income family--
       ``(i) in the case of a contract to purchase existing 
     housing, at the time of purchase;
       ``(ii) in the case of a lease-purchase agreement for 
     existing housing or for housing to be constructed, at the 
     time the agreement is signed; or
       ``(iii) in the case of a contract to purchase housing to be 
     constructed, at the time the contract is signed; or
       ``(B)(i) is a uniformed employee (which shall include 
     policemen, firemen, and sanitation and other maintenance 
     workers) or a teacher who is an employee of the participating 
     jurisdiction (or an agency or school district serving such 
     jurisdiction) that is investing funds made available under 
     this subtitle to support homeownership of the residence; and
       ``(ii) is a member of a family whose income, at the time 
     referred to in clause (i), (ii), or (iii) of subparagraph 
     (A), as appropriate, and as determined by the Secretary with 
     adjustments for smaller and larger families, does not exceed 
     115 percent of the median income of the area;''.
       (b) Income Targeting.--Section 214(2) of the Cranston-
     Gonzalez National Affordable Housing Act (42 U.S.C. 12744(2)) 
     is amended by inserting before the semicolon the following: 
     ``or families described in section 215(b)(2)(B)''.
       (c) Eligible Investments.--Section 212(b) of the Cranston-
     Gonzalez National Affordable Housing Act (42 U.S.C. 12742(b)) 
     is amended by adding at the end the following: 
     ``Notwithstanding the preceding sentence, in the case of 
     homeownership assistance for residences of owners described 
     in section 215(b)(2)(B), funds made available under this 
     subtitle may only be invested (A) to provide amounts for 
     downpayments on mortgages, (B) to pay reasonable closing 
     costs normally associated with the purchase of a residence, 
     (C) to obtain pre- or post-purchase counseling relating to 
     the financial and other obligations of homeownership, or (D) 
     to subsidize mortgage interest rates.''.

     SEC. 303. COMMUNITY DEVELOPMENT.

       (a) Eligible Activities.--Section 105(a) of the Housing and 
     Community Development Act of 1974 (42 U.S.C. 5305(a)), is 
     amended--
       (1) in paragraph (22)(C), by striking ``and'' at the end;
       (2) in paragraph (23), by striking the period at the end 
     and inserting a semicolon;
       (3) in paragraph (24), by striking ``and'' at the end;
       (4) in paragraph (25), by striking the period at the end 
     and inserting ``; and''; and
       (5) by adding at the end the following:
       ``(26) provision of direct assistance to facilitate and 
     expand homeownership among uniformed employees (including 
     policemen, firemen, and sanitation and other maintenance 
     workers) of, and teachers who are employees of, the 
     metropolitan city or urban county (or an agency or school 
     district serving such city or county) receiving grant amounts 
     under this title pursuant to section 106(b), or the unit of 
     general local government (or an agency or school district 
     serving such unit) receiving such grant amounts pursuant to 
     section 106(d), except that, notwithstanding section 
     102(a)(20)(B) or any other provision of this title, such 
     assistance may be provided on behalf of such employees whose 
     family incomes do not exceed 115 percent of the median income 
     of the area involved, as determined by the Secretary with 
     adjustments for smaller and larger families, and except that 
     such assistance shall be used only for acquiring principal 
     residences for such employees by--
       ``(A) providing amounts for downpayments on mortgages;
       ``(B) paying reasonable closing costs normally associated 
     with the purchase of a residence;
       ``(C) obtaining pre- or post-purchase counseling relating 
     to the financial and other obligations of homeownership; or
       ``(D) subsidizing mortgage interest rates.''.
       (b) Primary Objectives.--Section 105(c) of the Housing and 
     Community Development Act of 1974 (42 U.S.C. 5305(c)) is 
     amended by adding at the end the following:
       ``(5) Homeownership assistance for municipal employees.--
     Notwithstanding any other provision of this title, any 
     assisted activity described in subsection (a)(26) shall be 
     considered, for purposes of this title, to benefit persons of 
     low and moderate income and shall be directed toward the 
     objective under section 101(c)(3).''.

[[Page 383]]



          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

     SEC. 401. RELEASE FROM LIABILITY OF PERSONS THAT FULFILL 
                   REQUIREMENTS OF STATE AND LOCAL LAW.

       Section 107 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9607) is 
     amended by adding at the end the following:
       ``(o) Release From Liability of Persons That Fulfill 
     Requirements of State and Local Law.--
       ``(1) Definition of urban nonlisted facility.--In this 
     subsection, the term `urban nonlisted facility' means a 
     facility that is not listed or proposed for listing on the 
     National Priorities List.
       ``(2) Enforcement authority.--Neither the President nor any 
     other person may bring an administrative or judicial 
     enforcement action under this Act with respect to an urban 
     nonlisted facility against a person that has fulfilled all 
     requirements applicable to the person under State and local 
     law to conduct a response action at the urban nonlisted 
     facility, as evidenced by a release from liability issued by 
     authorized State and local officials, to the extent that the 
     administrative or judicial action would seek to require 
     response action that is within the scope of the response 
     action conducted in accordance with State and local law.''.

     SEC. 402. BROWNFIELD PROGRAM.

       Title I of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.) is amended by adding at the end the following:

     ``SEC. 128. BROWNFIELD PROGRAM.

       ``(a) Definition of Brownfield Facility.--
       ``(1) In general.--In this section, the term `brownfield 
     facility' means a parcel of land that contains an abandoned, 
     idled, or underused commercial or industrial facility, the 
     expansion or redevelopment of which is complicated by the 
     presence or potential presence of a hazardous substance.
       ``(2) Exclusions.--The term `brownfield facility' does not 
     include--
       ``(A) a facility that is the subject of a removal or 
     planned removal under this title;
       ``(B) a facility that is listed or has been proposed for 
     listing on the National Priorities List or that has been 
     removed from the National Priorities List;
       ``(C) a facility that is subject to corrective action under 
     section 3004(u) or 3008(h) of the Solid Waste Disposal Act 
     (42 U.S.C. 6924(u), 6928(h)) at the time at which an 
     application for a grant or loan concerning the facility is 
     submitted under this section;
       ``(D) a land disposal unit with respect to which--
       ``(i) a closure notification under subtitle C of the Solid 
     Waste Disposal Act (42 U.S.C. 6921 et seq.) has been 
     submitted; and
       ``(ii) closure requirements have been specified in a 
     closure plan or permit;
       ``(E) a facility with respect to which an administrative 
     order on consent or judicial consent decree requiring cleanup 
     has been entered into by the United States under--
       ``(i) the Toxic Substances Control Act (15 U.S.C. 2601 et 
     seq.);
       ``(ii) the Federal Water Pollution Control Act (33 U.S.C. 
     1251 et seq.);
       ``(iii) the Safe Drinking Water Act (42 U.S.C. 300f et 
     seq.);
       ``(iv) the Solid Waste Disposal Act (42 U.S.C. 6901 et 
     seq.); or
       ``(v) this Act;
       ``(F) a facility that is owned or operated by a department, 
     agency, or instrumentality of the United States; or
       ``(G) a portion of a facility, for which portion, 
     assistance for response activity has been obtained under 
     subtitle I of the Solid Waste Disposal Act (42 U.S.C. 6991 et 
     seq.) from the Leaking Underground Storage Tank Trust Fund 
     established under section 9508 of the Internal Revenue Code 
     of 1986.
       ``(b) Brownfield Program.--
       ``(1) In general.--There is established within the 
     Environmental Protection Agency a brownfield program.
       ``(2) Components.--Under the brownfield program, the 
     Administrator may--
       ``(A) expend funds to examine, identify as brownfield 
     facilities, and include in the brownfield program, idle or 
     underused industrial and commercial facilities; and
       ``(B) provide grants to State and local governments to 
     clean up brownfield facilities and return brownfield 
     facilities to productive use.
       ``(c) Maintenance of Preexisting Brownfield Program.--In 
     carrying out subsection (b), the Administrator shall maintain 
     any brownfield program established by the Administrator 
     before the date of enactment of this section.
       ``(d) Maximum Grant Amount.--A grant under subsection 
     (b)(2)(B) shall not exceed $200,000 with respect to any 
     brownfield facility.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated out of the Hazardous Substance 
     Superfund to carry out this section--
       ``(1) $100,000,000 for fiscal year 2002;
       ``(2) $105,000,000 for fiscal year 2003; and
       ``(3) $110,000,000 for fiscal year 2004.''.
                                 ______
                                 
      By Mr. LOTT (for Mr. Specter):
  S. 24. A bill to provide improved access to health care, enhance 
informed individual choice regarding health care services, lower health 
care costs through the use of appropriate providers, improve the 
quality of health care, improve access to long-term care, and for other 
purposes; to the Committee on Finance.


                   health care assurance act of 2001

  Mr. SPECTER. Mr. President, as the 107th Congress commences, those of 
us elected to serve in the most evenly divided Senate and House in 
history recognize that whatever our parties' differences may be, we 
have a new opportunity to make a positive impact on the lives of the 
American people. The narrow margins in both legislative bodies offer us 
a chance to learn from the past, determine how best to respond to the 
challenges that are before us, and forge important alliances which will 
enable us to pass legislation important to this nation. I believe it is 
clear that one of our first priorities must be additional incremental 
reforms of our health care system.
  There is no time to waste. Many of our nation's health care problems 
are getting worse, not better. In its April 2000 report, the Employee 
Benefit Research Institute (EBRI) analyzed the March 1999 Current 
Population Survey, a document generated yearly by the U.S. Census 
Bureau. EBRI's analysis tells us that in 1998, about 194.7 million 
working-age Americans derived their health insurance coverage as 
follows: approximately 65 percent from employer plans; 10.4 percent 
from Medicare and Medicaid within a total of 14.0 percent from public 
sources of coverage; and 7 percent from other private insurance. While 
this survey shows us where the insured are obtaining their coverage, it 
also details a troubling statistic: 43.9 million Americans, or 18 
percent of Americans aged 18-64, were uninsured. While the rate of 
growth of the number of uninsured is slowing, our goal of actually 
reducing the number of people without access to health coverage and 
services remains clear.
  As I have said many times, we can fix the problems felt by uninsured 
Americans without resorting to big government and without completely 
overhauling our current system, one that works well for most 
Americans--serving 81.6 percent of our non-elderly citizens. We must 
enact reforms that improve upon our current market-based health care 
system, as it is clearly the best health care system in the world.
  Accordingly, today I am introducing the Health Care Assurance Act of 
2001, which, if enacted, will take us further down the path of the 
incremental reforms started by the Health Insurance Portability and 
Accountability Act of 1996 (Kassebaum-Kennedy) and various health care 
provisions enacted during the 105th and 106th Congresses. I would note 
that the final version of Kassebaum-Kennedy contained many elements 
which were in S. 18, the incremental health care reform bill I 
introduced when the 104th Congress began on January 4, 1995.
  The bill I am introducing today is distinct from my longstanding 
efforts regarding managed care reform. During the 105th and 106th 
Congresses, I joined a bipartisan group of Senators to introduce the 
Promoting Responsible Managed Care Act of 1998 and 1999, balanced 
proposals which would ensure that patients receive the benefits and 
services to which they are entitled, without compromising the savings 
and coordination of care that can be achieved through managed care.
  The managed care debate, which aims to improve insurance coverage for 
those who already have it, stands in stark contrast to the Health Care 
Assurance Act of 2001. My bill is intended to provide access to 
insurance coverage for those who have never even had the option to 
purchase it--or who simply could not afford it--due to market 
constraints.
  Given the importance of enacting this type of legislation, it is 
worth reviewing recent history which has taught us that bipartisanship 
is crucial in accomplishing any goal. In particular, the debate over 
President Clinton's Health Security Act during the 103rd Congress is 
replete with lessons concerning the pitfalls that inevitably lead to 
legislative failure. Several times during the 103rd Congress, I spoke 
on the Senate floor to address what seemed to be the wisest course--

[[Page 384]]

to pass incremental health care reforms with which we could all agree. 
Unfortunately, what seemed obvious to me, based on comments and 
suggestions by a majority of Senators who favored a moderate approach, 
was not obvious at the time to the Senate's Democratic leadership.
  This failure to understand the merits of an incremental approach was 
demonstrated in April 1993, during my attempts to offer a health care 
reform amendment based on the text of S. 631, an incremental reform 
bill I had introduced earlier in the session. This bill incorporated 
moderate, consensus principles in a reasonable reform package. First, I 
attempted to offer the bill as an amendment to legislation dealing with 
debt ceilings. Subsequently, I was informed that the floor 
consideration of this bill would be structured in a way that precluded 
my offering an amendment. Therefore, I prepared to offer my health care 
bill as an amendment to the fiscal year 1993 Emergency Supplemental 
Appropriations bill. To my dismay, then Majority Leader Mitchell, and 
Senator Byrd, then Chairman of the Appropriations Committee, worked 
together to ensure that I could not offer my amendment by keeping the 
Senate in a quorum call, a parliamentary tactic used to delay and 
obstruct. I was unable to obtain unanimous consent to end the quorum 
call, and thus could not proceed with my amendment.
  Three years later, well after the behemoth Clinton health care reform 
bill was derailed, the Senate once again endured a lengthy political 
battle concerning the Kassebaum-Kennedy bill, which I was pleased to 
cosponsor. When enough Senators sensed the growing frustration of the 
American people, we achieved a breakthrough in August 1996, and 
Kassebaum-Kennedy's vital health insurance market reforms were finally 
passed. There is no question that Kassebaum-Kennedy made significant 
steps forward in addressing troubling issues in health care--such as 
increasing the ease of portability of health insurance coverage--but I 
continue to recognize that there is much more to be done. That bill's 
incremental approach to health care reform is what allowed it to 
generate bipartisan, consensus support in the Senate. We knew that it 
did not address every single problem in the health care delivery 
system, but it would make life better for millions of American men, 
women, and children.
  I urge my colleagues to note a most important fact: the Kassebaum-
Kennedy bill was enacted only after Democrats abandoned their hopes for 
passing a nationalized, big government health care scheme, and 
Republicans abandoned their position that access to health care is not 
really a major problem in the United States that demands Federal 
action.
  Perhaps the greatest recent example of the power of bipartisanship 
took place during the 105th Congress, with the passage of the Balanced 
Budget Act of 1997. This historic bipartisan agreement between Congress 
and the White House to balance the budget by 2002 extended the life of 
the vital Medicare hospital trust fund by ten years, while expanding 
needed benefits for seniors. The new law created a National Bipartisan 
Commission on the Future of Medicare to address the implications of the 
retirement of the Baby Boom generation, and marked the first balanced 
Federal budget in thirty years. This landmark accomplishment clearly 
would not have occurred without all members of Congress and the 
Administration crossing party lines, compromising, and doing what was 
right for the American people regardless of political affiliations.
  Despite the historic nature of the Balanced Budget Act of 1997, 
however, many providers, hospitals, home health agencies, and insurers 
argued that the cuts went too deep, and that patient access and care 
were being compromised. In both the 105th and 106th Congresses, I 
supported bipartisan efforts to carefully relieve and infuse additional 
dollars into areas which suffered too greatly from Medicare cuts, 
without upsetting the delicate balance of the budget.
  We must realize that if we are to continue to be successful in 
meeting the nation's health care needs, the solutions to the system's 
problems must come from the political center, not from the extremes.
  I have advocated health care reform in one form or another throughout 
my 18 years in the Senate. My strong interest in health care dates back 
to my first term, when I sponsored S. 811, the Health Care for 
Displaced Workers Act of 1983, and S. 2051, the Health Care Cost 
Containment Act of 1983, which would have granted a limited antitrust 
exemption to health insurers, permitting them to engage in certain 
joint activities such as acquiring or processing information, and 
collecting and distributing insurance claims for health care services 
aimed at curtailing then escalating health care costs. In 1985, I 
introduced the Community Based Disease Prevention and Health Promotion 
Projects Act of 1985, S. 1873, directed at reducing the human tragedy 
of low birth weight babies and infant mortality. Since 1983, I have 
introduced and cosponsored numerous other bills concerning health care 
in our country. A complete list of the 31 health care bills that I have 
sponsored since 1983 is included for the Record.
  During the 102nd Congress, I pressed the Senate to take action on the 
health care market issue. On July 29, 1992, I offered an amendment to 
legislation then pending on the Senate floor, which included a change 
from 25 percent to 100 percent deductibility for health insurance 
purchased by self-employed individuals, and small business insurance 
market reforms to make health coverage more affordable for small 
businesses. Included in this amendment were provisions from a bill 
introduced by the late Senator John Chafee, legislation which I 
cosponsored and which was previously proposed by Senators Bentsen and 
Durenberger. When then-Majority Leader Mitchell argued that the health 
care amendment I was proposing did not belong on that bill, I offered 
to withdraw the amendment if he would set a date certain to take up 
health care, similar to an arrangement made on product liability 
legislation, which had been placed on the calendar for September 8, 
1992. The Majority Leader rejected that suggestion and the Senate did 
not consider comprehensive health care legislation during the balance 
of the 102nd Congress. My July 29, 1992 amendment was defeated on a 
procedural motion by a vote of 35 to 60, along party lines.
  The substance of that amendment, however, was adopted later by the 
Senate on September 23, 1992, when it was included in a Bentsen/
Durenberger amendment which I cosponsored to broader tax legislation 
(H.R. 11). This amendment, which included essentially the same self-
employed tax deductibility and small group reforms I had proposed on 
July 29th of that year, passed the Senate by voice vote. Unfortunately, 
these provisions were later dropped from H.R. 11 in the House-Senate 
conference.
  On August 12, 1992, I introduced legislation entitled the Health Care 
Affordability and Quality Improvement Act of 1992, S. 3176, that would 
have enhanced informed individual choice regarding health care services 
by providing certain information to health care recipients, would have 
lowered the cost of health care through use of the most appropriate 
provider, and would have improved the quality of health care.
  On January 21, 1993, the first day of the 103rd Congress, I 
introduced the Comprehensive Health Care Act of 1993, S. 18. This 
legislation was comprised of reforms that our health care system could 
have adopted immediately. These initiatives would have both improved 
access and affordability of insurance coverage and would have 
implemented systemic changes to lower the escalating cost of care in 
this country. S. 18 is the principal basis of the legislation I 
introduced in the last three Congresses as well as this one.
  On March 23, 1993, I introduced the Comprehensive Access and 
Affordability Health Care Act of 1993, S. 631, which was a composite of 
health care legislation introduced by Senators Cohen, Kassebaum, Bond, 
and McCain, and included pieces of my bill, S. 18. I

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introduced this legislation in an attempt to move ahead on the 
consideration of health care legislation and provide a starting point 
for debate. As I noted earlier, I was precluded by Majority Leader 
Mitchell from obtaining Senate consideration of my legislation as a 
floor amendment on several occasions. Finally, on April 28, 1993, I 
offered the text of S. 631 as an amendment to the pending Department of 
the Environment Act (S. 171) in an attempt to urge the Senate to act on 
health care reform. My amendment was defeated 65 to 33 on a procedural 
motion, but the Senate had finally been forced to contemplate action on 
health care reform.
  On the first day of the 104th Congress, January 4, 1995, I introduced 
a slightly modified version of S. 18, the Health Care Assurance Act of 
1995 (also S. 18), which contained provisions similar to those 
ultimately enacted in the Kassebaum-Kennedy legislation, including 
insurance market reforms, an extension of the tax deductibility of 
health insurance for the self employed, and tax deductibility of long 
term care insurance.
  I continued these efforts in the 105th Congress, with the 
introduction of Health Care Assurance Act of 1997 (S. 24), which 
included market reforms similar to my previous proposals with the 
addition of a new Title I, an innovative program to provide vouchers to 
States to cover children who lack health insurance coverage. I also 
introduced Title I of this legislation as a stand-alone bill, the 
Healthy Children's Pilot Program of 1997 (S. 435) on March 13, 1997. 
This proposal targeted the approximately 4.2 million children of the 
working poor who lacked health insurance at that time. These are 
children whose parents earn too much to be eligible for Medicaid, but 
do not earn enough to afford private health care coverage for their 
families. This legislation would have established a $10 billion/5 year 
discretionary pilot program to cover these uninsured children by 
providing grants to States. Modeled after Pennsylvania's 
extraordinarily successful Caring and BlueCHIP programs, this 
legislation was the first Republican-sponsored child health insurance 
bill during the 105th Congress.
  I was encouraged that the Balanced Budget Act of 1997, signed into 
law on August 5, 1997, included a combination of the best provisions 
from many of the child health insurance proposals throughout this 
Congress. The new legislation allocated $24 billion over five years to 
establish State Child Health Insurance Programs, funded in part by a 
slight increase in the cigarette tax.
  On the first day of the 106th Congress, I again introduced the Health 
Care Assurance Act of 1999, also designated S. 24. This bill contained 
similar insurance market reforms, as well as new provisions to augment 
the new State Child Health Insurance Program, to assist individuals 
with disabilities in maintaining quality health care coverage, and to 
establish a National Fund for Health Research to supplement the funding 
of the National Institutes of Health. All these new initiatives, as 
well as the market reforms that I supported previously, work toward the 
goals of covering more individuals and stemming the tide of rising 
health costs.
  My commitment to the issue of health care reform across all 
populations has been consistently evident during my tenure in the 
Senate, as I have taken to this floor and offered health care reform 
bills and amendments on countless occasions. I will continue to stress 
the importance of the Federal government's investment in and attention 
to the system's future.
  As my colleagues are aware, I can personally report on the miracles 
of modern medicine. Seven and one half years ago, an MRI detected a 
benign tumor (meningioma) at the outer edge of my brain. It was removed 
by conventional surgery, with five days of hospitalization and five 
more weeks of recuperation.
  When a small regrowth was detected by a follow-up MRI in June 1996, 
it was treated with high powered radiation using a remarkable device 
called the ``Gamma Knife.'' I entered the hospital on the morning of 
October 11, 1996, and left the same afternoon, ready to resume my 
regular schedule. Like the MRI, the Gamma Knife is a recent innovation, 
coming into widespread use only in the past decade.
  In July 1998, I was pleased to return to the Senate after a 
relatively brief period of convalescence following heart bypass 
surgery. This experience again led me to marvel at our health care 
system and made me more determined than ever to support Federal funding 
for biomedical research and to support legislation which will 
incrementally make health care available to all Americans.
  My concern about health care has long pre-dated my own personal 
benefits from the MRI and other diagnostic and curative procedures. As 
I have previously discussed, my concern about health care began many 
years ago and has been intensified by my service on the Appropriations 
Subcommittee on Labor, Health and Human Services, and Education, which 
I now have the honor to chair.
  My own experience as a patient has given me deeper insights into the 
American health care system beyond my perspective from the U.S. Senate. 
I have learned: (1) our health care system, the best in the world, is 
worth every cent we pay for it; (2) patients sometimes have to press 
their own cases beyond doctors' standard advice; (3) greater 
flexibility must be provided on testing and treatment; (4) our system 
has the resources to treat the 43.9 million Americans currently 
uninsured, but we must find the way to pay for it; and (5) all 
Americans deserve the access to health care from which I and others 
with coverage have benefitted.
  I have long been convinced that our Federal budget of $1.8 trillion 
could provide sufficient funding for America's needs if we establish 
our real priorities. Over the past eight years, I believe we have 
learned a great deal about our health care system and what the American 
people are willing to accept from the Federal government. The message 
we heard loudest was that Americans do not want a massive overhaul of 
the health care system. Instead, our constituents want Congress to 
proceed at a slower pace and to target what is not working in the 
health care system while leaving in place what is working.
  As I have said both publicly and privately, I had been willing to 
cooperate with the Clinton Administration in solving the health care 
problems facing our country. However, I found many important areas 
where I differed with President Clinton's approach to solutions and I 
did so because I believed that the proposals would have been 
deleterious to my fellow Pennsylvanians, to the American people, and to 
our health care system as a whole. Most importantly, as the President 
proposed in 1993, I did not support creating a large new government 
bureaucracy because I believe that savings should go to health care 
services and not bureaucracies.
  On this latter issue, I first became concerned about the potential 
growth in bureaucracy in September 1993 after reading the President's 
239-page preliminary health care reform proposal. I was surprised by 
the number of new boards, agencies, and commissions, so I asked my 
legislative assistant, Sharon Helfant, to make me a list of all of 
them. Instead, she decided to make a chart. The initial chart depicted 
77 new entities and 54 existing entities with new or additional 
responsibilities.
  When the President's 1,342-page Health Security Act was transmitted 
to Congress on October 27, 1993, my staff reviewed it and found an 
increase to 105 new agencies, boards, and commissions and 47 existing 
departments, programs and agencies with new or expanded jobs. This 
chart received national attention after being used by Senator Bob Dole 
in his response to the President's State of the Union address on 
January 24, 1994.
  The response to the chart was tremendous, with more than 12,000 
people from across the country contacting my office for a copy; I still 
receive requests for the chart nearly eight years later. Groups and 
associations, such as United We Stand America, the American Small 
Business Association, the

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National Federation of Republican Women, and the Christian Coalition, 
reprinted the chart in their publications--amounting to hundreds of 
thousands more in distribution. Bob Woodward of the Washington Post 
later stated that he thought the chart was the single biggest factor 
contributing to the demise of the Clinton health care plan. And, as 
recently as the November 1996 election, my chart was used by Senator 
Dole in his presidential campaign to illustrate the need for 
incremental health care reform as opposed to a big government solution.
  With the history of the health care reform debate in mind and 
building on my previous efforts, I am again introducing an incremental 
bill which would provide quality health care without adversely 
affecting the many positive aspects of our health care system. It is 
more prudent to implement targeted reforms and then act later to 
improve upon what we have done. I call this trial and modification. We 
must be careful not to damage the positive aspects of our health care 
system upon which more than 194.7 million Americans justifiably rely.
  The legislation I am introducing today has three objectives: (1) to 
provide affordable health insurance for those now not covered; (2) to 
reduce health care costs for all Americans; and (3) to improve coverage 
for underinsured individuals, families, and children.
  This bill includes provisions to expand the Medicaid program to cover 
higher income individuals than currently allowed, to encourage the 
formation of small group insurance purchasing arrangements, to expand 
access to health insurance for children, to improve health benefits for 
individuals with disabilities, to strengthen preventive health benefits 
under the Medicare program, to increase access to prenatal care and 
outreach for the prevention of low birth weight babies, to strengthen 
patients' rights regarding medical care at the end of life, to expand 
access to primary and preventive health services, to reform the COBRA 
law, to enhance our investment in outcomes research, to reduce the 
incidence of medical errors, and to establish a national fund for 
health research as a supplement to the National Institutes of Health 
budget.
  Taken together, I believe the reforms proposed in the Health Care 
Assurance Act of 2001 will both improve the quality of health care 
delivery and will help ease the escalating costs of health care in this 
country.
  This new initiative, which was not contained in my previous version 
of this legislation, would guarantee coverage for individuals earning 
up to 133 percent of the Federal poverty level ($11,105 for a single/
$22,676 for a family of four) and would give states the option to cover 
individuals earning up to 200 percent of poverty ($16,700 for a single/
$34,100 for a family of four). This population is generally deemed 
undesirable by private insurers, and since these low-income individuals 
are ineligible for Medicaid, they currently remain uninsured.
  The provisions in this title advance the recent joint proposal by the 
Health Insurance Association of America and Families USA, two groups 
which have traditionally been on opposing ends of health policy 
debates. Recognizing the rising number of Americans who lack health 
insurance, these groups took the unprecedented step in crafting a set 
of basic policy goals on which Congress may build consensus and get 
something done for the uninsured. Currently, Medicaid only guarantees 
coverage for pregnant women and infants who earn up to 133 percent of 
the poverty level. Beyond that population, the Federal mandate varies 
across age, income, and disability status; for instance, there are 
different federal mandates for preschool age children than for school-
age children and for disabled individuals. Further, current law does 
not allow any Federal contributions for coverage of people ages 16-18 
or for adults with children. I recognize that states may certainly 
choose to establish programs to cover these and other categories of 
low-income people, but usually will not do so without Federal help.
  Title II of the bill builds on the State Child Health Insurance 
Program (SCHIP), the program established in the Balanced Budget Act of 
1997, which allocated $24 billion over five years to increase health 
insurance coverage for children. The SCHIP program gives States the 
option to use federally funded grants to provide vouchers to eligible 
families to purchase health insurance for their children, or to expand 
Medicaid coverage for those uninsured children, or a combination of 
both. This title would increase the income eligibility to families with 
incomes at or below 235 percent of the Federal poverty level ($40,067 
annually for a family of four). The Health Care Financing 
Administration reported that nearly two million children were enrolled 
in the SCHIP program during fiscal year 1999. The Administration's goal 
is to enroll five million more children in the program by the end of 
fiscal year 2002. This provision would allow eligibility for 
approximately another 850,000 uninsured children.
  Title III assists another of our Nation's most vulnerable populations 
by improving the delivery of care for individuals with long-term 
disabilities. This title would allow for Medicaid reimbursement for 
community-based attendant care services, as an alternative to 
institutionalization, for eligible individuals who require such 
services based on functional need, without regard to the individual's 
age or the nature of the disability. The most recent data available 
tell us that 6.64 million individuals receive care for disabilities 
under the Medicaid program.
  This title builds on S. 1935, legislation I introduced during the 
106th Congress with Senator Tom Harkin of Iowa. Such a change in 
Medicaid law is desperately needed given the Supreme Court's recent 
ruling in Olmstead v. L.C., 119 S. Ct. 2176 (1999): the Americans with 
Disabilities Act (ADA) requires States, in some circumstances, to 
provide community-based treatment to persons with mental disabilities 
rather than placement in institutions. This decision and several lower 
court decisions have pointed to the need for a structured Medicaid 
attendant-care services benefit in order to meet obligations under the 
ADA.
  I am pleased to report that my fiscal year 2001 Labor, HHS, and 
Education Appropriations bill provided $50 million for ``Real Choice, 
Systems Change'' grants for states to fund initiatives for systems 
improvements and to provide long term services and supports, including 
community-based attendant care. In addition, $20 million was provided 
to continue demonstration projects on Medicaid coverage of community-
based attendant care services. Title III of this bill expands and 
authorizes the programs we have been funding as demonstration projects 
in order to establish a permanent infrastructure for the new benefit.
  The next title contains provisions to make it easier for small 
businesses to buy health insurance for their workers by establishing 
voluntary purchasing groups. It also obligates employers to offer, but 
not pay for, at least two health insurance plans that protect 
individual freedom of choice and that meet a standard minimum benefits 
package. It extends COBRA benefits and coverage options to provide 
portability and security of affordable coverage between jobs.
  Specifically, Title IV extends the COBRA benefit option from 18 
months to 24 months. COBRA refers to a measure which was enacted in 
1985 as part of the Consolidated Omnibus Budget Reconciliation Act 
(COBRA '85) to allow employees who leave their job, either through a 
lay-off or by choice, to continue receiving their health care benefits 
by paying the full cost of such coverage. By extending this option, 
such unemployed persons will have enhanced coverage options, 
particularly when compared to what they would be able to buy in the 
individual insurance market.
  In addition, options under COBRA are expanded to include plans with 
lower premiums and higher deductibles of either $1,000 or $3,000. This 
provision is incorporated from legislation introduced in the 103rd 
Congress by Senator Phil Gramm and will provide an extra cushion of 
coverage options for people

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in transition. According to Senator Gramm, with these options, the 
typical monthly premium paid for a family of four would drop by as much 
as 20 percent when switching to a $1,000 deductible and as much as 52 
percent when switching to a $3,000 deductible.
  This title also includes a provision which would extend to 36 months 
the time period for COBRA coverage for a child who is no longer a 
dependent under a parent's health insurance policy. Uninsured workers 
tend to be concentrated among those under age 35, although the average 
age of uninsured workers is increasing. EBRI statistics indicate that 
24 percent of young adults between the ages of 18 and 24 were without 
coverage in 1998. This provision would allow those who are no longer 
dependents on their parents' plan to have a more secure safety net.
  With respect to the uninsured and underinsured, my bill would permit 
individuals and families to purchase guaranteed, comprehensive health 
coverage through purchasing groups. Health insurance plans offered 
through the purchasing groups would be required to meet basic, 
comprehensive standards with respect to benefits.
  My bill would also create health insurance purchasing groups for 
individuals wishing to purchase health insurance on their own. In 
today's market, such individuals often face a market where coverage 
options are not affordable. Purchasing groups will allow small 
businesses and individuals to buy coverage by pooling together to form 
purchasing groups, and choose from insurance plans that provide 
comprehensive benefits, with guaranteed enrollment, renewability, and 
equal pricing through community rating, adjusted by age and family 
size.
  Title IV of my bill also includes an important provision to give the 
self employed 100 percent deductibility of their health insurance 
premiums. The Kassebaum-Kennedy bill extended the deductibility of 
health insurance for the self employed to 80 percent by 2006. The 
Balanced Budget Act of 1997 and the Omnibus Appropriations Act for 
fiscal year 1999 both contained new phase-in scales for health 
insurance deductibility for the self-employed. Currently, self-employed 
persons may deduct 60 percent of their health insurance costs through 
2002, to be fully deductible in 2003. My bill would speed up the phase-
in: health insurance costs would be 70 percent deductible in 2001 and 
fully deductible in 2002, thereby giving the currently 3.1 million 
self-employed Americans who are uninsured a better incentive to 
purchase coverage.
  The provisions contained in this portion of my bill are vital, as 
EBRI statistics tell us that 60 percent of all uninsured workers in 
1998 were either self-employed or were working in small private-sector 
firms. The disparity is further demonstrated by the fact that 31 
percent of workers in private-sector firms with fewer than 25 employees 
were uninsured, compared with only 13 percent of workers in private-
sector firms with 1000 or more employees.
  It is anticipated that the increased costs to employers electing to 
cover their employees as provided under Title IV in my bill would be 
offset by the administrative savings generated by development of the 
small employer purchasing groups. Such savings have been estimated at 
levels as high as $9 billion annually. In addition, by addressing some 
of the areas within the health care system that have exacerbated costs, 
significant savings can be achieved and then redirected toward direct 
health care services.
  Although our existing health care system suffers from serious 
structural problems, common sense steps can be taken to head off the 
remaining problems before they reach crisis proportions. Title V of my 
bill includes initiatives which will enhance primary and preventive 
care services aimed at preventing disease.
  Each year about 7.6 percent of babies born in the United States are 
born with a low birth weight, multiplying their risk of death and 
disability. Most of the deaths which do occur are preventable. Although 
the infant mortality rate in the United States fell to an all-time low 
in 1989, and the rate decreased by 28 percent between 1988 and 1998, 
too many babies continue to be born of low birth weight. The Executive 
Director of the National Commission To Prevent Infant Mortality put it 
this way: ``More babies are being born at risk and all we are doing is 
saving them with expensive technology.''
  It is a human tragedy for a child to be born weighing 16 ounces with 
attendant problems which last a lifetime. I first saw one pound babies 
in 1984 when I was astounded to learn that Pittsburgh, Pennsylvania, 
had the highest infant mortality rate of African-American babies of any 
city in the United States. I wondered how that could be true of 
Pittsburgh, which has such enormous medical resources. It was an 
amazing thing for me to see a one pound baby, about as big as my hand. 
However, I am pleased to report that as a result of successful 
prevention initiatives like the federal Healthy Start program, 
Pittsburgh's infant mortality has decreased 20 percent.
  The Department of Health and Human Services has estimated that 
between $1.1 billion and $2.5 billion per year could be saved if the 
number of low birth weight children were reduced by 82,000 births. We 
know that in most instances, prenatal care is effective in preventing 
low birth weight babies. Numerous studies have demonstrated that low 
birth weight that does not have a genetic link is most often associated 
with inadequate prenatal care or the lack of prenatal care. The short 
and long-term costs of saving and caring for infants of low birth 
weight is staggering. In the most recent available study on the costs 
of low birth weight babies, the Office of Technology Assessment in 1988 
concluded that $8 billion was expended in 1987 for the care of 262,000 
low birth weight infants in excess of that which would have been spent 
on an equivalent number of babies born of normal birth weight, averted 
by earlier or more frequent prenatal care.
  To improve pregnancy outcomes for women at risk of delivering babies 
of low birth weight, my legislation would strengthen the Healthy Start 
program to reduce infant mortality and the incidence of low birth 
weight births, as well as to improve the health and well-being of 
mothers and their families, pregnant women and infants. Funds are 
awarded under this program with the goal of developing and coordinating 
effective health care and social support services for women and their 
babies.
  I initiated action that led to the creation of the Healthy Start 
program in 1991, working with the Bush Administration and Senator 
Harkin. As Chairman of the Appropriations Subcommittee with 
jurisdiction over the Department of Health and Human Services, I have 
worked with my colleagues to ensure the continued growth of this 
important program. In 1991, we allocated $25 million for the 
development of 15 demonstration projects. This number grew to 22 in 
1994, to 75 projects in 1998, and the Health Resources and Services 
Administration expects this number to continue to increase. For both 
fiscal years 2000 and 2001, we secured $90 million for this vital 
program.
  Title V also provides increased support to local educational agencies 
to develop and strengthen comprehensive health education programs, and 
to Head Start resource centers to support health education training 
programs for teachers and other day care workers. Many studies indicate 
that poor health and social habits are carried into adulthood and often 
passed on to the next generation. To interrupt this tragic cycle, our 
nation must invest in proven preventive health education programs.
  Title V also expands the authorization of a variety of public health 
programs, such as breast and cervical cancer prevention, childhood 
immunizations, family planning, and community health centers. These 
existing programs are designed to improve public health and prevent 
disease through primary and secondary prevention initiatives. It is 
essential that we invest more resources in these programs now if we are 
to make any substantial progress in reducing the costs of acute care in 
this country.

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  As Chairman of the Labor, HHS and Education Appropriations 
Subcommittee, I have greatly encouraged the development of prevention 
programs which are essential to keeping people healthy and lowering the 
cost of health care in this country. In my view, no aspect of health 
care policy is more important. Accordingly, my prevention efforts have 
been widespread. Specifically, I joined my colleagues in efforts to 
ensure that funding for the Centers for Disease Control and Prevention 
(CDC) increased $2.92 billion or 290 percent since 1989, for a fiscal 
year 2001 total of $3.92 billion. We have also worked to increase 
funding for CDC's breast and cervical cancer early detection program to 
$176 million in fiscal year 2001, almost one and a half times its 1993 
total.
  I have also supported programs at CDC which help children. CDC's 
childhood immunization program seeks to eliminate preventable diseases 
through immunization and to ensure that at least 90 percent of 2 year 
olds are vaccinated. The CDC also continues to educate parents and 
caregivers on the importance of immunization for children under two 
years. Along with my colleagues on the Appropriations Committee, I have 
helped ensure that funding for this important program totaled $532.5 
million for fiscal year 2001. The CDC's lead poisoning prevention 
program annually identifies about 50,000 children with elevated blood 
levels and places those children under medical management. The program 
prevents the amount of lead in children's blood from reaching dangerous 
levels and is currently funded at $36 million.
  In recent years, we have also strengthened funding for Community 
Health Centers, which provide immunizations, health advice, and health 
professions training. These Centers, administered by the Health 
Resources and Services Administration, provide a critical primary care 
safety net to rural and medically underserved communities, as well as 
uninsured individuals, migrant workers, the homeless, residents of 
public housing, and Medicaid recipients. For fiscal year 2001, these 
Centers received over $1.2 billion.
  As former Chairman of the Select Committee on Intelligence and 
current Chairman of the Appropriations Subcommittee with jurisdiction 
over non-defense biomedical research, I have worked to transfer CIA 
imaging technology to the fight against breast cancer. Through the 
Office of Women's Health within the Department of Health and Human 
Services, I secured a $2 million contract in fiscal year 1996 for a 
research consortium led by the University of Pennsylvania to perform 
the first clinical trials testing the use of intelligence technology 
for breast cancer detection. My Appropriations Subcommittee has 
continued to provide funds to continue these clinical trials.
  I have also been a strong supporter of funding for AIDS research, 
education, and prevention programs. Funding for Ryan White AIDS 
programs has increased from $757.4 million in 1996 to $1.6 billion for 
fiscal year 2001. Within the fiscal year 2001 funding, $65 million was 
included for pediatric AIDS programs and $589 million for the AIDS Drug 
Assistance Program (ADAP). AIDS research at the NIH totaled $742.4 
million in 1989, and has increased to an estimated $2.1 billion in 
fiscal year 2001.
  The health care community continues to recognize the importance of 
prevention in improving health status and reducing health care costs. 
The Balanced Budget Act of 1997 and the Consolidated Omnibus 
Appropriations Act of fiscal year 2001 established new and enhanced 
preventive benefits within the Medicare program, such as flu shots, 
bone mass measurements, yearly mammograms, biennial pap smears and 
pelvic exams, and coverage of colonoscopy for high risk patients. 
However, some of these ``wellness'' benefits have cost obligations, 
such as copayments or deductibles. In this bill, I have also included 
provisions which refine and strengthen preventive benefits within the 
Medicare program, including coverage of yearly pap smears, pelvic 
exams, and screening and diagnostic mammography with no copayment or 
Part B deductible; and coverage of insulin pumps for certain Type I 
Diabetics.
  The proposed expansions in preventive health services included in 
Title V of my bill are conservatively projected to save approximately 
$2.5 billion per year or $12.5 billion over five years. It is clearly 
difficult to quantify today the savings that will surely be achieved 
when future generations of children are truly educated in a range of 
health-related subjects.
  Title VI of my bill would establish a federal standard and create 
uniform national forms concerning a patient's right to decline medical 
treatment. Nothing in my bill mandates the use of uniform forms. 
Rather, the purpose of this provision is to make it easier for 
individuals to make their own choices and determination regarding their 
treatment during this vulnerable and highly personal time. Studies have 
also indicated that advance directives do not increase health care 
costs. Data indicate that end-of-life costs account for 10 percent of 
total health expenditures and 28 percent of total Medicare 
expenditures. Loose projections indicate that a 10 percent savings made 
in the final days of life would result in approximately $10 billion of 
savings in medical costs per year, and about $4.7 billion in savings 
for Medicare alone.
  However, economic considerations are not and should not be the 
primary reasons for using advance directives. They provide a means for 
patients to exercise their autonomy over end-of-life decisions. A study 
done at the Thomas Jefferson University Medical College in Philadelphia 
cited research which found that about 90 percent of the American 
population has expressed interest in discussing advance directives. 
However, even more recent studies indicate that living wills would be 
used by many more Americans if they were better understood. My bill 
would provide information on an individual's rights regarding living 
wills and advanced directives, and would make it easier for people to 
have their wishes known and honored. In my view, no one has the right 
to decide for anyone else what constitutes appropriate medical 
treatment to prolong a person's life. Encouraging the use of advance 
directives will ensure that patients are not needlessly and unlawfully 
treated against their will. No health care provider would be permitted 
to treat an adult contrary to the adult's wishes as outlined in an 
advance directive. However, in no way would the use of advance 
directives condone assisted suicide or any affirmative act to end human 
life.
  The next title addresses the unique barriers to coverage which exist 
in both rural and urban medically underserved areas. Within 
Pennsylvania, such barriers result from a lack of health care providers 
in rural areas, and other problems associated with the lack of coverage 
for indigent populations living in inner cities. Title VII of my bill 
improves access to health care services for these populations by: (1) 
expanding Public Health Service programs and training more primary care 
providers to serve in such areas; (2) increasing the utilization of 
non-physician providers, including nurse practitioners, clinical nurse 
specialists and physician assistants, through increased reimbursements 
under the Medicare and Medicaid programs; and (3) increasing support 
for education and outreach.
  I believe these provisions will also yield substantial savings. A 
study of the Canadian health system utilizing nurse practitioners 
projected savings of 10 to 15 percent of all medical costs. While our 
system is dramatically different from that of Canada, it may not be 
unreasonable to project annual savings of five percent, or $57.5 
billion, from an increased number of primary care providers in our 
system. Again, experience will raise or lower this projection.
  Outcomes research is another area where we can achieve considerable 
long term health care savings while also improving the quality of care. 
According to most outcomes management experts, it is estimated that 
about 25 to 30 percent of medical care is inappropriate or unnecessary. 
Dr. Marcia Angell, former editor-in-chief of the New England Journal of 
Medicine, also

[[Page 389]]

stated that 20 to 30 percent of health care procedures are either 
inappropriate, ineffective or unnecessary.
  I joined my colleagues in recognizing this important area of research 
by supporting passage of legislation reauthorizing the Agency for 
Healthcare Research and Quality (formerly the Agency for Health Care 
Policy and Research. The renamed agency, dubbed ``AHRQ,'' is authorized 
to expand outcomes research necessary for the development of medical 
practice guidelines and for increased access to consumer information. 
In order to boost funding for this vital area of research, title VIII 
of my bill would establish a trust fund for medical treatment outcomes 
research, capitalized by a .001 cent tax on total U.S. health insurance 
premiums collected. This trust fund would be specifically authorized 
for use by AHRQ to supplement its outcomes research mission. Based on 
the Health Care Financing Administration's 1998 health spending review, 
private health insurance premiums totaled $375 billion. As provided in 
my bill, a surcharge would generate $375 million for an outcomes 
research fund.
  Also included in this title is my ``Medical Errors Reduction Act,'' 
which I introduced in the 106th Congress with Senators Harkin and 
Inouye, in response to the November 29, 1999, Institute of Medicine 
(IOM) report, ``To Err Is Human: Building a Safer Health System.'' The 
report concluded that medical mistakes have led to numerous injuries 
and deaths, affecting an estimated three to four percent of all 
hospital patients. The IOM report also concluded that health care is a 
decade or more behind other high-risk industries in its attention to 
ensuring basic safety.
  According to the IOM, at least 44,000 Americans die each year as a 
result of medical errors, and the number may be as high as 98,000--
which catapults medical errors to the fifth leading cause of death 
nationwide. This total outnumbers deaths from motor vehicle accidents, 
breast cancer, and AIDS. Further, medical errors resulting in injury 
are estimated to cost the nation between $17 billion and $29 billion, 
including additional health care costs, lost income, lost household 
production, and disability costs.
  The IOM findings are startling and beg for national attention to 
determine ways to reduce the number of medical errors. On December 13, 
1999, I chaired a hearing of the Labor, HHS, Education Appropriations 
Subcommittee to hear details of IOM's report findings. On January 25, 
2000, I chaired a joint Labor, HHS, and Education Appropriations 
Subcommittee/Veterans' Affairs Committee hearing to consider mandatory 
and voluntary reporting requirements and to begin to determine ways to 
reduce medical errors.
  Specifically, my proposal would make grants available to states so 
they can establish their own error reporting systems and would 
establish 15 competitively-awarded research demonstration projects in 
rural and urban areas throughout the country. These projects would 
employ new and proven technologies and enhance staff training to 
determine ways to reduce errors. The provision also requires the 
Secretary of HHS to provide patient education programs to all 
individuals covered by Federal health plans.
  I am pleased to report that my Appropriations Subcommittee has 
already taken some critical first steps to reduce the incidence of 
deaths and injuries related to medical errors. In fiscal year 2001, $50 
million has been provided to explore opportunities for a better 
understanding of the systemic problems in health care, in the hope that 
we can dramatically reduce the incidence of medical errors. The 
research initiatives include a focus on developing guidance to assist 
in States' development of data collection systems so that national 
trends can be determined and analyzed. In addition, the Committee has 
encouraged health care providers to explore the use of technologies and 
other methods in reducing medical errors.
  Nursing home care is another significant issue which must be 
addressed. Spending on long term care totaled $115 billion in 1997, and 
over 40 percent of that cost was borne by the Medicaid program. Despite 
these large public expenditures, the elderly face significant uncovered 
liability for long term care. Title IX of my bill would provide a tax 
credit for premiums paid to purchase private long-term care insurance. 
Other tax incentives and reforms provided in my bill to make long term 
care insurance more affordable include: (1) allowing employees to 
select long-term care insurance as part of a cafeteria plan and 
allowing employers to deduct this expense; (2) excluding from income 
tax the life insurance savings used to pay for long term care; and (3) 
setting standards for long term care insurance that reduce the bias 
that currently favors institutional care over community and home-based 
alternatives.
  The final title of my bill would create a national fund for health 
research within the Department of the Treasury, to supplement the 
monies appropriated for the National Institutes of Health. To 
capitalize this fund, health insurance companies would be required to 
contribute 1 percent of all health insurance premiums received. This 
creative proposal was first developed by my distinguished colleagues, 
Senators Mark Hatfield and Tom Harkin. Their idea is a sound one and 
ought to be adopted. To this end, Senator Harkin and I introduced the 
National Fund for Health Research Act on March 13, 1997 (S. 441) and 
August 5, 1999 (S. 1504). I look forward to continuing to work with 
Senator Harkin to enact a biomedical research fund this Congress.
  While precision is again impossible, my proposal could conceivably 
achieve a net annual savings of between $74 billion to $86 billion. The 
savings are totaled as follows: $9 billion in small employer market 
reforms coupled with employer purchasing groups; $2.5 billion for 
preventive health services; $17 to $29 billion for reducing costs 
associated with reducing medical errors; $10 billion from advanced 
directives; $57.5 billion from increasing primary care providers; and 
$2.9 billion by reducing administrative costs. The costs would be 
conservatively estimated to be $2.8 billion for long term care tax 
credits, approximately $15 billion for community-based attendant care 
services under Medicaid, and $7 billion for general Medicaid expansion. 
Experience and more detailed analysis of the affected populations will 
require modification of these projections, and I am prepared to work 
with my colleagues to develop implementing legislation and to press for 
further action in the important area of health care reform.
  The provisions which I have outlined today contain my ideas for a 
framework to provide affordable, high quality health care for all 
Americans. I am opposed to rationing health care. I do not want 
rationing for myself, for my family, or for America. In my judgment, we 
should not scrap, but rather we should build upon our current health 
delivery system. We do not need the overwhelming bureaucracy that 
President Clinton and other Democratic leaders proposed in 1993 to 
accomplish this. I believe we can provide care for the 43.9 million 
Americans who are now not covered and reduce health care costs for 
those who are covered within the currently growing $1.15 trillion in 
health care spending. Mr. President, the time has come for concerted 
action in this arena.
  I urge the Congressional leadership, including the appropriate 
committee chairmen, to move this legislation and other health care 
bills forward promptly. I ask unanimous consent that the full text of 
the bill, a summary, and a list of my health reform bills be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 24

         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 ``Health 
     Care Assurance Act of 2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

     TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS

Sec. 101. Expanded medicaid coverage for low-income individuals.

[[Page 390]]

  TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM

Sec. 201. Increase in income eligibility.

      TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS

Sec. 301. Coverage of community-based attendant services and supports 
              under the medicaid program.
Sec. 302. Grants to develop and establish real choice systems change 
              initiatives.
Sec. 303. State option for eligibility for individuals.
Sec. 304. Studies and reports.
Sec. 305. Task force on financing of long-term care services.

                TITLE IV--HEALTH CARE INSURANCE COVERAGE

                     Subtitle A--General Provisions

Sec. 401. Amendments to the Employee Retirement Income Security Act of 
              1974.
Sec. 402. Amendments to the Public Health Service Act relating to the 
              group market.
Sec. 403. Amendment to the Public Health Service Act relating to the 
              individual market.
Sec. 404. Effective date.

                       Subtitle B--Tax Provisions

Sec. 411. Enforcement with respect to health insurance issuers.
Sec. 412. Enforcement with respect to small employers.
Sec. 413. Enforcement by excise tax on qualified associations.
Sec. 414. Deduction for health insurance costs of self-employed 
              individuals.
Sec. 415. Amendments to COBRA.

             TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES

Sec. 501. Improvement of medicare preventive care services.
Sec. 502. Authorization of appropriations for healthy start program.
Sec. 503. Reauthorization of certain programs providing primary and 
              preventive care.
Sec. 504. Comprehensive school health education program.
Sec. 505. Comprehensive early childhood health education program.
Sec. 506. Adolescent family life and abstinence.

         TITLE VI--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

Sec. 601. Patient's right to decline medical treatment.

            TITLE VII--PRIMARY AND PREVENTIVE CARE PROVIDERS

Sec. 701. Increased medicare reimbursement for physician assistants, 
              nurse practitioners, and clinical nurse specialists.
Sec. 702. Requiring coverage of certain nonphysician providers under 
              the medicaid program.
Sec. 703. Medical student tutorial program grants.
Sec. 704. General medical practice grants.

         TITLE VIII--SAFE AND COST-EFFECTIVE MEDICAL TREATMENT

Sec. 801. Enhancing investment in cost-effective methods of health 
              care.
Sec. 802. Medical Errors Reduction.

   TITLE IX--TAX INCENTIVES FOR PURCHASE OF QUALIFIED LONG-TERM CARE 
                               INSURANCE

Sec. 901. Credit for qualified long-term care premiums.
Sec. 902. Inclusion of qualified long-term care insurance in cafeteria 
              plans and flexible spending arrangements.
Sec. 903. Exclusion from gross income for amounts received on 
              cancellation of life insurance policies and used for 
              qualified long-term care insurance contracts.
Sec. 904. Use of gain from sale of principal residence for purchase of 
              qualified long-term health care insurance.

               TITLE X--NATIONAL FUND FOR HEALTH RESEARCH

Sec. 1001. Establishment of Fund.

     TITLE I--EXPANDED MEDICAID COVERAGE FOR LOW-INCOME INDIVIDUALS

     SEC. 101. EXPANDED MEDICAID COVERAGE FOR LOW-INCOME 
                   INDIVIDUALS.

       (a) Required Coverage of Individuals up to 133 Percent of 
     Poverty.--Section 1902(a)(10)(A)(i) of the Social Security 
     Act (42 U.S.C. 1396a(a)(10)(A)(i)) is amended--
       (1) by striking ``or'' at the end of subclause (VI);
       (2) by inserting ``or'' after the semicolon at the end of 
     subclause (VII); and
       (3) by adding at the end the following:

       ``(VIII) whose family income does not exceed 133 percent of 
     the income official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Omnibus Budget Reconciliation Act 
     of 1981) applicable to a family of the size involved;''.

       (b) Optional Coverage of Individuals Up To 200 Percent of 
     Poverty.--Section 1902(a)(10)(A)(i)(VIII) of the Social 
     Security Act, as added by subsection (a)(3), is amended by 
     inserting ``(200 percent, at State option)'' after ``133 
     percent''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section take 
     effect on October 1, 2001.
       (2) Extension if state law amendment required.--In the case 
     of a State plan under title XIX of the Social Security Act 
     which the Secretary of Health and Human Services determines 
     requires State legislation in order for the plan to meet the 
     additional requirements imposed by the amendments made by 
     this section, the State plan shall not be regarded as failing 
     to comply with the requirements of such title solely on the 
     basis of its failure to meet these additional requirements 
     before the first day of the first calendar quarter beginning 
     after the close of the first regular session of the State 
     legislature that begins after the date of the enactment of 
     this Act. For purposes of the previous sentence, in the case 
     of a State that has a 2-year legislative session, each year 
     of the session is considered to be a separate regular session 
     of the State legislature.

  TITLE II--EXPANSION OF THE STATE CHILDREN'S HEALTH INSURANCE PROGRAM

     SEC. 201. INCREASE IN INCOME ELIGIBILITY.

       (a) Definition of Low-Income Child.--Section 2110(c)(4) of 
     the Social Security Act (42 U.S.C. 42 U.S.C. 1397jj(c)(4)) is 
     amended by striking ``200'' and inserting ``235''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2001.

      TITLE III--EXPANDED HEALTH SERVICES FOR DISABLED INDIVIDUALS

     SEC. 301. COVERAGE OF COMMUNITY ATTENDANT SERVICES AND 
                   SUPPORTS UNDER THE MEDICAID PROGRAM.

       (a) Required Coverage for Individuals Entitled to Nursing 
     Facility Services or Eligible for Intermediate Care Facility 
     Services for the Mentally Retarded.--Section 1902(a)(10)(D) 
     of the Social Security Act (42 U.S.C. 1396a(a)(10)(D)) is 
     amended--
       (1) by inserting ``(i)'' after ``(D)'';
       (2) by adding ``and'' after the semicolon; and
       (3) by adding at the end the following:
       ``(ii) subject to section 1935, for the inclusion of 
     community attendant services and supports for any individual 
     who is eligible for medical assistance under the State plan 
     and with respect to whom there has been a determination that 
     the individual requires the level of care provided in a 
     nursing facility or an intermediate care facility for the 
     mentally retarded (whether or not coverage of such 
     intermediate care facility is provided under the State plan) 
     and who requires such community attendant services and 
     supports based on functional need and without regard to age 
     or disability;''.
       (b) Medicaid Coverage of Community Attendant Services and 
     Supports.--
       (1) In general.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended--
       (A) by redesignating section 1935 as section 1936; and
       (B) by inserting after section 1934 the following:
     ``community attendant services and supports
       ``Sec. 1935. (a) Definitions.--In this title:
       ``(1) Community attendant services and supports.--
       ``(A) In general.--The term `community attendant services 
     and supports' means attendant services and supports furnished 
     to an individual, as needed, to assist in accomplishing 
     activities of daily living, instrumental activities of daily 
     living, and health-related functions through hands-on 
     assistance, supervision, or cueing--
       ``(i) under a plan of services and supports that is based 
     on an assessment of functional need and that is agreed to by 
     the individual or, as appropriate, the individual's 
     representative;
       ``(ii) in a home or community setting, which may include a 
     school, workplace, or recreation or religious facility, but 
     does not include a nursing facility, an intermediate care 
     facility for the mentally retarded, or other congregate 
     facility;
       ``(iii) under an agency-provider model or other model (as 
     defined in paragraph (2)(C)); and
       ``(iv) the furnishing of which is selected, managed, and 
     dismissed by the individual, or, as appropriate, with 
     assistance from the individual's representative.
       ``(B) Included services and supports.--Such term includes--
       ``(i) tasks necessary to assist an individual in 
     accomplishing activities of daily living, instrumental 
     activities of daily living, and health-related functions;
       ``(ii) acquisition, maintenance, and enhancement of skills 
     necessary for the individual to accomplish activities of 
     daily living, instrumental activities of daily living, and 
     health-related functions;
       ``(iii) backup systems or mechanisms (such as the use of 
     beepers) to ensure continuity of services and supports; and
       ``(iv) voluntary training on how to select, manage, and 
     dismiss attendants.
       ``(C) Excluded services and supports.--Subject to 
     subparagraph (D), such term does not include--
       ``(i) provision of room and board for the individual;

[[Page 391]]

       ``(ii) special education and related services provided 
     under the Individuals with Disabilities Education Act and 
     vocational rehabilitation services provided under the 
     Rehabilitation Act of 1973;
       ``(iii) assistive technology devices and assistive 
     technology services;
       ``(iv) durable medical equipment; or
       ``(v) home modifications.
       ``(D) Flexibility in transition to community-based home 
     setting.--Such term may include expenditures for transitional 
     costs, such as rent and utility deposits, first months's rent 
     and utilities, bedding, basic kitchen supplies, and other 
     necessities required for an individual to make the transition 
     from a nursing facility or intermediate care facility for the 
     mentally retarded to a community-based home setting where the 
     individual resides.
       ``(2) Additional definitions.--
       ``(A) Activities of daily living.--The term `activities of 
     daily living' includes eating, toileting, grooming, dressing, 
     bathing, and transferring.
       ``(B) Consumer directed.--The term `consumer directed' 
     means a method of providing services and supports that allow 
     the individual, or where appropriate, the individual's 
     representative, maximum control of the community attendant 
     services and supports, regardless of who acts as the employer 
     of record.
       ``(C) Delivery models.--
       ``(i) Agency-provider model.--The term `agency-provider 
     model' means, with respect to the provision of community 
     attendant services and supports for an individual, a method 
     of providing consumer-directed services and supports under 
     which entities contract for the provision of such services 
     and supports.
       ``(ii) Other models.--The term `other models' means 
     methods, other than an agency-provider model, for the 
     provision of consumer-directed services and supports. Such 
     models may include the provision of vouchers, direct cash 
     payments, or use of a fiscal agent to assist in obtaining 
     services.
       ``(D) Health-related functions.--The term `health-related 
     functions' means functions that can be delegated or assigned 
     by licensed health-care professionals under State law to be 
     performed by an attendant.
       ``(E) Instrumental activities of daily living.--The term 
     `instrumental activities of daily living' includes meal 
     planning and preparation, managing finances, shopping for 
     food, clothing and other essential items, performing 
     essential household chores, communicating by phone and other 
     media, and getting around and participating in the community.
       ``(F) Individual's representative.--The term `individual's 
     representative' means a parent, a family member, a guardian, 
     an advocate, or an authorized representative of an 
     individual.
       ``(b) Limitation on Amounts of Expenditures under This 
     Title.--In carrying out section 1902(a)(10)(D)(ii), a State 
     shall permit an individual who has a level of severity of 
     physical or mental impairment that entitles such individual 
     to medical assistance with respect to nursing facility 
     services or qualifies the individual for intermediate care 
     facility services for the mentally retarded to choose to 
     receive medical assistance for community attendant services 
     and supports (rather than medical assistance for such 
     institutional services and supports), in the most integrated 
     setting appropriate to the needs of the individual, so long 
     as the aggregate amount of the Federal expenditures for 
     community attendant services and supports for all such 
     individuals in a fiscal year does not exceed the total that 
     would have been expended for such individuals to receive such 
     institutional services and supports in the year.
       ``(c) Maintenance of Effort.--With respect to a fiscal year 
     quarter, no Federal funds may be paid to a State for medical 
     assistance provided to individuals described in section 
     1902(a)(10)(D)(ii) for such fiscal year quarter if the 
     Secretary determines that the total of the State expenditures 
     for programs to enable such individuals with disabilities to 
     receive community attendant services and supports (or 
     services and supports that are similar to such services and 
     supports) under other provisions of this title for the 
     preceding fiscal year quarter is less than the total of such 
     expenditures for the same fiscal year quarter for the 
     preceding fiscal year.
       ``(d) State Quality Assurance Program.--In order to 
     continue to receive Federal financial participation for 
     providing community attendant services and supports under 
     this section, a State shall, at a minimum, establish and 
     maintain a quality assurance program that provides for the 
     following:
       ``(1) The State shall establish requirements, as 
     appropriate, for agency-based and other models that include--
       ``(A) minimum qualifications and training requirements, as 
     appropriate for agency-based and other models;
       ``(B) financial operating standards; and
       ``(C) an appeals procedure for eligibility denials and a 
     procedure for resolving disagreements over the terms of an 
     individualized plan.
       ``(2) The State shall modify the quality assurance program, 
     where appropriate, to maximize consumer independence and 
     consumer direction in both agency-provided and other models.
       ``(3) The State shall provide a system that allows for the 
     external monitoring of the quality of services by entities 
     consisting of consumers and their representatives, disability 
     organizations, providers, family, members of the community, 
     and others.
       ``(4) The State provides ongoing monitoring of the health 
     and well-being of each recipient.
       ``(5) The State shall require that quality assurance 
     mechanisms appropriate for the individual should be included 
     in the individual's written plan.
       ``(6) The State shall establish a process for mandatory 
     reporting, investigation, and resolution of allegations of 
     neglect, abuse, or exploitation.
       ``(7) The State shall obtain meaningful consumer input, 
     including consumer surveys, that measure the extent to which 
     a participant receives the services and supports described in 
     the individual's plan and the participant's satisfaction with 
     such services and supports.
       ``(8) The State shall make available to the public the 
     findings of the quality assurance program.
       ``(9) The State shall establish an on-going public process 
     for the development, implementation, and review of the 
     State's quality assurance program.
       ``(10) The State shall develop and implement a program of 
     sanctions.
       ``(e) Federal Role in Quality Assurance.--The Secretary 
     shall conduct a periodic sample review of outcomes for 
     individuals based upon the individual's plan of support and 
     based upon the quality assurance program of the State. The 
     Secretary may conduct targeted reviews upon receipt of 
     allegations of neglect, abuse, or exploitation. The Secretary 
     shall develop guidelines for States to use in developing 
     sanctions.
       ``(f) Requirement To Expand Eligibility.--Effective October 
     1, 2002, a State may not exercise the option of coverage of 
     individuals under section 1902(a)(10)(A)(ii)(V) without 
     providing coverage under section 1902(a)(10)(A)(ii)(VI).
       ``(g) Report on Impact of Section.--The Secretary shall 
     submit to Congress periodic reports on the impact of this 
     section on beneficiaries, States, and the Federal 
     Government.''.
       (c) Inclusion in Optional Eligibility Classification.--
     Section 1902(a)(10)(A)(ii)(VI) of the Social Security Act (42 
     U.S.C. 1396a(a)(10)(A)(ii)(VI)) is amended by inserting ``or 
     community attendant services and supports described in 
     section 1935'' after ``section 1915'' each place such term 
     appears.
       (d) Coverage as Medical Assistance.--
       (1) In general.--Section 1905(a) of the Social Security Act 
     (42 U.S.C. 1396d) is amended--
       (A) by striking ``and'' at the end of paragraph (26);
       (B) by redesignating paragraph (27) as paragraph (28); and
       (C) by inserting after paragraph (26) the following:
       ``(27) community attendant services and supports (to the 
     extent allowed and as defined in section 1935); and''.
       (2) Conforming amendment.--Section 1902(a)(10)(C)(iv) of 
     the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is 
     amended by inserting ``and (27)'' after ``(24)''.
       (e) Effective Date.--The amendments made by this section 
     take effect on October 1, 2001, and apply to medical 
     assistance provided under title XIX of the Social Security 
     Act (42 U.S.C. 1396 et seq.) on or after that date.

     SEC. 302. GRANTS TO DEVELOP AND ESTABLISH REAL CHOICE SYSTEMS 
                   CHANGE INITIATIVES.

       (a) Establishment.--
       (1) In general.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall 
     award grants described in subsection (b) to States for a 
     fiscal year to support real choice systems change initiatives 
     that establish specific action steps and specific timetables 
     to provide consumer-responsive long term services and 
     supports to eligible individuals in the most integrated 
     setting appropriate based on the unique strengths and needs 
     of the individual and the priorities and concerns of the 
     individual (or, as appropriate, the individual's 
     representative).
       (2) Eligibility.--To be eligible for a grant under this 
     section, a State shall--
       (A) establish the Consumer Task Force in accordance with 
     subsection (d); and
       (B) submit an application at such time, in such manner, and 
     containing such information as the Secretary may determine. 
     The application shall be jointly developed and signed by the 
     designated State official and the chairperson of such Task 
     Force, acting on behalf of and at the direction of the Task 
     Force.
       (3) Definition of state.--In this section, the term 
     ``State'' means each of the 50 States, the District of 
     Columbia, Puerto Rico, Guam, the United States Virgin 
     Islands, American Samoa, and the Commonwealth of the Northern 
     Mariana Islands.
       (b) Grants for Real Choice Systems Change Initiatives.--

[[Page 392]]

       (1) In general.--From funds appropriated under subsection 
     (g), the Secretary shall award grants to States for a fiscal 
     year to--
       (A) support the establishment, implementation, and 
     operation of the State real choice systems change initiatives 
     described in subsection (a); and
       (B) conduct outreach campaigns regarding the existence of 
     such initiatives.
       (2) Determination of awards; state allotments.--The 
     Secretary shall develop a formula for the distribution of 
     funds to States for each fiscal year under subsection (a). 
     Such formula shall give preference to States that have a 
     relatively higher proportion of long-term services and 
     supports furnished to individuals in an institutional setting 
     but who have a plan described in an application submitted 
     under subsection (a)(2).
       (c) Authorized Activities.--A State that receives a grant 
     under this section shall use the funds made available through 
     the grant to accomplish the purposes described in subsection 
     (a) and, in accomplishing such purposes, may carry out any of 
     the following systems change activities:
       (1) Needs assessment and data gathering.--The State may use 
     funds to conduct a statewide needs assessment that may be 
     based on data in existence on the date on which the 
     assessment is initiated and may include information about the 
     number of individuals within the State who are receiving 
     long-term services and supports in unnecessarily segregated 
     settings, the nature and extent to which current programs 
     respond to the preferences of individuals with disabilities 
     to receive services in home and community-based settings as 
     well as in institutional settings, and the expected change in 
     demand for services provided in home and community settings 
     as well as institutional settings.
       (2) Institutional bias.--The State may use funds to 
     identify, develop, and implement strategies for modifying 
     policies, practices, and procedures that unnecessarily bias 
     the provision of long-term services and supports toward 
     institutional settings and away from home and community-based 
     settings, including policies, practices, and procedures 
     governing statewideness, comparability in amount, duration, 
     and scope of services, financial eligibility, individualized 
     functional assessments and screenings (including individual 
     and family involvement), and knowledge about service options.
       (3) Over medicalization of services.--The State may use 
     funds to identify, develop, and implement strategies for 
     modifying policies, practices, and procedures that 
     unnecessarily bias the provision of long-term services and 
     supports by health care professionals to the extent that 
     quality services and supports can be provided by other 
     qualified individuals, including policies, practices, and 
     procedures governing service authorization, case management, 
     and service coordination, service delivery options, quality 
     controls, and supervision and training.
       (4) Interagency coordination; single point of entry.--The 
     State may support activities to identify and coordinate 
     Federal and State policies, resources, and services, relating 
     to the provision of long-term services and supports, 
     including the convening of interagency work groups and the 
     entering into of interagency agreements that provide for a 
     single point of entry and the design and implementation of a 
     coordinated screening and assessment system for all persons 
     eligible for long-term services and supports.
       (5) Training and technical assistance.--The State may carry 
     out directly, or may provide support to a public or private 
     entity to carry out training and technical assistance 
     activities that are provided for individuals with 
     disabilities, and, as appropriate, their representatives, 
     attendants, and other personnel (including professionals, 
     paraprofessionals, volunteers, and other members of the 
     community).
       (6) Public awareness.--The State may support a public 
     awareness program that is designed to provide information 
     relating to the availability of choices available to 
     individuals with disabilities for receiving long-term 
     services and support in the most integrated setting 
     appropriate.
       (7) Downsizing of large institutions.--The State may use 
     funds to support the per capita increased fixed costs in 
     institutional settings directly related to the movement of 
     individuals with disabilities out of specific facilities and 
     into community-based settings.
       (8) Transitional costs.--The State may use funds to provide 
     transitional costs described in section 1935(a)(1)(D) of the 
     Social Security Act, as added by section 301(b) of this Act.
       (9) Task force.--The State may use funds to support the 
     operation of the Consumer Task Force established under 
     subsection (d).
       (10) Demonstrations of new approaches.--The State may use 
     funds to conduct, on a time-limited basis, the demonstration 
     of new approaches to accomplishing the purposes described in 
     subsection (a).
       (11) Other activities.--The State may use funds for any 
     systems change activities that are not described in any of 
     the preceding paragraphs of this subsection and that are 
     necessary for developing, implementing, or evaluating the 
     comprehensive statewide system of long term services and 
     supports.
       (d) Consumer Task Force.--
       (1) Establishment and duties.--To be eligible to receive a 
     grant under this section, each State shall establish a 
     Consumer Task Force (referred to in this section as the 
     ``Task Force'') to assist the State in the development, 
     implementation, and evaluation of real choice systems change 
     initiatives.
       (2) Appointment.--Members of the Task Force shall be 
     appointed by the Chief Executive Officer of the State in 
     accordance with the requirements of paragraph (3), after the 
     solicitation of recommendations from representatives of 
     organizations representing a broad range of individuals with 
     disabilities and organizations interested in individuals with 
     disabilities.
       (3) Composition.--
       (A) In general.--The Task Force shall represent a broad 
     range of individuals with disabilities from diverse 
     backgrounds and shall include representatives from 
     Developmental Disabilities Councils, State Independent Living 
     Councils, Commissions on Aging, organizations that provide 
     services to individuals with disabilities and consumers of 
     long-term services and supports.
       (B) Individuals with disabilities.--A majority of the 
     members of the Task Force shall be individuals with 
     disabilities or the representatives of such individuals.
       (C) Limitation.--The Task Force shall not include employees 
     of any State agency providing services to individuals with 
     disabilities other than employees of agencies described in 
     the Developmental Disabilities Assistance and Bill of Rights 
     Act (42 U.S.C. 6000 et seq.).
       (e) Availability of Funds.--
       (1) Funds allotted to states.--Funds allotted to a State 
     under a grant made under this section for a fiscal year shall 
     remain available until expended.
       (2) Funds not allotted to states.--Funds not allotted to 
     States in the fiscal year for which they are appropriated 
     shall remain available in succeeding fiscal years for 
     allotment by the Secretary using the allotment formula 
     established by the Secretary under subsection (b)(2).
       (f) Annual Report.--A State that receives a grant under 
     this section shall submit an annual report to the Secretary 
     on the use of funds provided under the grant. Each report 
     shall include the percentage increase in the number of 
     eligible individuals in the State who receive long-term 
     services and supports in the most integrated setting 
     appropriate, including through community attendant services 
     and supports and other community-based settings.
       (g) Appropriation.--Out of any funds in the Treasury not 
     otherwise appropriated, there is authorized to be 
     appropriated and there is appropriated to make grants under 
     this section for--
       (1) fiscal year 2002, $25,000,000; and
       (2) for fiscal year 2003 and each fiscal year thereafter, 
     such sums as may be necessary to carry out this section.

     SEC. 303. STATE OPTION FOR ELIGIBILITY FOR INDIVIDUALS.

       (a) In General.--Section 1903(f) of the Social Security Act 
     (42 U.S.C. 1396b(f)) is amended--
       (1) in paragraph (4)(C), by inserting ``subject to 
     paragraph (5),'' after ``does not exceed'', and
       (2) by adding at the end the following:
       ``(5)(A) A State may waive the income, resources, and 
     deeming limitations described in paragraph (4)(C) in such 
     cases as the State finds the potential for employment 
     opportunities would be enhanced through the provision of 
     medical assistance for community attendant services and 
     supports in accordance with section 1935.
       ``(B) In the case of an individual who is eligible for 
     medical assistance described in subparagraph (A) only as a 
     result of the application of such subparagraph, the State 
     may, notwithstanding section 1916(b), impose a premium based 
     on a sliding scale related to income.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to medical assistance provided for community 
     attendant services and supports described in section 1935 of 
     the Social Security Act, as added by section 301(b) of this 
     Act, furnished on or after October 1, 2001.

     SEC. 304. STUDIES AND REPORTS.

       (a) Review of, and Report on, Regulations.--The National 
     Council on Disability established under title IV of the 
     Rehabilitation Act of 1973 (29 U.S.C. 780 et seq.) shall 
     review regulations in existence under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.) on the date of 
     enactment of this Act insofar as such regulations regulate 
     the provision of home health services, personal care 
     services, and other services in home and community-based 
     settings and, not later than 1 year after such date, submit a 
     report to Congress on the results of such study, together 
     with any recommendations for legislation that the Council 
     determines to be appropriate as a result of the study.
       (b) Report on Reduced Title XIX Expenditures.--Not later 
     than 1 year after the date of enactment of this Act, the 
     Secretary of Health and Human Services shall submit to 
     Congress a report on how expenditures under the medicaid 
     program under title XIX of the Social Security Act (42 U.S.C. 
     1396 et seq.)

[[Page 393]]

     can be reduced by the furnishing of community attendant 
     services and supports in accordance with section 1935 of the 
     Social Security Act (as added by section 301(b) of this Act).

     SEC. 305. TASK FORCE ON FINANCING OF LONG-TERM CARE SERVICES.

       The Secretary of Health and Human Services shall establish 
     a task force to examine appropriate methods for financing 
     long-term services and supports. The task force shall include 
     significant representation of individuals (and 
     representatives of individuals) who receive such services and 
     supports.

                TITLE IV--HEALTH CARE INSURANCE COVERAGE

                     Subtitle A--General Provisions

     SEC. 401. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME 
                   SECURITY ACT OF 1974.

       (a) In General.--Part 7 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1181 et seq.) is amended--
       (1) by redesignating subpart C as subpart D; and
       (2) by inserting after subpart B, the following:

            ``Subpart C--General Insurance Coverage Reforms

 ``CHAPTER 1--INCREASED AVAILABILITY AND CONTINUITY OF HEALTH COVERAGE

     ``SEC. 721. DEFINITION.

       ``As used in this subpart, the term `qualified group health 
     plan' means a group health plan, and a health insurance 
     issuer offering group health insurance coverage, that is 
     designed to provide standard coverage (consistent with 
     section 721A(b)).

     ``SEC. 721A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.

       ``(a) Set of Rules of Actuarial Equivalence.--
       ``(1) Initial determination.--The NAIC is requested to 
     submit to the Secretary, within 6 months after the date of 
     the enactment of this subpart, a set of rules which the NAIC 
     determines is sufficient for determining, in the case of any 
     group health plan, or a health insurance issuer offering 
     group health insurance coverage, and for purposes of this 
     section, the actuarial value of the coverage offered by the 
     plan or coverage.
       ``(2) Certification.--If the Secretary determines that the 
     NAIC has submitted a set of rules that comply with the 
     requirements of paragraph (1), the Secretary shall certify 
     such set of rules for use under this subpart. If the 
     Secretary determines that such a set of rules has not been 
     submitted or does not comply with such requirements, the 
     Secretary shall promptly establish a set of rules that meets 
     such requirements.
       ``(b) Standard Coverage.--
       ``(1) In general.--A group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     shall be considered to provide standard coverage consistent 
     with this subsection if the benefits are determined, in 
     accordance with the set of actuarial equivalence rules 
     certified under subsection (a), to have a value that is 
     within 5 percentage points of the target actuarial value for 
     standard coverage established under paragraph (2).
       ``(2) Initial determination of target actuarial value for 
     standard coverage.--
       ``(A) Initial determination.--
       ``(i) In general.--The NAIC is requested to submit to the 
     Secretary, within 6 months after the date of the enactment of 
     this subpart, a target actuarial value for standard coverage 
     equal to the average actuarial value of the coverage 
     described in clause (ii). No specific procedure or treatment, 
     or classes thereof, is required to be considered in such 
     determination by this subpart or through regulations. The 
     determination of such value shall be based on a 
     representative distribution of the population of eligible 
     employees offered such coverage and a single set of 
     standardized utilization and cost factors.
       ``(ii) Coverage described.--The coverage described in this 
     clause is coverage for medically necessary and appropriate 
     services consisting of medical and surgical services, medical 
     equipment, preventive services, and emergency transportation 
     in frontier areas. No specific procedure or treatment, or 
     classes thereof, is required to be covered in such a plan, by 
     this subpart or through regulations.
       ``(B) Certification.--If the Secretary determines that the 
     NAIC has submitted a target actuarial value for standard 
     coverage that complies with the requirements of subparagraph 
     (A), the Secretary shall certify such value for use under 
     this chapter. If the Secretary determines that a target 
     actuarial value has not been submitted or does not comply 
     with the requirements of subparagraph (A), the Secretary 
     shall promptly determine a target actuarial value that meets 
     such requirements.
       ``(c) Subsequent Revisions.--
       ``(1) NAIC.--The NAIC may submit from time to time to the 
     Secretary revisions of the set of rules of actuarial 
     equivalence and target actuarial values previously 
     established or determined under this section if the NAIC 
     determines that revisions are necessary to take into account 
     changes in the relevant types of health benefits provisions 
     or in demographic conditions which form the basis for the set 
     of rules of actuarial equivalence or the target actuarial 
     values. The provisions of subsection (a)(2) shall apply to 
     such a revision in the same manner as they apply to the 
     initial determination of the set of rules.
       ``(2) Secretary.--The Secretary may by regulation revise 
     the set of rules of actuarial equivalence and target 
     actuarial values from time to time if the Secretary 
     determines such revisions are necessary to take into account 
     changes described in paragraph (1).

     ``SEC. 721B. ESTABLISHMENT OF PLAN STANDARDS.

       ``(a) Establishment of General Standards.--
       ``(1) Role of naic.--The NAIC is requested to submit to the 
     Secretary, within 9 months after the date of the enactment of 
     this subpart, model regulations that specify standards for 
     making qualified group health plans available to small 
     employers. If the NAIC develops recommended regulations 
     specifying such standards within such period, the Secretary 
     shall review the standards. Such review shall be completed 
     within 60 days after the date the regulations are developed. 
     Such standards shall serve as the standards under this 
     section, with such amendments as the Secretary deems 
     necessary. Such standards shall be nonbinding (except as 
     provided in chapter 4).
       ``(2) Contingency.--If the NAIC does not develop such model 
     regulations within the period described in paragraph (1), the 
     Secretary shall specify, within 15 months after the date of 
     the enactment of this subpart, model regulations that specify 
     standards for insurers with regard to making qualified group 
     health plans available to small employers. Such standards 
     shall be nonbinding (except as provided in chapter 4).
       ``(3) Effective date.--The standards specified in the model 
     regulations shall apply to group health plans and health 
     insurance issuers offering group health insurance coverage in 
     a State on or after the respective date the standards are 
     implemented in the State.
       ``(b) No Preemption of State Law.--A State may implement 
     standards for group health plans available, and health 
     insurance issuers offering group health insurance coverage 
     offered, to small employers that are more stringent than the 
     standards under this section, except that a State may not 
     implement standards that prevent the offering of at least one 
     group health plan that provides standard coverage (as 
     described in section 721A(b)).

     ``SEC. 721C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.

       ``(a) Standard Premiums With Respect to Community-Rated 
     Eligible Employees and Eligible Individuals.--
       ``(1) In general.--Each group health plan offered, and each 
     health insurance issuer offering group health insurance 
     coverage, to a small employer shall establish within each 
     community rating area in which the plan is to be offered, a 
     standard premium for enrollment of eligible employees and 
     eligible individuals for the standard coverage (as defined 
     under section 721A(b)).
       ``(2) Establishment of community rating area.--
       ``(A) In general.--Not later than January 1, 2002, each 
     State shall, in accordance with subparagraph (B), provide for 
     the division of the State into 1 or more community rating 
     areas. The State may revise the boundaries of such areas from 
     time to time consistent with this paragraph.
       ``(B) Geographic area variations.--For purposes of 
     subparagraph (A), a State--
       ``(i) may not identify an area that divides a 3-digit zip 
     code, a county, or all portions of a metropolitan statistical 
     area;
       ``(ii) shall not permit premium rates for coverage offered 
     in a portion of an interstate metropolitan statistical area 
     to vary based on the State in which the coverage is offered; 
     and
       ``(iii) may, upon agreement with one or more adjacent 
     States, identify multi-State geographic areas consistent with 
     clauses (i) and (ii).
       ``(3) Eligible individuals.--For purposes of this section, 
     the term `eligible individuals' includes certain uninsured 
     individuals (as described in section 721G).
       ``(b) Uniform Premiums Within Community Rating Areas.--
       ``(1) In general.--Subject to paragraphs (2) and (3), the 
     standard premium for each group health plan to which this 
     section applies shall be the same, but shall not include the 
     costs of premium processing and enrollment that may vary 
     depending on whether the method of enrollment is through a 
     qualified small employer purchasing group, through a small 
     employer, or through a broker.
       ``(2) Application to enrollees.--
       ``(A) In general.--The premium charged for coverage in a 
     group health plan which covers eligible employees and 
     eligible individuals shall be the product of--
       ``(i) the standard premium (established under paragraph 
     (1));
       ``(ii) in the case of enrollment other than individual 
     enrollment, the family adjustment factor specified under 
     subparagraph (B); and
       ``(iii) the age adjustment factor (specified under 
     subparagraph (C)).
       ``(B) Family adjustment factor.--

[[Page 394]]

       ``(i) In general.--The standards established under section 
     721B shall specify family adjustment factors that reflect the 
     relative actuarial costs of benefit packages based on family 
     classes of enrollment (as compared with such costs for 
     individual enrollment).
       ``(ii) Classes of enrollment.--For purposes of this 
     subpart, there are 4 classes of enrollment:

       ``(I) Coverage only of an individual (referred to in this 
     subpart as the `individual' enrollment or class of 
     enrollment).
       ``(II) Coverage of a married couple without children 
     (referred to in this subpart as the `couple-only' enrollment 
     or class of enrollment).
       ``(III) Coverage of an individual and one or more children 
     (referred to in this subpart as the `single parent' 
     enrollment or class of enrollment).
       ``(IV) Coverage of a married couple and one or more 
     children (referred to in this subpart as the `dual parent' 
     enrollment or class of enrollment).

       ``(iii) References to family and couple classes of 
     enrollment.--In this subpart:

       ``(I) Family.--The terms `family enrollment' and `family 
     class of enrollment' refer to enrollment in a class of 
     enrollment described in any subclause of clause (ii) (other 
     than subclause (I)).
       ``(II) Couple.--The term `couple class of enrollment' 
     refers to enrollment in a class of enrollment described in 
     subclause (II) or (IV) of clause (ii).

       ``(iv) Spouse; married; couple.--

       ``(I) In general.--In this subpart, the terms `spouse' and 
     `married' mean, with respect to an individual, another 
     individual who is the spouse of, or is married to, the 
     individual, as determined under applicable State law.
       ``(II) Couple.--The term `couple' means an individual and 
     the individual's spouse.

       ``(C) Age adjustment factor.--The Secretary, in 
     consultation with the NAIC, shall specify uniform age 
     categories and maximum rating increments for age adjustment 
     factors that reflect the relative actuarial costs of benefit 
     packages among enrollees. For individuals who have attained 
     age 18 but not age 65, the highest age adjustment factor may 
     not exceed 3 times the lowest age adjustment factor.
       ``(3) Administrative charges.--
       ``(A) In general.--In accordance with the standards 
     established under section 721B, a group health plan which 
     covers eligible employees and eligible individuals may add a 
     separately-stated administrative charge which is based on 
     identifiable differences in legitimate administrative costs 
     and which is applied uniformly for individuals enrolling 
     through the same method of enrollment. Nothing in this 
     subparagraph may be construed as preventing a qualified small 
     employer purchasing group from negotiating a unique 
     administrative charge with an insurer for a group health 
     plan.
       ``(B) Enrollment through a qualified small employer 
     purchasing group.--In the case of an administrative charge 
     under subparagraph (A) for enrollment through a qualified 
     small employer purchasing group, such charge may not exceed 
     the lowest charge of such plan for enrollment other than 
     through a qualified small employer purchasing group in such 
     area.
       ``(c) Treatment of Negotiated Rate as Community Rate.--
     Notwithstanding any other provision of this section, a group 
     health plan and a health insurance issuer offering health 
     insurance coverage that negotiates a premium rate (exclusive 
     of any administrative charge described in subsection (b)(3)) 
     with a qualified small employer purchasing group in a 
     community rating area shall charge the same premium rate to 
     all eligible employees and eligible individuals.

     ``SEC. 721D. RATING PRACTICES AND PAYMENT OF PREMIUMS.

       ``(a) Full Disclosure of Rating Practices.--
       ``(1) In general.--A group health plan and a health 
     insurance issuer offering health insurance coverage shall 
     fully disclose rating practices for the plan to the 
     appropriate certifying authority.
       ``(2) Notice on expiration.--A group health plan and a 
     health insurance issuer offering health insurance coverage 
     shall provide for notice of the terms for renewal of a plan 
     at the time of the offering of the plan and at least 90 days 
     before the date of expiration of the plan.
       ``(3) Actuarial certification.--Each group health plan and 
     health insurance issuer offering health insurance coverage 
     shall file annually with the appropriate certifying authority 
     a written statement by a member of the American Academy of 
     Actuaries (or other individual acceptable to such authority) 
     who is not an employee of the group health plan or issuer 
     certifying that, based upon an examination by the individual 
     which includes a review of the appropriate records and of the 
     actuarial assumptions of such plan or insurer and methods 
     used by the plan or insurer in establishing premium rates and 
     administrative charges for group health plans--
       ``(A) such plan or insurer is in compliance with the 
     applicable provisions of this subpart; and
       ``(B) the rating methods are actuarially sound.
     Each plan and insurer shall retain a copy of such statement 
     at its principal place of business for examination by any 
     individual.
       ``(b) Payment of Premiums.--
       ``(1) In general.--With respect to a new enrollee in a 
     group health plan, the plan may require advanced payment of 
     an amount equal to the monthly applicable premium for the 
     plan at the time such individual is enrolled.
       ``(2) Notification of failure to receive premium.--If a 
     group health plan or a health insurance issuer offering 
     health insurance coverage fails to receive payment on a 
     premium due with respect to an eligible employee or eligible 
     individual covered under the plan involved, the plan or 
     issuer shall provide notice of such failure to the employee 
     or individual within the 20-day period after the date on 
     which such premium payment was due. A plan or issuer may not 
     terminate the enrollment of an eligible employee or eligible 
     individual unless such employee or individual has been 
     notified of any overdue premiums and has been provided a 
     reasonable opportunity to respond to such notice.

     ``SEC. 721E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

       ``(a) Qualified Small Employer Purchasing Groups 
     Described.--
       ``(1) In general.--A qualified small employer purchasing 
     group is an entity that--
       ``(A) is a nonprofit entity certified under State law;
       ``(B) has a membership consisting solely of small 
     employers;
       ``(C) is administered solely under the authority and 
     control of its member employers;
       ``(D) with respect to each State in which its members are 
     located, consists of not fewer than the number of small 
     employers established by the State as appropriate for such a 
     group;
       ``(E) offers a program under which qualified group health 
     plans are offered to eligible employees and eligible 
     individuals through its member employers and to certain 
     uninsured individuals in accordance with section 721D; and
       ``(F) an insurer, agent, broker, or any other individual or 
     entity engaged in the sale of insurance--
       ``(i) does not form or underwrite; and
       ``(ii) does not hold or control any right to vote with 
     respect to.
       ``(2) State certification.--A qualified small employer 
     purchasing group formed under this section shall submit an 
     application to the State for certification. The State shall 
     determine whether to issue a certification and otherwise 
     ensure compliance with the requirements of this subpart.
       ``(3) Special rule.--Notwithstanding paragraph (1)(B), an 
     employer member of a small employer purchasing group that has 
     been certified by the State as meeting the requirements of 
     paragraph (1) may retain its membership in the group if the 
     number of employees of the employer increases such that the 
     employer is no longer a small employer.
       ``(b) Board of Directors.--Each qualified small employer 
     purchasing group established under this section shall be 
     governed by a board of directors or have active input from an 
     advisory board consisting of individuals and businesses 
     participating in the group.
       ``(c) Domiciliary State.--For purposes of this section, a 
     qualified small employer purchasing group operating in more 
     than one State shall be certified by the State in which the 
     group is domiciled.
       ``(d) Membership.--
       ``(1) In general.--A qualified small employer purchasing 
     group shall accept all small employers and certain uninsured 
     individuals residing within the area served by the group as 
     members if such employers or individuals request such 
     membership.
       ``(2) Voting.--Members of a qualified small employer 
     purchasing group shall have voting rights consistent with the 
     rules established by the State.
       ``(e) Duties of Qualified Small Employer Purchasing 
     Groups.--Each qualified small employer purchasing group 
     shall--
       ``(1) enter into agreements with insurers offering 
     qualified group health plans;
       ``(2) enter into agreements with small employers under 
     section 721F;
       ``(3) enroll only eligible employees, eligible individuals, 
     and certain uninsured individuals in qualified group health 
     plans, in accordance with section 721G;
       ``(4) provide enrollee information to the State;
       ``(5) meet the marketing requirements under section 721I; 
     and
       ``(6) carry out other functions provided for under this 
     subpart.
       ``(f) Limitation on Activities.--A qualified small employer 
     purchasing group shall not--
       ``(1) perform any activity involving approval or 
     enforcement of payment rates for providers;
       ``(2) perform any activity (other than the reporting of 
     noncompliance) relating to compliance of qualified group 
     health plans with the requirements of this subpart;
       ``(3) assume financial risk in relation to any such health 
     plan; or
       ``(4) perform other activities identified by the State as 
     being inconsistent with the performance of its duties under 
     this subpart.
       ``(g) Rules of Construction.--

[[Page 395]]

       ``(1) Establishment not required.--Nothing in this section 
     shall be construed as requiring--
       ``(A) that a State organize, operate or otherwise establish 
     a qualified small employer purchasing group, or otherwise 
     require the establishment of purchasing groups; and
       ``(B) that there be only one qualified small employer 
     purchasing group established with respect to a community 
     rating area.
       ``(2) Single organization serving multiple areas and 
     states.--Nothing in this section shall be construed as 
     preventing a single entity from being a qualified small 
     employer purchasing group in more than one community rating 
     area or in more than one State.
       ``(3) Voluntary participation.--Nothing in this section 
     shall be construed as requiring any individual or small 
     employer to purchase a qualified group health plan 
     exclusively through a qualified small employer purchasing 
     group.

     ``SEC. 721F. AGREEMENTS WITH SMALL EMPLOYERS.

       ``(a) In General.--A qualified small employer purchasing 
     group shall offer to enter into an agreement under this 
     section with each small employer that employs eligible 
     employees in the area served by the group.
       ``(b) Payroll Deduction.--
       ``(1) In general.--Under an agreement under this section 
     between a small employer and a qualified small employer 
     purchasing group, the small employer shall deduct premiums 
     from an eligible employee's wages.
       ``(2) Additional premiums.--If the amount withheld under 
     paragraph (1) is not sufficient to cover the entire cost of 
     the premiums, the eligible employee shall be responsible for 
     paying directly to the qualified small employer purchasing 
     group the difference between the amount of such premiums and 
     the amount withheld.

     ``SEC. 721G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE 
                   INDIVIDUALS, AND CERTAIN UNINSURED INDIVIDUALS 
                   IN QUALIFIED GROUP HEALTH PLANS.

       ``(a) In General.--Each qualified small employer purchasing 
     group shall offer--
       ``(1) eligible employees,
       ``(2) eligible individuals, and
       ``(3) certain uninsured individuals,
     the opportunity to enroll in any qualified group health plan 
     which has an agreement with the qualified small employer 
     purchasing group for the community rating area in which such 
     employees and individuals reside.
       ``(b) Uninsured Individuals.--For purposes of this section, 
     an individual is described in subsection (a)(3) if such 
     individual is an uninsured individual who is not an eligible 
     employee of a small employer that is a member of a qualified 
     small employer purchasing group or a dependent of such 
     individual.

     ``SEC. 721H. RECEIPT OF PREMIUMS.

       ``(a) Enrollment Charge.--The amount charged by a qualified 
     small employer purchasing group for coverage under a 
     qualified group health plan shall be equal to the sum of--
       ``(1) the premium rate offered by such health plan;
       ``(2) the administrative charge for such health plan; and
       ``(3) the purchasing group administrative charge for 
     enrollment of eligible employees, eligible individuals and 
     certain uninsured individuals through the group.
       ``(b) Disclosure of Premium Rates and Administrative 
     Charges.--Each qualified small employer purchasing group 
     shall, prior to the time of enrollment, disclose to enrollees 
     and other interested parties the premium rate for a qualified 
     group health plan, the administrative charge for such plan, 
     and the administrative charge of the group, separately.

     ``SEC. 721I. MARKETING ACTIVITIES.

       ``Each qualified small employer purchasing group shall 
     market qualified group health plans to members through the 
     entire community rating area served by the purchasing group.

     ``SEC. 721J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER 
                   PURCHASING GROUPS.

       ``(a) In General.--The Secretary shall award grants to 
     States and small employer purchasing groups to assist such 
     States and groups in planning, developing, and operating 
     qualified small employer purchasing groups.
       ``(b) Application Requirements.--To be eligible to receive 
     a grant under this section, a State or small employer 
     purchasing group shall prepare and submit to the Secretary an 
     application in such form, at such time, and containing such 
     information, certifications, and assurances as the Secretary 
     shall reasonably require.
       ``(c) Use of Funds.--Amounts awarded under this section may 
     be used to finance the costs associated with planning, 
     developing, and operating a qualified small employer 
     purchasing group. Such costs may include the costs associated 
     with--
       ``(1) engaging in education and outreach efforts to inform 
     small employers, insurers, and the public about the small 
     employer purchasing group;
       ``(2) soliciting bids and negotiating with insurers to make 
     available group health plans;
       ``(3) preparing the documentation required to receive 
     certification by the Secretary as a qualified small employer 
     purchasing group; and
       ``(4) such other activities determined appropriate by the 
     Secretary.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated for awarding grants under this 
     section such sums as may be necessary.

     ``SEC. 721K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS 
                   ESTABLISHED BY A STATE.

       ``A State may establish a system in all or part of the 
     State under which qualified small employer purchasing groups 
     are the sole mechanism through which health care coverage for 
     the eligible employees of small employers shall be purchased 
     or provided.

     ``SEC. 721L. EFFECTIVE DATES.

       ``(a) In General.--Except as provided in this chapter, the 
     provisions of this chapter are effective on the date of the 
     enactment of this subpart.
       ``(b) Exception.--The provisions of section 721C(b) shall 
     apply to contracts which are issued, or renewed, after the 
     date which is 18 months after the date of the enactment of 
     this subpart.

   ``CHAPTER 2--REQUIRED COVERAGE OPTIONS FOR ELIGIBLE EMPLOYEES AND 
                     DEPENDENTS OF SMALL EMPLOYERS

     ``SEC. 722. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR 
                   ELIGIBLE INDIVIDUALS.

       ``(a) Requirement to Offer.--Each small employer shall make 
     available with respect to each eligible employee a group 
     health plan under which--
       ``(1) coverage of each eligible individual with respect to 
     such an eligible employee may be elected on an annual basis 
     for each plan year;
       ``(2) coverage is provided for at least the standard 
     coverage specified in section 721A(b); and
       ``(3) each eligible employee electing such coverage may 
     elect to have any premiums owed by the employee collected 
     through payroll deduction.
       ``(b) No Employer Contribution Required.--An employer is 
     not required under subsection (a) to make any contribution to 
     the cost of coverage under a group health plan described in 
     such subsection.
       ``(c) Special Rules.--
       ``(1) Exclusion of new employers and certain very small 
     employers.--Subsection (a) shall not apply to any small 
     employer for any plan year if, as of the beginning of such 
     plan year--
       ``(A) such employer (including any predecessor thereof) has 
     been an employer for less than 2 years;
       ``(B) such employer has no more than 2 eligible employees; 
     or
       ``(C) no more than 2 eligible employees are not covered 
     under any group health plan.
       ``(2) Exclusion of family members.--Under such procedures 
     as the Secretary may prescribe, any relative of a small 
     employer may be, at the election of the employer, excluded 
     from consideration as an eligible employee for purposes of 
     applying the requirements of subsection (a). In the case of a 
     small employer that is not an individual, an employee who is 
     a relative of a key employee (as defined in section 416(i)(1) 
     of the Internal Revenue Code of 1986) of the employer may, at 
     the election of the key employee, be considered a relative 
     excludable under this paragraph.
       ``(3) Optional application of waiting period.--A group 
     health plan and a health insurance issuer offering group 
     health insurance coverage shall not be treated as failing to 
     meet the requirements of subsection (a) solely because a 
     period of service by an eligible employee of not more than 60 
     days is required under the plan for coverage under the plan 
     of eligible individuals with respect to such employee.
       ``(d) Construction.--Nothing in this section shall be 
     construed as limiting the group health plans, or types of 
     coverage under such a plan, that an employer may offer to an 
     employee.

     ``SEC. 722A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH 
                   MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.

       ``(a) In General.--In any case in which an eligible 
     employee is, for any plan year, a participant in a group 
     health plan which is a multiemployer plan, the requirements 
     of section 722(a) shall be deemed to be met with respect to 
     such employee for such plan year if the employer requirements 
     of subsection (b) are met with respect to the eligible 
     employee, irrespective of whether, or to what extent, the 
     employer makes employer contributions on behalf of the 
     eligible employee.
       ``(b) Employer Requirements.--The employer requirements of 
     this subsection are met under a group health plan with 
     respect to an eligible employee if--
       ``(1) the employee is eligible under the plan to elect 
     coverage on an annual basis and is provided a reasonable 
     opportunity to make the election in such form and manner and 
     at such times as are provided by the plan;
       ``(2) coverage is provided for at least the standard 
     coverage specified in section 721A(b);
       ``(3) the employer facilitates collection of any employee 
     contributions under the plan and permits the employee to 
     elect to have employee contributions under the plan collected 
     through payroll deduction; and

[[Page 396]]

       ``(4) in the case of a plan to which part 1 does not 
     otherwise apply, the employer provides to the employee a 
     summary plan description described in section 102(a)(1) in 
     the form and manner and at such times as are required under 
     such part 1 with respect to employee welfare benefit plans.

``CHAPTER 3--REQUIRED COVERAGE OPTIONS FOR INDIVIDUALS INSURED THROUGH 
                           ASSOCIATION PLANS

              ``Subchapter A--Qualified Association Plans

     ``SEC. 723. TREATMENT OF QUALIFIED ASSOCIATION PLANS.

       ``(a) General Rule.--For purposes of this chapter, in the 
     case of a qualified association plan--
       ``(1) except as otherwise provided in this subchapter, the 
     plan shall meet all applicable requirements of chapter 1 and 
     chapter 2 for group health plans offered to and by small 
     employers;
       ``(2) if such plan is certified as meeting such 
     requirements and the requirements of this subchapter, such 
     plan shall be treated as a plan established and maintained by 
     a small employer, and individuals enrolled in such plan shall 
     be treated as eligible employees; and
       ``(3) any individual who is a member of the association not 
     enrolling in the plan shall not be treated as an eligible 
     employee solely by reason of membership in such association.
       ``(b) Election To Be Treated as Purchasing Cooperative.--
     Subsection (a) shall not apply to a qualified association 
     plan if--
       ``(1) the health insurance issuer makes an irrevocable 
     election to be treated as a qualified small employer 
     purchasing group for purposes of section 721D; and
       ``(2) such sponsor meets all requirements of this subpart 
     applicable to a purchasing cooperative.

     ``SEC. 723A. QUALIFIED ASSOCIATION PLAN DEFINED.

       ``(a) General Rule.--For purposes of this chapter, a plan 
     is a qualified association plan if the plan is a multiple 
     employer welfare arrangement or similar arrangement--
       ``(1) which is maintained by a qualified association;
       ``(2) which has at least 500 participants in the United 
     States;
       ``(3) under which the benefits provided consist solely of 
     medical care (as defined in section 213(d) of the Internal 
     Revenue Code of 1986);
       ``(4) which may not condition participation in the plan, or 
     terminate coverage under the plan, on the basis of the health 
     status or health claims experience of any employee or member 
     or dependent of either;
       ``(5) which provides for bonding, in accordance with 
     regulations providing rules similar to the rules under 
     section 412, of all persons operating or administering the 
     plan or involved in the financial affairs of the plan; and
       ``(6) which notifies each participant or provider that it 
     is certified as meeting the requirements of this chapter 
     applicable to it.
       ``(b) Self-Insured Plans.--In the case of a plan which is 
     not fully insured (within the meaning of section 
     514(b)(6)(D)), the plan shall be treated as a qualified 
     association plan only if--
       ``(1) the plan meets minimum financial solvency and cash 
     reserve requirements for claims which are established by the 
     Secretary and which shall be in lieu of any other such 
     requirements under this chapter;
       ``(2) the plan provides an annual funding report (certified 
     by an independent actuary) and annual financial statements to 
     the Secretary and other interested parties; and
       ``(3) the plan appoints a plan sponsor who is responsible 
     for operating the plan and ensuring compliance with 
     applicable Federal and State laws.
       ``(c) Certification.--
       ``(1) In general.--A plan shall not be treated as a 
     qualified association plan for any period unless there is in 
     effect a certification by the Secretary that the plan meets 
     the requirements of this subchapter. For purposes of this 
     chapter, the Secretary shall be the appropriate certifying 
     authority with respect to the plan.
       ``(2) Fee.--The Secretary shall require a $5,000 fee for 
     the original certification under paragraph (1) and may charge 
     a reasonable annual fee to cover the costs of processing and 
     reviewing the annual statements of the plan.
       ``(3) Expedited procedures.--The Secretary may by 
     regulation provide for expedited registration, certification, 
     and comment procedures.
       ``(4) Agreements.--The Secretary of Labor may enter into 
     agreements with the States to carry out the Secretary's 
     responsibilities under this subchapter.
       ``(d) Availability.--Notwithstanding any other provision of 
     this chapter, a qualified association plan may limit coverage 
     to individuals who are members of the qualified association 
     establishing or maintaining the plan, an employee of such 
     member, or a dependent of either.
       ``(e) Special Rules for Existing Plans.--In the case of a 
     plan in existence on January 1, 2001--
       ``(1) the requirements of subsection (a) (other than 
     paragraphs (4), (5), and (6) thereof) shall not apply;
       ``(2) no original certification shall be required under 
     this subchapter; and
       ``(3) no annual report or funding statement shall be 
     required before January 1, 2003, but the plan shall file with 
     the Secretary a description of the plan and the name of the 
     health insurance issuer.

     ``SEC. 723B. DEFINITIONS AND SPECIAL RULES.

       ``(a) Qualified Association.--For purposes of this 
     subchapter, the term `qualified association' means any 
     organization which--
       ``(1) is organized and maintained in good faith by a trade 
     association, an industry association, a professional 
     association, a chamber of commerce, a religious organization, 
     a public entity association, or other business association 
     serving a common or similar industry;
       ``(2) is organized and maintained for substantial purposes 
     other than to provide a health plan;
       ``(3) has a constitution, bylaws, or other similar 
     governing document which states its purpose; and
       ``(4) receives a substantial portion of its financial 
     support from its active, affiliated, or federation members.
       ``(b) Coordination.--The term `qualified association plan' 
     shall not include a plan to which subchapter B applies.

``Subchapter B--Special Rule for Church, Multiemployer, and Cooperative 
                                 Plans

     ``SEC. 723F. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND 
                   COOPERATIVE PLANS.

       ``(a) General Rule.--For purposes of this chapter, in the 
     case of a group health plan to which this section applies--
       ``(1) except as otherwise provided in this subchapter, the 
     plan shall be required to meet all applicable requirements of 
     chapter 1 and chapter 2 for group health plans offered to and 
     by small employers;
       ``(2) if such plan is certified as meeting such 
     requirements, such plan shall be treated as a plan 
     established and maintained by a small employer and 
     individuals enrolled in such plan shall be treated as 
     eligible employees; and
       ``(3) any individual eligible to enroll in the plan who 
     does not enroll in the plan shall not be treated as an 
     eligible employee solely by reason of being eligible to 
     enroll in the plan.
       ``(b) Modified Standards.--
       ``(1) Certifying authority.--For purposes of this chapter, 
     the Secretary shall be the appropriate certifying authority 
     with respect to a plan to which this section applies.
       ``(2) Availability.--Rules similar to the rules of 
     subsection (e) of section 723A shall apply to a plan to which 
     this section applies.
       ``(3) Access.--An employer which, pursuant to a collective 
     bargaining agreement, offers an employee the opportunity to 
     enroll in a plan described in subsection (c)(2) shall not be 
     required to make any other plan available to the employee.
       ``(4) Treatment under state laws.--A church plan described 
     in subsection (c)(1) which is certified as meeting the 
     requirements of this section shall not be deemed to be a 
     multiple employer welfare arrangement or an insurance company 
     or other insurer, or to be engaged in the business of 
     insurance, for purposes of any State law purporting to 
     regulate insurance companies or insurance contracts.
       ``(c) Plans to Which Section Applies.--This section shall 
     apply to a health plan which--
       ``(1) is a church plan (as defined in section 414(e) of the 
     Internal Revenue Code of 1986) which has at least 100 
     participants in the United States;
       ``(2) is a multiemployer plan which is maintained by a 
     health plan sponsor described in section 3(16)(B)(iii) and 
     which has at least 500 participants in the United States; or
       ``(3) is a plan which is maintained by a rural electric 
     cooperative or a rural telephone cooperative association and 
     which has at least 500 participants in the United States.''.
       (b) Conforming Amendments.--Section 731(d) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1186(d)) is 
     amended by adding at the end the following:
       ``(3) Eligible employee.--The term `eligible employee' 
     means, with respect to an employer, an employee who normally 
     performs on a monthly basis at least 30 hours of service per 
     week for that employer.
       ``(4) Eligible individual.--The term `eligible individual' 
     means, with respect to an eligible employee, such employee, 
     and any dependent of such employee.
       ``(5) NAIC.--The term `NAIC' means the National Association 
     of Insurance Commissioners.
       ``(6) Qualified group health plan.--The term `qualified 
     group health plan' shall have the meaning given the term in 
     section 721.''.

     SEC. 402. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT 
                   RELATING TO THE GROUP MARKET.

       (a) In General.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
     amended--
       (1) by inserting after the subpart heading the following:

               ``CHAPTER 1--MISCELLANEOUS REQUIREMENTS'';

     and
       (2) by adding at the end the following:

[[Page 397]]



            ``CHAPTER 2--GENERAL INSURANCE COVERAGE REFORMS

    ``Subchapter A--Increased Availability and Continuity of Health 
                                Coverage

     ``SEC. 2707. DEFINITION.

       ``As used in this chapter, the term `qualified group health 
     plan' means a group health plan, and a health insurance 
     issuer offering group health insurance coverage, that is 
     designed to provide standard coverage (consistent with 
     section 2707A(b)).

     ``SEC. 2707A. ACTUARIAL EQUIVALENCE IN BENEFITS PERMITTED.

       ``(a) Set of Rules of Actuarial Equivalence.--
       ``(1) Initial determination.--The NAIC is requested to 
     submit to the Secretary, within 6 months after the date of 
     the enactment of this chapter, a set of rules which the NAIC 
     determines is sufficient for determining, in the case of any 
     group health plan, or a health insurance issuer offering 
     group health insurance coverage, and for purposes of this 
     section, the actuarial value of the coverage offered by the 
     plan or coverage.
       ``(2) Certification.--If the Secretary determines that the 
     NAIC has submitted a set of rules that comply with the 
     requirements of paragraph (1), the Secretary shall certify 
     such set of rules for use under this chapter. If the 
     Secretary determines that such a set of rules has not been 
     submitted or does not comply with such requirements, the 
     Secretary shall promptly establish a set of rules that meets 
     such requirements.
       ``(b) Standard Coverage.--
       ``(1) In general.--A a group health plan, and a health 
     insurance issuer offering group health insurance coverage, 
     shall be considered to provide standard coverage consistent 
     with this subsection if the benefits are determined, in 
     accordance with the set of actuarial equivalence rules 
     certified under subsection (a), to have a value that is 
     within 5 percentage points of the target actuarial value for 
     standard coverage established under paragraph (2).
       ``(2) Initial determination of target actuarial value for 
     standard coverage.--
       ``(A) Initial determination.--
       ``(i) In general.--The NAIC is requested to submit to the 
     Secretary, within 6 months after the date of the enactment of 
     this chapter, a target actuarial value for standard coverage 
     equal to the average actuarial value of the coverage 
     described in clause (ii). No specific procedure or treatment, 
     or classes thereof, is required to be considered in such 
     determination by this chapter or through regulations. The 
     determination of such value shall be based on a 
     representative distribution of the population of eligible 
     employees offered such coverage and a single set of 
     standardized utilization and cost factors.
       ``(ii) Coverage described.--The coverage described in this 
     clause is coverage for medically necessary and appropriate 
     services consisting of medical and surgical services, medical 
     equipment, preventive services, and emergency transportation 
     in frontier areas. No specific procedure or treatment, or 
     classes thereof, is required to be covered in such a plan, by 
     this chapter or through regulations.
       ``(B) Certification.--If the Secretary determines that the 
     NAIC has submitted a target actuarial value for standard 
     coverage that complies with the requirements of subparagraph 
     (A), the Secretary shall certify such value for use under 
     this chapter. If the Secretary determines that a target 
     actuarial value has not been submitted or does not comply 
     with the requirements of subparagraph (A), the Secretary 
     shall promptly determine a target actuarial value that meets 
     such requirements.
       ``(c) Subsequent Revisions.--
       ``(1) NAIC.--The NAIC may submit from time to time to the 
     Secretary revisions of the set of rules of actuarial 
     equivalence and target actuarial values previously 
     established or determined under this section if the NAIC 
     determines that revisions are necessary to take into account 
     changes in the relevant types of health benefits provisions 
     or in demographic conditions which form the basis for the set 
     of rules of actuarial equivalence or the target actuarial 
     values. The provisions of subsection (a)(2) shall apply to 
     such a revision in the same manner as they apply to the 
     initial determination of the set of rules.
       ``(2) Secretary.--The Secretary may by regulation revise 
     the set of rules of actuarial equivalence and target 
     actuarial values from time to time if the Secretary 
     determines such revisions are necessary to take into account 
     changes described in paragraph (1).

     ``SEC. 2707B. ESTABLISHMENT OF PLAN STANDARDS.

       ``(a) Establishment of General Standards.--
       ``(1) Role of naic.--The NAIC is requested to submit to the 
     Secretary, within 9 months after the date of the enactment of 
     this chapter, model regulations that specify standards for 
     making qualified group health plans available to small 
     employers. If the NAIC develops recommended regulations 
     specifying such standards within such period, the Secretary 
     shall review the standards. Such review shall be completed 
     within 60 days after the date the regulations are developed. 
     Such standards shall serve as the standards under this 
     section, with such amendments as the Secretary deems 
     necessary. Such standards shall be nonbinding (except as 
     provided in chapter 4).
       ``(2) Contingency.--If the NAIC does not develop such model 
     regulations within the period described in paragraph (1), the 
     Secretary shall specify, within 15 months after the date of 
     the enactment of this chapter, model regulations that specify 
     standards for insurers with regard to making qualified group 
     health plans available to small employers. Such standards 
     shall be nonbinding (except as provided in chapter 4).
       ``(3) Effective date.--The standards specified in the model 
     regulations shall apply to group health plans and health 
     insurance issuers offering group health insurance coverage in 
     a State on or after the respective date the standards are 
     implemented in the State.
       ``(b) No Preemption of State Law.--A State may implement 
     standards for group health plans available, and health 
     insurance issuers offering group health insurance coverage 
     offered, to small employers that are more stringent than the 
     standards under this section, except that a State may not 
     implement standards that prevent the offering of at least one 
     group health plan that provides standard coverage (as 
     described in section 2707A(b)).

     ``SEC. 2707C. RATING LIMITATIONS FOR COMMUNITY-RATED MARKET.

       ``(a) Standard Premiums With Respect to Community-Rated 
     Eligible Employees and Eligible Individuals.--
       ``(1) In general.--Each group health plan offered, and each 
     health insurance issuer offering group health insurance 
     coverage, to a small employer shall establish within each 
     community rating area in which the plan is to be offered, a 
     standard premium for enrollment of eligible employees and 
     eligible individuals for the standard coverage (as defined 
     under section 2707A(b)).
       ``(2) Establishment of community rating area.--
       ``(A) In general.--Not later than January 1, 2002, each 
     State shall, in accordance with subparagraph (B), provide for 
     the division of the State into 1 or more community rating 
     areas. The State may revise the boundaries of such areas from 
     time to time consistent with this paragraph.
       ``(B) Geographic area variations.--For purposes of 
     subparagraph (A), a State--
       ``(i) may not identify an area that divides a 3-digit zip 
     code, a county, or all portions of a metropolitan statistical 
     area;
       ``(ii) shall not permit premium rates for coverage offered 
     in a portion of an interstate metropolitan statistical area 
     to vary based on the State in which the coverage is offered; 
     and
       ``(iii) may, upon agreement with one or more adjacent 
     States, identify multi-State geographic areas consistent with 
     clauses (i) and (ii).
       ``(3) Eligible individuals.--For purposes of this section, 
     the term `eligible individuals' includes certain uninsured 
     individuals (as described in section 2707G).
       ``(b) Uniform Premiums Within Community Rating Areas.--
       ``(1) In general.--Subject to paragraphs (2) and (3), the 
     standard premium for each group health plan to which this 
     section applies shall be the same, but shall not include the 
     costs of premium processing and enrollment that may vary 
     depending on whether the method of enrollment is through a 
     qualified small employer purchasing group, through a small 
     employer, or through a broker.
       ``(2) Application to enrollees.--
       ``(A) In general.--The premium charged for coverage in a 
     group health plan which covers eligible employees and 
     eligible individuals shall be the product of--
       ``(i) the standard premium (established under paragraph 
     (1));
       ``(ii) in the case of enrollment other than individual 
     enrollment, the family adjustment factor specified under 
     subparagraph (B); and
       ``(iii) the age adjustment factor (specified under 
     subparagraph (C)).
       ``(B) Family adjustment factor.--
       ``(i) In general.--The standards established under section 
     2707B shall specify family adjustment factors that reflect 
     the relative actuarial costs of benefit packages based on 
     family classes of enrollment (as compared with such costs for 
     individual enrollment).
       ``(ii) Classes of enrollment.--For purposes of this 
     chapter, there are 4 classes of enrollment:

       ``(I) Coverage only of an individual (referred to in this 
     chapter as the `individual' enrollment or class of 
     enrollment).
       ``(II) Coverage of a married couple without children 
     (referred to in this chapter as the `couple-only' enrollment 
     or class of enrollment).
       ``(III) Coverage of an individual and one or more children 
     (referred to in this chapter as the `single parent' 
     enrollment or class of enrollment).
       ``(IV) Coverage of a married couple and one or more 
     children (referred to in this chapter as the `dual parent' 
     enrollment or class of enrollment).

       ``(iii) References to family and couple classes of 
     enrollment.--In this chapter:

       ``(I) Family.--The terms `family enrollment' and `family 
     class of enrollment' refer

[[Page 398]]

     to enrollment in a class of enrollment described in any 
     subclause of clause (ii) (other than subclause (I)).
       ``(II) Couple.--The term `couple class of enrollment' 
     refers to enrollment in a class of enrollment described in 
     subclause (II) or (IV) of clause (ii).

       ``(iv) Spouse; married; couple.--

       ``(I) In general.--In this chapter, the terms `spouse' and 
     `married' mean, with respect to an individual, another 
     individual who is the spouse of, or is married to, the 
     individual, as determined under applicable State law.
       ``(II) Couple.--The term `couple' means an individual and 
     the individual's spouse.

       ``(C) Age adjustment factor.--The Secretary, in 
     consultation with the NAIC, shall specify uniform age 
     categories and maximum rating increments for age adjustment 
     factors that reflect the relative actuarial costs of benefit 
     packages among enrollees. For individuals who have attained 
     age 18 but not age 65, the highest age adjustment factor may 
     not exceed 3 times the lowest age adjustment factor.
       ``(3) Administrative charges.--
       ``(A) In general.--In accordance with the standards 
     established under section 2707B, a group health plan which 
     covers eligible employees and eligible individuals may add a 
     separately-stated administrative charge which is based on 
     identifiable differences in legitimate administrative costs 
     and which is applied uniformly for individuals enrolling 
     through the same method of enrollment. Nothing in this 
     subparagraph may be construed as preventing a qualified small 
     employer purchasing group from negotiating a unique 
     administrative charge with an insurer for a group health 
     plan.
       ``(B) Enrollment through a qualified small employer 
     purchasing group.--In the case of an administrative charge 
     under subparagraph (A) for enrollment through a qualified 
     small employer purchasing group, such charge may not exceed 
     the lowest charge of such plan for enrollment other than 
     through a qualified small employer purchasing group in such 
     area.
       ``(c) Treatment of Negotiated Rate as Community Rate.--
     Notwithstanding any other provision of this section, a group 
     health plan and a health insurance issuer offering health 
     insurance coverage that negotiates a premium rate (exclusive 
     of any administrative charge described in subsection (b)(3)) 
     with a qualified small employer purchasing group in a 
     community rating area shall charge the same premium rate to 
     all eligible employees and eligible individuals.

     ``SEC. 2707D. RATING PRACTICES AND PAYMENT OF PREMIUMS.

       ``(a) Full Disclosure of Rating Practices.--
       ``(1) In general.--A group health plan and a health 
     insurance issuer offering health insurance coverage shall 
     fully disclose rating practices for the plan to the 
     appropriate certifying authority.
       ``(2) Notice on expiration.--A group health plan and a 
     health insurance issuer offering health insurance coverage 
     shall provide for notice of the terms for renewal of a plan 
     at the time of the offering of the plan and at least 90 days 
     before the date of expiration of the plan.
       ``(3) Actuarial certification.--Each group health plan and 
     health insurance issuer offering health insurance coverage 
     shall file annually with the appropriate certifying authority 
     a written statement by a member of the American Academy of 
     Actuaries (or other individual acceptable to such authority) 
     who is not an employee of the group health plan or issuer 
     certifying that, based upon an examination by the individual 
     which includes a review of the appropriate records and of the 
     actuarial assumptions of such plan or insurer and methods 
     used by the plan or insurer in establishing premium rates and 
     administrative charges for group health plans--
       ``(A) such plan or insurer is in compliance with the 
     applicable provisions of this chapter; and
       ``(B) the rating methods are actuarially sound.
     Each plan and insurer shall retain a copy of such statement 
     at its principal place of business for examination by any 
     individual.
       ``(b) Payment of Premiums.--
       ``(1) In general.--With respect to a new enrollee in a 
     group health plan, the plan may require advanced payment of 
     an amount equal to the monthly applicable premium for the 
     plan at the time such individual is enrolled.
       ``(2) Notification of failure to receive premium.--If a 
     group health plan or a health insurance issuer offering 
     health insurance coverage fails to receive payment on a 
     premium due with respect to an eligible employee or eligible 
     individual covered under the plan involved, the plan or 
     issuer shall provide notice of such failure to the employee 
     or individual within the 20-day period after the date on 
     which such premium payment was due. A plan or issuer may not 
     terminate the enrollment of an eligible employee or eligible 
     individual unless such employee or individual has been 
     notified of any overdue premiums and has been provided a 
     reasonable opportunity to respond to such notice.

     ``SEC. 2707E. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

       ``(a) Qualified Small Employer Purchasing Groups 
     Described.--
       ``(1) In general.--A qualified small employer purchasing 
     group is an entity that--
       ``(A) is a nonprofit entity certified under State law;
       ``(B) has a membership consisting solely of small 
     employers;
       ``(C) is administered solely under the authority and 
     control of its member employers;
       ``(D) with respect to each State in which its members are 
     located, consists of not fewer than the number of small 
     employers established by the State as appropriate for such a 
     group;
       ``(E) offers a program under which qualified group health 
     plans are offered to eligible employees and eligible 
     individuals through its member employers and to certain 
     uninsured individuals in accordance with section 2707D; and
       ``(F) an insurer, agent, broker, or any other individual or 
     entity engaged in the sale of insurance--
       ``(i) does not form or underwrite; and
       ``(ii) does not hold or control any right to vote with 
     respect to.
       ``(2) State certification.--A qualified small employer 
     purchasing group formed under this section shall submit an 
     application to the State for certification. The State shall 
     determine whether to issue a certification and otherwise 
     ensure compliance with the requirements of this chapter.
       ``(3) Special rule.--Notwithstanding paragraph (1)(B), an 
     employer member of a small employer purchasing group that has 
     been certified by the State as meeting the requirements of 
     paragraph (1) may retain its membership in the group if the 
     number of employees of the employer increases such that the 
     employer is no longer a small employer.
       ``(b) Board of Directors.--Each qualified small employer 
     purchasing group established under this section shall be 
     governed by a board of directors or have active input from an 
     advisory board consisting of individuals and businesses 
     participating in the group.
       ``(c) Domiciliary State.--For purposes of this section, a 
     qualified small employer purchasing group operating in more 
     than one State shall be certified by the State in which the 
     group is domiciled.
       ``(d) Membership.--
       ``(1) In general.--A qualified small employer purchasing 
     group shall accept all small employers and certain uninsured 
     individuals residing within the area served by the group as 
     members if such employers or individuals request such 
     membership.
       ``(2) Voting.--Members of a qualified small employer 
     purchasing group shall have voting rights consistent with the 
     rules established by the State.
       ``(e) Duties of Qualified Small Employer Purchasing 
     Groups.--Each qualified small employer purchasing group 
     shall--
       ``(1) enter into agreements with insurers offering 
     qualified group health plans;
       ``(2) enter into agreements with small employers under 
     section 2707F;
       ``(3) enroll only eligible employees, eligible individuals, 
     and certain uninsured individuals in qualified group health 
     plans, in accordance with section 2707G;
       ``(4) provide enrollee information to the State;
       ``(5) meet the marketing requirements under section 2707I; 
     and
       ``(6) carry out other functions provided for under this 
     chapter.
       ``(f) Limitation on Activities.--A qualified small employer 
     purchasing group shall not--
       ``(1) perform any activity involving approval or 
     enforcement of payment rates for providers;
       ``(2) perform any activity (other than the reporting of 
     noncompliance) relating to compliance of qualified group 
     health plans with the requirements of this chapter;
       ``(3) assume financial risk in relation to any such health 
     plan; or
       ``(4) perform other activities identified by the State as 
     being inconsistent with the performance of its duties under 
     this chapter.
       ``(g) Rules of Construction.--
       ``(1) Establishment not required.--Nothing in this section 
     shall be construed as requiring--
       ``(A) that a State organize, operate or otherwise establish 
     a qualified small employer purchasing group, or otherwise 
     require the establishment of purchasing groups; and
       ``(B) that there be only one qualified small employer 
     purchasing group established with respect to a community 
     rating area.
       ``(2) Single organization serving multiple areas and 
     states.--Nothing in this section shall be construed as 
     preventing a single entity from being a qualified small 
     employer purchasing group in more than one community rating 
     area or in more than one State.
       ``(3) Voluntary participation.--Nothing in this section 
     shall be construed as requiring any individual or small 
     employer to purchase a qualified group health plan 
     exclusively through a qualified small employer purchasing 
     group.

     ``SEC. 2707F. AGREEMENTS WITH SMALL EMPLOYERS.

       ``(a) In General.--A qualified small employer purchasing 
     group shall offer to enter into an agreement under this 
     section with

[[Page 399]]

     each small employer that employs eligible employees in the 
     area served by the group.
       ``(b) Payroll Deduction.--
       ``(1) In general.--Under an agreement under this section 
     between a small employer and a qualified small employer 
     purchasing group, the small employer shall deduct premiums 
     from an eligible employee's wages.
       ``(2) Additional premiums.--If the amount withheld under 
     paragraph (1) is not sufficient to cover the entire cost of 
     the premiums, the eligible employee shall be responsible for 
     paying directly to the qualified small employer purchasing 
     group the difference between the amount of such premiums and 
     the amount withheld.

     ``SEC. 2707G. ENROLLING ELIGIBLE EMPLOYEES, ELIGIBLE 
                   INDIVIDUALS, AND CERTAIN UNINSURED INDIVIDUALS 
                   IN QUALIFIED GROUP HEALTH PLANS.

       ``(a) In General.--Each qualified small employer purchasing 
     group shall offer--
       ``(1) eligible employees,
       ``(2) eligible individuals, and
       ``(3) certain uninsured individuals,
     the opportunity to enroll in any qualified group health plan 
     which has an agreement with the qualified small employer 
     purchasing group for the community rating area in which such 
     employees and individuals reside.
       ``(b) Uninsured Individuals.--For purposes of this section, 
     an individual is described in subsection (a)(3) if such 
     individual is an uninsured individual who is not an eligible 
     employee of a small employer that is a member of a qualified 
     small employer purchasing group or a dependent of such 
     individual.

     ``SEC. 2707H. RECEIPT OF PREMIUMS.

       ``(a) Enrollment Charge.--The amount charged by a qualified 
     small employer purchasing group for coverage under a 
     qualified group health plan shall be equal to the sum of--
       ``(1) the premium rate offered by such health plan;
       ``(2) the administrative charge for such health plan; and
       ``(3) the purchasing group administrative charge for 
     enrollment of eligible employees, eligible individuals and 
     certain uninsured individuals through the group.
       ``(b) Disclosure of Premium Rates and Administrative 
     Charges.--Each qualified small employer purchasing group 
     shall, prior to the time of enrollment, disclose to enrollees 
     and other interested parties the premium rate for a qualified 
     group health plan, the administrative charge for such plan, 
     and the administrative charge of the group, separately.

     ``SEC. 2707I. MARKETING ACTIVITIES.

       ``Each qualified small employer purchasing group shall 
     market qualified group health plans to members through the 
     entire community rating area served by the purchasing group.

     ``SEC. 2707J. GRANTS TO STATES AND QUALIFIED SMALL EMPLOYER 
                   PURCHASING GROUPS.

       ``(a) In General.--The Secretary shall award grants to 
     States and small employer purchasing groups to assist such 
     States and groups in planning, developing, and operating 
     qualified small employer purchasing groups.
       ``(b) Application Requirements.--To be eligible to receive 
     a grant under this section, a State or small employer 
     purchasing group shall prepare and submit to the Secretary an 
     application in such form, at such time, and containing such 
     information, certifications, and assurances as the Secretary 
     shall reasonably require.
       ``(c) Use of Funds.--Amounts awarded under this section may 
     be used to finance the costs associated with planning, 
     developing, and operating a qualified small employer 
     purchasing group. Such costs may include the costs associated 
     with--
       ``(1) engaging in education and outreach efforts to inform 
     small employers, insurers, and the public about the small 
     employer purchasing group;
       ``(2) soliciting bids and negotiating with insurers to make 
     available group health plans;
       ``(3) preparing the documentation required to receive 
     certification by the Secretary as a qualified small employer 
     purchasing group; and
       ``(4) such other activities determined appropriate by the 
     Secretary.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated for awarding grants under this 
     section such sums as may be necessary.

     ``SEC. 2707K. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS 
                   ESTABLISHED BY A STATE.

       ``A State may establish a system in all or part of the 
     State under which qualified small employer purchasing groups 
     are the sole mechanism through which health care coverage for 
     the eligible employees of small employers shall be purchased 
     or provided.

     ``SEC. 2707L. EFFECTIVE DATES.

       ``(a) In General.--Except as provided in this chapter, the 
     provisions of this chapter are effective on the date of the 
     enactment of this chapter.
       ``(b) Exception.--The provisions of section 2707C(b) shall 
     apply to contracts which are issued, or renewed, after the 
     date which is 18 months after the date of the enactment of 
     this chapter.

 ``Subchapter B--Required Coverage Options for Eligible Employees and 
                     Dependents of Small Employers

     ``SEC. 2708. REQUIRING SMALL EMPLOYERS TO OFFER COVERAGE FOR 
                   ELIGIBLE INDIVIDUALS.

       ``(a) Requirement To Offer.--Each small employer shall make 
     available with respect to each eligible employee a group 
     health plan under which--
       ``(1) coverage of each eligible individual with respect to 
     such an eligible employee may be elected on an annual basis 
     for each plan year;
       ``(2) coverage is provided for at least the standard 
     coverage specified in section 2707A(b); and
       ``(3) each eligible employee electing such coverage may 
     elect to have any premiums owed by the employee collected 
     through payroll deduction.
       ``(b) No Employer Contribution Required.--An employer is 
     not required under subsection (a) to make any contribution to 
     the cost of coverage under a group health plan described in 
     such subsection.
       ``(c) Special Rules.--
       ``(1) Exclusion of new employers and certain very small 
     employers.--Subsection (a) shall not apply to any small 
     employer for any plan year if, as of the beginning of such 
     plan year--
       ``(A) such employer (including any predecessor thereof) has 
     been an employer for less than 2 years;
       ``(B) such employer has no more than 2 eligible employees; 
     or
       ``(C) no more than 2 eligible employees are not covered 
     under any group health plan.
       ``(2) Exclusion of family members.--Under such procedures 
     as the Secretary may prescribe, any relative of a small 
     employer may be, at the election of the employer, excluded 
     from consideration as an eligible employee for purposes of 
     applying the requirements of subsection (a). In the case of a 
     small employer that is not an individual, an employee who is 
     a relative of a key employee (as defined in section 416(i)(1) 
     of the Internal Revenue Code of 1986) of the employer may, at 
     the election of the key employee, be considered a relative 
     excludable under this paragraph.
       ``(3) Optional application of waiting period.--A group 
     health plan and a health insurance issuer offering group 
     health insurance coverage shall not be treated as failing to 
     meet the requirements of subsection (a) solely because a 
     period of service by an eligible employee of not more than 60 
     days is required under the plan for coverage under the plan 
     of eligible individuals with respect to such employee.
       ``(d) Construction.--Nothing in this section shall be 
     construed as limiting the group health plans, or types of 
     coverage under such a plan, that an employer may offer to an 
     employee.

     ``SEC. 2708A. COMPLIANCE WITH APPLICABLE REQUIREMENTS THROUGH 
                   MULTIPLE EMPLOYER HEALTH ARRANGEMENTS.

       ``(a) In General.--In any case in which an eligible 
     employee is, for any plan year, a participant in a group 
     health plan which is a multiemployer plan, the requirements 
     of section 2722(a) shall be deemed to be met with respect to 
     such employee for such plan year if the employer requirements 
     of subsection (b) are met with respect to the eligible 
     employee, irrespective of whether, or to what extent, the 
     employer makes employer contributions on behalf of the 
     eligible employee.
       ``(b) Employer Requirements.--The employer requirements of 
     this subsection are met under a group health plan with 
     respect to an eligible employee if--
       ``(1) the employee is eligible under the plan to elect 
     coverage on an annual basis and is provided a reasonable 
     opportunity to make the election in such form and manner and 
     at such times as are provided by the plan;
       ``(2) coverage is provided for at least the standard 
     coverage specified in section 2707A(b);
       ``(3) the employer facilitates collection of any employee 
     contributions under the plan and permits the employee to 
     elect to have employee contributions under the plan collected 
     through payroll deduction; and
       ``(4) in the case of a plan to which subchapter A does not 
     otherwise apply, the employer provides to the employee a 
     summary plan description described in section 102(a)(1) of 
     the Employee Retirement Income Security Act of 1974 in the 
     form and manner and at such times as are required under such 
     subchapter A with respect to employee welfare benefit plans.

   ``Subchapter C--Required Coverage Options for Individuals Insured 
                       Through Association Plans

     ``SEC. 2709. TREATMENT OF QUALIFIED ASSOCIATION PLANS.

       ``(a) General Rule.--For purposes of this chapter, in the 
     case of a qualified association plan--
       ``(1) except as otherwise provided in this subchapter, the 
     plan shall meet all applicable requirements of chapter 1 and 
     chapter 2 for group health plans offered to and by small 
     employers;
       ``(2) if such plan is certified as meeting such 
     requirements and the requirements of this subchapter, such 
     plan shall be treated as a plan established and maintained by 
     a small employer, and individuals enrolled in such

[[Page 400]]

     plan shall be treated as eligible employees; and
       ``(3) any individual who is a member of the association not 
     enrolling in the plan shall not be treated as an eligible 
     employee solely by reason of membership in such association.
       ``(b) Election To Be Treated as Purchasing Cooperative.--
     Subsection (a) shall not apply to a qualified association 
     plan if--
       ``(1) the health insurance issuer makes an irrevocable 
     election to be treated as a qualified small employer 
     purchasing group for purposes of section 2707D; and
       ``(2) such sponsor meets all requirements of this chapter 
     applicable to a purchasing cooperative.

     ``SEC. 2709A. QUALIFIED ASSOCIATION PLAN DEFINED.

       ``(a) General Rule.--For purposes of this chapter, a plan 
     is a qualified association plan if the plan is a multiple 
     employer welfare arrangement or similar arrangement--
       ``(1) which is maintained by a qualified association;
       ``(2) which has at least 500 participants in the United 
     States;
       ``(3) under which the benefits provided consist solely of 
     medical care (as defined in section 213(d) of the Internal 
     Revenue Code of 1986);
       ``(4) which may not condition participation in the plan, or 
     terminate coverage under the plan, on the basis of the health 
     status or health claims experience of any employee or member 
     or dependent of either;
       ``(5) which provides for bonding, in accordance with 
     regulations providing rules similar to the rules under 
     section 412, of all persons operating or administering the 
     plan or involved in the financial affairs of the plan; and
       ``(6) which notifies each participant or provider that it 
     is certified as meeting the requirements of this chapter 
     applicable to it.
       ``(b) Self-Insured Plans.--In the case of a plan which is 
     not fully insured (within the meaning of section 
     514(b)(6)(D)), the plan shall be treated as a qualified 
     association plan only if--
       ``(1) the plan meets minimum financial solvency and cash 
     reserve requirements for claims which are established by the 
     Secretary and which shall be in lieu of any other such 
     requirements under this chapter;
       ``(2) the plan provides an annual funding report (certified 
     by an independent actuary) and annual financial statements to 
     the Secretary and other interested parties; and
       ``(3) the plan appoints a plan sponsor who is responsible 
     for operating the plan and ensuring compliance with 
     applicable Federal and State laws.
       ``(c) Certification.--
       ``(1) In general.--A plan shall not be treated as a 
     qualified association plan for any period unless there is in 
     effect a certification by the Secretary that the plan meets 
     the requirements of this subchapter. For purposes of this 
     chapter, the Secretary shall be the appropriate certifying 
     authority with respect to the plan.
       ``(2) Fee.--The Secretary shall require a $5,000 fee for 
     the original certification under paragraph (1) and may charge 
     a reasonable annual fee to cover the costs of processing and 
     reviewing the annual statements of the plan.
       ``(3) Expedited procedures.--The Secretary may by 
     regulation provide for expedited registration, certification, 
     and comment procedures.
       ``(4) Agreements.--The Secretary of Labor may enter into 
     agreements with the States to carry out the Secretary's 
     responsibilities under this subchapter.
       ``(d) Availability.--Notwithstanding any other provision of 
     this chapter, a qualified association plan may limit coverage 
     to individuals who are members of the qualified association 
     establishing or maintaining the plan, an employee of such 
     member, or a dependent of either.
       ``(e) Special Rules for Existing Plans.--In the case of a 
     plan in existence on January 1, 2001--
       ``(1) the requirements of subsection (a) (other than 
     paragraphs (4), (5), and (6) thereof) shall not apply;
       ``(2) no original certification shall be required under 
     this subchapter; and
       ``(3) no annual report or funding statement shall be 
     required before January 1, 2003, but the plan shall file with 
     the Secretary a description of the plan and the name of the 
     health insurance issuer.

     ``SEC. 2709B. DEFINITIONS AND SPECIAL RULES.

       ``(a) Qualified Association.--For purposes of this 
     subchapter, the term `qualified association' means any 
     organization which--
       ``(1) is organized and maintained in good faith by a trade 
     association, an industry association, a professional 
     association, a chamber of commerce, a religious organization, 
     a public entity association, or other business association 
     serving a common or similar industry;
       ``(2) is organized and maintained for substantial purposes 
     other than to provide a health plan;
       ``(3) has a constitution, bylaws, or other similar 
     governing document which states its purpose; and
       ``(4) receives a substantial portion of its financial 
     support from its active, affiliated, or federation members.
       ``(b) Coordination.--The term `qualified association plan' 
     shall not include a plan to which subchapter B applies.

     ``SEC. 2709C. SPECIAL RULE FOR CHURCH, MULTIEMPLOYER, AND 
                   COOPERATIVE PLANS.

       ``(a) General Rule.--For purposes of this chapter, in the 
     case of a group health plan to which this section applies--
       ``(1) except as otherwise provided in this subchapter, the 
     plan shall be required to meet all applicable requirements of 
     subchapter A and subchapter B for group health plans offered 
     to and by small employers;
       ``(2) if such plan is certified as meeting such 
     requirements, such plan shall be treated as a plan 
     established and maintained by a small employer and 
     individuals enrolled in such plan shall be treated as 
     eligible employees; and
       ``(3) any individual eligible to enroll in the plan who 
     does not enroll in the plan shall not be treated as an 
     eligible employee solely by reason of being eligible to 
     enroll in the plan.
       ``(b) Modified Standards.--
       ``(1) Certifying authority.--For purposes of this chapter, 
     the Secretary shall be the appropriate certifying authority 
     with respect to a plan to which this section applies.
       ``(2) Availability.--Rules similar to the rules of 
     subsection (e) of section 2709A shall apply to a plan to 
     which this section applies.
       ``(3) Access.--An employer which, pursuant to a collective 
     bargaining agreement, offers an employee the opportunity to 
     enroll in a plan described in subsection (c)(2) shall not be 
     required to make any other plan available to the employee.
       ``(4) Treatment under state laws.--A church plan described 
     in subsection (c)(1) which is certified as meeting the 
     requirements of this section shall not be deemed to be a 
     multiple employer welfare arrangement or an insurance company 
     or other insurer, or to be engaged in the business of 
     insurance, for purposes of any State law purporting to 
     regulate insurance companies or insurance contracts.
       ``(c) Plans to Which Section Applies.--This section shall 
     apply to a health plan which--
       ``(1) is a church plan (as defined in section 414(e) of the 
     Internal Revenue Code of 1986) which has at least 100 
     participants in the United States;
       ``(2) is a multiemployer plan which is maintained by a 
     health plan sponsor described in section 3(16)(B)(iii) of the 
     Employee Retirement Income Security Act of 1974 and which has 
     at least 500 participants in the United States; or
       ``(3) is a plan which is maintained by a rural electric 
     cooperative or a rural telephone cooperative association and 
     which has at least 500 participants in the United States.''.
       (b) Conforming Amendments.--Section 2791(d) of the Public 
     Health Service Act (42 U.S.C. 300gg-91(d)) is amended by 
     adding at the end the following:
       ``(15) Eligible employee.--The term `eligible employee' 
     means, with respect to an employer, an employee who normally 
     performs on a monthly basis at least 30 hours of service per 
     week for that employer.
       ``(16) Eligible individual.--The term `eligible individual' 
     means, with respect to an eligible employee, such employee, 
     and any dependent of such employee.
       ``(17) NAIC.--The term `NAIC' means the National 
     Association of Insurance Commissioners.
       ``(18) Qualified group health plan.--The term `qualified 
     group health plan' shall have the meaning given the term in 
     section 2707.''.

     SEC. 403. AMENDMENT TO THE PUBLIC HEALTH SERVICE ACT RELATING 
                   TO THE INDIVIDUAL MARKET.

       The first subpart 3 of part B of title XXVII of the Public 
     Health Service Act (42 U.S.C. 300gg-51 et seq.) is amended--
       (1) by redesignating such subpart as subpart 2; and
       (2) by adding at the end the following:

     ``SEC. 2753. APPLICABILITY OF GENERAL INSURANCE MARKET 
                   REFORMS.

       ``The provisions of chapter 2 of subpart 2 of part A shall 
     apply to health insurance coverage offered by a health 
     insurance issuer in the individual market in the same manner 
     as they apply to health insurance coverage offered by a 
     health insurance issuer in connection with a group health 
     plan in the small or large group market.''.

     SEC. 404. EFFECTIVE DATE.

       The amendments made by this subtitle shall apply with 
     respect to health insurance coverage offered, sold, issued, 
     renewed, in effect, or operated on or after January 1, 2002.

                       Subtitle B--Tax Provisions

     SEC. 411. ENFORCEMENT WITH RESPECT TO HEALTH INSURANCE 
                   ISSUERS.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986 (relating to qualified pension, etc., plans) is amended 
     by adding at the end the following:

     ``SEC. 4980F. FAILURE OF INSURER TO COMPLY WITH CERTAIN 
                   STANDARDS FOR HEALTH INSURANCE COVERAGE.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on the 
     failure of a health insurance issuer to comply with the 
     requirements applicable to such issuer under--
       ``(A) chapter 2 of subpart 2 of part A of title XXVII of 
     the Public Health Service Act;
       ``(B) section 2753 of the Public Health Service Act; and

[[Page 401]]

       ``(C) subpart C of part 7 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974.
       ``(2) Exception.--Paragraph (1) shall not apply to a 
     failure by a health insurance issuer in a State if the 
     Secretary of Health and Human Services determines that the 
     State has in effect a regulatory enforcement mechanism that 
     provides adequate sanctions with respect to such a failure by 
     such an issuer.
       ``(b) Amount of Tax.--
       ``(1)  In general.--Subject to paragraph (2), the amount of 
     the tax imposed by subsection (a) shall be $100 for each day 
     during which such failure persists for each person to which 
     such failure relates. A rule similar to the rule of section 
     4980D(b)(3) shall apply for purposes of this section.
       ``(2) Limitation.--The amount of the tax imposed by 
     subsection (a) for a health insurance issuer with respect to 
     health insurance coverage shall not exceed 25 percent of the 
     amounts received under the coverage for coverage during the 
     period such failure persists.
       ``(c) Liability for Tax.--The tax imposed by this section 
     shall be paid by the health insurance issuer.
       ``(d) Limitations on Amount of Tax.--
       ``(1) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the first date the health insurance issuer 
     knows, or exercising reasonable diligence could have known, 
     that such failure existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.
       ``(e) Definitions.--For purposes of this section, the terms 
     `health insurance coverage' and `health insurance issuer' 
     have the meanings given such terms in section 2791 of the 
     Public Health Service Act and section 733 of the Employee 
     Retirement Income Security Act of 1974.''.
       (b) Conforming Amendment.--The table of sections for such 
     chapter 43 is amended by adding at the end the following new 
     item:

``Sec. 4980F. Failure of insurer to comply with certain standards for 
              health insurance coverage.''.

     SEC. 412. ENFORCEMENT WITH RESPECT TO SMALL EMPLOYERS.

       (a) In General.--Chapter 47 of the Internal Revenue Code of 
     1986 (relating to excise taxes on certain group health plans) 
     is amended by inserting after section 5000 the following new 
     section:

     ``SEC. 5000A. SMALL EMPLOYER REQUIREMENTS.

       ``(a) General Rule.--There is hereby imposed a tax on the 
     failure of any small employer to comply with the requirements 
     applicable to such employer under--
       ``(1) subchapter C of chapter 2 of subpart 2 of part A of 
     title XXVII of the Public Health Service Act;
       ``(2) section 2753 of the Public Health Service Act; and
       ``(3) chapter 2 of subpart C of part 7 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974.
       ``(b) Amount of Tax.--The amount of tax imposed by 
     subsection (a) shall be equal to $100 for each day for each 
     individual for which such a failure occurs.
       ``(c) Limitation on Tax.--
       ``(1) Tax not to apply where failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) with respect 
     to any failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the 1st date any of the individuals on whom the 
     tax is imposed knew, or exercising reasonable diligence would 
     have known, that such failure existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.''.
       (b) Conforming Amendment.--The table of sections for such 
     chapter 47 is amended by adding at the end the following new 
     item:

``Sec. 5000A. Small employer requirements.''.

     SEC. 413. ENFORCEMENT BY EXCISE TAX ON QUALIFIED 
                   ASSOCIATIONS.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986 (relating to qualified pension, etc., plans), as amended 
     by section 411, is amended by adding at the end the following 
     new section:

     ``SEC. 4980G. FAILURE OF QUALIFIED ASSOCIATIONS, ETC., TO 
                   COMPLY WITH CERTAIN STANDARDS FOR HEALTH 
                   INSURANCE COVERAGE.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on the 
     failure of a qualified association (as defined in section 
     2709A of the Public Health Service Act and section 723A of 
     the Employee Retirement Income Security Act of 1974), church 
     plan (as defined in section 414(e)), multiemployer plan, or 
     plan maintained by a rural electric cooperative or a rural 
     telephone cooperative association (within the meaning of 
     section 3(40) of the Employee Retirement Income Security Act 
     of 1974) to comply with the requirements applicable to such 
     association or plans under--
       ``(A) subchapter C of chapter 2 of subpart 2 of part A of 
     title XXVII of the Public Health Service Act;
       ``(B) section 2753 of the Public Health Service Act; and
       ``(C) subchapters A and B of chapter 3 of subpart C of part 
     7 of the Employee Retirement Income Security Act of 1974.
       ``(2) Exception.--Paragraph (1) shall not apply to a 
     failure by a qualified association, church plan, 
     multiemployer plan, or plan maintained by a rural electric 
     cooperative or a rural telephone cooperative association in a 
     State if the Secretary of Health and Human Services 
     determines that the State has in effect a regulatory 
     enforcement mechanism that provides adequate sanctions with 
     respect to such a failure by such a qualified association or 
     plan.
       ``(b) Amount of Tax.--The amount of the tax imposed by 
     subsection (a) shall be $100 for each day during which such 
     failure persists for each person to which such failure 
     relates. A rule similar to the rule of section 4980D(b)(3) 
     shall apply for purposes of this section.
       ``(c) Liability for Tax.--The tax imposed by this section 
     shall be paid by the qualified association or plan.
       ``(d) Limitations on Amount of Tax.--
       ``(1) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) such failure was due to reasonable cause and not to 
     willful neglect, and
       ``(B) such failure is corrected during the 30-day period 
     (or such period as the Secretary may determine appropriate) 
     beginning on the first date the qualified association, church 
     plan, multiemployer plan, or plan maintained by a rural 
     electric cooperative or a rural telephone cooperative 
     association knows, or exercising reasonable diligence could 
     have known, that such failure existed.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.''.
       (b) Conforming Amendment.--The table of sections for such 
     chapter 43, as amended by section 411, is amended by adding 
     at the end the following new item:

``Sec. 4980G. Failure of qualified associations, etc., to comply with 
              certain standards for health insurance plans.''.

     SEC. 414. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS.

       (a) Full Deduction in 2002.--The table contained in section 
     162(l)(1)(B) of the Internal Revenue Code of 1986 (relating 
     to special rules for health insurance costs of self-employed 
     individuals) is amended--
       (1) by striking ``2001'' and inserting ``2000'';
       (2) by striking ``2002'' and all that follows; and
       (3) by adding at the end the following:

        ``2001..................................................... 70 
        ``2002 and thereafter...................................100.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 415. AMENDMENTS TO COBRA.

       (a) Amendments to Internal Revenue Code of 1986.--
       (1) Lower cost coverage options.--Subparagraph (A) of 
     section 4980B(f)(2) of the Internal Revenue Code of 1986 
     (relating to continuation coverage requirements of group 
     health plans) is amended to read as follows:



       ``(A) Type of benefit coverage.--The coverage must consist 
     of coverage which, as of the time the coverage is being 
     provided--
       ``(i) is identical to the coverage provided under the plan 
     to similarly situated beneficiaries under the plan with 
     respect to whom a qualifying event has not occurred,
       ``(ii) is so identical, except such coverage is offered 
     with an annual $1,000 deductible, and
       ``(iii) is so identical, except such coverage is offered 
     with an annual $3,000 deductible.

     If coverage under the plan is modified for any group of 
     similarly situated beneficiaries, the coverage shall also be 
     modified in the same manner for all individuals who are 
     qualified beneficiaries under the plan pursuant to this 
     subsection in connection with such group.''.
       (2) Termination of cobra coverage after eligible for 
     employer-based coverage for 90 days.--Clause (iv) of section 
     4980B(f)(2)(B) of the Internal Revenue Code of 1986 (relating 
     to period of coverage) is amended--
       (A) by striking ``or'' at the end of subclause (I);
       (B) by redesignating subclause (II) as subclause (III); and
       (C) by inserting after subclause (I) the following:

       ``(II) eligible for such employer-based coverage for more 
     than 90 days, or''.

[[Page 402]]

       (3) Reduction of period of coverage.--Clause (i) of section 
     4980B(f)(2)(B) of the Internal Revenue Code of 1986 (relating 
     to period of coverage) is amended by striking ``18 months'' 
     each place it appears and inserting ``24 months''.
       (4) Continuation coverage for dependent child.--Clause (i) 
     of section 4980B(f)(2)(B) of the Internal Revenue Code of 
     1986 is amended by adding at the end the following:

       ``(VI) Special rule for dependent child.--In the case of a 
     qualifying event described in paragraph (3)(E), the date that 
     is 36 months after the date on which the dependent child of 
     the covered employee ceases to be a dependent child under the 
     plan.''.

       (b) Amendments to Employee Retirement Income Security Act 
     of 1974.--
       (1) Lower cost coverage options.--Paragraph (1) of section 
     602 of the Employee Retirement Income Security Act of 1974 
     (29 U.S.C. 1162(1)) (relating to continuation coverage 
     requirements of group health plans) is amended to read as 
     follows:
       ``(1) Type of benefit coverage.--The coverage must consist 
     of coverage which, as of the time the coverage is being 
     provided--
       ``(A) is identical to the coverage provided under the plan 
     to similarly situated beneficiaries under the plan with 
     respect to whom a qualifying event has not occurred,
       ``(B) is so identical, except such coverage is offered with 
     an annual $1,000 deductible, and
       ``(C) is so identical, except such coverage is offered with 
     an annual $3,000 deductible.

     If coverage under the plan is modified for any group of 
     similarly situated beneficiaries, the coverage shall also be 
     modified in the same manner for all individuals who are 
     qualified beneficiaries under the plan pursuant to this 
     subsection in connection with such group.''.
       (2) Termination of cobra coverage after eligible for 
     employer-based coverage for 90 days.--Subparagraph (D) of 
     section 602(2) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1162(2)(D)) (relating to period of 
     coverage) is amended--
       (A) by striking ``or'' at the end of clause (i);
       (B) by redesignating clause (ii) as clause (iii); and
       (C) by inserting after clause (i) the following:
       ``(ii) eligible for such employer-based coverage for more 
     than 90 days, or''.
       (3) Reduction of period of coverage.--Subparagraph (A) of 
     section 602(2) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1162(2)(A)) (relating to period of 
     coverage) is amended by striking ``18 months'' each place it 
     appears and inserting ``24 months''.
       (4) Continuation coverage for dependent child.--
     Subparagraph (A) of section 602(2) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1162(2)(A)) is amended 
     by adding at the end the following:
       ``(vi) Special rule for dependent child.--In the case of a 
     qualifying event described in section 603(5), the date that 
     is 36 months after the date on which the dependent child of 
     the covered employee ceases to be a dependent child under the 
     plan.''.
       (c) Amendments to Public Health Service Act.--
       (1) Lower cost coverage options.--Paragraph (1) of section 
     2202 of the Public Health Service Act (42 U.S.C. 300bb-2(1)) 
     (relating to continuation coverage requirements of group 
     health plans) is amended to read as follows:
       ``(1) Type of benefit coverage.--The coverage must consist 
     of coverage which, as of the time the coverage is being 
     provided--
       ``(A) is identical to the coverage provided under the plan 
     to similarly situated beneficiaries under the plan with 
     respect to whom a qualifying event has not occurred,
       ``(B) is so identical, except such coverage is offered with 
     an annual $1,000 deductible, and
       ``(C) is so identical, except such coverage is offered with 
     an annual $3,000 deductible.

     If coverage under the plan is modified for any group of 
     similarly situated beneficiaries, the coverage shall also be 
     modified in the same manner for all individuals who are 
     qualified beneficiaries under the plan pursuant to this 
     subsection in connection with such group.''.
       (2) Termination of cobra coverage after eligible for 
     employer-based coverage for 90 days.--Subparagraph (D) of 
     section 2202(2) of the Public Health Service Act (42 U.S.C. 
     300bb-2(2)(D)) (relating to period of coverage) is amended--
       (A) by striking ``or'' at the end of clause (i);
       (B) by redesignating clause (ii) as clause (iii); and
       (C) by inserting after clause (i) the following:
       ``(ii) eligible for such employer-based coverage for more 
     than 90 days, or''.
       (3) Reduction of period of coverage.--Subparagraph (A) of 
     section 2202(2) of the Public Health Service Act (42 U.S.C. 
     300bb-2(2)(A)) (relating to period of coverage) is amended by 
     striking ``18 months'' each place it appears and inserting 
     ``24 months''.
       (4) Continuation coverage for dependent child.--
     Subparagraph (A) of section 2202(2) of the Public Health 
     Service Act (42 U.S.C. 300bb-2(2)(A)) is amended by adding at 
     the end the following:
       ``(vi) Special rule for dependent child.--In the case of a 
     qualifying event described in section 2203(5), the date that 
     is 36 months after the date on which the dependent child of 
     the covered employee ceases to be a dependent child under the 
     plan.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to qualifying events occurring after the date of 
     the enactment of this Act.

             TITLE V--PRIMARY AND PREVENTIVE CARE SERVICES

     SEC. 501. IMPROVEMENT OF MEDICARE PREVENTIVE CARE SERVICES.

       (a) Waiver of Coinsurance for Screening and Diagnostic 
     Mammography.--
       (1) In general.--Section 1833(a)(1) of the Social Security 
     Act (42 U.S.C. 1395l(a)(1)), as amended by section 223(c) of 
     the Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000 (as enacted into law by section 
     1(a)(6) of Public Law 106-554), is amended--
       (A) by striking ``and (U)'' and inserting ``(U)''; and
       (B) by striking the semicolon at the end and inserting the 
     following: ``, and (V) with respect to screening mammography 
     (as defined in section 1861(jj)) and diagnostic mammography, 
     100 percent of the payment basis determined under section 
     1848;''.
       (2) Waiver of coinsurance in outpatient hospital 
     settings.--The third sentence of section 1866(a)(2)(A) of the 
     Social Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by 
     inserting after ``1861(s)(10)(A)'' the following: ``, with 
     respect to screening mammography (as defined in section 
     1861(jj)) and diagnostic mammography,''.
       (b) Coverage of Insulin Pumps.--
       (1) Inclusion as item of durable medical equipment.--
     Section 1861(n) of the Social Security Act (42 U.S.C. 
     1395x(n)) is amended by inserting before the semicolon the 
     following: ``, and includes insulin infusion pumps (as 
     defined in subsection (ww)) prescribed by the physician of an 
     individual with Type I diabetes who is experiencing severe 
     swings of high and low blood glucose levels and has 
     successfully completed a training program that meets 
     standards established by the Secretary or who has used such a 
     pump without interruption for at least 18 months immediately 
     before enrollment under part B''.
       (2) Definition of insulin infusion pump.--Section 1861 of 
     the Social Security Act (42 U.S.C. 1395x), as amended by 
     section 105(b) of the Medicare, Medicaid, and SCHIP Benefits 
     Improvement and Protection Act of 2000 (as enacted into law 
     by section 1(a)(6) of Public Law 106-554), is amended by 
     adding at the end the following:

                        ``Insulin Infusion Pump

       ``(ww) The term `insulin infusion pump' means an infusion 
     pump, approved by the Federal Food and Drug Administration, 
     that provides for the computerized delivery of insulin for 
     individuals with diabetes in lieu of multiple daily manual 
     insulin injections.''.
       (3) Payment for supplies relating to infusion pumps.--
     Section 1834(a)(2)(A) of the Social Security Act (42 U.S.C. 
     1395m(a)(2)(A)) is amended--
       (A) in clause (ii), by striking ``or'' at the end;
       (B) in clause (iii), by inserting ``or'' at the end; and
       (C) by inserting after clause (iii) the following:
       ``(iv) which is an accessory used in conjunction with an 
     insulin infusion pump (as defined in section 1861(ww)),''.
       (c) Annual Screening Pap Smear and Pelvic Exams.--
       (1) In general.--Section 1861(nn) of the Social Security 
     Act (42 U.S.C. 1395x(nn), as amended by section 101(a) of the 
     Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000 (as enacted into law by section 
     1(a)(6) of Public Law 106-554), is amended to read as 
     follows:

              ``Screening Pap Smear; Screening Pelvic Exam

       ``(nn)(1) The term `screening pap smear' means a diagnostic 
     laboratory test consisting of a routine exfoliative cytology 
     test (Papanicolaou test) provided to a woman for the purpose 
     of early detection of cervical or vaginal cancer and includes 
     a physician's interpretation of the results of the test, if 
     the individual involved has not had such a test during the 
     preceding year.
       ``(2) The term `screening pelvic exam' means a pelvic 
     examination provided to a woman if the woman involved has not 
     had such an examination during the preceding year, and 
     includes a clinical breast examination, relevant history-
     taking, medical decision-making, and patient counseling.''.
       (2) Waiver of coinsurance for pelvic exams.--Section 
     1833(a)(1) of the Social Security Act (42 U.S.C. 
     1395l(a)(1)), as amended by subsection (a)(1) and section 
     223(c) of the Medicare, Medicaid, and SCHIP Benefits 
     Improvement and Protection Act of 2000 (as enacted into law 
     by section 1(a)(6) of Public Law 106-554), is amended--
       (A) by striking ``and (V)'' and inserting ``(V)''; and
       (B) by striking the semicolon at the end and inserting the 
     following: ``, and (W) with respect to services described in 
     section 1861(nn)(2), 100 percent of the payment basis 
     determined under section 1848;''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to items and services furnished on or after the 
     first

[[Page 403]]

     day of the first calendar quarter beginning on or after the 
     date that is 6 months after the date of enactment of this 
     Act.

     SEC. 502. AUTHORIZATION OF APPROPRIATIONS FOR HEALTHY START 
                   PROGRAM.

       (a) Authorization of Appropriations.--To enable the 
     Secretary of Health and Human Services to carry out the 
     healthy start program established under the authority of 
     section 301 of the Public Health Service Act (42 U.S.C. 241), 
     there are authorized to be appropriated $115,000,000 for 
     fiscal year 2002, $150,000,000 for fiscal year 2003, 
     $250,000,000 for fiscal year 2004, and $300,000,000 for each 
     of the fiscal years 2005 through 2007.
       (b) Model Projects.--
       (1) In general.--Of the amount appropriated under 
     subsection (a) for a fiscal year, the Secretary of Health and 
     Human Services shall reserve $50,000,000 for such fiscal year 
     to be distributed to model projects determined to be eligible 
     under paragraph (2).
       (2) Eligibility.--To be eligible to receive funds under 
     paragraph (1), a model project shall--
       (A) have been one of the original 15 Healthy Start 
     projects; and
       (B) be determined by Secretary of Health and Human Services 
     to have been successful in serving needy areas and reducing 
     infant mortality.
       (3) Use of projects.--A model project that receives funding 
     under paragraph (1) shall be utilized as a resource center to 
     assist in the training of those individuals to be involved in 
     projects established under subsection (c). It shall be the 
     goal of such projects to become self-sustaining within the 
     project area.
       (4) Provision of matching funds.--In providing assistance 
     to a project under this subsection, the Secretary of Health 
     and Human Services shall ensure that--
       (A) with respect to fiscal year 2002, the project shall 
     make non-Federal contributions (in cash or in-kind) towards 
     the costs of such project in an amount equal to not less than 
     20 percent of such costs;
       (B) with respect to fiscal year 2003, the project shall 
     make non-Federal contributions (in cash or in-kind) towards 
     the costs of such project in an amount equal to not less than 
     30 percent of such costs;
       (C) with respect to fiscal year 2004, the project shall 
     make non-Federal contributions (in cash or in-kind) towards 
     the costs of such project in an amount equal to not less than 
     40 percent of such costs; and
       (D) with respect to each of the fiscal years 2005 through 
     2007, the project shall make non-Federal contributions (in 
     cash or in-kind) towards the costs of such project in an 
     amount equal to not less than 50 percent of such costs for 
     each such fiscal year.
       (c) New Projects.--Of the amount appropriated under 
     subsection (a) for a fiscal year, the Secretary of Health and 
     Human Services shall allocate amounts remaining after the 
     reservation under subsection (b) for such fiscal year among 
     new demonstration projects and existing special projects that 
     have proven to be successful as determined by the Secretary 
     of Health and Human Services. Such projects shall be 
     community-based and shall attempt to replicate healthy start 
     model projects that have been determined by the Secretary of 
     Health and Human Services to be successful.

     SEC. 503. REAUTHORIZATION OF CERTAIN PROGRAMS PROVIDING 
                   PRIMARY AND PREVENTIVE CARE.

       (a) Tuberculosis Prevention Grants.--Section 317(j)(1) of 
     the Public Health Service Act (42 U.S.C. 247b(j)(1)), as 
     amended by section 1711 of the Children's Health Act of 2000 
     (Public Law 106-310), is amended by striking ``2005'' and 
     inserting ``2007''.
       (b) Sexually Transmitted Diseases.--Section 318(e)(1) of 
     the Public Health Service Act (42 U.S.C. 247c(e)(1)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums'';
       (2) by striking ``1998'' and inserting ``2001''; and
       (3) by inserting before the period the following: ``, 
     $130,000,000 for each of the fiscal years 2002 and 2003, and 
     such sums as may be necessary for each of the fiscal years 
     2004 through 2006''.
       (c) Family Planning Project Grants.--Section 1001(d) of the 
     Public Health Service Act (42 U.S.C. 300(d)) is amended--
       (1) by striking ``and $158,400,000'' and inserting 
     ``$158,400,000''; and
       (2) by inserting before the period the following: ``; 
     $430,000,000 for fiscal year 2002; and such sums as may be 
     necessary for each of the fiscal years 2003 through 2005''.
       (d) Breast and Cervical Cancer Prevention.--Section 1510(a) 
     of the Public Health Service Act (42 U.S.C. 300n-5(a)) is 
     amended--
       (1) by striking ``and such sums'' and inserting ``such 
     sums''; and
       (2) by inserting before the period the following: ``, 
     $200,000,000 for fiscal year 2002, and such sums as may be 
     necessary for each of the fiscal years 2003 through 2005''.
       (e) Preventive Health and Health Services Block Grant.--
     Section 1901(a) of the Public Health Service Act (42 U.S.C. 
     300w(a)) is amended by striking ``$205,000,000'' and 
     inserting ``$235,000,000''.
       (f) Maternal and Child Health Services Block Grant.--
     Section 501(a) of the Social Security Act (42 U.S.C. 701(a)) 
     is amended by striking ``fiscal year 2001 and each fiscal 
     year thereafter'' and inserting ``each of fiscal years 2001 
     and 2002, and such sums as may be necessary for each of the 
     fiscal years 2003 through 2005''.

     SEC. 504. COMPREHENSIVE SCHOOL HEALTH EDUCATION PROGRAM.

       (a) Purpose.--It is the purpose of this section to 
     establish a comprehensive school health education and 
     prevention program for elementary and secondary school 
     students.
       (b) Program Authorized.--The Secretary of Education 
     (referred to in this section as the ``Secretary''), through 
     the Office of Comprehensive School Health Education 
     established in subsection (e), shall award grants to States 
     from allotments under subsection (c) to enable such States 
     to--
       (1) award grants to local or intermediate educational 
     agencies, and consortia thereof, to enable such agencies or 
     consortia to establish, operate, and improve local programs 
     of comprehensive health education and prevention, early 
     health intervention, and health education, in elementary and 
     secondary schools (including preschool, kindergarten, 
     intermediate, and junior high schools); and
       (2) develop training, technical assistance, and 
     coordination activities for the programs assisted pursuant to 
     paragraph (1).
       (c) Reservations and State Allotments.--
       (1) Reservations.--From the sums appropriated pursuant to 
     the authority of subsection (f) for any fiscal year, the 
     Secretary shall reserve--
       (A) 1 percent for payments to Guam, American Samoa, the 
     Virgin Islands, the Republic of the Marshall Islands, the 
     Federated States of Micronesia, the Northern Mariana Islands, 
     and the Republic of Palau, to be allotted in accordance with 
     their respective needs; and
       (B) 1 percent for payments to the Bureau of Indian Affairs.
       (2) State allotments.--From the remainder of the sums not 
     reserved under paragraph (1), the Secretary shall allot to 
     each State an amount which bears the same ratio to the amount 
     of such remainder as the school-age population of the State 
     bears to the school-age population of all States, except that 
     no State shall be allotted less than an amount equal to 0.5 
     percent of such remainder.
       (3) Reallotment.--The Secretary may reallot any amount of 
     any allotment to a State to the extent that the Secretary 
     determines that the State will not be able to obligate such 
     amount within 2 years of allotment. Any such reallotment 
     shall be made on the same basis as an allotment under 
     paragraph (2).
       (d) Use of Funds.--Grant funds provided to local or 
     intermediate educational agencies, or consortia thereof, 
     under this section may be used to improve elementary and 
     secondary education in the areas of--
       (1) personal health and fitness;
       (2) prevention of chronic diseases;
       (3) prevention and control of communicable diseases;
       (4) nutrition;
       (5) substance use and abuse;
       (6) accident prevention and safety;
       (7) community and environmental health;
       (8) mental and emotional health;
       (9) parenting and the challenges of raising children; and
       (10) the effective use of the health services delivery 
     system.
       (e) Office of Comprehensive School Health Education.--The 
     Secretary shall establish within the Office of the Secretary 
     an Office of Comprehensive School Health Education which 
     shall have the following responsibilities:
       (1) To recommend mechanisms for the coordination of school 
     health education programs conducted by the various 
     departments and agencies of the Federal Government.
       (2) To advise the Secretary on formulation of school health 
     education policy within the Department of Education.
       (3) To disseminate information on the benefits to health 
     education of utilizing a comprehensive health curriculum in 
     schools.
       (f) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     $50,000,000 for fiscal year 2002 and such sums as may be 
     necessary for each of the fiscal years 2003 and 2004 to carry 
     out this section.
       (2) Availability.--Funds appropriated pursuant to the 
     authority of paragraph (1) in any fiscal year shall remain 
     available for obligation and expenditure until the end of the 
     fiscal year succeeding the fiscal year for which such funds 
     were appropriated.

     SEC. 505. COMPREHENSIVE EARLY CHILDHOOD HEALTH EDUCATION 
                   PROGRAM.

       (a) Purpose.--It is the purpose of this section to 
     establish a comprehensive early childhood health education 
     program.
       (b) Program.--The Secretary of Health and Human Services 
     (referred to in this section as the ``Secretary'') shall 
     conduct a program of awarding grants to agencies conducting 
     Head Start training to enable such agencies to provide 
     training and technical assistance to Head Start teachers and 
     other child care providers. Such program shall--
       (1) establish a training system through the Head Start 
     agencies and organizations conducting Head Start training for 
     the purpose of enhancing teacher skills and providing 
     comprehensive early childhood health education curriculum;
       (2) enable such agencies and organizations to provide 
     training to day care providers in

[[Page 404]]

     order to strengthen the skills of the early childhood 
     workforce in providing health education;
       (3) provide technical support for health education programs 
     and curricula; and
       (4) provide cooperation with other early childhood 
     providers to ensure coordination of such programs and the 
     transition of students into the public school environment.
       (c) Use of Funds.--Grant funds under this section may be 
     used to provide training and technical assistance in the 
     areas of--
       (1) personal health and fitness;
       (2) prevention of chronic diseases;
       (3) prevention and control of communicable diseases;
       (4) dental health;
       (5) nutrition;
       (6) substance use and abuse;
       (7) accident prevention and safety;
       (8) community and environmental health;
       (9) mental and emotional health; and
       (10) strengthening the role of parent involvement.
       (d) Reservation for Innovative Programs.--The Secretary 
     shall reserve 5 percent of the funds appropriated pursuant to 
     the authority of subsection (e) in each fiscal year for the 
     development of innovative model health education programs or 
     curricula.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated $40,000,000 for fiscal year 2002 and such 
     sums as may be necessary for each of the fiscal years 2003 
     and 2004 to carry out this section.

     SEC. 506. ADOLESCENT FAMILY LIFE AND ABSTINENCE.

       (a) Definitions.--Section 2002(a)(4)(G)(i) of the Public 
     Health Service Act (42 U.S.C. 300z-1(a)(4)(G)(i)) is amended 
     by inserting ``and abstinence'' after ``adoption''.
       (b) Geographic Diversity.--Section 2005 of the Public 
     Health Service Act (42 U.S.C. 300z-4) is amended--
       (1) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively; and
       (2) by inserting after subsection (a) the following:
       ``(b) In approving applications for grants for 
     demonstration projects for services under this title, the 
     Secretary shall, to the maximum extent practicable, ensure 
     adequate representation of both urban and rural areas.''.
       (c) Simplified Application Process.--Section 2006 of the 
     Public Health Service Act (42 U.S.C. 300z-5) is amended by 
     adding at the end following:
       ``(g) The Secretary shall develop and implement a 
     simplified and expedited application process for applicants 
     seeking less than $15,000 of funds available under this title 
     for a demonstration project.''.
       (d) Authorization of Appropriations.--Section 2010(a) of 
     the Public Health Service Act (42 U.S.C. 300z-9) is amended 
     to read as follows:
       ``(a) For the purpose of carrying out this title, there are 
     authorized to be appropriated $75,000,000 for each of the 
     fiscal years 2002 through 2006.''.

         TITLE VI--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

     SEC. 601. PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT.

       (a) Right To Decline Medical Treatment.--
       (1) Rights of competent adults.--
       (A) In general.--Except as provided in subparagraph (B), a 
     State may not restrict the right of a competent adult to 
     consent to, or to decline, medical treatment.
       (B) Limitations.--
       (i) Affect on third parties.--A State may impose 
     limitations on the right of a competent adult to decline 
     treatment if such limitations protect third parties 
     (including minor children) from harm.
       (ii) Treatment which is not medically indicated.--Nothing 
     in this subsection shall be construed to require that any 
     individual be offered, or to state that any individual may 
     demand, medical treatment which the health care provider does 
     not have available, or which is, under prevailing medical 
     standards, either futile or otherwise not medically 
     indicated.
       (2) Rights of incapacitated adults.--
       (A) In general.--Except as provided in subparagraph (B)(i) 
     of paragraph (1), States may not restrict the right of an 
     incapacitated adult to consent to, or to decline, medical 
     treatment as exercised through the documents specified in 
     this paragraph, or through similar documents or other written 
     methods of directive which evidence the adult's treatment 
     choices.
       (B) Advance directives and powers of attorney.--
       (i) In general.--In order to facilitate the communication, 
     despite incapacity, of an adult's treatment choices, the 
     Secretary of Health and Human Services (referred to in this 
     section as the ``Secretary''), in consultation with the 
     Attorney General, shall develop a national advance directive 
     form that--

       (I) shall not limit or otherwise restrict, except as 
     provided in subparagraph (B)(i) of paragraph (1), an adult's 
     right to consent to, or to decline, medical treatment; and
       (II) shall, at minimum--

       (aa) provide the means for an adult to declare such adult's 
     own treatment choices in the event of a terminal condition;
       (bb) provide the means for an adult to declare, at such 
     adult's option, treatment choices in the event of other 
     conditions which are medically incurable, and from which such 
     adult likely will not recover; and
       (cc) provide the means by which an adult may, at such 
     adult's option, declare such adult's wishes with respect to 
     all forms of medical treatment, including forms of medical 
     treatment such as the provision of nutrition and hydration by 
     artificial means which may be, in some circumstances, 
     relatively nonburdensome.
       (ii)  National durable power of attorney form.--The 
     Secretary, in consultation with the Attorney General, shall 
     develop a national durable power of attorney form for health 
     care decisionmaking. The form shall provide a means for any 
     adult to designate another adult or adults to exercise the 
     same decisionmaking powers which would otherwise be exercised 
     by the patient if the patient were competent.
       (iii) Honored by all health care providers.--The national 
     advance directive and durable power of attorney forms 
     developed by the Secretary shall be honored by all health 
     care providers.
       (iv) Limitations.--No individual shall be required to 
     execute an advance directive. This section makes no 
     presumption concerning the intention of an individual who has 
     not executed an advance directive. An advance directive shall 
     be sufficient, but not necessary, proof of an adult's 
     treatment choices with respect to the circumstances addressed 
     in the advance directive.
       (C) Definition.--For purposes of this paragraph, the term 
     ``incapacity'' means the inability to understand or to 
     communicate concerning the nature and consequences of a 
     health care decision (including the intended benefits and 
     foreseeable risks of, and alternatives to, proposed treatment 
     options), and to reach an informed decision concerning health 
     care.
       (3) Health care providers.--
       (A) In general.--No health care provider may provide 
     treatment to an adult contrary to the adult's wishes as 
     expressed personally, by an advance directive as provided for 
     in paragraph (2)(B), or by a similar written advance 
     directive form or another written method of directive which 
     clearly and convincingly evidence the adult's treatment 
     choices. A health care provider who acts in good faith 
     pursuant to the preceding sentence shall be immune from 
     criminal or civil liability or discipline for professional 
     misconduct.
       (B) Health care providers under the medicare and medicaid 
     programs.--Any health care provider who knowingly provides 
     services to an adult contrary to the adult's wishes as 
     expressed personally, by an advance directive as provided for 
     in paragraph (2)(B), or by a similar written advance 
     directive form or another written method of directive which 
     clearly and convincingly evidence the adult's treatment 
     choices, shall be denied payment for such services under 
     titles XVIII and XIX of the Social Security Act.
       (C) Transfers.--Health care providers who object to the 
     provision of medical care in accordance with an adult's 
     wishes shall transfer the adult to the care of another health 
     care provider.
       (4)  Definition.--For purposes of this subsection, the term 
     ``adult'' means--
       (A) an individual who is 18 years of age or older; or
       (B) an emancipated minor.
       (b) Federal Right Enforceable in Federal Courts.--The 
     rights recognized in this section may be enforced by filing a 
     civil action in an appropriate district court of the United 
     States.
       (c) Suicide and Homicide.--Nothing in this section shall be 
     construed to permit, condone, authorize, or approve suicide 
     or mercy killing, or any affirmative act to end a human life.
       (d) Rights Granted by States.--Nothing in this section 
     shall impair or supersede rights granted by State law which 
     exceed the rights recognized by this section.
       (e) Effect on Other Laws.--
       (1) In general.--Except as specified in paragraph (2), 
     written policies and written information adopted by health 
     care providers pursuant to sections 4206 and 4751 of the 
     Omnibus Budget Reconciliation Act of 1990 (Public Law 101-
     508), shall be modified within 6 months after the enactment 
     of this section to conform to the provisions of this section.
       (2) Delay period for uniform forms.--Health care providers 
     shall modify any written forms distributed as written 
     information under sections 4206 and 4751 of the Omnibus 
     Budget Reconciliation Act of 1990 (Public Law 101-508) not 
     later than 6 months after promulgation of the forms referred 
     to in clauses (i) and (ii) of subsection (a)(2)(B) by the 
     Secretary.
       (f) Information Provided to Certain Individuals.--The 
     Secretary shall provide on a periodic basis written 
     information regarding an individual's right to consent to, or 
     to decline, medical treatment as provided in this section to 
     individuals who are beneficiaries under titles II, XVI, 
     XVIII, and XIX of the Social Security Act.
       (g) Recommendations to Congress on Issues Relating to a 
     Patient's Right of Self-Determination.--Not later than 180

[[Page 405]]

     days after the date of the enactment of this Act, and 
     annually thereafter for a period of 3 years, the Secretary 
     shall provide recommendations to Congress concerning the 
     medical, legal, ethical, social, and educational issues 
     related to in this section. In developing recommendations 
     under this subsection the Secretary shall address the 
     following issues:
       (1) The contents of the forms referred to in clauses (i) 
     and (ii) of subsection (a)(2)(B).
       (2) Issues pertaining to the education and training of 
     health care professionals concerning patients' self-
     determination rights.
       (3) Issues pertaining to health care professionals' duties 
     with respect to patients' rights, and health care 
     professionals' roles in identifying, assessing, and 
     presenting for patient consideration medically indicated 
     treatment options.
       (4) Issues pertaining to the education of patients 
     concerning their rights to consent to, and decline, 
     treatment, including how individuals might best be informed 
     of such rights prior to hospitalization and how uninsured 
     individuals, and individuals not under the regular care of a 
     physician or another provider, might best be informed of 
     their rights.
       (5) Issues relating to appropriate standards to be adopted 
     concerning decisionmaking by incapacitated adult patients 
     whose treatment choices are not known.
       (6) Such other issues as the Secretary may identify.
       (h) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), this 
     section shall take effect on the date that is 6 months after 
     the date of enactment of this Act.
       (2) Subsection (g).--The provisions of subsection (g) shall 
     take effect on the date of enactment of this Act.

            TITLE VII--PRIMARY AND PREVENTIVE CARE PROVIDERS

     SEC. 701. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN 
                   ASSISTANTS, NURSE PRACTITIONERS, AND CLINICAL 
                   NURSE SPECIALISTS.

       (a) Fee Schedule Amount.--Section 1833(a)(1)(O) of the 
     Social Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by 
     striking ``85 percent'' and inserting ``90 percent'' each 
     place it appears.
       (b) Technical Amendment.--Section 1833(a)(1)(O) of the 
     Social Security Act (42 U.S.C. 1395l(a)(1)(O)) is amended by 
     striking ``clinic'' and inserting ``clinical''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to services furnished and supplies 
     provided on and after January 1, 2002.

     SEC. 702. REQUIRING COVERAGE OF CERTAIN NONPHYSICIAN 
                   PROVIDERS UNDER THE MEDICAID PROGRAM.

       (a) In General.--Section 1905(a) of the Social Security Act 
     (42 U.S.C. 1396d(a)), as amended by section 301(c)(1), is 
     amended--
       (1) in paragraph (27), by striking ``and'' at the end;
       (2) by redesignating paragraph (28) as paragraph (29); and
       (3) by inserting after paragraph (27) the following:
       ``(28) services furnished by a physician assistant, nurse 
     practitioner, clinical nurse specialist (as defined in 
     section 1861(aa)(5)), or certified registered nurse 
     anesthetist (as defined in section 1861(bb)(2)); and''.
       (b) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of 
     the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)), as 
     amended by section 301(c)(3), is amended by striking ``and 
     (27)'' and inserting ``, (27), and (28)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to medical assistance furnished under title XIX 
     of the Social Security Act (42 U.S.C. 1396 et seq.) beginning 
     with the first fiscal year quarter that begins after the date 
     of enactment of this Act.

     SEC. 703. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

       Part C of title VII of the Public Health Service Act (42 
     U.S.C. 293j et seq.) is amended by adding at the end thereof 
     the following:

     ``SEC. 749. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

       ``(a) Establishment.--The Secretary shall establish a 
     program to award grants to eligible schools of medicine or 
     osteopathic medicine to enable such schools to provide 
     medical students for tutorial programs or as participants in 
     clinics designed to interest high school or college students 
     in careers in general medical practice.
       ``(b) Application.--To be eligible to receive a grant under 
     this section, a school of medicine or osteopathic medicine 
     shall prepare and submit to the Secretary an application at 
     such time, in such manner, and containing such information as 
     the Secretary may require, including assurances that the 
     school will use amounts received under the grant in 
     accordance with subsection (c).
       ``(c) Use of Funds.--
       ``(1) In general.--Amounts received under a grant awarded 
     under this section shall be used to--
       ``(A) fund programs under which students of the grantee are 
     provided as tutors for high school and college students in 
     the areas of mathematics, science, health promotion and 
     prevention, first aide, nutrition and prenatal care;
       ``(B) fund programs under which students of the grantee are 
     provided as participants in clinics and seminars in the areas 
     described in paragraph (1); and
       ``(C) conduct summer institutes for high school and college 
     students to promote careers in medicine.
       ``(2) Design of programs.--The programs, institutes, and 
     other activities conducted by grantees under paragraph (1) 
     shall be designed to--
       ``(A) give medical students desiring to practice general 
     medicine access to the local community;
       ``(B) provide information to high school and college 
     students concerning medical school and the general practice 
     of medicine; and
       ``(C) promote careers in general medicine.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for fiscal year 2002, and such sums as may be 
     necessary for fiscal year 2003.''.

     SEC. 704. GENERAL MEDICAL PRACTICE GRANTS.

       Part C of title VII of the Public Health Service Act (as 
     amended by section 703) is further amended by adding at the 
     end thereof the following:

     ``SEC. 749A. GENERAL MEDICAL PRACTICE GRANTS.

       ``(a) Establishment.--The Secretary shall establish a 
     program to award grants to eligible public or private 
     nonprofit schools of medicine or osteopathic medicine, 
     hospitals, residency programs in family medicine or 
     pediatrics, or to a consortium of such entities, to enable 
     such entities to develop effective strategies for recruiting 
     medical students interested in the practice of general 
     medicine and placing such students into general practice 
     positions upon graduation.
       ``(b) Application.--To be eligible to receive a grant under 
     this section, an entity of the type described in subsection 
     (a) shall prepare and submit to the Secretary an application 
     at such time, in such manner, and containing such information 
     as the Secretary may require, including assurances that the 
     entity will use amounts received under the grant in 
     accordance with subsection (c).
       ``(c) Use of Funds.--Amounts received under a grant awarded 
     under this section shall be used to fund programs under which 
     effective strategies are developed and implemented for 
     recruiting medical students interested in the practice of 
     general medicine and placing such students into general 
     practice positions upon graduation.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $25,000,000 for each of the fiscal years 2002 through 2004, 
     and such sums as may be necessary for fiscal years 
     thereafter.''.

         TITLE VIII--SAFE AND COST-EFFECTIVE MEDICAL TREATMENT

     SEC. 801. ENHANCING INVESTMENT IN COST-EFFECTIVE METHODS OF 
                   HEALTH CARE.

       (a) Establishment of Trust Fund for Medical Treatment 
     Outcomes Research.--
       (1) 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. TRUST FUND FOR MEDICAL TREATMENT OUTCOMES 
                   RESEARCH.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Trust Fund for Medical Treatment Outcomes Research' 
     (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 is hereby 
     appropriated to the Trust Fund an amount equivalent to the 
     taxes received in the Treasury under section 4491 (relating 
     to tax on health insurance policies).
       ``(c) Distribution of Amounts in Trust Fund.--On an annual 
     basis and without further appropriation the Secretary shall 
     distribute the amounts in the Trust Fund to the Secretary of 
     Health and Human Services for use by the Agency for 
     Healthcare Research and Quality. Such amounts shall be 
     available to pay for research activities related to medical 
     treatment outcomes and shall be in addition to any other 
     amounts appropriated for such purposes.''.
       (2) Conforming amendment.--The table of sections for 
     subchapter A of chapter 98 of such Code is amended by adding 
     at the end the following:

``Sec. 9511. Trust Fund for Medical Treatment Outcomes Research.''.

       (b) Imposition of Tax on Health Insurance Policies.--
       (1) In general.--Chapter 36 of the Internal Revenue Code of 
     1986 (relating to certain other excise taxes) is amended by 
     adding at the end the following:

            ``Subchapter F--Tax on Health Insurance Policies

``Sec. 4491. Imposition of tax.
``Sec. 4492. Liability for tax.

     ``SEC. 4491. IMPOSITION OF TAX.

       ``(a) General Rule.--There is hereby imposed a tax equal to 
     .001 cent on each dollar, or fractional part thereof, of the 
     premium paid on a policy of health insurance.
       ``(b) Definition.--For purposes of subsection (a), the term 
     `policy of health insurance' means any policy or other 
     instrument

[[Page 406]]

     by whatever name called whereby a contract of insurance is 
     made, continued, or renewed with respect to the health of an 
     individual or group of individuals.

     ``SEC. 4492. LIABILITY FOR TAX.

       ``The tax imposed by this subchapter shall be paid, on the 
     basis of a return, by any person who makes, signs, issues, or 
     sells any of the documents and instruments subject to the 
     tax, or for whose use or benefit the same are made, signed, 
     issued, or sold. The United States or any agency or 
     instrumentality thereof shall not be liable for the tax.''.
       (2) Conforming amendment.--The table of subchapters for 
     chapter 36 of such Code is amended by adding at the end the 
     following:

``Subchapter F. Tax on health insurance policies.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to policies issued after December 31, 2001.

     SEC. 802. MEDICAL ERRORS REDUCTION.

       Title IX of the Public Health Service Act (42 U.S.C. 299 et 
     seq.) is amended--
       (1) by redesignating part C as part D;
       (2) by redesignating sections 921 through 928, as sections 
     931 through 938, respectively;
       (3) in section 938(1) (as so redesignated), by striking 
     ``921'' and inserting ``931''; and
       (4) by inserting after part B the following:

                ``PART C--REDUCING ERRORS IN HEALTH CARE

     ``SEC. 921. DEFINITIONS.

       ``In this part:
       ``(1) Adverse event.--The term `adverse event' means an 
     injury resulting from medical management rather than the 
     underlying condition of the patient.
       ``(2) Error.--The term `error' means the failure of a 
     planned action to be completed as intended or the use of a 
     wrong plan to achieve the desired outcome.
       ``(3) Health care provider.--The term `health care 
     provider' means an individual or entity that provides medical 
     services and is a participant in a demonstration program 
     under this part.
       ``(4) Health care-related error.--The term ``health care-
     related error'' means a preventable adverse event related to 
     a health care intervention or a failure to intervene 
     appropriately.
       ``(5) Medication-related error.--The term `medication-
     related error' means a preventable adverse event related to 
     the administration of a medication.
       ``(6) Safety.--The term `safety' with respect to an 
     individual means that such individual has a right to be free 
     from preventable serious injury.
       ``(7) Sentinel event.--The term `sentinel event' means an 
     unexpected occurrence involving an individual that results in 
     death or serious physical injury that is unrelated to the 
     natural course of the individual's illness or underlying 
     condition.

     ``SEC. 922. ESTABLISHMENT OF STATE-BASED MEDICAL ERROR 
                   REPORTING SYSTEMS.

       ``(a) In General.--The Secretary shall make grants 
     available to States to enable such States to establish 
     reporting systems designed to reduce medical errors and 
     improve health care quality.
       ``(b) Requirement.--
       ``(1) In general.--To be eligible to receive a grant under 
     subsection (a), the State involved shall provide assurances 
     to the Secretary that amounts received under the grant will 
     be used to establish and implement a medical error reporting 
     system using guidelines (including guidelines relating to the 
     confidentiality of the reporting system) developed by the 
     Agency for Healthcare Research and Quality with input from 
     interested, non-governmental parties including patient, 
     consumer and health care provider groups.
       ``(2) Guidelines.--Not later than 90 days after the date of 
     enactment of this part, the Agency for Healthcare Research 
     and Quality shall develop and publish the guidelines 
     described in paragraph (1).
       ``(c) Data.--
       ``(1) Availability.--A State that receives a grant under 
     subsection (a) shall make the data provided to the medical 
     error reporting system involved available only to the Agency 
     for Healthcare Research and Quality and may not otherwise 
     disclose such information.
       ``(2) Confidentiality.--Nothing in this part shall be 
     construed to supersede any State law that is inconsistent 
     with this part.
       ``(d) Application.--To be eligible for a grant under this 
     section, a State shall prepare and submit to the Secretary an 
     application at such time, in such manner and containing, such 
     information as the Secretary shall require.

     ``SEC. 923. DEMONSTRATION PROJECTS TO REDUCE MEDICAL ERRORS, 
                   IMPROVE PATIENT SAFETY, AND EVALUATE REPORTING.

       ``(a) Establishment.--The Secretary, acting through the 
     Director of the Agency for Healthcare Research and Quality 
     and in conjunction with the Administrator of the Health Care 
     Financing Administration, may establish a program under which 
     funding will be provided for not less than 15 demonstration 
     projects, to be competitively awarded, in health care 
     facilities and organizations in geographically diverse 
     locations, including rural and urban areas (as determined by 
     the Secretary), to determine the causes of medical errors and 
     to--
       ``(1) use technology, staff training, and other methods to 
     reduce such errors;
       ``(2) develop replicable models that minimize the frequency 
     and severity of medical errors;
       ``(3) develop mechanisms that encourage reporting, prompt 
     review, and corrective action with respect to medical errors; 
     and
       ``(4) develop methods to minimize any additional paperwork 
     burden on health care professionals.
       ``(b) Activities.--
       ``(1) In general.--A health care provider participating in 
     a demonstration project under subsection (a) shall--
       ``(A) utilize all available and appropriate technologies to 
     reduce the probability of future medical errors; and
       ``(B) carry out other activities consistent with subsection 
     (a).
       ``(2) Reporting to patients.--In carrying out this section, 
     the Secretary shall ensure that--
       ``(A) 5 of the demonstration projects permit the voluntary 
     reporting by participating health care providers of any 
     adverse events, sentinel events, health care-related errors, 
     or medication-related errors to the Secretary;
       ``(B) 5 of the demonstration projects require participating 
     health care providers to report any adverse events, sentinel 
     events, health care-related errors, or medication-related 
     errors to the Secretary; and
       ``(C) 5 of the demonstration projects require participating 
     health care providers to report any adverse events, sentinel 
     events, health care-related errors, or medication-related 
     errors to the Secretary and to the patient involved and a 
     family member or guardian of the patient.
       ``(3) Confidentiality.--
       ``(A) In general.--The Secretary and the participating 
     grantee organization shall ensure that information reported 
     under this section remains confidential.
       ``(B) Use.--The Secretary may use the information reported 
     under this section only for the purpose of evaluating the 
     ability to reduce errors in the delivery of care. Such 
     information shall not be used for enforcement purposes.
       ``(C) Disclosure.--The Secretary may not disclose the 
     information reported under this section.
       ``(D) Nonadmissibility.--Information reported under this 
     section shall be privileged, confidential, shall not be 
     admissible as evidence or discoverable in any civil or 
     criminal action or proceeding or subject to disclosure, and 
     shall not be subject to the Freedom of Information Act (5 
     U.S.C. App). This paragraph shall apply to all information 
     maintained by the reporting entity and the entities who 
     receive such reports.
       ``(c) Use of Technologies.--The Secretary shall encourage, 
     as part of the demonstration projects conducted under 
     subsection (a), the use of appropriate technologies to reduce 
     medical errors, such as hand-held electronic prescription 
     pads, training simulators for medical education, and bar-
     coding of prescription drugs and patient bracelets.
       ``(d) Database.--The Secretary shall provide for the 
     establishment and operation of a national database of medical 
     errors to be used as provided for by the Secretary. The 
     information provided to the Secretary under subsection (b)(2) 
     shall be contained in the database.
       ``(e) Evaluation.--The Secretary shall evaluate the 
     progress of each demonstration project established under this 
     section in reducing the incidence of medical errors and 
     submit the results of such evaluations as part of the reports 
     under section 926(b).
       ``(f) Reporting.--Prior to October 1, of the third fiscal 
     year for which funds are made available under this section, 
     the Secretary shall prepare and submit to the appropriate 
     committees of Congress an interim report concerning the 
     results of such demonstration projects.

     ``SEC. 924. PATIENT SAFETY IMPROVEMENT.

       ``(a) In General.--The Secretary shall provide information 
     to educate patients and family members about their role in 
     reducing medical errors. Such information shall be provided 
     to all individuals who participate in Federally-funded health 
     care programs.
       ``(b) Development of Programs.--The Secretary shall develop 
     programs that encourage patients to take a more active role 
     in their medical treatment, including encouraging patients to 
     provide information to health care providers concerning pre-
     existing conditions and medications.

     ``SEC. 925. PRIVATE, NONPROFIT EFFORTS TO REDUCE MEDICAL 
                   ERRORS.

       ``(a) In General.--The Secretary shall make grants to 
     health professional associations and other organizations to 
     provide training in ways to reduce medical errors, including 
     curriculum development, technology training, and continuing 
     medical education.
       ``(b) Application.--To be eligible for a grant under this 
     section, an entity shall prepare and submit to the Secretary 
     an application at such time, in such manner and containing, 
     such information as the Secretary shall require.

     ``SEC. 926. REPORT TO CONGRESS.

       ``(a) Initial Report.--Not later than 180 days after the 
     date of enactment of this part,

[[Page 407]]

     the Secretary shall prepare and submit to the appropriate 
     committees of Congress a report concerning the costs 
     associated with implementing a program that identifies 
     factors that contribute to errors and which includes 
     upgrading the health care computer systems and other 
     technologies in the United States in order to reduce medical 
     errors, including computerizing hospital systems for the 
     coordination of prescription drugs and handling of laboratory 
     specimens, and contains recommendation on ways in which to 
     reduce those factors.
       ``(b) Other Reports.--Not later than 180 days after the 
     completion of all demonstration projects under section 923, 
     the Secretary shall prepare and submit to the appropriate 
     committees of Congress a report concerning--
       ``(1) how successful each demonstration project was in 
     reducing medical errors;
       ``(2) the data submitted by States under section 922(c);
       ``(3) the best methods for reducing medical errors;
       ``(4) the costs associated with applying such best methods 
     on a nationwide basis; and
       ``(5) the manner in which other Federal agencies can share 
     information on best practices in order to reduce medical 
     errors in all Federal health care programs.

     ``SEC. 927. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated such sums as may 
     be necessary to carry out this part.''.

   TITLE IX--TAX INCENTIVES FOR PURCHASE OF QUALIFIED LONG-TERM CARE 
                               INSURANCE

     SEC. 901. CREDIT FOR QUALIFIED LONG-TERM CARE PREMIUMS.

       (a) General Rule.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 35 as 
     section 36 and by inserting after section 34 the following:

     ``SEC. 35. LONG-TERM CARE INSURANCE CREDIT.

       ``(a) General Rule.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     subtitle for the taxable year an amount equal to the 
     applicable percentage of the premiums for a qualified long-
     term care insurance contract (as defined in section 7702B(b)) 
     paid during such taxable year for such individual or the 
     spouse of such individual.
       ``(b) Applicable Percentage.--
       ``(1) In general.--For purposes of this section, the term 
     `applicable percentage' means 28 percent reduced (but not 
     below zero) by 1 percentage point for each $1,000 (or 
     fraction thereof) by which the taxpayer's adjusted gross 
     income for the taxable year exceeds the base amount.
       ``(2) Base amount.--For purposes of paragraph (1) the term 
     `base amount' means--
       ``(A) except as otherwise provided in this paragraph, 
     $25,000,
       ``(B) $40,000 in the case of a joint return, and
       ``(C) zero in the case of a taxpayer who--
       ``(i) is married at the close of the taxable year (within 
     the meaning of section 7703) but does not file a joint return 
     for such taxable year, and
       ``(ii) does not live apart from the taxpayer's spouse at 
     all times during the taxable year.
       ``(c) Coordination With Medical Expense Deduction.--Any 
     amount allowed as a credit under this section shall not be 
     taken into account under section 213.''.
       (b) Conforming Amendment.--The table of sections for such 
     subpart C is amended by striking the item relating to section 
     35 and inserting the following:

``Sec. 35. Long-term care insurance credit.
``Sec. 36. Overpayments of tax.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 902. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE IN 
                   CAFETERIA PLANS AND FLEXIBLE SPENDING 
                   ARRANGEMENTS.

       (a) Cafeteria Plans.--The last sentence of section 125(f) 
     of the Internal Revenue Code of 1986 (defining qualified 
     benefits) is amended by striking ``shall not'' and inserting 
     ``shall''.
       (b) Flexible Spending Arrangements.--Section 106(c) of the 
     Internal Revenue Code of 1986 (relating to contributions by 
     employer to accident and health plans) is amended--
       (1) in paragraph (1), by striking ``include'' and inserting 
     ``shall not''; and
       (2) in the heading, by striking ``Inclusion'' and inserting 
     ``Exclusion''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 903. EXCLUSION FROM GROSS INCOME FOR AMOUNTS RECEIVED ON 
                   CANCELLATION OF LIFE INSURANCE POLICIES AND 
                   USED FOR QUALIFIED LONG-TERM CARE INSURANCE 
                   CONTRACTS.

       (a) In General.--
       (1) Exclusion from gross income.--
       (A) In general.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to items 
     specifically excluded from gross income) is amended by 
     redesignating section 139 as section 140 and by inserting 
     after section 138 the following new section:

     ``SEC. 139. AMOUNTS RECEIVED ON CANCELLATION, ETC. OF LIFE 
                   INSURANCE CONTRACTS AND USED TO PAY PREMIUMS 
                   FOR QUALIFIED LONG-TERM CARE INSURANCE.

       ``No amount (which but for this section would be includible 
     in the gross income of an individual) shall be included in 
     gross income on the whole or partial surrender, cancellation, 
     or exchange of any life insurance contract during the taxable 
     year if--
       ``(1) such individual has attained age 59\1/2\ on or before 
     the date of the transaction, and
       ``(2) the amount otherwise includible in gross income is 
     used during such year to pay for any qualified long-term care 
     insurance contract (as defined in section 7702B(b)) which--
       ``(A) is for the benefit of such individual or the spouse 
     of such individual if such spouse has attained age 59\1/2\ on 
     or before the date of the transaction, and
       ``(B) may not be surrendered for cash.''.
       (B) Conforming amendment.--The table of sections for such 
     part III is amended by striking the item relating to section 
     139 and inserting the following:

``Sec. 139. Amounts received on cancellation, etc. of life insurance 
              contracts and used to pay premiums for qualified long-
              term care insurance.
``Sec. 140. Cross references to other Acts.''.

       (2) Certain exchanges not taxable.--Section 1035(a) of such 
     Code (relating to certain exchanges of insurance contracts) 
     is amended by striking the period at the end of paragraph (3) 
     and inserting ``; or'', and by adding at the end the 
     following:
       ``(4) in the case of an individual who has attained age 
     59\1/2\, a contract of life insurance or an endowment or 
     annuity contract for a qualified long-term care insurance 
     contract (as defined in section 7702B(b)), if the qualified 
     long-term care insurance contract may not be surrendered for 
     cash.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 904. USE OF GAIN FROM SALE OF PRINCIPAL RESIDENCE FOR 
                   PURCHASE OF QUALIFIED LONG-TERM HEALTH CARE 
                   INSURANCE.

       (a) In General.--Subsection (d) of section 121 of the 
     Internal Revenue Code of 1986 (relating to exclusion of gain 
     from sale of principal) is amended by adding at the end the 
     following:
       ``(9) Eligibility of home equity conversion sale-leaseback 
     transaction for exclusion.--
       ``(A) In general.--For purposes of this section, the term 
     `sale or exchange' includes a home equity conversion sale-
     leaseback transaction.
       ``(B) Home equity conversion sale-leaseback transaction.--
     For purposes of subparagraph (A), the term `home equity 
     conversion sale-leaseback' means a transaction in which--
       ``(i) the seller-lessee--

       ``(I) sells property which during the 5-year period ending 
     on the date of the transaction has been owned and used as a 
     principal residence by such seller-lessee for periods 
     aggregating 2 years or more,
       ``(II) uses a portion of the proceeds from such sale to 
     purchase a qualified long-term care insurance contract (as 
     defined in section 7702B(b)), which contract may not be 
     surrendered for cash,

       ``(III) obtains occupancy rights in such property pursuant 
     to a written lease requiring a fair rental, and

       ``(IV) receives no option to repurchase the property at a 
     price less than the fair market price of the property 
     unencumbered by any leaseback at the time such option is 
     exercised, and

       ``(ii) the purchaser-lessor--

       ``(I) is a person,
       ``(II) is contractually responsible for the risks and 
     burdens of ownership and receives the benefits of ownership 
     (other than the seller-lessee's occupancy rights) after the 
     date of such transaction, and
       ``(III) pays a purchase price for the property that is not 
     less than the fair market price of such property encumbered 
     by a leaseback, and taking into account the terms of the 
     lease.

       ``(C) Additional definitions.--For purposes of subparagraph 
     (B)--
       ``(i) Occupancy rights.--The term `occupancy rights' means 
     the right to occupy the property for any period of time, 
     including a period of time measured by the life of the 
     seller-lessee on the date of the sale-leaseback transaction 
     (or the life of the surviving seller-lessee, in the case of 
     jointly held occupancy rights), or a periodic term subject to 
     a continuing right of renewal by the seller-lessee (or by the 
     surviving seller-lessee, in the case of jointly held 
     occupancy rights).
       ``(ii) Fair rental.--The term `fair rental' means a rental 
     for any subsequent year which equals or exceeds the rental 
     for the 1st year of a sale-leaseback transaction.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales after December 31, 2001, in taxable 
     years beginning after such date.

[[Page 408]]



               TITLE X--NATIONAL FUND FOR HEALTH RESEARCH

     SEC. 1001. ESTABLISHMENT OF FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund, to be known as the ``National Fund 
     for Health Research'' (in this section referred to as the 
     ``Fund''), consisting of such amounts as are transferred to 
     the Fund under subsection (b) and any interest earned on 
     investment of amounts in the Fund.
       (b) Transfers to Fund.--
       (1) In general.--The Secretary of the Treasury shall 
     transfer to the Fund amounts equivalent to amounts designated 
     under paragraph (2) and received in the Treasury.
       (2) Amounts.--
       (A) Health plan set aside.--With respect to each calendar 
     year beginning with the first full calendar year after the 
     date of enactment of this Act, each health plan shall set 
     aside and transfer to the Treasury of the United States an 
     amount equal to--
       (i) for the first full calendar year, 0.25 percent of all 
     health premiums received with respect to the plan for such 
     year;
       (ii) for the second full calendar year, 0.5 percent of all 
     health premiums received with respect to the plan for such 
     year;
       (iii) for the third full calendar year, 0.75 percent of all 
     health premiums received with respect to the plan for such 
     year; and
       (iv) for the fourth and each succeeding full calendar year, 
     1 percent of all health premiums received with respect to the 
     plan for such year.
       (3) Transfers based on estimates.--The amounts transferred 
     by paragraph (1) shall annually be transferred to the Fund 
     within 30 days after the President signs an appropriations 
     Act for the Departments of Labor, Health and Human Services, 
     and Education, and related agencies, or by the end of the 
     first quarter of the fiscal year. Proper adjustment shall be 
     made in amounts subsequently transferred to the extent prior 
     estimates were in excess of or less than the amounts required 
     to be transferred.
       (4) Definition.--As used in this subsection, the term 
     ``health plan'' means a group health plan (as defined in 
     section 2791(a) of the Public Health Service Act and any 
     individual health insurance (as defined in section 2791(b)(5) 
     of such Act) operated by a health insurance issuer.
       (c) Obligations From Fund.--
       (1) In general.--Subject to the provisions of paragraph 
     (4), with respect to the amounts made available in the Fund 
     in a fiscal year, the Secretary of Health and Human Services 
     shall distribute--
       (A) 2 percent of such amounts during any fiscal year to the 
     Office of the Director of the National Institutes of Health 
     to be allocated at the Director's discretion for the 
     following activities:
       (i) for carrying out the responsibilities of the Office of 
     the Director, including the Office of Research on Women's 
     Health and the Office of Research on Minority Health, the 
     Office of Rare Disease Research, the Office of Behavioral and 
     Social Sciences Research (for use for efforts to reduce 
     tobacco use), the Office of Dietary Supplements, and the 
     Office for Disease Prevention; and
       (ii) for construction and acquisition of equipment for or 
     facilities of or used by the National Institutes of Health;
       (B) 2 percent of such amounts for transfer to the National 
     Center for Research Resources to carry out section 1502 of 
     the National Institutes of Health Revitalization Act of 1993 
     concerning Biomedical and Behavioral Research Facilities;
       (C) 1 percent of such amounts during any fiscal year for 
     carrying out section 301 and part D of title IV of the Public 
     Health Service Act with respect to health information 
     communications; and
       (D) the remainder of such amounts during any fiscal year to 
     member institutes and centers, including the Office of AIDS 
     Research, of the National Institutes of Health in the same 
     proportion to the total amount received under this section, 
     as the amount of annual appropriations under appropriations 
     Acts for each member institute and Centers for the fiscal 
     year bears to the total amount of appropriations under 
     appropriations Acts for all member institutes and Centers of 
     the National Institutes of Health for the fiscal year.
       (2) Plans of allocation.--The amounts transferred under 
     paragraph (1)(D) shall be allocated by the Director of the 
     National Institutes of Health or the various directors of the 
     institutes and centers, as the case may be, pursuant to 
     allocation plans developed by the various advisory councils 
     to such directors, after consultation with such directors.
       (3) Grants and contracts fully funded in first year.--With 
     respect to any grant or contract funded by amounts 
     distributed under paragraph (1), the full amount of the total 
     obligation of such grant or contract shall be funded in the 
     first year of such grant or contract, and shall remain 
     available until expended.
       (4) Trigger and release of monies and phase-in.--
       (A) Trigger and release.--No expenditure shall be made 
     under paragraph (1) during any fiscal year in which the 
     annual amount appropriated for the National Institutes of 
     Health is less than the amount so appropriated for the prior 
     fiscal year.
       (B) Phase-in.--The Secretary of Health and Human Services 
     shall phase-in the distributions required under paragraph (1) 
     so that--
       (i) 25 percent of the amount in the Fund is distributed in 
     the first fiscal year for which funds are available;
       (ii) 50 percent of the amount in the Fund is distributed in 
     the second fiscal year for which funds are available;
       (iii) 75 percent of the amount in the Fund is distributed 
     in the third fiscal year for which funds are available; and
       (iv) 100 percent of the amount in the Fund is distributed 
     in the fourth and each succeeding fiscal year for which funds 
     are available.
       (d) Budget Treatment of Amounts in Fund.--The amounts in 
     the Fund shall be excluded from, and shall not be taken into 
     account, for purposes of any budget enforcement procedure 
     under the Congressional Budget Act of 1974 or the Balanced 
     Budget and Emergency Deficit Control Act of 1985.
                                  ____


               Health Care Assurance Act of 2001--Summary

     Title I: Expanded Medicaid Coverage for Low-Income Individuals

       Current law only guarantees coverage for pregnant women and 
     infants who earn up to 133% of the Federal level poverty 
     ($11,105 for a single/$22,676 for a family of four). Beyond 
     that population, the Federal mandate varies across age, 
     income, and disability status; for instance, there are 
     different federal mandates for preschool age children than 
     for school-age children and for disabled individuals. 
     Further, current law does not allow any Federal contributions 
     for coverage for individuals who earn up to 133% of the 
     federal poverty line, regardless of age or other status. 
     States would then have the option, as they have under the 
     State Child Health Insurance Programs (SCHIP), to cover 
     individuals all the way up to 200% of the federal poverty 
     level ($16,700 for a single/$34,100 for a family of four). 
     Unlike SCHIP, however, the states will not receive an 
     enhanced Federal match.

        Title II: Expanded State Child Health Insurance Program

       This title will expand upon the State Child Health 
     Insurance Program (SCHIP), the new program established in the 
     Balanced Budget Act of 1997 which allocates $24 billion/five 
     years to increase health insurance coverage for children. The 
     SCHIP program gives States the option to use federally funded 
     grants to provide vouchers to eligible families to purchase 
     health insurance for their children, or to expand Medicaid 
     coverage for those uninsured children, or a combination of 
     both. These grants are distributed to participating States 
     based on the number of uninsured children residing there. 
     This title would increase the income eligibility to families 
     with incomes at or below 235% of the Federal poverty level 
     ($40,067 annually for a family of four).

      Title III: Expanded Health Services for Disabled Individuals

       Expansion of Community-Based Attendant Care Services and 
     Supports: Medicaid currently covers the costs associated with 
     institutional care for disabled individuals. In an effort to 
     improve the delivery of care and the comfort of those with 
     long-term disabilities, this section would allow for 
     reimbursement for community-based attendant care services and 
     supports, instead of institutionalization, for eligible 
     individuals who require such services based on functional 
     need, without regard to the individual's age or the nature of 
     the disability.

         Title IV: General Health Insurance Coverage Provisions

       Tax Equity for the Self-Employed: Under current law, self-
     employed persons may deduct 60% of their health insurance 
     costs through 2002, and those costs would be fully deductible 
     in 2003. However, all other employees may already deduct 100% 
     of such costs. Title III would speed up the phase-in: health 
     insurance costs would be 70% deductible in 2001 and fully 
     deductible in 2002, thereby giving the currently 3.1 million 
     self-employed Americans who are uninsured a better incentive 
     to purchase coverage.
       Small Employer and Individual Purchasing Groups: 
     Establishes voluntary small employer and individual 
     purchasing groups designed to provide affordable, 
     comprehensive health coverage options for such employers, 
     their employees, and other uninsured and underinsured 
     individuals and families. Health plans offering coverage 
     through such groups will: (1) provide a standard, actuarially 
     equivalent health benefits package; (2) adjust community 
     rated premiums by age and family size in order to spread risk 
     and provide price equity to all; and (3) meet certain other 
     guidelines involving marketing practices.
       Standard Benefits Package: The standard package of benefits 
     would include a variation of benefits permitted among 
     actuarially equivalent plans developed through the National 
     Association of Insurance Commissioners (NAIC). The standard 
     plan will consist of the following services when medically 
     necessary or appropriate: (1) medical and surgical services; 
     (2) medical equipment; (3) preventive services; and (4) 
     emergency transportation in frontier areas.
       COBRA Portability Reform: For those persons who are 
     uninsured between jobs and for

[[Page 409]]

     insured persons who fear losing coverage should they lose 
     their jobs, Title III reforms the existing COBRA law by: (1) 
     extending to 24 months the minimum time period in which COBRA 
     may cover individuals through their former employers' plan, 
     and extending to 36 months the time period in which a child 
     who is no longer a dependent under a parent's health 
     insurance policy may receive coverage; (2) expanding coverage 
     options to include plans with a lower premium and a $1,000 
     deductible--saving a typical family of four 20% in monthly 
     premiums--and plans with a lower premium and a $3,000 
     deductible--saving a family of four 52% in monthly premiums.

             Title V: Primary and Preventive Care Services

       New Medicare preventive Care Services: The health care 
     community continues to recognize the importance of prevention 
     in improving health status and reducing health care costs. 
     This provision institutes new preventive benefits within the 
     Medicare program, and refines and strengthens existing ones. 
     Under this provision, Medicare would cover yearly pap smears, 
     pelvic exams, and screening and diagnostic mammography for 
     women, with no copayment of part B deductible; and cover 
     insulin pumps for certain Type I Diabetics.
       Primary Health and Education Assistance Programs: The 
     Department of Health and Human Service administers many 
     programs designed to increase access to primary and 
     preventive care. This provision provides increased 
     authorization for several existing preventive health programs 
     such as breast and cervical cancer prevention, Healthy Start 
     project grants aimed at reducing infant mortality and low 
     weight births and to improve the health and well-being of 
     mothers and their families, pregnant women and infants, and 
     childhood immunizations. This section also authorizes a new 
     grant program for local education agencies and pre-school 
     programs to provide comprehensive health education, and 
     reauthorizes the Adolescent Family Life (AFL) program (Title 
     XX) for the first time since 1984. The AFL program provides 
     funding for initiatives focusing directly on abstinence 
     education.

         Title VI: Patient's Right to Decline Medical Treatment

       Improves the effectiveness and portability of advance 
     directives by strengthening the federal law regarding patient 
     self-determination and establishing uniform federal forms 
     with regard to self-determination.

            Title VII: Primary and Preventive Care Providers

       Encourages use of non-physician providers such as nurse 
     practitioners, physician assistants, and clinical nurse 
     specialists by increasing direct reimbursement under Medicare 
     and Medicaid without regard to the setting where services are 
     provided. Title VI also seeks to encourage students early on 
     in their medical training to pursue a career in primary care 
     and it provides assistance to medical training programs to 
     recruit such students.

                      Title VIII: Cost Containment

       Investment in Outcomes Research: The recently renamed 
     Agency for Healthcare Research and Quality (formerly the 
     Agency for Health Care Policy and Research) is authorized to 
     expand outcomes research necessary for the development of 
     medical practice guidelines and for increased access to 
     consumer information. In order to boost funding for this 
     vital area of research, title VIII of my bill would establish 
     a trust fund for medical treatment outcomes research, 
     capitalized by a .001 cent tax on total U.S. health insurance 
     premiums collected. This trust fund would be specifically 
     authorized for use by the Agency for Healthcare Research and 
     Quality to supplement its currently authorized outcomes 
     research mission.
       Reducing Medical Errors: A recently released Institute of 
     Medicine (IOM) report, ``To Err Is Human: Building a Safer 
     Health System,'' concluded that medical mistakes have led to 
     numerous injuries and deaths, affecting an estimated three to 
     four percent of all hospital patients. The IOM report also 
     concluded that health care is a decade or more behind other 
     high-risk industries in its attention to ensuring basic 
     safety. This provision would make grants available to states 
     so they can establish their own error reporting systems and 
     would establish 15 competitively-awarded research 
     demonstration projects in rural and urban areas throughout 
     the country. Of the 15 facilities participating in the 
     demonstrations: 5 will be required to inform HHS of any 
     medical errors, 5 will not be required to inform HHS of 
     medical errors, and 5 will be required to inform HHS as well 
     as the patient and/or his family of any medical errors.
       The Secretary of HHS would be required to report to the 
     Congress on the results of the demonstration projects, 
     focusing on best practices and costs/benefits of applying 
     these practices nationwide. These projects would employ new 
     and proven technologies and enhance staff training to 
     determine ways to reduce errors. The provision also requires 
     the Secretary of HHS to provide patient education programs to 
     all individuals covered by Federal health plans.

   Title IX: Tax Incentives for Purchase of Qualified Long-Term Care 
                               Insurance

       Increases access to long-term care by: (1) establishing a 
     tax credit for amounts paid toward long-term care services of 
     family members; (2) excluding life insurance savings used to 
     pay for long-term care from income tax; (3) allowing 
     employees to select long-term care insurance as part of a 
     cafeteria plan and allowing employers to deduct this expense; 
     (4) setting standards that require long-term care to 
     eliminate the current bias that favors institutional care 
     over community and home-based alternatives.

               Title X: National Fund for Health Research

       Authorizes the establishment of a National Fund for Health 
     Research to supplement biomedical research through the 
     contributions of 1% of premiums collected by health insurers. 
     Funds will be distributed to the National Institutes of 
     Health's member institutes and centers in the same proportion 
     as the amount of appropriations they receive for the fiscal 
     year.
                                  ____


        31 Health Care Bills Introduced by Senator Arlen Specter


                  98th Congress 1/3/83 through 1/2/85

       (1) S. 811: The Health Care for Displaced Workers Act of 
     1983 (3/15/83)
       (2) S. 2051: The Health Care Cost Containment Act of 1983 
     (11/4/83)


                  99th Congress 1/3/85 through 1/2/87

       (3) S. 379: The Health Care Cost Containment Act of 1985 
     (2/5/85)
       (4) S. 1873: The Community Based Disease Prevention and 
     Health Promotion Projects Act of 1985 (11/21/85)


                  100th Congress 1/3/87 through 1/2/89

       (5) S. 281: The Aid to Families and Employment Transition 
     Act (1/6/87)
       (6) S. 1871: The Pediatric Acquired Immunodeficiency 
     Syndrome (AIDS) Resource Centers Act (11/17/87)
       (7) S. 1872: The Minority Acquired Immunodeficiency 
     Syndrome (AIDS) Awareness and Prevention Projects Act (11/17/
     87)


                  101st Congress 1/3/89 through 1/2/91

       (8) S. 896: The Pediatric AIDS Resource Centers Act (5/2/
     89)
       (9) S. 1607: Authorization of the Office of Minority Health 
     (9/12/89)


                  102nd Congress 1/3/91 through 1/5/93

       (10) S. 1122: The Long-Term Care Incentives Act of 1991 (5/
     22/91)
       (11) S. 1214: The Change in Designation of Lancaster 
     County, PA, for Purposes of Medicare Services (6/4/91)
       (12) S. 1864: The Children's Hospital of Philadelphia 
     Medical Research Facility Act (10/23/91)
       (13) S. 1995: The Health Care Access and Affordability Act 
     of 1991 (11/20/91)
       (14) S. 2028: The Women Veteran's Health Equity Act of 1991 
     (11/22/91)
       (15) S. 2029: Self-Funding of Veteran's Administrative 
     Health Care Act (11/22/91)
       (16) S. 2188: Rural Veterans Health Care Facilities Act (2/
     5/92)
       (17) S. 3176: The Health Care Affordability and Quality 
     Improvement Act of 1992 (8/12/92)
       (18) S. 3353: The Deferred Acquisition Cost Act (10/6/92)


                 103rd Congress 1/5/93 through 12/11/94

       (19) S. 18: The Comprehensive Health Care Act of 1993 (1/
     21/93)
       (20) S. 631: The Comprehensive Access and Affordability 
     Health Care (3/23/93)


                 104th Congress 1/4/95 through 10/3/96

       (21) S. 18: The Health Care Assurance Act of 1995 (1/4/95)
       (22) S. 1716: The Adolescent Family Life and Abstinence 
     Education Act of 1996 (4/29/96)


                 105th Congress 1/7/97 through 10/21/98

       (23) S. 24: The Health Care Assurance Act of 1997 (1/21/97)
       (24) S. 435: The Healthy Children's Pilot Program Act of 
     1997 (3/13/97)
       (25) S. 934: The Adolescent Family Life and Abstinence 
     Education Act of 1997 (6/18/97)
       (26) S. 999: Authorizing the Department of Veteran's 
     Affairs to Specify the Frequency of Screening Mammograms (7/
     9/97)


                106th Congress 1/19/99 through 12/15/00

       (27) S. 24: The Health Care Assurance Act of 1999 (1/19/99)
       (28) S. 836: The Access to Women's Health Care Act of 1999 
     (4/20/99)
       (29) S. 1402: The Veterans Benefits and Health Care 
     Improvement Act of 2000 (7/20/99)
       (30) S. 2015: The Stem Cell Research Act of 2000 (1/31/00)
       (31) S. 2038: The Medical Error Reduction Act of 2000 (2/8/
     00)
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Schumer, and Mrs. Boxer):
  S. 25. A bill to provide for the implementation of a system of 
licensing for purchasers of certain firearms and for a record of sale 
system for those firearms, and for other purposes; to the Committee on 
the Judiciary.


            firearm licensing and record of sale act of 2001

  Mrs. FEINSTEIN. Mr. President, last year on Mother's Day, supporters 
of sensible gun laws came together by the hundreds of thousands to 
participate in the Million Mom March and say to Congress: ``Enough is 
Enough.''

[[Page 410]]

  Those women, men and children all shared a common purpose: The 
passage of sensible gun laws--laws that will hopefully help save lives.
  The primary stated goal of the Million Mom March was to push for 
legislation to license gun owners and keep track of guns. We know it 
will be a long process of educating the Congress and the public on this 
issue. But we will not give in until we succeed. So today I rise, along 
with Senators Schumer and Boxer, to reintroduce the ``Firearm Licensing 
and Record of Sale Act,'' which I believe represents a common-sense 
approach to guns and gun violence in America.
  Mr. President, in this country, when you want to hunt, you get a 
hunting license; when you want to fish, you get a fishing license. But 
when you want to buy a gun, no license is necessary. That makes no 
sense.
  We register cars and license drivers. We register pesticides and 
license exterminators. We register animal carriers and researchers, we 
register gambling devices. And we register a whole host of other goods 
and activities--even ``international expositions'' must be registered 
with the Bureau of International Expositions!
  But when it comes to guns and gun owners--no license and no 
registration, despite the loss of more than 32,000 lives a year from 
gun violence.
  To this end, my staff and I worked for months with law enforcement 
officials and other experts in drafting the bill we introduced last 
year. And since that time, we have refined the bill, corrected some 
vague sections, and made it even more clear what the bill would do, and 
what it would not do.
  Upon enactment of this legislation, anyone purchasing a handgun or 
semi-automatic weapon that takes detachable ammunition magazines will 
be required to have a license. Shotguns and a large number of common 
hunting guns are not covered by the requirements of this bill.
  Current owners of these weapons will have up to 10 years to obtain a 
license, on a rolling basis, much like many states now handle drivers 
licenses.
  The bill sets up a federal system, but allows states to opt out if 
they adopt a system at least as effective as the federal program.
  Under this bill, anyone wishing to obtain a firearm license will need 
to go to a federally licensed firearms dealer. There are currently more 
than 100,000 such dealers across the country--to put that in some 
perspective, there are four times more gun dealers in America than 
there are McDonald's restaurants in the entire world. Operating the 
federal licensing system through these licensed dealers will minimize 
the burden on those wishing to obtain a license.
  If a state opts-out of the federal program, an individual will go to 
a State-designated entity, like a local sheriff, local police 
department, or even Department of Motor Vehicles. It will all depend on 
where the state feels is best.
  Either way, the purchaser will then need to:
  Provide information as to date and place of birth and name and 
address;
  Submit a thumb print;
  Submit a current photograph;
  Sign, under penalty of perjury, that all of the submitted information 
is true and that the applicant is qualified under Federal law to 
possess a firearm; Pass a written firearms safety test, requiring 
knowledge of the safe storage and handling of firearms, the legal 
responsibilities of firearm ownership, and other factors as determined 
by the state or federal authority;
  Sign a pledge to keep any firearm safely stored and out of the hands 
of juveniles (this pledge will be backed up by criminal penalties of up 
to three years in jail for anyone failing to do so);
  Undergo state and federal background checks.
  Licenses will be renewable every five years, and can be revoked at 
any time if the licensee becomes disqualified under federal law from 
owning or possessing a gun.
  And Mr. President, the fee for a license cannot exceed $25.
  Once the bill takes effect, all future sales and transfers of 
firearms falling within the scope of the bill will have to be recorded 
through a federally licensed firearms dealer, with an accompanying NICS 
background check. That way, law enforcement agencies will have easier 
access to information leading to the arrest of persons who use guns in 
crime.
  The bill covers both handguns and other guns that are semi-automatic 
and can accept detachable magazines.
  The legislation covers handguns because statistically, these guns are 
used in more crimes than any other. In fact, approximately 85 percent 
of all firearm homicides involve a handgun.
  And the legislation also covers semi-automatic firearms that can 
accept detachable magazines, because these are the kind of assault 
weapons that have the potential to destroy the largest number of lives 
in the shortest period of time.
  A gun that can take a detachable magazine can also take a large 
capacity magazine. Combine that with semi-automatic, rapid fire, and 
you have a deadly combination--as we have seen time and again in recent 
years.
  Put simply, this legislation will cover those firearms that represent 
the greatest threat to the safety of innocent men, women and children 
in this nation.
  Common hunting rifles, shotguns and other firearms that cannot accept 
detachable magazines will remain exempt.
  Penalties will vary depending on the severity of the violation. But 
in no case will gun owners face jail time simply because they forgot to 
get a license:
  Those who fail to get a license will face fines of between $500 (for 
a first offense) and $5,000 for subsequent offenses.
  Failing to report a change of address or the loss of a firearm will 
also result in penalties between $500 and $5,000, because this system 
works best for law enforcement when the perpetrators of gun crime can 
be quickly traced and arrested;
  Dealers who fail to maintain adequate records will face up to 2 years 
in prison--dealers know their responsibilities, and this will give law 
enforcement the tools necessary to root out bad dealers and prevent the 
straw purchases and other violations of law that allow criminals easy 
access to a continuing flow of guns;
  And adults who recklessly or knowingly allow a child access to a 
firearm face up to three years in prison if the child uses the gun to 
kill or seriously injure another person. In this way, the bill truly 
puts a new sense of responsibility onto gun owners in America.
  Mr. President, law enforcement in California tells me that a 
licensing and record of sale system like the one I am introducing today 
will help law enforcement, upon recovery of a firearm used in crime, to 
track the gun down to the person who sold it, and then to the person 
who bought it.
  And this legislation also sets in place a method through which we can 
better attempt to ensure that gun owners are responsible and trained in 
the use and care of their dangerous possessions.
  We have tried to minimize the burden of this bill at every turn:
  The licensing process will take place through federally licensed 
firearms dealers--as I mentioned earlier, there are currently more than 
100,000 in this country;
  The fee for a license will be only $25;
  Current gun owners will have as many as ten years to get a license, 
on a rolling basis, and guns now in homes will not have to be 
registered;
  Future gun transfers will simply be recorded by licensed dealers--as 
they are now--and a system will be put in place to allow the quick 
tracing of guns used in crime. Gun owners themselves will not have to 
register their old guns or send any paperwork to the government.
  This nation is awash in guns--there are more than 200 million of them 
in the United States. The problem of gun violence is not going away, 
and accidental deaths from firearms rob us of countless innocents each 
year.
  Too many lives are lost every year simply because gun owners do not 
know how to use or store their firearms--particularly around children. 
In

[[Page 411]]

fact, according to a study released in 1999, in 1996 alone there were 
more than 1,100 unintentional shooting deaths and more than 18,000 
firearm suicides--many of which might have been prevented if the person 
intent on suicide did not have easy access to a gun owned by somebody 
else. It is my hope that the provisions of this bill, particularly with 
regard to child access prevention, will begin the process of making it 
harder for children and others to gain easy access to firearms.
  As I said, I know that this bill will not pass overnight. We have a 
long process of education ahead of us. But the American people are with 
us. The facts are with us. And common sense is with us.
  I thank the Senate for its consideration of this measure, and I look 
forward to working with each of my colleagues to move this bill forward 
in the coming months.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 25

       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 ``Firearm 
     Licensing and Record of Sale Act of 2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.

                           TITLE I--LICENSING

Sec. 101. Licensing requirement.
Sec. 102. Application requirements.
Sec. 103. Issuance of license.
Sec. 104. Renewal of license.
Sec. 105. Revocation of license.

                  TITLE II--RECORD OF SALE OR TRANSFER

Sec. 201. Sale and transfer requirements for qualifying firearms.
Sec. 202. Firearm records.

                   TITLE III--ADDITIONAL PROHIBITIONS

Sec. 301. Universal background check requirement.
Sec. 302. Failure to maintain or permit inspection of records.
Sec. 303. Failure to report loss or theft of firearm.
Sec. 304. Failure to provide notice of change of address.
Sec. 305. Child access prevention.

                         TITLE IV--ENFORCEMENT

Sec. 401. Criminal penalties.
Sec. 402. Regulations.
Sec. 403. Inspections.
Sec. 404. Orders.
Sec. 405. Injunctive enforcement.

            TITLE V--FIREARM INJURY INFORMATION AND RESEARCH

Sec. 501. Duties of the Secretary.

                     TITLE VI--EFFECT ON STATE LAW

Sec. 601. Effect on State law.
Sec. 602. Certification of State firearm licensing and record of sale 
              systems.

                  TITLE VII--RELATIONSHIP TO OTHER LAW

Sec. 701. Subordination to Arms Export Control Act.

                      TITLE VIII--INAPPLICABILITY

Sec. 801. Inapplicability to governmental authorities.

                        TITLE IX--EFFECTIVE DATE

Sec. 901. Effective date of amendments.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the manufacture, distribution, and importation of 
     firearms is inherently commercial in nature;
       (2) firearms regularly move in interstate commerce;
       (3) firearms trafficking is so prevalent and widespread in 
     and among the States that it is usually impossible to 
     distinguish between intrastate trafficking and interstate 
     trafficking;
       (4) to the extent that firearms trafficking is intrastate 
     in nature, it arises out of and is substantially connected 
     with a commercial transaction, which, when viewed in the 
     aggregate, substantially affects interstate commerce;
       (5) because the intrastate and interstate trafficking of 
     firearms are so commingled, full regulation of interstate 
     commerce requires the incidental regulation of intrastate 
     commerce; and
       (6) it is in the national interest and within the role of 
     the Federal Government to ensure that the regulation of 
     firearms is uniform among the States, that law enforcement 
     can quickly and effectively trace firearms used in crime, and 
     that firearms owners know how to use and safely store their 
     firearms.
       (b) Purposes.--The purposes of this Act and the amendments 
     made by this Act are--
       (1) to protect the public against the unreasonable risk of 
     injury and death associated with the unrecorded sale or 
     transfer of qualifying firearms to criminals and youth;
       (2) to ensure that owners of qualifying firearms are 
     knowledgeable in the safe use, handling, and storage of those 
     firearms;
       (3) to restrict the availability of qualifying firearms to 
     criminals, youth, and other persons prohibited by Federal law 
     from receiving firearms; and
       (4) to facilitate the tracing of qualifying firearms used 
     in crime by Federal and State law enforcement agencies.

     SEC. 3. DEFINITIONS.

       (a) In General.--In this Act:
       (1) Firearm; licensed dealer; licensed manufacturer.--The 
     terms ``firearm'', ``licensed dealer'', and ``licensed 
     manufacturer'' have the meanings given those terms in section 
     921(a) of title 18, United States Code.
       (2) Qualifying firearm.--The term ``qualifying firearm'' 
     has the meaning given the term in section 921(a) of title 18, 
     United States Code, as amended by subsection (b) of this 
     section.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (4) State.--The term ``State'' means each of the several 
     States of the United States and the District of Columbia.
       (b) Amendment to Title 18, United States Code.--Section 
     921(a) of title 18, United States Code, is amended by adding 
     at the end the following:
       ``(35) The term `qualifying firearm'--
       ``(A) means--
       ``(i) any handgun ; or
       ``(ii) any semiautomatic firearm that can accept any 
     detachable ammunition feeding device; and
       ``(B) does not include any antique.''.

                           TITLE I--LICENSING

     SEC. 101. LICENSING REQUIREMENT.

       Section 922 of title 18, United States Code, is amended by 
     inserting after subsection (y) the following:
       ``(z) Firearm Licensing Requirement.--
       ``(1) In general.--It shall be unlawful for any person 
     other than a licensed importer, licensed manufacturer, 
     licensed dealer, or licensed collector to possess a 
     qualifying firearm on or after the applicable date, unless 
     that person has been issued a firearm license--
       ``(A) under title I of the Firearm Licensing and Record of 
     Sale Act of 2001, which license has not been invalidated or 
     revoked under that title; or
       ``(B) pursuant to a State firearm licensing and record of 
     sale system certified under section 602 of the Firearm 
     Licensing and Record of Sale Act of 2001, which license has 
     not been invalidated or revoked under State law.
       ``(2) Applicable date.--In this subsection, the term 
     `applicable date' means--
       ``(A) with respect to a qualifying firearm that is acquired 
     by the person before the date of enactment of the Firearm 
     Licensing and Record of Sale Act of 2001, 10 years after such 
     date of enactment; and
       ``(B) with respect to a qualifying firearm that is acquired 
     by the person on or after the date of enactment of the 
     Firearm Licensing and Record of Sale Act of 2001, 1 year 
     after such date of enactment.''.

     SEC. 102. APPLICATION REQUIREMENTS.

       (a) In General.--In order to be issued a firearm license 
     under this title, an individual shall submit to the Secretary 
     (in accordance with the regulations promulgated under 
     subsection (b)) an application, which shall include--
       (1) a current, passport-sized photograph of the applicant 
     that provides a clear, accurate likeness of the applicant;
       (2) the name, address, and date and place of birth of the 
     applicant;
       (3) any other name that the applicant has ever used or by 
     which the applicant has ever been known;
       (4) a clear thumb print of the applicant, which shall be 
     made when, and in the presence of the entity to whom, the 
     application is submitted;
       (5) with respect to each category of person prohibited by 
     Federal law, or by the law of the State of residence of the 
     applicant, from obtaining a firearm, a statement that the 
     individual is not a person prohibited from obtaining a 
     firearm;
       (6) a certification by the applicant that the applicant 
     will keep any firearm owned by the applicant safely stored 
     and out of the possession of persons who have not attained 18 
     years of age;
       (7) a certificate attesting to the completion at the time 
     of application of a written firearms examination, which shall 
     test the knowledge and ability of the applicant regarding--
       (A) the safe storage of firearms, particularly in the 
     vicinity of persons who have not attained 18 years of age;
       (B) the safe handling of firearms;
       (C) the use of firearms in the home and the risks 
     associated with such use;
       (D) the legal responsibilities of firearms owners, 
     including Federal, State, and local laws relating to 
     requirements for the possession and storage of firearms, and 
     relating to reporting requirements with respect to firearms; 
     and
       (E) any other subjects, as the Secretary determines to be 
     appropriate;

[[Page 412]]

       (8) the date on which the application was submitted; and
       (9) the signature of the applicant.
       (b) Regulations Governing Submission.--The Secretary shall 
     promulgate regulations specifying procedures for the 
     submission of applications to the Secretary under this 
     section, which regulations shall--
       (1) provide for submission of the application through a 
     licensed dealer or an office or agency of the Federal 
     Government designated by the Secretary;
       (2) require the applicant to provide a valid identification 
     document (as defined in section 1028(d)(2) of title 18, 
     United States Code) of the applicant, containing a photograph 
     of the applicant, to the licensed dealer or to the office or 
     agency of the Federal Government, as applicable, at the time 
     of submission of the application to that dealer, office, or 
     agency; and
       (3) require that a completed application be forwarded to 
     the Secretary not later than 48 hours after the application 
     is submitted to the licensed dealer or office or agency of 
     the Federal Government, as applicable.
       (c) Fees.--
       (1) In general.--The Secretary shall charge and collect 
     from each applicant for a license under this title a fee in 
     an amount determined in accordance with paragraph (2).
       (2) Fee amount.--The amount of the fee collected under this 
     subsection shall be not less than the amount determined by 
     the Secretary to be necessary to ensure that the total amount 
     of all fees collected under this subsection during a fiscal 
     year is sufficient to cover the costs of carrying out this 
     title during that fiscal year, except that such amount shall 
     not exceed $25.

     SEC. 103. ISSUANCE OF LICENSE.

       (a) In General.--The Secretary shall issue a firearm 
     license to an applicant who has submitted an application that 
     meets the requirements of section 102, if the Secretary 
     ascertains that the individual is not prohibited by 
     subsection (g) or (n) of section 922 of title 18, United 
     States Code, from receiving a firearm.
       (b) Effect of Issuance to Prohibited Person.--A firearm 
     license issued under this section shall be null and void if 
     issued to a person who is prohibited by subsection (g) or (n) 
     of section 922 of title 18, United States Code, from 
     receiving a firearm.
       (c) Form of License.--A firearm license issued under this 
     section shall be in the form of a tamper-resistant card, and 
     shall include--
       (1) the photograph of the licensed individual submitted 
     with the application;
       (2) the address of the licensed individual;
       (3) the date of birth of the licensed individual;
       (4) a license number, unique to each licensed individual;
       (5) the expiration date of the license, which shall be the 
     date that is 5 years after the initial anniversary of the 
     date of birth of the licensed individual following the date 
     on which the license is issued (or in the case of a license 
     renewal, following the date on which the license is renewed 
     under section 104);
       (6) the signature of the licensed individual provided on 
     the application, or a facsimile of the application; and
       (7) centered at the top of the license, capitalized, and in 
     bold-face type, the following statement:

         ``FIREARM LICENSE--NOT VALID FOR ANY OTHER PURPOSE''.

     SEC. 104. RENEWAL OF LICENSE.

       (a) Application for Renewal.--
       (1) In general.--In order to renew a firearm license issued 
     under this title, not later than 30 days before the 
     expiration date of the license, the licensed individual shall 
     submit to the Secretary (in accordance with the regulations 
     promulgated under paragraph (3)), in a form approved by the 
     Secretary, an application for renewal of the license.
       (2) Contents.--An application submitted under paragraph (1) 
     shall include--
       (A) a current, passport-sized photograph of the applicant 
     that provides a clear, accurate likeness of the applicant;
       (B) current proof of identity of the licensed individual; 
     and
       (C) the address of the licensed individual.
       (3) Regulations governing submission.--The Secretary shall 
     promulgate regulations specifying procedures for the 
     submission of applications under this subsection.
       (b) Issuance of Renewed License.--Upon approval of an 
     application submitted under subsection (a), the Secretary 
     shall issue a renewed license, which shall meet the 
     requirements of section 103(c), except that the license shall 
     include the current photograph and address of the licensed 
     individual, as provided in the application submitted under 
     this section, and the expiration date of the renewed license, 
     as provided in section 103(c)(5).

     SEC. 105. REVOCATION OF LICENSE.

       (a) In General.--If an individual to whom a license has 
     been issued under this title subsequently becomes a person 
     who is prohibited by subsection (g) or (n) of section 922 of 
     title 18, United States Code, from receiving a firearm--
       (1) the license is revoked; and
       (2) the individual shall promptly return the license to the 
     Secretary.
       (b) Administrative Action.--Upon receipt by the Secretary 
     of notice that an individual to whom a license has been 
     issued under this title has become a person described in 
     subsection (a), the Secretary shall ensure that the 
     individual promptly returns the license to the Secretary.

                  TITLE II--RECORD OF SALE OR TRANSFER

     SEC. 201. SALE OR TRANSFER REQUIREMENTS FOR QUALIFYING 
                   FIREARMS.

       Section 922 of title 18, United States Code, is amended by 
     inserting after subsection (z) (as added by section 101 of 
     this Act) the following:
       ``(aa) Unauthorized Sale or Transfer of a Qualifying 
     Firearm.--It shall be unlawful for any person to sell, 
     deliver, or otherwise transfer a qualifying firearm to, or 
     for, any person who is not a licensed importer, licensed 
     manufacturer, licensed dealer, or licensed collector, or to 
     receive a qualifying firearm from a person who is not a 
     licensed importer, licensed manufacturer, licensed dealer, or 
     licensed collector, unless, at the time and place of the 
     transfer or receipt--
       ``(1) the transferee presents to a licensed dealer a valid 
     firearm license issued to the transferee--
       ``(A) under title I of the Firearm Licensing and Record of 
     Sale Act of 2001; or
       ``(B) pursuant to a State firearm licensing and record of 
     sale system certified under section 602 of the Firearm 
     Licensing and Record of Sale Act of 2001 established by the 
     State in which the transfer or receipt occurs;
       ``(2) the licensed dealer contacts the Secretary or the 
     head of the State agency that administers the certified 
     system described in paragraph (1)(B), as applicable, and 
     receives notice that the transferee has been issued a firearm 
     license described in paragraph (1) and that the license 
     remains valid; and
       ``(3) the licensed dealer records on a document (which, in 
     the case of a sale, shall be the sales receipt) a tracking 
     authorization number provided by the Secretary or the head of 
     the State agency, as applicable, as evidence that the 
     licensed dealer has verified the validity of the license.''.

     SEC. 202. FIREARM RECORDS.

       (a) Submission of Sale or Transfer Reports.--Not later than 
     14 days after the date on which the transfer of qualifying 
     firearm is processed by a licensed dealer under section 
     922(aa) of title 18, United States Code (as added by section 
     201 of this title), the licensed dealer shall submit to the 
     Secretary (or, in the case of a licensed dealer located in a 
     State that has a State firearm licensing and record of sale 
     system certified under section 602, to the head of the State 
     agency that administers that system) a report of that 
     transfer, which shall include information relating to--
       (1) the manufacturer of the firearm;
       (2) the model name or number of the firearm;
       (3) the serial number of the firearm;
       (4) the date on which the firearm was received by the 
     transferee;
       (5) the number of a valid firearm license issued to the 
     transferee under title I; and
       (6) the name and address of the individual who transferred 
     the firearm to the transferee.
       (b) Federal Record of Sale System.--Not later than 9 months 
     after the date of enactment of this Act, the Secretary shall 
     establish and maintain a Federal record of sale system, which 
     shall include the information included in each report 
     submitted to the Secretary under subsection (a).
       (c) Elimination of Prohibition on Establishment of System 
     of Registration.--Section 926(a) of title 18, United States 
     Code, is amended by striking the second sentence.

                   TITLE III--ADDITIONAL PROHIBITIONS

     SEC. 301. UNIVERSAL BACKGROUND CHECK REQUIREMENT.

       Section 922 of title 18, United States Code, is amended by 
     inserting after subsection (aa) (as added by section 201 of 
     this Act) the following:
       ``(bb) Universal Background Check Requirement.--
       ``(1) Requirement.--Except as provided in paragraph (2), it 
     shall be unlawful for any person other than a licensed 
     importer, licensed manufacturer, licensed dealer, or licensed 
     collector to sell, deliver, or otherwise transfer a firearm 
     to any person other than such a licensee, unless the transfer 
     is processed through a licensed dealer in accordance with 
     subsection (t).
       ``(2) Exception.--Paragraph (1) shall not apply to the 
     infrequent transfer of a firearm by gift, bequest, intestate 
     succession or other means by an individual to a parent, 
     child, grandparent, or grandchild of the individual, or to 
     any loan of a firearm for any lawful purpose for not more 
     than 30 days between persons who are personally known to each 
     other.''.

     SEC. 302. FAILURE TO MAINTAIN OR PERMIT INSPECTION OF 
                   RECORDS.

       Section 922 of title 18, United States Code, is amended by 
     inserting after subsection (bb) (as added by section 301 of 
     this title) the following:
       ``(cc) Failure To Maintain or Permit Inspection of 
     Records.--It shall be unlawful for a licensed manufacturer or 
     a licensed dealer to fail to comply with section 202 of the 
     Handgun Licensing and Record of Sale Act of 2001, or to 
     maintain such records or supply such information as the 
     Secretary may require in order to ascertain compliance with 
     such Act and the regulations and orders issued under such 
     Act.''.

[[Page 413]]



     SEC. 303. FAILURE TO REPORT LOSS OR THEFT OF FIREARM.

       Section 922 of title 18, United States Code, is amended by 
     inserting after subsection (cc) (as added by section 302 of 
     this title) the following:
       ``(dd) Failure To Report Loss or Theft of Firearm.--It 
     shall be unlawful for any person who owns a qualifying 
     firearm to fail to report the loss or theft of the firearm to 
     the Secretary within 72 hours after the loss or theft is 
     discovered.''.

     SEC. 304. FAILURE TO PROVIDE NOTICE OF CHANGE OF ADDRESS.

       Section 922 of title 18, United States Code, is amended by 
     inserting after subsection (dd) (as added by section 303 of 
     this title) the following:
       ``(ee) Failure To Provide Notice of Change of Address.--It 
     shall be unlawful for any individual to whom a firearm 
     license has been issued under title I of the Firearm 
     Licensing and Record of Sale Act of 2001 to fail to report to 
     the Secretary a change in the address of that individual 
     within 60 days of that change of address.''.

     SEC. 305. CHILD ACCESS PREVENTION.

       Section 922 of title 18, United States Code, is amended by 
     inserting after subsection (ee) (as added by section 304 of 
     this title) the following:
       ``(ff) Child Access Prevention.--
       ``(1) Definition of child.--In this subsection, the term 
     `child' means an individual who has not attained the age of 
     18 years.
       ``(2) Prohibition and penalties.--Except as provided in 
     paragraph (3), it shall be unlawful for any person to keep a 
     loaded firearm, or an unloaded firearm and ammunition for the 
     firearm, any 1 of which has been shipped or transported in 
     interstate or foreign commerce, within any premises that is 
     under the custody or control of that person, if--
       ``(A) that person--
       ``(i) knows, or recklessly disregards the risk, that a 
     child is capable of gaining access to the firearm; and
       ``(ii) either--

       ``(I) knows, or recklessly disregards the risk, that a 
     child will use the firearm to cause the death of, or serious 
     bodily injury (as defined in section 1365 of this title) to, 
     the child or any other person; or
       ``(II) knows, or reasonably should know, that possession of 
     the firearm by a child is unlawful under Federal or State 
     law; and

       ``(B) a child uses the firearm and the use of that firearm 
     causes the death of, or serious bodily injury to, the child 
     or any other person.
       ``(3) Exceptions.--Paragraph (2) does not apply if--
       ``(A) at the time the child obtained access, the firearm 
     was secured with a secure gun storage or safety device;
       ``(B) the person is a peace officer, a member of the Armed 
     Forces, or a member of the National Guard, and the child 
     obtains the firearm during, or incidental to, the performance 
     of the official duties of the person in that capacity;
       ``(C) the child uses the firearm in a lawful act of self-
     defense or defense of 1 or more other persons; or
       ``(D) the person has no reasonable expectation, based on 
     objective facts and circumstances, that a child is likely to 
     be present on the premises on which the firearm is kept.''.

                         TITLE IV--ENFORCEMENT

     SEC. 401. CRIMINAL PENALTIES.

       (a) Failure To Possess Firearm License; Failure To Comply 
     With Qualifying Firearm Sale or Transfer Requirements; 
     Failure To Maintain or Permit Inspection of Records.--Section 
     924(a) of title 18, United States Code, is amended by adding 
     at the end the following:
       ``(7) Whoever knowingly violates subsection (z), (aa), or 
     (cc) of section 922 shall be fined under this title, 
     imprisoned not more than 2 years, or both.''.
       (b) Failure To Comply With Universal Background Checks; 
     Failure To Timely Report Loss or Theft of a Qualifying 
     Firearm; Failure To Provide Notice of Change of Address.--
     Section 924(a)(5) of title 18, United States Code, is amended 
     by striking ``(s) or (t)'' and inserting ``(s), (t), (bb), 
     (dd), or (ee)''.
       (c) Child Access Prevention.--Section 924(a) of title 18, 
     United States Code, is amended by adding at the end the 
     following:
       ``(8) Whoever violates section 105(a)(2) of the Handgun 
     Licensing and Record of Sale Act of 2001, knowingly or having 
     reason to believe that the person is prohibited by subsection 
     (g) or (n) of section 922 of title 18, United States Code, 
     from receiving a firearm, shall be fined under this title, 
     imprisoned not more than 2 years, or both.
       ``(9) Whoever violates section 922(ff) shall be fined under 
     this title, imprisoned not more than 3 years, or both.''.

     SEC. 402. REGULATIONS.

       (a) In General.--The Secretary shall issue regulations 
     governing the licensing of possessors of qualifying firearms 
     and the recorded sale of qualifying firearms, consistent with 
     this Act and the amendments made by this Act, as the 
     Secretary determines to be reasonably necessary to reduce or 
     prevent deaths or injuries resulting from qualifying 
     firearms, and to assist law enforcement in the apprehension 
     of owners or users of qualifying firearms used in criminal 
     activity.
       (b) Maximum Interval Between Issuance of Proposed and Final 
     Regulation.--Not later than 120 days after the date on which 
     the Secretary issues a proposed regulation under subsection 
     (a) with respect to a matter, the Secretary shall issue a 
     final regulation with respect to the matter.

     SEC. 403. INSPECTIONS.

       In order to ascertain compliance with this Act, the 
     amendments made by this Act, and the regulations and orders 
     issued under this Act, the Secretary may, during regular 
     business hours, enter any place in which firearms or firearm 
     products are manufactured, stored, or held, for distribution 
     in commerce, and inspect those areas where the products are 
     so manufactured, stored, or held.

     SEC. 404. ORDERS.

       The Secretary may issue an order prohibiting the sale or 
     transfer of any firearm that the Secretary finds has been 
     transferred or distributed in violation of this Act, an 
     amendment made by this Act, or a regulation issued under this 
     Act.

     SEC. 405. INJUNCTIVE ENFORCEMENT.

       Upon the request of the Secretary, the Attorney General may 
     bring an action to restrain any violation of this Act or an 
     amendment made by this Act in the district court of the 
     United States for any district in which the violation has 
     occurred, or in which the defendant is found or transacts 
     business.

            TITLE V--FIREARM INJURY INFORMATION AND RESEARCH

     SEC. 501. DUTIES OF THE SECRETARY.

       (a) In General.--The Secretary shall--
       (1) establish and maintain a firearm injury information 
     clearinghouse to collect, investigate, analyze, and 
     disseminate data and information relating to the causes and 
     prevention of death and injury associated with firearms;
       (2) conduct continuing studies and investigations of 
     firearm-related deaths and injuries; and
       (3) collect and maintain current production and sales 
     figures for each licensed manufacturer.
       (b) Availability of Information.--Periodically, but not 
     less frequently than annually, the Secretary shall make 
     available to the public a report on the activities of the 
     Secretary under subsection (a).

                     TITLE VI--EFFECT ON STATE LAW

     SEC. 601. EFFECT ON STATE LAW.

       (a) In General.--This Act and the amendments made by this 
     Act may not be construed to preempt any provision of the law 
     of any State or political subdivision of that State, or 
     prevent a State or political subdivision of that State from 
     enacting any provision of law regulating or prohibiting 
     conduct with respect to firearms, except to the extent that 
     the provision of law is inconsistent with any provision of 
     this Act or an amendment made by this Act, and then only to 
     the extent of the inconsistency.
       (b) Rule of Interpretation.--A provision of State law is 
     not inconsistent with this Act or an amendment made by this 
     Act if the provision imposes a regulation or prohibition of 
     greater scope or a penalty of greater severity than a 
     corresponding prohibition or penalty imposed by this Act or 
     an amendment made by this Act.

     SEC. 602. CERTIFICATION OF STATE FIREARM LICENSING SYSTEMS 
                   AND STATE FIREARM RECORD OF SALE SYSTEMS.

       Upon a written request of the chief executive officer of a 
     State, the Secretary may certify--
       (1) a firearm licensing system established by a State, if 
     State law requires the system to satisfy the requirements 
     applicable to the Federal firearm licensing system 
     established under title I; or
       (2) a firearm record of sale system established by a State, 
     if State law requires the head of the State agency that 
     administers the system to submit to the Federal firearm 
     record of sale system established under section 202(b) a copy 
     of each report submitted to the head of the agency under 
     section 202(a), within 7 days after receipt of the report.

                  TITLE VII--RELATIONSHIP TO OTHER LAW

     SEC. 701. SUBORDINATION TO ARMS EXPORT CONTROL ACT.

       In the event of any conflict between any provision of this 
     Act or an amendment made by this Act, and any provision of 
     the Arms Export Control Act (22 U.S.C. 2751), the provision 
     of the Arms Export Control Act shall control.

                      TITLE VIII--INAPPLICABILITY

     SEC. 801. INAPPLICABILITY TO GOVERNMENTAL AUTHORITIES.

       This Act and the amendments made by this Act do not apply 
     to any department or agency of the United States, of a State, 
     or of a political subdivision of a State, or to any official 
     conduct of any officer or employee of such a department or 
     agency.

                        TITLE IX--EFFECTIVE DATE

     SEC. 901. EFFECTIVE DATE OF AMENDMENTS.

       The amendments made by this Act shall take effect 1 year 
     after the date of enactment of this Act.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
  S. 26. A bill to amend the Department of Energy Authorization Act to

[[Page 414]]

authorize the Secretary of Energy to impose interim limitations on the 
cost of electric energy to protect consumers from unjust and 
unreasonable prices in the electric energy market; to the Committee on 
Energy and Natural Resources.


          amending the department of energy authorization act

  Mrs. FEINSTEIN. Mr. President, I am pleased to introduce this bill 
today to address problems with the California energy market and the 
unwillingness of the Federal Energy Regulatory Commission to take the 
necessary action.
  Last week, the lights went off in California and the Governor 
declared a state of emergency. More than 1 million businesses and 
homeowners throughout the state lost power. Computers shut off, ATMs 
stopped dispensing cash, traffic lights went dark and heaters went 
cold, jeopardizing public safety, the economy, and people's lives.
  The situation continues to worsen, and the prognosis for the future 
is dire. Unfortunately, the problem is not just limited to California. 
PG&E and Southern California Edison, our two largest blue chip 
utilities are on the brink of bankruptcy and have lost billions. The 
state's economy has also lost billions from work stoppages that seem to 
occur every single workday.
  As goes California so goes the rest of the country, I believe. 
California is the 6th largest economy in the world. Already financial 
institutions and banks that have underwritten the debts of our 
utilities are being saddled with their own problems due to the 
uncertainty over whether they will be paid.
  Those who believe that California deserves its present plight because 
of the state's deregulation bill are near-sighted. California passed a 
very flawed de-regulation bill in 1996. It was flawed because it relied 
almost entirely on a free market and assumed that there will always be 
adequate energy supply. What has resulted is an uncompetitive market 
and an absence of adequate supply.
  I believe California shares a major responsibility here and I am 
encouraged that the state legislature is beginning to take action. 
However, the federal government also has a major responsibility because 
the Federal Energy Regulatory Commission under the Federal Power Act 
holds the only authority over energy generators and marketers. The 
state cannot address this.
  Unfortunately, the FERC, even after concluding that rates in 
California are ``unjust and unreasonable,'' has failed to take the 
necessary action to solve the crisis. I am thus proposing legislation 
today to empower the Secretary of Energy to take the same action 
available to the FERC in instances when FERC has failed to take 
decisive action. Individual states would be able to opt out of any 
order from the Secretary as this bill is aimed at helping those states 
that need and want help.
  I urge the Senate to take up and pass this bill as soon as possible.
                                 ______
                                 
      By Mr. McCAIN (for himself, Mr. Feingold, Mr. Cochran, Mr. Levin, 
        Mr. Thompson, Mr. Lieberman, Ms. Collins, Mr. Schumer, Ms. 
        Snowe, Mr. Wellstone, Mr. Jeffords, Mr. Reed, Mr. Durbin, Mr. 
        Wyden, Mr. Kohl, Mrs. Boxer, Mr. Harkin, Ms. Stabenow, and Ms. 
        Cantwell):
  S. 27. A bill to amend the Federal Election Campaign Act of 1971 to 
provide bipartisan campaign reform; to the Committee on Rules and 
Administration.


                      campaign reform legislation

  Mr. McCain. Mr. President, today we confront yet again a very serious 
challenge to our political system, as dangerous in its debasing effect 
on our democracy as war and depression have been in the past. And it 
will take the best efforts of every public-spirited American to defeat 
it. We must overcome the cynicism that is growing rampant in our 
society. We must pass campaign reform legislation.
  That is why first I want to thank our cosponsors for being here 
today. They are proof that momentum is on our side and that we will 
pass campaign reform legislation and finally follow the American 
people's will. Action on this issue is long overdue and I am hopeful 
that this year will present us with our best opportunity yet to achieve 
passage of meaningful campaign reform.
  Our legislation is simple, bi-partisan, and achieves three primary 
objectives that will go far to reform our electoral system.
  The bill: Bans soft money for usage in federal elections; Requires 
increased disclosure of electioneering communications by so-called 
independent organizations in a constitutional and clear manner (the 
Snowe-Jeffords language); and Codifies the Supreme Court's Beck 
decision, a court decision effectively ignored by the previous Clinton 
Administration and now, under this Act, a decision which would be 
strictly enforced.
  After one of the closest elections in our nation's history, there's 
one thing the American people are unanimous about--they want their 
government back. We can to that by ridding politics of large, 
unregulated contributions that give special interests a seat at the 
table while average Americans are stuck in the back of the room. The 
Senate needs to act early on campaign finance reform so we can achieve 
meaningful reform and restore the public's faith in their government.
  This is not a perfect bill. It does not attempt to solve all the 
evils that plague our campaign system. But we will not let perfect be 
the enemy of progress. We expect amendments to be offered to this 
legislation and we fully expect that many of those amendments will be 
constructive and add to our efforts. We look forward to that kind of 
positive debate.
  Second, whatever bill passes, it must treat our corporate and union 
constituencies alike. We must resist any measures that skew this bill 
in favor of any one group. The soft money ban in this bill affects both 
corporations and unions.
  And for my Republican friends, I want to emphasize again, if this 
bill passes, the $100,000-plus union soft money checks to the 
Democratic Party will no longer exist. According to the Washington 
Post, the ``biggest donor of soft money in the (last) campaign was the 
American Federal of State, County, and Municipal Employees (which) gave 
the Democratic National Committee $1.27 million in last October and 
early November. AFSCME's soft money total for the election cycle was 
$6.3 million.'' Passage of this bill will end this practice once and 
for all.
  The key to our success now lies with a fair and open debate on this 
subject. In the past, we have been denied any constructive debate on 
this matter. I am hopeful that Senators Lott and Daschle and the co-
sponsors of the bill can construct a fair unanimous consent agreement 
that will allow the Senate to take up and consider numerous amendments, 
work its will, and craft legislation that can and will be signed into 
law by the President. That is now our singular goal. And I am confident 
it can be achieved.
  Mr. President, I hope we can soon take up and pass this crucial 
legislation.
  Mr. FEINGOLD. Mr. President, I am very pleased to once again 
introduce a campaign reform bill with my friend and colleague, the 
Senator from Arizona. This year we have an important new cosponsor, the 
senior Senator from Mississippi, Senator Thad Cochran, so this bill 
will be known as the McCain-Feingold-Cochran campaign reform bill.
  This is the fourth Congress in which Senator McCain and I have 
introduced a bill. We have made progress each year, and now we are 
closer than ever to finishing the job for the American people. The time 
for campaign finance reform to pass the Congress and become law has now 
come Mr. President. And Senator McCain and I are going to dedicate 
ourselves to this issue like never before to make it happen.
  The bill we are introducing today is broader than S. 1593, the bill 
we took to the floor in October 1999, but narrower than S. 26, the 
McCain-Feingold bill that was introduced in the beginning of the last 
Congress. Our bill this year consists of a soft money ban, the Snowe-
Jeffords language on issue ads, the Beck provision on union dues, and

[[Page 415]]

a few other provisions that will provide credibility to this reform 
bill as it's passed into law. Very significant in my mind is a clear 
prohibition on political fundraising in federal office buildings. This 
is a strong base bill for reform, but we are ready and willing to 
entertain the suggestions and proposals of all 98 other Senators. Each 
of us in this body is an expert on this issue, and I know that many of 
my colleagues have innovative ideas on how to improve our election 
laws. Any amendment that adds to this bill in a positive way and and 
doesn't undercut its basic principles will be given every 
consideration.
  One provision on which we will not compromise is the ban on soft 
money. The bill here is as tough and comprehensive as possible, leaving 
no room for the soft money abuses we have seen in the last decade. 
Obviously, loopholes will develop over time, but I am satisfied that 
this bill closes the soft money system down and anticipates at least 
some of the clever schemes that might be developed to avoid the ban. In 
the last election cycle, we saw over $500 million in soft money raised 
by the political parties. This system is a scandal that we must 
eliminate now.
  The bill includes the Snowe-Jeffords language on issue ads. This 
provision will have a major impact on labor union ads, but it is fair 
and balanced between unions and corporations. It will have minimal 
impact on established advocacy groups like National Right to Life and 
the Sierra Club because they have a significant small donor base, but 
it will prevent corporations and unions from laundering money through 
such groups. It allows groups to continue to run these ads as long as 
they use only individual money and disclose the large donors to the 
effort. The provision covers only phony issue ads on radio and TV, not 
direct mail, phone banks, or newspapers, or the Internet, but we are 
open to working with all sides to work out a fair and balanced way to 
broaden its coverage if that is what the Senate wants to do.
  Similarly, we are open to proposals that will require additional 
disclosure of election related spending by unions, corporations, and 
advocacy groups. But they must treat all players in this system evenly 
and fairly.
  That brings me to the issue that has received a lot of attention in 
recent weeks, so called ``paycheck protection.'' In the past, this has 
been a poison pill to reform, but with the changes in the Senate, we 
clearly have the votes to defeat the extreme and one-sided ``paycheck 
protection proposals that have been offered in the past. We will hold 
the President and those working with him to the standard that he 
himself has enunciated any proposal has to be fair and balanced. Our 
bill is currently fair and balanced. It treats unions and corporations 
equally. The paycheck protection proposals we have seen in the past are 
not fair and balanced. They attack only one player in the election 
system labor unions.
  Mr. President, I look forward to a real debate early this year, not 
only on our bill but on amendments that my colleagues want to offer. I 
am happy to meet with any Senator who wants to discuss a reform 
proposal. If we all work together, this process can yield a campaign 
reform bill that we will be proud of, and we can start out this new 
Congress by cleaning up our elections and ridding our system of the 
corrupting of soft money.
  Mr. McCAIN. Mr. President, Senator Feingold and I and others--a 
bipartisan group of Senators and friends from the House, Congressman 
Shays and Congressman Meehan--just had a press conference announcing 
our intentions. I don't intend to make a statement, except to express 
my deep and sincere appreciation for my partner, Senator Feingold, who 
someday will be written about in another book called profiles in 
courage for his willingness to stand up to the special interests at a 
time when his own candidacy was at risk if he did not do so.
  I thank Senator Feingold, and I look forward to continuing to work 
together on this issue. I believe we see a light at the end of the 
tunnel, which is an old phrase from the Vietnam war, uttered by one of 
our civilian leaders during that war. I remind Senator Feingold that 
when told of that, a soldier in the field said, ``Yes, the light at the 
end of the tunnel is a train.'' We hope that is not the case in this 
particular scenario.
  The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. Mr. President, I thank the Senator from Arizona for his 
kind remarks. I am happy to be back with him on this effort. As John 
McCain has said many times, we know that every Member of the Senate is 
an expert on this issue. Every Member has ideas about how we should 
reform the campaign finance system. What we want out of this is an 
opportunity for an open amending process so the Senate as a whole can 
fashion a bill to send to the President.
  Mr. McCAIN. I ask unanimous consent that the bill be left open for 
further cosponsors throughout the day.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Wisconsin has the floor.
  Mr. FEINGOLD. I yield the floor.
  The PRESIDING OFFICER. The Senator from Mississippi is recognized.
  Mr. COCHRAN. Mr. President, I am pleased to join my friends from 
Arizona and from Wisconsin in introducing the McCain-Feingold-Cochran 
bill today. They have worked very hard and very effectively to bring 
the attention of not only the Senate but the American people to bear on 
this issue and this important need for reform. I am convinced that we 
are well advised to take this legislation up at an early date in this 
session of the Congress.
  The impressions of the last election are fresh on everybody's mind. 
One that sticks with me very strongly is that candidates were 
overwhelmed in this process by the expenditures of soft money by groups 
buying ads, some attacking candidates, supporting others, without the 
American public knowing who these groups were, what their goals and 
intentions were, where the money was coming from, or how it was being 
spent. That has to be corrected, and it ought to be corrected.
  The purpose of the campaign finance laws was to let the American 
people know from where the money was coming, how it was being used, how 
much money was being raised by the candidates and spent by the 
candidates. We have now lost the right to know because of the loopholes 
that have been developed and perfected by those who are involving 
themselves in the election process.
  I am not against freedom of speech. We want everybody to be able to 
have their say, but we have a right to know how much they are spending 
and from where the money is coming. I think that is a fundamental part 
of this legislation, and I hope the Senate will take it up and pass it 
in the near future.
  Ms. COLLINS. Mr. President, I rise in support of the McCain-Feingold 
bipartisan campaign finance reform bill of 2001. I am very proud to be 
an original cosponsor of this legislation which goes a long way towards 
reforming our campaign system.
  I have long supported campaign finance reform. When I ran for the 
Senate from Maine in 1996 I promised my constituents that I would be a 
strong advocate for campaign finance reform. That pledge led to my 
decision to cosponsor the campaign finance reform that was introduced 
in 1997 by Senators McCain and Feingold.
  Unfortunately, comprehensive campaign finance reform efforts have 
been thwarted in the past two Congresses. This time, though, we have 
reason for optimism due to new and renewed support.
  The Bipartisan Campaign Reform Act of 2001 takes a number of 
important steps towards fixing a broken system. First and foremost, the 
bill closes the most glaring loophole in our campaign finance laws by 
banning the unlimited, unregulated contributions known as ``soft 
money.'' ``Soft money'' has made the current law's restrictions and 
contributions from individuals, corporations, and unions essentially 
meaningless. Second, the bill requires disclosure by the sponsors of 
certain issue ads that corporations and labor unions

[[Page 416]]

run in the period leading up to an election. Third, the bill codifies 
the Supreme Court's decision in Communication Workers of America v. 
Beck to ensure that nonunion members are not obligated to subsidize the 
political activities of labor unions. And finally, the bill makes it 
clear that foreign nationals may not contribute any funds--hard or 
soft--to federal, state, or local elections.
  My home State of Maine has a deep commitment to preserving the 
integrity of the electoral system and ensuring that all Mainers have an 
equal political voice. Mainers have backed their commitment to an open 
political process in both word and deed. In many regions of Maine, town 
meetings in which all citizens are invited to debate issues and make 
decisions are still prevalent. This is unvarnished, direct democracy. 
Maine's tradition of town meetings and equal participation rejects the 
notion that wealth dictates political discourse. Maine citizens feel 
strongly about reforming our federal campaign laws, as do I.
  The problem with soft money was painfully evident during the 1997 
hearings by the Senate Committee on Governmental Affairs, chaired by my 
good friend, Senator Thompson. During those investigations, we heard 
from one individual who gave $325,000 to the Democratic National 
Committee in order to secure a picture with the President of the United 
States. We also heard from the infamous Roger Tamraz who testified that 
the $300,000 he spend to gain access to the White House was not enough 
and that, next time, he would spend $600,000. And we heard of 
individuals, such as Chinese cigarette magnate Ted Sioeng, who 
orchestrated nearly $600,000 in political contributions during the 1996 
election cycle. Sioeng, we later discovered, was a self-described agent 
of the Chinese government.
  Soft money donations soared in the 2000 presidential election cycle, 
nearly doubling from $262 million in 1996 to $488 million in 2000. At 
the same time, regulated, hard money donations increased a little more 
than 10-percent. Soft money, then, is the crest of the wave that has 
swamped our campaign finance system and shaken public confidence in our 
government. I applaud the bipartisan efforts of Senators McCain and 
Feingold and pledge my continued support to see this legislation become 
law this year.
  Mr. JEFFORDS. Mr. President, I rise today as a proud cosponsor of the 
Bipartisan Campaign Reform Act of 2001 to discuss my thoughts and hopes 
on the actions the Senate will hopefully be taking in the coming months 
on this important issue.
  First, let me thank the sponsors of the legislation, Senators McCain 
and Feingold, for their tireless perseverance to enact campaign finance 
reform. Without their hard work and vast knowledge, we would not be at 
this important point. The time has come to schedule a full and open 
debate on this important issue. I look forward to hearing and debating 
the many ideas of my colleagues and believe the Senate should strive to 
show why we are considered the greatest deliberative body in the world 
by fully debating this important topic.
  Mr. President, I was first elected to Congress following the 
Watergate scandal, right around the time Congress last enacted 
comprehensive reform of our campaign finance system. I have watched 
with growing dismay during my over twenty-five years in Congress as the 
number of troubling examples of problems in our current campaign 
finance system have increased. These problems have led to a perception 
by the public that a disconnect exists between themselves and the 
people that they have elected. I believe that this perception is a 
pivotal factor behind the disturbingly low voter turnouts that have 
plagued national elections.
  While some may point to surveys that list campaign finance reform as 
a low priority for the electorate, I believe that the public actually 
strongly supports Congress debating and enacting comprehensive reform. 
It is important to reverse the trend of shrinking voter turnout by re-
establishing the connection between the public and us, their elected 
representatives, by passing comprehensive campaign finance reform.
  It is time to restore the public's confidence in our political 
system.
  It is time to increase disclosure requirements and ban soft money.
  It is time to work together to pass meaningful campaign finance 
reform.
  As I said earlier, I look forward to a full and open debate on the 
issue of campaign finance reform including the amendments that will be 
offered. At the end of this debate, the Senate should be able to pass 
comprehensive campaign finance reform. That to me is the most important 
aspect of any bill the Senate may pass, it must be comprehensive. If we 
fail to address the problems facing our campaign finance system with a 
comprehensive balanced package we will ultimately fail in our mission 
of reforming the system. Closing one loophole, without addressing the 
others in a systematic way, will not do enough to correct the current 
deficiencies, and may in fact create new and unintended consequences.
  Mr. President, we have all seen first-hand the problems with the 
current state of the law as it relates to sham issue advertisements. I 
have focused much time and effort on developing a legislative solution 
on this topic with my colleague Senator Olympia Snowe, and was pleased 
that this solution was adopted by the Senate during the 1998 debate on 
campaign finance reform. I was also proud to cosponsor the 
comprehensive campaign finance bill Senators McCain and Feingold 
introduced last Congress that included this legislative solution.
  I feel strongly that the legislation the Senate must ultimately vote 
on include some kind of changes to the current law concerning sham 
issue advertisements. I feel that we have crafted a reasonable, 
constitutional approach to this problem and am extremely pleased that 
this legislative solution is again included in the bill we introduce 
today.
  That does not mean, though, that we will stop working with our 
colleagues to craft additional, and perhaps different, ideas to address 
the problems with the current law on sham issue advertisements. My 
ultimate goal is to create a comprehensive campaign finance bill that 
will garner the support of at least 60 Senators, and hopefully more.
  Mr. President, I look forward to a full and open debate on this 
important issue, and pledge to continue working with my colleagues to 
enact comprehensive campaign finance reform into law this year.
                                 ______
                                 
      By Mr. GRAMM (for himself and Mrs. Hutchison):
  S. 28. A bill to guarantee the right of all active duty military 
personnel, merchant mariners, and their dependents to vote in Federal, 
State, and local elections; to the Committee on Rules and 
Administration and the Committee on Rules and Administration, jointly.


                   MILITARY VOTING RIGHTS ACT OF 2001

  Mr. GRAMM. Mr. President, along with Senator Kay Bailey Hutchison, I 
am introducing legislation today which will ensure that active duty 
military personnel and their dependents will never lose their right to 
vote in Federal, State, and local elections. The Military Voting Rights 
Act of 2001 will guarantee that those men and women who protect our 
freedom are not denied one of the basic rights upon which that freedom 
is based.
  I initially introduced this legislation in response to an outrageous 
case in my home state of Texas in which a federal district court, in a 
suit brought under federal law and supported by federal tax dollars, 
threw out 800 absentee ballots cast by military personnel in two 
closely-contested local elections in Val Verde County. While a state 
court ultimately restored the military votes, the case clearly 
demonstrated that military personnel who are away from their legal 
residence on official orders are at risk of losing their right to vote. 
In fact, based upon current statistics compiled by the Congressional 
Research Service and the Department of Defense, over 40 percent of our 
troops on active duty are residents of states that have no specific 
legislative provisions protecting their fundamental

[[Page 417]]

right to vote in state and local elections.
  As the Val Verde County case demonstrates, absent specific 
legislative protection, valid absentee votes cast by military personnel 
will be ripe targets for attack by those seeking to overturn the 
results of close elections. I find it unconscionable that American 
military personnel, who stand ready to fight and die for our nation, 
risk losing their right to vote as a consequence of their military 
service. To protect our military personnel from any such injustice, I 
again introduce this legislation in the Senate and ask my colleagues to 
support its immediate passage. Those Americans who volunteer to protect 
our freedom by serving in our Armed Forces should not be denied the 
right to vote in any election.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 28

       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 ``Military Voting Rights Act 
     of 2001''.

     SEC. 2. GUARANTEE OF RESIDENCY.

       Article VII of the Soldiers' and Sailors' Civil Relief Act 
     of 1940 (50 U.S.C. 700 et seq.) is amended by adding at the 
     end the following:
       ``Sec. 704. (a) For purposes of voting for an office of the 
     United States or of a State, a person who is absent from a 
     State in compliance with military or naval orders shall not, 
     solely by reason of that absence--
       ``(1) be deemed to have lost a residence or domicile in 
     that State;
       ``(2) be deemed to have acquired a residence or domicile in 
     any other State; or
       ``(3) be deemed to have become resident in or a resident of 
     any other State.
       ``(b) In this section, the term `State' includes a 
     territory or possession of the United States, a political 
     subdivision of a State, territory, or possession, and the 
     District of Columbia.''.

     SEC. 3. STATE RESPONSIBILITY TO GUARANTEE MILITARY VOTING 
                   RIGHTS.

       (a) Registration and Balloting.--Section 102 of the 
     Uniformed and Overseas Absentee Voting Act (42 U.S.C. 1973ff-
     1) is amended--
       (1) by inserting ``(a) Elections for Federal Offices.--'' 
     before ``Each State shall--'';
     and
       (2) by adding at the end the following:
       ``(b) Elections for State and Local Offices.--Each State 
     shall--
       ``(1) permit absent uniformed services voters to use 
     absentee registration procedures and to vote by absentee 
     ballot in general, special, primary, and runoff elections for 
     State and local offices; and
       ``(2) accept and process, with respect to any election 
     described in paragraph (1), any otherwise valid voter 
     registration application from an absent uniformed services 
     voter if the application is received by the appropriate State 
     election official not less than 30 days before the 
     election.''.
       (b) Conforming Amendment.--The heading for title I of such 
     Act is amended by striking out ``FOR FEDERAL OFFICE''.
                                 ______
                                 
      By Mr. BOND (for himself, Mr. Durbin, Mr. Baucus, Ms. Snowe, Mr. 
        Kerry, Mr. Jeffords, Mr. Kyl, Mr. Burns, Mr. Dorgan, Mr. 
        Harkin, Mrs. Lincoln, Mr. Leahy, Mr. Johnson, Mr. Fitzgerald, 
        Mr. Wellstone, and Mr. Bingaman):
  S. 29. A bill to amend the Internal Revenue Code of 1986 to allow a 
deduction for 100 percent of the health insurance costs of self-
employed individuals; to the Committee on Finance.


          self-employed health insurance fairness act of 2001

  Mr. BOND. Mr. President, I rise today to discuss a measure that has 
broad bipartisan support. Today, with my colleague from Illinois, 
Senator Durbin, I am introducing legislation addressing what is a top 
concern of small business owners in this country. That is the 
availability of health care.
  For the past three Congresses, we have worked to level the playing 
field for America's self-employed by ensuring that they can deduct 100 
percent of their health insurance premiums. Large corporations, 
businesses, and other organizations can deduct 100 percent of what they 
pay, but small businesses, up until recently, have been severely 
limited in what they can deduct.
  The legislation Senator Durbin and I are introducing today, the Self-
Employed Health Insurance Act of 2001, will end finally one of the most 
glaring inequities that has existed in our tax law.
  I have had the pleasure of serving for over 4 years now as chairman 
of the Senate Committee on Small Business. Throughout, one of my top 
priorities has been to ensure full deductibility of health insurance 
for the self-employed. We have made some progress. Most notably, in the 
Taxpayer Relief Act of 1997, we broke through the longstanding cap on 
the deduction to provide 100-percent deductibility. In 1998, we passed 
legislation to speed up the date that self-employed can fully deduct 
their health insurance costs to 2003 and increase the deductible 
amounts in the intervening years.
  We realize the problem with budget scoring has postponed the 
effective date of this measure, but I have talked to too many small 
business people who tell us they cannot wait until 2003 to get sick or 
to go to 2003 without having coverage for themselves and their 
employees. The self-employed still cannot afford, in many instances, 
health insurance without 100-percent deductibility. They should not 
have to wait any longer. It is time for us to unite behind this 
bipartisan issue and get this job done.
  Let me give you a fact, Mr. President. With a self-employed able to 
deduct only 60 percent of their health insurance costs today and only 
70 percent next year, it probably will come as no surprise to any of us 
that almost a quarter, 24.2 percent, of the self-employed business 
owners in Missouri do not have health insurance. In fact, 4.8 million 
Americans live in families headed by a self-employed individual and 
have no health insurance. Those families include more than 1 million 
children who lack adequate health care insurance coverage.
  The bill Senator Durbin and I are introducing today addresses this 
situation by making 100-percent deductibility begin this year. Full 
deductibility will make health insurance affordable to the self-
employed and help them get themselves and their families the kind of 
health insurance coverage they should have.
  This measure also corrects another inequity in the law affecting 
self-employed who try to provide health insurance for themselves, their 
families, and their employees. It deals with an issue I raised in the 
last Congress.
  Under the current law, the self-employed lose all the health 
insurance deduction if they are eligible to participate in another 
plan, whether or not they actually participate. This provision affects 
self-employed individuals such as Steve Hagan in my hometown of Mexico, 
MO. Steve is a financial planner who runs his own small business. 
Although he has a group medical plan for his employees, Steve cannot 
deduct the medical cost of covering himself or his family simply 
because his wife is eligible for health insurance through her employer.
  The inequity is clear. Why should he be able to deduct the cost of 
health insurance for his employees but not for himself and his family? 
What if the insurance available through his wife's employer does not 
meet the needs of their family?
  Besides being patently unfair, this is also an enormous trap for the 
unwary. Imagine the small business owner who learns that she can now 
deduct 60 percent of her health insurance costs this year, and with the 
extra deduction, she can finally afford a group medical plan for 
herself and her employees.
  Then later in the year, her husband gets a new job that offers health 
insurance. Suddenly, her self-employed health insurance deduction is 
gone. Sadly, she is left with two choices. She can bear the entire 
burden of her family's coverage, or she can terminate the insurance 
coverage for all her employees, which will likely increase due to 
coverage of fewer employees under the plan. The Tax Code should not 
force small business owners into this kind of ``no win'' situation when 
they try to provide insurance coverage for their employees and 
themselves.
  This bill eliminates this problem by clarifying that the self-
employed health insurance deduction is limited only if the self-
employed person actually participates in a subsidized health

[[Page 418]]

insurance plan offered by a spouse's employer or through a second job. 
It is simply a matter of fairness. It makes common sense. We ought to 
take this step right now.
  It is a commonsense measure that answers the urgent plea of small 
businesses for fairness in the Tax Code. It has been on the ``must do'' 
list of the national small business groups for too long. And when I 
hosted the National Women's Small Business Summit this past summer, in 
Kansas City, it was at the top of the list among the recommendations we 
received.
  We have a tremendous opportunity to work together. Let's take this 
opportunity and finish the job.
  I had initially offered a list of 21 original cosponsors. I ask 
unanimous consent that, in addition to those cosponsors, the following 
Senators be added: The Senator from Wyoming, Mr. Enzi; the Senator from 
Indiana, Mr. Lugar; the Senator from Kansas, Mr. Roberts; the Senator 
from Maine, Ms. Collins; the Senator from Pennsylvania, Mr. Specter; 
and the Senator from Wisconsin, Mr. Kohl.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BOND. Mr. President, I ask unanimous consent the bill and a 
description of its provisions be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 29

         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 ``Self-Employed Health 
     Insurance Fairness Act of 2001''.

     SEC. 2. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED 
                   INDIVIDUALS INCREASED.

       (a) In General.--Section 162(l)(1) of the Internal Revenue 
     Code of 1986 (relating to special rules for health insurance 
     costs of self-employed individuals) is amended to read as 
     follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical care for the taxpayer, 
     the taxpayer's spouse, and dependents.''
       (b) Clarification of Limitations on Other Coverage.--The 
     first sentence of section 162(l)(2)(B) of the Internal 
     Revenue Code of 1986 is amended to read as follows: 
     ``Paragraph (1) shall not apply to any taxpayer for any 
     calendar month for which the taxpayer participates in any 
     subsidized health plan maintained by any employer (other than 
     an employer described in section 401(c)(4)) of the taxpayer 
     or the spouse of the taxpayer.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
                                  ____


S. 29--Self-Employed Health Insurance Fairness Act of 2001--Description 
                             of Provisions

  The bill amends section 162(l)(1) of the Internal Revenue Code to 
increase the deduction for health-insurance costs for self-employed 
individuals to 100% beginning on January 1, 2001. Currently the self-
employed can only deduct 60% of these costs. The deduction is not 
scheduled to reach 100% until 2003, under the provisions of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1998, 
which was signed into law in October 1998. The bill is designed to 
place self-employed individuals on an equal footing with large 
businesses, which can currently deduct 100% of the health-insurance 
costs for all of their employees.
  The bill also corrects a disparity under current law that bars a 
self-employed individual from deducting any of his or her health-
insurance costs if the individual is eligible to participate in another 
health-insurance plan. This provision affects self-employed individuals 
who are eligible for, but do not participate in, a health-insurance 
plan offered through a second job or through a spouse's employer. That 
insurance plan may not be adequate for the self-employed business 
owner, and this provision prevents the self-employed from deducting the 
costs of insurance policies that do meet the specific needs of their 
families. In addition, this provision provides a significant 
disincentive for self-employed business owners to provide group health 
insurance for their employees. The bill ends this disparity by 
clarifying that a self-employed person loses the deduction only if he 
or she actually participates in another health-insurance plan.
  Mr. DURBIN. Mr. President, I rise today with my colleague from 
Missouri, to introduce ``The Self-Employed Health Insurance Fairness 
Act of 2001'', as our first order of business for the new Congress. We 
have both been working on this issue for many years now and are hopeful 
that we can finally get the bill fully enacted this year. In past 
years, we have each introduced very similar bills and this year we are 
combining our efforts by introducing this bipartisan bill, which we 
intend to pursue vigorously throughout this Congress.
  This bill would allow the self-employed to take a full tax deduction 
for their health insurance premiums as of December 31, 2000. 
Corporations already can take a full deduction for these expenses and 
this bill would level the playing field by allowing the self-employed 
to take the same full deduction. This bill would mean that the farmer 
and the agribusiness would be treated the same.
  Under current law, the self-employed may only deduct 60 percent of 
their health insurance premiums this year. The deductibility will 
increase to 70 percent in 2002 and 100 percent in 2003. I am committed 
to seeing the self-employed receive equal treatment sooner rather than 
later.
  The self-employed pay over 30 percent more for their health insurance 
than those insured by group health plans. This makes it much harder for 
them to afford health insurance. More than 22 percent of the self-
employed were without health insurance in 1999, compared to 17.5 
percent of other workers. That means that 4.8 million self-employed 
Americans went without health insurance in 1999.
  In Illinois, 17 percent of the self-employed were without health 
insurance in 1999, up from 14 percent in 1996. The vast majority of 
these individuals are members of low-income working families. Fifty-
three percent of the self-employed living on less than $20,000 in 
Illinois are without health insurance. This compares with 34 percent of 
other Illinois working families with the same low income level. Almost 
50 percent of those self-employed individuals who were without health 
insurance at some time during 1995, went without health insurance for 
the entire year. In comparison, 62 percent of government workers saw 
their lack of coverage end within 4 months or less.
  Overall, the self-employed pay more for health insurance and are 
therefore more likely to be uninsured, and they remain uninsured longer 
than other workers. This is exacerbated by their unequal treatment by 
the tax code. Congress should move expeditiously to level the playing 
field and help more hard-working, self-employed individuals and their 
families to afford the health insurance that they need and deserve.
  Mr. BAUCUS. Mr. President, I rise today, as an original cosponsor of 
S. 29, the Self-Employed Health Insurance Fairness Act of 2001, to 
speak about the importance of making health insurance a more affordable 
option for self-employed Americans. The legislation moves forward--by 
two years--the effective date for making health insurance fully 
deductible for self-employed taxpayers. In the early 1990s, I authored 
bills to ensure that the deduction--then 25 percent--would not expire. 
We won that battle, and throughout the 1990s I consistently fought for 
increases in the deductible amount. Finally, in 1997, we enacted 
legislation to allow full, 100 percent deductibility of health 
insurance for the self-employed, phased in by 2003.
  Mr. President, in these times of surpluses, as we reap the benefits 
of our fiscal discipline, the self-employed farmers, ranchers, and 
entrepreneurs in Montana and across the country deserve this important 
tax relief today. My small business and self-employed constituents 
constantly tell me that purchasing health insurance is one of the 
things they would most like to be able to do at their business. It is 
simply unfair that large businesses are allowed to deduct 100 percent 
of their employees' health insurance costs,

[[Page 419]]

while the self-employed must wait until 2003 for this privilege. In 
this country, we have a system of health insurance that encourages 
Americans to purchase health insurance through their employer. Allowing 
self-employed purchasers of health insurance the same deduction 
permitted to large employers adheres to those concepts and adds a 
measure of tax equity.
  I thank Senators Durbin and Bond for so actively pursuing enactment 
of this legislation. I believe the time is right to allow full 
deductibility of health insurance for the hard-working self-employed.
                                 ______
                                 
      By Mr. SARBANES (for himself, Mr. Leahy, Mr. Dodd, Mr. Reed, Mr. 
        Kerry, Mr. Harkin, and Mr. Edwards):
  S. 30. A bill to strengthen control by consumers over the use and 
disclosure of their personal financial and health information by 
financial institutions, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.


              FINANCIAL INFORMATION PRIVACY PROTECTION ACT

  Mr. SARBANES.
  Mr. President, I rise today to address a very important issue: the 
protection of every American's personal, sensitive, financial 
information that is held by their financial institutions.
  Few Americans understand that, under Federal law, a financial 
institution could take information it obtains about a customer through 
his or her transactions, and sell or transfer that information to an 
affiliated company without the customer being able to object. And the 
customer has no right to get access to or correct that information.
  The amount of information that could be disclosed is enormous. It 
includes: savings and checking account balances; certificate of deposit 
maturity dates and balances; any check an individual writes; any check 
that is deposited into a customer's account; stock and mutual fund 
purchases and sales; and life insurance payouts.
  In considering this issue, I start with the threshold question: whose 
information is it? Is it the individual's or the institution's? I 
believe this information belongs to the individual.
  To help alleviate the concerns of American consumers, I am 
introducing legislation that would give customers the right to choose 
whether their financial institutions should be allowed to transfer this 
date for unintended uses. I am pleased that Senators Leahy, Dodd, Reed, 
Kerry, Harkin and Edwards are joining me in co-sponsoring the Financial 
Information Privacy Protection Act of 2001. I want to particularly 
recognize Senator Leahy, chairman of the Democratic Privacy Caucus, for 
his strong leadership on the privacy issue over the years.
  This bill seeks to protect a fundamental right of privacy for every 
American who entrusts his or her highly sensitive and confidential 
financial information to a financial institution. Every American should 
at least have the opportunity to say ``no'' if he or she does not want 
that nonpublic information disclosed. Every American should have the 
right to have especially sensitive information held by his or her 
financial institution kept confidential unless consent is given. Every 
American should be allowed to make certain that the information is 
accurate and, if it is not, have it corrected. And, put quite simply, 
these rights should be enforced.
  The Financial Information Privacy Protection Act of 2001 would 
accomplish these objectives.
  Today's technology makes it easier, faster, and less costly than ever 
for institutions to have immediate access to large amounts of customer 
information; to analyze that data; and to send that data to others. 
With the passage of financial services modernization legislation in 
1999, banks, securities firms and insurance firms are now allowed to 
affiliate and offer their multiple products to each other's customers. 
As a result, many financial institutions are warehousing large amounts 
of sensitive information and sharing it throughout the affiliate 
structure without the customer being fully informed of what financial 
information is being disclosed or the purposes for which it will be 
used. While cross-marketing can bring new and beneficial products to 
receptive consumers, it can also result in unwanted invasions of 
personal privacy.
  Surveys have consistently shown that the public is widely concerned 
about its privacy. For example, a recent AARP survey found that 96% of 
respondents were unwilling to let a company freely share their 
financial information with other financial companies. The survey also 
asked, ``[w]ho owns financial information provided in a business 
transaction?'' and 93% of respondents answered that the information 
belongs to the ``customer'' while only 4% answered that it belongs to 
the `'business'' (and 3% said they did not know).
  Congress has already protected citizens' privacy on prior occasions. 
In response to public concerns, Congress passed privacy laws 
restricting companies' disclosure of customer information without 
customer consent, such as in the Cable Communications Policy Act and 
the Video Privacy Protection Act. Yet while video rentals and cable 
television selections are prohibited by law from being disclosed, 
millions of Americans cannot object to disclosure of their financial 
transactions to their financial institutions' affiliates and certain 
other financial companies for purposes inconsistent with those for 
which they gave their data.
  Other important privacy concerns, such as the privacy of bankruptcy 
court records, fall outside of this bill. Last week, the Clinton 
administration published a study ``Financial Privacy in Bankruptcy'' 
with important recommendations that should be carefully considered. I 
commend the Administration for its many efforts to protect individuals' 
right to privacy.
  Along with medical records, financial records rank among the kinds of 
personal data Americans most expect will be kept confidential. However, 
the privacy of even highly sensitive financial information has been 
increasingly put at risk with the move to an economy in which the 
selling or sharing of consumers' personal information is highly 
profitable--and legal.
  The Financial Information Privacy Protection Act of 2001 contains key 
financial privacy protections that are consistent with the expectations 
of Americans and good business practices.
  The Act would provide consumers with:
  An ``opt out'' for affiliate sharing, allowing customers to object to 
financial institutions sharing their financial data with all affiliated 
firms.
  An ``opt in'' for sharing some types of sensitive financial or 
medical information. A financial institution would need to have a 
consumer's affirmative consent before releasing his or her medical 
information or personal spending habits (e.g., credit card charges, 
check payees) to either an affiliate or an unaffiliated third party.
  Rights of access and correction. A consumer would be able to see the 
information to be released and correct material errors. To preclude 
abuse of this protection, the bill allows the institution to charge for 
access to this information.
  The Gramm-Leach-Bliley Act, enacted in November 1999, contains some 
limited Federal financial privacy protections for consumers. While an 
important beginning, these protections fail to meet the expectations of 
Americans. It does not contain the important protections that I have 
just referred to. Many groups have criticized the current law as 
inadequate. I agree.
  This bill would not affect Section 507 of the Gramm-Leach-Bliley Act, 
which I authored, which provides that these Federal privacy protections 
do not pre-empt stronger State privacy laws. States with citizens who 
want stronger privacy protections than contained in Federal law would 
still be able to enact such laws.
  A number of consumer groups, including Consumers Union, Consumer 
Federation of America, Consumer Action, Privacy Times, United Auto 
Workers and U.S. Public Interest Research Group, have stated their 
support of this bill. Mr. President, I would ask that their letter of 
endorsement be included at the end of my remarks.

[[Page 420]]

Professor Peter Swire, Professor of Law at Ohio State University and 
formerly the Clinton Administration's Chief Counselor for Privacy, has 
said: ``The bill is carefully crafted to provide the greatest 
protections for the most sensitive financial information. At the same 
time, the bill helps create an efficient financial system by allowing 
the use of information in situations where the risk to privacy is 
minimal.''
  The issue of financial privacy cuts across philosophical lines.
  For example, Mrs. Phyllis Schlafly and the Eagle Forum have spoken 
out for financial privacy protections even stronger than those 
contained in this bill. She has written, ``Some banks shamelessly admit 
they profile their customers so the bank can advise telemarketers which 
products a customer might like. But why should banks be able to make 
secret profits off of customers' personal information such as deposits, 
checks, phone numbers or credit card numbers? Many of us don't want to 
be solicited by any telemarketers.''
  Columnist William Safire has written frequently about the need for 
stronger privacy protections. For instance, in an editorial in the New 
York times of October 30, 2000, Mr. Safire pointed out that many people 
are concerned about financial records, and other records, ``being 
passed around by conglomerated banks, insurance companies and H.M.O.'s. 
Personal freedom is diminished when the most intimate secrets can be 
monitored by employers and merchants.''
  As we proceed in an age of technological advances and cross-industry 
marketing of financial services, we need to be mindful of the privacy 
concerns of the American public. Consumers who wish to keep their 
sensitive financial information private should be given a right to do 
so. The passage of the financial information Privacy Protection Act of 
2001 would be a major step toward that goal. Congress can and should 
provide that privacy protection by giving consumers, at a minimum, the 
rights of consent and access.
  I ask unanimous consent that the bill and a letter be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 30

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Financial 
     Information Privacy Protection Act of 2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Opt-out requirement for disclosure to affiliates and 
              nonaffiliated third parties.
Sec. 3. Restricting the transfer of information about personal spending 
              habits.
Sec. 4. Restricting the use of health information in making credit and 
              other financial decisions.
Sec. 5. Limits on redisclosure and reuse of information.
Sec. 6. Consumer rights to access and correct information.
Sec. 7. Improved enforcement authority.
Sec. 8. Enhanced disclosure of privacy policies.
Sec. 9. Limit on disclosure of account numbers.
Sec. 10. General exceptions.
Sec. 11. Definitions.
Sec. 12. Issuance of implementing regulations.
Sec. 13. FTC rulemaking authority under the Fair Credit Reporting Act.

     SEC. 2. OPT-OUT REQUIREMENT FOR DISCLOSURE TO AFFILIATES AND 
                   NONAFFILIATED THIRD PARTIES.

       Section 502(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 
     6802(a)) is amended to read as follows:
       ``(a) Disclosure of Nonpublic Personal Information.--Except 
     as otherwise provided in this subtitle, a financial 
     institution may not disclose any nonpublic personal 
     information to an affiliate or a nonaffiliated third party 
     unless the financial institution--
       ``(1) has provided to the consumer a clear and conspicuous 
     notice, in writing or electronic form or other form permitted 
     by the regulations implementing this subtitle, of the 
     categories of information that may be disclosed to the--
       ``(A) affiliate; or
       ``(B) nonaffiliated third party;
       ``(2) has given the consumer an opportunity, before the 
     time that such information is initially disclosed, to direct 
     that such information not be disclosed to such--
       ``(A) affiliate; or
       ``(B) nonaffiliated third party; and
       ``(3) has given the consumer the ability to exercise the 
     nondisclosure option described in paragraph (2) through the 
     same method of communication by which the consumer received 
     the notice described in paragraph (1) or another method at 
     least as convenient to the consumer, and an explanation of 
     how the consumer can exercise such option.''.

     SEC. 3. RESTRICTING THE TRANSFER OF INFORMATION ABOUT 
                   PERSONAL SPENDING HABITS.

       Section 502(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 
     6802(b)) is amended to read as follows:
       ``(b) Restriction on the Transfer of Information About 
     Personal Spending Habits.--
       ``(1) In general.--Notwithstanding subsection (a), if a 
     financial institution provides a service to a consumer 
     through which the consumer makes or receives payments or 
     transfers by check, debit card, credit card, or other similar 
     instrument, the financial institution shall not transfer to 
     an affiliate or a nonaffiliated third party--
       ``(A) an individualized list of that consumer's 
     transactions or an individualized description of that 
     consumer's interests, preferences, or other characteristics; 
     or
       ``(B) any such list or description constructed in response 
     to an inquiry about a specific, named individual;
     if the list or description is derived from information 
     collected in the course of providing that service.
       ``(2) Restriction on transfer of aggregate lists containing 
     certain health information.--Notwithstanding subsection (a), 
     a financial institution shall not transfer to an affiliate or 
     a nonaffiliated third party any aggregate list of consumers 
     containing or derived from individually identifiable health 
     information.
       ``(3) Exceptions.--
       ``(A) In general.--The financial institution may disclose 
     the information described in paragraph (1) or (2) to an 
     affiliate or a nonaffiliated third party if such financial 
     institution--
       ``(i) has clearly and conspicuously requested in writing or 
     in electronic form or other form permitted by the regulations 
     implementing this subtitle, that the consumer affirmatively 
     consent to such disclosure; and
       ``(ii) has obtained from the consumer such affirmative 
     consent and such consent has not been withdrawn.
       ``(B) Rule of construction.--This subsection shall not be 
     construed as preventing a financial institution from 
     transferring the information described in paragraph (1) or 
     (2) to an affiliate or a nonaffiliated third party for the 
     purposes described in paragraph (1), (2), (3), (5), (7), (8), 
     (9), or (10) of subsection (f).
       ``(C) Scope of application.--Paragraph (1) shall not apply 
     to the transfer of aggregate lists of consumers.''.

     SEC. 4. RESTRICTING THE USE OF HEALTH INFORMATION IN MAKING 
                   CREDIT AND OTHER FINANCIAL DECISIONS.

       (a) Restriction on Use of Consumer Health Information.--
     Section 502(c) of the Gramm-Leach-Bliley Act (15 U.S.C. 
     6802(c)) is amended to read as follows:
       ``(c) Use of Consumer Health Information Available From 
     Affiliates and Nonaffiliated Third Parties.--In deciding 
     whether, or on what terms, to offer, provide, or continue to 
     provide a financial product or service to a consumer, a 
     financial institution shall not obtain or receive 
     individually identifiable health information about the 
     consumer from an affiliate or nonaffiliated third party, or 
     evaluate or otherwise consider any such information, unless 
     the financial institution--
       ``(1) has clearly and conspicuously requested in writing or 
     in electronic form or other form permitted by the regulations 
     implementing this subtitle, that the consumer affirmatively 
     consent to the transfer and use of that information with 
     respect to a particular financial product or service;
       ``(2) has obtained from the consumer such affirmative 
     consent and such consent has not been withdrawn; and
       ``(3) requires the same health information about all 
     consumers as a condition for receiving the financial product 
     or service.''.
       (b) Existing Protections for Health Information Not 
     Affected.--Subtitle A of title V of the Gramm-Leach-Bliley 
     Act (15 U.S.C. 6801 et seq.) is amended--
       (1) by redesignating section 510 as section 512; and
       (2) by inserting after section 509 the following new 
     section:

     ``SEC. 510. RELATION TO STANDARDS ESTABLISHED UNDER THE 
                   HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY 
                   ACT OF 1996.

       ``Nothing in this subtitle shall be construed as--
       ``(1) modifying, limiting, or superseding standards 
     governing the privacy and security of individually 
     identifiable health information promulgated by the Secretary 
     of Health and Human Services under sections 262(a) and 264 of 
     the Health Insurance Portability and Accountability Act of 
     1996; or

[[Page 421]]

       ``(2) authorizing the use or disclosure of individually 
     identifiable health information in a manner other than as 
     permitted by other applicable law.''.
       (c) Definition of Individually Identifiable Health 
     Information.--Section 509 of the Gramm-Leach-Bliley Act (15 
     U.S.C. 6809) is amended by adding at the end the following 
     new paragraph:
       ``(12) Individually identifiable health information.--The 
     term `individually identifiable health information' means any 
     information, including demographic information obtained from 
     or about an individual, that is described in section 
     1171(6)(B) of the Social Security Act.''.
       (d) Technical and Conforming Amendment.--Section 505(a)(6) 
     of the Gramm-Leach-Bliley Act (15 U.S.C. 6805(a)(6)) is 
     amended by inserting before the period at the end ``to the 
     extent that the provisions of such section are not 
     inconsistent with the provisions of this subtitle''.

     SEC. 5. LIMITS ON REDISCLOSURE AND REUSE OF INFORMATION.

       Section 502 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802) 
     is amended--
       (1) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (c) the following new 
     subsection:
       ``(d) Limits on Redisclosure and Reuse of Information.--
       ``(1) In general.--An affiliate or a nonaffiliated third 
     party that receives nonpublic personal information from a 
     financial institution shall not disclose such information to 
     any other person unless such disclosure would be lawful if 
     made directly to such other person by the financial 
     institution.
       ``(2) Disclosure under a general exception.--
     Notwithstanding paragraph (1), any person that receives 
     nonpublic personal information from a financial institution 
     in accordance with one of the general exceptions in 
     subsection (f) may use or disclose such information only--
       ``(A) as permitted under that general exception; or
       ``(B) under another general exception in subsection (f), if 
     necessary to carry out the purpose for which the information 
     was disclosed by the financial institution.''.

     SEC. 6. CONSUMER RIGHTS TO ACCESS AND CORRECT
                   INFORMATION.

       Subtitle A of title V of the Gramm-Leach-Bliley Act (15 
     U.S.C. 6801 et seq.) is amended by inserting after section 
     510 (as added by section 4(b) of this Act), the following new 
     section:

     ``SEC. 511. ACCESS TO AND CORRECTION OF INFORMATION.

       ``(a) Access.--
       (1) In general.--Upon the request of a consumer, a 
     financial institution shall make available to the consumer 
     information about the consumer that is under the control of, 
     and reasonably available to, the financial institution.
       ``(2) Exceptions.--Notwithstanding paragraph (1), a 
     financial institution--
       ``(A) shall not be required to disclose to a consumer any 
     confidential commercial information, such as an algorithm 
     used to derive credit scores or other risk scores or 
     predictors;
       ``(B) shall not be required to create new records in order 
     to comply with the consumer's request;
       ``(C) shall not be required to disclose to a consumer any 
     information assembled by the financial institution, in a 
     particular matter, as part of the financial institution's 
     efforts to comply with laws preventing fraud, money 
     laundering, or other unlawful conduct; and
       ``(D) shall not disclose any information required to be 
     kept confidential by any other Federal law.
       ``(b) Correction.--A financial institution shall provide a 
     consumer the opportunity to dispute the accuracy of any 
     information disclosed to the consumer pursuant to subsection 
     (a), and to present evidence thereon. A financial institution 
     shall correct or delete material information identified by a 
     consumer that is materially incomplete or inaccurate.
       ``(c) Coordination and Consultation.--In prescribing 
     regulations implementing this section, the Federal agencies 
     specified in section 504(a) shall consult with one another to 
     ensure that the rules--
       ``(1) impose consistent requirements on the financial 
     institutions under their respective jurisdictions;
       ``(2) take into account conditions under which financial 
     institutions do business both in the United States and in 
     other countries; and
       ``(3) are consistent with the principle of technology 
     neutrality.
       ``(d) Charges for Disclosures.--A financial institution may 
     impose a reasonable charge for making a disclosure under this 
     section, which charge must be disclosed to the consumer 
     before making the disclosure. ''.

     SEC. 7. IMPROVED ENFORCEMENT AUTHORITY.

       (a) Compliance With Privacy Policy.--Section 503 of the 
     Gramm-Leach-Bliley Act (15 U.S.C. 6803) is amended by adding 
     at the end the following new subsection:
       ``(c) Compliance With Privacy Policy.--A financial 
     institution's failure to comply with any of its policies or 
     practices disclosed to a consumer under this section 
     constitutes a violation of the requirements of this 
     section.''.
       (b) Unfair and Deceptive Trade Practice.--Section 505(a)(7) 
     of the Gramm-Leach-Bliley Act (15 U.S.C. 6805(a)(7)) is 
     amended by adding at the end the following new sentence: ``A 
     violation of any requirement of this subtitle, or the 
     regulations of the Federal Trade Commission prescribed under 
     this subtitle, by a financial institution or other person 
     described in this paragraph shall constitute an unfair or 
     deceptive act or practice in commerce in violation of section 
     5(a) of the Federal Trade Commission Act.''.
       (c) Supplemental State Enforcement for FTC Regulated 
     Entities.--Section 505 of the Gramm-Leach-Bliley Act (15 
     U.S.C. 6805) is amended by adding at the end the following 
     new subsection:
       ``(e) State Action for Violations.--
       ``(1) Authority of the states.--In addition to such other 
     remedies as are provided under State law, if the attorney 
     general of a State, or an officer authorized by the State, 
     has reason to believe that any financial institution or other 
     person described in section 505(a)(7) has violated or is 
     violating this subtitle or the regulations prescribed 
     thereunder by the Federal Trade Commission, the State may--
       ``(A) bring an action on behalf of the residents of the 
     State to enjoin such violation in any appropriate United 
     States district court or in any other court of competent 
     jurisdiction; and
       ``(B) bring an action on behalf of the residents of the 
     State to enforce compliance with this subtitle and the 
     regulations prescribed thereunder by the Federal Trade 
     Commission, to obtain damages, restitution, or other 
     compensation on behalf of the residents of such State, or to 
     obtain such further and other relief as the court may deem 
     appropriate.
       ``(2) Rights of the federal trade commission.--The State 
     shall serve prior written notice of any action under 
     paragraph (1) upon the Federal Trade Commission and shall 
     provide the Commission with a copy of its complaint; provided 
     that, if such prior notice is not feasible, the State shall 
     serve such notice immediately upon instituting such action. 
     The Federal Trade Commission shall have the right--
       ``(A) to move to stay the action, pending the final 
     disposition of a pending Federal matter as described in 
     paragraph (4);
       ``(B) to intervene in an action under paragraph (1);
       ``(C) upon so intervening, to be heard on all matters 
     arising therein;
       ``(D) to remove the action to the appropriate United States 
     district court; and
       ``(E) to file petitions for appeal.
       ``(3) Investigatory powers.--For purposes of bringing any 
     action under this subsection, nothing in this subsection 
     shall prevent the attorney general, or officers of such State 
     who are authorized by such State to bring such actions, from 
     exercising the powers conferred on the attorney general or 
     such officers by the laws of such State to conduct 
     investigations or to administer oaths or affirmations or to 
     compel the attendance of witnesses or the production of 
     documentary and other evidence.
       ``(4) Limitation on state action while federal action is 
     pending.--If the Federal Trade Commission has instituted an 
     action for a violation of this subtitle, no State may, during 
     the pendency of such action, bring an action under this 
     section against any defendant named in the complaint of the 
     Commission for any violation of this subtitle that is alleged 
     in that complaint.''.
       (d) State Action for Violations of Ban on Pretext 
     Calling.--Section 522 of the Gramm-Leach-Bliley Act (15 
     U.S.C. 6822) is amended by adding at the end the following 
     new subsection:
       ``(c) State Action for Violations.--
       ``(1) Authority of the states.--In addition to such other 
     remedies as are provided under State law, if the attorney 
     general of a State, or an officer authorized by the State, 
     has reason to believe that any person (other than a person 
     described in subsection (b)(1)) has violated or is violating 
     this subtitle, the State may--
       ``(A) bring an action on behalf of the residents of the 
     State to enjoin such violation in any appropriate United 
     States district court or in any other court of competent 
     jurisdiction; and
       ``(B) bring an action on behalf of the residents of the 
     State to enforce compliance with this subtitle, to obtain 
     damages, restitution, or other compensation on behalf of the 
     residents of such State, or to obtain such further and other 
     relief as the court may deem appropriate.
       ``(2) Rights of federal agencies.--The State shall serve 
     prior written notice of any action commenced under paragraph 
     (1) upon the Attorney General and the Federal Trade 
     Commission, and shall provide the Attorney General and the 
     Commission with a copy of the complaint; provided that, if 
     such prior notice is not feasible, the State shall serve such 
     notice immediately upon instituting such action. The Attorney 
     General and the Federal Trade Commission shall have the 
     right--

[[Page 422]]

       ``(A) to move to stay the action, pending the final 
     disposition of a pending Federal matter as described in 
     paragraph (4);
       ``(B) to intervene in an action under paragraph (1);
       ``(C) upon so intervening, to be heard on all matters 
     arising therein;
       ``(D) to remove the action to the appropriate United States 
     district court; and
       ``(E) to file petitions for appeal.
       ``(3) Investigatory powers.--For purposes of bringing any 
     action under this subsection, nothing in this subsection 
     shall prevent the attorney general, or officers of such State 
     who are authorized by such State to bring such actions, from 
     exercising the powers conferred on the attorney general or 
     such officers by the laws of such State to conduct 
     investigations or to administer oaths or affirmations or to 
     compel the attendance of witnesses or the production of 
     documentary and other evidence.
       ``(4) Limitation on state action while federal action is 
     pending.--If the Attorney General has instituted a criminal 
     proceeding or the Federal Trade Commission has instituted a 
     civil action for a violation of this subtitle, no State may, 
     during the pendency of such proceeding or action, bring an 
     action under this section against any defendant named in the 
     criminal proceeding or civil action for any violation of this 
     subtitle that is alleged in that proceeding or action.''.

     SEC. 8. ENHANCED DISCLOSURE OF PRIVACY POLICIES.

       (a) Timing of Notice to Consumers.--Section 503(a) of the 
     Gramm-Leach-Bliley Act (15 U.S.C. 6803(a)) is amended to read 
     as follows:
       ``(a) Disclosure Required.--
       ``(1) Time of disclosure.--A financial institution shall 
     provide a disclosure that complies with paragraph (2)--
       ``(A) to an individual upon the individual's request;
       ``(B) as part of an application for a financial product or 
     service from the financial institution; and
       ``(C) to a consumer, prior to establishing a customer 
     relationship with the consumer and not less frequently than 
     annually during the continuation of such relationship.
       ``(2) Disclosure format.--The disclosure required by 
     paragraph (1) shall be a clear and conspicuous notice, in 
     writing or in electronic form or other form permitted by the 
     regulations implementing this subtitle, of such financial 
     institution's policies and practices with respect to--
       ``(A) disclosing nonpublic personal information to 
     affiliates and nonaffiliated third parties, consistent with 
     section 502, including the categories of information that may 
     be disclosed;
       ``(B) disclosing nonpublic personal information of persons 
     who have ceased to be customers of the financial institution; 
     and
       ``(C) protecting the nonpublic personal information of 
     consumers.
     Such disclosure shall be made in accordance with the 
     regulations implementing this subtitle.''.
       (b) Notice of Rights to Access and Correct Information.--
     Section 503(b)(2) of the Gramm-Leach-Bliley Act (15 U.S.C. 
     6803(b)(2)) is amended by inserting ``, and a statement of 
     the consumer's right to access and correct such information, 
     consistent with section 511'' after ``institution''.
       (c) Technical and Conforming Amendment.--Section 
     503(b)(1)(A) of the Gramm-Leach-Bliley Act (15 U.S.C. 
     6803(b)(1)(A)) is amended by striking ``502(e)'' and 
     inserting ``502(f)''.

     SEC. 9. LIMIT ON DISCLOSURE OF ACCOUNT NUMBERS.

       Section 502 of the Gramm-Leach-Bliley Act (15 U.S.C. 6802) 
     is amended in subsection (e) (as so redesignated by section 
     5) by inserting ``affiliate or'' before ``nonaffiliated third 
     party''.

     SEC. 10. GENERAL EXCEPTIONS.

       Section 502(f) of the Gramm-Leach-Bliley Act (15 U.S.C. 
     6802)) (as so redesignated by section 5 of this Act) is 
     amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``Subsections (a) and (b)'' and inserting ``Subsection (a)'';
       (2) in paragraph (1)--
       (A) by striking ``or'' at the end of subparagraph (B);
       (B) by inserting ``or'' after the semicolon at the end of 
     subparagraph (C); and
       (C) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) performing services for or functions solely on behalf 
     of the financial institution with respect to the financial 
     institution's own customers, including marketing of the 
     financial institution's own products or services to the 
     financial institution's customers;'';
       (3) in paragraph (4), by striking ``, and the institution's 
     attorneys, accountants, and auditors'';
       (4) in paragraph (5), by inserting ``section 21 of the 
     Federal Deposit Insurance Act,'' after ``title 31, United 
     States Code,'';
       (5) in paragraph (7), by striking ``or'' at the end;
       (6) in paragraph (8), by striking the period and inserting 
     a semicolon; and
       (7) by adding at the end the following new paragraphs:
       ``(9) in order to facilitate customer service, such as 
     maintenance and operation of consolidated customer call 
     centers or the use of consolidated customer account 
     statements; or
       ``(10) to the institution's attorneys, accountants, and 
     auditors.''.

     SEC. 11. DEFINITIONS.

       Section 509 of the Gramm-Leach-Bliley Act (15 U.S.C. 6809) 
     is amended--
       (1) in paragraph (3)--
       (A) by striking ``(3) Financial institution'' and all that 
     follows through ``The term `financial institution' '' and 
     inserting ``(3) Financial institution.--The term `financial 
     institution' ''; and
       (B) by striking subparagraphs (B), (C), and (D);
       (2) by amending paragraph (4) to read as follows:
       ``(4) Nonpublic personal information.--The term `nonpublic 
     personal information' means--
       ``(A) any personally identifiable information, including a 
     Social Security number--
       ``(i) provided by a consumer to a financial institution, in 
     an application or otherwise, to obtain a financial product or 
     service from the financial institution;
       ``(ii) resulting from any transaction between a financial 
     institution and a consumer involving a financial product or 
     service; or
       ``(iii) obtained by the financial institution about a 
     consumer in connection with providing a financial product or 
     service to that consumer, other than publicly available 
     information, as such term is defined by the regulations 
     prescribed under section 504; and
       ``(B) any list, description or other grouping of one or 
     more consumers of the financial institution and publicly 
     available information pertaining to them.''; and
       (3) in paragraph (9), by inserting ``applies for or'' 
     before ``obtains''.

     SEC. 12. ISSUANCE OF IMPLEMENTING REGULATIONS.

       (a) In General.--The Federal agencies specified in section 
     504(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 6804(a)) 
     shall prescribe regulations implementing the amendments to 
     subtitle A of title V of the Gramm-Leach-Bliley Act made by 
     this Act, and shall include such requirements determined to 
     be appropriate to prevent their circumvention or evasion.
       (b) Coordination, Consistency, and Comparability.--The 
     regulations issued under subsection (a) shall be issued in 
     accordance with the requirements of section 504(a) of the 
     Gramm-Leach-Bliley Act (15 U.S.C. 6804(a)), except that the 
     deadline in section 504(a)(3) shall not apply.

     SEC. 13. FTC RULEMAKING AUTHORITY UNDER THE FAIR CREDIT 
                   REPORTING ACT.

       Section 621(e) of the Fair Credit Reporting Act (15 U.S.C. 
     1681s(e)) is amended by adding at the end the following new 
     paragraph:
       ``(3) Regulations.--The Federal Trade Commission shall 
     prescribe such regulations as necessary to carry out the 
     provisions of this title with respect to any persons 
     identified under paragraph (1) of subsection (a). Prior to 
     prescribing such regulations, the Federal Trade Commission 
     shall consult with the Federal banking agencies referred to 
     in paragraph (1) of this subsection in order to ensure, to 
     the extent possible, comparability and consistency with the 
     regulations issued by the Federal banking agencies under that 
     paragraph.''.
                                  ____

                                                 January 22, 2001.
       Dear Senator Sarbanes: We are writing in support of the 
     introduction of the Financial Information Privacy Act of 
     2001. If passed this legislation will correct many of the 
     shortcomings of the Gramm-Leach-Biley Act. The Financial 
     Privacy Act will be a significant improvement for consumers 
     by requiring financial institutions to obtain a consumer's 
     consent before sensitive financial and medical data is 
     shared, extending privacy protections to the sharing of 
     information among affiliated companies, and allowing 
     consumers to have access to the information about them that 
     is held by financial institutions.
       The GLB's privacy provisions are grossly inadequate. Mere 
     notice that data is being collected with a limited ability of 
     consumers to prevent the sharing of personal data--one that 
     is riddled with loopholes--fail to provide the privacy 
     protections that American consumers want and deserve. Instead 
     of protecting personal privacy, GLB protects the ability of 
     the financial services industry to collect and use personal 
     information about their customers with virtually no 
     restrictions.
       As personal privacy continues to erode, it is vital that 
     consumers be given strong privacy protections. The current 
     trend of favoring the appetite of business interests over the 
     privacy of individuals must be reversed. If a financial 
     institution cannot convince its customers that the sharing of 
     their personal information will be safe and beneficial to 
     them, then the financial institution should not be allowed to 
     share that information.
       The Financial Privacy Act is a step in advancing some of 
     the Fair Information Principles supported by our 
     organizations in the context of financial services. We will 
     continue to seek the strongest possible privacy safeguards 
     for Americans, including expanded medical privacy 
     protections, limitations on initial collection practices, and 
     increased enforcement mechanisms. Those protections may even 
     go beyond those in this bill.

[[Page 423]]

       We appreciate your introducing this important legislation 
     and look forward to working with you on future legislative 
     efforts to protect the privacy of all Americans.
         Ken McEldowney, Consumer Action.
         Travis Plunkett, Consumer Federation of America.
         Frank Torres, Consumers Union.
         Jason Catlett, Junkbusters.
         Even Hendricks, Privacy Times.
         Mary Rouleau, United Auto Workers.
         Edmund Mierzwinski, US Public Interest Research Group.

  Mr. LEAHY. Mr. President, I am pleased today to be a original 
cosponsor of the Financial Information Privacy Protection Act of 2001. 
I am delighted to join Senator Sarbanes, the ranking member of the 
Senate Banking Committee, who is a real leader in the Senate on 
protecting personal financial information.
  In November 1999, President Clinton signed into law the landmark 
Financial Modernization Act, which updated our financial laws and opens 
up the financial services industry to become more competitive, both at 
home and abroad. Many of my colleagues and I supported that legislation 
because we believe it will benefit businesses and consumers. It is 
already making it easier for banking, securities, and insurance firms 
to consolidate their services, cut expenses and offer more products at 
a lower cost to all. But this consolidation also raises new concern 
about our financial privacy.
  New conglomerates in the financial services industry are offering a 
widening variety of services, each of which may require a customer to 
provide financial, medical or other personal information. Nothing in 
the new law prevents these new subsidiaries or affiliates of financial 
conglomerates from sharing this information for uses beyond those the 
customer thought he or she was providing it. For example, the new law 
has no requirement for the consumer to control whether these new 
financial subsidiaries or affiliates sell, share, or publish 
information on savings account balances, certificates of deposit 
maturity dates and balances, stock and mutual fund purchases and sales, 
life insurance payouts or health insurance claims. That is wrong.
  I believe the Financial Information Privacy Protection Act of 2001 
should serve as the foundation for model financial privacy legislation 
that Congress enacts into law this year. This bill is a common sense 
approach that can attract both consumers and the industry.
  Privacy is one of our most vulnerable rights in the information age. 
Digitalization of information offers tremendous benefits but also new 
threats. Some in Congress are content to punt the privacy issue down 
the field for another year. The public disagrees. People know that the 
longer we dawdle, the harder it will be to halt the erosion of privacy. 
A year is an eternity in the digital age.
  The right of privacy is a personal and fundamental right protected by 
the Constitution of the United States. But today, the American people 
are growing more and more concerned over encroachments on their 
personal privacy. To return personal financial privacy to the control 
of the consumer, this legislation would create the following rights in 
Federal law.
  New Right To Opt-out of Information Sharing By Affiliates. The new 
financial modernization law permits consumers to say no to information 
sharing, selling or publishing among third parties in many cases, but 
not among affiliated firms. The Financial Information Privacy Act of 
2001 would require financial conglomerates, which will only grow under 
the new modernization law, to expand this protection to give consumers 
the right to notify it (opt-out) to stop all information sharing, 
selling or publishing of personal financial information among all third 
parties and affiliates.
  New Right For Consumers To Opt-In For Sharing of Medical Information 
and Personal Spending Habits. The Financial Information Privacy 
Protection Act of 2001 would require financial firms to get the 
affirmative consent (opt-in) of consumers before a firm could gain 
access to medical information within a financial conglomerate or share 
detailed information about a consumer's personal spending habits.
  New Right To Access and Correct Financial Information. The Financial 
Information Privacy Protection Act of 2001 would give consumers the 
right to review and correct their financial records, just like 
consumers today may review and correct their credit reports.
  New Right To Privacy Policy Up Front. The Financial Information 
Privacy Protection Act of 2001 would require financial firms to provide 
their privacy policies to consumers before committing to a customer 
relationship, not after. In addition, the bill's new rights would be 
enforced by federal banking regulators, the Federal Trade Commission 
and state attorney generals.
  Unfortunately, if you have a checking account, you may have a 
financial privacy problem. Your bank may sell or share with business 
allies information about who you are writing checks to, when, and for 
how much. And even if you tell your bank to stop, it can ignore you 
under current law. This legislation returns to consumers the power to 
stop the selling or sharing of personal financial information.
  Americans ought to be able to enjoy the exciting innovations of this 
burgeoning information era without losing control over the use of their 
financial information. The Financial Information Privacy Protection Act 
of 2001 updates United States privacy laws to provide these 
fundamentals protections of personal financial information in the 
evolving financial services industry. I urge my colleagues to support 
it.
                                 ______
                                 
      By Mr. CAMPBELL:
  S. 31. A bill to amend the Internal Revenue Code of 1986 to phase out 
the estate and gift taxes over a 10-year period; to the Committee on 
Finance.


             Estate and Gift Tax Rate Reduction Act of 2001

  Mr. CAMPBELL. Mr. President, today I reintroduce a bill that I feel 
is of vital importance to farmers and family business owners, the 
Estate and Gift Tax Rate Reduction Act of 2001.
  This bill is based on legislation I introduced in the 105th Congress 
and the 106th Congress. Unfortunately, the 105th Congress adjourned 
before we could debate and pass this bill and President Clinton vetoed 
similar legislation during the 106th Congress. Since then, I have heard 
from numerous Coloradans and National organizations and am fully aware 
that the problems the bill would correct still exist. In fact, I have 
heard from hundreds of Coloradans and constituents from other states 
regarding this burdensome and overreaching tax. I believe that 
eliminating this tax is a fundamental issue of fairness. Death should 
not be an event government prospers from.
  Estate and gift taxes remain a burden on American families, 
particularly those who pursue the American dream of owning their own 
business. That is because family-owned businesses and farms are hit 
with the highest tax rate when they are handed down to descendants--
often immediately following the death of a loved one. Families ought to 
be encouraged, not discouraged, from building successful farms, ranches 
and businesses and keeping the ownership of those enterprises within 
the families that worked to make them successful.
  These taxes, and the financial burdens and difficulties they create 
come at the worst possible time. Making a terrible situation worse is 
the fact that the rate of this estate tax is crushing, reaching as high 
as 55 percent for the highest bracket. That's higher than even the 
highest income tax rate bracket of 39 percent. Furthermore, the tax is 
due as soon as the business is turned over to the heir, allowing no 
time for financial planning or the setting aside of money to pay the 
tax bills. Estate and gift taxes right now are one of the leading 
reasons why the number of family-owned farms and businesses are 
declining; the burden of this tax is just too much to bear.
  This tax sends the troubling message that families should either sell 
the business while they are still alive, in order to spare their 
descendants this huge tax after their passing, or run-down the value of 
the business, so that it won't make it into the higher tax brackets. 
This is not how America was built. Private investment and initiative 
have historically been a strong

[[Page 424]]

part of our American heritage and we should encourage those values, not 
tax successful family businesses into submission.
  That is why I again introduce this bill and will fight for its 
passage during the 107th Congress. It will gradually eliminate this tax 
by phasing it out--reducing the amount of the tax 5% each year, 
beginning with the highest rate bracket of 55%, until the tax rate 
reaches zero. Several states have already adopted similar plans, and I 
believe we ought to follow their example. We need to change the message 
we are sending to farmers and family business owners. Leading 
organizations agree, and have continuously endorsed this legislation. 
In fact, over 100 organizations, like the National Federation of 
Independent Business and the Farm Bureau, have joined together to form 
the Family Business Estate Tax Coalition, which strongly endorsed this 
bill during the 106th Congress.
  Mr. President, this tax should be eliminated across the board, and I 
ask my colleagues to help in working to achieve that goal.
  I ask unanimous consent that this bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       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 ``Estate and Gift Tax Rate 
     Reduction Act of 2001''.

     SEC. 2. FINDINGS.

       The Congress finds and declares that--
       (1) estate and gift tax rates, which reach as high as 55 
     percent of a decedent's taxable estate, are in most cases 
     substantially in excess of the tax rates imposed on the same 
     amount of regular income and capital gains income; and
       (2) a reduction in estate and gift tax rates to a level 
     more comparable with the rates of tax imposed on regular 
     income and capital gains income will make the estate and gift 
     tax less confiscatory and mitigate its negative impacts on 
     American families and businesses.

     SEC. 3. PHASEOUT OF ESTATE AND GIFT TAXES.

       (a) Repeal of Estate and Gift Taxes.--Subtitle B of the 
     Internal Revenue Code of 1986 (relating to estate and gift 
     taxes) is repealed effective with respect to estates of 
     decedents dying, and gifts made, after December 31, 2011.
       (b) Phaseout of Tax.--Subsection (c) of section 2001 of 
     such Code (relating to imposition and rate of tax) is amended 
     by adding at the end the following new paragraph:
       ``(3) Phaseout of tax.--In the case of estates of decedents 
     dying, and gifts made, during any calendar year after 2001 
     and before 2012--
       ``(A) In general.--The tentative tax under this subsection 
     shall be determined by using a table prescribed by the 
     Secretary (in lieu of using the table contained in paragraph 
     (1)) which is the same as such table; except that--
       ``(i) each of the rates of tax shall be reduced (but not 
     below zero) by the number of percentage points determined 
     under subparagraph (B), and
       ``(ii) the amounts setting forth the tax shall be adjusted 
     to the extent necessary to reflect the adjustments under 
     clause (i).
       ``(B) Percentage points of reduction.--

                                                          The number of
``For calendar year:                              percentage points is:
  2002...........................................................5 ....

  2003..........................................................10 ....

  2004..........................................................15 ....

  2005..........................................................20 ....

  2006..........................................................25 ....

  2007..........................................................30 ....

  2008..........................................................35 ....

  2009..........................................................40 ....

  2010..........................................................45 ....

  2011..........................................................50.....

       ``(C) Coordination with paragraph (2).--Paragraph (2) shall 
     be applied by reducing the 55 percent percentage contained 
     therein by the number of percentage points determined for 
     such calendar year under subparagraph (B).
       ``(D) Coordination with credit for state death taxes.--
     Rules similar to the rules of subparagraph (A) shall apply to 
     the table contained in section 2011(b) except that the number 
     of percentage points referred to in subparagraph (A)(i) shall 
     be determined under the following table:

                                                          The number of
``For calendar year:                              percentage points is:
  2002......................................................1\1/2\ ....

  2003...........................................................3 ....

  2004......................................................4\1/2\ ....

  2005...........................................................6 ....

  2006......................................................7\1/2\ ....

  2007...........................................................9 ....

  2008.....................................................10\1/2\ ....

  2009..........................................................12 ....

  2010.....................................................13\1/2\ ....

  2011........................................................15.''....

       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, and gifts made, 
     after December 31, 2001.
                                 ______
                                 
      By Mr. THURMOND:
  S. 32. A bill to amend title 28, United States Code, to clarify the 
remedial jurisdiction of inferior Federal courts; to the Committee on 
the Judiciary.


                   judicial taxation prohibition act

  Mr. THURMOND. Mr. President, I rise today to introduce legislation to 
prohibit Federal judges from imposing a tax increase as a judicial 
remedy.
  It has always been my firm belief that Federal judges exceed the 
boundaries of their limited jurisdiction under the Constitution when 
they order new taxes or order increases in existing tax rates.
  The Founding Fathers clearly understood that taxation was a role for 
the legislative branch and not the judicial branch. Article I of the 
Constitution lists the legislative powers, one of which is that ``the 
Congress shall have the power to lay and collect taxes.'' Article III 
establishes the judicial powers, and the power to tax is nowhere 
contained in Article III.
  The Federalist Papers are also clear in this regard. in Federalist 
No. 48, James Madison explained that ``the legislative branch alone has 
access to the pockets of the people.'' In Federalist No. 78, Alexander 
Hamilton stated, ``The judiciary . . . has no influence over . . . the 
purse, no direction either of the strength or of the wealth of the 
society, and can take no active resolution whatever.''
  In 1990, in the case of Missouri v. Jenkins, five members of the 
Supreme Court stated in dicta that although a Federal judge could not 
directly raise taxes, he could order the local government to raise 
taxes. There is no difference between a judge raising taxes and a judge 
ordering a legislative official to raise taxes. I am hopeful that, if 
the issue were directly before the Court today, a majority of the 
current membership of the Court would reject that dicta and hold that 
Federal judges do not have the power to order that taxes be raised. 
However, in the event the Court does not correct this error, I am 
introducing the Judicial Taxation Prohibition Act, which would prohibit 
judges from raising taxes. I have introduced it in every Congress since 
the Supreme Court's misguided decision was issued, and I intend to do 
so until it is corrected. This legislation is essential to affirm the 
separation of powers.
  There is a simple reason why this distinction between the branches of 
government is so important and must remain clear. The legislative 
branch is responsible to the people through the democratic process. 
However, the judicial branch is composed of individuals who are not 
elected and have life tenure. By design, the members of the judicial 
branch do not depend on the popular will for their offices. They are 
not accountable to the people. They simply have no business setting the 
rate of taxes the people must pay. For a judge to order that taxes be 
increased amounts to taxation without representation. It is entirely 
contrary to the understanding of the Founding Fathers.
  The phrase ``taxation without representation'' recalls an important 
time in American history that is worth repeating in some detail. The 
Constitution can best be understood by referencing the era in which it 
was adopted.
  Not since Great Britain's ministry of George Grenville in 1765 have 
the American people faced the assault of taxation without 
representation as now authorized in the Jenkins decision. As part of 
his imperial reforms to tighten British control in the colonies, 
Grenville pushed the Stamp Act through the Parliament in 1765. This Act 
required excise duties to be paid by the colonists in the form of 
revenue stamps affixed to a variety of legal documents. This action 
came at a time when the colonies were in an uproar over the Sugar Act 
of 1764 which levied duties on certain imports such as sugar, indigo, 
coffee, and linens.
  The ensuing firestorm of debate in America centered on the power of 
Britain to tax the colonies. James Otis, a young Boston attorney, 
echoed the

[[Page 425]]

opinion of most colonists stating that the parliament did not have 
power to tax the colonies because Americans had no representation in 
that body. Mr. Otis had been attributed with the statement in 1761 that 
``taxation without representation is tyranny.''
  In October 1765, delegates from nine states were sent to New York as 
part of the Stamp Act Congress to protest the new law. It was during 
this time that John Adams wrote in opposition to the Stamp Act, ``we 
have always understood it to be a grand and fundamental principle * * * 
that no free man shall be subject to any tax to which he has not given 
his own consent, in person or by proxy.'' A number of resolutions were 
adopted by the Stamp Act Congress protesting the acts of Parliament. 
One resolution stated, ``It is inseparably essential to the freedom of 
a people * * * that no taxes be imposed on them, but with their own 
consent, given personally or by their representatives.'' The 
resolutions concluded that the Stamp Act had a ``manifest tendency to 
subvert the rights and liberties of the colonists.''
  Opposition to the Stamp Act was vehement throughout the colonies. 
While Grenville's successor was determined to repeal the law, the 
social, economic, and political climate in the colonies brought on the 
American Revolution. The principles expressed during the earlier crisis 
against taxation without representation became firmly imbedded in our 
Federal Constitution of 1787.
  I recognize that some say this legislation is unconstitutional. They 
argue that the Congress does not have the authority under Article III 
to limit and regulate the jurisdiction of the inferior Federal courts. 
This argument has no basis in the Constitution or common sense.
  Article III, Section 1, of the Constitution provides jurisdiction to 
the lower Federal courts as the ``Congress may from time to time ordain 
and establish.'' There is no mandate in the Constitution to confer 
equity jurisdiction to the inferior Federal courts. Congress has the 
flexibility under Article III to ``ordain and establish'' the lower 
Federal courts as it deems appropriate. This basic premise has been 
upheld by the Supreme Court in a number of cases including Lawcourt v. 
Phillips, Lauf v. E.G. Skinner and Co., Kline v. Burke Construction 
Co., and Sheldon v. Sill.
  In other words, the Congress was expressly granted the authority to 
establish lower Federal courts, which it did. What the Congress has 
been given the power to do, it can certainly decide to stop doing. By 
passing this bill, the Congress would simply be limiting the 
jurisdiction of the lower Federal courts in a small area.
  It is also important to note that this legislation would not restrict 
the power of the Federal courts to remedy Constitutional wrongs. 
Clearly, the Court has the power to order a remedy for a Constitutional 
violation that may include expenditures of money by Federal, State, or 
local governments. This bill simply requires that if the Court orders 
that money be spent, it is for the legislative body to decide how to 
comply with that order. The legislative body may choose to raise taxes, 
but it also may choose to cut spending or sell assets. That choice of 
how to come up with the money should always be for the legislature to 
decide. I believe it is clear under Article III that the Congress has 
the authority to restrict the remedial jurisdiction of the Federal 
Courts in this fashion.
  Mr. President, the dispositive issue presented by the Jenkins 
decision is whether the American people want, as a matter of national 
policy, to be exposed to taxation without their consent by an 
independent and insulated judiciary. I most assuredly believe they do 
not.
  Mr. President, how long will it be before a Federal judge orders tax 
increases to build new highways or prisons? I do not believe the 
Founding Fathers had this type of activism in mind when they 
established the judicial branch of government.
  Judicial activism is a matter of great concern to me and has been for 
many years. I have always felt that Federal judges must strictly adhere 
to the principle that it is their role to interpret the law and not 
make the law. This simple principle is fundamental to our system of 
government.
  The American people deserve a response to the Jenkins decision. We 
must provide protection against the imposition of taxes by an 
unelected, unaccountable judiciary. We must not permit this blatant 
violation of the separation of powers. We have a duty to right this 
wrong.
  Mr. President, I ask unanimous consent that this bill be printed in 
the Record following my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 32

       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 ``Judicial Taxation 
     Prohibition Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1)(A) a variety of effective and appropriate judicial 
     remedies are available for the full redress of legal and 
     constitutional violations under existing law; and
       (B) the imposition or increase of taxes by courts is 
     neither necessary nor appropriate for the full and effective 
     exercise of Federal court jurisdiction;
       (2) the imposition or increase of taxes by judicial order--
       (A) constitutes an unauthorized and inappropriate exercise 
     of the judicial power under the Constitution of the United 
     States; and
       (B) is incompatible with traditional principles of law and 
     government of the United States and the basic principle of 
     the United States that taxation without representation is 
     tyranny;
       (3) Federal courts exceed the proper boundaries of their 
     limited jurisdiction and authority under the Constitution of 
     the United States, and impermissibly intrude on the 
     legislative function in a democratic system of government, 
     when they issue orders requiring the imposition of new taxes 
     or the increase of existing taxes; and
       (4) Congress retains the authority under article III, 
     sections 1 and 2 of the Constitution of the United States to 
     limit and regulate the jurisdiction of the inferior Federal 
     courts that Congress has seen fit to establish, and such 
     authority includes the power to limit the remedial authority 
     of inferior Federal courts.

     SEC. 3. JUDICIAL TAXATION PROHIBITION.

       (a) In General.--Chapter 85 of title 28, United States 
     Code, is amended by inserting after section 1341 the 
     following:

     ``Sec. 1341A. Prohibition of judicial imposition or increase 
       of taxes

       ``(a) Notwithstanding any other provision of law, no 
     inferior court established by Congress shall have 
     jurisdiction to issue any remedy, order, injunction, writ, 
     judgment, or other judicial decree requiring the Federal 
     Government or any State or local government to impose any new 
     tax or to increase any existing tax or tax rate.
       ``(b) Nothing in this section shall prohibit inferior 
     Federal courts from ordering duly authorized remedies, 
     otherwise within the jurisdiction of those courts, that may 
     require expenditures by a Federal, State, or local government 
     in any case in which those expenditures are necessary to 
     effectuate those remedies.
       ``(c) In this section, the term `tax' includes--
       ``(1) personal income taxes;
       ``(2) real and personal property taxes;
       ``(3) sales and transfer taxes;
       ``(4) estate and gift taxes;
       ``(5) excise taxes;
       ``(6) user taxes;
       ``(7) corporate and business income taxes; and
       ``(8) licensing fees or taxes.''.
       (b) Table of Sections.--The table of sections for chapter 
     85 of title 28, United States Code, is amended by inserting 
     after the item relating to section 1341 the following:

``1341A. Prohibition of judicial imposition or increase of taxes.''.

     SEC. 4. APPLICABILITY.

       This Act and the amendments made by this Act shall apply to 
     cases pending or commenced in a Federal court on or after the 
     date of enactment of this Act.
                                 ______
                                 
      By Mr. THURMOND (for himself and Mr. Helms):
  S. 33. A bill to amend title II of the Americans with Disabilities 
Act of 1990 and section 504 of the Rehabilitation Act of 1973 to 
exclude prisoners from the requirements of that title and section; to 
the Committee on Health, Education, Labor, and Pensions.
  Mr. THURMOND. Mr. President. I rise today to introduce legislation to 
address an undue burden that has arisen out of the Americans with 
Disabilities Act.

[[Page 426]]

  The purpose of the ADA was to give disabled Americans the opportunity 
to fully participate in society and contribute to it. This was a worthy 
goal. But even legislation with the best of intentions often has 
unintended consequences. I submit that one of those is the application 
of the ADA to state and local prisoners throughout America.
  In 1998, the Supreme Court ruled in Pennsylvania Department of 
Corrections v. Yeskey [118 S.Ct. 1952 (1998)] that the ADA applies to 
every state prison and local jail in this country. To no avail, the 
Attorneys General of most states, as well as numerous state and local 
organizations, had joined with Pennsylvania in court filings to oppose 
the ADA applying to prisoners.
  Prior to the Supreme Court ruling, the circuit courts were split on 
the issue. The Fourth Circuit Court of Appeals, my home circuit, had 
forcefully concluded that the ADA, as well as its predecessor and 
companion law, the Rehabilitation Act, did not apply to state 
prisoners. The decision focused on federalism concerns and the fact 
that the Congress did not make clear that it intended to involve itself 
to this degree in an activity traditionally reserved to the states.
  However, the Supreme Court did not agree, holding that the language 
of the Act is broad enough to clearly cover state prisons. It is not an 
issue on the Federal level because the Federal Bureau of Prisons 
voluntarily complies with the Act. The Supreme Court did not say 
whether applying the ADA to state prisons exceeded the Congress's 
powers under the Commerce Clause or the Fourteenth Amendment, but we 
should not wait on the Supreme Court to consider this argument before 
acting. Although it was rational for the Supreme Court to read the 
broad language of the ADA the way it did, it is far from clear that we 
in the Congress considered the application of this sweeping new social 
legislation in the prison environment.
  The Seventh Circuit has recognized that the ``failure to exclude 
prisoners may well have been an oversight.'' The findings and purpose 
of the law seem to support this. The introductory language of the ADA 
states, ``The Nation's proper goals regarding individuals with 
disabilities are to assure equality of opportunity, full participation, 
independent living, and economic self-sufficiency'' to allow ``people 
with disabilities * * * to compete on an equal basis and to pursue 
those opportunities for which our free society is justifiably famous.'' 
Of course, a prison is not a free society, as the findings and purpose 
of the Act envisioned. Indeed, it is quite the opposite. In short, as 
the Ninth Circuit explained, ``The Act was not designed to deal 
specifically with the prison environment; it was intended for general 
societal application.''
  In any event, now that the Supreme Court has spoken, it is time for 
the Congress to confront this issue. The Congress should act now to 
exempt state and local prisons from the ADA. That is why I am again 
introducing the State and Local Prison Relief Act, as I did soon after 
the Supreme Court decided the Yeskey case in 1998.
  The State and Local Prison Relief Act would exempt prisons from the 
requirements of the ADA and the Rehabilitation Act for prisoners. More 
specifically, it exempts any services, accommodations, programs, 
activities or treatment of any kind regarding prisoners that may 
otherwise be required by the Acts. Through this language, I wish to 
make entirely clear that the bill is not intended to exempt prisons 
from having to accommodate disabled legal counsel, visitors, or others 
who are not inmates. Also, the fact that the bill applies to Title II 
of the ADA should make clear that it is not intended to exempt prison 
hiring practices for non-inmate employees. The bill is intended only to 
apply to prisoners.
  I firmly believe that if we do not act, the ADA will have broad 
adverse implications for the management of penal institutions. 
Prisoners will file an endless number of lawsuits demanding special 
privileges, which will involve Federal judges in the intricate details 
of running our state and local prisons.
  Mr. President, we should continuously remind ourselves that the 
Constitution created a Federal government of limited, enumerated 
powers. Those powers not delegated to the Federal government were 
reserved to the states or the people. As James Madison wrote in 
Federalist No. 45, ``the powers delegated to the Federal government are 
few and definite. . . . [The powers] which are to remain in the State 
governments are numerous and indefinite.'' The Federal government 
should avoid intrusion into matters traditionally reserved for the 
states. We must respect this delicate balance of power. Unfortunately, 
federalism is more often spoken about than respected.
  Although the entire ADA raises federalism concerns, the problem is 
especially acute in the prison context. There are few powers more 
traditionally reserved for the states than crime. The criminal laws 
have always been the province of the states, and the vast majority of 
prisoners have always been housed in state prisons. The First Congress 
enacted a law asking the states to house Federal prisoners in their 
jails for fifty cents per month. The first Federal prison was not built 
until over 100 years later, and only three existed before 1925.
  Even today, as the size and scope of the Federal government has grown 
immensely, only about 6% of prisoners are housed in Federal 
institutions. Managing that other 94% is a core state function. As the 
Supreme Court has stated, ``Maintenance of penal institutions is an 
essential part of one of government's primary functions--the 
preservation of societal order through enforcement of the criminal law. 
It is difficult to imagine an activity in which a State has a stronger 
interest, or one that is more intricately bound up with state laws, 
regulations, and procedures.''
  The primary function of prisons is to house criminals. Safety and 
security are the overriding concerns of prison administration. The 
rules and regulations, the daily schedules, the living and working 
arrangements--these all revolve around protecting prison employees, 
inmates, and the public. But the goal of the ADA essentially is to take 
away any barrier to anyone with any disability. Accommodating inmates 
in the manner required by the ADA will interfere with the ability of 
prison administrators to keep safety and security their overriding 
concern.
  For example, a federal court in Pennsylvania ruled that a prisoner 
who disobeyed a direct order could not be punished because of the ADA. 
The judge said it was okay for a prisoner to return to his cell after 
he was told not to by a guard, saying the prisoner was justified in 
refusing to comply because he was doing so to relieve stress built up 
due to his Tourette's Syndrome.
  The practical effect of the ADA will be that prison officials will 
have to grant special privileges to certain inmates and to excuse 
others from complying with generally-applicable prison rules. For 
example, a federal judge ordered an Iowa prison to install cable 
television in a disabled inmate's cell because the man had difficulty 
going to the common areas to watch TV. After much public protest, the 
ruling was eventually reversed.
  The ADA presents a perfect opportunity for prisoners to try to beat 
the system, and use the courts to do it. There are over 1.7 million 
inmates in state prisons and local jails, and the numbers are rising 
every year. Indeed, the total prison population has grown about 6.5% 
per year since 1990. Prisons have a substantially greater percentage of 
persons with disabilities that are covered by the ADA than the general 
population, including AIDS, mental retardation, psychological 
disorders, learning disabilities, drug addiction, and alcoholism. 
Further, administrators control every aspect of prisoners' lives, such 
as assigning educational opportunities, recreation, and jobs in prison 
industries. Combine these facts, and the possibilities for lawsuits are 
endless.
  For example, in most state prison systems, inmates are classified and 
assigned based in part on their disabilities. This helps administrators 
meet the disabled inmates' needs in a cost-effective manner. However, 
under the ADA, prisoners probably will be able to claim that they must 
be assigned to a

[[Page 427]]

prison without regard to their disability. Were it not for their 
disability, they may have been assigned to the prison closest to their 
home, and in that case, every prison would have to be able to 
accommodate every disability. That could mean every prison having, for 
example, mental health treatment centers, services for hearing-impaired 
inmates, and dialysis treatment. The cost is potentially enormous.
  A related expense is attorney's fees. The ADA has incentives to 
encourage private litigants to vindicate their rights in court. Any 
plaintiff, including an inmate, who is only partially successful can 
get generous attorney's fees and monetary damages, possibly including 
even punitive damages. In one ADA class action lawsuit in California, 
the state has paid the prisoners' attorneys over $2 million, with 
hourly fees as high as $300.
  Applying the ADA to prisons is the latest unfunded Federal mandate 
that we are imposing on the states.
  Adequate funding is hard for prisons to achieve, especially in state 
and local communities where all government funds are scarce. The public 
is angry about how much money must be spent to house prisoners. Even 
with prison populations rising, the people do not want more of their 
money spent on prisoners. Often, there is simply not enough money to 
make the changes in challenged programs to accommodate the disabled. If 
prison administrators do not have the money to change a program, they 
will probably have to eliminate it. Thus, accommodation could mean the 
elimination of worthwhile educational, recreational, and rehabilitative 
programs, making all inmates worse off.
  Apart from money, accommodation may mean modifying the program in 
such a way as to take away its beneficial purpose. A good example is 
the Supreme Court's Yeskey case itself. Yeskey was declared medically 
ineligible to participate in a boot camp program because he had high 
blood pressure. So, he sued under the ADA. The boot camp required 
rigorous physical activity, such as work projects. If the program has 
to be changed to accommodate his physical abilities, it may not meet 
its basic goals, and the authorities may eliminate it. Thus, the result 
could be that everyone loses the benefit of an otherwise effective 
correctional tool.
  Another impact of the ADA may be to make an already volatile prison 
environment even more difficult to control. Many inmates are very 
sensitive to the privileges and benefits that others get in a world 
where privileges are relatively few. Some have irrational suspicions 
and phobias. An inmate who is not disabled may be angry if he believes 
a disabled prisoner is getting special treatment, without rationally 
accepting that the law requires it, and could take out his anger on 
others around him, including the disabled prisoner.
  We must keep in mind that it is judges who will be making these 
policy decisions. To apply the Act and determine what phrases like 
``qualified individual with a disability'' mean, judges must involved 
themselves in intricate, fact-intensive issues. Essentially, the ADA 
requires judges to micromanage prisons. Judges are not qualified to 
second-guess prison administrators and make these complex, difficult 
decisions. Prisons cannot be run by judicial decree.
  In applying Constitutional rights to prisoners, the Supreme Court has 
tried to get away from micromanagement and has viewed prisoner claims 
deferentially in favor of the expertise of prison officials. It has 
stated that we will not ``substitute our judgment on difficult and 
sensitive matters of institutional administration for the 
determinations of those charged with the formidable task of running a 
prison. This approach ensures the ability of corrections officials to 
anticipate security problems and to adopt innovative solutions to the 
intractable problems of prison administration, and avoids unnecessary 
intrusion of the judiciary into problems particularly ill suited to 
resolution by decree.''
  Take for example a case from the Fourth Circuit, my home circuit, 
from 1995. The Court explained that a morbidly obese inmate presented 
corrections officials ``with a lengthy and ever-increasing list of 
modifications which he insisted were necessary to accommodate his obese 
condition. Thus, he demanded a larger cell, a cell closer to support 
facilities, handrails to assist him in using the toilet, wider 
entrances to his cell and the showers, non-skid matting in the lobby 
area, and alternative outdoor recreational activities to accommodate 
his inability to stand or walk for long periods.'' It is not workable 
for judges to resolve all of these questions.
  It is noteworthy that a primary purpose of the Prison Litigation 
Reform Act was to stop judges from micromanaging prisons and to reduce 
the burdens of prison litigation. As the Chief Justice of the Supreme 
Court recognized last year, the PLRA is having some success. However, 
this most recent Supreme Court decision will hamper that progress.
  Moreover, the ADA delegated to Federal agencies the authority to 
create regulations to implement the law. In response, the Federal 
bureaucracy has created extremely specific and detailed mandates. 
Regarding facilities, they dictate everything from the number of water 
fountains to the flash rates of visual alarms. State and local 
correctional authorities must fall in line behind these regulations. In 
yet another way, we have the Justice Department exercising regulatory 
oversight over our state and local communities.
  Prisons are fundamentally different from other places in society. 
Prisoners are not entitled to all of the rights and privileges of law-
abiding citizens, but they often get them. They have cable television. 
They have access to better gyms and libraries than most Americans. The 
list goes on.
  The public is tired of special privileges for prisoners. Applying the 
ADA to prisons is a giant step in the wrong direction. Prisoners will 
abuse the ADA to get privileges they were previously denied, and the 
reason will be the overreaching hand of the Federal government. We 
should not let this happen.
  Mr. President, the National Government has gone full circle. We have 
gone from asking the states to house Federal prisoners to dictating to 
the states how they house their own prisoners. There must be some end 
to the powers of the Federal government, and to the privileges it 
grants the inmates of this Nation. I propose that we start by passing 
this important legislation.
  I ask unanimous consent that following my remarks a copy of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 33

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

     SECTION 1. EXCLUSION OF PRISONERS.

       (a) Americans With Disabilities Act of 1990.--Section 
     201(2) of the Americans with Disabilities Act of 1990 (42 
     U.S.C. 12131(2)) is amended by adding at the end the 
     following: ``The term shall not include a prisoner in a 
     prison, as such terms are defined in section 3626(g) of title 
     18, United States Code, with respect to services, programs, 
     activities, and treatment (including accommodations) relating 
     to the prison.''.
       (b) Rehabilitation Act of 1973.--Section 7(20) of the 
     Rehabilitation Act of 1973 (29 U.S.C. 705(20)) is amended--
       (1) by redesignating subparagraph (G) as subparagraph (H); 
     and
       (2) by inserting after subparagraph (F) the following:
       ``(G) Prison programs and activities; exclusion of 
     prisoners.--For purposes of section 504, the term `individual 
     with a disability' shall not include a prisoner in a prison, 
     as such terms are defined in section 3626(g) of title 18, 
     United States Code, with respect to programs and activities 
     (including accommodations) relating to the prison.''.
                                 ______
                                 
      By Mr. THURMOND:
  S. 34. A bill to eliminate a requirement for a unanimous verdict in 
criminal trials in Federal courts; to the Committee on the Judiciary.


  LEGISLATION TO ALLOW FEDERAL CRIMINAL CONVICTION ON A 10-2 JURY VOTE

  Mr. THURMOND. Mr. President, I rise today to introduce legislation to 
allow juries to convict criminals on a 10-2 jury vote rather than a 
unanimous vote.

[[Page 428]]

  It is my belief that this change to the Federal Rules of Criminal 
Procedure will bring about increased efficiency and finality in our 
Nation's Federal court system while maintaining the integrity of the 
pursuit of justice.
  This legislation is consistent with the Supreme Court ruling 
concerning unanimity in jury verdicts, specifically in Apodaca v. 
Oregon [406 U.S. 404 (1972)]. In that case, the Supreme Court ruled 
that the Sixth Amendment guarantee of a jury trial does not require 
that the jury's vote be unanimous. The Supreme Court affirmed an Oregon 
law that permitted what I am proposing--a 10-2 conviction in criminal 
prosecutions.



  Mr. President, clearly there is no constitutional mandate for the 
current requirement under the Federal Rules of a jury verdict by a 
unanimous vote. The origins of the unanimity rule are not easy to 
trace, although it may date back to the latter half of the 14th 
century. One theory proffered is that defendants had few other rules to 
ensure a fair trial and a unanimous jury vote for conviction 
compensated for other inadequacies at trial. Of course, today the 
entire trial process is heavily tilted towards the accused with many, 
many safeguards in place to ensure that the defendant receives a fair 
trial.
  It is interesting that a unanimity requirement was considered by our 
Founding Fathers as part of the Sixth Amendment to the Constitution, 
but it was rejected. The proposed language for the Sixth Amendment, as 
introduced by James Madison in the House of Representatives, provided 
for trial by jury as well as a ``requisite of unanimity for 
conviction.'' The language eventually adopted by the Congress and the 
States in the Sixth Amendment provides ``the right to a speedy and 
public trial, by an impartial jury,'' but does not specify any 
requirement on conviction. This was a wise decision.
  It is clear that ``trial by jury in criminal cases is fundamental to 
the American scheme of justice,'' as the Supreme Court has stated. 
Juries are representative of the community and their solemn duty is to 
hear the evidence, deliberate, and decide the case after careful review 
of the facts and the law. As the Supreme Court has noted, a jury can 
responsibly perform this function if allowed to decide the case by a 
margin that is less than unanimous.
  This change for jury verdicts in the Federal courts will reduce the 
likelihood of a single juror corrupting an otherwise thoughtful and 
reasonable deliberation of the evidence. It is not easy to adequately 
screen a juror for potential bias before they are selected to serve on 
a jury. This cannot be done with absolute certainty. We should work to 
prevent one such juror from having the power to prevent justice from 
being served.
  One juror should not have the power to allow a criminal to go free in 
the face of considerable opposition from his peers on the jury. Even if 
a defendant is tried again after one or two jurors hold out against 
conviction, a new trial is very costly and time-consuming. Most 
importantly, a new trial substantially delays justice for the victims 
and society.
  It is important to note that this new rule could also work to the 
advantage of someone on trial. Currently, if there is a hung jury, a 
prosecutor has the power to retry a defendant. This is true even if 
only one juror believed the defendant was guilty. Under this new rule, 
if at least ten jurors concluded that the defendant was not guilty, he 
would be acquitted and could not be forced to endure a new trial. This 
rule has the potential to benefit either side as it brings finality to 
a criminal case.
  In other words, there are cases where a requirement of unanimity 
produced a hung jury where, had there been a non-unanimous allowance, 
the jury would have voted to convict or acquit. Yet, in either 
instance, the defendant is accorded his constitutional right of a 
judgment by his peers. It is my firm belief that this legislation will 
not undermine the pillars of justice or result in the conviction of 
innocent persons.
  Moreover, I believe the American people will strongly support this 
reform to allow a 10-2 decision. This is one way the Congress can help 
fight crime and promote criminal justice.
  Mr. President, I hope the Congress will support this important 
proposal. I ask unanimous consent that the bill be printed in its 
entirety in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 34

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

     SECTION 1. AMENDMENT OF RULE 31 OF THE FEDERAL RULES OF 
                   CRIMINAL PROCEDURE.

       (a) In General.--Rule 31(a) of the Federal Rules of 
     Criminal Procedure is amended by striking ``unanimous'' and 
     inserting ``by five-sixths of the jury''.
       (b) Applicability.--The amendment made by subsection (a) 
     shall apply to cases pending or commenced on or after the 
     date of enactment of this Act.
                                 ______
                                 
      By Mr. GRAMM (for himself and Mr. Miller):
  S. 35. A bill to provide relief to America's working families and to 
promote continued economic growth by returning a portion of the tax 
surplus to those who created it; to the Committee on Finance.


                   Tax cut with a purpose act of 2001

  Sen. GRAMM. Mr. President, I am introducing legislation today with my 
colleague, Senator Miller of Georgia, to provide tax relief for 
America's families by returning a portion of the tax surplus to the 
working men and women who are responsible for creating it.
  Our proposal consists of the core elements of the plan that President 
Bush outlined during his campaign for the Presidency. There are three 
principal components: Lower income tax rates for all Americans, relief 
from the marriage tax penalty, and repeal of the death tax. The bill 
replaces the current tax rate structure with rates of 10, 15, 25, and 
33 percent. Lower income Americans get a larger percentage cut in 
rates, higher income Americans get a smaller reduction, but obviously 
this is a tax cut for taxpayers.
  The next provision of the bill begins the effort to repeal the 
marriage penalty. There is no reason in America that people who meet 
and fall in love should have to pay $1,400 a year in additional taxes 
as the price of getting married. Senator Miller and I are for love and 
marriage, and we don't think they ought to be taxed.
  The final major provision of the bill is repeal of the death tax. A 
death tax is double taxation in which people work their whole lives, 
build up a business or a family farm, and pay taxes on every penny they 
earn. Yet when they die, their children have to sell the business or 
the family farm in order to give the government up to 55 cents out of 
every dollar of its value. This is fundamentally unfair.
  Finally, since our President was elected three things have happened, 
and every one of them argues for this package of tax cuts. No. 1, the 
economy is weaker and investment is falling off. Secondly, our 
estimates of the budget surplus have gone up, not down. And lastly, 
that surplus is being spent at an unprecedented rate.
  We believe that Congress should enact the Bush tax plan, continue to 
pay down the debt, and resist the urge to spend the tax surplus so that 
we can return a portion of it to the working men and women who produced 
it.
  Mr. Miller. Mr. President, I am very pleased to join with Senator 
Gramm as a sponsor of this important piece of legislation, first 
because it is an opportunity to reach across party lines and really 
practice bipartisanship, not just talk about it. But I'm even more 
pleased to be a cosponsor because of the far-reaching consequences of 
this bill.
  Right now, our taxes have never been higher. Right now, our surplus 
has never been greater. To me, it's just common sense you deal with the 
first by using the second.
  Remember that old Elvis Presley song, ``Return to Sender.'' Well, 
that's what we want to do with this overpayment of taxes.
  As some of you know, I've been in politics for a long time, and I 
thought I had seen it all. But when I came to Washington last year I 
was not prepared for the shock of just how matter

[[Page 429]]

of factly Congress ate into the surplus, gobbled it up indiscriminately 
and without hesitation on both sides of the aisle.
  I couldn't believe it and it became clear to me that if we don't send 
this overpayment of taxes back to those who paid it, much of it will be 
frittered away, and I think most Americans have enjoyed as much of that 
as they can stand.
  Some of my colleagues talk of ``targeted'' tax cuts, and I respect 
their opinion, I respect them. But here's how I think about that: who 
are we to pick and choose and cull and select and single out among our 
taxpayers.
  Who are we to play ``eeny, meany, miney, mo,'' with them. All of them 
combined have paid more than it takes to run this government. And all 
of them combined should get a break from this oppressive tax structure 
of ours.
  This plan would make our tax code more progressive by cutting federal 
income taxes for people all across the income spectrum, and the largest 
percentage cuts would go to those Americans who earn the least. Under 
this proposal, six million families will no longer pay any federal 
income taxes at all. That's one out of five families with children.
  Any time I look at a tax cut, I always apply it to the family I grew 
up in: a single parent with two children. Under the current rate, that 
single parent begins paying taxes when she earns $21,300. Under this 
plan, she would not become a taxpayer until her earnings reach $31,300.
  Lower taxes gives Americans a better chance at a better standard of 
living. It can mean the difference between renting or buying a home. 
Today, it can be the difference between being able, or not being able, 
to pay your heating bill.
  No one in America should have to work more than four months out of a 
year to pay the IRS, and in peacetime, the federal government should 
never take more than 33% out of anyone's pay check.
  I also believe this tax cut could help provide some needed insurance 
against a long-lasting economic slow down. But most importantly, and 
why I'm here, is that I agree with President Bush that the taxpayers 
are much better judges of how to spend their own money than we are.
  When I was governor of Georgia, I was proud that in my state we cut 
taxes by more than a billion dollars. As a U.S. Senator, I'm looking 
forward to cutting taxes in this nation by more than a trillion 
dollars.
                                 ______
                                 
      Mr. THURMOND:
  S. 36. A bill to amend title 1, United States Code, to clarify the 
effect and application of legislation; to the Committee on the 
Judiciary.


      AN ACT TO CLARIFY THE APPLICATION AND EFFECT OF LEGISLATION

  Mr. THURMOND. Mr. President, I rise today to introduce a bill to 
clarify the application and effect of legislation which the Congress 
enacts.
  My act is simple and straightforward. It provides that unless future 
legislation expressly states otherwise, new enactments shall be applied 
prospectively and shall not create private rights of action. This will 
significantly reduce unnecessary litigation and court costs, and will 
benefit both the public and our judicial system.
  The purpose of this legislation is to tackle a persistent problem 
that is easy to prevent. When Congress enacts a bill, the legislation 
often does not indicate whether it is to be applied retroactively or 
whether it creates private rights of action. The failure of the 
Congress to address these issues in each piece of legislation results 
in unnecessary confusion and uncertainty. This uncertainty leads to 
lawsuits, thereby contributing to the high cost of litigation and the 
congestion of our courts.
  In the absence of clear action by the Congress on its intent 
regarding these critical threshold questions, the outcome is left up to 
the courts. Whether a law applies to conduct that occurred before the 
effective date of the Act and whether a private person has been granted 
the right to sue on their own behalf in civil court under an Act can be 
critical or even dispositive of a case. Even if the issue is only one 
aspect of a case and it is raised early in a lawsuit, a decision that 
the lawsuit can proceed generally cannot be appealed until the end of 
the case. If the appellate court eventually rules that one of these 
issues should have prevented the trial, the litigants have been put to 
substantial burden and unnecessary expense which could have been 
avoided.
  Currently, courts attempt to determine the intent of the Congress in 
deciding the effect and application of legislation in this regard. 
Thus, courts look first and foremost to the statutory language. If a 
statute expressly provides that it is retroactive or creates a private 
cause of action, that dictate is followed. Further, courts apply a 
presumption that legislation is not retroactive. This is an entirely 
appropriate, longstanding rule because, absent mistake or an emergency, 
fundamental fairness generally dictates that conduct should be assessed 
under the rules that existed at the time the conduct took place. There 
is a similar presumption that the Congress did not intend to create 
rights beyond those that it expressly includes in its legislation.
  If the intent of Congress is not clear from the statute, courts 
generally look to legislative history, statutory structure, and 
possibly other sources of Congressional intent. This is where the 
unnecessary complexity and confusion is created. Sources other than 
statutory language are to varying degrees less reliable in predicting 
Congressional intent. They are much more difficult to interpret and may 
even be contradictory. The more sources for the course to analyze and 
the more vague the standard for review, the more likely courts will 
reach different results. Under current practice, trial courts around 
the country reach conflicting and inconsistent results on these issues, 
as do appellate courts when the issues are appealed.
  The problem of whether legislation is retroactive was dramatically 
illustrated after the passage of the Civil Rights Act of 1991. District 
courts and courts of appeal all over the country were required to 
resolve whether the 1991 Act should be applied retroactively, and the 
issue ultimately was considered by the Supreme Court. However, by the 
time the Court resolved the issue in 1994, well over 100 lower courts 
had ruled on this question and, although most had not found 
retroactivity, their decisions were inconsistent. Countless litigants 
across the country expended substantial resources debating this 
threshold procedural issue.
  All this litigation arose from a statute that contained no language 
providing that it be retroactive. To conclude that the provision of the 
statute in issue in the case was not to be applied retroactively, the 
majority opinion of the Court took 39 pages in the United States 
Reporter to explain why. It undertook a detailed analysis that 
demonstrates the unnecessary complexity of the current standard. It is 
no wonder that some Supreme Court justices argued in this case that a 
court should look only to whether the language of the statute expressly 
provides for retroactivity. That is what I propose. If my law had been 
in effect, the litigation would have been averted, while the outcome 
would have been exactly the same as the Supreme Court decided.
  Under my bill, newly enacted laws are not to be applied retroactively 
and do not create a private right of action, unless the legislation 
expressly provides otherwise. It is important to note that my bill does 
not in any way restrict the Congress on these important issues. The 
Congress may override this presumption by simply stating when it wishes 
legislation to be retroactive or create new private rights of action.
  It is clear that this legislation would save litigants and our 
judicial system millions and millions of dollars by avoiding a great 
deal of uncertainty and litigation. The Administrative Office of the 
Courts has expressed support for this important clarification to the 
law.
  Mr. President, if we are truly concerned about relieving the backlog 
of cases in our courts and reducing the costs of litigation, we should 
help our

[[Page 430]]

judicial system to focus its limited time and resources on resolving 
the merits of disputes, rather than deciding these preliminary matters. 
We hear numerous complaints about overworked judges and crowded 
dockets. This is a simple and straightforward way to do something about 
it. The Congress can help reduce the Federal caseload and help simplify 
the law. We should act on this important reform promptly.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record in its entirety.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 36

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

     SECTION 1. CLARIFICATION OF THE EFFECT AND APPLICATION OF 
                   LEGISLATION.

       (a) In General.--Chapter 1 of title 1, United States Code 
     is amended by adding at the end the following:

     ``Sec. 7. Rules for application and effect of legislation

       ``Any Act of Congress enacted after the effective date of 
     this section--
       ``(1) shall be prospective in application only;
       ``(2) shall not create a private claim or cause of action; 
     and
       ``(3) shall be presumed not to preempt the law of any 
     State,
     unless a provision of the Act expressly specifies 
     otherwise.''.
       (b) Table of Sections.--The table of sections for chapter 1 
     of title 1, United States Code, is amended by adding at the 
     end the following:

``7. Rules for application and effect of legislation.''.
       (c) Effective Date.--The amendments made by this Act shall 
     take effect 180 days after the date of enactment of this Act.
                                 ______
                                 
      By Mr. LUGAR (for himself, Mr. Leahy, Mr. Fitzgerald, Mr. Harkin, 
        Mr. Roberts, Mr. Dodd, Mr. DeWine, Mr. Reid, Mr. Santorum, Mr. 
        Bayh, and Mr. Johnson):
  S. 37. A bill to amend the Internal Revenue Code of 1986 to provide 
for a charitable deduction for contributions of food inventory; to the 
Committee on Finance.


           the good samaritan hunger relief tax incentive act

  Mr. LUGAR. Mr. President, I rise today with Senators Leahy, 
Fitzgerald, Harkin, Roberts, Dodd, DeWine, Reid, Santorum, and Bayh to 
introduce the Good Samaritan Hunger Relief Tax Incentive Act, 
bipartisan legislation aimed at increasing food donations to our 
nation's food banks. Next week, Congressman Tony Hall, who has been a 
leader in Congress in the fight against hunger, will introduce 
companion legislation in the House of Representatives. This bill would 
provide important incentives for farmers, restaurant owners, and 
corporations to donate food to front-line organizations that serve the 
hungry.
  The demand on our nation's food banks, church pantries, soup kitchens 
and shelters continues to rise. According to an August 2000 report on 
Hunger Security by the U.S. Department of Agriculture, 31 million 
Americans (around 10 percent of our citizens) are living on the edge of 
hunger. One segment of our population--families with incomes between 50 
and 130 percent of the poverty level--has experienced an increase in 
the number of households that are food insecure since 1995. This study 
confirms what food bank managers and workers have been telling me--
while many families are moving from welfare to work, these families are 
still vulnerable to hunger and are using food banks to supplement their 
nutritional needs.
  Unfortunately, many food banks cannot meet this increased demand for 
food. A December 1999 study by the U.S. Conference of Mayors found that 
requests for emergency food assistance increased by an average of 18 
percent in American cities over the previous year and that 21 percent 
of emergency food requests could not be met.
  These figures are troubling because of the enormous amount of food 
that goes unused annually. The United States Department of Agriculture 
estimates that up to 96 billion pounds of food goes to waste each year 
in the United States. If a small percentage of this wasted food could 
be redirected to food banks, we could make important strides in our 
fight against hunger.
  In many ways, current law is a hindrance to food donations. The tax 
code provides corporations with a special deduction for donations to 
food banks, but it excludes farmers, ranchers, and restaurant owners 
from the same tax incentive. For many of these businesses, it is more 
cost effective to throw away food than to donate it to charity.
  The Good Samaritan Hunger Relief Tax Incentive Act would address this 
inequity by extending the special deduction to all business taxpayers 
and by increasing it to the fair market value of the donation. The 
hunger relief community believes that these changes will markedly 
increase food donations. One Hoosier food bank, Second Helpings of 
Indianapolis, estimates that this legislation will cause an additional 
400,000 pounds of food to be donated to its coffers.
  This bipartisan legislation, which enjoys the support of Republicans 
and Democrats alike, has been endorsed by a diverse set of 
organizations, including America's Second Harvest Food Banks, the 
Salvation Army, the American Farm Bureau Federation, the National 
Farmers Union, the National Restaurant Association, the Grocery 
Manufacturers of America, At-Sea Processors Association, California 
Emergency Foodlink, Council of Chain Restaurants, National Cattlemen's 
Beef Association, National Fisheries Association, and the National Milk 
Producers Federation.
  Last year, this legislation unanimously passed the Senate as part of 
an agricultural tax amendment offered by Senator Grassley to H.R. 8, 
the Death Tax Elimination Act. Although the measure was ultimately 
stripped from the underlying legislation, the vote indicated strong 
support for this legislation in the Senate.
  I am hopeful that Congress will thoughtfully address the hunger 
problem in the U.S. by passing this bill into law.
                                 ______
                                 
      By Mr. INOUYE:
  S. 38. A bill to amend title 10, United States Code, to permit former 
members of the Armed Forces who have a service-connected disability 
rated as total to travel on military aircraft in the same manner and to 
the same extent as retired members of the Armed Forces are entitled to 
travel on such aircraft; to the Committee on Armed Services.


    Extend travel on military aircraft to disabled military retirees

  Mr. INOUYE. Mr. President today I am reintroducing a bill which is of 
great importance to a group of patriotic Americans. This legislation is 
designed to extend space-available travel privileges on military 
aircraft to those who have been totally disabled in the service of our 
country.
  Currently, retired members of the Armed Forces are permitted to 
travel on a space-available basis on non-scheduled military flights 
within the continental United States, and on scheduled overseas flights 
operated by the Military Airlift Command. My bill would provide the 
same benefits for veterans with 100 percent service-connected 
disabilities.
  We owe these heroic men and women who have given so much to our 
country a debt of gratitude. Of course, we can never repay them for the 
sacrifices they have made on behalf of our nation, but we can surely 
try to make their lives more pleasant and fulfilling. One way in which 
we can help is to extend military travel privileges to these 
distinguished American veterans. I have received numerous letters from 
all over the country attesting to the importance attached to this issue 
by veterans. Therefore, I ask that my colleagues show their concern and 
join me in saying ``thank you'' by supporting this legislation.
  Mr. President, I ask unanimous consent that the text of my bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 38

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

[[Page 431]]



     SECTION 1. TRAVEL ON MILITARY AIRCRAFT OF CERTAIN DISABLED 
                   FORMER MEMBERS OF THE ARMED FORCES.

       (a) In General.--Chapter 53 of title 10, United States 
     Code, is amended by adding after section 1060a the following 
     new section:

     ``Sec. 1060b. Travel on military aircraft: certain disabled 
       former members of the armed forces

       ``The Secretary of Defense shall permit any former member 
     of the armed forces who is entitled to compensation under the 
     laws administered by the Secretary of Veterans Affairs for a 
     service-connected disability rated as total to travel, in the 
     same manner and to the same extent as retired members of the 
     armed forces, on unscheduled military flights within the 
     continental United States and on scheduled overseas flights 
     operated by the Military Airlift Command. The Secretary of 
     Defense shall permit such travel on a space-available 
     basis.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by adding after the item 
     relating to section 1060a the following new item:

``1060b. Travel on military aircraft: certain disabled former members 
              of the armed forces.''.
                                 ______
                                 
      By Mr. STEVENS:
  S. 39. A bill to provide a national medal for public safety officers 
who act with extraordinary valor above and beyond the call of duty, and 
for other purposes; to the Committee on the Judiciary.


                    public safety medal of valor act

  Mr. STEVENS. Mr. President, today I am honored to introduce the 
Public Safety Medal of Valor Act.
  It is a bill intended to enhance recognition of an important segment 
of our public servants.
  These are the men and women who engage in the law enforcement and 
public safety duties that benefit our communities every day.
  I introduced this bill early in the 106th Congress, and the Senate 
passed it unanimously in May 1999.
  The Senate Judiciary Committee deliberated on a similar piece of 
legislation, H.R. 46, and reported a version with amendments. 
Unfortunately, after the Senate passed H.R. 46 in the last days of the 
106th Congress, there was not time for the House to act.
  Today I submit the bill as introduced in the 106th Congress, and hope 
my colleagues will join me again in seeking its passage.
                                 ______
                                 
      By Mrs. HUTCHISON (for herself, Mr. Frist, and Mr. Crapo):
  S. 40. A bill entitled ``The Careers to Classrooms Act of 2001''; to 
the Committee on Health, Education, Labor, and Pensions.


                   careers to classrooms act of 2001

  Mrs. HUTCHISON. Mr. President, I have another bill to introduce. This 
is cosponsored by Senators Frist and Crapo. It is the Careers to 
Classrooms Act of 2001. Once again, this is a bill that has already 
been passed by Congress, but it has never made it into law. I am very 
hopeful that this President will sign a comprehensive reauthorization 
of the Elementary and Secondary Education Act, and included in that I 
hope will be Careers to Classrooms.
  There is no question that many, if not most, of our States are facing 
huge teacher shortages. This is one of the most critical needs in our 
public schools today. It is most pressing in our inner-city and rural 
communities.
  Ironically, the biggest enemy to hiring a sufficient number of 
teachers is our booming economy. A recent college graduate with a 
degree in math might expect to make $25,000 to $35,000 in a starting 
position as a high school math teacher. That same graduate could easily 
make twice that much in the private sector, especially in the red hot 
computer field. We have some issues we have to deal with--increasing 
teacher salaries, increasing teacher benefits--and we know that, but 
there is more we can do.
  What we need in our public school systems in America is more 
creativity. What we want to do with our reauthorization of the 
Elementary and Secondary Education Act is to put more incentives for 
creativity in our public schools.
  I am a total product of public education. I grew up in La Marque, TX, 
a small town of about 15,000 in Galveston County, and attended and 
graduated from its public schools. Then I attended the University of 
Texas and the University of Texas Law School. You will find no bigger 
advocate for public education than this Senator. I owe so much of what 
I am to the teachers who took the time to help me become the best that 
I could be.
  Teachers are the backbone of our schools. You can design a state-of-
the-art, fully computerized school connected to the Internet 24 hours a 
day with every modern textbook and piece of science equipment, but at 
the end of the day, if you do not have quality teachers, all of that 
equipment really does not mean that much.
  Adding to the growth in the population of our public schools is an 
effort in many public school systems to hire more teachers to reduce 
class size. The approach I am putting forth today will ensure that more 
teachers are available, more can be hired, and that they are better 
teachers, qualified teachers, teachers with real world experience and 
knowledge that can be taken into the classroom.
  Careers to Classrooms builds upon a tremendously successful 
Department of Defense program that takes experienced, qualified 
military service men and women and helps them transition into the 
classroom as teachers. That program is known as Troops to Teachers. it 
has placed over 4,000 qualified, certified teachers in our Nation's 
public schools, including over 600 in my home State of Texas.
  The Troops to Teachers Program seeks out and helps place into schools 
members of the military with at least 10 years of military service and 
skills in high-need areas, such as math, science, computers, and 
languages. Typically, these experienced service personnel obtain their 
certification in a year or less utilizing one of the many different 
alternative certification programs now in place in over 40 States.
  My provision essentially builds upon this proven model and extends it 
to the application in the context of civilian professionals and others 
with skills. What we want to do in Careers to Classrooms is take 
individuals with demonstrable skills in high-need areas and give them a 
chance to go into the teaching profession, especially mid-level 
professionals who would like to change careers and go into teaching.
  The program would provide limited stipend assistance for individuals 
enrolled in State alternative certification programs, and those who 
agreed to teach in rural schools, schools with the most pressing 
teacher shortages and schools with the highest percentages of students 
from low-income families, would also get stipends to help them with 
this alternative certification to get them in the classroom faster than 
if they were going through the whole college course and curriculum that 
includes all of the teacher education courses.
  High-need schools would also receive funding assistance to help 
compensate for the added teacher mentoring, training, and other costs 
associated with bringing-in prospective teachers under an alternative 
certification process.
  Our legislation specifies priority disciplines in which we want to 
focus to recruit teachers. In particular, the proposal emphasizes 
sciences, math, computer literacy, and foreign languages. These are 
where our teacher shortages are most acute.
  I particularly thank my colleague from Tennessee, Senator Frist, who 
suggested adding outstanding recent college graduates to be eligible to 
participate in the Careers to Classrooms proposal. Senator Frist 
correctly pointed out that in addition to encouraging midlevel career 
professionals, we want to have these young, top-flight college 
graduates who did not go through their college's education degree 
program but who do have the academic achievement and the mastery of 
these skills to be able to become excellent teachers.
  I also thank Senator Crapo of Idaho who has also been helpful in 
adding the provision that encourages individuals to go into our rural 
areas with this Careers-to-Classrooms-added incentive to become 
teaching professionals.
  Our Nation's parents and teachers do not need more Federal control, 
they do not need more bureaucracy, they do not need more red tape. What 
they

[[Page 432]]

need is to be empowered with greater choices and options to find the 
education path that is best for them. We need to make those options 
available to them, to do so in a way that is new, that is innovative, 
that is flexible. Simply heaping more money on failed systems and 
programs has been exhaustively proven to lead to failure. The policies 
of the past have failed.
  No. What we need to do is work with our new Secretary of Education, 
Rod Paige, who has made creativity the benchmark of his success in the 
public schools in Houston, TX. We need to go forward in a bipartisan 
Congress, with President Bush, to make public education the best 
education in our country.
  Careers to Classrooms will put our qualified teachers in the 
classroom. It will give them the ability to be certified in an 
alternative certification program very quickly so that they will be a 
resource to our young people.
  We want to encourage more people to go into the teaching profession 
because if we do not have good teachers, we are not going to have a 
successful country. We will not have young people able to go into our 
great economy and the opportunities that our economy would offer if 
they do not have the basic skills that are given by good teachers.
  I hope this year Careers to Classrooms will become law. I hope we 
will see more and more of the qualified people in our country decide to 
take up the teaching profession and be mentors and role models and 
teachers to our young people.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Baucus, Mr. Murkowski, Mr. 
        Jeffords, Ms. Snowe, Mr. Kyl, Mr. Rockfeller, Mr. Breaux, Mr. 
        Conrad, Mr. Graham, Mr. Daschle, Mr. Kerry, Mr. Bingaman, Mr. 
        Torricelli, and Mrs. Lincoln):
  S. 41. A bill to amend the Internal Revenue Code of 1986 to 
permanently extend the research credit and to increase the rates of the 
alternative incremental credit; to the Committee on Finance.


          Legislation to Permanently Extend the R&E Tax Credit

  Mr. HATCH. Mr. President, I am very pleased to join with my friend 
Senator Baucus and many of our Finance Committee colleagues today in 
introducing legislation that would permanently extend the research and 
experimentation tax credit.
  Over the past 10 years, our nation has experienced the longest and 
strongest peacetime period of economic expansion in our history. Over 
this past decade, the standard of living for all Americans has 
increased markedly while millions of new jobs have been created. At the 
same time, our federal budget outlook has been transformed from one of 
large and increasing deficits into the indefinite future to one of 
multitrillion dollar surpluses for at least the next ten years.
  Much of the cause of this economic expansion that has so blessed the 
United States is due to a strong surge in our productivity rate. This 
increase in productivity has allowed the economy to continue to grow at 
a rapid pace without the increase in inflation that usually accompanies 
such growth.
  The Congressional Budget Office, Federal Reserve Chairman Alan 
Greenspan, and dozens of leading economists have all heralded the 
increase in our productivity as a key to our economic good times--and 
to their continuance. A major factor of this increase in productivity, 
Mr. President, is spending on research and development. This is what 
our bill today is all about.
  An August 1999 study commissioned by the National Association of 
Manufacturers concluded that as much as two-thirds of productivity 
gains is due to technological advances. These advances, in turn, fuel 
economic growth. The standard model of economic growth argues that one-
third of growth in private-sector output is attributable to advances in 
technology. In the manufacturing sector, as much as two-thirds of 
growth can be attributed to technological advances. Moreover, this 
contribution is expected to increase over the next decade.
  It seems clear to me that if we want to keep our economy strong and 
growing, it is vital that we keep up and even increase these advances 
in technology. How do we do this? The answer is simple. Our nation must 
continue to invest in research and development, both at the public 
level, and especially in the private sector.
  I believe the best way to ensure that private-sector investment in 
research and development continues at the healthy rate needed to fuel 
the productivity gains of the future is to permanently extend the 
current-law research and experimentation credit. This tax provision is 
a proven and a cost-effective incentive to increase private-sector R&D 
spending.
  Studies have shown that the R&E tax credit significantly increases 
research and development expenditures. The marginal effect of one 
dollar of the R&E credit stimulates approximately one dollar of 
additional private research and development spending over the short-run 
and as much as two dollars of extra investment over the long-run.
  Congress has recognized the vital role the R&E credit has played in 
spurring increased research spending by extending the credit ten times 
since its inception in 1981. For most of those years, Congress was 
never able to find the funds to pay for a permanent extension of the 
credit, due to budget constraints. Fortunately, Congress passed a five-
year extension in 1999 that will keep the credit alive until 2004.
  However, Mr. President, permanence is essential to the effectiveness 
of this credit. Research and development projects typically take a 
number of years and may even last longer than a decade. As our business 
leaders plan these projects, they need to know whether or not they can 
count on the R&E tax credit. The continual uncertainty surrounding the 
credit has induced businesses to allocate significantly less to 
research than they otherwise would if they were assured the tax credit 
would be available. This uncertainty undermines the entire purpose of 
the credit and has stifled its full potential for inducing research 
spending. For the government and the American people to maximize the 
return on their investment in U.S.-based research spending, this credit 
must be made permanent.
  In the business community, the development of new products, 
technologies, medicines, and ideas can result in either success or 
failure. Investments carry a risk. The R&E tax credit helps ease the 
cost of incurring these risks. Whereas foreign nations heavily 
subsidize research with public dollars, the United States has typically 
relied less on direct public funds and more on private sector 
incentives. The R&E tax credit has the potential to be an even more 
effective incentive if it were made permanent.
  I am aware that not every company that invests in research and 
development in the U.S. can take advantage of the regular R&E tax 
credit. As the credit's base period recedes and business cycles change, 
the current credit is out of reach for some companies that still incur 
significant research expenditures. To help solve this problem Congress 
enacted the Alternative Incremental Research Credit to help businesses 
that do not qualify for the R&E tax credit. To improve the 
effectiveness of this alternative credit, we have included a proposal 
to slightly increase each of its three incentive levels.
  A permanent extension of this credit may seem costly in terms of lost 
revenue. However, when you consider the value that this investment will 
create for our economy, it is a bargain. In fact, one study estimates 
that a permanent R&E credit would result in our Gross Domestic Product 
increasing by $10 billion after five years and by $31 billion after 20 
years.
  Moreover, making the credit permanent will encourage more companies 
to locate their research activities within the United States. This will 
lead to more jobs and higher wages for U.S. workers. We must recognize 
that international competition is fierce. Many other countries offer 
significant enticements to prompt companies to move research activities 
within their borders. If we fail to ensure at least a level

[[Page 433]]

playing field, many companies will begin to consider moving their 
research activities abroad and we could lose thousands of precious 
high-paying jobs.
  Findings from a study conducted by Coopers & Lybrand show that 
workers in every state will benefit from higher wages if the R&E tax 
credit is made permanent. Payroll increases as a result of gains in 
productivity stemming from the credit have been estimated to exceed $60 
billion over the next 12 years. Furthermore, greater productivity from 
additional R&E will increase overall economic growth in every state in 
the Union.
  My home state of Utah is a good example of how state economies 
benefit from the research tax credit. Utah is home to a large number of 
firms who invest a high percentage of their revenue on research and 
development.
  For example, between Salt Lake City and Provo lies one of the world's 
biggest stretches of software and computer engineering firms. This 
area, which was named ``Software Valley'' by Business Week, is a 
significant example of one of a growing number of thriving high tech 
commercial regions outside California's Silicon Valley. Newsweek 
magazine included Utah among the top ten information technology centers 
in the world. The Utah Information Technologies Association estimates 
that Utah's IT industry consists of more than 2,500 IT vendor 
enterprises and more than 1,000 eBusiness enterprises, employing tens 
of thousands and bringing billions of dollars to Utah's economy.
  In addition, Utah is home to about 700 biotechnology and biomedical 
firms that employ nearly 9,000 workers. Research and development are 
the reasons these companies exist. Not only do these companies need to 
continue conducting a high quality level of research, but this research 
feeds other industries and, ultimately, consumers. Just ask the 
patients who have benefitted from new drugs or therapies.
  In all, Mr. President there are more than 80,000 employees working in 
Utah's thousands of technology based companies. Many other states have 
experienced similar growth in high technology businesses. Research and 
development is the lifeblood of these firms and hundreds of thousands 
like them throughout the nation.
  During the ten times in the past 20 years that Congress has extended 
the R&E credit for a short time, the ostensible reason has been a lack 
of revenue. The excuse we give to constituents is that we didn't have 
the money to extend the bill permanently. Ironically, it costs at least 
as much in terms of lost revenue, in the long run, to enact short-term 
extensions as it does to extend it permanently.
  With the latest projections of the on-budget surplus, for one year, 
for five years, and for ten years, this excuse is gone. There is simply 
no valid reason that this credit should not be extended on a permanent 
basis.
  Moreover, now is the time to extend the provision permanently. By 
making the research credit permanent now, we will send a strong signal 
to the business community that a new era of stronger support for 
research has dawned.
  The timing could not be better because, as I mentioned, many research 
projects, especially those in pharmaceuticals and biotechnology, must 
be planned and budgeted for months and even years in advance. The more 
uncertain the long-term future of the research credit is, the smaller 
the potential of the credit to stimulate increased research. Simply 
knowing of the reliability of a permanent research credit will give a 
boost to the amount of research performed, even before the current 
credit expires in 2004.
  A permanent R&E credit has wide support in both the Senate and the 
House. Last year, this body passed by a vote of 98-1 an amendment that 
would have permanently extended the credit. Unfortunately, all 
amendments were ultimately stripped from the underlying bill. The bill 
we are introducing today is identical to legislation introduced earlier 
this month by Representatives Nancy Johnson and Robert Matsui. The 
identical bill in the 106th Congress was cosponsored by 164 other 
members of that body. Moreover, the permanent extension of the credit 
is a major provision in President Bush's tax cut plan, and was 
supported by both former President Clinton and by Al Gore.
  In conclusion Mr. President, if we fail to make the R&E tax credit 
permanent, we are limiting the potential growth of our economy. How can 
we expect the American economy to hold its lead in the global economic 
race if we allow other countries to take the edge in innovation? Making 
the tax credit permanent will keep American business ahead of the pack. 
It will speed economic growth. New technology resulting from American 
research and development will continue to improve the standard of 
living for every person in the U.S. and also worldwide.
  Simply put, the costs of not making the R&E tax credit permanent are 
far greater than the costs of making it permanent. As we begin the new 
millennium, we cannot afford to let the American economy slow down. Now 
is the time to send a strong message to our companies and to the world 
that America intends to retain its position as the world's foremost 
innovator.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 41

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

     SECTION 1. PERMANENT EXTENSION OF RESEARCH
                   CREDIT.

       (a) In General.--Section 41 of the Internal Revenue Code of 
     1986 (relating to credit for increasing research activities) 
     is amended by striking subsection (h).
       (b) Conforming Amendment.--Paragraph (1) of section 45C(b) 
     of such Code is amended by striking subparagraph (D).
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.

     SEC. 2. INCREASE IN RATES OF ALTERNATIVE INCREMENTAL CREDIT.

       (a) In General.--Subparagraph (A) of section 41(c)(4) of 
     the Internal Revenue Code of 1986 (relating to election of 
     alternative incremental credit) is amended--
       (1) by striking ``2.65 percent'' and inserting ``3 
     percent'',
       (2) by striking ``3.2 percent'' and inserting ``4 
     percent'', and
       (3) by striking ``3.75 percent'' and inserting ``5 
     percent''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

  Mr. BAUCUS. Mr. President, it is with great pleasure that I join with 
my colleague from Utah, Senator Hatch, and my other colleagues on the 
Senate Finance Committee, to introduce this bill, which is so vitally 
important to American businesses competing in the global marketplace. I 
am particularly pleased that this bill includes as original cosponsors 
a majority of members of the Senate Finance Committee. This legislation 
is bipartisan and bicameral. A companion bill was introduced--on the 
very first day of this Congress--in the House of Representatives by 
Congresswoman Nancy Johnson and Congressman Robert Matsui.
  Our nation is the world's undisputed leader in technological 
innovation, a position that would not be possible absent U.S. 
companies' commitment to research and development. Investment in 
research is an investment in our Nation's economic future, and it is 
appropriate that both the public and private sector share the costs 
involved, as we share in the benefits. The credit provided through the 
tax code for research and experimentation expenses provides a modest 
but critical incentive for companies to conduct their research in the 
United States, thus creating high-skilled, high-paying jobs for 
American workers.
  The R&D credit has played a key role in placing the United States 
ahead of its competition in developing and marketing new products. 
Every dollar that the Federal government spends on the R&D tax credit 
is matched by another dollar of spending on research over the short run 
by private companies, and two dollars of spending over the long run. 
Our global competitors are well

[[Page 434]]

aware of the importance of providing incentives for research, and many 
provide more generous tax treatment for research and experimentation 
expenses than does the United States. As a result, Japanese and German 
spending on non-defense R&D as a percentage of GDP has grown, while 
U.S. spending has remained relatively flat since 1985. The R&D credit 
is instrumental in keeping research dollars in the United States and we 
must do all we can to make sure it remains an effective incentive by 
eliminating the on-again, off-again treatment.
  The benefits of the credit, though certainly significant, have been 
limited over the years by the fact that the credit has been temporary. 
In addition to the numerous times that the credit has been allowed to 
lapse only to be extended retroactively, the 1996 extension left a 12-
month gap during which the credit was not available. This unprecedented 
lapse sent a troubling signal to the U.S. companies and universities 
that have come to rely on the government's longstanding commitment to 
the credit. Let me be clear: companies are under-investing in research 
because there has been continued uncertainty about the credit's life. 
Much of the economic gains we enjoy now is the direct result of 
research, technology and innovation undertaken in prior decades. If 
current indicators are accurate in their warning of a slowdown in our 
economy, then now is appropriate time to send a strong signal to our 
research-intensive industries. We must demonstrate our long-term 
commitment to U.S.-based research by finally putting an end to all 
uncertainty and making the R&D credit permanent.
  Much research and development takes years to mature. Companies must 
make their commitment to research projects often five or ten years into 
the future. The more uncertain the future of the credit, the fewer 
additional research projects will be started. If companies evaluating 
research projects cannot rely on the seamless continuation of the 
credit, then they are less likely to invest on research in this country 
and less likely to put money into cutting-edge technological innovation 
that is critical to keeping us in the forefront of global competition.
  Our country is locked in a fierce battle for high-paying 
technological jobs in the global economy. As more nations succeed in 
creating educationally advanced workforces and join the U.S. as high-
technology manufacturing centers, they become more attractive to 
companies trying to penetrate foreign markets. Multinational companies 
sometimes find that moving both manufacturing and basic research 
activities overseas is necessary if they are to remain competitive. The 
uncertainty of the R&D credit factors into their economic calculations, 
and makes keeping these jobs in the U.S. more difficult.
  According to a 1998 study conducted by Coopers & Lybrand, making the 
R&D credit permanent will provide a substantial positive stimulus to 
investment, wage-growth, productivity, and overall economic activity 
for this country. Payroll increases from gains in productivity are 
estimated to total $64 over the period 1998 through 2010. In the year 
2010 alone, the payroll increase is estimated to total nearly $12 
billion.
  Also according to the study, Gross State Product, which is the basic 
measure of economic activity in a state, will rise overall by nearly 
$58 billion between 1998 and 2010 as a result of a permanent credit. 
Nearly three-fifths of this increase nationally is attributable to 
additional value added by industries that generally do not perform R&D 
themselves, but benefit from the R&D done by companies in other 
industries.
  Gains in payroll and in Gross State Product are not limited to states 
regarded as centers for technological innovation. Although such regions 
of the country certainly benefit from the credit, each and every state 
will profit in some measurable way from the credit since all sectors of 
the economy--agriculture, mining, basic manufacturing, and high-tech 
services--benefit from productivity improvements resulting from the 
additional research and development caused by the credit.
  My own state of Montana is an excellent example of this economic 
activity. According to the 1998 study, the total increase in payroll 
due to the R&D credit for the years 1998-2010 is estimated to be just 
over $250 million. Neither of these increases place Montana in the top 
tier of states benefitting from the credit. However, looking beyond 
these numbers, the impact of the credit in Montana is substantial. In 
1995, 12 of every 1,000 private sector workers were employed directly 
by high-tech firms in Montana. Almost 400 establishments provided high-
technology services, at an average wage of $34,500 per year. These jobs 
paid 77 percent more than the average private sector wage in 1995 of 
$19,500 per year. Many of these jobs would never have been created 
without the assistance of the R&D credit. And many more jobs in Montana 
are dependent upon the growth and stability of the high-tech sector. 
Although the cumulative numbers may not be high in comparison with 
other states, the impact of the R&D credit on Montana's economy is 
clear.
  The American Bar Association Section of Taxation, the American 
Institute of Certified Public Accountants Tax Division, and the Tax 
Executives Institute urge making the credit permanent. In their view, 
uncertainty in the tax law breeds complexity. The constant need to 
extend the R&D credit and other Code provisions adds confusion to the 
law and, in many cases, undermines the policy reasons for enacting the 
incentives in the first place. This is so because the provisions are 
intended to encourage particular activities but uncertainty surrounding 
whether the provisions will be extended leaves taxpayers unable to plan 
for those activities. The on-again, off-again nature of these 
provisions, coupled in some cases with retroactive enactment (which 
often necessitates the filing of an amended return), contributes 
mightily to the complexity of the law.
  Senator Hatch and I are not newcomers to this issue. We have jointly 
introduced bills to make the R&D credit permanent in previous 
Congresses only to end up with short-term extensions. Last year, we 
came close. During consideration of the bill to repeal the estate tax 
(H.R. 8) last July, the Senate voted 98 to 1 in favor of making the R&D 
tax credit permanent.
  This year, we hope to be successful. The hard work we have done to 
bring our budget into balance is finally beginning to pay off, and the 
projected budget surpluses gives us an opportunity to think carefully 
about how best to allocate our resources. Making the R&D credit 
permanent is a wise use of budget dollars because of the direct 
positive impact on economic growth and productivity. This is not just a 
corporate issue. The real winners from past research investments have 
been the American people--in higher wage jobs, higher standards of 
living, and better health and lifestyle. This is a use of tax dollars 
that benefits all of us who are working to expand employment, increase 
wages and keep our Nation at the cutting edge of technological 
development. We were gratified to see that a permanent R&D credit was 
included in the tax plan on which President Bush campaigned, and I 
sincerely hope we can work together to finally make this year the year 
we fulfill our commitment to long-term, U.S.-based research.
  I urge my colleagues to support this important piece of legislation.
                                 ______
                                 
      By Mr. INOUYE:
  S. 43. A bill to amend title 10, United States Code, to authorize 
certain disabled former prisoners of war to use Department of Defense 
commissary and exchange stores; to the Committee on Armed Services.


    MILITARY COMMISSARY AND POST EXCHANGE PRIVILEGES FOR FORMER POWS

  Mr. INOUYE. Mr. President, today I am reintroducing legislation to 
enable those former prisoners of war who have been separated honorably 
from their respective services and who have been rated as having a 30 
percent service-connected disability to have the use of both the 
military commissary and post exchange privileges. While I realize it is 
impossible to adequately compensate

[[Page 435]]

one who has endured long periods of incarceration at the hands of our 
nation's enemies, I do feel this gesture is both meaningful and 
important to those concerned. It also serves as a reminder that our 
nation has not forgotten their sacrifices.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 43

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

     SECTION 1. USE OF COMMISSARY AND EXCHANGE STORES BY CERTAIN 
                   DISABLED FORMER PRISONERS OF WAR.

       (a) In General.--Chapter 54 of title 10, United States 
     Code, is amended by inserting after section 1064 the 
     following new section:

     ``Sec. 1064a. Use of commissary and exchange stores by 
       certain disabled former prisoners of war

       ``(a) In General.--Under regulations prescribed by the 
     Secretary of Defense, former prisoners of war described in 
     subsection (b) may use commissary and exchange stores.
       ``(b) Covered Individuals.--Subsection (a) applies to any 
     former prisoner of war who--
       ``(1) separated from active duty in the armed forces under 
     honorable conditions; and
       ``(2) has a service-connected disability rated by the 
     Secretary of Veterans Affairs at 30 percent or more.
       ``(c) Definitions.--In this section:
       ``(1) The term `former prisoner of war' has the meaning 
     given that term in section 101(32) of title 38.
       ``(2) The term `service-connected' has the meaning given 
     that term in section 101(16) of title 38.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1064 the following new item:

``1064a. Use of commissary and exchange stores by certain disabled 
              former prisoners of war.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 44. A bill to amend title 10, United States Code, to increase the 
grade provided for the heads of the nurse corps of the Armed Forces; to 
the Committee on Armed Services.


         U.S. Military Chief Nurse Corps Amendment Act of 2001

  Mr. INOUYE. Mr. President, today I introduce an amendment that would 
change the existing law regarding the designated position and grade for 
the Chief Nurses of the United States Army, the United States Navy, and 
the United States Air Force. Currently, the Chief Nurses of these three 
branches of the military are only one-star general officer grades; this 
law would change the current grade to Major General in the Army and Air 
Force, and Rear Admiral (upper half) in the Navy.
  Our military Chief Nurses have a tremendous responsibility--their 
scope of duties include peacetime and wartime health care doctrine, and 
standards and policy for all nursing personnel within their respective 
branches. They are responsible for thousands of Army, Navy, and Air 
Force officer and enlisted nursing personnel in the active, reserve, 
and guard components of the military. This level of responsibility 
certainly supports the need to change the grade for the Chief Nurses, 
which would ensure that they have an appropriate voice in Defense 
Health Program executive management.
  Organizations are best served when the leadership is composed of a 
mix of specialties--of equal rank--bring their unique talents to the 
policy setting and decision-making process. I believe it is time to 
ensure that military health care organizations utilize the expertise 
and unique contributions of the military Chief Nurses.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                  S. 44

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

     SECTION 1. INCREASED GRADE FOR HEADS OF NURSE CORPS.

       (a) Army.--Section 3069(b) of title 10, United States Code, 
     is amended by striking ``brigadier general'' in the second 
     sentence and inserting ``major general''.
       (b) Navy.--The first sentence of section 5150(c) of such 
     title is amended--
       (1) by inserting ``rear admiral (upper half) in the case of 
     an officer in the Nurse Corps or'' after ``for promotion to 
     the grade of''; and
       (2) by inserting ``in the case of an officer in the Medical 
     Service Corps'' after ``rear admiral (lower half)''.
       (c) Air Force.--Section 8069(b) of such title is amended by 
     striking ``brigadier general'' in the second sentence and 
     inserting ``major general''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 45. A bill to amend title 5, United States Code, to require the 
issuance of a prisoner-of-war medal to civilian employees of the 
Federal Government who are forcibly detailed or interred by an enemy 
government or a hostile force under wartime conditions; to the 
Committee on Governmental Affairs.


                         Prisoner of War Medal

  Mr. INOUYE. Mr. President, all too often we find that our nation's 
civilian employees of our federal government who have been forcibly 
detained or interred by a hostile government do not receive the 
recognition they deserve. My bill would correct this inequity and 
provide a prisoner of war medal for such citizens.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 45

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

     SECTION 1. PRISONER-OF-WAR MEDAL FOR CIVILIAN EMPLOYEES OF 
                   THE FEDERAL GOVERNMENT.

       (a) Authority To Issue Prisoner-of-War Medal.--(1) Subpart 
     A of part III of title 5, United States Code, is amended by 
     inserting after chapter 23 the following new chapter:

                   ``CHAPTER 25--MISCELLANEOUS AWARDS

``Sec.
``2501. Prisoner-of-war medal: issue.

     ``Sec. 2501. Prisoner-of-war medal: issue

       ``(a) The President shall issue a prisoner-of-war medal to 
     any person who, while serving in any capacity as an officer 
     or employee of the Federal Government, was forcibly detained 
     or interned, not as a result of the willful misconduct of 
     such person--
       ``(1) by an enemy government or its agents, or a hostile 
     force, during a period of war; or
       ``(2) by a foreign government or its agents, or a hostile 
     force, during a period other than a period of war in which 
     such person was held under circumstances that the President 
     finds to have been comparable to the circumstances under 
     which members of the armed forces have generally been 
     forcibly detained or interned by enemy governments during 
     periods of war.
       ``(b) The prisoner-of-war medal shall be of appropriate 
     design, with ribbons and appurtenances.
       ``(c) Not more than one prisoner-of-war medal may be issued 
     to a person under this section or section 1128 of title 10. 
     However, for each succeeding service that would otherwise 
     justify the issuance of such a medal, the President (in the 
     case of service referred to in subsection (a) of this 
     section) or the Secretary concerned (in the case of service 
     referred to in section 1128(a) of title 10) may issue a 
     suitable device to be worn as determined by the President or 
     the Secretary, as the case may be.
       ``(d) For a person to be eligible for issuance of a 
     prisoner-of-war medal, the conduct of the person must have 
     been honorable for the period of captivity that serves as the 
     basis for the issuance.
       ``(e) If a person dies before the issuance of a prisoner-
     of-war medal to which he is entitled, the medal may be issued 
     to the person's representative, as designated by the 
     President.
       ``(f) Under regulations to be prescribed by the President, 
     a prisoner-of-war medal that is lost, destroyed, or rendered 
     unfit for use without fault or neglect on the part of the 
     person to whom it was issued may be replaced without charge.
       ``(g) In this section, the term `period of war' has the 
     meaning given that term in section 101(11) of title 38.''.
       (2) The table of chapters at the beginning of part III of 
     such title is amended by inserting after the item relating to 
     chapter 23 the following new item:

``25. Miscellaneous Awards..................................2501''.....

       (b) Applicability.--Section 2501 of title 5, United States 
     Code, as added by subsection (a), applies with respect to any 
     person who, after April 5, 1917, is forcibly detained or 
     interned as described in subsection (a) of that section.
                                 ______
                                 
      By Mr. INOUYE:
  S. 46. A bill to amend chapter 81 of title 5, United States Code, to 
authorize the use of clinical social workers to

[[Page 436]]

conduct evaluations to determine work-related emotional and mental 
illnesses; to the Committee on Governmental Affairs.


            clinical social workers' recognition act of 2001

  Mr. INOUYE. Mr. President, today I rise to introduce the Clinical 
Social Workers' Recognition Act of 2001 to correct a continuing problem 
in the Federal Employees Compensation Act. This bill will also provide 
clinical social workers the recognition they deserve as independent 
providers of quality mental health care services.
  Clinical social workers are authorized to independently diagnose and 
treat mental illnesses through public and private health insurance 
plans across the nation. However, Title V, United States Code, does not 
permit the use of mental health evaluations conducted by clinical 
social workers for use as evidence in determining workers' compensation 
claims brought by federal employees. The bill I am introducing corrects 
this problem.
  It is a sad irony that federal employees may select a clinical social 
worker through their health plans to provide mental health services, 
but may not go to this professional for workers' compensation 
evaluations. The failure to recognize the validity of evaluations 
provided by clinical social workers unnecessarily limits federal 
employees' selection of a provider to conduct the workers' compensation 
mental health evaluations. Lack of this recognition may well impose an 
undue burden on federal employees where clinical social workers are the 
only available providers of mental health care.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 46

       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 ``Clinical Social Workers' 
     Recognition Act of 2001''.

     SEC. 2. EXAMINATIONS BY CLINICAL SOCIAL WORKERS FOR FEDERAL 
                   WORKER COMPENSATION CLAIMS.

       Section 8101 of title 5, United States Code, is amended--
       (1) in paragraph (2) by striking ``and osteopathic 
     practitioners'' and inserting ``osteopathic practitioners, 
     and clinical social workers''; and
       (2) in paragraph (3) by striking ``osteopathic 
     practitioners'' and inserting ``osteopathic practitioners, 
     clinical social workers,''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 47. A bill to amend the Internal Revenue Code of 1986 to exempt 
certain helicopter uses from ticket taxes on transportation by air; to 
the Committee on Finance.


               Airport and Airway Trust Fund Legislation

  Mr. INOUYE. Mr. President, I rise to introduce legislation that would 
exempt from the Airport and Airway Trust Fund excise taxes air 
transportation by helicopters of individuals and cargo for the purpose 
of conducting removal and environmental restoration activities relating 
to unexploded ordnance on the island of Kahoolawe.
  The Kahoolawe Island Unexploded Ordnance Clearance and Environmental 
Restoration Project is authorized under Title X of the Fiscal Year 1994 
Department of Defense Appropriations Act. The island of Kahoolawe is 
uninhabited, and it served as a bombing range for the Department of 
Defense until 1990. The Department of Defense is currently in the 
process of cleaning up and restoring Kahoolawe for its eventual return 
to the State of Hawaii by 2003.
  The Airport and Airway Trust Fund excise taxes help support our 
nation's air traffic systems and airport infrastructures. However, 
there are no airports or landing zones on Kahoolawe that receive 
benefits from the Trust Fund. In addition, the taxes place an undue 
burden on the air transportation services provided to the Kahoolawe 
Clearance Project. Compared to a normal airline whose aircraft make 
fewer trips per day over much longer distances, the services provided 
to the project are very frequent, with many trips over very short 
distances. I urge my colleagues to support this measure.
  Mr. President, I ask unanimous consent that the full text of my bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 47

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

     SECTION 1. EXEMPTION OF CERTAIN HELICOPTER USES FROM TAXES ON 
                   TRANSPORTATION BY AIR.

       (a) In General.--Section 4261 of the Internal Revenue Code 
     of 1986 (relating to imposition of tax) is amended by 
     redesignating subsection (i) as subsection (j) and by 
     inserting after subsection (h) the following new subsection:
       ``(i) Additional Exemption for Certain Helicopter Uses.--No 
     tax shall be imposed under this section or section 4271 on 
     air transportation by helicopter for the purpose of 
     transporting individuals and cargo to and from sites for the 
     purpose of conducting removal and environmental restoration 
     activities relating to unexploded ordnance.''.
       (b) Conforming Amendment.--Section 4041(l) of the Internal 
     Revenue Code of 1986 is amended by striking ``(f) or (g)'' 
     and inserting ``(f), (g), or (i)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to transportation beginning after June 30, 1997, 
     and before August 1, 2005.
                                 ______
                                 
      By Mr. INOUYE:
  S. 48. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief for the conversion of cooperative housing corporations into 
condominiums; to the Committee on Finance.


tax relief for the conversion of cooperative housing corporations into 
                              condominiums

  Mr. INOUYE. Mr. President, today I rise to introduce legislation that 
would amend the Internal Revenue Code of 1986 to allow Cooperative 
Housing Corporations (Co-ops) to convert to condominium forms of 
ownership without any immediate tax consequences.
  Under current law, a conversion from cooperative shareholding to 
condominium ownership is taxable at a corporate level as well as an 
individual level. The conversion is treated as a corporate liquidation, 
and therefore taxed accordingly. In addition, a capital gains tax is 
levied on any increase between the owner's basis in the co-op share 
pre-conversion and the market value of the condominium conversion 
because the owner is being taxed on a transaction that is nothing more 
than a change in the form of ownership. While the Internal Revenue 
Service concedes that there are no discernible advantages to society 
from the cooperative form of ownership, it does not view federal tax 
statutes as having the flexibility to allow co-ops to reorganize freely 
as condominiums.
  In cooperative housing, real property ownership is vested in a 
corporation, with shares of stock for each apartment unit, that are 
sold to buyers. The corporation then issues a proprietary lease 
entitling the owner of the stock to the use of the unit in perpetuity. 
Because the investment is in the form of a share of stock, investors 
sometimes lose their entire investment as a result of debt incurred by 
the corporation in construction and development. In addition, due to 
the structure of a cooperative housing corporation, a prospective 
purchaser of shares in the corporation from an existing tenant-
stockholder has difficulty obtaining a mortgage financing for the 
purchase. Furthermore, tenant-stockholders of cooperative housing also 
encounter difficulties in securing bank loans for the full value of 
their investment.
  As a result, owners of cooperative housing are increasingly looking 
toward conversion to condominium ownership regimes. Condominium 
ownership permits each owner of a unit to directly own the unit itself, 
eliminating the cooperative housing dilemmas of corporate debt that 
supersedes the investment of cooperative housing share owners, and 
other financial concerns.
  The legislation I introduce today will remove the penalty of double 
taxation of the conversion from the cooperative housing to condominium 
ownership, and will greatly benefit co-op owners across the nation. I 
urge my colleagues to consider and support this measure.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.

[[Page 437]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 48

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

     SECTION 1. NONRECOGNITION OF GAIN OR LOSS ON DISTRIBUTIONS BY 
                   COOPERATIVE HOUSING CORPORATIONS.

       (a) In General.--Section 216(e) of the Internal Revenue 
     Code of 1986 (relating to distributions by cooperative 
     housing corporations) is amended to read as follows:
       ``(e) Distributions by Cooperative Housing Corporations.--
       ``(1) In general.--Except as provided in regulations--
       ``(A) no gain or loss shall be recognized to a cooperative 
     housing corporation on the distribution by such corporation 
     of a dwelling unit to a stockholder in such corporation if 
     such distribution is in exchange for the stockholder's stock 
     in such corporation, and
       ``(B) no gain or loss shall be recognized to a stockholder 
     of such corporation on the transfer of such stockholder's 
     stock in an exchange described in subparagraph (A).
       ``(2) Basis.--The basis of a dwelling unit acquired in a 
     distribution to which paragraph (1) applies shall be the same 
     as the basis of the stock in the cooperative housing 
     corporation for which it is exchanged, decreased in the 
     amount of any money received by the taxpayer in such 
     exchange.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions after the date of the enactment 
     of this Act.
                                 ______
                                 
      By Mr. STEVENS:
  S. 49. A bill to amend the wetlands regulatory program under the 
Federal Water Pollution Control Act to provide credit for the low 
wetlands loss rate in Alaska and recognize the significant extent of 
wetlands conservation in Alaska, to protect Alaskan property owners, 
and to ease the burden on overly regulated Alaskan cities, boroughs, 
municipalities, and villages; to the Committee on Environment and 
Public Works.


                    Alaska wetlands conservation act

  Mr. STEVENS. Mr. President, I am proud to introduce a piece of 
legislation important to my State, the ``Alaska Wetlands Conservation 
Act.''
  The legislation I submit today is identical to that introduced in the 
106th Congress, except for a minor addition relative to silviculture. 
The new language simply clarifies the existing exemption for normal 
silviculture activities as applied to lands owned by Alaska Native 
corporations established pursuant to the Alaska Native Claims 
Settlement Act (``ANCSA'').
  Congress in enacting the ANCSA intended and expected that Native 
timber holdings would be subject to harvesting. In fact, most Native 
timber lands are former national forest lands that, at the time of the 
enactment of ANCSA in 1971, were part of an ``established'' or 
``ongoing'' silviculture program for that forest.
  I hope my colleagues will support my State and its Native peoples as 
we pursue this legislation.
                                 ______
                                 
      By Mr. INOUYE:
  S. 51. A bill to amend title XVIII of the Social Security Act to 
remove the restriction that a clinical psychologist or clinical social 
worker provide services in a comprehensive outpatient rehabilitation 
facility to a patient only under care of a physician; to the Committee 
on Finance.


  autonomous functioning of clinical psychologists and social workers 
                             under medicare

  Mr. INOUYE. Mr. President, today, I rise to introduce legislation to 
authorize the autonomous functioning of clinical psychologists and 
clinical social workers within the Medicare comprehensive outpatient 
rehabilitation facility program.
  In my judgment, it is unfortunate that Medicare requires clinical 
supervision of the services provided by certain health professionals 
and does not allow them to function to the full extent of their state 
practice licenses. Those who need the services of outpatient 
rehabilitation facilities should have access to a wide range of social 
and behavioral science expertise. Clinical psychologists and clinical 
social workers are recognized as independent providers of mental health 
care services under the Federal Employee Health Benefits Program, the 
Civilian Health and Medical Program of the Uniformed Services, the 
Medicare (Part B) Program, and numerous private insurance plans. This 
legislation will ensure that these qualified professionals achieve the 
same recognition under Medicare comprehensive outpatient rehabilitation 
facility program.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 51

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

     SECTION 1. REMOVAL OF RESTRICTION THAT A CLINICAL 
                   PSYCHOLOGIST OR CLINICAL SOCIAL WORKER PROVIDE 
                   SERVICES IN A COMPREHENSIVE OUTPATIENT 
                   REHABILITATION FACILITY TO A PATIENT ONLY UNDER 
                   THE CARE OF A PHYSICIAN.

       (a) In General.--Section 1861(cc)(2)(E) of the Social 
     Security Act (42 U.S.C. 1395x(cc)(2)(E)) is amended by 
     striking ``physician'' and inserting ``physician, except that 
     a patient receiving qualified psychologist services (as 
     defined in subsection (ii)) may be under the care of a 
     clinical psychologist with respect to such services to the 
     extent permitted under State law and except that a patient 
     receiving clinical social worker services (as defined in 
     subsection (hh)(2)) may be under the care of a clinical 
     social worker with respect to such services to the extent 
     permitted under State law''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to services provided on or after January 1, 2002.
                                 ______
                                 
      By Mr. INOUYE:
  S. 52. A bill to amend title XVIII of the Social Security Act to 
provide improved reimbursement for clinical social worker services 
under the Medicare Program; to the Committee on Finance.


                   Clinical Social Worker Act of 2001

  Mr. INOUYE. Mr. President, today I am introducing legislation to 
amend Title XVIII of the Social Security Act to correct discrepancies 
in the reimbursement of clinical social workers covered through 
Medicare, Part B. The three proposed changes contained in this 
legislation clarify the current payment process for clinical social 
workers and establish a reimbursement methodology for the profession 
that is similar to other health care professionals reimbursed through 
the Medicare program.
  First, this legislation sets payment for clinical social worker 
services according to a fee schedule established by the Secretary. 
Second, it explicitly states that services and supplies furnished by a 
clinical social worker are a covered Medicare expense, just as these 
services are covered for other mental health professionals in Medicare. 
Third, the bill allows clinical social workers to be reimbursed for 
services provided to a client who is hospitalized.
  Clinical social workers are valued members of our health care 
provider network. They are legally regulated in every state of the 
nation and are recognized as independent providers of mental health 
care throughout the health care system. I believe it is time to correct 
the disparate reimbursement treatment of this profession under 
Medicare.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.

                                 S. 52

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

     SECTION 1. IMPROVED REIMBURSEMENT FOR CLINICAL SOCIAL WORKER 
                   SERVICES UNDER MEDICARE.

       (a) In General.--Section 1833(a)(1)(F)(ii) of the Social 
     Security Act (42 U.S.C. 1395l(a)(1)(F)(ii)) is amended to 
     read as follows: ``(ii) the amount determined by a fee 
     schedule established by the Secretary,''.
       (b) Definition of Clinical Social Worker Services 
     Expanded.--Section 1861(hh)(2) of the Social Security Act (42 
     U.S.C. 1395x(hh)(2)) is amended by striking ``services 
     performed by a clinical social worker (as defined in 
     paragraph (1))'' and inserting ``such services and such 
     services and supplies furnished as an incident to such 
     services performed by a clinical social worker (as defined in 
     paragraph (1))''.
       (c) Clinical Social Worker Services Not To Be Included in 
     Inpatient Hospital Services.--Section 1861(b)(4) of the 
     Social Security Act (42 U.S.C. 1395x(b)(4)) is amended by 
     striking ``and services'' and inserting ``clinical social 
     worker services, and services''.
       (d) Treatment of Services Furnished in Inpatient Setting.--
     Section 1832(a)(2)(B)(iii)

[[Page 438]]

     of the Social Security Act (42 U.S.C. 1395k(a)(2)(B)(iii)) is 
     amended by striking ``and services'' and inserting ``clinical 
     social worker services, and services''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to payments made for clinical social worker 
     services furnished on or after January 1, 2002.
                                 ______
                                 
      By Mr. INOUYE:
  S. 53. A bill to amend title XIX of the Social Security Act to 
provide for coverage of services provided by nursing school clinics 
under State Medicaid programs; to the Committee on Finance.


                   Nursing School Clinics Act of 2001

  Mr. INOUYE. Mr. President, I rise today to introduce the Nursing 
School Clinics Act of 2001. This measure builds on our concerted 
efforts to provide access to quality health care for all Americans by 
offering grants and incentives for nursing schools to establish primary 
care clinics in underserved areas where additional medical services are 
most needed. In addition, this measure provides the opportunity for 
nursing schools to enhance the scope of student training and education 
by providing firsthand clinical experience in primary care facilities.
  Primary care clinics administered by nursing schools are university 
or nonprofit entity primary care centers developed mainly in 
collaboration with university schools of nursing and the communities 
they serve. These centers are staffed by faculty and staff who are 
nurse practitioners and public health nurses. Students supplement 
patient care while receiving preceptorships provided by college of 
nursing faculty and primary care physicians, often associated with 
academic institutions, who serve as collaborators with nurse 
practitioners. To date, the comprehensive models of care provided by 
nursing clinics have yielded excellent results, including significantly 
fewer emergency room visits, fewer hospital inpatient days, and less 
use of specialists, as compared to conventional primary health care.
  This bill reinforces the principle of combining health care delivery 
in underserved areas with education of advanced practice nurses. To 
accomplish these objectives, Title XIX of the Social Security Act would 
be amended to designate that the services provided in these nursing 
school clinics are reimbursable under Medicaid. The combination of 
grants and the provision of Medicaid reimbursement furnishes the 
incentives and operational resources to establish the clinics.
  In order to meet the increasing challenges of bringing cost-effective 
and quality health care to all Americans, we must consider and debate 
various proposals, both large and small. Most importantly, we must 
approach the issue of health care with creativity and determination, 
ensuring that all reasonable avenues are pursued. Nurses have always 
been an integral part of health care delivery. The Nursing School 
Clinics Act of 2001 recognizes the central role they can perform as 
care givers to the medically underserved.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record as follows:

                                 S. 53

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

     SECTION 1. MEDICAID COVERAGE OF SERVICES PROVIDED BY NURSING 
                   SCHOOL CLINICS.

       (a) In General.--Section 1905(a) of the Social Security Act 
     (42 U.S.C. 1396d(a)) is amended--
       (1) in paragraph (26), by striking ``and'' at the end;
       (2) by redesignating paragraph (27) as paragraph (28); and
       (3) by inserting after paragraph (26), the following new 
     paragraph:
       ``(27) nursing school clinic services (as defined in 
     subsection (x)) furnished by or under the supervision of a 
     nurse practitioner or a clinical nurse specialist (as defined 
     in section 1861(aa)(5)), whether or not the nurse 
     practitioner or clinical nurse specialist is under the 
     supervision of, or associated with, a physician or other 
     health care provider; and''.
       (b) Nursing School Clinic Services Defined.--Section 1905 
     of the Social Security Act (42 U.S.C. 1396d) is amended by 
     adding at the end the following new subsection:
       ``(x) The term `nursing school clinic services' means 
     services provided by a health care facility operated by an 
     accredited school of nursing which provides primary care, 
     long-term care, mental health counseling, home health 
     counseling, home health care, or other health care services 
     which are within the scope of practice of a registered 
     nurse.''.
       (c) Conforming Amendment.--Section 1902(a)(10)(C)(iv) of 
     the Social Security Act (42 U.S.C. 1396a(a)(10)(C)(iv)) is 
     amended by inserting ``and (27)'' after ``(24)''.
       (d) Effective Date.--The amendments made by this section 
     shall be effective with respect to payments made under a 
     State plan under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) for calendar quarters commencing with 
     the first calendar quarter beginning after the date of 
     enactment of this Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 58. A bill to recognize the organization known as the National 
Academies of Practice; to the Committee on the Judiciary.


         National Academies of Practice Recognition Act of 2001

  Mr. INOUYE. Mr. President, today I am introducing legislation that 
would provide a federal charter for the National Academies of Practice. 
This organization represents outstanding medical professionals who have 
made significant contributions to the practice of applied psychology, 
medicine, dentistry, nursing, optometry, podiatry, social work, and 
veterinary medicine. When fully established, each of the nine academies 
will possess 100 distinguished practitioners selected by their peers. 
This umbrella organization will be able to provide the Congress of the 
United States and the executive branch with considerable health policy 
expertise, especially from the perspective of those individuals who are 
in the forefront of actually providing health care.
  As we continue to grapple with the many complex issues surrounding 
the delivery of health care services, it is clearly in our best 
interest to ensure that the Congress has direct and immediate access to 
the recommendations of an interdisciplinary body of health care 
practitioners.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 58

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

     SECTION 1. CHARTER.

       The National Academies of Practice organized and 
     incorporated under the laws of the District of Columbia, is 
     hereby recognized as such and is granted a Federal charter.

     SEC. 2. CORPORATE POWERS.

       The National Academies of Practice (referred to in this Act 
     as the ``corporation'') shall have only those powers granted 
     to it through its bylaws and articles of incorporation filed 
     in the State in which it is incorporated and subject to the 
     laws of such State.

     SEC. 3. PURPOSES OF CORPORATION.

       The purposes of the corporation shall be to honor persons 
     who have made significant contributions to the practice of 
     applied psychology, dentistry, medicine, nursing, optometry, 
     osteopathy, podiatry, social work, veterinary medicine, and 
     other health care professions, and to improve the practices 
     in such professions by disseminating information about new 
     techniques and procedures.

     SEC. 4. SERVICE OF PROCESS.

       With respect to service of process, the corporation shall 
     comply with the laws of the State in which it is incorporated 
     and those States in which it carries on its activities in 
     furtherance of its corporate purposes.

     SEC. 5. MEMBERSHIP.

       Eligibility for membership in the corporation and the 
     rights and privileges of members shall be as provided in the 
     bylaws of the corporation.

     SEC. 6. BOARD OF DIRECTORS; COMPOSITION; RESPONSIBILITIES.

       The composition and the responsibilities of the board of 
     directors of the corporation shall be as provided in the 
     articles of incorporation of the corporation and in 
     conformity with the laws of the State in which it is 
     incorporated.

     SEC. 7. OFFICERS OF THE CORPORATION.

       The officers of the corporation and the election of such 
     officers shall be as provided in the articles of 
     incorporation of the corporation and in conformity with the 
     laws of the State in which it is incorporated.

     SEC. 8. RESTRICTIONS.

       (a) Use of Income and Assets.--No part of the income or 
     assets of the corporation shall

[[Page 439]]

     inure to any member, officer, or director of the corporation 
     or be distributed to any such person during the life of this 
     charter. Nothing in this subsection shall be construed to 
     prevent the payment of reasonable compensation to the 
     officers of the corporation or reimbursement for actual 
     necessary expenses in amounts approved by the board of 
     directors.
       (b) Loans.--The corporation shall not make any loan to any 
     officer, director, or employee of the corporation.
       (c) Political Activity.--The corporation, any officer, or 
     any director of the corporation, acting as such officer or 
     director, shall not contribute to, support, or otherwise 
     participate in any political activity or in any manner 
     attempt to influence legislation.
       (d) Issuance of Stock and Payment of Dividends.--The 
     corporation shall have no power to issue any shares of stock 
     nor to declare or pay any dividends.
       (e) Claims of Federal Approval.--The corporation shall not 
     claim congressional approval or Federal Government authority 
     for any of its activities.

     SEC. 9. LIABILITY.

       The corporation shall be liable for the acts of its 
     officers and agents when acting within the scope of their 
     authority.

     SEC. 10. MAINTENANCE AND INSPECTION OF BOOKS AND RECORDS.

       (a) Books and Records of Account.--The corporation shall 
     keep correct and complete books and records of account and 
     shall keep minutes of any proceeding of the corporation 
     involving any of its members, the board of directors, or any 
     committee having authority under the board of directors.
       (b) Names and Addresses of Members.--The corporation shall 
     keep at its principal office a record of the names and 
     addresses of all members having the right to vote in any 
     proceeding of the corporation.
       (c) Right To Inspect Books and Records.--All books and 
     records of the corporation may be inspected by any member 
     having the right to vote, or by any agent or attorney of such 
     member, for any proper purpose, at any reasonable time.
       (d) Application of State Law.--Nothing in this section 
     shall be construed to contravene any applicable State law.

     SEC. 11. ANNUAL REPORT.

       The corporation shall report annually to the Congress 
     concerning the activities of the corporation during the 
     preceding fiscal year. The report shall not be printed as a 
     public document.

     SEC. 12. RESERVATION OF RIGHT TO AMEND OR REPEAL CHARTER.

       The right to alter, amend, or repeal this Act is expressly 
     reserved to the Congress.

     SEC. 13. DEFINITION.

       In this Act, the term ``State'' includes the District of 
     Columbia, the Commonwealth of Puerto Rico, and the 
     territories and possessions of the United States.

     SEC. 14. TAX-EXEMPT STATUS.

       The corporation shall maintain its status as an 
     organization exempt from taxation as provided in the Internal 
     Revenue Code of 1986 or any corresponding similar provision.

     SEC. 15. TERMINATION.

       If the corporation fails to comply with any of the 
     restrictions or provisions of this Act the charter granted by 
     this Act shall terminate.
                                 ______
                                 
      By Mr. INOUYE:
  S. 59. A bill to allow the psychiatric or psychological examinations 
required under chapter 313 of title 18, United States Code, relating to 
offenders with mental disease or defect, to be conducted by a clinical 
social worker; to the Committee on the Judiciary.


         Psychiatric and Psychological Examinations Act of 2001

  Mr. INOUYE. Mr. President, today I introduce legislation to amend 
Title 18 of the United States Code to allow our nation's clinical 
social workers to use their mental health expertise on behalf of the 
federal judiciary by conducting psychological and psychiatric exams.
  I feel that the time has come to allow our nation's judicial system 
to have access to a wide range of behavioral science and mental health 
expertise. I am confident that the enactment of this legislation would 
be very much in our nation's best interest.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:


                                 S. 59

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

     SECTION 1. EXAMINATIONS BY CLINICAL SOCIAL WORKERS.

       Section 4247(b) of title 18, United States Code, is 
     amended, in the first sentence, by striking ``psychiatrist or 
     psychologist'' and inserting ``psychiatrist, psychologist, or 
     clinical social worker''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 61. A bill to restore the traditional day of observance of 
Memorial Day; to the Committee on the Judiciary.


                 Restoration of Memorial Day to May 30

  Mr. INOUYE. Mr. President, in our effort to accommodate many 
Americans by making Memorial Day the last Monday in May, we have lost 
sight of the significance of this day to our nation. My bill would 
restore Memorial Day to May 30 and authorize our flag to fly at half 
mast on that day. In addition, this legislation would authorize the 
President to issue a proclamation designating Memorial Day and Veterans 
Day as days for prayer and ceremonies. This legislation would help 
restore the recognition our veterans deserve for the sacrifices they 
have made on behalf of our nation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 61

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

     SECTION 1. RESTORATION OF TRADITIONAL DAY OF OBSERVANCE OF 
                   MEMORIAL DAY.

       (a) Designation of Legal Public Holiday.--Section 6103(a) 
     of title 5, United States Code, is amended in the item 
     relating to Memorial Day by striking ``the last Monday in 
     May.'' and inserting ``May 30.''.
       (b) Observances and Ceremonies.--Section 116 of title 36, 
     United States Code, is amended--
       (1) in subsection (a), by striking ``The last Monday in 
     May'' and inserting ``May 30''; and
       (2) in subsection (b)--
       (A) by striking ``and'' at the end of paragraph (3);
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) by inserting after paragraph (3) the following new 
     paragraph (4):
       ``(4) calling on the people of the United States to observe 
     Memorial Day as a day of ceremonies for showing respect for 
     American veterans of wars and other military conflicts; 
     and''.
       (c) Display of Flag.--Section 6(d) of title 4, United 
     States Code, is amended by striking ``the last Monday in 
     May;'' and inserting ``May 30;''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 62. A bill to amend title 38, United States Code, to revise 
certain provisions relating to the appointment of professional 
psychologists in the Veterans Health Administration, and for other 
purposes; to the Committee on Veterans' Affairs.


              veteran's health administration act of 2001

  Mr. INOUYE. Mr. President, I introduce legislation today to amend 
Chapter 74 of Title 38, United States Code, to revise certain 
provisions relating to the appointment of clinical and professional 
psychologists in the Veterans Health Administration (VHA). The VHA has 
a long history of maintaining a staff of the very best health care 
professionals to provide care to those men and women who have served 
our country in the Armed Forces.
  Recently, a distressing situation regarding the care of our veterans 
has come to my attention: the recruiting and retention of psychologists 
in the VHA of the Department of Veterans Affairs has become a 
significant problem.
  The Congress has recognized the important contribution of the 
behavioral sciences in the treatment of several conditions afflicting a 
significant portion of our veterans. Programs related to homelessness, 
substance abuse, and post traumatic stress disorder (PTSD) have 
received funding from the Congress in recent years.
  Psychologists, as behavioral science experts, are essential to the 
successful implementation of these programs. Consequently, the high 
vacancy and turnover rates for psychologists in the VHA might seriously 
jeopardize these programs and will negatively impact overall patient 
care in the VHA.
  Recruitment of psychologists by the VHA is hindered by a number of 
factors including a pay scale that is not commensurate with private 
sector rates together with a low number of clinical and professional 
psychologists appearing on the register of the Office of Personnel 
Management (OPM). Most new

[[Page 440]]

hires have no post-doctoral experience, and are hired immediately after 
a VHA internship. Recruitment, when successful, takes up to six months 
or longer.
  Retention of psychologists in the VHA system poses an even more 
significant problem. I have been informed that almost 40 percent of VHA 
psychologists have five years or less of post-doctoral experience. 
Psychologists leave the VHA system after five years because they have 
almost reached peak levels for salary and professional advancement. 
Under the present system, psychologists cannot be recognized, or 
appropriately compensated, for excellence or for taking on additional 
responsibilities such as running treatment programs.
  In effect, the current system for hiring psychologists in the VHA 
supports mediocrity, not excellence and mastery. Our veterans with 
behavioral and mental health disorders deserve better psychological 
care from more experienced professionals than they are now receiving.
  Currently, psychologists are the only doctoral level health care 
providers in the VHA who are not included in Title 38. This is without 
question a significant factor in the recruitment and retention 
difficulties that I have mentioned. Title 38 appointment authority for 
psychologists would help ameliorate the recruitment and retention 
problems. The length of time needed to recruit psychologists could be 
shortened by eliminating the requirement for applicants to be rated by 
the OPM. This would also encourage the recruitment of applicants who 
are not recent VHA interns by reducing the amount of time between 
identifying a desirable applicant and being able to offer that 
applicant a position.
  It is expected that problems in retention will be greatly alleviated 
by the implementation of a Title 38 system that offers financial 
incentives for psychologists to pursue professional development. 
Achievements that would merit salary increases include such activities 
as assuming supervisory responsibilities for clinical programs, 
implementing innovative clinical treatments that improve the 
effectiveness and efficiency of patient care, making significant 
contributions to the science of psychology, earning the ABPP diplomate 
state, and becoming a Fellow of the American Psychological Association.
  The addition of psychologists to Title 38, as proposed by this 
amendment, would provide relief for the retention and recruitment 
issues and enhance the quality of care for our veterans and their 
families.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 62

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

     SECTION 1. REVISION OF AUTHORITY RELATING TO APPOINTMENT OF 
                   PROFESSIONAL PSYCHOLOGISTS IN THE VETERANS 
                   HEALTH ADMINISTRATION.

       (a) In General.--Section 7401(3) of title 38, United States 
     Code, is amended by striking ``who hold diplomas as 
     diplomates in psychology from an accrediting authority 
     approved by the Secretary''.
       (b) Certain Other Appointments.--Section 7405(a) of such 
     title is amended--
       (1) in paragraph (1)(B), by striking ``Certified or'' and 
     inserting ``Professional psychologists, certified or''; and
       (2) in paragraph (2)(B), by striking ``Certified or'' and 
     inserting ``Professional psychologists, certified or''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall take effect on the date of the enactment of 
     this Act.
       (d) Appointment Requirement.--Notwithstanding any other 
     provision of law, the Secretary of Veterans Affairs shall 
     begin to make appointments of professional psychologists in 
     the Veterans Health Administration under section 7401(3) of 
     title 38, United States Code (as amended by subsection (a)), 
     not later than 1 year after the date of the enactment of this 
     Act.
                                 ______
                                 
      By Mr. INOUYE:
  S. 63. A bill for the relief of Donald C. Pence; to the Committee on 
Veterans' Affairs.


                   for the relief of donald c. pence

  Mr. INOUYE. Mr. President, today I am introducing a private relief 
bill on behalf of Donald C. Pence of Stanford, North Carolina, for 
compensation for the failure of the Department of Veterans Affairs to 
pay dependency and indemnity compensation to Kathryn E. Box, the now-
deceased mother of Donald C. Pence. It is rare that a federal agency 
admits a mistake. In this case, the Department of Veterans Affairs has 
admitted that a mistake was made and explored ways to permit payment 
under the law, including equitable relief, but has found no provisions 
authorizing the Department to release the remaining benefits that were 
unpaid to Mrs. Box at the time of her death. My bill would correct this 
injustice, and I urge my colleagues to support this measure.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 63

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

     SECTION 1. RELIEF OF DONALD C. PENCE.

       (a) Relief.--The Secretary of the Treasury shall pay, out 
     of any moneys in the Treasury not otherwise appropriated, to 
     Donald C. Pence, of Sanford, North Carolina, the sum of 
     $31,128 in compensation for the failure of the Department of 
     Veterans Affairs to pay dependency and indemnity compensation 
     to Kathryn E. Box, the now-deceased mother of Donald C. 
     Pence, for the period beginning on July 1, 1990, and ending 
     on March 31, 1993.
       (b) Limitation on Fees.--Not more than a total of 10 
     percent of the payment authorized by subsection (a) may be 
     paid to or received by agents or attorneys for services 
     rendered in connection with obtaining such payment, any 
     contract to the contrary notwithstanding. Any person who 
     violates this subsection shall be fined not more than $1,000.
                                 ______
                                 
      By Mr. INOUYE:
  S. 65. A bill to amend title VII of the Public Health Service Act to 
ensure that social work students or social work schools are eligible 
for support under the certain programs to assist individuals in 
pursuing health careers and programs of grants for training projects in 
geriatrics, an to establish a social work training program; to the 
Committee on Health, Education, Labor, and Pensions.


        Amendment to Title VII of the Public Health Service Act

  Mr. INOUYE. Mr. President, on behalf of our nation's clinical social 
workers, I am introducing legislation to amend the Public Health 
Service Act. This legislation would (1) establish a new social work 
training program; (2) ensure that social work students are eligible for 
support under the Health Careers Opportunity Program; (3) provide 
social work schools with eligibility for support under the Minority 
Centers of Excellence programs; (4) permit schools offering degrees in 
social work to obtain grants for training projects in geriatrics; and 
(5) ensure that social work is recognized as a profession under the 
Public Health Maintenance Organization (HMO) Act.
  Despite the impressive range of services social workers provide to 
people of this national, few federal programs exit to the provide 
opportunities for social work training in health and mental health 
care. This legislation would (1) provide funding for existing social 
work training programs or fellowships for individuals who plan to 
specialize in, practice, or teach social work; (2) help disadvantaged 
students earn graduate degrees in social work with a concentration in 
health or mental health; (3) provide new resources and opportunities in 
social work training for minorities; and (4) encourage schools of 
social work to expand programs in geriatrics.
  Social workers have long provided quality mental health services to 
our citizens and continue to be at the forefront of establishing 
innovative programs to service our disadvantaged populations. I believe 
it is important to ensure that the special expertise social workers 
posses continue to be available to the citizens of this nation. This 
bill, by providing financial assistance to schools of social work and 
social work students, acknowledges the long historic and critical 
importance of the services provided by social work professionals. I 
believe it is time to provide them with the cognition they deserve.

[[Page 441]]

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

                                 S. 65

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

     SECTION 1. SOCIAL WORK STUDENTS.

       (a) Health Professions School.--Section 736(g)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 293(g)(1)(A)) is amended 
     by striking ``graduate program in behavioral or mental 
     health'' and inserting ``graduate program in behavioral or 
     mental health including a school offering graduate programs 
     in clinical social work, or programs in social work''.
       (b) Scholarships, Generally.--Section 737(d)(1)(A) of the 
     Public Health Service Act (42 U.S.C. 293a(d)(1)(A)) is 
     amended by striking ``mental health practice'' and inserting 
     ``mental health practice including graduate programs in 
     clinical psychology, graduate programs in clinical social 
     work, or programs in social work''.
       (c) Faculty Positions.--Section 738(a)(3) of the Public 
     Health Service Act (42 U.S.C. 293b(a)(3)) is amended by 
     striking ``offering graduate programs in behavioral and 
     mental health'' and inserting ``offering graduate programs in 
     behavioral and mental health including graduate programs in 
     clinical psychology, graduate programs in clinical social 
     work, or programs in social work''.

     SEC. 2. GERIATRICS TRAINING PROJECTS.

       Section 753(b)(1) of the Public Health Service Act (42 
     U.S.C. 294c(b)(1)) is amended by inserting ``schools offering 
     degrees in social work,'' after ``teaching hospitals,''.

     SEC. 3. SOCIAL WORK TRAINING PROGRAM.

       Subpart 2 of part E of title VII of the Public Health 
     Service Act (42 U.S.C. 295 et seq.) is amended--
       (1) by redesignating section 770 as section 770A;
       (2) by inserting after section 769, the following:

     ``SEC. 770. SOCIAL WORK TRAINING PROGRAM.

       ``(a) Training Generally.--The Secretary may make grants 
     to, or enter into contracts with, any public or nonprofit 
     private hospital, school offering programs in social work, or 
     to or with a public or private nonprofit entity (which the 
     Secretary has determined is capable of carrying out such 
     grant or contract)--
       ``(1) to plan, develop, and operate, or participate in, an 
     approved social work training program (including an approved 
     residency or internship program) for students, interns, 
     residents, or practicing physicians;
       ``(2) to provide financial assistance (in the form of 
     traineeships and fellowships) to students, interns, 
     residents, practicing physicians, or other individuals, who 
     are in need thereof, who are participants in any such 
     program, and who plan to specialize or work in the practice 
     of social work;
       ``(3) to plan, develop, and operate a program for the 
     training of individuals who plan to teach in social work 
     training programs; and
       ``(4) to provide financial assistance (in the form of 
     traineeships and fellowships) to individuals who are 
     participants in any such program and who plan to teach in a 
     social work training program.
       ``(b) Academic Administrative Units.--
       ``(1) In general.--The Secretary may make grants to or 
     enter into contracts with schools offering programs in social 
     work to meet the costs of projects to establish, maintain, or 
     improve academic administrative units (which may be 
     departments, divisions, or other units) to provide clinical 
     instruction in social work.
       ``(2) Preference in making awards.--In making awards of 
     grants and contracts under paragraph (1), the Secretary shall 
     give preference to any qualified applicant for such an award 
     that agrees to expend the award for the purpose of--
       ``(A) establishing an academic administrative unit for 
     programs in social work; or
       ``(B) substantially expanding the programs of such a unit.
       ``(c) Duration of Award.--The period during which payments 
     are made to an entity from an award of a grant or contract 
     under subsection (a) may not exceed 5 years. The provision of 
     such payments shall be subject to annual approval by the 
     Secretary of the payments and subject to the availability of 
     appropriations for the fiscal year involved to make the 
     payments.
       ``(d) Funding.--
       ``(1) Authorization of appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated $10,000,000 for each of the fiscal years 2002 
     through 2004.
       ``(2) Allocation.--Of the amounts appropriated under 
     paragraph (1) for a fiscal year, the Secretary shall make 
     available not less than 20 percent for awards of grants and 
     contracts under subsection (b).''; and
       (3) in section 770A (as so redesignated) by inserting 
     ``other than section 770,'' after ``carrying out this 
     subpart,''.

     SEC. 4. CLINICAL SOCIAL WORKER SERVICES.

       Section 1302 of the Public Health Service Act (42 U.S.C. 
     300e-1) is amended--
       (1) in paragraphs (1) and (2), by inserting ``clinical 
     social worker,'' after ``psychologist,'' each place it 
     appears;
       (2) in paragraph (4)(A), by striking ``and psychologists'' 
     and inserting ``psychologists, and clinical social workers''; 
     and
       (3) in paragraph (5), by inserting ``clinical social 
     work,'' after ``psychology,''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 66. A bill to amend title VII of the Public Health Service Act to 
revise and extend certain programs relating to the education of 
individuals as health professionals, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.


    Physical Therapy and Occupational Therapy Education Act of 2001

  Mr. INOUYE. Mr. President, today I rise to introduce the Physical and 
Occupational Therapy Education Act of 2001. This legislation will 
increase educational opportunities for physical therapy and 
occupational therapy practitioners in order to meet the growing demand 
for the valuable services they provide in our communities.
  Several factors contribute to the present need for federal support in 
this area. The rapid aging of our nation's population, the demands of 
the AIDS crisis, increasing emphasis on health promotion and disease 
prevention, and the growth of home health care has increased the demand 
for physical and occupational therapy services. This demand has 
exceeded our ability to educate an adequate number of physical 
therapists and occupational therapists. In addition, technological 
advances are allowing injured and disabled individuals to survive 
conditions that would have proven fatal in past years.
  An inadequate number of physical therapists has led to an increased 
reliance on foreign-educated, non-immigrant temporary workers (H-1B 
visa holders). The U.S. Commission on Immigration Reform has identified 
physical therapy and occupational therapy as having the highest number 
of H-1B visa holders in the United States, second only to computer 
specialists.
  In addition to the shortage of practitioners, a shortage of faculty 
impedes the expansion of established education programs. The critical 
shortage of doctoral-prepared occupational therapists and physical 
therapists has resulted in a depleted pool of potential faculty. This 
bill would assist in the development of qualified faculty by giving 
preference to grant applicants seeking to develop and expand post-
professional programs for the advanced training of physical and 
occupational therapists.
  The legislation I introduce today would provide necessary assistance 
to physical and occupational therapy programs throughout the country. 
The investment we make will help reduce America's dependence on foreign 
labor and create highly-skilled, high-wage employment opportunities for 
American citizens.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 66

       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 ``Physical Therapy and 
     Occupational Therapy Education Act of 2001''.

     SEC. 2. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

       Subpart 2 of part E of title VII of the Public Health 
     Service Act (42 U.S.C. 295 et seq.) is amended by inserting 
     after section 769, the following:

     ``SEC. 769A. PHYSICAL THERAPY AND OCCUPATIONAL THERAPY.

       ``(a) In General.--The Secretary may make grants to, and 
     enter into contracts with, programs of physical therapy and 
     occupational therapy for the purpose of planning and 
     implementing projects to recruit and retain faculty and 
     students, develop curriculum, support the distribution of 
     physical therapy and occupational therapy practitioners in 
     underserved areas, or support the continuing development of 
     these professions.
       ``(b) Preference in Making Grants.--In making grants under 
     subsection (a), the Secretary shall give preference to 
     qualified applicants that seek to educate physical therapists 
     or occupational therapists in rural or urban medically 
     underserved communities, or to expand post-professional 
     programs for the advanced education of physical therapy or 
     occupational therapy practitioners.

[[Page 442]]

       ``(c) Peer Review.--Each peer review group under section 
     799(f) that is reviewing proposals for grants or contracts 
     under subsection (a) shall include not fewer than 2 physical 
     therapists or occupational therapists.
       ``(d) Report to Congress.--
       ``(1) In general.--The Secretary shall prepare a report 
     that--
       ``(A) summarizes the applications submitted to the 
     Secretary for grants or contracts under subsection (a);
       ``(B) specifies the identity of entities receiving the 
     grants or contracts; and
       ``(C) evaluates the effectiveness of the program based upon 
     the objectives established by the entities receiving the 
     grants or contracts.
       ``(2) Date certain for submission.--Not later than February 
     1, 2003, the Secretary shall submit the report prepared under 
     paragraph (1) to the Committee on Commerce and the Committee 
     on Appropriations of the House of Representatives, the 
     Committee on Health, Education, Labor, and Pensions and the 
     Committee on Appropriations of the Senate.
       ``(e) Authorization of Appropriations.--For the purpose of 
     carrying out this section, there is authorized to be 
     appropriated $3,000,000 for each of the fiscal years 2002 
     through 2005.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 67. A bill to amend title VII of the Public Health Service Act to 
establish a psychology post-doctoral fellowship program, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.


                   Public Health Service Act of 2001

  Mr. INOUYE. Mr. President, I am introducing legislation today to 
amend Title VII of the Public Health Service Act to establish a 
psychology post-doctoral program.
  Psychologists have made a unique contribution in reaching out to the 
nation's medically underserved populations. Expertise in behavioral 
science is useful in addressing grave concerns such as violence, 
addiction, mental illness, adolescent and child behavioral disorders, 
and family disruption. Establishment of a psychology post-doctoral 
program could be an effective way to find solutions to these issues.
  Similar programs supporting additional, specialized training in 
traditionally underserved settings have been successful in retaining 
participants to serve the same populations. For example, mental health 
professionals who have participated in these specialized federally 
funded programs have tended not only to meet their repayment 
obligations, but have continued to work in the public sector or with 
the underserved.
  While a doctorate in psychology provides broad-based knowledge and 
mastery in a wide variety of clinical skills, specialized post-doctoral 
fellowship programs help to develop particular diagnostic and treatment 
skills required to respond effectively to underserved populations. For 
example, what appears to be poor academic motivation in a child 
recently relocated from Southeast Asia might actually reflect a 
cultural value of reserve rather than a disinterest in academic 
learning. Specialized assessment skills enable the clinician to 
initiate effective treatment.
  Domestic violence poses a significant public health problem and is 
not just a problem for the criminal justice system. Violence against 
women results in almost 100,000 days of hospitalization, 30,000 
emergency room visits and 40,000 visits to physicians each year. Rates 
of child and spouse abuse in rural areas are particularly high, as are 
the rates of alcohol abuse and depression in adolescents. A post-
doctoral fellowship program in the psychology of the rural populations 
could be of special benefit in addressing these problems.
  Given the demonstrated success and effectiveness of specialized 
training programs, it is incumbent upon us to encourage participation 
in post-doctoral fellowships that respond to the needs of the nation's 
underserved.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 67

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

     SECTION 1. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       Part C of title VII of the Public Health Service Act (42 
     U.S.C. 293k et seq.) is amended by adding at the end the 
     following:

     ``SEC. 749. GRANTS FOR FELLOWSHIPS IN PSYCHOLOGY.

       ``(a) In General.--The Secretary shall establish a 
     psychology post-doctoral fellowship program to make grants to 
     and enter into contracts with eligible entities to encourage 
     the provision of psychological training and services in 
     underserved treatment areas.
       ``(b) Eligible Entities.--
       ``(1) Individuals.--In order to receive a grant under this 
     section an individual shall submit an application to the 
     Secretary at such time, in such form, and containing such 
     information as the Secretary shall require, including a 
     certification that such individual--
       ``(A) has received a doctoral degree through a graduate 
     program in psychology provided by an accredited institution 
     at the time such grant is awarded;
       ``(B) will provide services in a medically underserved 
     population during the period of such grant;
       ``(C) will comply with the provisions of subsection (c); 
     and
       ``(D) will provide any other information or assurances as 
     the Secretary determines appropriate.
       ``(2) Institutions.--In order to receive a grant or 
     contract under this section, an institution shall submit an 
     application to the Secretary at such time, in such form, and 
     containing such information as the Secretary shall require, 
     including a certification that such institution--
       ``(A) is an entity, approved by the State, that provides 
     psychological services in medically underserved areas or to 
     medically underserved populations (including entities that 
     care for the mentally retarded, mental health institutions, 
     and prisons);
       ``(B) will use amounts provided to such institution under 
     this section to provide financial assistance in the form of 
     fellowships to qualified individuals who meet the 
     requirements of subparagraphs (A) through (C) of paragraph 
     (1);
       ``(C) will not use in excess of 10 percent of amounts 
     provided under this section to pay for the administrative 
     costs of any fellowship programs established with such funds; 
     and
       ``(D) will provide any other information or assurance as 
     the Secretary determines appropriate.
       ``(c) Continued Provision of Services.--Any individual who 
     receives a grant or fellowship under this section shall 
     certify to the Secretary that such individual will continue 
     to provide the type of services for which such grant or 
     fellowship is awarded for at least 1 year after the term of 
     the grant or fellowship has expired.
       ``(d) Regulations.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall promulgate 
     regulations necessary to carry out this section, including 
     regulations that define the terms `medically underserved 
     areas' or `medically unserved populations'.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for each of the fiscal years 2002 through 2004.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 68. A bill to amend title VII of the Public Health Service Act to 
make certain graduate programs in professional psychology eligible to 
participate in various health professions loan programs; to the 
Committee on Health, Education, Labor, and Pensions.


          U.S. Public Health Service Act Amendment Act of 2001

  Mr. INOUYE. Mr. President, I rise to introduce legislation today to 
modify Title VII of the U.S. Public Health Service Act in order to 
provide students enrolled in graduate psychology programs with the 
opportunity to participate in various health professions loan programs.
  Providing students enrolled in graduate psychology programs with 
eligibility for financial assistance in the form of loans, loan 
guarantees, and scholarships will facilitate a much-needed infusions of 
behavioral science expertise into our community of public health, 
providers. There is a growing recognition of the valuable contribution 
being made by psychologists toward solving some of our nation's most 
distressing problems.
  The participation of students from all backgrounds and clinical 
disciplines is vital to the success of health care training. The Title 
VII programs play a significant role in providing financial support for 
the recruitment of minorities, women, and individuals from economically 
disadvantaged backgrounds. Minority therapists have an advantage in the 
provision of critical services to minority populations because often 
they can communicate with clients in their own language and cultural 
framework. Minority therapists are more

[[Page 443]]

likely to work in community settings where ethnic minority and 
economically disadvantaged individuals are most likely to seek care. It 
is critical that continued support be provided for the training of 
individuals who provide health care services to underserved 
communities.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 68

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

     SECTION 1. PARTICIPATION IN VARIOUS HEALTH PROFESSIONS LOAN 
                   PROGRAMS.

       (a) Loan Agreements.--Section 721 of the Public Health 
     Service Act (42 U.S.C. 292q) is amended--
       (1) in subsection (a), by inserting ``, or any public or 
     nonprofit school that offers a graduate program in 
     professional psychology'' after ``veterinary medicine'';
       (2) in subsection (b)(4), by inserting ``, or to a graduate 
     degree in professional psychology'' after ``or doctor of 
     veterinary medicine or an equivalent degree''; and
       (3) in subsection (c)(1), by inserting ``, or schools that 
     offer graduate programs in professional psychology'' after 
     ``veterinary medicine''.
       (b) Loan Provisions.--Section 722 of the Public Health 
     Service Act (42 U.S.C. 292r) is amended--
       (1) in subsection (b)(1), by inserting ``, or to a graduate 
     degree in professional psychology'' after ``or doctor of 
     veterinary medicine or an equivalent degree'';
       (2) in subsection (c), in the matter preceding paragraph 
     (1), by inserting ``, or at a school that offers a graduate 
     program in professional psychology'' after ``veterinary 
     medicine''; and
       (3) in subsection (k)--
       (A) in the matter preceding paragraph (1), by striking ``or 
     podiatry'' and inserting ``podiatry, or professional 
     psychology''; and
       (B) in paragraph (4), by striking ``or podiatric medicine'' 
     and inserting ``podiatric medicine, or professional 
     psychology''.

     SEC. 2. GENERAL PROVISIONS.

       (a) Health Professions Data.--Section 792(a) of the Public 
     Health Service Act (42 U.S.C. 295k(a)) is amended by striking 
     ``clinical'' and inserting ``professional''.
       (b) Prohibition Against Discrimination on Basis of Sex.--
     Section 794 of the Public Health Service Act (42 U.S.C. 295m) 
     is amended in the matter preceding paragraph (1) by striking 
     ``clinical'' and inserting ``professional''.
       (c) Definitions.--Section 799B(1)(B) of the Public Health 
     Service Act (42 U.S.C. 295p(1)(B)) is amended by striking 
     ``clinical'' each place it appears and inserting 
     ``professional''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 69. A bill to amend the Public Health Service Act to provide 
health care practitioners in rural areas with training in preventive 
health care, including both physical and mental care, and for other 
purposes; to the Committee on Health, Education, Labor, and Pensions.


           rural preventive health care training act of 2001

  Mr. INOUYE. Mr. President, I rise today to introduce the Rural 
Preventive Health Care Training Act of 2001, a bill that responds to 
the dire need of our rural communities for quality health care and 
disease prevention programs.
  Almost one fourth of Americans live in rural areas and frequently 
lack access to adequate physical and mental health care. As many as 21 
million of the 34 million people living in undeserved rural areas are 
without access to a primary care provider. Even in areas where 
providers do exist, there are numerous limits to access, such as 
geography, distance, lack of transportation, and lack of knowledge 
about available resources. Due to the diversity of rural populations, 
language and cultural obstacles are often a factor in the access to 
medical care.
  Compound these problems with limited financial resources, and the 
result is that many Americans living in rural communities go without 
vital health care, especially preventive care. Children fail to receive 
immunizations and routine checkups. Preventable illnesses and injuries 
occur needlessly, and lead to expensive hospitalizations. Early 
symptoms of emotional problems and substance abuse go undetected, and 
often develop into full-blown disorders.
  An Institute of Medicine (IOM) report entitled, ``Reducing Risks for 
Mental Disorders; Frontiers for Preventive Intervention Research,'' 
highlights the benefits of preventive care for all health problems. The 
training of health care providers in prevention is crucial in order to 
meet the demand for care in underserved areas. Currently, rural health 
care providers lack preventive care training opportunities.
  Interdisciplinary preventive training of rural health care providers 
must be encouraged. Through such training, rural health care providers 
can build a strong educational foundation from the behavioral, 
biological, and psychological sciences. Interdisciplinary team 
prevention training will also facilitate operations at sites with both 
health and mental health clinics by facilitating routine consultation 
between groups. Emphasizing the mental health disciplines and their 
services as part of the health care team will contribute to the overall 
health of rural communities.
  The Rural Preventive Health Care Training Act of 2001 would implement 
the risk-reduction model described in the IOM study. This model is 
based on the identification of risk factors and targets specific 
interventions for those risk factors.
  The human suffering caused by poor health is immeasurable, and places 
a huge financial burden on communities, families, and individuals. By 
implementing preventive measures to reduce this suffering, the 
potential psychological and financial savings are enormous.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 69

       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 ``Rural Preventive Health Care 
     Training Act of 2001''.

     SEC. 2. PREVENTIVE HEALTH CARE TRAINING.

       Part D of title VII of the Public Health Service Act (42 
     U.S.C. 294 et seq.) is amended by inserting after section 754 
     the following:

     ``SEC. 754A. PREVENTIVE HEALTH CARE TRAINING.

       ``(a) In General.--The Secretary may make grants to, and 
     enter into contracts with, eligible applicants to enable such 
     applicants to provide preventive health care training, in 
     accordance with subsection (c), to health care practitioners 
     practicing in rural areas. Such training shall, to the extent 
     practicable, include training in health care to prevent both 
     physical and mental disorders before the initial occurrence 
     of such disorders. In carrying out this subsection, the 
     Secretary shall encourage, but may not require, the use of 
     interdisciplinary training project applications.
       ``(b) Limitation.--To be eligible to receive training using 
     assistance provided under subsection (a), a health care 
     practitioner shall be determined by the eligible applicant 
     involved to be practicing, or desiring to practice, in a 
     rural area.
       ``(c) Use of Assistance.--Amounts received under a grant 
     made or contract entered into under this section shall be 
     used--
       ``(1) to provide student stipends to individuals attending 
     rural community colleges or other institutions that service 
     predominantly rural communities, for the purpose of enabling 
     the individuals to receive preventive health care training;
       ``(2) to increase staff support at rural community colleges 
     or other institutions that service predominantly rural 
     communities to facilitate the provision of preventive health 
     care training;
       ``(3) to provide training in appropriate research and 
     program evaluation skills in rural communities;
       ``(4) to create and implement innovative programs and 
     curricula with a specific prevention component; and
       ``(5) for other purposes as the Secretary determines to be 
     appropriate.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for each of fiscal years 2002 through 2004.''.
                                 ______
                                 
      By Mr. INOUYE:
  S. 70. A bill to amend the Public Health Service Act to provide for 
the establishment of a National Center for Social Work Research; to the 
Committee on Health, Education, Labor, and Pensions.


                national center for social work research

  Mr. INOUYE. Mr. President, I rise today to introduce legislation to 
amend the Public Health Service Act for the establishment of a National 
Center for Social Work Research.

[[Page 444]]

  Social workers provide a multitude of health care delivery services 
throughout America to our children, families, the elderly, and persons 
suffering from various forms of abuse and neglect.
  The purpose of this center is to support and disseminate information 
about basic and clinical social work research, and training, with 
emphasis on service to underserved and rural populations.
  While the federal government provides funding for various social work 
research activities through the National Institutes of Health and other 
federal agencies, there presently is no coordination or direction of 
these critical activities and no overall assessment of needs and 
opportunities for empirical knowledge development. The establishment of 
a Center for Social Work Research would result in improved behavioral 
and mental health care outcomes for our nation's children, families, 
the elderly, and others.
  In order to meet the increasing challenges of bringing cost-
effective, research-based, quality health care to all Americans, we 
must recognize the important contributions of social work researchers 
to health care delivery and the central role that the Center for Social 
Work can provide in facilitating their work.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 70

       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 ``National Center for Social 
     Work Research Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) social workers focus on the improvement of individual 
     and family functioning and the creation of effective health 
     and mental health prevention and treatment interventions in 
     order for individuals to become more productive members of 
     society;
       (2) social workers provide front line prevention and 
     treatment services in the areas of school violence, aging, 
     teen pregnancy, child abuse, domestic violence, juvenile 
     crime, and substance abuse, particularly in rural and 
     underserved communities; and
       (3) social workers are in a unique position to provide 
     valuable research information on these complex social 
     concerns, taking into account a wide range of social, 
     medical, economic and community influences from an 
     interdisciplinary, family-centered and community-based 
     approach.

     SEC. 3. ESTABLISHMENT OF NATIONAL CENTER FOR SOCIAL WORK 
                   RESEARCH.

       (a) In General.--Section 401(b)(2) of the Public Health 
     Service Act (42 U.S.C. 281(b)(2)) is amended by adding at the 
     end the following:
       ``(G) The National Center for Social Work Research.''.
       (b) Establishment.--Part E of title IV of the Public Health 
     Service Act (42 U.S.C. 287 et seq.) is amended by adding at 
     the end the following:

         ``Subpart 6--National Center for Social Work Research

     ``SEC. 485G. PURPOSE OF CENTER.

       ``The general purpose of the National Center for Social 
     Work Research (referred to in this subpart as the `Center') 
     is the conduct and support of, and dissemination of targeted 
     research concerning social work methods and outcomes related 
     to problems of significant social concern. The Center shall--
       ``(1) promote research and training that is designed to 
     inform social work practices, thus increasing the knowledge 
     base which promotes a healthier America; and
       ``(2) provide policymakers with empirically-based research 
     information to enable such policymakers to better understand 
     complex social issues and make informed funding decisions 
     about service effectiveness and cost efficiency.

     ``SEC. 485H. SPECIFIC AUTHORITIES.

       ``(a) In General.--To carry out the purpose described in 
     section 485G, the Director of the Center may provide research 
     training and instruction and establish, in the Center and in 
     other nonprofit institutions, research traineeships and 
     fellowships in the study and investigation of the prevention 
     of disease, health promotion, the association of 
     socioeconomic status, gender, ethnicity, age and geographical 
     location and health, the social work care of individuals 
     with, and families of individuals with, acute and chronic 
     illnesses, child abuse, neglect, and youth violence, and 
     child and family care to address problems of significant 
     social concern especially in underserved populations and 
     underserved geographical areas.
       ``(b) Stipends and Allowances.--The Director of the Center 
     may provide individuals receiving training and instruction or 
     traineeships or fellowships under subsection (a) with such 
     stipends and allowances (including amounts for travel and 
     subsistence and dependency allowances) as the Director 
     determines necessary.
       ``(c) Grants.--The Director of the Center may make grants 
     to nonprofit institutions to provide training and instruction 
     and traineeships and fellowships under subsection (a).

     ``SEC. 485I. ADVISORY COUNCIL.

       ``(a) Duties.--
       ``(1) In general.--The Secretary shall establish an 
     advisory council for the Center that shall advise, assist, 
     consult with, and make recommendations to the Secretary and 
     the Director of the Center on matters related to the 
     activities carried out by and through the Center and the 
     policies with respect to such activities.
       ``(2) Gifts.--The advisory council for the Center may 
     recommend to the Secretary the acceptance, in accordance with 
     section 231, of conditional gifts for study, investigations, 
     and research and for the acquisition of grounds or 
     construction, equipment, or maintenance of facilities for the 
     Center.
       ``(3) Other duties and functions.--The advisory council for 
     the Center--
       ``(A)(i) may make recommendations to the Director of the 
     Center with respect to research to be conducted by the 
     Center;
       ``(ii) may review applications for grants and cooperative 
     agreements for research or training and recommend for 
     approval applications for projects that demonstrate the 
     probability of making valuable contributions to human 
     knowledge; and
       ``(iii) may review any grant, contract, or cooperative 
     agreement proposed to be made or entered into by the Center;
       ``(B) may collect, by correspondence or by personal 
     investigation, information relating to studies that are being 
     carried out in the United States or any other country and, 
     with the approval of the Director of the Center, make such 
     information available through appropriate publications; and
       ``(C) may appoint subcommittees and convene workshops and 
     conferences.
       ``(b) Membership.--
       ``(1) In general.--The advisory council shall be composed 
     of the ex officio members described in paragraph (2) and not 
     more than 18 individuals to be appointed by the Secretary 
     under paragraph (3).
       ``(2) Ex officio members.--The ex officio members of the 
     advisory council shall include--
       ``(A) the Secretary of Health and Human Services, the 
     Director of NIH, the Director of the Center, the Chief Social 
     Work Officer of the Veterans' Administration, the Assistant 
     Secretary of Defense for Health Affairs, the Associate 
     Director of Prevention Research at the National Institute of 
     Mental Health, the Director of the Division of Epidemiology 
     and Services Research, the Assistant Secretary of Health and 
     Human Services for the Administration for Children and 
     Families, the Assistant Secretary of Education for the Office 
     of Educational Research and Improvement, the Assistant 
     Secretary of Housing and Urban Development for Community 
     Planning and Development, and the Assistant Attorney General 
     for Office of Justice Programs (or the designees of such 
     officers); and
       ``(B) such additional officers or employees of the United 
     States as the Secretary determines necessary for the advisory 
     council to effectively carry out its functions.
       ``(3) Appointed members.--The Secretary shall appoint not 
     to exceed 18 individuals to the advisory council, of which--
       ``(A) not more than two-thirds of such individuals shall be 
     appointed from among the leading representatives of the 
     health and scientific disciplines (including public health 
     and the behavioral or social sciences) relevant to the 
     activities of the Center, and at least 7 such individuals 
     shall be professional social workers who are recognized 
     experts in the area of clinical practice, education, or 
     research; and
       ``(B) not more than one-third of such individuals shall be 
     appointed from the general public and shall include leaders 
     in fields of public policy, law, health policy, economics, 
     and management.

     The Secretary shall make appointments to the advisory council 
     in such a manner as to ensure that the terms of the members 
     do not all expire in the same year.
       ``(4) Compensation.--Members of the advisory council who 
     are officers or employees of the United States shall not 
     receive any compensation for service on the advisory council. 
     The remaining members shall receive, for each day (including 
     travel time) they are engaged in the performance of the 
     functions of the advisory council, compensation at rates not 
     to exceed the daily equivalent of the annual rate in effect 
     for an individual at grade GS-18 of the General Schedule.
       ``(c) Terms.--
       ``(1) In general.--The term of office of an individual 
     appointed to the advisory council under subsection (b)(3) 
     shall be 4 years, except that any individual appointed to 
     fill a vacancy on the advisory council shall serve for the 
     remainder of the unexpired term. A member may serve after the 
     expiration of the member's term until a successor has been 
     appointed.

[[Page 445]]

       ``(2) Reappointments.--A member of the advisory council who 
     has been appointed under subsection (b)(3) for a term of 4 
     years may not be reappointed to the advisory council prior to 
     the expiration of the 2-year period beginning on the date on 
     which the prior term expired.
       ``(3) Vacancy.--If a vacancy occurs on the advisory council 
     among the members under subsection (b)(3), the Secretary 
     shall make an appointment to fill that vacancy not later than 
     90 days after the date on which the vacancy occurs.
       ``(d) Chairperson.--The chairperson of the advisory council 
     shall be selected by the Secretary from among the members 
     appointed under subsection (b)(3), except that the Secretary 
     may select the Director of the Center to be the chairperson 
     of the advisory council. The term of office of the 
     chairperson shall be 2 years.
       ``(e) Meetings.--The advisory council shall meet at the 
     call of the chairperson or upon the request of the Director 
     of the Center, but not less than 3 times each fiscal year. 
     The location of the meetings of the advisory council shall be 
     subject to the approval of the Director of the Center.
       ``(f) Administrative Provisions.--The Director of the 
     Center shall designate a member of the staff of the Center to 
     serve as the executive secretary of the advisory council. The 
     Director of the Center shall make available to the advisory 
     council such staff, information, and other assistance as the 
     council may require to carry out its functions. The Director 
     of the Center shall provide orientation and training for new 
     members of the advisory council to provide such members with 
     such information and training as may be appropriate for their 
     effective participation in the functions of the advisory 
     council.
       ``(g) Comments and Recommendations.--The advisory council 
     may prepare, for inclusion in the biennial report under 
     section 485J--
       ``(1) comments with respect to the activities of the 
     advisory council in the fiscal years for which the report is 
     prepared;
       ``(2) comments on the progress of the Center in meeting its 
     objectives; and
       ``(3) recommendations with respect to the future direction 
     and program and policy emphasis of the center.

     The advisory council may prepare such additional reports as 
     it may determine appropriate.

     ``SEC. 485J. BIENNIAL REPORT.

       ``The Director of the Center, after consultation with the 
     advisory council for the Center, shall prepare for inclusion 
     in the biennial report under section 403, a biennial report 
     that shall consist of a description of the activities of the 
     Center and program policies of the Director of the Center in 
     the fiscal years for which the report is prepared. The 
     Director of the Center may prepare such additional reports as 
     the Director determines appropriate. The Director of the 
     Center shall provide the advisory council of the Center an 
     opportunity for the submission of the written comments 
     described in section 485I(g).

     ``SEC. 485K. QUARTERLY REPORT.

       ``The Director of the Center shall prepare and submit to 
     Congress a quarterly report that contains a summary of 
     findings and policy implications derived from research 
     conducted or supported through the Center.''.
                                 ______
                                 
      Mr. CRAIG:
  S. 71. A bill to amend the Federal Power Act to improve the 
hydroelectric licensing process by granting the Federal Energy 
Regulatory Commission statutory authority to better coordinate 
participation by other agencies and entities, and for other purposes; 
to the Committee on Energy and Natural Resources.


        HYDROELECTRIC LICENSING PROCESS IMPROVEMENT ACT OF 2001

  Mr. CRAIG. Mr. President, I rise to introduce a bill, and I send it 
to the desk.
  Mr. President, the bill I introduce is the Hydroelectric Licensing 
Process Improvement Act of 2001. As its title suggests, the purpose of 
the bill is to improve the process by which non-federal hydroelectric 
projects are licensed by the Federal Energy Regulatory Commission.
  I introduced an identical bill early in the 106th Congress. Several 
hearings were held on the bill in both the Senate and House. I 
introduce this bill today with the full understanding that the bill may 
undergo some changes as a result of collaboration with my colleague 
Senator Bingaman and others on the Senate Energy and Natural Resources 
Committee. At the end of the last Congress, Senator Bingaman offered to 
work with me in a bipartisan fashion to successfully report this bill 
out of Committee in the 107th Congress. I enthusiastically look forward 
to working with him to ensure that this bill gets the necessary 
attention to move smoothly and with appropriate speed through the 
Committee process.
  Mr. President, hydropower represents ten percent of the energy 
produced in the United States, and approximately 85% of all renewable 
energy generation. This is a significant portion of our nation's 
electricity, produced without air pollution or greenhouse gas 
emissions, and it is accomplished at relatively low cost.
  The Commission for many years since its creation in 1920, controlled 
our nation's water power potential with uncompromising authority. 
However, over the years, a number of environmental statutes, amendments 
to the Federal Power Act, Commission regulations, licensing and policy 
decisions, and several critical court decisions, has made the 
Commission's licensing process extremely costly, time consuming, and, 
at times, arbitrary. Indeed, the current Commission licensing program 
is burdened with mixed mandates and redundant bureaucracy and prone to 
gridlock and litigation.
  Under current law, several federal agencies are required to set 
conditions for licenses without regard to the effects those conditions 
have on project economics, energy benefits, impacts on greenhouse gas 
emissions and values protected by other statutes and regulations. Far 
too often we have agencies fighting agencies and issuing inconsistent 
demands.
  The consequent delays in processing hydropower applications result in 
significant business costs and lost capacity. For example, according to 
a September 1997 study of the U.S. Department of Energy, since 1987, of 
52 peaking projects relicensed by the Commission, four projects 
increased capacity, and 48 decreased capacity. In simple terms, those 
48 projects became less productive as a result of the relicensing 
process at the Commission than they were prior to relicensing. Ninety-
two percent of the peaking projects since 1987 lost capacity.
  In addition, faced with the uncertainties currently plaguing the 
relicensing process, some existing licensees are contemplating 
abandonment of their projects. This is of concern to the nation because 
two-thirds of all non-federal hydropower capacity is up for relicensing 
in the next fifteen years. This concern has been exacerbated in the 
last several months by the catastrophic energy supply crisis 
experienced by California and the rest of the West. By the year 2010, 
220 projects will be subject to the relicensing process.
  Publicly owned hydropower projects constitute nearly 50% of the total 
capacity that will be up for renewal. The problems resulting in lost 
capacity, coupled with the momentous changes occurring in the 
electricity industry and the increasing need for emission free sources 
of power, all underscore the need for Congressional action to reform 
hydroelectric licensing.
  Moreover, the loss of a hydropower project means more than the loss 
of clean, efficient, renewable electric power. Hydropower projects 
provide drinking water, flood control, fish and wildlife habitat, 
irrigation, transportation, environmental enhancement funding and 
recreation benefits. Also, due to its unique load-following capability, 
peaking capacity and voltage stability attributes, hydropower plays a 
critical role in maintaining our nation's reliable electric service.
  My bill will help remedy the inefficient and complex Commission 
licensing process by ensuring that federal agencies involved in the 
process act in a timely and accountable manner.
  My bill does not change or modify any existing environmental laws, 
nor remove regulatory authority from various agencies. It does not call 
for the repeal of mandatory conditioning authority of appropriate 
federal agencies. Rather, it requires participating agencies to 
consider, and be accountable for, the full effects of their actions 
before imposing mandatory conditions on a Commission issued license.
  It is clear to me and many of my colleagues here in the Senate that 
hydropower is at risk. Clearly, one of the most important tasks for 
energy policymakers in the 21st Century is to develop an energy 
strategy that will ensure an adequate supply of reasonably priced, 
reliable energy to all American consumers in an environmentally 
responsible manner. The relicensing of

[[Page 446]]

non-federal hydropower can and should continue be an important and 
viable element in this strategy.
  Mr. President, I ask unanimous consent that the bill and a section-
by-section analysis appear in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 71

       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 ``Hydroelectric Licensing 
     Process Improvement Act of 2001''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) hydroelectric power is an irreplaceable source of 
     clean, economic, renewable energy with the unique capability 
     of supporting reliable electric service while maintaining 
     environmental quality;
       (2) hydroelectric power is the leading renewable energy 
     resource of the United States;
       (3) hydroelectric power projects provide multiple benefits 
     to the United States, including recreation, irrigation, flood 
     control, water supply, and fish and wildlife benefits;
       (4) in the next 15 years, the bulk of all non-Federal 
     hydroelectric power capacity in the United States is due to 
     be relicensed by the Federal Energy Regulatory Commission;
       (5) the process of licensing hydroelectric projects by the 
     Commission--
       (A) does not produce optimal decisions, because the 
     agencies that participate in the process are not required to 
     consider the full effects of their mandatory and recommended 
     conditions on a license;
       (B) is inefficient, in part because agencies do not always 
     submit their mandatory and recommended conditions by a time 
     certain;
       (C) is burdened by uncoordinated environmental reviews and 
     duplicative permitting authority; and
       (D) is burdensome for all participants and too often 
     results in litigation; and
       (6) while the alternative licensing procedures available to 
     applicants for hydroelectric project licenses provide 
     important opportunities for the collaborative resolution of 
     many of the issues in hydroelectric project licensing, those 
     procedures are not appropriate in every case and cannot 
     substitute for statutory reforms of the hydroelectric 
     licensing process.

     SEC. 3. PURPOSE.

       The purpose of this Act is to achieve the objective of 
     relicensing hydroelectric power projects to maintain high 
     environmental standards while preserving low cost power by--
       (1) requiring agencies to consider the full effects of 
     their mandatory and recommended conditions on a hydroelectric 
     power license and to document the consideration of a broad 
     range of factors;
       (2) requiring the Federal Energy Regulatory Commission to 
     impose deadlines by which Federal agencies must submit 
     proposed mandatory and recommended conditions to a license; 
     and
       (3) making other improvements in the licensing process.

     SEC. 4. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF 
                   CONDITIONS TO LICENSES.

       (a) In General.--Part I of the Federal Power Act (16 U.S.C. 
     791a et seq.) is amended by adding at the end the following:

     ``SEC. 32. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF 
                   CONDITIONS TO LICENSES.

       ``(a) Definitions.--In this section:
       ``(1) Condition.--The term `condition' means--
       ``(A) a condition to a license for a project on a Federal 
     reservation determined by a consulting agency for the purpose 
     of the first proviso of section 4(e); and
       ``(B) a prescription relating to the construction, 
     maintenance, or operation of a fishway determined by a 
     consulting agency for the purpose of the first sentence of 
     section 18.
       ``(2) Consulting agency.--The term `consulting agency' 
     means--
       ``(A) in relation to a condition described in paragraph 
     (1)(A), the Federal agency with responsibility for 
     supervising the reservation; and
       ``(B) in relation to a condition described in paragraph 
     (1)(B), the Secretary of the Interior or the Secretary of 
     Commerce, as appropriate.
       ``(b) Factors To Be Considered.--
       ``(1) In general.--In determining a condition, a consulting 
     agency shall take into consideration--
       ``(A) the impacts of the condition on--
       ``(i) economic and power values;
       ``(ii) electric generation capacity and system reliability;
       ``(iii) air quality (including consideration of the impacts 
     on greenhouse gas emissions); and
       ``(iv) drinking, flood control, irrigation, navigation, or 
     recreation water supply;
       ``(B) compatibility with other conditions to be included in 
     the license, including mandatory conditions of other 
     agencies, when available; and
       ``(C) means to ensure that the condition addresses only 
     direct project environmental impacts, and does so at the 
     lowest project cost.
       ``(2) Documentation.--
       ``(A) In general.--In the course of the consideration of 
     factors under paragraph (1) and before any review under 
     subsection (e), a consulting agency shall create written 
     documentation detailing, among other pertinent matters, all 
     proposals made, comments received, facts considered, and 
     analyses made regarding each of those factors sufficient to 
     demonstrate that each of the factors was given full 
     consideration in determining the condition to be submitted to 
     the Commission.
       ``(B) Submission to the commission.--A consulting agency 
     shall include the documentation under subparagraph (A) in its 
     submission of a condition to the Commission.
       ``(c) Scientific Review.--
       ``(1) In general.--Each condition determined by a 
     consulting agency shall be subjected to appropriately 
     substantiated scientific review.
       ``(2) Data.--For the purpose of paragraph (1), a condition 
     shall be considered to have been subjected to appropriately 
     substantiated scientific review if the review--
       ``(A) was based on current empirical data or field-tested 
     data; and
       ``(B) was subjected to peer review.
       ``(d) Relationship to Impacts on Federal Reservation.--In 
     the case of a condition for the purpose of the first proviso 
     of section 4(e), each condition determined by a consulting 
     agency shall be directly and reasonably related to the 
     impacts of the project within the Federal reservation.
       ``(e) Administrative Review.--
       ``(1) Opportunity for review.--Before submitting to the 
     Commission a proposed condition, and at least 90 days before 
     a license applicant is required to file a license application 
     with the Commission, a consulting agency shall provide the 
     proposed condition to the license applicant and offer the 
     license applicant an opportunity to obtain expedited review 
     before an administrative law judge or other independent 
     reviewing body of--
       ``(A) the reasonableness of the proposed condition in light 
     of the effect that implementation of the condition will have 
     on the energy and economic values of a project; and
       ``(B) compliance by the consulting agency with the 
     requirements of this section, including the requirement to 
     consider the factors described in subsection (b)(1).
       ``(2) Completion of review.--
       ``(A) In general.--A review under paragraph (1) shall be 
     completed not more than 180 days after the license applicant 
     notifies the consulting agency of the request for review.
       ``(B) Failure to make timely completion of review.--If 
     review of a proposed condition is not completed within the 
     time specified by subparagraph (A), the Commission may treat 
     a condition submitted by the consulting agency as a 
     recommendation is treated under section 10(j).
       ``(3) Remand.--If the administrative law judge or reviewing 
     body finds that a proposed condition is unreasonable or that 
     the consulting agency failed to comply with any of the 
     requirements of this section, the administrative law judge or 
     reviewing body shall--
       ``(A) render a decision that--
       ``(i) explains the reasons for a finding that the condition 
     is unreasonable and may make recommendations that the 
     administrative law judge or reviewing body may have for the 
     formulation of a condition that would not be found 
     unreasonable; or
       ``(ii) explains the reasons for a finding that a 
     requirement was not met and may describe any action that the 
     consulting agency should take to meet the requirement; and
       ``(B) remand the matter to the consulting agency for 
     further action.
       ``(4) Submission to the commission.--Following 
     administrative review under this subsection, a consulting 
     agency shall--
       ``(A) take such action as is necessary to--
       ``(i) withdraw the condition;
       ``(ii) formulate a condition that follows the 
     recommendation of the administrative law judge or reviewing 
     body; or
       ``(iii) otherwise comply with this section; and
       ``(B) include with its submission to the Commission of a 
     proposed condition--
       ``(i) the record on administrative review; and
       ``(ii) documentation of any action taken following 
     administrative review.
       ``(f) Submission of Final Condition.--
       ``(1) In general.--After an applicant files with the 
     Commission an application for a license, the Commission shall 
     set a date by which a consulting agency shall submit to the 
     Commission a final condition.
       ``(2) Limitation.--Except as provided in paragraph (3), the 
     date for submission of a final condition shall be not later 
     than 1 year after the date on which the Commission gives the 
     consulting agency notice that a license application is ready 
     for environmental review.
       ``(3) Default.--If a consulting agency does not submit a 
     final condition to a license by the date set under paragraph 
     (1)--
       ``(A) the consulting agency shall not thereafter have 
     authority to recommend or establish a condition to the 
     license; and

[[Page 447]]

       ``(B) the Commission may, but shall not be required to, 
     recommend or establish an appropriate condition to the 
     license that--
       ``(i) furthers the interest sought to be protected by the 
     provision of law that authorizes the consulting agency to 
     propose or establish a condition to the license; and
       ``(ii) conforms to the requirements of this Act.
       ``(4) Extension.--The Commission may make 1 extension, of 
     not more than 30 days, of a deadline set under paragraph (1).
       ``(g) Analysis by the Commission.--
       ``(1) Economic analysis.--The Commission shall conduct an 
     economic analysis of each condition submitted by a consulting 
     agency to determine whether the condition would render the 
     project uneconomic.
       ``(2) Consistency with this section.--In exercising 
     authority under section 10(j)(2), the Commission shall 
     consider whether any recommendation submitted under section 
     10(j)(1) is consistent with the purposes and requirements of 
     subsections (b) and (c) of this section.
       ``(h) Commission Determination on Effect of Conditions.--
     When requested by a license applicant in a request for 
     rehearing, the Commission shall make a written determination 
     on whether a condition submitted by a consulting agency--
       ``(1) is in the public interest, as measured by the impact 
     of the condition on the factors described in subsection 
     (b)(1);
       ``(2) was subjected to scientific review in accordance with 
     subsection (c);
       ``(3) relates to direct project impacts within the 
     reservation, in the case of a condition for the first proviso 
     of section 4(e);
       ``(4) is reasonable;
       ``(5) is supported by substantial evidence; and
       ``(6) is consistent with this Act and other terms and 
     conditions to be included in the license.''.
       (b) Conforming and Technical Amendments.--
       (1) Section 4.--Section 4(e) of the Federal Power Act (16 
     U.S.C. 797(e)) is amended--
       (A) in the first proviso of the first sentence by inserting 
     after ``conditions'' the following: ``, determined in 
     accordance with section 32,''; and
       (B) in the last sentence, by striking the period and 
     inserting ``(including consideration of the impacts on 
     greenhouse gas emissions)''.
       (2) Section 18.--Section 18 of the Federal Power Act (16 
     U.S.C. 811) is amended in the first sentence by striking 
     ``prescribed by the Secretary of Commerce'' and inserting 
     ``prescribed, in accordance with section 32, by the Secretary 
     of the Interior or the Secretary of Commerce, as 
     appropriate''.

     SEC. 5. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

       Part I of the Federal Power Act (16 U.S.C. 791a et seq.) 
     (as amended by section 4) is amended by adding at the end the 
     following:

     ``SEC. 33. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

       ``(a) Lead Agency Responsibility.--The Commission, as the 
     lead agency for environmental reviews under the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) for 
     projects licensed under this part, shall conduct a single 
     consolidated environmental review--
       ``(1) for each such project; or
       ``(2) if appropriate, for multiple projects located in the 
     same area
       ``(b) Consulting Agencies.--In connection with the 
     formulation of a condition in accordance with section 32, a 
     consulting agency shall not perform any environmental review 
     in addition to any environmental review performed by the 
     Commission in connection with the action to which the 
     condition relates.
       ``(c) Deadlines.--
       ``(1) In general.--The Commission shall set a deadline for 
     the submission of comments by Federal, State, and local 
     government agencies in connection with the preparation of any 
     environmental impact statement or environmental assessment 
     required for a project.
       ``(2) Considerations.--In setting a deadline under 
     paragraph (1), the Commission shall take into consideration--
       ``(A) the need of the license applicant for a prompt and 
     reasonable decision;
       ``(B) the resources of interested Federal, State, and local 
     government agencies; and
       ``(C) applicable statutory requirements.''.

     SEC. 6. STUDY OF SMALL HYDROELECTRIC PROJECTS.

       (a) In General.--Not later than 18 months after the date of 
     enactment of this Act, the Federal Energy Regulatory 
     Commission shall submit to the Committee on Energy and 
     Natural Resources of the Senate and the Committee on Commerce 
     of the House of Representatives a study of the feasibility of 
     establishing a separate licensing procedure for small 
     hydroelectric projects.
       (b) Definition of Small Hydroelectric Project.--The 
     Commission may by regulation define the term ``small 
     hydroelectric project'' for the purpose of subsection (a), 
     except that the term shall include at a minimum a 
     hydroelectric project that has a generating capacity of 5 
     megawatts or less.

  Section-by-Section Analysis of the Hydroelectric Licensing Process 
                        Improvement Act of 2001

       Section 1: Short Title. The legislation may be referred to 
     as the Hydroelectric Licensing Process Improvement Act of 
     2001.
       Section 2: Findings. Hydropower is a vital renewable energy 
     resource, providing clean, economic and reliable electricity. 
     Hydropower projects also provide recreation, irrigation, 
     flood control, water supply and fish and wildlife benefits. 
     The bulk of all non-Federal hydro projects are coming up for 
     relicensing by the Federal Energy Regulatory Commission 
     (FERC) in the next 15 years. The hydroelectric licensing 
     process does not produce optimal decisions, because agencies 
     participating in the process fail to consider the full 
     effects of mandatory and recommended license conditions. The 
     process is inefficient, in part because of delays in the 
     submission of mandatory and recommended conditions, and 
     environmental reviews are uncoordinated. As a result, the 
     process is burdensome for all participants, and prone to 
     litigation. While alternative licensing procedures are 
     available and can lead to the collaborative resolution of 
     issues in some relicensings, they are not appropriate in all 
     circumstances, and are not a substitute for needed statutory 
     reform.
       Section 3: Purpose. The purpose of the legislation is to 
     achieve the objective of relicensing hydroelectric power 
     projects to maintain high environmental standards while 
     preserving low cost power. This purpose will be achieved 
     through statutory reforms to improve the licensing process by 
     (1) requiring agencies to consider key factors, and document 
     their consideration of those factors, when developing 
     mandatory and recommended license conditions; (2) requiring 
     FERC to set deadlines for the submission of agency 
     conditions; and (3) making other process improvements.
       Section 4(a): Process for Consideration by Federal Agencies 
     of Conditions to Licenses. The legislation would create a new 
     section 32 of the Federal Power Act (FPA), specifying the 
     process for consideration by Federal agencies of conditions 
     to hydroelectric project licenses.
       Definitions: New FPA section 32(a) would define 
     ``condition'' and ``consulting agency'' as used in section 
     32. ``Condition'' refers to conditions for projects on 
     Federal reservations determined under FPA section 4(e) and 
     fishway prescriptions determined under FPA section 18. 
     ``Consulting agencies'' are the agencies with authority to 
     determine conditions under sections 4(e) and 18.
       Factors to be Considered: New FPA section 32(b) would 
     require consulting agencies to consider the impact of 
     conditions on: economic and power values; electric generating 
     capacity and system reliability; air quality, including 
     impacts on greenhouse gas emissions; and drinking, flood 
     control, irrigation, navigation or recreation water supply. 
     In addition, agencies would be required to consider the 
     compatibility of their conditions with other conditions that 
     will be included in the license, including, if available, 
     mandatory conditions of other agencies. Further, agencies 
     would be required to consider means to ensure that conditions 
     address only direct project environmental impacts, and do so 
     at the lowest cost to the project. Agencies must create 
     written documentation of their consideration of these issues, 
     and submit the documentation to FERC along with the 
     condition.
       Scientific Review: New FPA section 32(c) would require that 
     each condition be subjected to appropriately substantiated 
     scientific review based on current empirical data or field-
     tested data and subjected to peer review.
       Relationship to Impacts on Federal Reservation: New FPA 
     section 32(d) would require that conditions determined under 
     FPA section 4(e) be directly and reasonably related to the 
     impacts of the project within the Federal reservation.
       Administrative Review: New FPA section 32(e) would require 
     that proposed conditions be provided to applicants at least 
     90 days prior to the deadline for filing a license 
     application. Prior to submitting proposed conditions to the 
     Commission, consulting agencies must offer the license 
     applicant an opportunity to obtain administrative review of 
     the condition before an administrative law judge or other 
     independent reviewing body. The administrative review would 
     consider the reasonableness of the proposed condition, in 
     light of its effects on the energy and economic values of the 
     project, and the agency's compliance with the requirements 
     imposed in section 32. Administrative review must be 
     completed within 180 days of a request for review from the 
     applicant. If it is not, the Commission is authorized to 
     treat the condition as a recommendation is treated under FPA 
     section 10(j). If an agency reviewing body decides that a 
     proposed condition is unreasonable or that the requirements 
     of the new FPA section 32 are not met, it must explain its 
     decision and remand the matter to the agency for further 
     action. The reviewing body may recommend curative actions. 
     Finally, the consulting agency, following administrative 
     review, would be required to either withdraw the condition, 
     formulate a condition that follows the recommendations of the 
     administrative review body, or otherwise comply with section 
     32. When the condition is submitted to the Commission, the 
     consulting agency would be required to include any record on 
     administrative review

[[Page 448]]

     and documentation of any action taken after administrative 
     review.
       Submission of Final Condition: After a license application 
     is filed, new FPA section 32(f) would require FERC to 
     establish a deadline for the submission to the Commission of 
     final conditions. The deadline would be no later than one 
     year after the date on which the Commission gives notice that 
     the license application is ready for environmental review 
     (subject to one 30 day extension by FERC). If the consulting 
     agency fails to comply with the deadline, the agency would 
     not have authority to recommend or establish a condition. The 
     legislative language restates FERC's current authority under 
     its regulations to propose or establish license conditions in 
     place of the defaulting agency in such a situation.
       Analysis by the Commission: New section 32(g) would require 
     FERC to conduct an economic analysis of conditions to 
     determine whether a condition would render the project 
     uneconomic. In addition, in exercising its authority under 
     section 10(j) to reject a recommendation that is inconsistent 
     with the Federal Power Act, the Commission would be required 
     to consider whether 10(j) recommendations are consistent with 
     the provisions of sections 32 (b) and (c) (consideration of 
     factors and scientific review).
       Commission Determination on Effect of Conditions: New 
     section 32(h) would require the Commission, if requested on 
     rehearing by a license applicant, to make a written 
     determination on whether a condition (1) is in the public 
     interest (measured by the impact of the condition on the 
     energy, economic and resource considerations enumerated in 
     section 32(b); (2) was subject to scientific review as 
     required in section 32(c); (3) relates to direct project 
     impacts within the reservation (if applicable); (4) is 
     reasonable; (5) is supported by substantial evidence; and (6) 
     is consistent with the Federal Power Act and other license 
     terms and conditions.
       Section 4(b): Conforming and Technical Amendments: This 
     section makes certain technical changes in FPA sections 4(e) 
     and 18 to reflect the new requirements of section 32.
       Section 5: Coordinated Environmental Review Process: A new 
     section 33 would be added to the Federal Power Act to confirm 
     the FERC's responsibilities as the lead agency for 
     environmental reviews of hydroelectric projects under the 
     National Environmental Policy Act.
       Lead Agency Responsibility: New FPA section 33(a) would 
     confirm FERC's responsibility to conduct a single, 
     consolidated environmental review for each project or, if 
     appropriate, for multiple projects located in the same area. 
     This language assures that the legislation does not preclude 
     a single environmental review being done for multiple 
     projects.
       Consulting Agencies: New FPA section 33(b) would impose a 
     limitation on consulting agencies seeking to perform a 
     separate environmental review for conditions submitted in 
     accordance with new FPA section 32. This language is designed 
     to avert agency reviews that would duplicate the consolidated 
     environmental review conducted by FERC.
       Deadlines: New FPA section 33(c) would require the 
     Commission to set deadlines that provide opportunity for 
     input on environmental reviews by federal, state and local 
     agencies.
       Section 6: Study of Small Hydroelectric Projects. Within 18 
     months of the date of enactment, FERC must complete a study 
     of the feasibility of establishing a separate licensing 
     procedure for small hydroelectric projects. The study would 
     be submitted to the Senate Energy and Natural Resources and 
     House Commerce Committees. The term ``small hydroelectric 
     project'' would be defined by FERC, and shall include 
     projects with generating capacity of 5 megawatts or less.
                                 ______
                                 
      Mr. BINGAMAN:
       S. 72. A bill to amend the National Energy Conservation 
     Policy Act to enhance and extend authority relating to energy 
     savings performance contracts of the Federal Government; to 
     the Committee on Energy and Natural Resources.


                        expanding ESPC authority

  Mr. BINGAMAN. Mr. President, I rise today to introduce important 
legislation, to amend the National Energy Conservation Policy Act of 
1986. This legislation, the ``Energy Efficient Cost Savings Improvement 
Act of 2001,'' which I previously introduced on December 14, 2000 as S. 
3277 and was accepted by unanimous consent, will improve the current 
law by enhancing and extending the authority relating to energy savings 
performance contracts of the Federal Government. The benefit to the 
taxpayer will be not only the realization of greater cost savings as 
they pertain to older, inefficient Federal buildings but, more 
importantly, the reduction in the waste of monies spent trying to 
improve these buildings when other, more cost effective alternatives 
are available.
  The National Energy Conservation Policy Act, as amended by the Energy 
Policy Act of 1992, established a mandate for energy savings in Federal 
buildings and facilities. Aggressive energy conservation goals were 
subsequently established by Executive Order 12902, stating that, by 
2005, Federal agencies must reduce their energy consumption in their 
buildings by 30 percent per square foot when compared to 1985 levels. 
Executive Order 13123 increased this goal to 35 percent by 2010.
  To help attain these objectives, the Energy Policy Act of 1992 
created Energy Savings Performance Contracting (ESPC), which offered a 
means of achieving this energy reduction goal at no capital cost to the 
government. That's right--no capital cost to the government, since ESPC 
is an alternative to the traditional method of Federal appropriations 
to finance these types of improvements in Federal buildings. Under the 
ESPC authority, Federal agencies contract with energy service companies 
(ESCO), which pay all the up-front costs. These costs relate to 
evaluation, design, financing, acquisition, installation, and 
maintenance of energy efficient equipment; altered operation and 
maintenance improvements; and technical services. The ESCO guarantees a 
fixed amount of energy cost savings throughout the life of the contract 
and is paid directly from those cost savings. Agencies retain the 
remainder of the cost savings for themselves and, at the end of the 
contract, ownership of all property, along with the additional cost 
savings, reverts to the Federal government. Currently, contracts may 
range up to 25 years. Over the entire contract period, Federal monies 
are neither required nor appropriated for the improvements.
  But, as innovative as the ESPC alternative may be, there is one area 
in which it falls short--and that is, how to avoid wasting valuable 
funds improving energy efficiency in a building that has long since 
passed its useful life. How do you justify energy conservation measures 
in buildings that are in constant need of maintenance or repair? 
Facilities that, no matter how much money is invested for renovation, 
will never meet existing building code requirements? You may save money 
by improving energy efficiency, but then turn around and reinvest even 
larger amounts in operating and maintaining a very old facility. 
Somewhere there has to be a point where we decide there must be other 
alternatives--and that is exactly what my legislation offers.
  Mr. President, the most important element of my legislation is in the 
way it proposes to fund the construction of replacement Federal 
facilities. The legislation builds upon the existing Energy Savings 
Performance Contracting and takes it one logical step further--to 
include savings anticipated from operation and maintenance efficiencies 
of a new replacement Federal building. Perhaps the easiest way to 
explain the benefits of this change is by citing an example. In my home 
state of New Mexico, the Department of Energy Albuquerque Operations 
office resides in a complex of buildings constructed originally as Army 
barracks during the Korean War. Although these facilities have been 
renovated and modified throughout the years, they remain energy 
inefficient and require high maintenance and operation costs when 
compared to more contemporary buildings. What's more, over the next 
seven years, the Operations office will institute additional 
modifications to meet compliance requirements for seismic, energy 
savings, and other facility infrastructure concerns (maintenance, 
environmental, safety and health, etc.) at a cost of $34.2 million. 
Even with these modifications, we end up with a modernized 50-year old 
building that will continue to require expensive maintenance dollars. 
The estimate to replace the office complex with a new facility, by the 
way, is $35.3 million. While Congress cannot afford to appropriate 
funds to build a new facility, we're willing to spend--no, we're forced 
to waste--almost as much in maintaining an old one.
  As requested by the National Defense Authorization Act for FY2000, 
the Department of Energy conducted a feasibility study for replacing 
the Albuquerque Operations office using an

[[Page 449]]

ESPC. The results of the study are enlightening, for it demonstrated 
that by using anticipated energy, operations, and maintenance 
efficiencies of a new replacement building over the old one, the cost 
savings alone pay for the new facility. What's more, the analysis 
forecasts that after the annual ESPC loan payment is made to the 
contractor, there is a $1 million per year surplus. Over a 25-year 
contract, the savings to the taxpayer is $25 million.
  Finally, Mr. President, I want to draw your attention to the broader 
implications that this legislation has for Federal agencies and 
taxpayers alike. The application of authority created by this 
legislation in the replacement of other Federal buildings could result 
in billions of dollars of avoided waste. Simply by considering 
operation and maintenance cost savings, we would reap a double benefit 
of newer facilities and much needed improvements to the Federal 
infrastructure at a fraction of the cost. And, since ESCOs typically 
use local companies to provide construction services, this type of 
program would have a very beneficial effect on local economies.
  There is certainly enough work within the Federal government to move 
forward on this ESPC legislation. To this end, I urge my colleagues to 
support the bill.
  I ask for unanimous consent that the text of the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 72

       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 ``Energy Efficient Cost 
     Savings Improvement Act of 2001''.

     SEC. 2. ENHANCEMENT AND EXTENSION OF AUTHORITY RELATING TO 
                   ENERGY SAVINGS PERFORMANCE CONTRACTS OF THE 
                   FEDERAL GOVERNMENT.

       (a) Energy Savings Through Construction of Replacement 
     Facilities.--Section 804 of the National Energy Conservation 
     Policy Act (42 U.S.C. 8287c) is amended--
       (1) in paragraph (2)--
       (A) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (B) by inserting ``(A)'' after ``(2)''; and
       (C) by adding at the end the following new subparagraph:
       ``(B) The term also means a reduction in the cost of 
     energy, from such a base cost, that would otherwise be 
     utilized in a federally owned building or buildings or other 
     federally owned facilities by reason of the construction and 
     operation of one or more buildings or facilities to replace 
     such federally owned building or buildings or other federally 
     owned facilities.''; and
       (2) in paragraph (3), by inserting after the first sentence 
     the following new sentence: ``The terms also mean a contract 
     that provides for energy savings through the construction and 
     operation of one or more buildings or facilities to replace 
     one or more existing buildings or facilities.''.
       (b) Cost Savings From Operation and Maintenance 
     Efficiencies in Replacement Facilities.--Section 801(a) of 
     that Act (42 U.S.C. 8287(a)) is amended by adding at the end 
     the following new paragraph:
       ``(3)(A) In the case of an energy savings contract or 
     energy savings performance contract providing for energy 
     savings through the construction and operation of one or more 
     buildings or facilities to replace one or more existing 
     buildings or facilities, benefits ancillary to the purpose of 
     such contract under paragraph (1) may include savings 
     resulting from reduced costs of operation and maintenance at 
     such replacement buildings or facilities when compared with 
     costs of operation and maintenance at the buildings or 
     facilities being replaced.
       ``(B) Notwithstanding paragraph (2)(B), aggregate annual 
     payments by an agency under an energy savings contract or 
     energy savings performance contract referred to in 
     subparagraph (A) may take into account (through the 
     procedures developed pursuant to this section) savings 
     resulting from reduced costs of operation and maintenance as 
     described in that subparagraph.''.
       (c) Five-Year Extension of Authority.--Section 801(c) of 
     that Act (42 U.S.C. 8287(c)) is amended by striking ``October 
     1, 2003'' and inserting ``October 1, 2008''.
                                 ______
                                 
      By Mr. HELMS:
  S. 73. A bill to prohibit the provision of Federal funds to any State 
or local educational agency that denies or prevents participation in 
constitutional prayer in schools; read the first time.
  S. 74. A bill to prohibit the provision of Federal funds to any State 
or local educational agency that distributes or provides morning-after 
pills to schoolchildren; read the first time.
  S. 75. A bill to protect the lives of unborn human beings; read the 
first time.
  S. 76. A bill to make it a violation of a right secured by the 
Constitution and laws of the United States to perform an abortion with 
the knowledge that the abortion is being performed solely because of 
the gender of the fetus; read the first time.
  S. 78. A bill to amend the Civil Rights Act of 1964 to make 
preferential treatment an unlawful employment practice, and for other 
purposes; read the first time.
  S. 79. A bill to encourage drug-free and safe schools; read the first 
time.


           LEGISLATION TO CORRECT PERMISSIVE SOCIAL POLICIES

  Mr. HELMS. Mr. President, it is customary for me to introduce 
legislation on the first day of a new Congress that addresses what 
countless Americans believe are our Nation's most serious social 
problems. These problems are not new--and the solutions are familiar--
but I shall nonetheless devote a few moments to explaining the 
importance of these bills, and why, more than ever, it is so crucial to 
correct a number of permissive social policies that are creating a 
moral and spiritual crisis in our country.
  During the past several years, Mr. President, I have been delighted 
that the responsible fiscal policies of the Republican Congress, 
coupled with strong and stable monetary policy engineered by the 
Federal Reserve, has proved a successful combination for the economy. 
The resulting expansion--fueled not by government but by the limitless 
entrepreneurial energy of the American people--has been highly 
gratifying.
  But while the American people have been largely optimistic about the 
state of the economy, there is a curious dichotomy between those 
positive feelings and their unease about the state of American society. 
Because for every positive report Americans read on the financial page, 
there seems to be utterly horrifying stories elsewhere, stories which 
detail a moral sickness at the heart of our culture, stories which 
chronicle the devaluation of human life in our society, symbolized by 
the tragic 1973 Supreme Court decision, Roe v. Wade.
  Two years ago, I told the story of the young New Jersey woman who in 
May of 1997 gave birth to an infant in a public bathroom stall during 
her senior prom. She promptly strangled her newborn baby boy, placed 
his little body in a trash can, adjusted her makeup, and returned to 
the dance floor.
  The American people were justly shocked by such callousness, and I 
was even more stunned to learn that stories of a similar nature are 
common.
  Consider the following examples reported in the media in December of 
the year 2000.
  Portland Oregonian, December 5, 2000: ``A teen-ager accused of 
drowning her newborn baby in the bathtub at a family gathering in July 
in Eagle Creek pleaded guilty on Monday to second-degree 
manslaughter.''
  Chicago Tribune, December 9, 2000: ``A 21-year-old Fox Lake man 
pleaded guilty Friday to first-degree murder in the death of his 
girlfriend's 2-month-old daughter, who authorities said was brutally 
shaken and thrown during the last days of her life.
  Orlando Sentinel, December 24, 2000: ``A 17-month-old baby has died 
after his stepfather beat the infant in the head with his fists.
  News Tribune (Tacoma, Washington), December 1, 2000: ``A Lakewood 
mother and her live-in boyfriend have been charged with homicide-by-
abuse in the mid-September death of the woman's 2-month-old son.''
  Salt Lake Tribune, December 5, 2000: The mother of a newborn boy 
found dead after being abandoned in a shed at a St. George amusement 
park was bound over Monday for trial on a charge of first-degree 
murder.
  Should we really be surprised, Mr. President, that a Nation that not 
only tolerates, but actively defends the practice of partial birth 
abortion would produce these gruesome headlines? And should we be 
surprised that the extraordinary level of disrespect for human life to 
which America has fallen

[[Page 450]]

has not been limited to infant abuse on the part of caregivers, but now 
pervades every part of our society?
  In fact, Mr. President, the abortion-on-demand zealots holding sway 
over the media and much of the intellectual and political establishment 
are becoming ever more brazen in their assault on the unborn. Just this 
month, the National Abortion Rights Action League, known as NARAL, 
began an outrageously offensive television advertising campaign seeking 
to cloak the divisive practice of abortion under the guise of 
patriotism. Amidst images of families and children, and accompanied by 
stirring music, the text of the advertisement falsely treats this 
painful procedure as a cause for celebration. ``What's life,'' the 
commercial asks, ``without choice?''
  The deliberate destruction of the most innocent, most helpless human 
beings imaginable has nothing whatsoever to do with ``life.''
  We have a moral crisis in our country. But too often, the mainstream 
media doesn't seek to remedy our decaying culture; they actually 
celebrate it. During the past two years, the FOX network has become 
notorious for trivializing our most cherished institutions with so-
called ``reality entertainment'' programs like ``Who Wants to Marry a 
Multi-Millionaire'' and its most recent assault on good taste, 
``Temptation Island''.
  On this program, which debuted just weeks ago, contestants--or 
perhaps I should say exhibitionists--exchange their real-life 
relationships for promiscuous affairs, solely to divert the viewing 
public. And instead of responding with outrage--or at the very least, 
indifference--a sizeable portion of the American public rewarded the 
program with high ratings.
  It is increasingly apparent that American society has lost its 
moorings. But too many politicians blithely suggest that government and 
morality are not and should not be related; too many producers in 
Hollywood claim that the filth that passes for entertainment does not 
corrupt our culture; and too many educators claim the academy does not 
have a place in addressing the difference between right and wrong.
  Mr. President, they are the ones who are wrong. We fool ourselves and 
we fool the public if we suggest that there is no connection between 
the business we do in Congress and the state of public morality in our 
society. We are the caretakers of our own culture. And we must not 
shrink from the responsibility of passing laws that promote what is 
right and prevent what is wrong in our society.
  When we make good choices, such as passing comprehensive welfare 
reform, the American people are rewarded with declining welfare 
caseloads with a corresponding decrease in crime and poverty. When 
Congress pursues responsible fiscal policy and balances the budget, it 
is possible to return to the American people more of their hard-earned 
money in the form of a tax cut.
  In short, Mr. President, good laws help make good societies. And that 
is the reason I continue to introduce bills in each and every Congress 
that limit the modern tragedy of abortion and its insidious effects; 
that allow for voluntary prayer in schools; that take steps to end the 
scourge of drug use among our children; and that make sure our civil 
rights laws treat Americans as individuals rather than faceless members 
of racial groups, religious groups, or of a certain gender.
  Mr. President, I ask unanimous consent that these six bills be 
printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 73

       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 ``Voluntary School Prayer 
     Protection Act''.

     SEC. 2. FUNDING CONTINGENT ON RESPECT FOR CONSTITUTIONAL 
                   SCHOOL PRAYER.

       (a) In General.--Notwithstanding any other provision of 
     law, no funds made available through the Department of 
     Education shall be provided to any State or local educational 
     agency that has a policy of denying, or that effectively 
     prevents participation in, constitutional prayer in public 
     schools by individuals on a voluntary basis.
       (b) Limitation.--No person shall be required to participate 
     in prayer, or shall influence the form or content of any 
     constitutional prayer, in a public school.
                                  ____


                                 S. 74

       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 ``Schoolchildren's Health 
     Protection Act''.

     SEC. 2. SCHOOLCHILDREN'S HEALTH PROTECTION.

       (a) In General.--Notwithstanding any other provision of law 
     (including the specific provisions described in subsection 
     (b)), no funds made available through the Department of 
     Education shall be provided to any State or local educational 
     agency that distributes or provides postcoital emergency 
     contraception, or distributes or provides a prescription for 
     postcoital emergency contraception, to an unemancipated 
     minor, on the premises or in the facilities of any elementary 
     school or secondary school.
       (b) Specific Provisions.--The specific provisions referred 
     to in subsection (a) are section 330 and title X of the 
     Public Health Service Act (42 U.S.C. 254b, 300 et seq.) and 
     title V and XIX of the Social Security Act (42 U.S.C. 701 et 
     seq., 1396 et seq.).
       (c) Definitions.--In this section:
       (1) Elementary school; secondary school.--The terms 
     ``elementary school'' and ``secondary school'' have the 
     meanings given the terms in section 14101 of the Elementary 
     and Secondary Education Act of 1965 (20 U.S.C. 8801).
       (2) Unemancipated minor.--The term ``unemancipated minor'' 
     means an unmarried individual who is 17 years of age or 
     younger and is a dependent, as defined in section 152(a) of 
     the Internal Revenue Code of 1986.
                                  ____


                                 S. 75

       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 ``Unborn Children's Civil 
     Rights Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) scientific evidence demonstrates that abortion takes 
     the life of an unborn child who is a living human being;
       (2) a right to abortion is not secured by the Constitution;
       (3) in the cases of Roe v. Wade (410 U.S. 113 (1973)) and 
     Doe v. Bolton (410 U.S. 179 (1973)) the Supreme Court erred 
     in not recognizing the humanity of the unborn child and the 
     compelling interest of the States in protecting the life of 
     each person before birth.

     SEC. 3. PROHIBITION ON USE OF FUNDS FOR ABORTION.

       No funds appropriated by Congress shall be used to take the 
     life of an unborn child, except that such funds may be used 
     only for those medical procedures required to prevent the 
     death of either the pregnant woman or her unborn child so 
     long as every reasonable effort is made to preserve the life 
     of each.

     SEC. 4. PROHIBITION ON USE OF FUNDS TO ENCOURAGE OR PROMOTE 
                   ABORTION.

       No funds appropriated by Congress shall be used to promote, 
     encourage, counsel for, refer for, pay for (including travel 
     expenses), or do research on, any procedure to take the life 
     of an unborn child, except that such funds may be used in 
     connection with only those medical procedures required to 
     prevent the death of either the pregnant woman or her unborn 
     child so long as every reasonable effort is made to preserve 
     the life of each.

     SEC. 5. PROHIBITION ON ENTERING INTO CERTAIN INSURANCE 
                   CONTRACTS.

       Neither the United States, nor any agency or department 
     thereof shall enter into any contract for insurance that 
     provides for payment or reimbursement for any procedure to 
     take the life of an unborn child, except that the United 
     States, or an agency or department thereof may enter into 
     contracts for payment or reimbursement for only those medical 
     procedures required to prevent the death of either the 
     pregnant woman or her unborn child so long as every 
     reasonable effort is made to preserve the life of each.

     SEC. 6. LIMITATIONS ON RECIPIENTS OF FEDERAL FUNDS.

       No institution, organization, or other entity receiving 
     Federal financial assistance shall--
       (1) discriminate against any employee, applicant for 
     employment, student, or applicant for admission as a student 
     on the basis of such person's opposition to procedures to 
     take the life of an unborn child or to counseling for or 
     assisting in such procedures;
       (2) require any employee or student to participate, 
     directly or indirectly, in a health insurance program which 
     includes procedures to take the life of an unborn child or 
     which provides counseling or referral for such procedures; or
       (3) require any employee or student to participate, 
     directly or indirectly, in procedures to take the life of an 
     unborn child or in counseling, referral, or any other 
     administrative arrangements for such procedures.

[[Page 451]]



     SEC. 7. LIMITATION ON CERTAIN ATTORNEYS' FEES.

       Notwithstanding any other provision of Federal law, 
     attorneys' fees shall not be allowable in any civil action in 
     Federal court involving, directly or indirectly, a law, 
     ordinance, regulation, or rule prohibiting or restricting 
     procedures to take the life of an unborn child.

     SEC. 8. APPEALS OF CERTAIN CASES.

       Chapter 81 of title 28, United States Code, is amended by 
     inserting after section 1251, the following:

     ``Sec. 1252. Appeals of certain cases

       ``Notwithstanding the absence of the United States as a 
     party, if any State or any subdivision of any State enforces 
     or enacts a law, ordinance, regulation, or rule prohibiting 
     procedures to take the life of an unborn child, and such law, 
     ordinance, regulation, or rule is declared unconstitutional 
     in an interlocutory or final judgment, decree, or order of 
     any court of the United States, any party in such a case may 
     appeal such case to the Supreme Court, notwithstanding any 
     other provision of law.''.
                                  ____


                                 S. 76

       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 ``Civil Rights of Infants 
     Act''.

     SEC. 2. DEPRIVING PERSONS OF THE EQUAL PROTECTION OF LAWS 
                   BEFORE BIRTH.

       Section 1979 of the Revised Statutes (42 U.S.C. 1983) is 
     amended--
       (1) by inserting ``(a)'' before ``Every person''; and
       (2) by adding at the end the following:
       ``(b) For purposes of subsection (a), it shall be a 
     deprivation of a `right' secured by the laws of the United 
     States for an individual to perform an abortion with the 
     knowledge that the pregnant woman is seeking the abortion 
     solely because of the gender of the fetus. No pregnant woman 
     who seeks to obtain an abortion solely because of the gender 
     of the fetus shall be liable for such abortion in any manner 
     under this section.''.
                                  ____


                                 S. 78

       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 ``Civil Rights Restoration Act 
     of 2001''.

     SEC. 2. PREFERENTIAL TREATMENT.

       (a) Unlawful Employment Practice.--Section 703(j) of the 
     Civil Rights Act of 1964 (42 U.S.C. 2000e-2(j) is amended to 
     read as follows:
       ``(j)(1) It shall be an unlawful employment practice for 
     any entity that is an employer, employment agency, labor 
     organization, or joint labor-management committee subject to 
     this title to grant preferential treatment to any individual 
     or group with respect to selection for, discharge from, 
     compensation for, or the terms, conditions, or privileges of, 
     employment or union membership, on the basis of the race, 
     color, religion, sex, or national origin of such individual 
     or group, for any purpose, except as provided in subsection 
     (e) or paragraph (2).
       ``(2) It shall not be an unlawful employment practice for 
     an entity described in paragraph (1) to recruit individuals 
     of an underrepresented race, color, religion, sex, or 
     national origin, to expand the applicant pool of the 
     individuals seeking employment or union membership with the 
     entity.''
       (b) Construction.--Nothing in the amendment made by 
     subsection (a) shall be construed to limit the authority of 
     courts to remedy, under section 706(g) of the Civil Rights 
     Act of 1964 (42 U.S.C. 2000e-5(g)), intentional 
     discrimination under title VII of such Act (42 U.S.C. 2000e 
     et seq.).
                                  ____


                                 S. 79

       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 ``Safe Schools Act of 2001''.

     SEC. 2. SAFE SCHOOLS.

       (a) Amendments to the Gun-Free Schools Act of 1994.--Part F 
     of title XIV of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 8921 et seq.) is amended--
       (1) in section 14601 (20 U.S.C. 8921)--
       (A) in subsection (a)--
       (i) by striking ``Gun-Free'' and inserting ``Safe''; and
       (ii) by striking ``1994'' and inserting ``2001'';
       (B) in subsection (b)(1), by inserting after ``determined'' 
     the following: ``to be in possession of felonious quantities 
     of an illegal drug, on school property under the jurisdiction 
     of, or in a vehicle operated by an employee or agent of, a 
     local educational agency in that State, or''; and
       (C) in subsection (b)(4)--
       (i) by striking ``Definitions.--For the purpose of this 
     section, the'' and inserting the following: ``Definitions.--
     For purposes of this section:
       ``(1) Weapon.--The''; and
       (ii) by adding at the end the following:
       `'(2) Illegal drug.--The term `illegal drug' means a 
     controlled substance, as defined in section 102(6) of the 
     Controlled Substances Act (21 U.S.C. 802(6)), the possession 
     of which is unlawful under such Act (21 U.S.C. 801 et seq.) 
     or under the Controlled Substances Import and Export Act (21 
     U.S.C. 951 et seq.), but does not include a controlled 
     substance used pursuant to a valid prescription or as 
     authorized by law.
       (3) Illegal drug paraphernalia.--The term `illegal drug 
     paraphernalia' means drug paraphernalia, as defined in 
     section 422(d) of the Controlled Substances Act (21 U.S.C. 
     863(d)), except that the first sentence of that section shall 
     be applied by inserting `or under the Controlled Substances 
     Import and Export Act (21 U.S.C. 951 et seq.)' before the 
     period.
       ``(4) Felonious quantities of an illegal drug.--The term 
     `felonious quantities of an illegal drug' means any quantity 
     of an illegal drug--
       ``(A) possession of which (quantity) would, under Federal, 
     State, or local law, either constitute a felony or indicate 
     an intent to distribute; or
       ``(B) that is possessed with an intent to distribute.'';
       (D) in subsection (d)(2)(C), by inserting ``illegal drugs 
     or'' before ``weapons''; and
       (E) by striking subsection (f);(2) in section 14602(a) (20 
     U.S.C. 8922(a))--
       (A) by inserting after ``who'' the following: ``is in 
     possession of an illegal drug, or illegal drug paraphernalia, 
     on school property under the jurisdiction of, or in a vehicle 
     operated by an employee or agent of, such agency, or who''; 
     and
       (B) by striking ``served by'' and inserting ``under the 
     jurisdiction of''; and
       (3) in section 14603 (20 U.S.C. 8923)--
       (A) in paragraph (1)--
       (i) by striking ``policy of the Department in effect on the 
     date of enactment of the Improving America's Schools Act of 
     1994'' and inserting ``policy in effect on the date of 
     enactment of the Safe Schools Act of 2001''; and
       (ii) by adding ``and'' at the end; (B) in paragraph (2)--
       (i) by striking ``engaging'' and inserting ``possessing 
     illegal drugs, or illegal drug paraphernalia, on school 
     property, or in vehicles operated by employees or agents of, 
     schools or local educational agencies, or engaging''; and
       (ii) by striking ``; and'' and inserting a period; and
       (C) by striking paragraph (3).
       (b) Compliance Date Reporting.--
       (1) Compliance date.--A State shall have 2 years from the 
     date of enactment of this Act to comply with the requirements 
     established under the amendments made by subsection (a).
       (2) Reports.--
       (A) On approaches for discipline.--Not later than 2 years 
     after the date of enactment of this Act, the Secretary of 
     Education shall submit to Congress a report analyzing the 
     strengths and weaknesses of approaches regarding the 
     disciplining of children with disabilities.
       (B) On compliance.--Not later than 3 years after the date 
     of enactment of this Act, the Secretary of Education shall 
     submit to Congress a report on any State that is not in 
     compliance with the requirements of this part.


                 voluntary school prayer protection act

  Mr. HELMS. Mr. President, the voluntary School Prayer Protection Act 
will make sure that student-initiated prayer is treated the same as all 
other student-initiated free speech--which the U.S. Supreme Court has 
upheld as constitutionally protected so long as it is done in an 
appropriate time, place and manner such that it ``does not materially 
disrupt the school day.'' [Tinker v. Des Moines School District, 393 
U.S. 503.]
  Under this bill, school districts could not continue--in 
constitutional ignorance--enforcing blanket denials of students' rights 
to voluntary prayer and religious activity in the schools. For the 
first time, schools would be faced with real consequences for making 
uninformed and unconstitutional decisions prohibiting all voluntary 
prayer. The bill creates a complete system of checks and balances to 
make sure that school districts do not shortchange their students one 
way or the other.
  This proposal, Mr. President, prevents public schools from 
prohibiting constitutionally protected voluntary student-initiated 
prayer. It does not mandate school prayer and suggestions to the 
contrary are simply in error. Nor does it require schools to write any 
particular prayer, or compel any student to participate in prayer. It 
does not prevent school districts from establishing appropriate time, 
place, and manner restrictions on voluntary prayer--the same kind of 
restrictions that are placed on other forms of speech in the schools.

[[Page 452]]

  What this proposal will do is prevent school districts from 
establishing official policies or procedures with the intent of 
prohibiting students from exercising their constitutionally protected 
right to lead, or participate in, voluntary prayer in school.


                 schoolchildren's health protection act

  Mr. President, there is a significant question pending before the 
Senate: should schools receiving federal funds be able to distribute 
``morning after pills''--also identified as abortion pills--to 
schoolchildren? The answer is unequivocally no. Which is why I am 
introducing the Schoolchildren's Health Protection Act. This pivotal 
legislation will put an end to elementary and secondary schools 
receiving federal funds from distributing ``morning after pills'' to 
schoolchildren as young as 12 years old.
  The Congressional Research Service (CRS) has not only confirmed that 
Federal law permits school-based health clinics receiving federal 
family planning money to distribute ``Morning-after pills,'' but CRS 
has also reported that at least 180 schools in America are in fact 
distributing these abortion pills to schoolchildren. Obviously, Mr. 
President, we are no longer just talking about condoms being handed out 
at school.
  What's more is that federal law currently allows schools to provide 
these abortion-inducing drugs to children behind the backs of parents. 
In a handful of cases, the federal courts have struck down parental 
consent laws, ruling that any federal family planning program trumps a 
state or county parental consent statute because federal law prohibits 
parental consent requirements.
  Just as disturbing, if not more so, Mr. President, is that schools 
distributing ``morning after pills'' are placing the health of these 
young children in jeopardy. In fact, the manufacturer--PREVEN--warns 
that ``Morning after pills'' can cause severe health risks, such as: 
blood clots; liver tumors; elevated blood pressure; heart attacks and 
strokes.
  It is well worth noting that the current policy in the majority of 
U.S. public schools prohibits the distribution of aspirin to 
schoolchildren unless parental consent is given. Yet, here we are 
legally permitting schools to secretly provide these dangerous abortion 
pills to minors without the knowledge of parents.
  Under this bill, this unethical practice will no longer continue. 
Planned Parenthood and its cronies will no longer be able to use public 
school facilities to covertly get abortion pills into the mouths of 
children.
  As Americans may recall, I offered a similar bill in amendment form 
last Congress to the Labor-HHS appropriations bill, which rightfully 
passed both the Senate and the House. Even though this language was not 
included in the final budget deal struck last year, I am hopeful 
Congress will revisit this issue once more, and put a complete end to 
the unthinkable practice of giving children abortion pills at school.


                   Unborn Children's Civil Rights Act

  Mr. President, the Unborn Children's Civil Rights Act has several 
goals. First, it puts the Senate on record as declaring that one, every 
abortion destroys deliberately the life of an unborn child; two, that 
the U.S. Constitution sanctions no right to abortion; and three, that 
Roe v. Wade was incorrectly decided.
  Second, this legislation will prohibit Federal funding to pay for, or 
promote, abortion. Further, this legislation proposes to de-fund 
abortion permanently, thereby relieving Congress of annual legislative 
battles about abortion restrictions in appropriation bills.
  Third, the Unborn Children's Civil Rights Act proposes to end 
indirect Federal funding for abortions by one, prohibiting 
discrimination, at all federally funded institutions, against citizens 
who as a matter of conscience object to abortion and two, curtailing 
attorney fees in abortion-related cases.
  Fourth, this bill proposes that appeals to the Supreme Court be 
provided as a right if and when any lower Federal court declares 
restrictions on abortion unconstitutional, thus effectively assuring 
Supreme Court reconsideration of the abortion issue.
  Mr. President, I believe this bill begins to remedy some of the 
damage done to America by the Supreme Court's decision in Roe v. Wade. 
I continue to believe that a majority of my colleagues will one day 
agree, and I will never give up doing everything in my power to protect 
the most vulnerable Americans of all: the unborn.


                      Civil Rights of Infants Act

  In 1989, our distinguished colleague from New Hampshire, Senator 
Gordon Humphrey, first called attention to the incredibly brutal 
practice of abortions performed solely because prospective parents 
prefer a child of a gender different from that of the baby in the 
mother's womb.
  The Civil Rights in Infants Act makes sure nobody could ever act upon 
this unthinkable decision by specifically amending title 42 of the 
United States Code governing civil rights. Anyone who administers an 
abortion for the purpose of choosing the gender of the infant will be 
subject to the same laws which protects any other citizen who is a 
victim of discrimination.
  Nobody--even the most radical feminists--can ignore the absurdity of 
denying a child the right to life simply because the parents happened 
to prefer a child of the opposite gender. I hope the 106th Congress 
will swiftly act to fulfill the desires of the American people, who 
rightfully believe it is immoral to destroy unborn babies simply 
because the parents demand a child of a different gender.


                      Civil Rights Restoration Act

  Mr. President, the last of these bills is entitled the Civil Rights 
Restoration Act. Specifically, this legislation prevents Federal 
agencies, and the Federal courts, from interpreting title VII of the 
Civil Rights Act of 1964 to allow an employer to grant preferential 
treatment in employment to any group or individual on account of race.
  This proposal prohibits the use of racial quotas once and for all. 
During the past several years, almost every Member of the Senate--and 
the President of the United States--have proclaimed that they are 
opposed to quotas. This bill will give Senators an opportunity to 
reinforce their statements by voting in a rollcall vote against quotas.
  Mr. President, this legislation emphasizes that from here on out, 
employers must hire on a race neutral basis. They can reach out into 
the community to the disadvantaged and they can even have businesses 
with 80 percent or 90 percent minority workforces as long as the 
motivating factor in employment is not race.
  This bill clarifies section 703(j) of title VII of the Civil Rights 
Act of 1964 to make it consistent with the intent of its authors, 
Hubert Humphrey and Everett Dirksen. Let me state it for the Record:

       It shall be an unlawful employment practice for any entity 
     that is an employer, employment agency, labor organization, 
     or joint labor-management committee subject to this title to 
     grant preferential treatment to any individual or group with 
     respect to selection for, discharge from, compensation for, 
     or the terms, conditions, or privileges of, employment or 
     union membership, on the basis of the race, color, religion, 
     sex, or national origin of such individual or group, for any 
     person, except as provided in subsection (e) or paragraph 
     (2).
       It shall not be an unlawful employment practice for an 
     entity described in paragraph (1) to recruit individuals of 
     an under-represented race, color, religion, sex, or national 
     origin, to expand the applicant pool of the individuals 
     seeking employment or union membership with the entity.

  Specifically, this bill proposes to make part (j) of Section 703 of 
the 1964 Civil Rights Act consistent with subsections (a) and (d) of 
that section. It contains the identical language used in those sections 
to make preferential treatment on the basis of race (that is, quotas) 
an unlawful employment practice.
  Mr. President, I want to be clear that this legislation does not make 
outreach programs an unlawful employment practice. Under language 
suggested years ago by the distinguished Senator from Kansas, Bob Dole, 
a company can recruit and hire in the inner city, prefer people who are 
disadvantaged, create literacy programs, recruit in the schools, 
establish day care programs, and expand its labor pool in

[[Page 453]]

the poorest sections of the community. In other words, expansion of the 
employee pool is specifically provided for under this act.
  Mr. President, this legislation is necessary because in the 37 years 
since the passage of the Civil Rights Act, the Federal Government and 
the courts have combined to corrupt the spirit of the Act as enumerated 
by both Hubert Humphrey and Everett Dirksen, who made clear that they 
were unalterably opposed to racial quotas. Yet in spite of the clear 
intent of Congress, businesses large and small must adhere to hiring 
quotas in order to keep the all-powerful federal government off their 
backs. This bill puts an end to that sort of nonsense once and for all.


                        safe schools act of 2001

  Mr. President, the protection of the most vulnerable among us--our 
children--is the highest responsibility of government. Government's 
obligation to protect our children from harm is nowhere more important 
than while they are in the care of public employees at school. 
Tragically, in too many of America's classrooms, this fundamental 
responsibility is not being met.
  That is why I have worked with other concerned Senators in recent 
years to introduce and promote the Safe Schools Act. During the 106th 
Congress, the Senate passed the Act as an amendment to other 
legislation. Regrettably, neither of the bills it was attached to 
successfully navigated both the conference and final floor 
consideration processes.
  The Safe Schools Act directly confronts the issue of illegal drug use 
and juvenile violence by equalizing the treatment of students who 
choose to carry either felonious quantities of illegal drugs or 
firearms to a public school. When enacted, this legislation will 
provide a consistent federal policy with respect to the possession of 
both firearms and illegal drugs in America's public school classrooms.
  For students and parents, the message of the Safe Schools Act is that 
there are serious consequences for anyone willingly choosing to violate 
the law and to jeopardize the safety and security of their fellow 
students, teachers, and school personnel.
  Mr. President, by enacting the Gun-Free Schools Act in 1994, the 
federal government encouraged states to adopt a stringent uniform 
standard with respect to students who willingly chose to carry a 
firearm to school. The act did this by conditioning eligibility for 
federal education dollars on state adoption of a policy requiring the 
expulsion for not less than one year of any student who brought a 
firearm to school. The Safe Schools Act extends this same common sense 
policy to any student who willingly takes a felonious quantity of 
illegal drugs to school.
  Recently, some authorities have reported a modest reduction in 
criminal activity at our schools. While this news is encouraging, we 
can not satisfy ourselves with modest reductions. Instead, we should 
demand that every student be educated in a safe and crime-free 
classroom. Achieving this goal requires that we do more to eliminate 
drug-related activity from our nation's classrooms.
  Anyone who doubts this need only review the latest results from the 
National Parents' Resource Institute for Drug Education survey, or 
PRIDE survey as it is called, which found that:
  Gun-toting students were twenty-four times more likely to use cocaine 
than those who didn't bring a gun to school;
  Gang members were nineteen times more likely to use cocaine than non-
gang members;
  Students who threatened others were six times more likely to be 
cocaine users than others.
  Faced with the clear relationship between school violence and drugs 
in our classrooms, it should be evident that we must do more to protect 
America's school children.
  In deciding what to do, I believe that we should respect the advice 
of those who are daily confronted with the variety of evils that result 
from the increasing availability of drugs in our classrooms--our 
students, teachers and school administrators. When surveyed, these 
groups have reported overwhelming support for the approach embodied in 
the Safe Schools Act.
  Mr. President, students consistently say that the number one problem 
they face is the scourge of illegal drugs. Perhaps even more disturbing 
is the fact that students of all ages, including elementary ages, 
report that drugs are readily available to them.
  The Center on Addiction and Substance Abuse (CASA) at Columbia 
University has documented the extent of this national tragedy by 
documenting that two-thirds (66%) of students report going to schools 
where students keep, use and sell drugs and that over half (51%) of 
high school students believe that the drug problem is getting worse.
  Mr. President, I invite my colleagues to join with me and build on 
the progress that we made last Congress in addressing this vital issue. 
It is undeniable that reducing drug activity at schools will result in 
a better learning environment, increased discipline, and a reduction in 
violence. It is long past time to take action to restore schools that 
are secure and conducive to the education of the vast majority of 
students who are eager to learn. America's students and teachers 
deserve nothing less.
  Mr. President, I do not pretend that enacting this legislation will 
solve all of the pathologies of modern society. But taken as a whole, 
they seek to turn the tide of the increasing apathy--and in some cases, 
outright hostility--toward moral and spiritual principles that have 
marked social policy at the turn of the century.
  The Founding Fathers knew what would become of a society that ignores 
traditional morality. I have often quoted the parting words of advice 
our first President, George Washington, left his beloved new Nation. He 
reminded his fellow citizens:

       Of all the dispensations and habits which lead to political 
     prosperity, religion and morality are indispensable supports. 
     In vain would that man claim the tribute to patriotism who 
     should labor to subvert these great pillars of human 
     happiness.

  Mr. President, that distinguished world leader, Margaret Thatcher, 
highlighted for us the words of Washington's successor, John Adams, who 
said ``our Constitution was designed only for a moral and religious 
people. It is wholly inadequate for the government of any other.''
  Our Founding Fathers understood well the intricate relationship 
between freedom of responsibility. They knew that the blessings of 
liberty engendered certain obligations on the part of a free people--
namely, that citizens conduct their actions in such a way that society 
can remain cohesive without excessive government intrusion. The 
American experiment would never have succeeded without the traditional 
moral and spiritual values of the American people--values that allow 
people to govern themselves, rather than be governed.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Ms. Mikulski, Mr. Kennedy, Mr. 
        Harkin, Mr. Wellstone, Ms. Landrieu, Mrs. Lincoln, Mr. Akaka, 
        Mr. Breaux, Mr. Cleland, Mr. Durbin, Mr. Inouye, Mr. Kerry, Mr. 
        Leahy, Mr. Reid, Mr. Sarbanes, Mr. Schumer, and Mr. Johnson):
  S. 77. A bill to amend the Fair Labor Standards Act of 1938 to 
provide more effective remedies to victims of discrimination in the 
payment of wages on the basis of sex, and for other purposes; to the 
Committee on Health, Education, Labor, and Pensions.


                         paycheck fairness act

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

                                 S. 77

       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 ``Paycheck Fairness Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Women have entered the workforce in record numbers.
       (2) Even today, women earn significantly lower pay than men 
     for work on jobs that require equal skill, effort, and 
     responsibility

[[Page 454]]

     and that are performed under similar working conditions. 
     These pay disparities exist in both the private and 
     governmental sectors. In many instances, the pay disparities 
     can only be due to continued intentional discrimination or 
     the lingering effects of past discrimination.
       (3) The existence of such pay disparities--
       (A) depresses the wages of working families who rely on the 
     wages of all members of the family to make ends meet;
       (B) prevents the optimum utilization of available labor 
     resources;
       (C) has been spread and perpetuated, through commerce and 
     the channels and instrumentalities of commerce, among the 
     workers of the several States;
       (D) burdens commerce and the free flow of goods in 
     commerce;
       (E) constitutes an unfair method of competition in 
     commerce;
       (F) leads to labor disputes burdening and obstructing 
     commerce and the free flow of goods in commerce;
       (G) interferes with the orderly and fair marketing of goods 
     in commerce; and
       (H) in many instances, may deprive workers of equal 
     protection on the basis of sex in violation of the 5th and 
     14th amendments.
       (4)(A) Artificial barriers to the elimination of 
     discrimination in the payment of wages on the basis of sex 
     continue to exist more than 3 decades after the enactment of 
     the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) 
     and the Civil Rights Act of 1964 (42 U.S.C. 2000a et seq.).
       (B) Elimination of such barriers would have positive 
     effects, including--
       (i) providing a solution to problems in the economy created 
     by unfair pay disparities;
       (ii) substantially reducing the number of working women 
     earning unfairly low wages, thereby reducing the dependence 
     on public assistance; and
       (iii) promoting stable families by enabling all family 
     members to earn a fair rate of pay;
       (iv) remedying the effects of past discrimination on the 
     basis of sex and ensuring that in the future workers are 
     afforded equal protection on the basis of sex; and
       (v) ensuring equal protection pursuant to Congress' power 
     to enforce the 5th and 14th amendments.
       (5) With increased information about the provisions added 
     by the Equal Pay Act of 1963 and wage data, along with more 
     effective remedies, women will be better able to recognize 
     and enforce their rights to equal pay for work on jobs that 
     require equal skill, effort, and responsibility and that are 
     performed under similar working conditions.
       (6) Certain employers have already made great strides in 
     eradicating unfair pay disparities in the workplace and their 
     achievements should be recognized.

     SEC. 3. ENHANCED ENFORCEMENT OF EQUAL PAY REQUIREMENTS.

       (a) Required Demonstration for Affirmative Defense.--
     Section 6(d)(1) of the Fair Labor Standards Act of 1938 (29 
     U.S.C. 206(d)(1)) is amended by striking ``(iv) a 
     differential'' and all that follows through the period and 
     inserting the following: ``(iv) a differential based on a 
     bona fide factor other than sex, such as education, training 
     or experience, except that this clause shall apply only if--
       ``(I) the employer demonstrates that--

       ``(aa) such factor--

       ``(AA) is job-related with respect to the position in 
     question; or
       ``(BB) furthers a legitimate business purpose, except that 
     this item shall not apply where the employee demonstrates 
     that an alternative employment practice exists that would 
     serve the same business purpose without producing such 
     differential and that the employer has refused to adopt such 
     alternative practice; and

       ``(bb) such factor was actually applied and used reasonably 
     in light of the asserted justification; and

       ``(II) upon the employer succeeding under subclause I, the 
     employee fails to demonstrate that the differential produced 
     by the reliance of the employer on such factor is itself the 
     result of discrimination on the basis of sex by the employer.

     ``An employer that is not otherwise in compliance with this 
     paragraph may not reduce the wages of any employee in order 
     to achieve such compliance.''.
       (b) Application of Provisions.--Section 6(d)(1) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 206(d)(1)) is amended 
     by adding at the end the following: ``The provisions of this 
     subsection shall apply to applicants for employment if such 
     applicants, upon employment by the employer, would be subject 
     to any provisions of this section.''.
       (c) Elimination of Establishment Requirement.--Section 6(d) 
     of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(d)) is 
     amended--
       (1) by striking ``, within any establishment in which such 
     employees are employed,''; and
       (2) by striking ``in such establishment'' each place it 
     appears.
       (d) Nonretaliation Provision.--Section 15(a)(3) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 215(a)(3)) is 
     amended--
       (1) by striking ``or has'' each place it appears and 
     inserting ``has''; and
       (2) by inserting before the semicolon the following: ``, or 
     has inquired about, discussed, or otherwise disclosed the 
     wages of the employee or another employee, or because the 
     employee (or applicant) has made a charge, testified, 
     assisted, or participated in any manner in an investigation, 
     proceeding, hearing, or action under section 6(d)''.
       (e) Enhanced Penalties.--Section 16(b) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 216(b)) is amended--
       (1) by inserting after the first sentence the following: 
     ``Any employer who violates section 6(d) shall additionally 
     be liable for such compensatory or punitive damages as may be 
     appropriate, except that the United States shall not be 
     liable for punitive damages.'';
       (2) in the sentence beginning ``An action to'', by striking 
     ``either of the preceding sentences'' and inserting ``any of 
     the preceding sentences of this subsection'';
       (3) in the sentence beginning ``No employees shall'', by 
     striking ``No employees'' and inserting ``Except with respect 
     to class actions brought to enforce section 6(d), no 
     employee'';


       (4) by inserting after the sentence referred to in 
     paragraph (3), the following: ``Notwithstanding any other 
     provision of Federal law, any action brought to enforce 
     section 6(d) may be maintained as a class action as provided 
     by the Federal Rules of Civil Procedure.''; and
       (5) in the sentence beginning ``The court in''--
       (A) by striking ``in such action'' and inserting ``in any 
     action brought to recover the liability prescribed in any of 
     the preceding sentences of this subsection''; and
       (B) by inserting before the period the following: ``, 
     including expert fees''.
       (f) Action by Secretary.--Section 16(c) of the Fair Labor 
     Standards Act of 1938 (29 U.S.C. 216(c)) is amended--
       (1) in the first sentence--
       (A) by inserting ``or, in the case of a violation of 
     section 6(d), additional compensatory or punitive damages,'' 
     before ``and the agreement''; and
       (B) by inserting before the period the following: ``, or 
     such compensatory or punitive damages, as appropriate'';
       (2) in the second sentence, by inserting before the period 
     the following: ``and, in the case of a violation of section 
     6(d), additional compensatory or punitive damages'';
       (3) in the third sentence, by striking ``the first 
     sentence'' and inserting ``the first or second sentence''; 
     and
       (4) in the last sentence--
       (A) by striking ``commenced in the case'' and inserting 
     ``commenced--
       ``(1) in the case'';
       (B) by striking the period and inserting 
     ``; or''; and
       (C) by adding at the end the following:
       ``(2) in the case of a class action brought to enforce 
     section 6(d), on the date on which the individual becomes a 
     party plaintiff to the class action''.

     SEC. 4. TRAINING.

       The Equal Employment Opportunity Commission and the Office 
     of Federal Contract Compliance Programs, subject to the 
     availability of funds appropriated under section 9(b), shall 
     provide training to Commission employees and affected 
     individuals and entities on matters involving discrimination 
     in the payment of wages.

     SEC. 5. RESEARCH, EDUCATION, AND OUTREACH.

       The Secretary of Labor shall conduct studies and provide 
     information to employers, labor organizations, and the 
     general public concerning the means available to eliminate 
     pay disparities between men and women, including--
       (1) conducting and promoting research to develop the means 
     to correct expeditiously the conditions leading to the pay 
     disparities;
       (2) publishing and otherwise making available to employers, 
     labor organizations, professional associations, educational 
     institutions, the media, and the general public the findings 
     resulting from studies and other materials, relating to 
     eliminating the pay disparities;
       (3) sponsoring and assisting State and community 
     informational and educational programs;
       (4) providing information to employers, labor 
     organizations, professional associations, and other 
     interested persons on the means of eliminating the pay 
     disparities;
       (5) recognizing and promoting the achievements of 
     employers, labor organizations, and professional associations 
     that have worked to eliminate the pay disparities; and
       (6) convening a national summit to discuss, and consider 
     approaches for rectifying, the pay disparities.

     SEC. 6. TECHNICAL ASSISTANCE AND EMPLOYER RECOGNITION 
                   PROGRAM.

       (a) Guidelines.--
       (1) In general.--The Secretary of Labor shall develop 
     guidelines to enable employers to evaluate job categories 
     based on objective criteria such as educational requirements, 
     skill requirements, independence, working conditions, and 
     responsibility, including decisionmaking responsibility and 
     de facto supervisory responsibility.
       (2) Use.--The guidelines developed under paragraph (1) 
     shall be designed to enable employers voluntarily to compare 
     wages paid for different jobs to determine if the pay scales 
     involved adequately and fairly reflect the educational 
     requirements, skill requirements, independence, working 
     conditions,

[[Page 455]]

     and responsibility for each such job with the goal of 
     eliminating unfair pay disparities between occupations 
     traditionally dominated by men or women.
       (3) Publication.--The guidelines shall be developed under 
     paragraph (1) and published in the Federal Register not later 
     than 180 days after the date of enactment of this Act.
       (b) Employer Recognition.--
       (1) Purpose.--It is the purpose of this subsection to 
     emphasize the importance of, encourage the improvement of, 
     and recognize the excellence of employer efforts to pay wages 
     to women that reflect the real value of the contributions of 
     such women to the workplace.
       (2) In general.--To carry out the purpose of this 
     subsection, the Secretary of Labor shall establish a program 
     under which the Secretary shall provide for the recognition 
     of employers who, pursuant to a voluntary job evaluation 
     conducted by the employer, adjust their wage scales (such 
     adjustments shall not include the lowering of wages paid to 
     men) using the guidelines developed under subsection (a) to 
     ensure that women are paid fairly in comparison to men.
       (3) Technical assistance.--The Secretary of Labor may 
     provide technical assistance to assist an employer in 
     carrying out an evaluation under paragraph (2).
       (c) Regulations.--The Secretary of Labor shall promulgate 
     such rules and regulations as may be necessary to carry out 
     this section.

     SEC. 7. ESTABLISHMENT OF THE NATIONAL AWARD FOR PAY EQUITY IN 
                   THE WORKPLACE.

       (a) In General.--There is established the Alexis Herman 
     National Award for Pay Equity in the Workplace, which shall 
     be evidenced by a medal bearing the inscription ``Alexis 
     Herman National Award for Pay Equity in the Workplace''. The 
     medal shall be of such design and materials, and bear such 
     additional inscriptions, as the Secretary of Labor may 
     prescribe.
       (b) Criteria for Qualification.--To qualify to receive an 
     award under this section a business shall--
       (1) submit a written application to the Secretary of Labor, 
     at such time, in such manner, and containing such information 
     as the Secretary may require, including at a minimum 
     information that demonstrates that the business has made 
     substantial effort to eliminate pay disparities between men 
     and women, and deserves special recognition as a consequence; 
     and
       (2) meet such additional requirements and specifications as 
     the Secretary of Labor determines to be appropriate.
       (c) Making and Presentation of Award.--
       (1) Award.--After receiving recommendations from the 
     Secretary of Labor, the President or the designated 
     representative of the President shall annually present the 
     award described in subsection (a) to businesses that meet the 
     qualifications described in subsection (b).
       (2) Presentation.--The President or the designated 
     representative of the President shall present the award under 
     this section with such ceremonies as the President or the 
     designated representative of the President may determine to 
     be appropriate.
       (d) Business.--In this section, the term ``business'' 
     includes--
       (1)(A) a corporation, including a nonprofit corporation;
       (B) a partnership;
       (C) a professional association;
       (D) a labor organization; and
       (E) a business entity similar to an entity described in any 
     of subparagraphs (A) through (D);
       (2) an entity carrying out an education referral program, a 
     training program, such as an apprenticeship or management 
     training program, or a similar program; and
       (3) an entity carrying out a joint program, formed by a 
     combination of any entities described in paragraph (1) or 
     (2).

     SEC. 8. COLLECTION OF PAY INFORMATION BY THE EQUAL EMPLOYMENT 
                   OPPORTUNITY COMMISSION.

       Section 709 of the Civil Rights Act of 1964 (42 U.S.C. 
     2000e-8) is amended by adding at the end the following:
       ``(f)(1) Not later than 18 months after the date of 
     enactment of this subsection, the Commission shall--
       ``(A) complete a survey of the data that is currently 
     available to the Federal Government relating to employee pay 
     information for use in the enforcement of Federal laws 
     prohibiting pay discrimination and, in consultation with 
     other relevant Federal agencies, identify additional data 
     collections that will enhance the enforcement of such laws; 
     and
       ``(B) based on the results of the survey and consultations 
     under subparagraph (A), issue regulations to provide for the 
     collection of pay information data from employers as 
     described by the sex, race, and national origin of employees.
       ``(2) In implementing paragraph (1), the Commission shall 
     have as its primary consideration the most effective and 
     efficient means for enhancing the enforcement of Federal laws 
     prohibiting pay discrimination. For this purpose, the 
     Commission shall consider factors including the imposition of 
     burdens on employers, the frequency of required reports 
     (including which employers should be required to prepare 
     reports), appropriate protections for maintaining data 
     confidentiality, and the most effective format for the data 
     collection reports.''.

     SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary to carry out this Act.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mrs. Feinstein):
  S. 80. A bill to require the Federal Energy Regulatory Commission to 
order refunds of unjust, unreasonable, unduly discriminatory or 
preferential rates or changes for electricity, to establish cost-based 
rates for electricity sold at wholesale in the Western Systems 
Coordinating Council, and for other purposes; to the Committee on 
Energy and Natural Resources.


               california electricity crisis legislation

  Mrs. BOXER. Mr. President, today I am introducing a bill relating to 
the electricity crisis in California. As a result of deregulation, 
Californians are confronting higher electricity prices and an 
unreliable supply
  Last week, Northern California experienced rolling blackouts. 
Children were trapped in elevators. Manufacturing plans had to shut 
down, costing millions of dollars. Entire agricultural crops can be 
destroyed with a blackout. Obviously, this situation does not just 
affect Californians but can impact the entire nation's economy.
  The bill I am introducing today is similar to legislation I 
introduced last fall with Representative Bob Filner. The California 
Electricity Consumers Relief Act would establish a Western Regional Cap 
for electricity rates.
  The electricity shortage experienced by California in recent months, 
clearly demonstrates that a price cap must be imposed on the entire 
Western United States to be effective. If the price for electricity is 
higher in other Western states than California, then a generator 
chooses to sell power outside of California. A regional price cap will 
being some stability to the market by ensuring a reliable supply for 
the entire Western region, so that no state will confront a shortage.
  I urge Congress to bring an end to this crisis. We must now act to 
bring Californians and other Western states what they need--an adequate 
supply of electricity at a fair and reasonable price. By implementing 
this region-wide cap, we can address a major cause of California's 
energy crisis.
                                 ______
                                 
      By Mr. AKAKA (for himself and Mr. Inouye):
  S. 81. A bill to express the policy of the United States regarding 
the United States relationship with Native Hawaiians, to provide a 
process for the reorganization of a Native Hawaiian government and the 
recognition by the United States of the Native Hawaiian government, and 
for other purposes; to the Committee on Indian Affairs.


                      NATIVE HAWAIIANS LEGISLATION

  Mr. AKAKA. Mr. President, I rise today to introduce a bill on behalf 
of myself and my friend and colleague, Senator Inouye. This measure is 
of significant importance to the people of Hawaii, particularly to the 
indigenous peoples of Hawaii, Native Hawaiians. This measure clarifies 
the political relationship between Native Hawaiians and the United 
States by extending the federal policy of self-determination and self-
governance to Native Hawaiians.
  The United States has declared a special responsibility for the 
welfare of the native peoples of the United States, including Native 
Hawaiians. Congress has recognized Native Hawaiians as the aboriginal, 
indigenous, native peoples of Hawaii and has passed over 150 statutes 
addressing the conditions of Native Hawaiians. The measure that we are 
introducing today extends the federal policy of self-determination and 
self-governance to Native Hawaiians by authorizing a process of 
reorganization of a Native Hawaiian government for the purposes of a 
federally recognized government-to-government relationship with the 
United States. This measure establishes parity in federal policies 
towards American Indians, Alaska Natives and Native Hawaiians.
  The political relationship between Native Hawaiians and the United 
States has been a topic of discussion in Hawaii for many, many years. A 
significant portion of the discussion has

[[Page 456]]

centered around the history of Hawaii's indigenous peoples and the role 
of the United States in that history. In 1993, Congress passed Public 
Law 103-150, the Apology Resolution, which extended an apology on 
behalf of the United States to Native Hawaiians for the United States' 
role in the overthrow of the Kingdom of Hawaii. The Apology Resolution 
also expressed the commitment of Congress and the President to 
acknowledge the ramifications of the overthrow of the Kingdom of Hawaii 
and to support reconciliation efforts between the United States and 
Native Hawaiians.
  Mr. President, I am pleased to inform you that the reconciliation 
process is ongoing. The reconciliation process is an incremental 
process of dialogue between Native Hawaiians and the United States to 
address a number of longstanding issues arising out of the overthrow of 
the Kingdom of Hawaii. I look forward to working with the Bush 
Administration as we continue this important process.
  On October 23, 2000, a joint report was issued by the Departments of 
the Interior and Justice on the reconciliation process. The report was 
based on public consultations held in Hawaii in December 1999 between 
officials from the Interior and Justice Departments and Native 
Hawaiians. The report recommends that Native Hawaiians have self-
determination over their own affairs within the framework of federal 
law, as do Native American tribes. The measure we are introducing 
today, Mr. President is consistent with this recommendation.
  This measure does not create a political relationship between Native 
Hawaiians and the United States. The political relationship has existed 
since Hawaii's inception as a territory. Rather, the measure we 
introduce today clarifies the existing political relationship between 
Hawaii's indigenous peoples and the United States.
  This measure authorizes a process for the reorganization of the 
Native Hawaiian government for the purposes of a federally recognized 
government-to-government relationship. The measure authorizes Native 
Hawaiians to resolve many issues in developing the organic governing 
documents, including the issue of membership or citizenship in the 
reorganized government. This bill also establishes an office within the 
Department of the Interior to focus on Native Hawaiian issues. The 
office would serve as a liaison between Native Hawaiians and the United 
States during the reconciliation process and would provide assistance 
during the process of reorganization of the Native Hawaiian government. 
Federal programs currently administered with other federal agencies 
would remain with those agencies.
  An identical version of the measure was introduced during the 106th 
Congress. The House of Representatives passed the measure with 
bipartisan support. The Senate Committee on Indian Affairs reported the 
measure favorably. Unfortunately, the Senate did not consider the 
measure prior to the adjournment of the last Congress.
  Mr. President, I would like to clarify some misconceptions regarding 
this important measure. First, this measure is not being introduced to 
circumvent the 1999 United States Supreme Court decision in the case of 
Rice v. Cayetano. The Rice case was a voting rights case whereby the 
Supreme Court held that the State of Hawaii must allow all citizens of 
Hawaii to vote for the Board of Trustees of a quasi-state agency, the 
Office of Hawaiian Affairs.
  The Office of Hawaiian Affairs was established by citizens of the 
State of Hawaii as part of the 1978 State of Hawaii Constitutional 
Convention. The State constitution was amended to create the Office of 
Hawaiian Affairs as a means to give expression to the right of self-
determination and self-governance for Hawaii's indigenous peoples, 
Native Hawaiians. The Office of Hawaiian Affairs administers programs 
and services for Native Hawaiians. The State constitution provided for 
9 trustees who were Native Hawaiian to be elected by Native Hawaiians. 
Following the Supreme court's ruling in Rice v. Cayetano, the elections 
were not only open to all citizens in the State of Hawaii, but non-
Hawaiians were deemed eligible to serve on the Board of Trustees. 
Whereas the Rice case dealt with voting rights and the State of Hawaii, 
the measure we introduce today addresses the federal policy of self-
determination and self-governance and does not involve the Office of 
Hawaiian Affairs.
  This measure does not establish entitlements or special treatment for 
Native Hawaiians based on race. This measure focuses on the political 
relationship afforded to Native Hawaiians based on the United States' 
recognition of Native Hawaiians as the aboriginal, indigenous peoples 
of Hawaii. As we all know, the United States' history with its 
indigenous peoples has been dismal. In recent decades, however, the 
United States has engaged in a policy of self-determination and self-
governance with its indigenous peoples. Government-to-government 
relationships provide indigenous peoples with the opportunity to work 
directly with the federal government on policies affecting their lands, 
natural resources and many other aspects of their well-being. While 
federal policies towards Native Hawaiians have paralleled that of 
Native American Indians and Alaska Natives, the federal policy of self-
determination and self-governance, has not yet been extended to Native 
Hawaiians. This measure extends this policy to Native Hawaiians, thus 
furthering the process of reconciliation between Native Hawaiians and 
the United States.
  This measure does not impact program funding for American Indians and 
Alaska Natives. Federal programs for Native Hawaiian health, education 
and housing are already administered by the Departments of Health and 
Human Services, Education, and Housing and Urban Development.
  In addition, this measure has strong support from indigenous peoples 
within the United States. The National Congress of American Indians and 
Alaska Federation of Natives have both passed resolutions in support of 
a government-to-government relationship between Native Hawaiians and 
the United States. Similar resolutions have been passed by the Japanese 
American Citizens' League and the National Education Association. The 
measure is also supported by the Hawaii State Legislature, which passed 
a resolution supporting a federally recognized government-to-government 
relationship.
  This measure does not preclude Native Hawaiians from seeking 
alternatives in the international arena. Instead, this measure focuses 
on self-determination within the framework of federal law and seeks to 
establish equality in the federal policies extended towards American 
Indians, Alaska Natives and Native Hawaiians.
  This measure is critical to the people in Hawaii because it begins a 
process to address many longstanding issues facing Hawaii's indigenous 
peoples and the State of Hawaii. By resolving these matters, we begin a 
process of healing, a process of reconciliation not only within the 
United States, but within the State of Hawaii. These issues are deeply 
rooted in the history of Hawaii. The time has come for us to begin to 
resolve these differences in order to be able to move forward together 
as one.
  Mr. President, I cannot emphasize enough how significant this measure 
is for the State of Hawaii. I look forward to working with my 
colleagues to enact this critical measure for the State of Hawaii and 
indigenous peoples in the United States.
  Mr. President, I request unanimous consent that the text of this 
measure be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 81

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

     SECTION 1. FINDINGS.

       Congress makes the following findings:
       (1) The Constitution vests Congress with the authority to 
     address the conditions of the indigenous, native people of 
     the United States.
       (2) Native Hawaiians, the native people of the Hawaiian 
     archipelago which is now part of the United States, are 
     indigenous, native people of the United States.
       (3) The United States has a special trust relationship to 
     promote the welfare of the native people of the United 
     States, including Native Hawaiians.

[[Page 457]]

       (4) Under the treaty making power of the United States, 
     Congress exercised its constitutional authority to confirm a 
     treaty between the United States and the government that 
     represented the Hawaiian people, and from 1826 until 1893, 
     the United States recognized the independence of the Kingdom 
     of Hawaii, extended full diplomatic recognition to the 
     Hawaiian government, and entered into treaties and 
     conventions with the Hawaiian monarchs to govern commerce and 
     navigation in 1826, 1842, 1849, 1875, and 1887.
       (5) Pursuant to the provisions of the Hawaiian Homes 
     Commission Act, 1920 (42 Stat. 108, chapter 42), the United 
     States set aside 203,500 acres of land in the Federal 
     territory that later became the State of Hawaii to address 
     the conditions of Native Hawaiians.
       (6) By setting aside 203,500 acres of land for Native 
     Hawaiian homesteads and farms, the Act assists the Native 
     Hawaiian community in maintaining distinct native settlements 
     throughout the State of Hawaii.
       (7) Approximately 6,800 Native Hawaiian lessees and their 
     family members reside on Hawaiian Home Lands and 
     approximately 18,000 Native Hawaiians who are eligible to 
     reside on the Home Lands are on a waiting list to receive 
     assignments of land.
       (8) In 1959, as part of the compact admitting Hawaii into 
     the United States, Congress established the Ceded Lands Trust 
     for 5 purposes, 1 of which is the betterment of the 
     conditions of Native Hawaiians. Such trust consists of 
     approximately 1,800,000 acres of land, submerged lands, and 
     the revenues derived from such lands, the assets of which 
     have never been completely inventoried or segregated.
       (9) Throughout the years, Native Hawaiians have repeatedly 
     sought access to the Ceded Lands Trust and its resources and 
     revenues in order to establish and maintain native 
     settlements and distinct native communities throughout the 
     State.
       (10) The Hawaiian Home Lands and the Ceded Lands provide an 
     important foundation for the ability of the Native Hawaiian 
     community to maintain the practice of Native Hawaiian 
     culture, language, and traditions, and for the survival of 
     the Native Hawaiian people.
       (11) Native Hawaiians have maintained other distinctly 
     native areas in Hawaii.
       (12) On November 23, 1993, Public Law 103-150 (107 Stat. 
     1510) (commonly known as the Apology Resolution) was enacted 
     into law, extending an apology on behalf of the United States 
     to the Native people of Hawaii for the United States role in 
     the overthrow of the Kingdom of Hawaii.
       (13) The Apology Resolution acknowledges that the overthrow 
     of the Kingdom of Hawaii occurred with the active 
     participation of agents and citizens of the United States and 
     further acknowledges that the Native Hawaiian people never 
     directly relinquished their claims to their inherent 
     sovereignty as a people over their national lands to the 
     United States, either through their monarchy or through a 
     plebiscite or referendum.
       (14) The Apology Resolution expresses the commitment of 
     Congress and the President to acknowledge the ramifications 
     of the overthrow of the Kingdom of Hawaii and to support 
     reconciliation efforts between the United States and Native 
     Hawaiians; and to have Congress and the President, through 
     the President's designated officials, consult with Native 
     Hawaiians on the reconciliation process as called for under 
     the Apology Resolution.
       (15) Despite the overthrow of the Hawaiian government, 
     Native Hawaiians have continued to maintain their separate 
     identity as a distinct native community through the formation 
     of cultural, social, and political institutions, and to give 
     expression to their rights as native people to self-
     determination and self-governance as evidenced through their 
     participation in the Office of Hawaiian Affairs.
       (16) Native Hawaiians also maintain a distinct Native 
     Hawaiian community through the provision of governmental 
     services to Native Hawaiians, including the provision of 
     health care services, educational programs, employment and 
     training programs, children's services, conservation 
     programs, fish and wildlife protection, agricultural 
     programs, native language immersion programs and native 
     language immersion schools from kindergarten through high 
     school, as well as college and master's degree programs in 
     native language immersion instruction, and traditional 
     justice programs, and by continuing their efforts to enhance 
     Native Hawaiian self-determination and local control.
       (17) Native Hawaiians are actively engaged in Native 
     Hawaiian cultural practices, traditional agricultural 
     methods, fishing and subsistence practices, maintenance of 
     cultural use areas and sacred sites, protection of burial 
     sites, and the exercise of their traditional rights to gather 
     medicinal plants and herbs, and food sources.
       (18) The Native Hawaiian people wish to preserve, develop, 
     and transmit to future Native Hawaiian generations their 
     ancestral lands and Native Hawaiian political and cultural 
     identity in accordance with their traditions, beliefs, 
     customs and practices, language, and social and political 
     institutions, and to achieve greater self-determination over 
     their own affairs.
       (19) This Act provides for a process within the framework 
     of Federal law for the Native Hawaiian people to exercise 
     their inherent rights as a distinct aboriginal, indigenous, 
     native community to reorganize a Native Hawaiian government 
     for the purpose of giving expression to their rights as 
     native people to self-determination and self-governance.
       (20) The United States has declared that--
       (A) the United States has a special responsibility for the 
     welfare of the native peoples of the United States, including 
     Native Hawaiians;
       (B) Congress has identified Native Hawaiians as a distinct 
     indigenous group within the scope of its Indian affairs 
     power, and has enacted dozens of statutes on their behalf 
     pursuant to its recognized trust responsibility; and
       (C) Congress has also delegated broad authority to 
     administer a portion of the Federal trust responsibility to 
     the State of Hawaii.
       (21) The United States has recognized and reaffirmed the 
     special trust relationship with the Native Hawaiian people 
     through--
       (A) the enactment of the Act entitled ``An Act to provide 
     for the admission of the State of Hawaii into the Union'', 
     approved March 18, 1959 (Public Law 86-3; 73 Stat. 4) by--
       (i) ceding to the State of Hawaii title to the public lands 
     formerly held by the United States, and mandating that those 
     lands be held in public trust for 5 purposes, one of which is 
     for the betterment of the conditions of Native Hawaiians; and
       (ii) transferring the United States responsibility for the 
     administration of the Hawaiian Home Lands to the State of 
     Hawaii, but retaining the authority to enforce the trust, 
     including the exclusive right of the United States to consent 
     to any actions affecting the lands which comprise the corpus 
     of the trust and any amendments to the Hawaiian Homes 
     Commission Act, 1920 (42 Stat. 108, chapter 42) that are 
     enacted by the legislature of the State of Hawaii affecting 
     the beneficiaries under the Act.
       (22) The United States continually has recognized and 
     reaffirmed that--
       (A) Native Hawaiians have a cultural, historic, and land-
     based link to the aboriginal, native people who exercised 
     sovereignty over the Hawaiian Islands;
       (B) Native Hawaiians have never relinquished their claims 
     to sovereignty or their sovereign lands;
       (C) the United States extends services to Native Hawaiians 
     because of their unique status as the aboriginal, native 
     people of a once sovereign nation with whom the United States 
     has a political and legal relationship; and
       (D) the special trust relationship of American Indians, 
     Alaska Natives, and Native Hawaiians to the United States 
     arises out of their status as aboriginal, indigenous, native 
     people of the United States.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Aboriginal, indigenous, native people.--The term 
     ``aboriginal, indigenous, native people'' means those people 
     whom Congress has recognized as the original inhabitants of 
     the lands and who exercised sovereignty prior to European 
     contact in the areas that later became part of the United 
     States.
       (2) Adult members.--The term ``adult members'' means those 
     Native Hawaiians who have attained the age of 18 at the time 
     the Secretary publishes the final roll, as provided in 
     section 7(a)(3) of this Act.
       (3) Apology resolution.--The term ``Apology Resolution'' 
     means Public Law 103-150 (107 Stat. 1510), a joint resolution 
     offering an apology to Native Hawaiians on behalf of the 
     United States for the participation of agents of the United 
     States in the January 17, 1893 overthrow of the Kingdom of 
     Hawaii.
       (4) Ceded lands.--The term ``ceded lands'' means those 
     lands which were ceded to the United States by the Republic 
     of Hawaii under the Joint Resolution to provide for annexing 
     the Hawaiian Islands to the United States of July 7, 1898 (30 
     Stat. 750), and which were later transferred to the State of 
     Hawaii in the Act entitled ``An Act to provide for the 
     admission of the State of Hawaii into the Union'' approved 
     March 18, 1959 (Public Law 86-3; 73 Stat. 4).
       (5) Commission.--The term ``Commission'' means the 
     commission established in section 7 of this Act to certify 
     that the adult members of the Native Hawaiian community 
     contained on the roll developed under that section meet the 
     definition of Native Hawaiian, as defined in paragraph 
     (7)(A).
       (6) Indigenous, native people.--The term ``indigenous, 
     native people'' means the lineal descendants of the 
     aboriginal, indigenous, native people of the United States.
       (7) Native hawaiian.--
       (A) Prior to the recognition by the United States of a 
     Native Hawaiian government under the authority of section 
     7(d)(2) of this Act, the term ``Native Hawaiian'' means the 
     indigenous, native people of Hawaii who are the lineal 
     descendants of the aboriginal, indigenous, native people who 
     resided in the islands that now comprise the State of Hawaii 
     on or before January 1, 1893, and who occupied and exercised 
     sovereignty in the Hawaiian archipelago, including the area 
     that now constitutes the State of Hawaii, and includes all 
     Native Hawaiians who were eligible in

[[Page 458]]

     1921 for the programs authorized by the Hawaiian Homes 
     Commission Act (42 Stat. 108, chapter 42) and their lineal 
     descendants.
       (B) Following the recognition by the United States of the 
     Native Hawaiian government under section 7(d)(2) of this Act, 
     the term ``Native Hawaiian'' shall have the meaning given to 
     such term in the organic governing documents of the Native 
     Hawaiian government.
       (8) Native hawaiian government.--The term ``Native Hawaiian 
     government'' means the citizens of the government of the 
     Native Hawaiian people that is recognized by the United 
     States under the authority of section 7(d)(2) of this Act.
       (9) Native hawaiian interim governing council.--The term 
     ``Native Hawaiian Interim Governing Council'' means the 
     interim governing council that is organized under section 
     7(c) of this Act.
       (10) Roll.--The term ``roll'' means the roll that is 
     developed under the authority of section 7(a) of this Act.
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (12) Task force.--The term ``Task Force'' means the Native 
     Hawaiian Interagency Task Force established under the 
     authority of section 6 of this Act.

     SEC. 3. UNITED STATES POLICY AND PURPOSE.

       (a) Policy.--The United States reaffirms that--
       (1) Native Hawaiians are a unique and distinct aboriginal, 
     indigenous, native people, with whom the United States has a 
     political and legal relationship;
       (2) the United States has a special trust relationship to 
     promote the welfare of Native Hawaiians;
       (3) Congress possesses the authority under the Constitution 
     to enact legislation to address the conditions of Native 
     Hawaiians and has exercised this authority through the 
     enactment of--
       (A) the Hawaiian Homes Commission Act, 1920 (42 Stat. 108, 
     chapter 42);
       (B) the Act entitled ``An Act to provide for the admission 
     of the State of Hawaii into the Union'', approved March 18, 
     1959 (Public Law 86-3; 73 Stat. 4); and
       (C) more than 150 other Federal laws addressing the 
     conditions of Native Hawaiians;
       (4) Native Hawaiians have--
       (A) an inherent right to autonomy in their internal 
     affairs;
       (B) an inherent right of self-determination and self-
     governance;
       (C) the right to reorganize a Native Hawaiian government; 
     and
       (D) the right to become economically self-sufficient; and
       (5) the United States shall continue to engage in a process 
     of reconciliation and political relations with the Native 
     Hawaiian people.
       (b) Purpose.--It is the intent of Congress that the purpose 
     of this Act is to provide a process for the reorganization of 
     a Native Hawaiian government and for the recognition by the 
     United States of the Native Hawaiian government for purposes 
     of continuing a government-to-government relationship.

     SEC. 4. ESTABLISHMENT OF THE UNITED STATES OFFICE FOR NATIVE 
                   HAWAIIAN AFFAIRS.

       (a) In General.--There is established within the Office of 
     the Secretary the United States Office for Native Hawaiian 
     Affairs.
       (b) Duties of the Office.--The United States Office for 
     Native Hawaiian Affairs shall--
       (1) effectuate and coordinate the special trust 
     relationship between the Native Hawaiian people and the 
     United States through the Secretary, and with all other 
     Federal agencies;
       (2) upon the recognition of the Native Hawaiian government 
     by the United States as provided for in section 7(d)(2) of 
     this Act, effectuate and coordinate the special trust 
     relationship between the Native Hawaiian government and the 
     United States through the Secretary, and with all other 
     Federal agencies;
       (3) fully integrate the principle and practice of 
     meaningful, regular, and appropriate consultation with the 
     Native Hawaiian people by providing timely notice to, and 
     consulting with the Native Hawaiian people prior to taking 
     any actions that may affect traditional or current Native 
     Hawaiian practices and matters that may have the potential to 
     significantly or uniquely affect Native Hawaiian resources, 
     rights, or lands, and upon the recognition of the Native 
     Hawaiian government as provided for in section 7(d)(2) of 
     this Act, fully integrate the principle and practice of 
     meaningful, regular, and appropriate consultation with the 
     Native Hawaiian government by providing timely notice to, and 
     consulting with the Native Hawaiian people and the Native 
     Hawaiian government prior to taking any actions that may have 
     the potential to significantly affect Native Hawaiian 
     resources, rights, or lands;
       (4) consult with the Native Hawaiian Interagency Task 
     Force, other Federal agencies, and with relevant agencies of 
     the State of Hawaii on policies, practices, and proposed 
     actions affecting Native Hawaiian resources, rights, or 
     lands;
       (5) be responsible for the preparation and submittal to the 
     Committee on Indian Affairs of the Senate, the Committee on 
     Energy and Natural Resources of the Senate, and the Committee 
     on Resources of the House of Representatives of an annual 
     report detailing the activities of the Interagency Task Force 
     established under section 6 of this Act that are undertaken 
     with respect to the continuing process of reconciliation and 
     to effect meaningful consultation with the Native Hawaiian 
     people and the Native Hawaiian government and providing 
     recommendations for any necessary changes to existing Federal 
     statutes or regulations promulgated under the authority of 
     Federal law;
       (6) be responsible for continuing the process of 
     reconciliation with the Native Hawaiian people, and upon the 
     recognition of the Native Hawaiian government by the United 
     States as provided for in section 7(d)(2) of this Act, be 
     responsible for continuing the process of reconciliation with 
     the Native Hawaiian government; and
       (7) assist the Native Hawaiian people in facilitating a 
     process for self-determination, including but not limited to 
     the provision of technical assistance in the development of 
     the roll under section 7(a) of this Act, the organization of 
     the Native Hawaiian Interim Governing Council as provided for 
     in section 7(c) of this Act, and the recognition of the 
     Native Hawaiian government as provided for in section 7(d) of 
     this Act.
       (c) Authority.--The United States Office for Native 
     Hawaiian Affairs is authorized to enter into a contract with 
     or make grants for the purposes of the activities authorized 
     or addressed in section 7 of this Act for a period of 3 years 
     from the date of enactment of this Act.

     SEC. 5. DESIGNATION OF DEPARTMENT OF JUSTICE REPRESENTATIVE.

       The Attorney General shall designate an appropriate 
     official within the Department of Justice to assist the 
     United States Office for Native Hawaiian Affairs in the 
     implementation and protection of the rights of Native 
     Hawaiians and their political, legal, and trust relationship 
     with the United States, and upon the recognition of the 
     Native Hawaiian government as provided for in section 7(d)(2) 
     of this Act, in the implementation and protection of the 
     rights of the Native Hawaiian government and its political, 
     legal, and trust relationship with the United States.

     SEC. 6. NATIVE HAWAIIAN INTERAGENCY TASK FORCE.

       (a) Establishment.--There is established an interagency 
     task force to be known as the ``Native Hawaiian Interagency 
     Task Force''.
       (b) Composition.--The Task Force shall be composed of 
     officials, to be designated by the President, from--
       (1) each Federal agency that establishes or implements 
     policies that affect Native Hawaiians or whose actions may 
     significantly or uniquely impact on Native Hawaiian 
     resources, rights, or lands;
       (2) the United States Office for Native Hawaiian Affairs 
     established under section 4 of this Act; and
       (3) the Executive Office of the President.
       (c) Lead Agencies.--The Department of the Interior and the 
     Department of Justice shall serve as the lead agencies of the 
     Task Force, and meetings of the Task Force shall be convened 
     at the request of either of the lead agencies.
       (d) Co-Chairs.--The Task Force representative of the United 
     States Office for Native Hawaiian Affairs established under 
     the authority of section 4 of this Act and the Attorney 
     General's designee under the authority of section 5 of this 
     Act shall serve as co-chairs of the Task Force.
       (e) Duties.--The responsibilities of the Task Force shall 
     be--
       (1) the coordination of Federal policies that affect Native 
     Hawaiians or actions by any agency or agencies of the Federal 
     Government which may significantly or uniquely impact on 
     Native Hawaiian resources, rights, or lands;
       (2) to assure that each Federal agency develops a policy on 
     consultation with the Native Hawaiian people, and upon 
     recognition of the Native Hawaiian government by the United 
     States as provided in section 7(d)(2) of this Act, 
     consultation with the Native Hawaiian government; and
       (3) to assure the participation of each Federal agency in 
     the development of the report to Congress authorized in 
     section 4(b)(5) of this Act.

     SEC. 7. PROCESS FOR THE DEVELOPMENT OF A ROLL FOR THE 
                   ORGANIZATION OF A NATIVE HAWAIIAN INTERIM 
                   GOVERNING COUNCIL, FOR THE ORGANIZATION OF A 
                   NATIVE HAWAIIAN INTERIM GOVERNING COUNCIL AND A 
                   NATIVE HAWAIIAN GOVERNMENT, AND FOR THE 
                   RECOGNITION OF THE NATIVE HAWAIIAN GOVERNMENT.

       (a) Roll.--
       (1) Preparation of roll.--The United States Office for 
     Native Hawaiian Affairs shall assist the adult members of the 
     Native Hawaiian community who wish to participate in the 
     reorganization of a Native Hawaiian government in preparing a 
     roll for the purpose of the organization of a Native Hawaiian 
     Interim Governing Council. The roll shall include the names 
     of the--
       (A) adult members of the Native Hawaiian community who wish 
     to become citizens of a Native Hawaiian government and who 
     are--
       (i) the lineal descendants of the aboriginal, indigenous, 
     native people who resided in the

[[Page 459]]

     islands that now comprise the State of Hawaii on or before 
     January 1, 1893, and who occupied and exercised sovereignty 
     in the Hawaiian archipelago; or
       (ii) Native Hawaiians who were eligible in 1921 for the 
     programs authorized by the Hawaiian Homes Commission Act (42 
     Stat. 108, chapter 42) or their lineal descendants; and
       (B) the children of the adult members listed on the roll 
     prepared under this subsection.
       (2) Certification and submission.--
       (A) Commission.--
       (i) In general.--There is authorized to be established a 
     Commission to be composed of 9 members for the purpose of 
     certifying that the adult members of the Native Hawaiian 
     community on the roll meet the definition of Native Hawaiian, 
     as defined in section 2(7)(A) of this Act.
       (ii) Membership.--

       (I) Appointment.--The Secretary shall appoint the members 
     of the Commission in accordance with subclause (II). Any 
     vacancy on the Commission shall not affect its powers and 
     shall be filled in the same manner as the original 
     appointment.
       (II) Requirements.--The members of the Commission shall be 
     Native Hawaiian, as defined in section 2(7)(A) of this Act, 
     and shall have expertise in the certification of Native 
     Hawaiian ancestry.
       (III) Congressional submission of suggested candidates.--In 
     appointing members of the Commission, the Secretary may 
     choose such members from among--

       (aa) five suggested candidates submitted by the Majority 
     Leader of the Senate and the Minority Leader of the Senate 
     from a list of candidates provided to such leaders by the 
     Chairman and Vice Chairman of the Committee on Indian Affairs 
     of the Senate; and
       (bb) four suggested candidates submitted by the Speaker of 
     the House of Representatives and the Minority Leader of the 
     House of Representatives from a list provided to the Speaker 
     and the Minority Leader by the Chairman and Ranking member of 
     the Committee on Resources of the House of Representatives.
       (iii) Expenses.--Each member of the Commission shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Commission.
       (B) Certification.--The Commission shall certify that the 
     individuals listed on the roll developed under the authority 
     of this subsection are Native Hawaiians, as defined in 
     section 2(7)(A) of this Act.
       (3) Secretary.--
       (A) Certification.--The Secretary shall review the 
     Commission's certification of the membership roll and 
     determine whether it is consistent with applicable Federal 
     law, including the special trust relationship between the 
     United States and the indigenous, native people of the United 
     States.
       (B) Publication.--Upon making the determination authorized 
     in subparagraph (A), the Secretary shall publish a final 
     roll.
       (C) Appeal.--
       (i) Establishment of mechanism.--The Secretary is 
     authorized to establish a mechanism for an appeal of the 
     Commission's determination as it concerns--

       (I) the exclusion of the name of a person who meets the 
     definition of Native Hawaiian, as defined in section 2(7)(A) 
     of this Act, from the roll; or
       (II) a challenge to the inclusion of the name of a person 
     on the roll on the grounds that the person does not meet the 
     definition of Native Hawaiian, as so defined.

       (ii) Publication; update.--The Secretary shall publish the 
     final roll while appeals are pending, and shall update the 
     final roll and the publication of the final roll upon the 
     final disposition of any appeal.
       (D) Failure to act.--If the Secretary fails to make the 
     certification authorized in subparagraph (A) within 90 days 
     of the date that the Commission submits the membership roll 
     to the Secretary, the certification shall be deemed to have 
     been made, and the Commission shall publish the final roll.
       (4) Effect of publication.--The publication of the final 
     roll shall serve as the basis for the eligibility of adult 
     members listed on the roll to participate in all referenda 
     and elections associated with the organization of a Native 
     Hawaiian Interim Governing Council and the Native Hawaiian 
     government.
       (b) Recognition of Rights.--The right of the Native 
     Hawaiian people to organize for their common welfare and to 
     adopt appropriate organic governing documents is hereby 
     recognized by the United States.
       (c) Organization of the Native Hawaiian Interim Governing 
     Council.--
       (1) Organization.--The adult members listed on the roll 
     developed under the authority of subsection (a) are 
     authorized to--
       (A) develop criteria for candidates to be elected to serve 
     on the Native Hawaiian Interim Governing Council;
       (B) determine the structure of the Native Hawaiian Interim 
     Governing Council; and
       (C) elect members to the Native Hawaiian Interim Governing 
     Council.
       (2) Election.--Upon the request of the adult members listed 
     on the roll developed under the authority of subsection (a), 
     the United States Office for Native Hawaiian Affairs may 
     assist the Native Hawaiian community in holding an election 
     by secret ballot (absentee and mail balloting permitted), to 
     elect the membership of the Native Hawaiian Interim Governing 
     Council.
       (3) Powers.--
       (A) In general.--The Native Hawaiian Interim Governing 
     Council is authorized to represent those on the roll in the 
     implementation of this Act and shall have no powers other 
     than those given to it in accordance with this Act.
       (B) Funding.--The Native Hawaiian Interim Governing Council 
     is authorized to enter into a contract or grant with any 
     Federal agency, including but not limited to, the United 
     States Office for Native Hawaiian Affairs within the 
     Department of the Interior and the Administration for Native 
     Americans within the Department of Health and Human Services, 
     to carry out the activities set forth in subparagraph (C).
       (C) Activities.--
       (i) In general.--The Native Hawaiian Interim Governing 
     Council is authorized to conduct a referendum of the adult 
     members listed on the roll developed under the authority of 
     subsection (a) for the purpose of determining (but not 
     limited to) the following:

       (I) The proposed elements of the organic governing 
     documents of a Native Hawaiian government.
       (II) The proposed powers and authorities to be exercised by 
     a Native Hawaiian government, as well as the proposed 
     privileges and immunities of a Native Hawaiian government.
       (III) The proposed civil rights and protection of such 
     rights of the citizens of a Native Hawaiian government and 
     all persons subject to the authority of a Native Hawaiian 
     government.

       (ii) Development of organic governing documents.--Based 
     upon the referendum, the Native Hawaiian Interim Governing 
     Council is authorized to develop proposed organic governing 
     documents for a Native Hawaiian government.
       (iii) Distribution.--The Native Hawaiian Interim Governing 
     Council is authorized to distribute to all adult members of 
     those listed on the roll, a copy of the proposed organic 
     governing documents, as drafted by the Native Hawaiian 
     Interim Governing Council, along with a brief impartial 
     description of the proposed organic governing documents.
       (iv) Consultation.--The Native Hawaiian Interim Governing 
     Council is authorized to freely consult with those members 
     listed on the roll concerning the text and description of the 
     proposed organic governing documents.
       (D) Elections.--
       (i) In general.--The Native Hawaiian Interim Governing 
     Council is authorized to hold elections for the purpose of 
     ratifying the proposed organic governing documents, and upon 
     ratification of the organic governing documents, to hold 
     elections for the officers of the Native Hawaiian government.
       (ii) Assistance.--Upon the request of the Native Hawaiian 
     Interim Governing Council, the United States Office of Native 
     Hawaiian Affairs may assist the Council in conducting such 
     elections.
       (4) Termination.--The Native Hawaiian Interim Governing 
     Council shall have no power or authority under this Act after 
     the time at which the duly elected officers of the Native 
     Hawaiian government take office.
       (d) Recognition of the Native Hawaiian Government.--
       (1) Process for recognition.--
       (A) Submittal of organic governing documents.--The duly 
     elected officers of the Native Hawaiian government shall 
     submit the organic governing documents of the Native Hawaiian 
     government to the Secretary.
       (B) Certifications.--Within 90 days of the date that the 
     duly elected officers of the Native Hawaiian government 
     submit the organic governing documents to the Secretary, the 
     Secretary shall certify that the organic governing 
     documents--
       (i) were adopted by a majority vote of the adult members 
     listed on the roll prepared under the authority of subsection 
     (a);
       (ii) are consistent with applicable Federal law and the 
     special trust relationship between the United States and the 
     indigenous native people of the United States;
       (iii) provide for the exercise of those governmental 
     authorities that are recognized by the United States as the 
     powers and authorities that are exercised by other 
     governments representing the indigenous, native people of the 
     United States;
       (iv) provide for the protection of the civil rights of the 
     citizens of the Native Hawaiian government and all persons 
     subject to the authority of the Native Hawaiian government, 
     and to assure that the Native Hawaiian government exercises 
     its authority consistent with the requirements of section 202 
     of the Act of April 11, 1968 (25 U.S.C. 1302);
       (v) prevent the sale, disposition, lease, or encumbrance of 
     lands, interests in lands, or other assets of the Native 
     Hawaiian government without the consent of the Native 
     Hawaiian government;
       (vi) establish the criteria for citizenship in the Native 
     Hawaiian government; and
       (vii) provide authority for the Native Hawaiian government 
     to negotiate with Federal, State, and local governments, and 
     other entities.

[[Page 460]]

       (C) Failure to act.--If the Secretary fails to act within 
     90 days of the date that the duly elected officers of the 
     Native Hawaiian government submitted the organic governing 
     documents of the Native Hawaiian government to the Secretary, 
     the certifications authorized in subparagraph (B) shall be 
     deemed to have been made.
       (D) Resubmission in case of noncompliance with federal 
     law.--
       (i) Resubmission by the secretary.--If the Secretary 
     determines that the organic governing documents, or any part 
     thereof, are not consistent with applicable Federal law, the 
     Secretary shall resubmit the organic governing documents to 
     the duly elected officers of the Native Hawaiian government 
     along with a justification for each of the Secretary's 
     findings as to why the provisions are not consistent with 
     such law.
       (ii) Amendment and resubmission by the native hawaiian 
     government.--If the organic governing documents are 
     resubmitted to the duly elected officers of the Native 
     Hawaiian government by the Secretary under clause (i), the 
     duly elected officers of the Native Hawaiian government 
     shall--

       (I) amend the organic governing documents to ensure that 
     the documents comply with applicable Federal law; and
       (II) resubmit the amended organic governing documents to 
     the Secretary for certification in accordance with 
     subparagraphs (B) and (C).

       (2) Federal recognition.--
       (A) Recognition.--Notwithstanding any other provision of 
     law, upon the election of the officers of the Native Hawaiian 
     government and the certifications (or deemed certifications) 
     by the Secretary authorized in paragraph (1), Federal 
     recognition is hereby extended to the Native Hawaiian 
     government as the representative governing body of the Native 
     Hawaiian people.
       (B) No diminishment of rights or privileges.--Nothing 
     contained in this Act shall diminish, alter, or amend any 
     existing rights or privileges enjoyed by the Native Hawaiian 
     people which are not inconsistent with the provisions of this 
     Act.

     SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated such sums as may be 
     necessary to carry out the activities authorized in this Act.

     SEC. 9. REAFFIRMATION OF DELEGATION OF FEDERAL AUTHORITY; 
                   NEGOTIATIONS.

       (a) Reaffirmation.--The delegation by the United States of 
     authority to the State of Hawaii to address the conditions of 
     Native Hawaiians contained in the Act entitled ``An Act to 
     provide for the admission of the State of Hawaii into the 
     Union'' approved March 18, 1959 (Public Law 86-3; 73 Stat. 5) 
     is hereby reaffirmed.
       (b) Negotiations.--Upon the Federal recognition of the 
     Native Hawaiian government pursuant to section 7(d)(2) of 
     this Act, the United States is authorized to negotiate and 
     enter into an agreement with the State of Hawaii and the 
     Native Hawaiian government regarding the transfer of lands, 
     resources, and assets dedicated to Native Hawaiian use under 
     existing law as in effect on the date of enactment of this 
     Act to the Native Hawaiian government.

     SEC. 10. DISCLAIMER.

       Nothing in this Act is intended to serve as a settlement of 
     any claims against the United States, or to affect the rights 
     of the Native Hawaiian people under international law.

     SEC. 11. REGULATIONS.

       The Secretary is authorized to make such rules and 
     regulations and such delegations of authority as the 
     Secretary deems necessary to carry out the provisions of this 
     Act.

     SEC. 12. SEVERABILITY.

       In the event that any section or provision of this Act, or 
     any amendment made by this Act is held invalid, it is the 
     intent of Congress that the remaining sections or provisions 
     of this Act, and the amendments made by this Act, shall 
     continue in full force and effect.
                                 ______
                                 
      By Mr. LUGAR:
  S. 82. A bill to repeal the Federal estate and gift taxes and the tax 
on generation-skipping transfers; to the Commitee on Finance.
  S. 83. A bill to phase-out and repeal the Federal estate and gift 
taxes and the tax on generation-skipping transfers; to the Committee on 
Finance.
  S. 84. A bill to increase the unified estate and gift taxes and the 
tax credit to exempt small businesses and farmers from estate taxes; to 
the Committee on Finance
  S. 85. A bill to amend the Internal Revenue Code of 1986 to increase 
the gift tax exclusion to $25,000; to the Committee on Finance.


                              Estate Taxes

  Mr. LUGAR. Mr. President, I am pleased to introduce a series of bills 
intended to address the burden that estate taxes place on our economy. 
The estate tax hinders entrepreneurial activity and job creation in 
many economic sectors.
  As Chairman of the Senate Agriculture Committee, I have held hearings 
on the impact of the estate tax on farmers, ranchers, and rural 
communities. The effects of inheritance taxes are far reaching in the 
agricultural community. Citing personal experiences, witnesses 
described how the estate tax discourages savings, capital investment, 
and job formation.
  One such story came from a Hoosier, Mr. Woody Barton. He is a fifth 
generation tree farmer living in the house his great grandparents built 
in 1885. I visited his 300 acres of forested property recently and can 
attest to their beauty. Typical of many farmers, Mr. Barton is over 65 
years old and wants to leave this legacy to his four children. But he 
fears that the estate tax may cause his children to strip the timber 
and then sell the land in order to pay the estate tax bill. His 
grandmother logged a portion of the land in 1939 to pay the debts that 
came from the death of her husband. In essence, each generation must 
buy back the hard work and dedication of their ancestors from the 
federal government. Mr. Barton believes, and I agree, that the actions 
of Congress have more impact on the outcome of his family's land than 
his own planning and investment. This should not be the case.
  The estate tax falls disproportionately on our agricultural 
producers. Ninety-five percent of farms and ranch operations are sold 
proprietorships or family partnerships, subjecting a vast majority of 
these businesses to the threat of inheritance taxes. According to USDA 
figures farmers are six times more likely to face inheritance taxes 
than other Americans. And commercial farm estates--those core farms 
that produce 85 percent of our nation's agricultural products-are 
fifteen times more likely to pay inheritance taxes than other 
individuals.
  The threat of estate taxes to family farms will become even more 
prevalent if nothing is done. With the average farmer approaching 60 
years of age, farm families throughout the country are about to 
confront the burden of estate taxes as they prepare to pass their farm 
onto the next generation. Recently, the USDA estimated that between 
1992 and 2002, more than 500,000 farmers will have retired. Demographic 
studies indicate that a quarter of all farmers could confront the 
inheritance tax during the next 20 years.
  In light of this problem, today I offer several bills to provide 
relief to those impacted by the estate tax. This is the third 
consecutive Congress that I have offered this series of bills on the 
first day of bill introduction. I am optimistic that this will be the 
Congress that will finally repeal the estate tax.
  My first bill would repeal the estate and gift taxes outright. My 
second bill would phase out the estate tax over five years by gradually 
raising the unified credit each year until the tax is repealed after 
the fifth year. My third bill would immediately raise the effective 
unified credit to $5 million. My last bill would raise the gift tax 
exemption from $10,000 to $25,000.
  I believe that the best option is a simple repeal of the estate tax. 
However, even if the estate tax is not repealed, the unified credit 
must be raised significantly. Despite our most recent success in 
raising the exemption level, inflation has caused a growing percentage 
of estates to be subjected to the estate tax. My second bill is 
intended to highlight this point and provide a gradual path to repeal. 
My third bill focuses on relieving the estate tax burden that falls 
disproportionately on farmers and small business owners. By raising the 
exemption amount to $5 million, 96 percent of estates with farm assets 
and 90 percent of estates with non-corporate business assets would not 
have to pay estate taxes, according to the IRS. The final bill raising 
the gift tax exemption from $10,000 to $25,000 would provide Americans 
with an additional tool for passing productive assets to the next 
generation. This level has not been adjusted since 1982.
  Despite its modest beginnings in 1916, the estate tax has mushroomed 
into an exorbitant tax on death that discourages savings, economic 
growth, and job formation by blocking the accumulation of 
entrepreneurial capital and by breaking up family businesses and farms. 
With the highest marginal rate

[[Page 461]]

at 55 percent, more than half of an estate can go directly to the 
government. By the time the inheritance tax is levied on families, 
their assets have already been taxed at least once. This form of double 
taxation violates perceptions of fairness in our tax system.
  If we are sincere about boosting economic growth, we must consider 
what effect the estate tax has on a business owner deciding whether to 
invest in new capital goods or hire a new employee. The Heritage 
Foundation estimates that repealing the estate tax would annually boost 
our economic output by $11 billion, create 145,000 new jobs and raise 
personal income by $8 billion. These figures underscore the current 
weight of this tax on our economy.
  One might expect that for all the economic disincentives caused by 
the estate tax, it must at least provide a sizable contribution to the 
U.S. Treasury. But in reality, the estate tax only accounts for about 1 
percent of federal taxes. It cannot be justified as an indispensable 
revenue raiser. Given the blow delivered to job formation and economic 
growth, the estate tax may even cost the Treasury money. Our nation's 
ability to crease new jobs, new opportunities, and new wealth is 
damaged as a result of our insistence on collecting a tax that earns 
less than 1 percent of our revenue.
  But this tax affects more than just the national economy. It affects 
how we as a nation think about community, family, and work. Small 
businesses and farms represent much more than assets. They represent 
years of toil and entrepreneurial risk taking. They also represent the 
hopes that families have for their children. Part of the American Dream 
has always been to build up a business, farm, or ranch so that economic 
opportunities and a way of life can be passed on to one's children and 
grandchildren.
  I know first-hand about the dangers of this tax to agriculture. My 
father died when I was 24, leaving his 604-acre farm in Marion County, 
Indiana, to his family. I helped manage the farm, which had built up 
considerable debts during my father's illness. Fortunately, after a 
number of years, we were successful in working out the financial 
problems and repaying the money. We were lucky; that farm remains in 
our family. But many of today's farmers and small business owners are 
not so fortunate. Only about 30 percent of businesses are transferred 
from parent to child, and only about 12 percent of businesses make it 
to a grandchild.
  Mr. President, I was delighted that during the last Congress we were 
able to pass the Death Tax Elimination Act. Despite its ultimate veto, 
this legislative step was an important one and will hopefully carry 
over momentum to this congress. As we take up this issue again in the 
coming months, the bills that I have introduced will provide 
policymakers with a range of options as they seek to mitigate the 
burdens of the estate tax. Doing so will lead to expanded investment 
incentives and job creation and will reinvigorate an important part of 
the American Dream. I am hopeful that Senators will join me in the 
effort to free small businesses, family farms, and our economy from 
this counterproductive tax. I ask unanimous consent that my four bills 
be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 82

       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 ``Estate and Gift Tax Repeal 
     Act of 2001''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The economy of the United States cannot achieve strong, 
     sustained growth without adequate levels of savings to fuel 
     productive activity. Inadequate savings have been shown to 
     lead to lower productivity, stagnating wages, and reduced 
     standards of living.
       (2) Savings levels in the United States have steadily 
     declined over the past 25 years, and have lagged behind the 
     industrialized trading partners of the United States.
       (3) These anemic savings levels have contributed to the 
     country's long-term downward trend in real economic growth, 
     which averaged close to 3.5 percent over the last 100 years 
     but has slowed to 2.4 percent over the past quarter century.
       (4) Congress should work toward reforming the entire 
     Federal tax code to end its bias against savings and 
     eliminate double taxation.
       (5) Repealing the estate and gift tax would contribute to 
     the goals of expanding savings and investment, boosting 
     entrepreneurial activity, and expanding economic growth. The 
     estate tax is harmful to the economy because of its high 
     marginal rates and its multiple taxation of income.
       (6) Abolishing the estate tax would restore a measure of 
     fairness to the Federal tax system. Families should be able 
     to pass on the fruits of labor to the next generation without 
     realizing a taxable event.
       (7) Abolishing the estate tax would benefit the 
     preservation of family farms. Nearly 95 percent of farms and 
     ranches are owned by sole proprietors or family partnerships, 
     subjecting most of this property to estate taxes upon the 
     death of the owner. Due to the capital intensive nature of 
     farming and its low return on investment, farmers are 15 
     times more likely to be subject to estate taxes than other 
     Americans.

     SEC. 3. REPEAL OF FEDERAL TRANSFER TAXES.

       (a) In General.--Subtitle B of the Internal Revenue Code of 
     1986 is repealed.
       (b) Effective Date.--The repeal made by subsection (a) 
     shall apply to the estates of decedents dying, and gifts and 
     generation-skipping transfers made, after the date of the 
     enactment of this Act.
       (c) Technical and Conforming Changes.--The Secretary of the 
     Treasury or the Secretary's delegate shall, as soon as 
     practicable but in any event not later than 90 days after the 
     date of the enactment of this Act, submit to the Committee on 
     Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate a draft of any technical 
     and conforming changes in the Internal Revenue Code of 1986 
     which are necessary to reflect throughout such Code the 
     changes in the substantive provisions of law made by this 
     Act.
                                  ____


                                 S. 83

       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 ``Estate and Gift Tax Phase-
     Out Act of 2001''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The economy of the United States cannot achieve strong, 
     sustained growth without adequate levels of savings to fuel 
     productive activity. Inadequate savings have been shown to 
     lead to lower productivity, stagnating wages, and reduced 
     standards of living.
       (2) Savings levels in the United States have steadily 
     declined over the past 25 years, and have lagged behind the 
     industrialized trading partners of the United States.
       (3) These anemic savings levels have contributed to the 
     country's long-term downward trend in real economic growth, 
     which averaged close to 3.5 percent over the last 100 years 
     but has slowed to 2.4 percent over the past quarter century.
       (4) Repealing the estate and gift tax would contribute to 
     the goals of expanding savings and investment, boosting 
     entrepreneurial activity, and expanding economic growth.
       (5) Abolishing the estate tax would restore a measure of 
     fairness to the Federal tax system. Families should be able 
     to pass on the fruits of labor to the next generation without 
     realizing a taxable event.
       (6) Abolishing the estate tax would benefit the 
     preservation of family farms. Nearly 95 percent of farms and 
     ranches are owned by sole proprietors or family partnerships, 
     subjecting most of this property to estate taxes upon the 
     death of the owner. Due to the capital intensive nature of 
     farming and its low return on investment, farmers are 15 
     times more likely to be subject to estate taxes than other 
     Americans.

     SEC. 3. PHASE-OUT OF ESTATE AND GIFT TAXES THROUGH INCREASE 
                   IN UNIFIED ESTATE AND GIFT TAX CREDIT.

       (a) In General.--The table in section 2010(c) of the 
     Internal Revenue Code (relating to applicable credit amount) 
     is amended to read as follows:

``In the case of estates of decedentThe applicable exclusion amount is:
      2002..................................................$1,000,000 
      2003..................................................$1,500,000 
      2004..................................................$2,000,000 
      2005..................................................$2,500,000 
      2006...............................................$5,000,000.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to the estates of decedents dying, and gifts 
     made, after December 31, 2001.

     SEC. 4. REPEAL OF FEDERAL TRANSFER TAXES.

       (a) In General.--Subtitle B of the Internal Revenue Code of 
     1986 is repealed.
       (b) Effective Date.--The repeal made by subsection (a) 
     shall apply to the estates of decedents dying, and gifts and 
     generation-skipping transfers made, after December 31, 2006.

[[Page 462]]

       (c) Technical and Conforming Changes.--The Secretary of the 
     Treasury or the Secretary's delegate shall not later than 90 
     days after the effective date of this section, submit to the 
     Committee on Ways and Means of the House of Representatives 
     and the Committee on Finance of the Senate a draft of any 
     technical and conforming changes in the Internal Revenue Code 
     of 1986 which are necessary to reflect throughout such Code 
     the changes in the substantive provisions of law made by this 
     Act.
                                  ____


                                 S. 84

       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 ``Farmer and Entrepreneur 
     Estate Tax Relief Act of 2001''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The economy of the United States cannot achieve strong, 
     sustained growth without adequate levels of savings to fuel 
     productive activity. Inadequate savings have been shown to 
     lead to lower productivity, stagnating wages and reduced 
     standards of living.
       (2) Savings levels in the United States have steadily 
     declined over the past 25 years, and have lagged behind the 
     industrialized trading partners of the United States.
       (3) These anemic savings levels have contributed to the 
     country's long-term downward trend in real economic growth, 
     which averaged close to 3.5 percent over the last 100 years 
     but has slowed to 2.4 percent over the past quarter century.
       (4) Congress should work toward reforming the entire 
     Federal tax code to end its bias against savings.
       (5) Repealing the estate and gift tax would contribute to 
     the goals of expanding savings and investment, boosting 
     entrepreneurial activity, and expanding economic growth. The 
     estate tax is harmful to the economy because of its high 
     marginal rates and its multiple taxation of income.
       (6) The repeal of the estate tax would increase the growth 
     of the small business sector, which creates a majority of new 
     jobs in our Nation. Estimates indicate that as many as 70 
     percent of small businesses do not make it to a second 
     generation and nearly 90 percent do not make it to a third.
       (7) Eliminating the estate tax would lift the compliance 
     burden from farmers and family businesses. On average, 
     family-owned businesses spent over $33,000 on accountants, 
     lawyers, and financial experts in complying with the estate 
     tax laws over a 6.5-year period.
       (8) Abolishing the estate tax would benefit the 
     preservation of family farms. Nearly 95 percent of farms and 
     ranches are owned by sole proprietors or family partnerships, 
     subjecting most of this property to estate taxes upon the 
     death of the owner. Due to the capital intensive nature of 
     farming and its low return on investment, farmers are 15 
     times more likely to be subject to estate taxes than other 
     Americans.
       (9) As the average age of farmers approaches 60 years, it 
     is estimated that a quarter of all farmers could confront the 
     estate tax over the next 20 years. The auctioning of these 
     productive assets to finance tax liabilities destroys jobs 
     and harms the economy.
       (10) Abolishing the estate taxes would restore a measure of 
     fairness to our Federal tax system. Families should be able 
     to pass on the fruits of the labor to the next generation 
     without realizing a taxable event.
       (11) Despite this heavy burden on entrepreneurs, farmers, 
     and our entire economy, estate and gift taxes collect only 
     about 1 percent of our Federal tax revenues. In fact, the 
     estate tax may not raise any revenue at all, because more 
     income tax is lost from individuals attempting to avoid 
     estate taxes than is ultimately collected at death.
       (12) Repealing estate and gift taxes is supported by the 
     White House Conference on Small Business, the Kemp Commission 
     on Tax Reform, and 60 small business advocacy organizations.

     SEC. 3. INCREASE IN UNIFIED ESTATE AND GIFT TAX CREDIT.

       (a) In General.--The table in section 2010(c) of the 
     Internal Revenue Code (relating to applicable credit amount) 
     is amended--
       (1) by striking ``2002 and 2003'' and inserting ``2002 or 
     thereafter'',
       (2) by striking ``$700,000'' and inserting ``$5,000,000'', 
     and
       (3) by striking all matter beginning with the item relating 
     to 2004 through the end of the table.
       (b) Effective Date.--The amendments made by this section 
     shall apply to the estates of decedents dying, and gifts 
     made, after December 31, 2001.
                                  ____


                                 S. 85

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

     SECTION 1. INCREASE IN GIFT TAX EXCLUSION.

       (a) In General.--Section 2503(b) of the Internal Revenue 
     Code of 1986 (relating to exclusions from gifts) is amended--
       (1) by striking ``$10,000'' each place it appears and 
     inserting ``$25,000'',
       (2) by striking ``1998'' in paragraph (2) and inserting 
     ``2002'', and
       (3) by striking ``1997'' in paragraph (2)(B) and inserting 
     ``2001''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to gifts made after December 31, 2001.
                                 ______
                                 
      By Mr. ROCKEFELLER (for himself, Ms. Snowe, Mr. Kerry, Mr. Hatch, 
        Mr. Baucus, Mr. Burns, Mr. Hollings, Mr. Bayh, Mrs. Boxer, Mr. 
        Brownback, Mr. Cleland, Mrs. Clinton, Mr. Craig, Mr. Daschle, 
        Mr. DeWine, Mr. Dodd, Mr. Edwards, Mr. Enzi, Mr. Johnson, Mr. 
        Kennedy, Ms. Landrieu, Mrs. Lincoln, Mr. Miller, Mrs. Murray, 
        Mr. Roberts, Mr. Schumer, Mr. Thomas, Mr. Wyden, Mr. Helms, Mr. 
        Leahy, Mr. Conrad, Mr. Reid, and Mr. Harkin):
  S. 88. A bill to amend the Internal Revenue Code of 1986 to provide 
an incentive to ensure that all Americans gain timely and equitable 
access to the Internet over current and future generations of broadband 
capability; to the Committee on Finance.


                    Broadband Tax Credit Legislation

  Mr. ROCKEFELLER. Mr. President, I rise today to introduce the 
Broadband Internet Access Act of 2001. The convergence of computing and 
communications has changed the way America interacts and does business. 
Individuals, businesses, schools, libraries, hospitals, and many 
others, reap the benefits of networked communications more and more 
each year. However, where in the past access to low bandwidth telephone 
facilities met our communications needs, today many people and 
organizations need the ability to transmit and receive large amounts of 
data quickly--as part of electronic commerce, distance learning, 
telemedicine, and even for mere access to many web sites.
  In some areas of the country companies are building networks that 
meet today's broadband need as fast as they can. Technology companies 
are fighting to roll out the current generation of broadband facilities 
as quickly as they can in urban and suburban areas. They are tearing up 
streets to install fiber optics, converting cable TV facilities to 
broadband telecom applications, developing incredible new DSL 
technologies that convert regular copper telephone wires into broadband 
powerhouses.
  Other areas are not as fortunate. In rural and inner city areas 
access to even the current generation of broadband communications is 
harder to come by. In fact, there are only a few broadband providers 
outside the prosperous areas of big cities and suburban areas 
nationwide. This is because in many cases rural areas are more 
expensive to serve. Terrain is difficult. Populations are widely 
dispersed. Importantly, many of our current broadband technologies 
cannot serve people who live more than eighteen thousand feet from a 
phone company's central office--which is the case for most rural 
Americans. In inner cities, companies may believe that lower household 
income levels will not support a market for their services, so they 
chose not to invest in these communities.
  The implications for the country if we allow this broadband disparity 
to continue are alarming. Organizations in traditional robust 
communications and computing regions, often located in prosperous urban 
and suburban communities, will be able to reap the rewards of a 
networked economy. Organizations in other areas, often in rural areas 
as in inner cities, including many areas in my State of West Virginia, 
will suffer the consequences of being unable to take advantage of the 
astounding power of broadband networked computing.
  Just as companies that employ technological advances are decimating 
their less technologically savvy competitors, businesses in 
infrastructure-rich areas may soon decimate competitors in 
infrastructure-poor areas. This is just as true as rural and inner city 
students, workers trying to gain new skills, and regular individuals 
who want to participate in the New Economy in other ways compete 
against their non-rural peers. The result could

[[Page 463]]

be disastrous for Americans who live in rural areas or in our inner 
cities: job loss, tax revenue loss, brain drain, and business failure 
concentrated in their communities.
  Denying Americans who live in rural areas and inner cities a chance 
to participate in the New Economy is also bad for the national economy. 
Businesses will be forced to locate their operations and hire their 
employees in urban locations that have adequate broadband 
infrastructure, rather than in rural or inner city locations that are 
otherwise more efficient due to the location of their customers or 
suppliers, a stable or better workforce, and cheaper production 
environments. Additionally, without adequate infrastructure, the 
businesses and individuals in these communications infrastructure poor 
areas are less likely to be integrated into the national electronic 
marketplace. Their absence would put a damper on the growth of the 
digital economy for everyone--not just for those in rural areas.
  Therefore, we must do everything we can to ensure that broadband 
communications are available to all areas of the country--rural and 
inner city as well as the prosperous urban and suburban communities. 
The Broadband Internet Access Act of 2001 addresses this problem.
  The Act would give companies the incentive to build current 
generation broadband facilities in rural areas by using a very focused 
tax credit. It would offer any company that invests in broadband 
facilities in rural or inner city areas a ten percent tax credit over 
the next five years. This tax credit will help fight the growing 
disparity in technology I just described.
  The credit is also restricted to investments needed for high-speed 
broadband telecommunications services. This means that only powerful 
broadband services are covered. Companies cannot claim that inferior 
services qualify for the credit. Only facilities that can download data 
at a rate of speed of 1.5 megabytes per second, and upload data at 200 
kilobytes per second qualify.
  In addition, the bill provides a 20 percent tax credit for companies 
that invest in next generation broadband services. These powerful new 
services, that can deliver data capacities of 22 megabytes per second 
download and 5 megabytes per second upload will be the infrastructure 
the new economy depends as the digital economy matures. We need to 
reward the companies who have the foresight to invest in these next 
generation broadband services--they will benefit the whole country.
  The Broadband Internet Access Act of 2000 is part of the solution to 
the critically important digital divide problem. Rural Americans and 
Americans living in inner cities deserve the chance to participate in 
the New Economy. Without access to broadband services they will not 
have this chance. I hope that the Members of this body will support 
this important bill.
  For those who want even more details, I ask unanimous consent that 
Attachment One to this statement, titled Broadband Internet Access Tax 
Credit, be made part of the Record. This attachment is a detailed 
explanation of the tax credit based on an analysis of the similar 
Broadband Internet Access Act of 2000, from the 106th Congress. We will 
hopefully have a more updated explanation that reflects changes to the 
bill for the 107th Congress very soon.
  There being no objection, the attachment ordered to be printed in the 
Record, as follows:

                  Broadband Internet Access Tax Credit

                       (New sec. 48A of the Code)


                              present law

       Present law does not provide a credit for investments in 
     telecommunications infrastructure.


                        explanation of provision

       The bill provides a credit to 10 percent of the qualified 
     expenditures incurred by the taxpayer with respect to 
     qualified equipment with which ``current generation'' 
     broadband services are delivered to subscribers in rural and 
     underserved areas. In the addition, the bill provides a 
     credit equal to 20 percent of the qualified expenditures 
     incurred by the taxpayer with respect to qualified equipment 
     with which ``next generation'' broadband services are 
     delivered to subscribers in rural areas, underserved areas, 
     and to residential subscribers.
       Current generation broadband services is defined as the 
     transmission of signals at a rate of at least 1.5 million 
     bits per second to the subscriber and at a rate of at least 
     200,000 bits per second from the subscriber. Next generation 
     broadband services is defined as the transmission of signals 
     at a rate of at least 22 million bits per second to the 
     subscriber and at a rate of at least 5 million bits per 
     second from the subscriber. Taxpayers will be permitted to 
     substantiate their satisfaction of the required transmission 
     rates through statistically significant test data 
     demonstrating satisfaction of the required transmission 
     rates, by providing evidence that all relevant subscribers 
     were provided with a written guarantee that the required 
     transmission rates would be satisfied, or through any other 
     reasonable method. For this purpose, the fact that certain 
     subscribers are not able to access such services at the 
     required transmission rates due to limitations in equipment 
     outside of the control of the provider, or in equipment other 
     than qualified equipment, shall not be taken into account.
       A rural area is any census tract which is not within 10 
     miles of any incorporated or census designated place with a 
     population of more than 25,000 and which is not within a 
     county with a population density of more than 500 people per 
     square mile. An underserved area is any census tract which is 
     located in an empowerment zone, enterprise community, renewal 
     zone or low-income community. A residential subscriber is any 
     individual who purchases broadband services to be delivered 
     to his or her dwelling.
     Qualified expenditures
       Qualified expenditures are those amounts otherwise 
     chargeable to the capital account with respect to the 
     purchase and installation of qualified equipment for which 
     depreciation is allowable under section 168. Qualified 
     expenditures are those that are incurred by the taxpayer 
     after December 31, 2001, and before January 1, 2006.
       The expenditures are taken into account for purposes of 
     claiming the credit in the first taxable year in which 
     broadband service is delivered to at least 10 percent of the 
     specified type of subscribers which the qualified equipment 
     is capable of serving in an area in which the provider has 
     legal or contractual area access rights or obligations. For 
     this purpose, it is intended that the subscribers which the 
     equipment is capable of serving will be determined by the 
     least capable link in the system. For example, if a system 
     has a packet switch capable of serving 10,000 subscribers, 
     followed by a digital subscriber line access multiplexer 
     (``DSLAM'') capable of serving only 2,000 subscribers, then 
     the area which the equipment is capable of serving is the 
     area served by the 2,000 DSLAM lines.
       Although the credit only applies with respect to qualified 
     expenditures incurred during specified periods, the fact that 
     the expenditures are not taken into account until a later 
     period will not affect the taxpayer's eligibility for the 
     credit. For example, if a taxpayer incurs qualified 
     expenditures with respect to equipment providing next 
     generation broadband services in 2004, but the taxpayer does 
     not satisfy the 10 percent subscription threshold until 2005, 
     the taxpayer will be eligible for the credit in 2005 
     (assuming the other requirements of the bill are satisfied). 
     To substantiate their satisfaction of the 10 percent 
     subscription threshold, taxpayers will be required to provide 
     such information as is required by the Secretary, which may 
     include relevant customer date or evidence of independent 
     certification.
       In the case of a taxpayer that incurs expenditures for 
     equipment capable of serving both subscribers in qualifying 
     areas and other areas, qualified expenditures are determined 
     by multiplying otherwise qualified expenditures by the ratio 
     of the number of potential qualifying subscribers to all 
     potential subscribers the qualified equipment would be 
     capable of serving, as determined by the least capable link 
     in the system. Taxpayers may use any reasonable method to 
     determine the relevant total potential subscriber population, 
     based on the most recently published census data. In 
     addition, for purposes of substantiating the total potential 
     subscriber population which equipment is capable of serving, 
     taxpayers will be required to provide such information as is 
     required by the Secretary, which may include manufacturer's 
     equipment ratings or evidence of independent certification.
     Qualified equipment
       Qualified equipment must be capable of providing broadband 
     services at any time to each subscriber who is utilizing such 
     services. It is intended that this standard would be 
     satisfied if a subscriber utilizing broadband services 
     through the equipment is able to receive the specified 
     transmission rates in at least 99 out of 100 attempts.
       In the case of a telecommunications carrier, qualified 
     equipment is equipment that extends from the last point of 
     switching to the outside of the building in which the 
     subscriber is located. In the case of a commercial mobile 
     service carrier, qualified equipment that extends from the 
     customer side of a mobile telephone switching office to a 
     transmission/reception antenna (including the antenna) of the 
     subscriber. In the case of a cable operator or open video 
     system operator, qualified equipment is equipment that

[[Page 464]]

     extends from the customer side of the headend to the outside 
     of the building in which the subscriber is located. In the 
     case of a satellite carrier or other wireless carrier (other 
     than a telecommunications carrier), qualified equipment is 
     equipment that extends from a transmission/reception antenna 
     (including the antenna) to a transmission/reception antenna 
     on the outside of the building used by the subscriber. In 
     addition, any packet switching equipment deployed in 
     connection with other qualified equipment is qualified 
     equipment, regardless of location, provided that it is the 
     last such equipment in a series as part of transmission of a 
     signal to a subscriber or the first in a series in the 
     transmission of a signal from a subscriber. Finally, 
     multiplexing and demultiplexing equipment and other equipment 
     making associated applications deployed in connection with 
     other qualified equipment is qualified equipment only if it 
     is located between qualified packet switching equipment and 
     the subscriber's premises.
       Although a taxpayer must incur the expenditures directly in 
     order to qualify for the credit, the taxpayer may provide the 
     requisite broadband services either directly or indirectly. 
     For example, if a partnership constructs qualified equipment 
     or otherwise incurs expenditures, but the requisite services 
     are provided by one or more of its partners, the partnership 
     will be eligible for the credit (assuming the other 
     requirements of the bill are satisfied). It is anticipated 
     that the Secretary will issue regulations or other published 
     guidance demonstrating how the requirements of the bill are 
     satisfied in such situations.


                             effective date

       The provision is effective for expenditures incurred after 
     December 31, 2001.

  Mr. BURNS. Mr. President, I rise today in support of a bill I 
supported last Congress along with over half of the members in this 
body. The bill, the Broadband Internet Access Act of 2001, creates tax 
incentives for the deployment of broadband (high-speed) Internet 
services to rural, low-income, and residential areas.
  This bill will ensure that all Americans gain timely and equitable 
access to the Internet over current and future generations of broadband 
capability.
  The legislation provides graduated tax credits to companies that 
bring qualified telecommunication capabilities to targeted areas. It 
grants a 10-percent credit for expenditures on equipment that provide 
current generation bandwidth of 1.5 million bits per second (mbps) 
downstream and .2 mbps upstream to subscribers in rural and low-income 
areas, and a 20-percent credit for delivery of next generation 22 mbps 
downstream and 5 mbps upstream to these customers and other residential 
subscribers.
  This bill has been endorsed by a number of organizations, including 
Bell Atlantic, MCI/Worldcom, Corning Incorporated, the National 
Telephone Cooperative Association, the Association for Local 
Telecommunications Services, the United States Distance Learning 
Association, and the Imaging Science and Information Systems Center at 
Georgetown University Medical Center.
  Mr. President, in a few short years, the Internet has grown 
exponentially to become a mass medium used daily by over 100 million 
people worldwide. The explosion of information technology has created 
opportunities undreamed of by previous generations. In my home state of 
Montana, companies such as Healthdirectory.com and Vanns.com are taking 
advantage of the global markets made possible by the stunning reach of 
the Internet.
  The pace of broadband deployment to rural America must be accelerated 
for electronic commerce to meet its full potential however. Broadband 
access is as important to our small businesses in Montana as water is 
to agribusiness.
  I am aware of all of the recent discussion regarding the ``digital 
divide'' and I am very concerned that the pace of broadband deployment 
is greater in urban than rural areas. However, there is some positive 
and exciting news on this front as well. The reality on the ground 
shows that some of the ``gloom and doom'' scenarios are far from the 
case. By pooling their limited resources, Montana's independent and 
cooperative telephone companies are doing great things. I encourage my 
colleagues to support this bill.
                                 ______
                                 
      Mr. GRASSLEY:
  S. 89. A bill to enhance the illegal narcotics control activities of 
the United States, and for other purposes; to the Committee on the 
Judiciary.


                     Drug-Free America Act of 2001

  Mr. GRASSLEY. Mr. President. I rise today to introduce the ``Drug-
Free America Act of 2001.'' As many of my colleagues know, drug use by 
the children in our country continues to be a serious concern of mine. 
The ``Drug-Free America Act'' offers a series of initiatives that I 
believe will support efforts across the board to discourage drug use at 
all levels in America.
  Mr. President, I've said it before, but it bears repeating. Somewhere 
along the way, we lost the clear, consistent message that the only 
proper response to drugs is to say an emphatic ``no.'' We're supposed 
to be more sophisticated. More tolerant. More willing to listen to 
notions of making dangerous drugs more available. What all of this 
``more'' has meant is that we have more young people using more drugs 
at younger ages. Today we are competing with a drug culture that tells 
our children ``drugs are cool,'' that ``drug are safe.'' Drugs are 
being more aggressively marketed, and are presented as being ``user 
friendly''.
  We cannot remain silent. I look forward with working with President 
Bush in providing the resources and message necessary to let everyone 
know that drugs are bad, that drugs will damage your brain and your 
body, and that drug use will hurt you, your friends, your family, your 
community, and your future.
  The drug problem confronting our country is not static. 
Methamphetamine, Ecstasy, and other new drugs pose different challenges 
and require different solutions than the heroin and cocaine epidemics. 
Treatment, education, prevention, and law enforcement efforts must all 
be strengthened and updated. The National Institutes of Health have 
some exciting research efforts underway that could really make a 
difference as we try to reclaim the lives of our fellow citizens who 
have been seduced by the false pleasures of drug use. There are several 
education and prevention initiatives that we can strengthen to support 
the educators, counselors, community activists, and parents who work 
hard every day to keep our children and our communities drug free. We 
should support ongoing efforts by the National Guard Counterdrug 
Directorate, and re-authorize the U.S. Customs Service, our Nation's 
oldest law enforcement agency. We need to believe in our future. I 
believe that by working together, we can, we will make a difference. I 
hope my colleagues will join me in working to address this important 
problem before it becomes any worse.
  Left unanswered, we will see another generation of young lives 
blighted. We will see families torn up by a widening circle of hurt 
from drug use. We saw what a similar wave of drug use did to us and to 
a generation of young people in the 1960s and 1970s. We are smarter 
now, we have better tools and better knowledge. We cannot afford to go 
through this again. I hope we can begin today to renew our commitment 
to a drug free future for our young people. I have said this in 
numerous town meetings, and I now say it here, ``working together, we 
can make a difference.''
  I urge my colleagues to join me in supporting the Drug-Free America 
Act, and look forward to working with my colleagues on these important 
initiatives.
  Mr. President, I send this bill to the desk, and request that it be 
printed in the appropriate place in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 89

       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 ``Drug-Free 
     America Act of 2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

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

                   TITLE I--DOMESTIC DEMAND REDUCTION

Sec. 101. Short title.

                Subtitle A--Drug Treatment and Research

Sec. 111. Short title.
Sec. 112. Amendments to the Public Health Service Act.

[[Page 465]]

Sec. 113. Adolescent therapeutic community treatment programs.
Sec. 114. Residential treatment program in Federal prisons.
Sec. 115. Counter-Drug Technology Assessment Center.
Sec. 116. Sense of Congress on research by the National Institutes of 
              Health.

                   Subtitle B--Drug-Free Communities

Sec. 121. Findings.
Sec. 122. Drug-free communities support program.

                     Subtitle C--Drug-Free Families

Sec. 131. Short title.
Sec. 132. Findings.
Sec. 133. Purposes.
Sec. 134. Definitions.
Sec. 135. Establishment of drug-free families support program.
Sec. 136. Authorization of appropriations.

      Subtitle D--National Community Antidrug Coalition Institute

Sec. 141. Short title.
Sec. 142. Establishment.
Sec. 143. Authorization of appropriations.

                   TITLE II--DOMESTIC LAW ENFORCEMENT

                   Subtitle A--National Guard Matters

Sec. 201. Minimum number of members of the National Guard on duty to 
              perform drug interdiction or counter-drug activities.
Sec. 202. National Guard counterdrug schools.

                      Subtitle B--Customs Matters

Sec. 211. Short title.

   Part I--Authorization of Appropriations for United States Customs 
     Service for Enhanced Inspection, Trade Facilitation, and Drug 
                              Interdiction

Sec. 221. Authorization of appropriations.
Sec. 222. Cargo inspection and narcotics detection equipment for the 
              United States-Mexico border, United States-Canada border, 
              and Florida and Gulf Coast seaports; internal management 
              improvements.
Sec. 223. Peak hours and investigative resource enhancement for the 
              United States-Mexico and United States-Canada borders, 
              Florida and Gulf Coast seaports, and the Bahamas.
Sec. 224. Agent rotations; elimination of backlog of background 
              investigations.
Sec. 225. Air and marine operation and maintenance funding.
Sec. 226. Compliance with performance plan requirements.
Sec. 227. Report on intelligence requirements.

                      Part II--Customs Management

Sec. 231. Term and salary of the Commissioner of Customs.
Sec. 232. Internal compliance.
Sec. 233. Report on personnel flexibility.
Sec. 234. Report on personnel allocation model.
Sec. 235. Report on detection and monitoring requirements along the 
              southern tier and northern border.

                      Part III--Marking Violations

Sec. 241. Civil penalties for marking violations.

                       Subtitle C--Miscellaneous

Sec. 251. Tethered Aerostat Radar System.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Illegal drugs cost America more than $70,000,000,000 
     annually. These costs include lost productivity, as well as 
     money spent for drug treatment, illnesses related to drug 
     use, crime prevention and enforcement, and welfare.
       (2) Federal, State, and local governments spend more than 
     $30,000,000,000 annually to combat illegal drugs and the 
     consequences of illegal drugs.
       (3) The estimated total expenditure by Americans on illicit 
     drugs in 1993 was $48,700,000,000. The vast majority of these 
     illegal drugs are produced overseas and then smuggled into 
     the United States by major criminal organizations.
       (4) The estimated worldwide potential of coca net 
     production in 1996 was 303,600 metric tons, and in the same 
     year, the worldwide coca cultivation was 209,700 hectares.
       (5) The production of opium has also been increasing for at 
     least the past 10 years, and reached a new high in 1996 of 
     4,212 metric tons. Production throughout the world has led to 
     an increase in the heroin addict population of the United 
     States, bringing it to a new high of more than 600,000 
     people.
       (6) Money laundering constitutes a serious challenge to the 
     maintenance of law and order throughout the hemisphere and 
     poses a threat to stability, reliability, and the integrity 
     of governments, financial systems, and commerce.
       (7) Money laundering of illegal drug profits is an integral 
     part of the drug trafficking process, creating an obstacle in 
     fighting drugs. It is estimated that $100,000,000,000 to 
     $300,000,000,000 in United States currency is laundered each 
     year.
       (8) Certification pursuant to the Foreign Assistance Act of 
     1961 is an essential tool in United States foreign policy. 
     Through the certification process there has been improvement 
     in cooperation levels that demonstrates the importance of 
     holding countries responsible for being major producing, 
     transit, and money laundering countries.
       (9) The major criminal organizations that traffic in 
     illegal narcotics are international in scope and extremely 
     flexible in their activities, and are becoming increasingly 
     sophisticated in their methods of operation. Their influence 
     reaches to the highest levels of some foreign governments.
       (10) The threat of corruption at all levels of government 
     remains a significant concern when dealing with many nations. 
     Explosive corruption in a number of countries is undermining 
     domestic processes and the rule of law. United States 
     assistance and the pressure of decertification have 
     encouraged many countries to take corruption seriously.
       (11) The production and trafficking of illegal narcotics 
     presents a threat to United States interests, both domestic 
     and foreign. Drugs are a corrosive influence on our children, 
     our values, and our Government.

                   TITLE I--DOMESTIC DEMAND REDUCTION

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``Domestic Narcotic Demand 
     Reduction Act of 2001''.

                Subtitle A--Drug Treatment and Research

     SEC. 111. SHORT TITLE.

       This subtitle may be cited as the ``Drug Treatment and 
     Research Enhancement Act of 2001''.

     SEC. 112. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

       (a) Short Title.--This section may be cited as the ``Key 
     Professionals Education Act''.
       (b) Core Competencies.--Subpart 2 of part B of title V of 
     the Public Health Service Act (42 U.S.C. 290bb-21 et seq.), 
     as amended by the Youth Drug and Mental Health Services Act 
     (Public Law 106-310), is amended by adding at the end the 
     following:

     ``SEC. 519F. CORE COMPETENCIES.

       ``(a) Findings.--Congress makes the following findings:
       ``(1) According to a 1999 Monitoring the Future Report, 
     heroin use doubled among youth in the United States between 
     1991 and 1995. Since that time, such heroin use among such 
     youth has remained at the high level reached in 1995.
       ``(2) The sharp increase in heroin use during the 1990's 
     may be a result of the introduction into the market of heroin 
     of a higher purity.
       ``(3) According to the National Center on Addiction and 
     Substance Abuse, 29.9 percent of the population living in 
     rural areas, 32.4 percent of the population living in small 
     cities, and 30.2 percent of the population living in big 
     cities found heroin very easy or fairly easy to procure.
       ``(4) Studies show a high correlation between drug use, 
     availability of drugs, and violence.
       ``(5) A March 2000 report by the Office of National Drug 
     Control Policy reported that in 1999 persons using illegal 
     drugs were 16 times more likely than nonusers to be arrested 
     for larceny or theft, at least 14 times more likely to be 
     arrested for driving under the influence, drunkenness, and 
     liquor law violations, and at least 9 times more likely to be 
     arrested for assault.
       ``(b) Purpose.--The purpose of this section is--
       ``(1) to educate, train, motivate, and engage key 
     professionals to identify and intervene with children in 
     families affected by substance abuse and to refer members of 
     such families to appropriate programs and services in the 
     communities of such families;
       ``(2) to encourage professionals to collaborate with key 
     professional organizations representing the targeted 
     professional groups, such as groups of educators, social 
     workers, faith community members, and probation officers, for 
     the purposes of developing and implementing relevant core 
     competencies; and
       ``(3) to encourage professionals to develop networks to 
     coordinate local substance abuse prevention coalitions.
       ``(c) Program Authorized.--The Secretary shall award grants 
     to leading nongovernmental organizations with an expertise in 
     aiding children of substance abusing parents or experience 
     with community antidrug coalitions to help professionals 
     participate in such coalitions and identify and help youth 
     affected by familial substance abuse.
       ``(d) Duration of Grants.--No organization shall receive a 
     grant under subsection (c) for more than 5 consecutive years.
       ``(e) Application.--Any organization desiring a grant under 
     subsection (c) shall prepare and submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require, including a plan 
     for the evaluation of the project involved, including both 
     process and outcome evaluation, and the submission of the 
     evaluation at the end of the project period.
       ``(f) Use of Funds.--Grants awarded under subsection (c) 
     shall be used to--
       ``(1) develop core competencies with various professional 
     groups that the professionals can use in identifying and 
     referring children affected by substance abuse;

[[Page 466]]

       ``(2) widely disseminate the competencies to professionals 
     and professional organizations through publications and 
     journals that are widely read and respected;
       ``(3) develop training modules around the competencies; and
       ``(4) develop training modules for community coalition 
     leaders to enable such leaders to engage professionals from 
     identified groups at the local level in community-wide 
     prevention and intervention efforts.
       ``(g) Definition.--In this section, the term `professional' 
     includes a physician, student assistance professional, social 
     worker, youth and family social service agency counselor, 
     Head Start teacher, clergy, elementary and secondary school 
     teacher, school counselor, juvenile justice worker, child 
     care provider, or a member of any other professional group in 
     which the members provide services to or interact with 
     children, youth, or families.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section, 
     $5,000,000 for fiscal year 2002, and such sums as may be 
     necessary for each of fiscal years 2003 through 2006.''.
       (c) National Institute on Drug Abuse.--Subpart 15 of part C 
     of title IV of the Public Health Service Act (42 U.S.C. 285o 
     et seq.) is amended by adding at the end the following:

     ``SEC. 464Q. NATIONAL DRUG ABUSE TREATMENT CLINICAL TRIALS 
                   NETWORK.

       ``(a) Program Authorized.--The Director of the Institute 
     shall establish a National Drug Abuse Treatment Clinical 
     Trials Network (referred to in this section as the 
     `Network'), and provide support to such Network, to conduct 
     large scale drug abuse treatment studies in community 
     settings using broadly diverse patient populations.
       ``(b) Activities of Network.--The Network described in 
     subsection (a) shall use the support provided under 
     subsection (a) to--
       ``(1) conduct coordinated, multisite, clinical trials of 
     behavioral and pharmacological approaches and combined 
     therapies for drug abuse and addiction;
       ``(2) conduct a research practice initiative to--
       ``(A) identify factors that affect successful adoption of 
     new treatments in order to transport research findings into 
     real-life practice; and
       ``(B) rapidly and efficiently disseminate scientific 
     findings to the field and to communities in need.
       ``(c) Members of Network.--The Network described in 
     subsection (a) shall consist of research and training centers 
     that are linked with community-based treatment programs that 
     represent a diversity of treatment settings and patient 
     populations in the regions of such centers.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary for each of fiscal years 2002 
     through 2007.''.
       (d) Survey.--Title II of the Public Health Service Act (42 
     U.S.C. 202 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 247. SURVEYS.

       ``The results of any federally funded survey under this Act 
     shall be made available in at least a preliminary format to 
     the public not later than 1 year after the date on which any 
     such survey is complete.''.
       (e) Practice/Research Collaboratives.--Part A of title V of 
     the Public Health Service Act (42 U.S.C. 290aa et seq.), as 
     amended by the Youth Drug and Mental Health Services Act 
     (Public Law 106-310), is amended by adding the following:

     ``SEC. 506C. PRACTICE/RESEARCH COLLABORATIVES.

       ``(a) In General.--The Secretary shall award grants, 
     cooperative agreements, or contracts to public or private 
     nonprofit entities for the purpose of assisting local 
     communities and regions within States in improving the 
     quality of substance abuse treatment and clinical preventive 
     services provided in such communities and regions by 
     increasing interaction and knowledge exchange among key 
     community-based stakeholders, including substance abuse 
     treatment providers, community-based organizations that 
     provide support services to substance abusers, researchers, 
     and policymakers including managed care plan managers and 
     purchasers of substance abuse treatment services.
       ``(b) Eligibility.--To be eligible to receive a grant, 
     contract, or cooperative agreement under this section an 
     entity shall--
       ``(1) be a public or private nonprofit entity;
       ``(2) prepare and submit to the Secretary an application, 
     at such time, in such manner, and containing such information 
     as the Secretary may require; and
       ``(3) demonstrate that the entity has developed a full 
     partnership among--
       ``(A) community-based treatment and prevention service 
     providers that provide treatment services representing a 
     variety of modalities and including both for profit and 
     nonprofit private entities and programs that serve diverse 
     populations;
       ``(B) researchers on substance abuse prevention and 
     treatment issues;
       ``(C) government officials from the community involved in 
     the grant application;
       ``(D) State officials involved in the funding of substance 
     abuse prevention and treatment services;
       ``(E) service organizations that serve substance abusers 
     including organizations providing health and mental health 
     services, child welfare, law enforcement, social services, 
     education, and other such services; and
       ``(F) policymakers.
       ``(c) Use of Funds.--Amounts awarded under a grant, 
     contract, or cooperative agreement under subsection (a) may 
     be used to--
       ``(1) develop ongoing communications for the entities 
     described in subsection (b)(3) to support the establishment 
     of an infrastructure for community-based studies and 
     knowledge transfer;
       ``(2) share evaluation and applied research results in 
     seminars and publications;
       ``(3) identify areas of particularly local concern for 
     further study;
       ``(4) determine, in consultation with appropriate agencies 
     (including the National Institutes of Health), public policy 
     issues of interest to be included in an applied research 
     agenda;
       ``(5) identify and describe existing prevention and 
     intervention strategies;
       ``(6) improve methods for evaluating prevention and 
     treatment strategies;
       ``(7) recruit or retain substance abuse educators and 
     practitioners to participate in specialized training programs 
     to improve knowledge exchange and transfer;
       ``(8) provide for the implementation of training programs 
     to sustain the adoption of community-based treatment study 
     findings; and
       ``(9) provide public policymakers and State officials with 
     appropriate information.
       ``(d) Conditions.--The Secretary shall ensure that awards 
     made under subsection (a) are distributed among urban and 
     rural areas and address the needs of vulnerable populations 
     including ethnic and racial minorities, women of childbearing 
     age, individuals with sexually transmitted diseases or HIV.
       ``(e) Duration of Awards.--With respect to grants, 
     cooperative agreements, or contracts awarded under this 
     section, the period during which payments under such awards 
     are made to the recipient may not exceed 5 years.
       ``(f) Report.--A recipient of a grant, contract, or 
     cooperative agreement under this section shall prepare and 
     submit to the Secretary a report for each year under the 
     grant, contract, or cooperative agreement of the grant a 
     report that details the activities of the recipient under the 
     grant, contract, or cooperative agreement, and makes 
     recommendations for a research agenda for future years based 
     on the information received from those assisted under the 
     grant, contract, or cooperative agreement.
       ``(g) Evaluation.--The Secretary shall evaluate each 
     project carried out under subsection (a) and shall 
     disseminate the findings with respect to each such evaluation 
     to appropriate public and private entities.
       ``(h) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $20,000,000 for 
     fiscal year 2002, and such sums as may be necessary for each 
     of fiscal years 2003 and 2004.''.

     SEC. 113. ADOLESCENT THERAPEUTIC COMMUNITY TREATMENT 
                   PROGRAMS.

       (a) Short Title.--This section may be cited as the 
     ``Adolescent Therapeutic Community Treatment Programs Act''.
       (b) Findings.--Congress makes the following findings:
       (1) Of the adolescents that currently need substance abuse 
     treatment services, only 20 percent of such adolescents are 
     receiving such services.
       (2) Providing alcohol and drug treatment services reduces 
     health care, welfare, and criminal justice costs.
       (3) Studies have found that completion of substance abuse 
     treatment services produces sustained reductions in drug use, 
     welfare dependency, crime, and unemployment.
       (4) The National Institute of Justice Arrestee Drug Abuse 
     Monitoring drug testing program found that more than half of 
     juvenile male arrestees tested positive for at least 1 drug 
     in 1998.
       (5) The 1999 Monitoring the Future study showed that more 
     than half of the teenagers in the United States have tried an 
     illicit drug by the time such teenagers finish high school, 
     and more than 28 percent of such teenagers have tried an 
     illicit drug by the time such teenagers are in eighth grade.
       (6) According to the 1999 National Household Survey on Drug 
     Abuse, the average age of new heroin users has dropped from 
     26.0 years of age in 1992 to 21.3 years of age in 1998.
       (7) Studies have shown that intervention at an early stage 
     of addiction is essential in stopping an increasingly 
     frequent drug user from becoming an addict. Whether 
     voluntarily or through legal or parental pressure, the sooner 
     a drug user enters into a well-designed treatment program, 
     the more likely such treatment is to be effective. Voluntary 
     participation in substance abuse programs is not necessary in 
     order to successfully treat a drug user.
       (c) Program Authorized.--The Secretary shall award 
     competitive grants to treatment providers who administer 
     treatment programs to enable such providers to establish 
     adolescent residential substance abuse treatment programs 
     that provide services for individuals who are between the 
     ages of 14 and 21.

[[Page 467]]

       (d) Preference.--In awarding grants under subsection (c), 
     the Secretary shall consider the geographic location of each 
     treatment provider and give preference to such treatment 
     providers that are geographically located in such a manner as 
     to provide services to addicts from non-metropolitan areas.
       (e) Duration of Grants.--For awards made under subsection 
     (c), the period during which payments are made may not exceed 
     5 years.
       (f) Restrictions.--A treatment provider receiving a grant 
     under subsection (c) shall not use any amount of the grant 
     under this section for land acquisition or a construction 
     project.
       (g) Construction.--Nothing in this subsection shall be 
     construed to preclude qualifying faith-based treatment 
     providers from receiving a grant under subsection (c).
       (h) Application.--A treatment provider that desires a grant 
     under subsection (c) shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require.
       (i) Use of Funds.--A treatment provider that receives a 
     grant under subsection (c) shall use funds received under 
     such grant to provide substance abuse services for 
     adolescents, including--
       (1) a thorough psychosocial assessment;
       (2) individual treatment planning;
       (3) a strong education component integral to the treatment 
     regimen;
       (4) life skills training;
       (5) individual and group counseling;
       (6) family services;
       (7) daily work responsibilities; and
       (8) community-based aftercare, providing 6 months of 
     treatment following discharge from a residential facility.
       (j) Treatment Type.--The Therapeutic Community model shall 
     be used as a basis for all adolescent residential substance 
     abuse treatment programs established under this section, 
     which shall be characterized by--
       (1) the self-help dynamic, requiring youth to participate 
     actively in their own treatment;
       (2) the role of mutual support and the therapeutic 
     importance of the peer therapy group;
       (3) a strong focus on family involvement and family 
     strengthening;
       (4) a clearly articulated value system emphasizing both 
     individual responsibility and responsibility for the 
     community; and
       (5) an emphasis on development of positive social skills.
       (k) Report by Provider.--Not later than 1 year after 
     receiving a grant under this section, and annually 
     thereafter, a treatment provider shall prepare and submit to 
     the Secretary a report describing the services provided 
     pursuant to this section.
       (l) Report by Secretary.--
       (1) In general.--Not later than 3 months after receiving 
     all reports by providers under subsection (k), and annually 
     thereafter, the Secretary shall prepare and submit a report 
     containing information described in paragraph (2) to--
       (A) the Committee on Health, Education, Labor, and Pensions 
     of the Senate;
       (B) the Committee on Appropriations of the Senate;
       (C) the United States Senate Caucus on International 
     Narcotics Control;
       (D) the Committee on Commerce of the House of 
     Representatives;
       (E) the Committee on Appropriations of the House of 
     Representatives; and
       (F) the Committee on Government Reform of the House of 
     Representatives.
       (2) Content.--The report described in paragraph (1) shall--
       (A) outline the services provided by providers pursuant to 
     this section;
       (B) evaluate the effectiveness of such services;
       (C) identify the geographic distribution of all treatment 
     centers provided pursuant to this section, and evaluate the 
     accessibility of such centers for addicts from rural areas 
     and small towns; and
       (D) make recommendations to improve the programs carried 
     out pursuant to this section.
       (m) Definitions.--In this section:
       (1) Adolescent residential substance abuse treatment 
     program.--The term ``adolescent residential substance abuse 
     treatment program'' means a program that provides a regimen 
     of individual and group activities, lasting ideally not less 
     than 12 months, in a community-based residential facility 
     that provides comprehensive services tailored to meet the 
     needs of adolescents and designed to return youth to their 
     families in order that such youth may become capable of 
     enjoying and supporting positive, productive, drug-free 
     lives.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.
       (3) Therapeutic community.--The term ``Therapeutic 
     Community'' means a highly structured residential treatment 
     facility that--
       (A) employs a treatment methodology;
       (B) relies on self-help methods and group process, a view 
     of drug abuse as a disorder affecting the whole person, and a 
     comprehensive approach to recovery;
       (C) maintains a strong educational component; and
       (D) carries out activities that are designed to help youths 
     address alcohol or other drug abuse issues and learn to act 
     in their own best interests, as well as in the best interests 
     of their peers and families.
       (n) Authorization of appropriations.--There are authorized 
     be appropriated to carry out this section--
       (1) $21,000,000 for fiscal year 2002;
       (2) $42,000,000 for fiscal year 2003;
       (3) $63,000,000 for fiscal year 2004;
       (4) $84,000,000 for fiscal year 2005; and
       (5) $105,000,000 for fiscal year 2006.

     SEC. 114. RESIDENTIAL TREATMENT PROGRAM IN FEDERAL PRISONS.

       (a) Findings.--Congress makes the following findings:
       (1) In April 2000, there were more than 140,000 inmates in 
     the Federal prison system.
       (2) In April 2000, nearly 30 percent of Federal inmates 
     were serving sentences ranging between 5 and 10 years, and 
     just over 58 percent of such inmates, or 61,547 persons, were 
     serving time for a drug related offense.
       (3) A March 2000 report by the Office of National Drug 
     Control Policy reported that in 1999 illicit drug users--
       (A) were 16 times more likely than non-users to be arrested 
     and booked for larceny or theft;
       (B) were more than 14 times more likely to be arrested and 
     booked for driving under the influence, drunkenness, and 
     liquor law violations; and
       (C) were more than 9 times more likely to be arrested and 
     booked for assault.
       (4) According to the Federal Bureau of Investigation's 
     Uniform Crime Reports, drugs are one of the main factors 
     leading to the total number of all homicides.
       (5) In a 1999 study, the Bureau of Prisons reported that--
       (A) offenders who completed a residential drug abuse 
     treatment program and had been released for a minimum of 6 
     months were less likely to be arrested and use illegal drugs 
     than inmates who did not participate in such program; and
       (B) only 3.3 percent of such offenders who completed such 
     program were likely to be arrested within the first 6 months 
     that such offenders were in the community.
       (b) Purpose.--The purpose of this section is to increase 
     residential drug abuse treatment units in Federal prisons to 
     reduce the number of criminal offenders who are rearrested or 
     who use illegal drugs after release from prison.
       (c) Program Authorized.--The Director of the Federal Bureau 
     of Prisons shall use funds made available under this section 
     to establish residential drug abuse treatment units in 
     Federal prisons.
       (d) Requirements.--A residential drug abuse treatment unit 
     that receives funds under this section shall--
       (1) maintain not less than 1,000 hours of activities during 
     a 1-year period;
       (2) maintain a staff of such unit in which there is not 
     more than 1 staff member per 12 inmates;
       (3) provide intensive treatment activities for all inmates 
     in the residential drug treatment program, including 
     individual and group therapy, specialty seminars, self 
     improvement group counseling, and education, work skills 
     training, and other programs; and
       (4) have frequent, regular, and random drug testing for 
     inmates and staff.
       (e) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this section $2,500,000 for 
     each of fiscal years 2002 and 2003.

     SEC. 115. COUNTER-DRUG TECHNOLOGY ASSESSMENT CENTER.

       (a) Study of Heroin Use in the United States.--
       (1) In general.--Using amounts appropriated pursuant to the 
     authorization of appropriations in subsection (c)(1), the 
     Counter-Drug Technology Assessment Center (CTAC) of the 
     Office of National Drug Control Policy shall carry out a 
     study on the number of individuals in the United States who 
     engaged in sustained use of heroin.
       (2) Basis for study.--The study under paragraph (1) shall 
     be based on the study entitled ``A Plan for Estimated the 
     Number of `Hardcore' Drug Users in the United States''.
       (b) Counter-Drug Technology Initiatives.--Using amounts 
     appropriated pursuant to the authorization of appropriations 
     in subsection (c)(2), the Counter-Drug Technology Assessment 
     Center of the Office of National Drug Control Policy shall--
       (1) conduct outreach for purposes of reducing duplication 
     of activities among Federal, State, and local entities 
     regarding counterdrug technologies;
       (2) develop and implement mechanisms for monitoring and 
     coordinating such activities; and
       (3) assist in the transfer of such technologies to State 
     and local law enforcement agencies under the Technology 
     Transfer Program.
       (c) Authorization of Appropriations.--There is hereby 
     authorized to be appropriated for the Counter-Drug Technology 
     Assessment Center of the Office of National Drug Control 
     Policy for fiscal year 2002 the following:
       (1) $15,000,000 for purposes of the study required by 
     subsection (a).

[[Page 468]]

       (2) $15,000,000 for purposes of activities under subsection 
     (b).

     SEC. 116. SENSE OF CONGRESS ON RESEARCH BY THE NATIONAL 
                   INSTITUTES OF HEALTH.

       It is the sense of Congress that the National Institutes of 
     Health should work with or collaborate with experts from 
     private industry to promote research regarding 
     pharmacological options that may be employed to support drug 
     treatment efforts.

                   Subtitle B--Drug-Free Communities

     SEC. 121. FINDINGS.

       Congress makes the following findings:
       (1) A child that has a positive relationship with both 
     parents is less likely to use illegal drugs.
       (2) Family activities, such as eating dinners together and 
     spending quality time together, can reduce the risk that a 
     child engaged by such activities will use illegal drugs.
       (3) Most parents today work and have little opportunity to 
     spend quality time with their children.
       (4) Many families are headed by single parents who work all 
     day and do not have enough time to spend with their children.
       (5) The 1999 Parent's Resource Institute for Drug Education 
     study (referred to in this section as the ``PRIDE study'') 
     reported that more than 4,000,000 students who are between 
     the ages 11 and 18 used drugs regularly, and more than 
     1,000,000 of such students used an illegal drug every day.
       (6) The PRIDE study found that students with parents who 
     talked to them about drug use had a 37 percent lower drug use 
     rate than students with parents who did not talk to them 
     about drug use.
       (7) The 1999 Monitoring the Future study found that nearly 
     55 percent of high school seniors in the United States had 
     used an illicit drug in the past month.
       (8) A 1999 Mellman Group study found that--
       (A) 56 percent of the population in the United States 
     believed that drug use was increasing in 1999;
       (B) 92 percent of the population viewed illegal drug use as 
     a serious problem in the United States; and
       (C) 73 percent of the population viewed illegal drug use as 
     a serious problem in their communities.

     SEC. 122. DRUG-FREE COMMUNITIES SUPPORT PROGRAM.

       (a) Extension and Increase of Program.--Section 1024(a) of 
     the National Narcotics Leadership Act of 1988 (21 U.S.C. 
     1524(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (4);
       (2) by striking the period at the end of paragraph (5) and 
     inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(6) $46,000,000 for fiscal year 2003;
       ``(7) $48,500,000 for fiscal year 2004;
       ``(8) $51,000,000 for fiscal year 2005;
       ``(9) $53,500,000 for fiscal year 2006; and
       ``(10) $56,000,000 for fiscal year 2007.''.
       (b) Extension of Limitation on Administrative Costs.--
     Section 1024(b) of that Act (21 U.S.C. 1524(b)) is amended by 
     adding at the end the following new paragraph:
       ``(6) 8 percent for each of fiscal years 2003 through 
     2007.''.
       (c) Modification of Eligibility Criteria or Amount for 
     Grant Renewals.--Section 1032 of that Act (21 U.S.C. 1532) is 
     amended by adding at the end the following new subsection:
       ``(c) Modification of Eligibility Criteria or Amount for 
     Grant Renewals.--The Administrator may not implement any 
     modification in the criteria for eligibility for the renewal 
     of a grant under this section, or any modification in grant 
     amount upon renewal of a grant under this section, until one 
     year after the date on which the Administrator notifies the 
     recipient of the grant concerned of such modification.''.
       (d) Source of Funds for Evaluation of Program by 
     Administrator.--Section 1033(b) of that Act (21 U.S.C. 
     1533(b)) is amended by adding at the end the following new 
     paragraph:
       ``(3) Source of funds for evaluation of program.--Amounts 
     for activities under paragraph (2)(B) shall be derived from 
     amounts under section 1024(a) that are available under 
     section 1024(b) for administrative costs.''.

                     Subtitle C--Drug-Free Families

     SEC. 131. SHORT TITLE.

       This subtitle may be cited as the ``Drug-Free Families Act 
     of 2001''.

     SEC. 132. FINDINGS.

       Congress makes the following findings:
       (1) The National Institute on Drug Abuse estimates that in 
     1962, less than 1 percent of the nation's adolescents had 
     ever tried an illicit drug. By 1979, drug use among young 
     people had escalated to the highest levels in history: 34 
     percent of adolescents (ages 12-17), 65 percent of high 
     school seniors (age 18), and 70 percent of young adults (ages 
     18-25) had used an illicit drug in their lifetime.
       (2) Drug use among young people was not confined to initial 
     trials. By 1979, 16 percent of adolescents, 39 percent of 
     high school seniors, and 38 percent of young adults had used 
     an illicit drug in the past month. Moreover, 1 in 9 high 
     school seniors used marijuana daily.
       (3) In 1979, the year the largest number of seniors used 
     marijuana, their belief that marijuana could hurt them was at 
     its lowest (35 percent) since surveys have tracked these 
     measures.
       (4) Three forces appeared to be driving this escalation in 
     drug use among children and young adults. Between 1972 and 
     1978, a nationwide political campaign conducted by drug 
     legalization advocates persuaded 11 State legislatures to 
     ``decriminalize'' marijuana. (Many of those States have 
     subsequently ``recriminalized'' the drug.) Such legislative 
     action reinforced advocates' assertion that marijuana was 
     ``relatively harmless.''
       (5) The decriminalization effort gave rise to the emergence 
     of ``head shops'' (shops for ``heads,'' or drug users--``coke 
     heads,'' ``pot heads,'' ``acid heads,'' etc.) which sold drug 
     paraphernalia--an array of toys, implements, and 
     instructional pamphlets and booklets to enhance the use of 
     illicit drugs. Some 30,000 such shops were estimated to be 
     doing business throughout the nation by 1978.
       (6) In the absence of Federal funding for drug education 
     then, most of the drug education materials that were 
     available proclaimed that few illicit drugs were addictive 
     and most were ``less harmful'' than alcohol and tobacco and 
     therefore taught young people how to use marijuana, cocaine, 
     and other illicit drugs ``responsibly''.
       (7) Between 1977 and 1980, 3 national parent drug-
     prevention organizations--National Families in Action, PRIDE, 
     and the National Federation of Parents for Drug-Free Youth 
     (now called the National Family Partnership)--emerged to help 
     concerned parents form some 4,000 local parent prevention 
     groups across the nation to reverse all of these trends in 
     order to prevent children from using drugs. Their work 
     created what has come to be known as the parent drug-
     prevention movement, or more simply, the parent movement. 
     This movement set 3 goals: to prevent the use of any illegal 
     drug, to persuade those who had started using drugs to stop, 
     and to obtain treatment for those who had become addicted so 
     that they could return to drug-free lives.
       (8) The parent movement pursued a number of objectives to 
     achieve these goals. First, it helped parents educate 
     themselves about the harmful effects of drugs, teach that 
     information to their children, communicate that they expected 
     their children not to use drugs, and establish consequences 
     if children failed to meet that expectation. Second, it 
     helped parents form groups with other parents to set common 
     age-appropriate social and behavioral guidelines to protect 
     their children from exposure to drugs. Third, it encouraged 
     parents to insist that their communities reinforce parents' 
     commitment to protect children from drug use.
       (9) The parent movement stopped further efforts to 
     decriminalize marijuana, both in the States and at the 
     Federal level.
       (10) The parent movement worked for laws to ban the sale of 
     drug paraphernalia. If drugs were illegal, it made no sense 
     to condone the sale of toys and implements to enhance the use 
     of illegal drugs, particularly when those products targeted 
     children. As town, cities, counties, and States passed anti-
     paraphernalia laws, drug legalization organizations 
     challenged their Constitutionality in Federal courts until 
     the early 1980's, when the United States Supreme Court upheld 
     Nebraska's law and established the right of communities to 
     ban the sale of drug paraphernalia.
       (11) The parent movement insisted that drug-education 
     materials convey a strong no-use message in compliance with 
     both the law and with medical and scientific information that 
     demonstrates that drugs are harmful, particularly to young 
     people.
       (12) The parent movement encouraged others in society to 
     join the drug prevention effort and many did, from First Lady 
     Nancy Reagan to the entertainment industry, the business 
     community, the media, the medical community, the educational 
     community, the criminal justice community, the faith 
     community, and local, State, and national political leaders.
       (13) The parent movement helped to cause drug use among 
     young people to peak in 1979. As its efforts continued 
     throughout the next decade, and as others joined parents to 
     expand the drug-prevention movement, between 1979 and 1992 
     these collaborative prevention efforts contributed to 
     reducing monthly illicit drug use by two-thirds among 
     adolescents and young adults and reduced daily marijuana use 
     among high-school seniors from 10.7 percent to 1.9 percent. 
     Concurrently, both the parent movement and the larger 
     prevention movement that evolved throughout the 1980's, 
     working together, increased high school seniors' belief that 
     marijuana could hurt them, from 35 percent in 1979 to 79 
     percent in 1991.
       (14) Unfortunately, as drug use declined, most of the 4,000 
     volunteer parents groups that contributed to the reduction in 
     drug use disbanded, having accomplished the job they set out 
     to do. But the absence of active parent groups left a vacuum 
     that was soon filled by a revitalized drug-legalization 
     movement. Proponents began advocating for the legalization of 
     marijuana for medicine, the legalization of all Schedule I 
     drugs for medicine, the legalization of hemp for medicinal, 
     industrial and recreational use, and a variety

[[Page 469]]

     of other proposals, all designed to ultimately attack, 
     weaken, and eventually repeal the nation's drug laws.
       (15) Furthermore, legalization proponents are also 
     beginning to advocate for treatment that maintains addicts on 
     the drugs to which they are addicted (heroin maintenance for 
     heroin addicts, controlled drinking for alcoholics, etc.), 
     for teaching school children to use drugs ``responsibly,'' 
     and for other measures similar to those that produced the 
     drug epidemic among young people in the 1970's.
       (16) During the 1990's, the message embodied in all of this 
     activity has once again driven down young people's belief 
     that drugs can hurt them. As a result, the reductions in drug 
     use that occurred over 13 years reversed in 1992, and 
     adolescent drug use has more than doubled.
       (17) In 1970, 40.5 percent of women in the workforce were 
     married. By 1997, that percentage has climbed to 61.6 
     percent, meaning fewer parents have time to volunteer. Many 
     families are headed by single parents. In some families no 
     parents are available, and grandparents, aunts, uncles, or 
     foster parents are raising the family's children.
       (18) Recognizing that these challenges make it much more 
     difficult to reach parents today, several national parent and 
     family drug-prevention organizations have formed the Parent 
     Collaboration to address these issues in order to build a new 
     parent and family movement to prevent drug use among 
     children.
       (19) Motivating parents and parent groups to coordinate 
     with local community anti-drug coalitions is a key goal of 
     the Parent Collaboration, as well as coordinating parent and 
     family drug-prevention efforts with Federal, State, and local 
     governmental and private agencies and political, business, 
     medical and scientific, educational, criminal justice, 
     religious, and media and entertainment industry leaders.

     SEC. 133. PURPOSES.

       The purposes of this subtitle are to--
       (1) build a movement to help parents and families prevent 
     drug use among their children and adolescents;
       (2) help parents and families reduce drug abuse and drug 
     addiction among adolescents who are already using drugs, and 
     return them to drug-free lives;
       (3) increase young people's perception that drugs are 
     harmful to their health, well-being, and ability to function 
     successfully in life;
       (4) help parents and families educate society that the best 
     way to protect children from drug use and all of its related 
     problems is to convey a clear, consistent, no-use message;
       (5) strengthen coordination, cooperation, and collaboration 
     between parents and families and all others who are 
     interested in protecting children from drug use and all of 
     its related problems;
       (6) help parents strengthen their families, neighborhoods, 
     and school communities to reduce risk factors and increase 
     protective factors to ensure the healthy growth of children; 
     and
       (7) provide resources in the fiscal year 2002 Federal drug 
     control budget for a grant to the Parent Collaboration to 
     conduct a national campaign to mobilize today's parents and 
     families through the provision of information, training, 
     technical assistance, and other services to help parents and 
     families prevent drug use among their children and to build a 
     new parent and family drug-prevention movement.

     SEC. 134. DEFINITIONS.

       In this subtitle:
       (1) Administrative costs.--The term ``administrative 
     costs'' means those costs that the assigned Federal agency 
     will incur to administer the grant to the Parent 
     Collaboration.
       (2) No-use message.--The term ``no-use message'' means a 
     message advocating no use of any illegal drug and no illegal 
     use of any legal drug or substance that is sometimes used 
     illegally, such as prescription drugs, inhalants, and alcohol 
     and tobacco for children and adolescents under the legal 
     purchase age.
       (3) Parent collaboration.--The term ``Parent 
     Collaboration'' means a legal entity, that is exempt from 
     income taxation under section 501(c)(3) of the Internal 
     Revenue Code of 1986, and is created by 3 or more groups 
     that--
       (A) have a primary mission of helping parents prevent drug 
     use, drug abuse, and drug addiction among their children, 
     their families, and their communities;
       (B) have carried out this mission for a minimum of 5 
     consecutive years; and
       (C) base their drug-prevention missions on the foundation 
     of a strong, no-use message in compliance with international, 
     Federal, State, and local treaties and laws that prohibit the 
     possession, production, cultivation, distribution, sale, and 
     trafficking in illegal drugs;
     in order to build a new parent and family movement to prevent 
     drug use among children and adolescents.

     SEC. 135. ESTABLISHMENT OF DRUG-FREE FAMILIES SUPPORT 
                   PROGRAM.

       (a) In General.--The Attorney General shall make a grant to 
     the Parents Collaboration to conduct a national campaign to 
     build a new parent and family movement to help parents and 
     families prevent drug abuse among their children.
       (b) Termination.--The period of the grant under this 
     section shall be 5 years.

     SEC. 136. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated to 
     carry out this subtitle, $5,000,000 for each of fiscal years 
     2002 through 2006 for a grant to the Parent Collaboration to 
     conduct the national campaign to mobilize parents and 
     families.
       (b) Administrative Costs.--Not more than 5 percent of the 
     total amount made available under subsection (a) in each 
     fiscal year may be used to pay administrative costs of the 
     Parent Collaboration.

      Subtitle D--National Community Antidrug Coalition Institute

     SEC. 141. SHORT TITLE.

       This subtitle may be cited as the ``National Community 
     Antidrug Coalition Institute Act of 2001''.

     SEC. 142. ESTABLISHMENT.

       (a) In General.--The Director of the Office of National 
     Drug Control Policy may make grants to an organization to 
     provide for the establishment of a National Community 
     Antidrug Coalition Institute.
       (b) Requirements.--The organization receiving a grant under 
     subsection (a) shall--
       (1) be a national nonprofit organization that represents, 
     provides technical assistance and training to, and has 
     special expertise and broad, national-level experience in 
     community anti-drug coalitions; and
       (2) establish a National Community Antidrug Coalition 
     Institute that will--
       (A) provide education, training, and technical assistance 
     for coalition leaders and community teams;
       (B) conduct evaluation, testing, and diffusion of tools, 
     mechanisms, and measures to better assess and document 
     coalition performance measures and outcomes; and
       (C) bridge the gap between research and practice by 
     translating knowledge from research into practical 
     information.
       (c) Discharge of Responsibilities.--The Director may employ 
     such staff and enter into such contracts and agreements, 
     including agreements or memoranda of understanding with other 
     governmental agencies, as the Director considers appropriate 
     for purposes of making grants under this section and 
     otherwise carrying out the responsibilities of the Director 
     under this subtitle.

     SEC. 143. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated $2,000,000 for each 
     of fiscal years 2002 and 2003 for purposes of making grants 
     as provided in section 142.

                   TITLE II--DOMESTIC LAW ENFORCEMENT

                   Subtitle A--National Guard Matters

     SEC. 201. MINIMUM NUMBER OF MEMBERS OF THE NATIONAL GUARD ON 
                   DUTY TO PERFORM DRUG INTERDICTION OR COUNTER-
                   DRUG ACTIVITIES.

       (a) Findings.--Congress makes the following findings 
     regarding members of the National Guard who participate in 
     drug interdiction and counter-drug activities of the National 
     Guard:
       (1) Such members have significantly higher rates of 
     attendance at inactive duty training and annual training than 
     members of the National Guard who do not participate in such 
     activities.
       (2) Such members attend significantly more military 
     training than members of the National Guard who do not 
     participate in such activities, thereby putting such members 
     at a higher state of military readiness.
       (3) Such members attend significantly more non-military 
     training designed to enhance support of law enforcement and 
     community-based agencies than members of the National Guard 
     who do not participate in such activities.
       (4) Such members are above-average soldiers and airmen who 
     maintain a high level of individual combat readiness.
       (5) This high level of individual combat readiness has a 
     positive effect on individual combat readiness in the 
     National Guard as a whole and contributes to the success of 
     unit training and evaluations and unit readiness.
       (6) Such members evoke positive comments regarding their 
     qualifications and performance in the National Guard.
       (b) Minimum Number of Members on Duty.--Section 112(f) of 
     title 32, United States Code, is amended--
       (1) by striking ``End Strength Limitation.--(1) Except as 
     provided in paragraph (2), at the end of a fiscal year there 
     may not be more than 4000 members'' and inserting ``Minimum 
     Number of Members on Duty Performing Activities.--(1) At the 
     end of a fiscal year there may not be less than 4,000 
     members'';
       (2) by striking paragraph (2); and
       (3) by adding at the end the following new paragraph (2):
       ``(2) The President may waive the minimum in paragraph (1) 
     in the event that the armed forces are involved in 
     hostilities or that imminent involvement by the armed forces 
     in hostilities is clearly indicated by the circumstances.''.
       (c) Applicability.--The amendments made by subsection (b) 
     shall take effect on October 1, 2001, and shall apply with 
     respect to fiscal years ending after that date.

[[Page 470]]



     SEC. 202. NATIONAL GUARD COUNTERDRUG SCHOOLS.

       (a) Authority To Operate.--Under such regulations as the 
     Secretary of Defense may prescribe, the Chief of the National 
     Guard Bureau may establish and operate not more than five 
     schools (to be known generally as ``National Guard 
     counterdrug schools'') for the provision by the National 
     Guard of training in drug interdiction and counter-drug 
     activities, and drug demand reduction activities, to the 
     personnel of the following:
       (1) Federal agencies.
       (2) State and local law enforcement agencies.
       (3) Community-based organizations engaged in such 
     activities.
       (4) Other non-Federal governmental and private entities and 
     organizations engaged in such activities.
       (b) Counterdrug Schools Specified.--The National Guard 
     counterdrug schools operated under the authority in 
     subsection (a) are as follows:
       (1) The National Interagency Civil-Military Institute 
     (NICI), San Luis Obispo, California.
       (2) The Multi-Jurisdictional Counterdrug Task Force 
     Training (MCTFT), St. Petersburg, Florida.
       (3) The Midwest Counterdrug Training Center (MCTC), to be 
     established in Johnston, Iowa.
       (4) The Regional Counterdrug Training Academy (RCTA), 
     Meridian, Mississippi.
       (5) The Northeast Regional Counterdrug Training Center 
     (NCTC), Fort Indiantown Gap, Pennsylvania.
       (c) Use of National Guard Personnel.--(1) To the extent 
     provided for in the State drug interdiction and counter-drug 
     activities plan of a State in which a National Guard 
     counterdrug school is located, personnel of the National 
     Guard of that State who are ordered to perform full-time 
     National Guard duty authorized under section 112(b) of that 
     title 32, United States Code, may provide training referred 
     to in subsection (a) at that school.
       (2) In this subsection, the term ``State drug interdiction 
     and counter-drug activities plan'', in the case of a State, 
     means the current plan submitted by the Governor of the State 
     to the Secretary of Defense under section 112 of title 32, 
     United States Code.
       (d) Annual Reports on Activities.--(1) Not later than 
     February 1, 2002, and annually thereafter, the Secretary of 
     Defense shall submit to Congress a report on the activities 
     of the National Guard counterdrug schools.
       (2) Each report under paragraph (1) shall set forth the 
     following:
       (A) The amount made available for each National Guard 
     counterdrug school during the fiscal year ending in the year 
     preceding the year in which such report is submitted.
       (B) A description of the activities of each National Guard 
     counterdrug school during the year preceding the year in 
     which such report is submitted.
       (3) The report under paragraph (1) in 2002 shall set forth, 
     in addition to the matters described in paragraph (2), a 
     description of the activities relating to the establishment 
     of the Midwest Counterdrug Training Center in Johnston, Iowa.
       (e) Authorization of Appropriations.--(1) There is hereby 
     authorized to be appropriated for the Department of Defense 
     for the National Guard for fiscal year 2002, $25,000,000 for 
     purposes of the National Guard counterdrug schools in that 
     fiscal year.
       (2) The amount authorized to be appropriated by paragraph 
     (1) is in addition to any other amount authorized to be 
     appropriated for the Department of Defense for the National 
     Guard for fiscal year 2002.
       (f) Availability of Funds.--(1) Of the amount authorized to 
     be appropriated by subsection (e)(1)--
       (A) $4,000,000 shall be available for the National 
     Interagency Civil-Military Institute, San Luis Obispo, 
     California;
       (B) $8,000,000 shall be available for the Multi-
     Jurisdictional Counterdrug Task Force Training, St. 
     Petersburg, Florida;
       (C) $3,000,000 shall be available for the Midwest 
     Counterdrug Training Center, Johnston, Iowa;
       (D) $5,000,000 shall be available for the Regional 
     Counterdrug Training Academy, Meridian, Mississippi; and
       (E) $5,000,000 shall be available for the Northeast 
     Regional Counterdrug Training Center, Fort Indiantown Gap, 
     Pennsylvania.
       (2) Amounts available under paragraph (1) shall remain 
     available until expended.
       (g) Funding for Fiscal Years After Fiscal Year 2002.--(1) 
     The budget of the President that is submitted to Congress 
     under section 1105 of title 31, United States Code, for any 
     fiscal year after fiscal year 2002 shall set forth as a 
     separate budget item the amount requested for such fiscal 
     year for the National Guard counterdrug schools.
       (2) It is the sense of Congress that--
       (A) the amount authorized to appropriated for the National 
     Guard counterdrug schools for any fiscal year after fiscal 
     year 2002 should not be less than the amount authorized to be 
     appropriated for those schools for fiscal year 2002 by 
     subsection (e)(1), in constant fiscal year 2002 dollars; and
       (B) the amount made available to each National Guard 
     counterdrug school for any fiscal year after fiscal year 2002 
     should not be less than the amount made available for such 
     school for fiscal year 2002 by subsection (f)(1), in constant 
     fiscal year 2002 dollars, except that the amount made 
     available for the Midwest Counterdrug Training School should 
     not be less than $5,000,000, in constant fiscal year 2002 
     dollars.

                      Subtitle B--Customs Matters

     SEC. 211. SHORT TITLE.

       This subtitle may be cited as the ``Customs Authorization 
     Act of 2001''.

   PART I--AUTHORIZATION OF APPROPRIATIONS FOR UNITED STATES CUSTOMS 
     SERVICE FOR ENHANCED INSPECTION, TRADE FACILITATION, AND DRUG 
                              INTERDICTION

     SEC. 221. AUTHORIZATION OF APPROPRIATIONS.

       (a) Drug Enforcement and Other Noncommercial Operations.--
     Subparagraphs (A) and (B) of section 301(b)(1) of the Customs 
     Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)(1)) are amended to read as follows:
       ``(A) $1,029,608,384 for fiscal year 2002.
       ``(B) $1,111,450,668 for fiscal year 2003.''.
       (b) Commercial Operations.--Clauses (i) and (ii) of section 
     301(b)(2)(A) of such Act (19 U.S.C. 2075(b)(2)(A)) are 
     amended to read as follows:
       ``(i) $1,251,794,435 for fiscal year 2002.
       ``(ii) $1,348,676,435 for fiscal year 2003.''.
       (c) Air and Marine Interdiction.--Subparagraphs (A) and (B) 
     of section 301(b)(3) of such Act (19 U.S.C. 2075(b)(3)) are 
     amended to read as follows:
       ``(A) $229,001,000 for fiscal year 2002.
       ``(B) $176,967,000 for fiscal year 2003.''.
       (d) Submission of Budget Projections.--Section 301(a) of 
     such Act (19 U.S.C. 2075(a)) is amended by adding at the end 
     the following:
       ``(3) By no later than the date on which the President 
     submits to Congress the budget of the United States 
     Government for a fiscal year, the Commissioner of Customs 
     shall submit to the Committee on Appropriations and the 
     Committee on Ways and Means of the House of Representatives 
     and the Committee on Appropriations and the Committee on 
     Finance of the Senate the budget request submitted to the 
     Secretary of the Treasury estimating the amount of funds for 
     that fiscal year that will be necessary for the operations of 
     the Customs Service as provided for in subsection (b).''.
       (e) Authorization of Appropriations for Modernizing Customs 
     Service Computer Systems.--
       (1) Establishment of automation modernization working 
     capital fund.--There is established within the United States 
     Customs Service an Automation Modernization Working Capital 
     Fund (in this section referred to as the ``Fund''). The Fund 
     shall consist of the amounts authorized to be appropriated 
     under paragraph (2) and shall be available as follows:
       (A) To implement a program for modernizing the Customs 
     Service computer systems.
       (B) To maintain the existing computer systems of the 
     Customs Service until a modernized computer system is fully 
     implemented.
       (C)For related computer system modernization activities of 
     the Customs Service.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated for the Fund $242,000,000 for fiscal year 
     2002 and $336,000,000 for fiscal year 2003. The amounts 
     authorized to be appropriated under this paragraph shall 
     remain available until expended.
       (3) Report and audit.--
       (A) Report.--The Commissioner of Customs shall, not later 
     than March 31 and September 30 of each year, submit to the 
     Comptroller General of the United States, the Committee on 
     Appropriations and the Committee on Ways and Means of the 
     House of Representatives and the Committee on Appropriations 
     and the Committee on Finance of the Senate a report on the 
     progress being made in the modernization of the Customs 
     Service computer systems. Each such report shall--
       (i) include explicit criteria used to identify, evaluate, 
     and prioritize investments for computer systems modernization 
     planned for the Customs Service for each of fiscal years 2002 
     through 2006;
       (ii) provide a schedule for mitigating any deficiencies 
     identified by the Comptroller General and for developing and 
     implementing all computer systems modernization projects;
       (iii) provide a plan for expanding the utilization of 
     private sector sources for the development and integration of 
     computer systems; and
       (iv) contain timely schedules and resource allocations for 
     implementing the modernization of the Customs Service 
     computer systems.
       (B) Audit.--Not later than 30 days after a report described 
     in subparagraph (A) is received, the Comptroller General 
     shall audit the report and shall provide the results of the 
     audit to the Commissioner of Customs, the Committee on 
     Appropriations and the Committee on Ways and Means of the 
     House of Representatives, and the Committee on Appropriations 
     and the Committee on Finance of the Senate.
       (C) Cessation of report.--No report is required under this 
     paragraph after September 30, 2006.

[[Page 471]]



     SEC. 222. CARGO INSPECTION AND NARCOTICS DETECTION EQUIPMENT 
                   FOR THE UNITED STATES-MEXICO BORDER, UNITED 
                   STATES-CANADA BORDER, AND FLORIDA AND GULF 
                   COAST SEAPORTS; INTERNAL MANAGEMENT 
                   IMPROVEMENTS.

       (a) Fiscal Year 2002.--Of the amounts made available for 
     fiscal year 2002 under section 301(b)(1)(A) of the Customs 
     Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)(1)(A)), as amended by section 221(a) of this Act, 
     $118,936,000 shall be available until expended for 
     acquisition and other expenses associated with implementation 
     and deployment of narcotics detection equipment along the 
     United States-Mexico border, the United States-Canada border, 
     and Florida and the Gulf Coast seaports, and for internal 
     management improvements as follows:
       (1) United states-mexico border.--For the United States-
     Mexico border, the following amounts shall be available:
       (A) $6,000,000 for 8 Vehicle and Container Inspection 
     Systems (VACIS).
       (B) $11,000,000 for 5 mobile truck x-rays with transmission 
     and backscatter imaging.
       (C) $12,000,000 for the upgrade of 8 fixed-site truck x-
     rays from the present energy level of 450,000 electron volts 
     to 1,000,000 electron volts (1-MeV).
       (D) $7,200,000 for 8 1-MeV pallet x-rays.
       (E) $1,000,000 for 200 portable contraband detectors 
     (busters) to be distributed among ports where the current 
     allocations are inadequate.
       (F) $600,000 for 50 contraband detection kits to be 
     distributed among all southwest border ports based on traffic 
     volume.
       (G) $500,000 for 25 ultrasonic container inspection units 
     to be distributed among all ports receiving liquid-filled 
     cargo and to ports with a hazardous material inspection 
     facility.
       (H) $2,450,000 for 7 automated targeting systems.
       (I) $360,000 for 30 rapid tire deflator systems to be 
     distributed to those ports where port runners are a threat.
       (J) $480,000 for 20 portable Treasury Enforcement 
     Communications Systems (TECS) terminals to be moved among 
     ports as needed.
       (K) $1,000,000 for 20 remote watch surveillance camera 
     systems at ports where there are suspicious activities at 
     loading docks, vehicle queues, secondary inspection lanes, or 
     areas where visual surveillance or observation is obscured.
       (L) $1,254,000 for 57 weigh-in-motion sensors to be 
     distributed among the ports with the greatest volume of 
     outbound traffic.
       (M) $180,000 for 36 AM traffic information radio stations, 
     with 1 station to be located at each border crossing.
       (N) $1,040,000 for 260 inbound vehicle counters to be 
     installed at every inbound vehicle lane.
       (O) $950,000 for 38 spotter camera systems to counter the 
     surveillance of customs inspection activities by persons 
     outside the boundaries of ports where such surveillance 
     activities are occurring.
       (P) $390,000 for 60 inbound commercial truck transponders 
     to be distributed to all ports of entry.
       (Q) $1,600,000 for 40 narcotics vapor and particle 
     detectors to be distributed to each border crossing.
       (R) $400,000 for license plate reader automatic targeting 
     software to be installed at each port to target inbound 
     vehicles.
       (S) $1,000,000 for a demonstration site for a high-energy 
     relocatable rail car inspection system with an x-ray source 
     switchable from 2,000,000 electron volts (2-MeV) to 6,000,000 
     electron volts (6-MeV) at a shared Department of Defense 
     testing facility for a two-month testing period.
       (T) $2,500,000 for a demonstration project for passive 
     detection technology.
       (2) United states-canada border.--For the United States-
     Canada border, the following amounts shall be available:
       (A) $3,000,000 for 4 Vehicle and Container Inspection 
     Systems (VACIS).
       (B) $8,800,000 for 4 mobile truck x-rays with transmission 
     and backscatter imaging.
       (C) $3,600,000 for 4 1-MeV pallet x-rays.
       (D) $250,000 for 50 portable contraband detectors (busters) 
     to be distributed among ports where the current allocations 
     are inadequate.
       (E) $300,000 for 25 contraband detection kits to be 
     distributed among ports based on traffic volume.
       (F) $240,000 for 10 portable Treasury Enforcement 
     Communications Systems (TECS) terminals to be moved among 
     ports as needed.
       (G) $400,000 for 10 narcotics vapor and particle detectors 
     to be distributed to each border crossing based on traffic 
     volume.
       (H) $600,000 for 30 fiber optic scopes.
       (I) $250,000 for 50 portable contraband detectors (busters) 
     to be distributed among ports where the current allocations 
     are inadequate.
       (J) $3,000,000 for 10 x-ray vans with particle detectors.
       (K) $40,000 for 8 AM loop radio systems.
       (L) $400,000 for 100 vehicle counters.
       (M) $1,200,000 for 12 examination tool trucks.
       (N) $2,400,000 for 3 dedicated commuter lanes.
       (O) $1,050,000 for 3 automated targeting systems.
       (P) $572,000 for 26 weigh-in-motion sensors.
       (Q) $480,000 for 20 portable Treasury Enforcement 
     Communication Systems (TECS).
       (3) Florida and gulf coast seaports.--For Florida and the 
     Gulf Coast seaports, the following amounts shall be 
     available:
       (A) $4,500,000 for 6 Vehicle and Container Inspection 
     Systems (VACIS).
       (B) $11,800,000 for 5 mobile truck x-rays with transmission 
     and backscatter imaging.
       (C) $7,200,000 for 8 1-MeV pallet x-rays.
       (D) $250,000 for 50 portable contraband detectors (busters) 
     to be distributed among ports where the current allocations 
     are inadequate.
       (E) $300,000 for 25 contraband detection kits to be 
     distributed among ports based on traffic volume.
       (4) Internal management improvements.--For internal 
     management improvements, the following amounts shall be 
     available:
       (A) $2,500,000 for automated systems for management of 
     internal affairs functions.
       (B) $700,000 for enhanced internal affairs file management 
     systems.
       (C) $2,700,000 for enhanced financial asset management 
     systems.
       (D) $6,100,000 for enhanced human resources information 
     system to improve personnel management.
       (E) $2,700,000 for new data management systems for improved 
     performance analysis, internal and external reporting, and 
     data analysis.
       (F) $1,700,000 for automation of the collection of key 
     export data as part of the implementation of the Automated 
     Export system.
       (b) Textile Transshipment.--Of the amounts made available 
     for fiscal years 2002 and 2003 under section 301(b)(1)(B) of 
     the Customs Procedural Reform and Simplification Act of 1978 
     (19 U.S.C. 2075(b)(1)(B)), as amended by section 221(a) of 
     this Act, $3,364,435 shall be available for each such fiscal 
     year for textile transshipment enforcement.
       (c) Fiscal Year 2003.--Of the amounts made available for 
     fiscal year 2003 under section 301(b)(1)(B) of the Customs 
     Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)(1)(B)), as amended by section 221(a) of this Act, 
     $9,923,500 shall be available for the maintenance and support 
     of the equipment and training of personnel to maintain and 
     support the equipment described in subsection (a).
       (d) Acquisition of Technologically Superior Equipment; 
     Transfer of Funds.--
       (1) In general.--The Commissioner of Customs may use 
     amounts made available for fiscal year 2002 under section 
     301(b)(1)(A) of the Customs Procedural Reform and 
     Simplification Act of 1978 (19 U.S.C. 2075(b)(1)(A)), as 
     amended by section 221(a) of this Act, for the acquisition of 
     equipment other than the equipment described in subsection 
     (a) if such other equipment--
       (A)(i) is technologically superior to the equipment 
     described in subsection (a); and
       (ii) will achieve at least the same results at a cost that 
     is the same or less than the equipment described in 
     subsection (a); or
       (B) is technologically equivalent to the equipment 
     described in subsection (a) and can be obtained at a lower 
     cost than the equipment described in subsection (a).
       (2) Transfer of funds.--Notwithstanding any other provision 
     of this section, the Commissioner of Customs may reallocate 
     an amount not to exceed 25 percent of--
       (A) the amount specified in any of subparagraphs (A) 
     through (R) of subsection (a)(1) for equipment specified in 
     any other of such subparagraphs (A) through (R);
       (B) the amount specified in any of subparagraphs (A) 
     through (Q) of subsection (a)(2) for equipment specified in 
     any other of such subparagraphs (A) through (Q); and
       (C) the amount specified in any of subparagraphs (A) 
     through (E) of subsection (a)(3) for equipment specified in 
     any other of such subparagraphs (A) through (E).

     SEC. 223. PEAK HOURS AND INVESTIGATIVE RESOURCE ENHANCEMENT 
                   FOR THE UNITED STATES-MEXICO AND UNITED STATES-
                   CANADA BORDERS, FLORIDA AND GULF COAST 
                   SEAPORTS, AND THE BAHAMAS.

       (a) In General.--Of the amounts made available for fiscal 
     years 2002 and 2003 under subparagraphs (A) and (B) of 
     section 301(b)(1) of the Customs Procedural Reform and 
     Simplification Act of 1978 (19 U.S.C. 2075(b)(1)), as amended 
     by section 221(a) of this Act, $181,864,800 for fiscal year 
     2002 (including $5,673,600 until expended for investigative 
     equipment) and $230,983,340 for fiscal year 2003 shall be 
     available for the following:
       (1) A net increase of 535 inspectors, 120 special agents, 
     and 10 intelligence analysts for the United States-Mexico 
     border, and 375 inspectors for the United States-Canada 
     border, in order to open all primary lanes on such borders 
     during peak hours and enhance investigative resources.
       (2) A net increase of 285 inspectors and canine enforcement 
     officers to be distributed at large cargo facilities as 
     needed to process and screen cargo (including rail cargo) and 
     reduce commercial waiting times on the United States-Mexico 
     border and a net increase of 125 inspectors to be distributed 
     at large cargo facilities as needed to process and screen 
     cargo (including rail cargo) and reduce commercial waiting 
     times on the United States-Canada border.

[[Page 472]]

       (3) A net increase of 40 special agents and 10 intelligence 
     analysts to facilitate the activities of the additional 
     inspectors authorized under paragraphs (1) and (2).
       (4) A net increase of 40 inspectors at sea ports in 
     southeast Florida to process and screen cargo.
       (5) A net increase of 70 special agent positions, 23 
     intelligence analyst positions, 9 support staff positions, 
     and the necessary equipment to enhance investigation efforts 
     targeted at internal conspiracies at the Nation's seaports.
       (6) A net increase of 360 special agents, 30 intelligence 
     analysts, and additional resources to be distributed among 
     offices that have jurisdiction over major metropolitan drug 
     or narcotics distribution and transportation centers for 
     intensification of efforts against drug smuggling and money-
     laundering organizations.
       (7) A net increase of 2 special agent positions to re-
     establish a Customs Attache office in Nassau.
       (8) A net increase of 62 special agent positions and 8 
     intelligence analyst positions for maritime smuggling 
     investigations and interdiction operations.
       (9) A net increase of 50 positions and additional resources 
     to the Office of Internal Affairs to enhance investigative 
     resources for anticorruption efforts.
       (10) The costs incurred as a result of the increase in 
     personnel hired pursuant to this section.
       (b) Relocation of Personnel.--Notwithstanding any other 
     provision of this section, the Commissioner of Customs may 
     reduce the amount of additional personnel provided for in any 
     of paragraphs (1) through (9) of subsection (a) by not more 
     than 25 percent, if the Commissioner of Customs makes a 
     corresponding increase in the personnel provided for in one 
     or more of such paragraphs (1) through (9).
       (c) Net Increase.--In this section, the term ``net 
     increase'' means an increase in the number of employees in 
     each position described in this section over the number of 
     employees in each such position that was provided for in 
     fiscal year 2000.

     SEC. 224. AGENT ROTATIONS; ELIMINATION OF BACKLOG OF 
                   BACKGROUND INVESTIGATIONS.

       Of the amounts made available for fiscal years 2002 and 
     2003 under subparagraphs (A) and (B) of section 301(b)(1) of 
     the Customs Procedural Reform and Simplification Act of 1978 
     (19 U.S.C. 2075(b)(1)), as amended by section 221(a) of this 
     Act, $16,000,000 for fiscal year 2002 (including $10,000,000 
     until expended) and $6,000,000 for fiscal year 2003 shall be 
     available to--
       (1) provide additional funding to clear the backlog of 
     existing background investigations and to provide for 
     background investigations during extraordinary recruitment 
     activities of the agency; and
       (2) provide for the interoffice transfer of up to 100 
     special agents, including costs related to relocations, 
     between the Office of Investigations and Office of Internal 
     Affairs, at the discretion of the Commissioner of Customs.

     SEC. 225. AIR AND MARINE OPERATION AND MAINTENANCE FUNDING.

       (a) Fiscal Year 2002.--Of the amounts made available for 
     fiscal year 2002 under subparagraphs (A) and (B) of section 
     301(b)(3) of the Customs Procedural Reform and Simplification 
     Act of 1978 (19 U.S.C. 2075(b)(3)), as amended by section 
     221(c) of this Act, $130,513,000 shall be available until 
     expended for the following:
       (1) $96,500,000 for Customs Service aircraft restoration 
     and replacement initiative.
       (2) $15,000,000 for increased air interdiction and 
     investigative support activities.
       (3) $19,013,000 for marine vessel replacement and related 
     equipment.
       (b) Fiscal Year 2003.--Of the amounts made available for 
     fiscal year 2003 under subparagraphs (A) and (B) of section 
     301(b)(3) of the Customs Procedural Reform and Simplification 
     Act of 1978 (19 U.S.C. 2075(b)(3)) as amended by section 
     221(c) of this Act, $75,524,000 shall be available until 
     expended for the following:
       (1) $36,500,000 for Customs Service aircraft restoration 
     and replacement.
       (2) $15,000,000 for increased air interdiction and 
     investigative support activities.
       (3) $24,024,000 for marine vessel replacement and related 
     equipment.

     SEC. 226. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS.

       (a) In General.--As part of the annual performance plan for 
     each of fiscal years 2002 and 2003, as required under section 
     1115 of title 31, United States Code, the Commissioner of 
     Customs shall evaluate the benefits of the activities 
     authorized to be carried out pursuant to sections 222 through 
     225 of this Act.
       (b) Enforcement Performance Measures.--The Commissioner of 
     Customs is authorized to contract for the review and 
     assessment of enforcement performance goals and indicators 
     required by section 1115 of title 31, United States Code, 
     with experts in the field of law enforcement, from academia, 
     and from the research community. Any contract for review or 
     assessment conducted pursuant to this subsection shall 
     provide for recommendations of additional measures that would 
     improve the enforcement strategy and activities of the 
     Customs Service.
       (c) Report to Congress.--The Commissioner of Customs shall 
     submit any assessment, review, or report provided for under 
     this section to the Committee on Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives.

     SEC. 227. REPORT ON INTELLIGENCE REQUIREMENTS.

       The Commissioner of Customs shall, not later than one year 
     of the date of the enactment of this Act, submit to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives a report containing 
     the following:
       (1) An assessment of the intelligence-gathering and 
     information-gathering capabilities and needs of the Customs 
     Service.
       (2) An assessment of the impact of any limitations on the 
     intelligence-gathering and information-gathering capabilities 
     necessary for adequate enforcement of the customs laws of the 
     United States and other laws enforced by the Customs Service.
       (3) The Commissioner's recommendations for improving the 
     intelligence-gathering and information-gathering capabilities 
     of the Customs Service.

                      PART II--CUSTOMS MANAGEMENT

     SEC. 231. TERM AND SALARY OF THE COMMISSIONER OF CUSTOMS.

       (a) Term.--
       (1) General requirements.--The first section of the Act 
     entitled ``An Act to create a Bureau of Customs and a Bureau 
     of Prohibition in the Department of the Treasury'', approved 
     March 3, 1927 (19 U.S.C. 2071), is amended--
       (A) by striking ``There shall be'' and inserting ``(a) In 
     General.--There shall be'';
       (B) in the second sentence--
       (i) by inserting ``for a term of 5 years'' after 
     ``Senate'';
       (ii) by striking ``and'' at the end of paragraph (2);
       (iii) by striking the period at the end of paragraph (3) 
     and inserting ``; and''; and
       (iv) by adding at the end the following new paragraph:
       ``(4) have demonstrated ability in management.''; and
       (C) by adding at the end the following:
       ``(b) Vacancy.--Any individual appointed to fill a vacancy 
     in the position of Commissioner occurring before the 
     expiration of the term for which the individual's predecessor 
     was appointed shall be appointed only for the remainder of 
     that term.
       ``(c) Removal.--The Commissioner may be removed at the will 
     of the President.
       ``(d) Reappointment.--The Commissioner may be appointed to 
     more than one 5-year term.''.
       (2) Current office holder.-- In the case of an individual 
     serving as the Commissioner of Customs on the date of the 
     enactment of this Act, who was appointed to such position 
     before such date, the 5-year term required by the first 
     section of the Act entitled ``An Act to create a Bureau of 
     Customs and a Bureau of Prohibition in the Department of the 
     Treasury'', as amended by this section, shall begin as of the 
     date of such appointment.
       (b) Salary.--
       (1) In general.--
       (A) Section 5315 of title 5, United States Code, is amended 
     by striking the following item:
       ``Commissioner of Customs, Department of the Treasury.''.
       (B) Section 5314 of title 5, United States Code, is amended 
     by inserting at the end the following item:
       ``Commissioner of Customs, Department of the Treasury.''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect on October 1, 2001.

     SEC. 232. INTERNAL COMPLIANCE.

       (a) Establishment of Internal Compliance Program.--The 
     Commissioner of Customs shall--
       (1) establish, within the Office of Internal Affairs, a 
     program of internal compliance designed to enhance the 
     performance of the basic mission of the Customs Service to 
     ensure compliance with all applicable laws and, in 
     particular, with the implementation of title VI of the North 
     American Free Trade Agreement Implementation Act (commonly 
     referred to as the ``Customs Modernization Act'');
       (2) institute a program of ongoing self-assessment and 
     conduct a review on an annual basis of the performance of all 
     core functions of the Customs Service;
       (3) identify deficiencies in the current performance of the 
     Customs Service with respect to commercial operations, 
     enforcement, and internal management and propose specific 
     corrective measures to address such concerns; and
       (4) not later than 6 months after the date of the enactment 
     of this Act, and annually thereafter, submit to the Committee 
     on Finance of the Senate and the Committee on Ways and Means 
     of the House of Representatives a report on the programs and 
     reviews conducted under this subsection.
       (b) Evaluation and Report on Best Practices.--The 
     Commissioner of Customs shall, as part of the development of 
     an improved system of internal compliance, initiate a review 
     of current best practices in internal compliance programs 
     among government

[[Page 473]]

     agencies and private sector organizations and, not later than 
     18 months after the date of the enactment of this Act, report 
     on the results of the review to the Committee on Governmental 
     Affairs and the Committee on Finance of the Senate and the 
     Committee on Government Reform and the Committee on Ways and 
     Means of the House of Representatives.
       (c) Review by Inspector General.--The Inspector General of 
     the Department of the Treasury shall review and audit the 
     implementation of the programs described in subsection (a) as 
     part of the Inspector General's report required under the 
     Inspector General Act of 1978 (5 U.S.C. App).

     SEC. 233. REPORT ON PERSONNEL FLEXIBILITY.

       Not later than 6 months after the date of the enactment of 
     this Act, the Commissioner of Customs shall submit to the 
     Committee on Governmental Affairs and the Committee on 
     Finance of the Senate and the Committee on Government Reform 
     and the Committee on Ways and Means of the House of 
     Representatives a report on the Commissioner's 
     recommendations for modifying existing personnel rules to 
     permit more effective management of the resources of the 
     Customs Service and for improving the ability of the Customs 
     Service to fulfill its mission. The report shall also include 
     an analysis of why the flexibility provided under existing 
     personnel rules is insufficient to meet the needs of the 
     Customs Service.

     SEC. 234. REPORT ON PERSONNEL ALLOCATION MODEL.

       Not later than 6 months after the date of the enactment of 
     this Act, the Commissioner of Customs shall submit to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives a report on the 
     following:
       (1) The resources and personnel requirements under the 
     personnel allocation model under development in the Customs 
     Service.
       (2) The implementation of the personnel allocation model.

     SEC. 235. REPORT ON DETECTION AND MONITORING REQUIREMENTS 
                   ALONG THE SOUTHERN TIER AND NORTHERN BORDER.

       Not later than 6 months after the date of the enactment of 
     this Act, the Commissioner of Customs shall submit to the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives a report on the 
     requirements of the Customs Service for counterdrug detection 
     and monitoring of the arrival zones along the southern tier 
     and northern border of the United States. The report shall 
     include an assessment of--
       (1) the performance of existing detection and monitoring 
     equipment, technology, and personnel;
       (2) any gaps in radar coverage of the arrival zones along 
     the southern tier and northern border of the United States; 
     and
       (3) any limitations imposed on the enforcement activities 
     of the Customs Service as a result of the reliance on 
     detection and monitoring equipment, technology, and personnel 
     operated under the auspices of the Department of Defense.

                      PART III--MARKING VIOLATIONS

     SEC. 241. CIVIL PENALTIES FOR MARKING VIOLATIONS.

       Section 304(l) of the Tariff Act of 1930 (19 U.S.C. 
     1304(l)) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively;
       (2) by striking ``Any person'' and inserting ``(1) In 
     general.--Any person'';
       (3) by moving the remaining text 2 ems to the right; and
       (4) by adding at the end the following new paragraph:
       ``(2) Civil penalties.--Any person who defaces, destroys, 
     removes, alters, covers, obscures, or obliterates any mark 
     required under this section shall be liable for a civil 
     penalty of not more than $10,000 for each violation. The 
     civil penalty imposed under this subsection shall be in 
     addition to any marking duties owed under subsection (i).''.

                       Subtitle C--Miscellaneous

     SEC. 251. TETHERED AEROSTAT RADAR SYSTEM.

       (a) Findings.--Congress makes the following findings:
       (1) Drug traffickers exploit openings in the United States 
     detection and monitoring network. Tethered Aerostat Radar 
     Systems (TARS) are a critical element in closing potential 
     routes for drug smuggling.
       (2) The Tethered Aerostat Radar System, a network of 11 
     radar sites, serves as an important component of the 
     counterdrug mission of the United States by providing low 
     altitude radar surveillance, detection, and monitoring 
     capabilities to military and law enforcement entities. 
     Failure to operate the TARS system results in a degraded 
     counterdrug capability for the United States.
       (3) Most of the illicit drugs consumed in the United States 
     enter the country over the Southwest, Gulf of Mexico, or 
     Florida borders. The United States will not have complete 
     coastal radar coverage to combat counterdrug threats unless 
     the entire Tethered Aerostat Radar System network is 
     standardized and maintained, including the Tethered Aerostat 
     Radar System sites in Matagorda, Texas, Morgan City, 
     Louisiana, and Horseshoe Beach, Florida.
       (4) The Department of Defense, the lead Federal agency for 
     detection and monitoring, is responsible for fulfilling the 
     surveillance, detection, and monitoring mission in support of 
     counterdrug operations.
       (5) The Department of Defense's current budget allocation 
     for the Tethered Aerostat Radar System is inadequate. At 
     present, 3 sites are not in operation because of the 
     expiration of their life cycle.
       (b) Responsibility for Tethered Aerostat Radar System.--The 
     Secretary of Defense shall take all necessary actions to 
     ensure that the 11 sites that comprise the Tethered Aerostat 
     Radar System network are placed under the policy direction of 
     the Drug Enforcement Policy and Support office of the 
     Assistant Secretary of Defense for Special Operations and Low 
     Intensity Conflict.
       (c) Limitation on Transfer.--The Secretary shall cease all 
     activities relating to the transfer of responsibility for the 
     Tethered Aerostat Radar System program to any entity outside 
     the Department of Defense.
       (d) Report on Status.--(1) The Secretary shall annually 
     submit to the congressional defense committees and the United 
     States Senate Caucus on International Narcotics Control a 
     report on the status of the Tethered Aerostat Radar System 
     network.
       (2) In this subsection, the term ``congressional defense 
     committees'' means the following:
       (A) The Committees on Armed Services and Appropriations of 
     the Senate.
       (B) The Committees on Armed Services and Appropriations of 
     the House of Representatives.
       (e) Authorization.--There is hereby authorized to be 
     appropriated for the requirements of the 11-site network of 
     the Tethered Aerostat Radar System, including standardization 
     of the sites located along the Gulf of Mexico of the United 
     States, amounts as follows:
       (1) For fiscal year 2002, $76,000,000.
       (2) For fiscal year 2003, $48,500,000.
       (2) For fiscal year 2004, $40,500,000.
       (3) For fiscal year 2005, $44,700,000.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 90. A bill authorizing funding for nanoscale science and 
engineering research and development at the Department of Energy for 
fiscal years 2002 through 2006; to the Committee on Energy and Natural 
Resources.


                    NANOSCIENCE AND NANOENGINEERING

  Mr. BINGAMAN. Mr. President. I rise today to introduce a bill 
authorizing the Secretary of Energy to provide for a long term 
commitment in its Office of Science to the area of nanoscience and 
nanoengineering. This new area is of fundamental importance for 
maintaining our global economic leadership in energy technology as well 
in areas such as microchip design, space and transportation, medicines 
and biomedical devices. The fields of nanoscience and nanoengineering 
as so new and broad in their reach that no one industry can support 
them. They are a perfect example how we in Congress can make a 
difference to support our nation's technological leadership, a key 
element of the 21st century global economy.
  The fields of nanoscience and engineering encompass the ability to 
create new states of matter by prepositioning the atoms that make up 
their structure. The physical features that nanoscale R&D will develop 
are on the order of about 10 nanometers or 1000 times smaller than the 
diameter of a human hair. What we are talking about is making materials 
and devices not be miniaturization, which is a top down approach. 
Nanoscience is the bottom up fabrication of materials, atom by atom. 
When you build materials at this level, amazing things begin to happen. 
We are talking about microchips whose features will shrink by a factor 
of 100 below where industry projects they will be in the year 2010. 
These chip features will lead to radical breakthroughs in speed, cost 
and density of information storage. In the field of medicine and 
health, we are talking about drugs whose routes of delivery are 
literally at the molecular level. It will be possible to custom build 
proteins and other biological materials for future biomedical devices. 
In the field of energy efficiency, batteries and fuel cells can be 
built with storage capacities far exceeding our current state of the 
art. In the transportation industry, it will be possible to make ultra 
strong and light materials reducing the weight in airplanes, cars and 
space vehicles. All these breakthroughs in the diverse industries I 
have discussed will keep the United States' as a global leader in the 
21st century economy.
  The Department of Energy and its Office of Science are uniquely 
suited to

[[Page 474]]

support this critical research. The Office of Science has been at the 
forefront of conducting nanotechnology research for the past decade 
through its broad array of materials, physics, chemistry and biology 
programs. This authorization bill will carry forth four broad 
objectives of the Office of Science's existing nanotechnology effort, 
(1) attain a fundamental understanding of nanoscale phenomena, (2) 
achieve the ability to design bulk materials with desired properties 
using nanoscale manipulation, (3) study how living organisms produce 
materials naturally by arranging their atomic structure and implement 
it into the design process for nanomaterials, (4) develop experimental 
and computer tools with a national infrastructure to carry out 
nanoscience. Let me briefly comment on the fourth area in this list. 
The Office of Science is the nation's leader in developing and managing 
national user facilities across the broad range of physical sciences. 
It would be a natural progression for the Office of Science to develop 
similar user facilities to advance nanoscience. These facilities, 
located across the United States, will contain unique equipment and 
computers which will be accessible to individuals as well as multi-
disciplinary teams. In the past, Office of Science national user 
facilities have served as crossing points between the transition from 
fundamental science to industrial capability. I expect that these 
nanoscience user facilities will serve as a similar transition point 
from long term fundamental research into applied industrial know-how. 
Accordingly, in this authorization bill I have allotted portions of the 
yearly budget towards developing these unique user facilities.
  This bill is an important first step in a combined national 
nanoscience effort which will help to maintain the technological edge 
of our U.S. industry. I encourage my House colleagues in the Science 
Committee to also consider this bill with the possibility of joint 
hearings so that we may be enlightened on nanoscience's full potential. 
I also hope that the other federal R&D agencies will make similar 
commitments in their areas of expertise. Maintaining this edge, by 
promoting these long term and high risk investigations is something 
which we cannot expect in the short time frame world of today's 
industry. It is critical that our U.S. government step into this void, 
particularly in the area of nanoscience, and provide the necessary 
intellectual capital to propel our national economy as a leader in the 
21st century.
                                 ______
                                 

      By Mr. Gramm (for himself, Mrs. Hutchison, Mr. Bingaman, Mr. 
        Domenici, Mr. Kyl, Mr. McCain, and Mrs.  Boxer):
  S. 92. A bill to authorize appropriations for the United States 
Customs Service for fiscal years 2002 and 2003, and for other purposes; 
to the Committee on Finance.


                       PROTECTION OF U.S. BORDERS

  Mr. GRAMM. Mr. President, on behalf of Senators Hutchison, Bingaman, 
Domenici, Kyl, McCain, and Boxer, I am introducing legislation today 
which will authorize the United States Customs Service to acquire the 
necessary personnel and technology to reduce delays at our border 
crossings with Mexico and Canada to no more than 20 minutes, while 
strengthening our commitment to interdict illegal narcotics and other 
contraband.
  This bill represents the progress that we made in this regard in the 
last Congress, and it builds on efforts that we first initiated in the 
105th Congress. This legislation passed the Senate unanimously on 
August 5, 1999, and a similar bill passed the House of Representatives 
on May 25, 1999, by a vote of 410-2. In addition to the resources 
dedicated to our nation's land borders, this bill also incorporates the 
efforts of Senators Grassley and Graham in adding resources for 
interdiction efforts in the air and along our coastline, provisions 
that were passed by the Senate in last year's bill.
  I am very concerned about the impact of narcotics trafficking on 
Texas and the nation and have worked closely with federal and state law 
enforcement officials to identify and secure the necessary resources to 
battle the onslaught of illegal drugs. At the same time, however, our 
current enforcement strategy is burdened by insufficient staffing, a 
gross underuse of vital interdiction technology, and is effectively 
closing the door to legitimate trade.
  At a time when NAFTA and the expanding world marketplace are making 
it possible for us to create more commerce, freedom and opportunity for 
people on both sides of the border, it is important that we eliminate 
the border crossing delays that are stifling these goals. In order for 
all Americans to fully enjoy the benefits of growing trade with Mexico 
and Canada, we must ensure that the Customs Service has the resources 
necessary to accomplish its mission. Customs inspections should not be 
obstacles to legitimate trade and commerce. Customs staffing needs to 
be increased significantly to facilitate the flow of substantially 
increased traffic on both the Southwestern and Northern borders, and 
these additional personnel need the modern technology that will allow 
them to inspect more cargo, more efficiently. The practical effect of 
these increases will be to open all the existing primary inspection 
lanes where congestion is a problem during peak hours and to enhance 
investigative capabilities on the Southwest border.
  Long traffic lines at our international crossings are 
counterproductive to improving our trade relationship with Mexico and 
Canada. This bill is designed to shorten those lines and promote 
legitimate commerce, while providing the customs Service with the means 
necessary to tackle the drug trafficking operations that are now 
rampant along the 1,200-mile border that my State shares with Mexico. I 
will be speaking further to my colleagues about this initiative and 
urge their support for this bill.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. Jeffords):
  S. 93. A bill to amend the Federal Election Campaign Act of 1971 to 
require disclosure of certain disbursements made for electioneering 
communications, and for other purposes; to the Committee on Rules and 
Administration.


                            campaign reform

  Ms. SNOWE. Mr. President, I rise to introduce a bill along with my 
friend and colleague from Vermont, Senator Jeffords, to ensure that we 
will have balanced, comprehensive campaign finance reform that doesn't 
close one loophole while leaving another open. It is a bipartisan 
approach to a burgeoning segment of undisclosed and unregulated 
campaign activity that will only get worse if left unchecked.
  Mr. President, the bill I am offering is based on a provision this 
body added to the McCain-Feingold bill three years ago, and a bill we 
introduced in the 106th Congress. With that amendment, the Senate 
finally went on record as having a majority in support of campaign 
finance reform. In fact, 53 senators cast a vote supporting the 
combined approach of a soft money ban and a sound, constitutional 
approach to addressing a veritable explosion in unregulated, so-called 
``issue ads''.
  Senator Jeffords and I crafted this measure because we wanted 
campaign finance reform; we wanted a bill that represented the best 
possible policy; and we wanted a package that could bridge the 
political gap that had opened between supporters and opponents.
  On the one hand, we had Republicans concerned that McCain-Feingold, 
as it stood, might not have done enough to focus on the use of the 
union dues for political purposes. On the other hand, we had Democrats 
who didn't want unions signaled out and wanted corporate money to be 
addressed as well.
  That's the context in which we set out to carefully construct a 
measure that would withstand constitutional scrutiny, address some of 
the most egregious abuses, and focus on areas where we know the Supreme 
Court has already allowed us to go--disclosure, and a prohibition on 
union and corporation money for electioneering. Indeed, the compromise 
language eventually adopted was supported by groups like Common Cause 
and Public Citizen, and by the bill's sponsors themselves.

[[Page 475]]

  I would also like to enter into the record a portion of a March 1, 
1998 Washington Post editorial that said,'' The (Snowe-Jeffords) 
amendment was a reminder of how good a bill might be in reach if only 
there were the political will, and willing leadership, to write it.'' 
The editorial went on to say that ``that's the sort of compromise that 
the legislative process at its best produces.''
  I am pleased that a provision based directly on that amendment is now 
included in the McCain-Feingold bill being introduced today, and of 
which I am an original cosponsor. I think the provision strengthens the 
McCain-Feingold bill in terms of providing balance and more 
comprehensive approach to reform.
  Mr. President, I have stood on the Senate floor and spoken of the 
burgeoning problem this bill seeks to address. And I have said that, if 
we do nothing, the situation will only get worse. Well, it has gotten 
worse, and let me just take a moment before describing what the bill 
will do to detail why this bill is necessary in the first place.
  What I'm talking about here are broadcast advertisements the sole 
purpose of which is to influence federal elections, but that require no 
disclosure and have none of the restrictions that for decades have been 
placed on other forms of campaigning. These are broadcast ads that 
masquerade as informational or educational, but are really ``stealth 
advocacy'' ads for or against candidates.
  According to estimates by the Annenberg Public Policy center which 
has been extensively studying this trend, in the 2000 elections over 
$400 million was spent on these so-called ``issue ads''--many of which 
are blatant attempts to influence federal elections, and everyone knows 
it. And that number--which is four times what was estimated for the 
last presidential election cycle, I might add, may be just the tip of 
the iceberg. Because we simply don't know all the money that's being 
spent.
  So how do we address the problem?
  The Snowe-Jeffords approach is simple and straightforward. First, we 
require disclosure on all groups and individuals running broadcast ads 
within 30 days of a primary and 60 days of any election that mention 
the name of a federal candidate. And second, a ban on the use of union 
or corporate treasury money to pay for these ads.
  That's what this boils down to, Mr. President. Disclosure, 
disclosure, disclosure. In fact, nothing in this bill prevents anyone 
from running any ads at any time saying anything they want.
  All we say is, if you spend more than $10,000 per year on these 
broadcast ads you can't use union or corporation money. That's the only 
ban on anything in this bill. And we require you to disclose who is 
bankrolling the ads if they give $500 or more.
  We developed this approach in consultation with noted constitutional 
scholars and reformers such as Norm Ornstein of the American Enterprise 
Institute, Joshua Rosenkrantz, Director of the Brennan Center for 
Justice at NYU, and Daniel Ortiz, John Allan Love Professor of Law at 
the University of Virginia School of Law. The bill is narrowly and 
carefully crafted, and based on the precept that the Supreme Court has 
made clear that, for constitutional purposes, campaigning--which make 
no mistake, these ads do--is different from other speech.
  Corporations have been banned from direct involvement in campaigns 
since the Tillman Act of 1907--unions were first addressed in the 
Smith-Connally Act of 1943 and the prohibition was finally made 
permanent in 1947 with the Taft-Hartley Act.
  Under Snowe-Jeffords, unions and corporations still have a voice in 
federal elections through the appropriate avenue--a political action 
committee to which individuals voluntarily contribute up to the amount 
allowed by law. They just can't use unlimited shareholder monies or 
money from union coffers to fund the ads--a logical extension of 
current law.
  As for disclosure, the Brennan Center analysis has concluded that, 
``Congress is permitted to demand that the sponsor of an electioneering 
message disclose the amount spent on the message and the sources of the 
funds.''
  It has been said in the past that this measure prohibits running 
these ads altogether. In point of fact, anyone can run any ad saying 
anything they want at any time. They simply must not use union or 
corporate treasury money within 30 days of a primary or 60 days before 
a general election, and they must let us know who paid for them. Is 
that too much to ask?
  The fact is, Mr. President, we are burying our heads in the sand if 
we do nothing about this problem. It is clearly taking elections out of 
the hands of individuals and of candidates.
  Certainly, there are some legitimate issue ads out there. They are 
truly designed to inform the public, or advocate a particular position. 
We don't effect these ads one iota. We don't want to effect these ads.
  And certainly, people have a right to disagree with candidates, and 
even attack their positions. That is why nothing in this bill prevents 
people from doing so. All we say is that we ought to know who is paying 
for these ads, and that they should not be paid for with union or 
corporation money--like any other activity that is influencing a 
federal election.
  Again, the bill only requires disclosure for large donors to all 
groups spending more than $10,000 on ads running 30 days before a 
primary and 60 days before a general election. And it only bans union 
and corporation treasury money from funding such ads, based on the 1907 
and 1947 laws I mentioned earlier.
  This approach has garnered majority support from the Senate in the 
past and in light of the previous elections it deserves even greater 
support today. We need balanced, meaningful, and comprehensive campaign 
finance reform, and this bill is a vital component. I urge its 
consideration.
  Mr. JEFFORDS. Mr. President, I rise today to express my strong 
support for the bill Senator Snowe and I are introducing and urge my 
Senate colleagues to join as cosponsors of this important legislation.
  Throughout the last Congress the Senate spent many legislative hours 
debating campaign finance reform. In fact, since my election to the 
House in the wake of the Watergate scandal, I have spent many long 
hours working with my colleagues to craft campaign finance reform 
legislation that could ensure the legislative process and survive a 
constitutional challenge. We have come close in the past, and I believe 
circumstances still remain right for enactment of meaningful campaign 
finance reform during this Congress.
  I believe that the irregularities associated with our recent 
campaigns point out the fact that current election laws are not being 
strongly enforced or working to achieve the goals that we all have for 
campaign finance reform. Without action, these abuses will become more 
pronounced and widespread as we go from election to election.
  The Snowe-Jeffords bill, the Advancing Truth and Accountability of 
Campaign Communications Act (ATACC), will boost disclosure requirements 
and tighten the rules on expenditures of corporate and union treasury 
funds in the weeks preceding a primary and general election.
  I would like to begin with a story that may help my colleagues 
understand the need for this legislation, and that many of my 
colleagues may understand from their own campaigns. Two individuals are 
running for the Senate and have spent the last few months holding 
debates, talking to the voters and traveling around the state. Both 
candidates feel that they have informed the voters of their thoughts, 
views and opinions on the issues, and that the voters can use this 
information to decide on which candidate they will support.
  Two weeks before the day of the election a group called the People 
for the Truth and the American Way, let's say, begins to run television 
advertisements which include the picture of one of the candidates and 
that candidate's name. However, these advertisements do not use the 
express terms of ``vote for'' or ``vote against.'' These advertisements 
discuss personal and family issues.

[[Page 476]]

  The voters do not know who this group is, who are its financial 
backers and why they have an interest in this specific election, and 
under our current election law the voters will not find out. Thus, even 
though the candidates have attempted to provide the voters with all the 
information concerning the candidate's views on the issues, they will 
be casting their vote lacking critical information concerning these 
advertisements.
  Some people may say that voters do not need this information. But as 
James Madison said, ``A popular government without popular information 
is but a prologue to a tragedy or a farce or perhaps both. Knowledge 
will forever govern ignorance and a people who mean to be their own 
governors must arm themselves with the power which knowledge gives.''
  Mr. President, the ATACC act will arm the people with the knowledge 
they need in order to sustain our popular government. And the need to 
arm the people with this knowledge is becoming greater every year. The 
amount of money spent on issue advocacy advertising is increasing over 
time at an alarming rate. In the 1995-1996 election cycle an estimated 
$135-150 million was spent on issue advocacy, while in the 1997-1998 
cycle an estimated $275-340 million was expended on these types of 
advertisements. There appears to have been no slowing of expenditures 
during the 1999-2000 election cycle as the most recent estimates show 
the previous election cycle's total being surpassed with the final two 
months of campaigning, where a large proportion of these advertisements 
are run, remaining.
  I have long believed in Justice Brandeis' statement that, ``Sunlight 
is said to be the best of disinfectants.'' The disclosure requirements 
in the ATACC act are narrow and tailored to provide the electorate with 
the important pertinent information they will need to make an informed 
decision. Information included on the disclosure statement includes the 
sponsor of the advertisement, amount spent, and the identity of the 
contributors who donated more than $500. Getting the public this 
information will greatly help the electorate evaluate those who are 
seeking federal office.
  Additionally, this disclosure, or disinfectant as Justice Brandeis 
puts it, will also help deter actual corruption and avoid the 
appearance of corruption that many already feel pervades our campaign 
finance system. This, too, is an important outcome of the disclosure 
requirements of this bill. Getting this information into the public 
purview would enable the press, the FEC and interest groups to help 
ensure that our federal campaign finance laws are obeyed. If the public 
doesn't feel that the laws Congress passes in this area are being 
followed, this will lead to a greater level of disillusionment in their 
elected representatives. Exposure to the light of day of any corruption 
by this required disclosure will help reassure our public that the laws 
will be followed and enforced.
  While our bill focuses on disclosure, it will also prohibit 
corporations and unions from using general treasury monies to fund 
these types of electioneering communications in a defined period close 
to an election. Since 1907, federal law has banned corporations from 
engaging in electioneering. In 1947, that ban was extended to prohibit 
unions from electioneering as well. The Supreme Court has upheld these 
restrictions in order to avoid the deleterious influences on federal 
elections resulting from the use of money by those who exercise control 
over large aggregations of capital. By treating both corporations and 
unions similarly we extend current regulation cautiously and fairly. I 
feel that this prohibition, coupled with the disclosure requirements, 
will address many of the concerns my colleagues from both sides of the 
aisle have raised with regards to our current campaign finance laws.
  Mr. President, I think it is important to clarify at this time some 
of the things that this bill will not do. It will not prevent grass-
roots lobbying communications, it does not cover printed material, nor 
require the text or a copy of the advertisement to be disclosed. 
Finally, it does not restrict how much money can be spent on ads, nor 
restrict how much money a group raises. These points must be expressed 
early on to ensure that my colleagues can clearly understand what we 
are and are not attempting to do with our legislation.
  We have taken great care with our bill to avoid violating the 
important principles in the First Amendment of our Constitution. This 
has required us to review the seminal cases in this areas, including 
Buckley v. Valeo. Limiting corporate and union spending and disclosure 
rules has been an area that the Supreme Court has been most tolerant of 
regulation. We also strove to make the requirements sufficiently clear 
and narrow to overcome unconstitutional claims of vagueness and 
overbreadth.
  Mr. President, I wish I could guarantee to my colleagues that these 
provisions would be held constitutional, but as we found out with the 
Religious Freedom Restoration Act, even with near unanimous support, it 
is difficult to gauge what the Supreme Court will decide on 
constitutional issues. However, I feel that the provisions we have 
created follow closely the constitutional roadmap established by the 
Supreme Court by the decisions in this area, and that it would be 
upheld.
  I know that campaign finance reform is an area of diverse viewpoints 
and beliefs. However, I feel that the ATACC act offers a constructive 
and constitutional solution that addresses some of the problems that 
have been expressed concerning our current campaign finance system. The 
American people are watching and hoping that we will have a fair, 
informative and productive debate on campaign finance reform. I know 
that the proposal that Senator Snowe and I have put forward will do 
just that.
  The electorate has grown more and more disappointed with the tenor of 
campaigns over the last few years, and this disappointment is reflected 
in the low number of people that actually participate in what makes 
this country and democracy great, voting. I feel that giving the voters 
the additional information required by our legislation will help dispel 
some of the disillusionment the electorate feels with our campaign 
system and reinvigorate people to participate again in our democratic 
system.
  In conclusion, the very basis of our democracy requires that an 
informed electorate participate by going to the polls and voting. The 
ATACC act will through its disclosure requirements inform our 
electorate and lead people to again participate in our democratic 
system.
                                 ______
                                 
      By Mr. DORGAN:
  S. 94. A bill to amend the Internal Revenue Code of 1986 to provide a 
5-year extension of the credit for electricity produced from wind; to 
the Commission on Finance.


                    extending wind power incentives

 Mr. DORGAN. Mr. President, today I am introducing a bill that 
would extend for five additional years the Federal tax incentive that 
is currently available for facilities that produce electricity from 
wind.
  Despite all of its promise, wind energy is still a relatively 
untapped clean source of energy in our region and across the country. 
U.S. wind energy capacity in today's electricity marketplace is about 
2,600 megawatts. That's enough to serve about 600,000 typical American 
households. In 1999, the Administration committed our country to a goal 
of producing five percent of our total electricity needs--about 80,000 
megawatts--from wind power by the year 2020.
  Wind energy is one of the world's fastest growing energy 
technologies. As a result, wind energy can--and should--play a larger 
role in helping this country move toward greater energy independence. 
Soaring energy prices over the past year provide a stark reminder of 
the importance of reducing our reliance on foreign energy sources and 
keeping a diverse energy supply here at home. In addition, for states 
like North Dakota, wind energy offers needed economic opportunities for 
farmers and other rural landowners.
  North Dakota is the top-ranked state for wind energy potential and is 
often

[[Page 477]]

referred to as the ``Saudi Arabia'' of wind by industry experts. 
Together, North and South Dakota could supply two-thirds of the 
nation's current electricity supply with their wind energy capacity, 
according to a Department of Energy analysis.
  Greater wind development would also bring new jobs to many rural 
communities. Moreover, struggling family farmers could earn an extra 
$2,000-$3,000 annually for each 750 kilowatt wind turbine placed on the 
farm, while removing only a small fraction of land from the farmer's 
overall operation.
  Congress and the Administration have made some important progress in 
the effort to promote greater wind energy development. Congress has 
increased federal funding for wind and other renewable energy research 
and development at the Department of Energy over the past several 
years. It also has provided a substantial federal income tax credit 
that is vital for continued private sector investment in wind 
generation facilities. Most recently, the U.S. Department of 
Agriculture's Rural Utilities Service awarded its first-ever wind 
energy loan a rural electric cooperative serving the Upper Midwest will 
use to finance the construction of wind turbine generators and power 
lines to help distribute wind-generated power to rural communities.
  Regrettably, Congress and the Administration have undermined their 
very own efforts by failing to ensure that the federal income tax 
credit provided to facilities producing electricity from wind is 
available over the long term.
  I recently cosponsored a wind energy conference in North Dakota. It 
was attended by more than five hundred people, including developers, 
industry experts, utility executives, rural landowners, public 
officials and others. This was double the number of expected 
participants, which demonstrates the growing interest in this renewable 
energy resource.
  Among other things, I heard from wind energy developers who 
emphasized that one of the major obstacles to greater deployment of new 
wind technologies is the continued uncertainty surrounding the 
availability of the wind energy production tax credit. This credit is 
now scheduled to expire at the end of the year. Industry experts tell 
me that financial lenders will soon stop providing needed capital to 
new wind initiatives. As a result, projects already underway will 
quickly come to a halt. Many developers will simply be unable to build 
and purchase equipment, secure financing, obtain the required 
environmental permits and bring wind turbine generators on-line by 
year's end.
  One of the best ways to give developers the certainty and help they 
need to bring new state-of-the-art wind turbines to the marketplace at 
a competitive rate is to provide a sufficiently long period of time for 
them to access the credit. That's exactly what the bill I'm introducing 
today would do. Specifically, my bill would extend the current 
production tax credit for qualifying wind facilities that are placed in 
service on or before December 31, 2006.
  The wind energy production tax credit has had broad bipartisan 
support in the Senate and the House of Representatives in previous 
years, so I am optimistic that we can pass this legislation quickly in 
this new Congress. I urge my Senate colleagues to cosponsor this 
legislation and work with me to get it enacted into law as soon as 
possible. If we don't, many new wind energy initiatives will come to a 
standstill at a time when this country can least afford it.
                                 ______
                                 
      Mr. KOHL (for himself and Mr. Feingold):
  S. 95. A bill to promote energy conservation investments in Federal 
facilities, and for other purposes; to the Committee on Energy and 
Natural Resources.


                    Federal Energy Bank Legislation

  Mr. KOHL. Mr. President, I rise today to introduce legislation 
entitled ``The Federal Energy Bank Act.'' The purpose of this 
legislation is to provide a stable long term source of funding for 
energy efficiency projects throughout the Federal Government. If we are 
to start the Nation on the road toward increased energy conservation we 
must begin with the Federal Government. This bill will help provide the 
necessary investments to make this first step toward long term energy 
conservation possible.
  Energy policy is a raging issue for our country at this time. Natural 
gas prices are at all time highs at a time when we are becoming more 
and more dependent on gas because of its minimal impact on the 
environment. Gas has become of victim of its own success, as our demand 
for the commodity has outstripped our ability in the short term to 
bring the supply to market.
  While I do not oppose continuing fossil fuel exploration and 
extraction, we cannot drill our way out of the tight energy market. We 
must also consider other options including conservation. Conservation 
often gets a bad rap as people think politicians are simply telling 
them to turn down the heat and shut off the lights they aren't using. 
Conservation doesn't necessarily mean hardship and darkness, it can 
also mean new technologies that do not require us to change our habits. 
It means using energy smarter, using it when we need it, and only as 
much as we need. Conservation means holding on to the energy we have, 
and not wasting it.
  Conservation is the compliment to production. If we do a better job 
of saving energy, that means megawatts of generation that will not need 
to be built. That does not mean we do not need additional generation, 
the situation in California makes the clear the danger of not keeping 
up with the demand, it just means that less capacity will be necessary. 
Anyone who has ever grappled with the siting issues involved with a 
power plant knows it will be difficult to build even the bare minimum 
of power generation and transmission.
  I have long believed that our Nation must implement a sensible 
national energy policy which emphasizes greater energy conservation and 
efficiency, as well as the development of renewable resources. This 
bill is just one step of many that need to be taken to reduce our 
energy consumption problems. The events in the Middle East, coupled 
with the environmental problems associated with the use of fossil 
fuels, have only increased the need for improved energy conservation. 
Simply put, we cannot continue to rely on imported oil to meet such a 
large part of our Nation's energy needs. This dependence places our 
economic security at great risk. In addition, the use of oil and other 
fossil fuels contributes to global climate change, air pollution, and 
acid rain.
  Mr. President out attempts to remedy this situation are nothing new. 
In fact, the laws requiring significant energy use reductions are 
already in place. The Energy Policy Act of 1992 mandated that Federal 
agencies use cost-effective measures, with less than a 10-year payback, 
to reduce energy consumption in their facilities. President Clinton, 
with Executive Order 13123, extended the mandate by requiring Federal 
agencies to reduce energy consumption by 35 percent by the year 2010 
compared to 1985 energy uses. If accomplished, this would save the 
American taxpayer millions in annual energy costs and in turn put us on 
the road to future energy savings. This would also improve our 
environment, our balance of trade, and our national security.
  Mr. President, my business background has taught me that most large 
paybacks come from positive long-term investments. Unfortunately, the 
Federal Government does not traditionally take this approach. More 
often than not, it seeks short-term savings and cuts which do not 
address the problem of energy consumption or encourage future energy 
conservation.
  Mr. President, my bill will help address this funding shortfall. The 
bill creates a bank to fund the purchase of energy efficiency projects 
by Federal agencies and in the long run will reduce the overall amount 
of money spent on energy consumption by the Federal Government. For 
each of the fiscal years 1999, 2000, 2001, each Federal agency will 
contribute an amount equal to 5 percent of its previous year's utility 
costs into a fund or bank managed by the Secretary of the Treasury.
  The Secretary of Energy will authorize loans from the bank to any 
Federal

[[Page 478]]

agency for use toward investment in energy efficiency projects. The 
agency will then repay the loan, making the bank self-supporting after 
a few years. The Secretary of Energy will also establish selection 
criteria for each energy efficiency project, determining the project is 
cost-effective and produces a payback in 3 years or less. Agencies will 
be required to report the progress of each project with a cost of more 
than $1 million to the Secretary 1 year after installation. The 
Secretary will then report to Congress each year on all the operations 
of the bank.
  Mr. President, this bill will provide the real dollars required to 
make the Executive order goals a reality.
  Mr. President, in closing I would like to thank Johnson Controls, the 
largest public company in Wisconsin, for their continued leadership and 
input on this bill. As a maker of energy conservation systems, Johnson 
has provided me with the real world insights that have helped me draft 
a bill that attempts to address our energy conservation needs.
  Mr. President, I ask unanimous consent the full text of the bill be 
printed in full in the Record. I urge my colleagues to support this 
bill and will push for its early enactment.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 95

       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 ``Federal Energy Bank Act''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) energy conservation is a cornerstone of national energy 
     security policy;
       (2) the Federal Government is the largest consumer of 
     energy in the economy of the United States;
       (3) many opportunities exist for significant energy cost 
     savings within the Federal Government; and
       (4) to achieve the energy savings required by Executive 
     Order, the Federal Government must make significant 
     investments in energy savings systems and products, including 
     energy management control systems.
       (b) Purpose.--The purpose of this Act is to promote energy 
     conservation investments in Federal facilities.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Agency.--The term ``agency'' means--
       (A) an Executive agency (as defined in section 105 of title 
     5, United States Code, except that the term also includes the 
     United States Postal Service);
       (B) Congress and any other entity in the legislative 
     branch; and
       (C) a court and any other entity in the judicial branch.
       (2) Bank.--The term ``Bank'' means the Federal Energy Bank 
     established by section 4.
       (3) Energy efficiency project.--The term ``energy 
     efficiency project'' means a project that assists an agency 
     in meeting or exceeding the energy efficiency requirements 
     of--
       (A) part 3 of title V of the National Energy Conservation 
     Policy Act (42 U.S.C. 8251 et seq.);
       (B) subtitle F of title I of the Energy Policy Act of 1992 
     and the amendments made by that subtitle (106 Stat. 2843); 
     and
       (C) applicable Executive orders, including Executive Order 
     Nos. 12759 and 12902.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (5) Total utility payments.--The term ``total utility 
     payments'' means payments made to supply electricity, natural 
     gas, and any other form of energy to provide the heating, 
     ventilation, air conditioning, lighting, and other energy 
     needs of an agency facility.

     SEC. 4. ESTABLISHMENT OF BANK.

       (a) In General.--There is established in the Treasury of 
     the United States a trust fund to be known as the ``Federal 
     Energy Bank'', consisting of--
       (1) such amounts as are appropriated to the Bank under 
     section 8;
       (2) such amounts as are transferred to the Bank under 
     subsection (b);
       (3) such amounts as are repaid to the Bank under section 
     5(b)(4); and
       (4) any interest earned on investment of amounts in the 
     Bank under subsection (c).
       (b) Transfers to Bank.--
       (1) In general.--At the beginning of each of fiscal years 
     2002, 2003, and 2004, each agency shall transfer to the 
     Secretary of the Treasury, for deposit in the Bank, an amount 
     equal to 5 percent of the total utility payments paid by the 
     agency in the preceding fiscal year.
       (2) Utilities paid for as part of rental payments.--The 
     Secretary shall by regulation establish a formula by which 
     the appropriate portion of a rental payment that covers the 
     cost of utilities shall be considered to be a utility payment 
     for the purposes of paragraph (1).
       (c) Investment of Funds.--The Secretary of the Treasury 
     shall invest such portion of funds in the Bank as is not, in 
     the Secretary's judgment, required to meet current 
     withdrawals. Investments may be made only in interest-bearing 
     obligations of the United States.

     SEC. 5. LOANS FROM THE BANK.

       (a) In General.--The Secretary of the Treasury shall 
     transfer from the Bank to the Secretary such amounts as are 
     appropriated to carry out the loan program under subsection 
     (b).
       (b) Loan Program.--
       (1) In general.--In accordance with section 6, the 
     Secretary shall establish a program to loan amounts from the 
     Bank to any agency that submits an application satisfactory 
     to the Secretary in order to finance an energy efficiency 
     project.
       (2) Performance contracting funding.--To the extent 
     practicable, an agency shall not submit a project for which 
     performance contracting funding is available.
       (3) Purposes of loan.--
       (A) In general.--A loan under this section may be made to 
     pay the costs of--
       (i) an energy efficiency project; or
       (ii) development and administration of a performance 
     contract.
       (B) Limitation.--An agency may use not more than 15 percent 
     of the amount of a loan under subparagraph (A)(i) to pay the 
     costs of administration and proposal development (including 
     data collection and energy surveys).
       (4) Repayments.--
       (A) In general.--An agency shall repay to the Bank the 
     principal amount of the energy efficiency project loan plus 
     interest at a rate determined by the President, in 
     consultation with the Secretary and the Secretary of the 
     Treasury.
       (B) Waiver.--The Secretary may waive the requirement of 
     subparagraph (A) if the Secretary determines that payment of 
     interest by an agency is not required to sustain the needs of 
     the Bank in making energy efficiency project loans.
       (5) Agency energy budgets.--Until a loan is repaid, an 
     agency budget submitted to Congress for a fiscal year shall 
     not be reduced by the value of energy savings accrued as a 
     result of the energy conservation measure implemented with 
     funds from the Bank.
       (6) Availability of funds.--An agency shall not rescind or 
     reprogram funds made available by this Act. Funds loaned to 
     an agency shall be retained by the agency until expended, 
     without regard to fiscal year limitation.

     SEC. 6. SELECTION CRITERIA.

       (a) In General.--The Secretary shall establish criteria for 
     the selection of energy efficiency projects to be awarded 
     loans in accordance with subsection (b).
       (b) Selection Criteria.--The Secretary may make loans only 
     for energy efficiency projects that--
       (1) are technically feasible;
       (2) are determined to be cost-effective using life cycle 
     cost methods established by the Secretary by regulation;
       (3) include a measurement and management component to--
       (A) commission energy savings for new Federal facilities; 
     and
       (B) monitor and improve energy efficiency management at 
     existing Federal facilities; and
       (4) have a project payback period of 3 years or less.

     SEC. 7. REPORTS AND AUDITS.

       (a) Reports to the Secretary.--Not later than 1 year after 
     the installation of an energy efficiency project that has a 
     total cost of more than $1,000,000, and each year thereafter, 
     an agency shall submit to the Secretary a report that--
       (1) states whether the project meets or fails to meet the 
     energy savings projections for the project; and
       (2) for each project that fails to meet the savings 
     projections, states the reasons for the failure and describes 
     proposed remedies.
       (b) Audits.--The Secretary may audit any energy efficiency 
     project financed with funding from the Bank to assess the 
     project's performance.
       (c) Reports to Congress.--At the end of each fiscal year, 
     the Secretary shall submit to Congress a report on the 
     operations of the Bank, including a statement of the total 
     receipts into the Bank, and the total expenditures from the 
     Bank to each agency.

     SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this Act.

  Mr. FEINGOLD. Mr. President, I am delighted to join with my 
colleague, the Senior Senator from Wisconsin (Mr. Kohl) as an original 
cosponsor of the Federal Energy Bank Act.
  As a politician, the idea of the federal government ``leading by 
example'' in the area of energy efficiency has made sense to me for a 
long time, so much so, in fact, that in campaigning

[[Page 479]]

for the Senate in 1992, I included energy efficiency in my campaign 
platform. I proposed an 82-point plan to reduce the deficit, a series 
of specific spending reductions and revenue changes which, if enacted 
in sum total, would have eliminated the deficit.
  Among those items, as I was a candidate for office after the passage 
of the 1992 Energy Policy Act and after the United States' signing of 
the Framework Convention on Climate Change in Rio De Janeiro, Brazil, 
was one to encourage the federal government to implement a 
comprehensive energy savings program for the federal government through 
energy efficiency investments.
  After all, I believe that if Wisconsin consumers and business have 
been converted to the wisdom of compact fluorescent light bulbs, 
efficient heating and cooling systems, weatherization, and energy 
saving computers, among the wide range of potential efficiency 
improvements, that the federal government promoting those actions 
should also make the same investments to the taxpayers' benefit.
  Section 152 of the Energy Policy Act mandated that Federal agencies 
use all cost-effective measures that could be implemented with less 
than a 10-year payback to reduce energy consumption in their facilities 
by 20 percent by the year 2000 compared to 1985 consumption levels. 
Both of the two previous Administrations have been committed to these 
types of common sense ``no-regrets'' energy savings strategies. After 
taking office, I have learned that among the most significant 
constraints to implementing more energy efficient practices in the 
federal government is the lack of sufficient funds to invest in energy 
efficient equipment.
  Section 162 of the Energy Policy Act of 1992 directed the Secretary 
of Energy to conduct a detailed study of options for financing energy 
and water conservation measures in Federal facilities as required under 
the Act and by subsequent Executive Orders. On June 3, 1997, the then 
Secretary of Energy (Mr. Pena) released that study. It documented a 
need for a $5.7 billion financial investment between 1996 and 2005 to 
meet the Energy Policy Act and Executive Order goals, a value which 
could vary from a low of $4.4 billion to a high of $7.1 billion given 
variability in both energy and water investment requirements.
  The best estimate, according to the same study of the total federal 
funding available to spend on energy and water efficiency improvements 
from various sources, including direct agency appropriations, energy 
savings performance contracts, and utility demand-side management 
programs, and appropriations to the Federal Energy Efficiency Fund, to 
the federal government to meet those needs over the same time period is 
$3.7 billion. Thus, under DOE's best estimate, at the federal level we 
face a potential shortfall of funds necessary to achieve our federal 
energy and water conservation objectives of $2 billion.
  In order to address this shortfall, I am pleased to join as a co-
sponsor of this legislation to create a federal energy revolving fund 
or ``energy bank.'' I hope this legislation can be one of the items on 
which we can reach bipartisan consensus in our efforts to develop a 
national energy strategy this Congress.
  Some in this body may be concerned that the existence of the current 
Federal Energy Efficiency Fund alleviates the need for additional 
federal conservation investment. The problem with the current fund, 
which operates as a grant program for agencies to make efficiency 
improvements, is that it does not contribute to the replenishment of 
capital resources because it does not have to be paid back and is 
therefore dependent upon appropriations.
  Under the legislation I join in cosponsoring with my colleague from 
Wisconsin today, federal agencies will be required to deposit 5 percent 
of their total utility payments in the proceeding fiscal year to 
capitalize the fund. After 2001, the Secretary of Energy will determine 
an amount necessary to ensure that the fund meets its obligations.
  Agencies will then be able to get a loan from the fund to finance 
efficiency projects, which they will be responsible for repaying with 
interest. The projects must use off-the-shelf technologies and must be 
cost effective. The best part of this approach is that the technologies 
are required to have a three-year pay back period, and, therefore, this 
legislation achieves some modest savings for the taxpayer. CBO scores 
this measure as saving $3 million over 5 years.
  There is a need to improve federal procurement of energy efficient 
technologies, and this measure is a positive, proactive measure to 
ensure that federal agencies specifically set aside funds to achieve 
this goal. The Senior Senator from Wisconsin (Mr. Kohl) and I look 
forward to working with the administration to advance this legislation 
as a piece of the country's overall greenhouse gas reductions strategy.
  In conclusion, I look forward to working with my Senior Senator on 
this issue. I believe that this is a unique opportunity for Senate 
colleagues to support legislation that is both fiscally responsible and 
environmentally sound.
                                 ______
                                 
      By Mr. KOHL:
  S. 96. A bill to ensure that employees of traveling sales crews are 
protected under the Fair Labor Standards Act of 1938 and under other 
provisions of law; to the Committee on Health, Education, Labor, and 
Pensions.


                  Traveling sales crew protection act

  Mr. KOHL. Mr. President, almost two years have gone by since the 
tragic accident in Janesville, WI, that brought to light the abuse of 
workers in the magazine sales industry. Since 1992, forty-two sales 
people have been killed or injured in similar crashes. Unfortunately 
deaths and injuries still occur. Parents are still separated from their 
children without knowing where they are or whether they are safe. Young 
people are not being paid for their work, and are being falsely listed 
as independent contractors. Roving sweatshops continue to travel our 
highways and solicit unlicensed in our neighborhoods.
  My legislation would go a long way toward ending this sad state of 
affairs.
  Today I have introduced legislation to crack down on abuses in the 
traveling sales crew industry. These companies employ crews who travel 
from city to city selling products door to door. Often times, however, 
these companies mistreat their workers and violate local, state, and 
federal labor law. Because they rapidly move from state to state, 
enforcement efforts are difficult if not impossible for local 
authorities.
  In 1987 former Senator Roth, as part of the Permanent Subcommittee on 
Investigations, looked into this industry, and was appalled at what he 
found. Incidents of verbal and physical abuse of workers were 
widespread. Young people were coerced into continuing to sell long 
after they wanted to leave through threats and taunts from their 
employers. When sellers were able to get free they were often unpaid or 
denied the bus ticket home they were promised when they signed up.
  The compensation system for the workers was also rigged to ensure 
that workers could not leave. Prospective sellers were promised big 
bucks when they were recruited, but soon found that decent pay was 
difficult to come by. Sellers were paid on a commission basis according 
to their sales, but they were also charged by the company for their 
accommodations and fined for small infractions like showing up late to 
meetings or sleeping on the van. Salespeople were not paid in a timely 
manner, but their earnings were kept on ``paper'' and the employees 
only drew a daily allowance to pay for food. Employees were seldom 
allowed to see the paper work that tracked their earnings so they had 
little idea about how much they are entitled. Many found that they were 
not able to keep up with the sales and fell in debt to the company. 
After working 12 hour days, six days a week for months, employees 
actually owed the company money! These young people became indentured 
servants, working long hours for only room and board.
  In the thirteen years since Senator Roth's investigation, nothing has

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changed. These abuses continue, and Congress should act.
  I am not one to frivolously engage in regulating business, but in 
this case the need for federal involvement is clear. Because of the 
mobility of these companies, states cannot crack down on these groups 
alone. They need federal help to eliminate the unscrupulous actors in 
the industry.
  The Traveling Sales Crew Protection Act would take important steps to 
eliminate employers who abuse their workers. First, it would no longer 
allow minors to be employed in this line of work. Door to door sales 
can be dangerous work and combined with the long hours and hazardous 
travel, creates a job too dangerous for children. Second, the bill 
would narrowly eliminate the exemption under the Fair Labor Standards 
Act for these specific kinds of operations. Covering these employees 
with minimum wages laws and overtime requirements protects them from 
becoming indentured servants to their employers through complex 
compensation systems. This provision is carefully crafted to cover only 
traveling sales crews; individuals who sell over the road or at trade 
shows would be unaffected. Lastly, the bill creates a licensing 
procedure through the Department of Labor to monitor those engaged in 
supervising and running these operations.
  These measures are important steps forward in a nationwide effort to 
eliminate this particularly abusive form of worker exploitation. I hope 
I will have my colleagues' support as I try to make the painful crash 
in Janesville, the last chapter in this shameful story.
  Mr. President, I ask unanimous consent that the text of my 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 96

       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 ``Traveling Sales Crew 
     Protection Act''.

               TITLE I--FAIR LABOR STANDARDS ACT OF 1938

     SEC. 101. APPLICATION OF PROVISIONS TO CERTAIN OUTSIDE 
                   SALESMAN.

       (a) In General.--Section 13 of the Fair Labor Standards Act 
     of 1938 (29 U.S.C. 213) is amended by adding at the end the 
     following:
       ``(k) For purposes of subsection (a)(1), and 
     notwithstanding any other provision of law, the term `outside 
     salesman' shall not include any individual employed in the 
     position of a salesman where the individual travels with a 
     group of salespeople, including a supervisor, team leader or 
     crew leader, and the employees in the group do not return to 
     their permanent residences at the end of the work day.''.
       (b) Limitation on Child Labor.--Section 12 of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 212) is amended by 
     adding at the end the following:
       ``(e) No individual under 18 years of age may be employed 
     in a position requiring the individual to engaged in door to 
     door sales or in related support work in a manner that 
     requires the individual to remain away from his or her 
     permanent residence for more than 24 hours.''.
       (c) Rules and Regulations.--The Secretary of Labor may 
     issue such rules and regulations as are necessary to carry 
     out the amendments made by this section, consistent with the 
     requirements of chapter 5 of title 5, United States Code.

             TITLE II--PROTECTION OF TRAVELING SALES CREWS

     SEC. 201. PURPOSE.

       It is the purpose of this title--
       (1) to remove the restraints on interstate commerce caused 
     by activities detrimental to traveling sales crew workers;
       (2) to require the employers of such workers to register 
     under this Act; and
       (3) to assure necessary protections for such employees.

     SEC. 202. DEFINITIONS.

       In this title:
       (1) Certificate of registration.--The term ``Certificate of 
     Registration'' means a Certificate issued by the Secretary 
     under section 203(c)(1).
       (2) Employ.--The term ``employ'' has the meaning given such 
     term by section 3(g) of the Fair Labor Standards Act of 1938 
     (29 U.S.C. 201(g)).
       (3) Goods.--The term ``goods'' means wares, products, 
     commodities, merchandise, or articles or subjects of 
     interstate commerce of any character, or any part or 
     ingredient thereof.
       (4) Person.--The term ``person'' means any individual, 
     partnership, association, joint stock company, trust, 
     cooperative, or corporation.
       (5) Sale, sell.--The terms ``sale'' or ``sell'' include any 
     sale, exchange, contract to sell, consignment for sale, 
     shipment for sale, or other disposition of goods.
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of Labor.
       (7) Traveling sales crew worker.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``traveling sales crew worker'' means an individual 
     who--
       (i) is employed as a salesperson or in related support 
     work;
       (ii) travels with a group of salespersons, including a 
     supervisor; and
       (iii) is required to be absent overnight from his or her 
     permanent place of residence.
       (B) Limitation.--The term ``traveling sales crew worker'' 
     does not include--
       (i) any individual who meets the requirements of 
     subparagraph (A) if such individual is traveling to a trade 
     show or convention; or
       (ii) any immediate family member of a traveling sales crew 
     employer.

     SEC. 203. REGISTRATION OF EMPLOYERS AND SUPERVISORS OF 
                   TRAVELING SALES CREW WORKERS.

       (a) Registration Requirement.--
       (1) In general.--No person shall engage in any form of 
     employment of traveling sales crew workers, unless such 
     person has a Certificate of Registration from the Secretary.
       (2) Supervisors.--A traveling sales crew employer shall not 
     hire, employ, or use any individual as a supervisor of a 
     traveling sales crew, unless such individual has a 
     Certificate of Registration from the Secretary.

       (3) Display of certificate of registration.--Each 
     registered traveling sales crew employer and each registered 
     traveling sales crew supervisor shall carry at all times 
     while engaging in traveling sales crew activities a 
     Certificate of Registration from the Secretary and, upon 
     request, shall exhibit that certificate to all persons with 
     whom they intend to deal.
       (b) Application for Registration.--Any person desiring to 
     be issued a Certificate of Registration from the Secretary, 
     as either a traveling sales crew employer or traveling sales 
     crew supervisor, shall file with the Secretary a written 
     application that contains the following:
       (1) A declaration, subscribed and sworn to by the 
     applicant, stating the applicant's permanent place of 
     residence, the type or types of sales activities to be 
     performed, and such other relevant information as the 
     Secretary may require.
       (2) A statement identifying each vehicle to be used to 
     transport any member of any traveling sales crew and, if the 
     vehicle is or will be owned or controlled by the applicant, 
     documentation showing that the applicant is in compliance 
     with the requirements of section 204(d) with respect to each 
     such vehicle.
       (3) A statement identifying, with as much specificity as 
     the Secretary may require, each facility or real property to 
     be used to house any member of any traveling sales crew and, 
     if the facility or real property is or will be owned or 
     controlled by the applicant, documentation showing that the 
     applicant is in compliance with section 204(e) with respect 
     to each such facility or real property.
       (4) A set of fingerprints of the applicant.
       (5) A declaration, subscribed and sworn to by the 
     applicant, consenting to the designation by a court of the 
     Secretary as an agent available to accept service of summons 
     in any action against the applicant, if the applicant has 
     left the jurisdiction in which the action is commenced or 
     otherwise has become unavailable to accept service.
       (c) Issuance of Certificate of Registration.--
       (1) In general.--In accordance with regulations, and after 
     any investigation which the Secretary may deem appropriate, 
     the Secretary shall issue a Certificate of Registration, as 
     either a traveling sales crew employer or traveling sales 
     crew supervisor, to any person who meets the standards for 
     such registration.
       (2) Refusal to issue or renew, suspension and revocation.--
     The Secretary may refuse to issue or renew, or may suspend or 
     revoke, a Certificate of Registration if the applicant for or 
     holder or the Certificate--
       (1) has knowingly made any misrepresentation in the 
     application for such Certificate of Registration;
       (2) is not the real party in interest with respect to the 
     application or Certificate of Registration and the real party 
     in interest is a person who--
       (A) has been refused issuance or renewal of a Certificate;
       (B) has had a Certificate suspended or revoked; or
       (C) does not qualify for a Certificate under this section;
       (3) has failed to comply with this title or any regulation 
     promulgated under this title;
       (4) has failed--
       (A) to pay any court judgment obtained by the Secretary or 
     any other person under this title or any regulation 
     promulgated under this title; or
       (B) to comply with any final order issued by the Secretary 
     as a result of a violation of this title or any regulation 
     promulgated under this title;
       (5) has been convicted within the 5 years preceding the 
     date on which the application was filed or the Certificate 
     was issued--

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       (A) of any crime under Federal or State law relating to the 
     sale, distribution or possession of alcoholic beverages or 
     narcotics, in connection with or incident to any traveling 
     sales crew activities;
       (B) of any crime under Federal or State law relating to 
     child abuse, neglect, or endangerment; or
       (C) of any felony under Federal or State law involving 
     robbery, bribery, extortion, embezzlement, grand larceny, 
     burglary, arson, murder, rape, assault with intent to kill, 
     assault which inflicts grievous bodily injury, prostitution, 
     peonage, or smuggling or harboring individuals who have 
     entered the United States illegally;
       (6) has been found to have violated paragraph (1) or (2) of 
     section 274A(a) of the Immigration and Nationality Act (8 
     U.S.C. 1324a(a)(1) or (2));
       (7) has failed to comply with any bonding or security 
     requirements as the Secretary may establish; or
       (8) has failed to satisfy any other requirement which the 
     Secretary may by regulation establish.
       (d) Administrative Proceedings and Judicial Review.--
       (1) In general.--A person who is refused the issuance or 
     renewal of a Certificate or Registration, or whose 
     Certificate of Registration is suspended or revoked, shall be 
     afforded an opportunity for an agency hearing, upon a request 
     made within 30 days after the date of issuance of the notice 
     of refusal, suspension, or revocation. If no hearing is 
     requested as provided for in this subsection, the refusal, 
     suspension, or revocation shall constitute a final and 
     unappealable order.
       (2) Hearing.--If a hearing is requested under paragraph 
     (1), the initial agency decision shall be made by an 
     administrative law judge, with all issues to be determined on 
     the record pursuant to section 554 of title 5, United States 
     Code, and such decision shall become the final order unless 
     the Secretary modifies or vacates the decision. Notice of 
     intent to modify or vacate the decision of the administrative 
     law judge shall be issued to the parties within 90 days after 
     the decision of the administrative law judge. A final order 
     which takes effect under this paragraph shall be subject to 
     review only as provided under paragraph (3).
       (3) Review by court.--Any person against whom an order has 
     been entered after an agency hearing under this subsection 
     may obtain review by the United States district court for any 
     district in which the person is located, or the United States 
     District Court for the District of Columbia, by filing a 
     notice of appeal in such court within 30 days from the date 
     of such agency order, and simultaneously sending a copy of 
     such notice by registered mail to the Secretary. The 
     Secretary shall promptly certify and file in such court the 
     record upon which the agency order was based. The findings of 
     the Secretary shall be set aside only if found to be 
     unsupported by substantial evidence as provided by section 
     706(2)(E) of title 5, United States code. Any final decision, 
     order, or judgment of such District Court concerning such 
     review shall be subject to appeal as provided for in chapter 
     83 of title 28, United States Code.
       (e) Transfer or Assignment of Certificate; Expiration; 
     Renewal.--
       (1) Limitation.--A Certificate of Registration may not be 
     transferred or assigned.
       (2) Expiration and extension.--
       (A) Expiration.--Unless earlier suspended or revoked, a 
     Certificate of Registration shall expire 12 months from the 
     date of issuance.
       (B) Extension.--A Certificate of Registration may be 
     temporarily extended, at the Secretary's discretion, by the 
     filing of an application with the Secretary at least 30 days 
     prior to the Certificate's expiration date.
       (3) Renewal.--A Certificate of Registration may be renewed 
     through the application process provided for in subsections 
     (b) and (c).
       (f) Notice of Address Change; Amendment of Certificate of 
     Registration.--During the period for which a Certificate of 
     Registration is in effect, the traveling sales crew employer 
     or supervisor named on the Certificate shall--
       (1) provide to the Secretary within 30 days a notice of 
     each change of permanent place of residence; and
       (2) apply to the Secretary to amend the Certificate of 
     Registration whenever the person intends to--
       (A) engage in any form of traveling sales crew activity not 
     identified on the Certificate;
       (B) use or cause to be used any vehicle not covered by the 
     Certificate to transport any traveling sales crew worker; or
       (C) use or cause to be used any facility or real property 
     not covered by the Certificate to house any traveling sales 
     crew worker.
       (g) Filing Fee.--The Secretary shall require the payment of 
     a fee by an employer filing an application for the issuance 
     or renewal of a Certificate of Registration. The amount of 
     the fee shall be $500 for a Certificate for an employer and 
     $50 for a Certificate for a supervisor. Sums collected 
     pursuant to this section shall be applied by the Secretary 
     toward reimbursement of the costs of administering this 
     title.

     SEC. 204. OBLIGATIONS OF EMPLOYERS OF TRAVELING SALES CREW 
                   WORKERS.

       (a) Disclosure of Terms and Conditions of Employment.--
       (1) Written disclosure.--At the time of recruitment, each 
     traveling sales crew worker shall be provided with a written 
     disclosure of the following information, which shall be 
     accurate and complete to the best of the employer's 
     knowledge:
       (A) The place or places of employment, stated with as much 
     specificity as possible.
       (B) The wage rate or rates to be paid.
       (C) The type or types of work on which the worker may be 
     employed.
       (D) The period of employment.
       (E) The transportation, housing, and any other employee 
     benefit to be provided, and any costs to be charged to the 
     worker for each such benefit.
       (F) The existence of any strike or other concerted work 
     stoppage, slowdown, or interruption of operations by 
     employees at the place of employment.
       (G) Whether State workers' compensation insurance is 
     provided and, if so, the name of the State workers' 
     compensation insurance carrier, the name of the policyholder 
     of such insurance, the name and the telephone number of each 
     person who must be notified of an injury or death, and the 
     time period within which such notice must be given.
       (2) Records and statements.--Each employer of traveling 
     sales crew workers shall--
       (A) with respect to each such worker, make, keep, and 
     preserve records for 3 years of the--
       (i) basis on which wages are paid;
       (ii) number of piecework units earned, if paid on a 
     piecework basis;
       (iii) number of hours worked;
       (iv) total pay period earnings;
       (v) specific sums withheld and the purpose of each sum 
     withheld; and
       (vi) net pay; and
       (B) provide to each worker for each pay period, an itemized 
     written statement of the information required under 
     subparagraph (A).
       (b) Payment of Wages When Due.--Each traveling sales crew 
     worker shall be paid the wages owed that worker when due. The 
     payment of wages shall be in United States currency or in a 
     negotiable instrument such as a bank check. The payment of 
     wages shall be accompanied by the written disclosure required 
     by subsection (a)(2)(B).
       (c) Costs of Goods, Services, and Business Expenses.--
       (1) Prohibition.--No employer of traveling sales crew 
     workers shall--
       (A) require any worker to purchase any goods or services 
     solely from such employer; or
       (B) impose on any worker any of the employer's business 
     expenses, such as the cost of maintaining and operating a 
     vehicle used to transport the traveling sales crew.
       (2) Inclusion as part of wages.--An employer may include as 
     part of the wages paid to a traveling sales crew worker the 
     reasonable cost to the employer of furnishing board, lodging, 
     or other facilities to such worker, so long as--
       (A) such facilities are customarily furnished by such 
     employer to the employees of the employer; and
       (B) such cost does not exceed the fair market value of such 
     facility and does not include any profit to the employer.
       (d) Safety and Health in Transportation.--
       (1) Standards.--An employer of traveling sales crew workers 
     shall provide transportation for such workers in a manner 
     that is consistent with the following standards:
       (A) The employer shall ensure that each vehicle which the 
     employer uses or causes to be used for such transportation 
     conforms to the standards prescribed by the Secretary under 
     paragraph (2) and conforms to other applicable Federal and 
     State safety standards.
       (B) The employer shall ensure that each driver of each such 
     vehicle has a valid and appropriate license, as provided by 
     State law, to operate the vehicle.
       (C) The employer shall have an insurance policy or fidelity 
     bond in accordance with subsection (c).
       (2) Promulgation by secretary.--The Secretary shall 
     prescribe, by regulation, such safety and health standards as 
     may be appropriate for vehicles used to transport traveling 
     sales crew workers. In establishing such standards, the 
     Secretary shall consider--
       (A) the type of vehicle used;
       (B) the passenger capacity of the vehicle;
       (C) the distance which such workers will be carried in the 
     vehicle;
       (D) the type of roads and highways on which such workers 
     will be carried in the vehicle;
       (E) the extent to which a proposed standard would cause an 
     undue burden on an employer of traveling sales crew workers; 
     and
       (F) any standard prescribed by the Secretary of 
     Transportation under part II of the Interstate Commerce Act 
     (49 U.S.C. 301 et seq.) or any successor provision of 
     subtitle IV of title 49, United States Code.
       (e) Safety and Health in Housing.--An employer of traveling 
     sales crew workers shall provide housing for such workers in 
     a manner that is consistent with the following standards:
       (1) If the employer owns or controls the facility or real 
     property which is used for

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     housing traveling sales crew workers, the employer shall be 
     responsible for ensuring that the facility or real property 
     complies with substantive Federal and State safety and health 
     standards applicable to that housing. Prior to occupancy by 
     such workers, the facility or real property shall be 
     certified by a State or local health authority or other 
     appropriate agency as meeting applicable safety and health 
     standards. Written notice shall be posted in the facility or 
     real property, prior to and throughout the occupancy by such 
     workers, informing such workers that the applicable safety 
     and health standards are met.
       (2) If the employer does not own or control the facility or 
     real property which is used for housing traveling sales crew 
     workers, the employer shall be responsible for ensuring that 
     the owner or operator of such facility or real property 
     complies with substantive Federal and State safety and health 
     standards applicable to that housing. Such assurance by the 
     employer shall include the verification that the owner or 
     operator of such facility or real property is licensed and 
     insured in accordance with all applicable State and local 
     laws. The employer shall obtain such assurance prior to 
     housing any workers in the facility or real property.
       (f) Insurance of Vehicles; Workers' Compensation 
     Insurance.--
       (1) Insurance.--An employer of traveling sales crew workers 
     shall ensure that there is in effect, for each vehicle used 
     to transport such workers, an insurance policy or a liability 
     bond which insures the employer against liability for damage 
     to persons and property arising from the ownership, 
     operation, or the causing to be operated of such vehicle for 
     such purpose. The level of insurance or liability bond 
     required shall be determined by the Secretary considering at 
     least the factors set forth in subsection (d)(2) and any 
     relevant State law.
       (2) Workers' compensation.--If an employer of traveling 
     sales crew workers is the employer of such workers for 
     purposes of a State workers' compensation law and such 
     employer provides workers' compensation coverage for such 
     workers as provided for by such State law, the following 
     modifications to the requirements of paragraph (1) shall 
     apply:
       (A) No insurance policy or liability bond shall be required 
     of the employer if such workers are transported only under 
     circumstances for which there is workers' compensation 
     coverage under such State law.
       (B) An insurance policy or liability bond shall be required 
     of the employer for all circumstances under which workers' 
     compensation coverage for the transportation of such workers 
     is not provided under such State law.

     SEC. 205. ENFORCEMENT PROVISIONS.

       (a) Criminal Sanctions.--An employer who willfully and 
     knowingly violates this title, or any regulation promulgated 
     under this title, shall be fined not more than $10,000 or 
     imprisoned for not to exceed 1 year, or both. Upon conviction 
     for any subsequent violation of this title, or any such 
     regulation, an employer shall be fined not more than $50,000 
     or imprisoned for not to exceed 3 years, or both.
       (b) Judicial Enforcement.--
       (1) Injunctive relief.--The Secretary may petition any 
     appropriate district court of the United States for temporary 
     or permanent injunctive relief if the Secretary determines 
     that this title, or any regulation promulgated under this 
     title, has been violated.
       (2) Solicitor of labor.--Except as provided in section 
     518(a) of title 28, United States Code, relating to 
     litigation before the Supreme Court, the Solicitor of Labor 
     may appear for and represent the Secretary in any civil 
     litigation brought under this title, but all such litigation 
     shall be subject to the direction and control of the Attorney 
     General.
       (c) Administrative Sanctions; Proceedings.--
       (1) Civil money penalty.--Subject to paragraph (2), an 
     employer that violates this title, or any regulation 
     promulgated under this title, may be assessed a civil money 
     penalty of not more than $10,000 for each such violation.
       (2) Determination of penalty.--In determining the amount of 
     any penalty to be assessed under paragraph (1), the Secretary 
     shall take into account--
       (A) the previous record of the employer in terms of 
     compliance with this title and the regulations promulgated 
     under this title; and
       (B) the gravity of the violation.
       (3) Proceedings.--
       (A) In general.--An employer that is assessed a civil money 
     penalty under this subsection shall be afforded an 
     opportunity for an agency hearing, upon request made within 
     30 days after the date of issuance of the notice of 
     assessment. In such hearing, all issues shall be determined 
     on the record pursuant to section 554 of title 5, United 
     States Code. If no hearing is requested as provided for in 
     this paragraph, the assessment shall constitute a final and 
     unappealable order.
       (B) Administrative law judge.--If a hearing is requested 
     under subparagraph (A), the initial agency decision shall be 
     made by an administrative law judge, and such decision shall 
     become the final order unless the Secretary modifies or 
     vacates this decision. Notice of intent to modify or vacate 
     the decision of the administrative law judge shall be issued 
     to the parties within 90 days after the decision of the 
     administrative law judge. A final order which takes effect 
     under this paragraph shall be subject to review only as 
     provided for under subparagraph (C).
       (C) Review.--An employer against whom an order imposing a 
     civil money penalty has been entered after an agency hearing 
     under this section may obtain review by the United States 
     district court for any district in which the employer is 
     located, or the United States District Court for the District 
     of Columbia, by filing a notice of appeal in such court 
     within 30 days from the date of such order and simultaneously 
     sending a copy of such notice by registered mail to the 
     Secretary. The Secretary shall promptly certify and file in 
     such court the record upon which the penalty was imposed. The 
     findings of the Secretary shall be set aside only if found to 
     be unsupported by substantial evidence as provided by section 
     706(2)(E) of title 5, United States Code. Any final decision, 
     order, or judgment of such District Court concerning such 
     review shall be subject to appeal as provided in chapter 83 
     of title 28, United States Code.
       (D) Failure to pay.--If any person fails to pay an 
     assessment after it has become a final and unappealable order 
     under this paragraph, or after the court has entered final 
     judgment in favor of the agency, the Secretary shall refer 
     the matter to the Attorney General, who shall recover the 
     amount assessed by action in the appropriate United States 
     district court. In such action, the validity and 
     appropriateness of the final order imposing the penalty shall 
     not be subject to review.
       (E) Payment of penalties.--All penalties collected under 
     authority of this section shall be paid into the Treasury of 
     the United States.
       (d) Private Right of Action.--
       (1) in general.--Any traveling sales crew worker aggrieved 
     by a violation of this title, or any regulation promulgated 
     under this title, by an employer may file suit in any 
     district court of the United States having jurisdiction over 
     the parties, without respect to the amount in controversy and 
     without regard to exhaustion of any alternative 
     administrative remedies provided for in this title.
       (2) Damages.--
       (A) In general.--If the court in an action under paragraph 
     (1) finds that the defendant intentionally violated a 
     provision of this Act, or a regulation promulgated under this 
     Act, the court may award--
       (i) damages up to and including an amount equal to the 
     amount of actual damages;
       (ii) statutory damages of not more than $1,000 per 
     plaintiff per violation or, if such complaint is certified as 
     a class action, not more than $1,000,000 for all plaintiffs 
     in the class; or
       (iii) other equitable relief.
       (B) Determination of amount.--In determining the amount of 
     damages to be awarded under subparagraph (A), the court may 
     consider whether an attempt was made to resolve the issues in 
     dispute before the resort to litigation.
       (C) Workers' compensation.--
       (i) In general.--Notwithstanding any other provision of 
     this title, where a State workers' compensation law is 
     applicable and coverage is provided for a traveling sales 
     crew worker, the workers' compensation benefits shall be the 
     exclusive remedy for loss of such worker under this title in 
     the case of bodily injury or death in accordance with such 
     State's workers' compensation law.
       (ii) Limitation.--The exclusive remedy provided for under 
     clause (i) precludes the recovery under subparagraph (A) of 
     actual damages for loss from an injury or death but does not 
     preclude recovery under such subparagraph for statutory 
     damages (as provided for in clause (iii)) or equitable 
     relief, except that such relief shall not include back or 
     front pay or in any manner, directly or indirectly, expand or 
     otherwise alter or affect--

       (I) a recovery under a State workers' compensation law; or
       (II) rights conferred under a State workers' compensation 
     law.

       (iii) Statutory damages.--In an action in which a claim for 
     actual damages is precluded as provided for in clause (ii), 
     the court shall award statutory damages of not more than 
     $20,000 per plaintiff per violation or, in the case of a 
     class action, not more than $1,000,000 for all plaintiffs in 
     the class, if the court finds any of the following:

       (I) The defendant violated section 204(d) by knowingly 
     requiring or permitting a driver to drive a vehicle for the 
     transportation of the plaintiff or plaintiffs while under the 
     influence of alcohol or a controlled substance (as defined in 
     section 102 of the Controlled Substances Act (21 U.S.C. 
     802)), the defendant had actual knowledge of the driver's 
     condition, such violation resulted in the injury or death of 
     the plaintiff or plaintiffs, and such injury or death arose 
     out of and in the course of employment as defined under the 
     State worker's compensation law.
       (II) The defendant was found by the court or was determined 
     in a previous administrative or judicial proceeding to have 
     violated a safety standard prescribed by the Secretary

[[Page 483]]

     under section 204 and such violation resulted in the injury 
     or death of the plaintiff or plaintiffs.
       (III) The defendant willfully disabled or removed a safety 
     device prescribed by the Secretary under section 204, or the 
     defendant in conscious disregard of the requirements of such 
     section failed to provide a safety device required by the 
     Secretary, and such disablement, removal, or failure to 
     provide a safety device resulted in the injury or death of 
     the plaintiff or plaintiffs.
       (IV) At the time of the violation of section 204, which 
     resulted in the injury or death of the plaintiff or 
     plaintiffs, the employer or the supervisor of the traveling 
     sales crew did not have a Certificate of Registration in 
     accordance with section 203.

       (iv) Determination of amount.--For purposes of determining 
     the amount of statutory damages due to a plaintiff under this 
     subparagraph, multiple infractions of a single provision of 
     this title, or of regulations promulgated under this title, 
     shall constitute a single violation.
       (D) Attorney's fee.--The court shall, in addition to any 
     judgment awarded to the plaintiff or plaintiffs under this 
     paragraph, allow a reasonable attorney's fee to be paid by 
     the defendant or defendants, and costs of the action.
       (E) Appeals.--Any civil action brought under this 
     subsection shall be subject to appeal as provided for in 
     chapter 83 of title 28, United States Code.
       (e) Discrimination Prohibited.--
       (1) In general.--No person shall intimidate, threaten, 
     restrain, coerce, blacklist, discharge, or in any manner 
     discriminate against any traveling sales crew worker because 
     such worker has, with just cause, filed any complaint or 
     instituted, or caused to be instituted, any proceeding under 
     or related to this title, or has testified or is about to 
     testify in any such proceedings, or because of the exercise, 
     with just cause, by such worker on behalf of the worker or 
     others of any right or protection afforded by this title.
       (2) Complaint.--
       (A) In general.--A traveling sales crew worker who 
     believes, with just cause, that such worker has been 
     discriminated against in violation of this subsection may, 
     within 12 months of the date of such violation, file a 
     complaint with the Secretary alleging such discrimination.
       (B) Investigation.--Upon receipt of a complaint under 
     subparagraph (A), the Secretary shall cause such 
     investigation to be made as the determines to be appropriate.
       (C) Actions.--If upon an investigation under subparagraph 
     (B), the Secretary determines that the provisions of this 
     subsection have been violated, the Secretary shall bring an 
     action in any appropriate United States district court 
     against the person involved.
       (D) Relief.--In any action under subparagraph (C), the 
     United States district court shall have jurisdiction, for 
     cause shown, to restrain violations of this subsection and 
     order all appropriate relief, including rehiring or 
     reinstatement of the worker, with back pay, or damages.
       (f) Waiver of Rights.--Agreements by workers purporting to 
     waive or to modify their rights under this title shall be 
     void as contrary to public policy, except that a waiver or 
     modification of rights in favor of the Secretary shall be 
     valid for purposes of enforcement of this title.
       (g) Authority to Obtain Information.--
       (1) In general.--To carry out this title, the Secretary, 
     either pursuant to a complaint or otherwise, shall, as may be 
     appropriate, investigate and, in connection with such 
     investigation, enter and inspect such places (including 
     housing and vehicles) and such records (and make 
     transcriptions thereof), question such persons and gather 
     such information to determine compliance with this title, or 
     regulations promulgated under this title.
       (2) Production and receipt of evidence.--The Secretary may 
     issue subpoenas requiring the attendance and testimony of 
     witnesses or the production of any evidence in connection 
     with investigations under paragraph (1). The Secretary may 
     administer oaths, examine witnesses, and receive evidence. 
     For the purpose of any hearing or investigation provided for 
     in this title, the authority contained in sections 9 and 10 
     of the Federal Trade Commission Act (15 U.S.C. 49 and 50), 
     relating to the attendance of witnesses and the production of 
     books, papers, and documents, shall be available to the 
     Secretary.
       (3) Confidentiality.--The Secretary shall conduct 
     investigations under paragraph (1) in a manner which protects 
     the confidentiality of any complainant or other party who 
     provides information to the Secretary in good faith.
       (4) Violation.--It shall be violation of this title for any 
     person to unlawfully resist, oppose, impede, intimidate, or 
     interfere with any official of the Department of Labor 
     assigned to perform any investigation, inspection, or law 
     enforcement function pursuant to this title during the 
     performance of such duties.
       (h) State Laws and Regulations; Government Agencies.--
       (1) Relation to state laws.--This title is intended to 
     supplement State law, and compliance with this title shall 
     not be construed to excuse any person from compliance with 
     appropriate State laws and regulations.
       (2) Agreements.--The Secretary may enter into agreements 
     with Federal and State agencies--
       (A) to use their facilities and services;
       (B) to delegate to Federal and State agencies such 
     authority, other than rulemaking, as may be useful in 
     carrying out this title; and
       (C) to allocate or transfer funds to, or otherwise pay or 
     reimburse, such agencies for expenses incurred pursuant to 
     agreements under this paragraph.
       (i) Rules and Regulations.--The Secretary may issue such 
     rules and regulations as may be necessary to carry out this 
     title, consistent with the requirements of chapter 5 of title 
     5, United States Code.
                                 ______
                                 
      By Mr. KOHL:
  S. 97. A bill to amend the Internal Revenue Code of 1986 with respect 
to the eligibility of veterans for mortgage revenue bond financing, and 
for other purposes; to the Commission on Finance.


                        veterans home loan bill

  Mr. KOHL. Mr. President, I rise today to introduce legislation that 
will help Wisconsin and several other States, including Oregon, Texas, 
Alaska, and California, extend one of our most successful veterans 
programs to Persian Gulf war participants and others. This bill will 
amend the eligibility requirements for mortgage revenue bond financing 
for State veterans housing programs.
  State run plans do an excellent job of helping vets bridge the gap to 
home ownership, and are often more successful than our own federal 
plan. This bill gives states the tools they need to help veterans.
  Wisconsin uses this tax-exempt bond authority to assist veterans in 
purchasing their first home. Under rules adopted by Congress in 1984, 
this program excluded from eligibility veterans who served after 1977. 
This bill would simply remove that restriction.
  At a time when everyone is looking for ways to make military service 
more appealing, we should not overlook the role state sponsored 
benefits, like home loan programs, can reward our veterans. Wisconsin 
and the other eligible States simply want to maintain a principle that 
we in the Senate have also strived to uphold--that veterans of the 
Persian Gulf war should not be treated less generously than those of 
past wars. This bill meets a commitment to our service members and 
levels the benefits between Persian Gulf vets and the vets of the Cold 
War era.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 97

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

     SECTION 1. ELIGIBILITY OF VETERANS FOR MORTGAGE REVENUE BONDS 
                   DETERMINED BY STATES.

       (a) In General.--Paragraph (4) of section 143(l) of the 
     Internal Revenue Code of 1986 (defining qualified veteran) is 
     redesignated as paragraph (6) of such section and amended to 
     read as follows:
       ``(6) Qualified veteran.--For purposes of this subsection, 
     the term ``qualified veteran'' means any veteran--
       ``(A) who meets such requirements as may be imposed by the 
     State law pursuant to which qualified veterans' mortgage 
     bonds are issued,
       ``(B) who applied for the financing before the date 30 
     years after the last date on which such veteran left active 
     service, and
       ``(C) in the case of financing provided by the proceeds of 
     bonds issued during the period beginning July 19, 1984, and 
     ending June 30, 2001, who served on active duty at some time 
     before January 1, 1977.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 2. STATE CAP RESTRICTIONS.

       (a) In General.--Section 143(l) of the Internal Revenue 
     Code of 1986 (relating to additional requirements for 
     qualified veterans' mortgage bonds), as amended by section 
     1(a), is amended by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) Subcap restriction.--
       ``(A) In general.--An issue meets the requirements of this 
     paragraph only if the amount of bonds issued pursuant thereto 
     that is to be used to provide financing to mortgagors who 
     have not served on active duty at some time before January 1, 
     1977, when added to the amount of the aggregate

[[Page 484]]

     qualified veterans' mortgage bonds previously issued by the 
     State during the calendar year that is to be so used, does 
     not exceed the subcap amount.
       ``(B) Subcap amount.--
       ``(i) In general.--The subcap amount for any calendar year 
     is an amount equal to the applicable percentage of the State 
     veterans limit for such year.
       ``(ii) Applicable percentage.--For purposes of clause (i), 
     the applicable percentage shall be determined under the 
     following table:

                                                             Applicable
``Calendar year:                                            Percentage:
  2002..........................................................10 ....

  2003..........................................................20 ....

  2004..........................................................30 ....

  2005..........................................................40 ....

  2006 and thereafter........................................50.''.....

       (b) Restriction on Overall State Cap.--Paragraph (3)(B) of 
     section 143(l) of such Code (relating to State veterans 
     limit) is amended by adding at the end the following flush 
     sentence:

     ``But in no event shall the State veterans limit exceed 
     $340,000,000 for any calendar year after 2002.''.
       (c) Conforming Amendment.--The matter preceding paragraph 
     (1) of section 143(l) of such Code is amended by striking 
     ``and (3)'' and inserting ``, (3), and (4)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 2001.
                                 ______
                                 
      Mr. KOHL (for himself and Mr. Graham):
  S. 99. A bill to amend the Internal Revenue Code of 1986 to provide a 
credit against tax for employers who provide child care assistance for 
dependents of their employees, and for other purposes; to the Committee 
on Finance.


                 child care infrastructure act of 2001.

  Mr. KOHL. Mr. President, I rise today to reintroduce the Child Care 
Infrastructure Act, along with Senator Graham of Florida. Senator 
Graham and I have both worked on child care issues for many years, and 
I am pleased that we have combined our efforts to introduce this bill 
together.
  Mr. President, we have talked a great deal in recent years, as well 
as in the recent campaign, about giving working families the tools they 
need to succeed. And while some of us may disagree on the details, I 
think we can all agree upon one basic premise: Working couples who 
decide to have a family should not be penalized because they both also 
choose to keep working. But unfortunately today, many working parents 
do not have access to one of the critical tools they need to succeed at 
work: quality child care.
  Working families spend a large proportion of their income on child 
care--from 8 percent for families above the poverty line to 18 percent 
for those below. And nothing adds more to these high costs than the 
dramatic shortage of quality child care in this country. The Children's 
Defense Fund states in a recent report that ``parents and experts 
report that child care is in short supply--particularly for some age 
groups and for certain types of care--and that some communities have 
little or no licensed care.''
  This shortage of quality child care is not just inconvenient. It is 
dangerous, and could jeopardize the ability of children to succeed 
later in life. Research on the brain has confirmed that the most 
significant period in a child's development and education is between 
the years 0-3. Good early childhood programs can improve children's 
chances of long-term success in school, higher earnings as adults, and 
decreased involvement with the criminal justice system.
  But the lack of quality child care is not only harmful to children. 
It places a tremendous strain on parents. Full-time child care can cost 
$4,000 to $6,000 per year, and many working families simply cannot find 
affordable, quality child care for their young children.
  And make no mistake: the lack of reliable child care has a direct 
impact on businesses and our economy. Parents who can't find reliable 
child care are more likely to miss work, and the lack of stable child 
care makes it more difficult for parents to be productive while at 
work.
  Clearly, we all have a stake in increasing the supply of quality 
child care for families. It will take a sustained effort from families, 
from government--and yes, from businesses too--to build the child care 
infrastructure necessary to make sure children, parents, and businesses 
succeed.
  My legislation brings all these players together in a simple, common-
sense way. We provide a tax credit to businesses who are willing to 
take action to increase the supply of quality child care. The credit is 
available for child care activities such as:
  Expenses related to the acquisition, expansion, or repair of an on- 
or near-site day care center, after-hours care facility, or sick-child 
facility. This credit would also be available for a consortium of 
businesses that joined together to create a child care center.
  Direct company subsidization of the operating costs of a child care 
facility.
  Direct company payments or reimbursements to employees for their 
child care expenses.
  A company's reservation for their employees of child care slots in a 
licensed child care facility.
  Company expenditures on training and continuing education for child 
care workers.
  The credit would be 25 percent for these activities, and 10 percent 
for the cost of a company's contract with a non-profit Child Care 
Resource and Referral service, which help parents locate child care in 
their communities. The credit is capped at $150,000 per year. 
Safeguards in the legislation ensure that the companies receive the tax 
credits for capital expenditures that go toward facilities that stay in 
operation for several years.
  In 1997, the Senate passed a similar proposal by a bipartisan vote of 
72-28. Versions of this tax credit have been included in most major 
child care legislation introduced by Democrats and Republicans in the 
106th Congress, including the tax bill passed by the Senate in July of 
1999.
  This bill makes us all partners in ensuring we have enough quality 
child care for working families. I hope my colleagues will continue 
their long-time support of the child care infrastructure tax credit, 
and I look forward to working with all of you to pass it this year.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record following my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 99

       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 ``Child Care Infrastructure 
     Act of 2001''.

     SEC. 2. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD 
                   CARE ASSISTANCE.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by adding at the end the 
     following:

     ``SEC. 45E. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to the sum 
     of--
       ``(1) 25 percent of the qualified child care expenditures, 
     and
       ``(2) 10 percent of the qualified child care resource and 
     referral expenditures,
     of the taxpayer for such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $150,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--
       ``(A) In general.--The term `qualified child care 
     expenditure' means any amount paid or incurred--
       ``(i) to acquire, construct, rehabilitate, or expand 
     property--

       ``(I) which is to be used as part of a qualified child care 
     facility of the taxpayer,
       ``(II) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(III) which does not constitute part of the principal 
     residence (within the meaning of section 121) of the taxpayer 
     or any employee of the taxpayer,

       ``(ii) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees, to scholarship programs, and to the 
     providing of increased compensation to employees with higher 
     levels of child care training,
       ``(iii) under a contract with a qualified child care 
     facility to provide child care services to employees of the 
     taxpayer, or
       ``(iv) to reimburse an employee for expenses for child care 
     which enables the employee to be gainfully employed including 
     expenses related to--

[[Page 485]]

       ``(I) day care and before and after school care,
       ``(II) transportation associated with such care, and
       ``(III) before and after school and holiday programs 
     including educational and recreational programs and camp 
     programs.

       ``(B) Fair market value.--The term `qualified child care 
     expenditures' shall not include expenses in excess of the 
     fair market value of such care.
       ``(2) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including the licensing of the facility as a 
     child care facility.

     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 121) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--
       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) if the facility is the principal trade or business 
     of the taxpayer, at least 30 percent of the enrollees of such 
     facility are dependents of employees of the taxpayer, and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(3) Qualified child care resource and referral 
     expenditure.--
       ``(A) In general.--The term `qualified child care resource 
     and referral expenditure' means any amount paid or incurred 
     under a contract to provide child care resource and referral 
     services to an employee of the taxpayer.
       ``(B) Nondiscrimination.--The services shall not be treated 
     as qualified unless the provision of such services (or the 
     eligibility to use such services) does not discriminate in 
     favor of employees of the taxpayer who are highly compensated 
     employees (within the meaning of section 414(q)).
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--
       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer described in subsection (c)(1)(A) with respect to 
     such facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

                                                         The applicable
                                                              recapture
                                    ``If the recapture evpercentage is:
    Years 1-3....................................................100   
    Year 4........................................................85   
    Year 5........................................................70   
    Year 6........................................................55   
    Year 7........................................................40   
    Year 8........................................................25   
    Years 9 and 10................................................10   
    Years 11 and thereafter........................................0.  
       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the taxable year in which the 
     qualified child care facility is placed in service by the 
     taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If, during any taxable year, 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.''.
       (b) Conforming Amendments.--
       (1) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended by striking ``plus'' at the end of paragraph (12), by 
     striking the period at the end of paragraph (13) and 
     inserting ``, plus'', and by adding at the end the following:
       ``(14) the employer-provided child care credit determined 
     under section 45E.''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     at the end the following:

``Sec. 45E. Employer-provided child care credit.''
       (3) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (26), by striking the period 
     at the end of paragraph (27) and inserting ``, and'', and by 
     adding at the end the following:
       ``(28) in the case of a facility with respect to which a 
     credit was allowed under section 45E, to the extent provided 
     in section 45E(f)(1).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

  Mr. GRAHAM. Mr. President, I am extremely pleased to join my 
colleague Senator Kohl in introducing the Child Care Infrastructure Act 
of 2001. This measure will make child care more accessible and 
affordable to the many millions of Americans who find it not only 
important, but necessary, to work.
  This legislation grants tax credits to employers who assist their 
employees with child care expenses, either by providing child care on-
site, reimbursing employees for the cost of child care, or establishing 
a referral service to help employees locate a child care provider.
  An employer is eligible for an income tax credit equal to 25 percent 
of its child care expenses. Expenses eligible for the credit include:
  The cost of acquiring, constructing, rehabilitating or expanding 
employer property used to provide employees with child care;
  the cost of operating an employer child care facility;
  costs incurred under a contract with a qualified child care facility 
to provide child care services to employees; and
  to reimburse employees for the cost of child care.
  Employers may also be eligible for a separate credit equal to 10 
percent of child care resource and referral expenses.
  The bill establishes an overall limit on the amount of child care 
credits an employer can qualify to receive. That limit is $150,000 per 
year.

[[Page 486]]

  Why is this legislation important?
  First, the workplace has changed over the years. In 1947, one in four 
mothers with children between the ages of 6 and 17 were in the labor 
force. By 1996, their labor force participation rate had tripled to 
nearly three in four.
  Indeed, the Bureau of Labor Statistics reports that 65 percent of all 
women with children under 18 years of age are now working and that the 
growth in the number of working women will continue into the next 
century.
  Second, child care is one of the most pressing social issues of the 
day. It impacts every family, rich or poor.
  In June of 1998, I hosted a Florida statewide summit on child care 
where over 500 residents of my State shared with me their concerns and 
frustrations on child care issues. They told me that quality child care 
is either unavailable or unaffordable.
  Those who had found affordable child care often were faced with long 
waiting lists.
  They told me that working parents struggle to cope with the often 
conflicting time demands of work and child care.
  They told me of their concerns with school-age children who often are 
at risk because before and after-school supervised care programs are 
not readily available.
  Mr. President, quality child care should be a concern to all 
Americans. The care and nurturing that children receive early in life 
has a profound influence on their future--and their future is our 
future.
  In the 21st century, women will comprise more than 60 percent of all 
new entrants into the labor market. A large proportion of these women 
are expected to be mothers of children under the age of 6.
  The implications for employers are clear. They understand the rapidly 
changing nature of our Nation's work force and that those employers who 
can help their employees with child care will have a competitive 
advantage.
  Many smaller businesses would like to join them, but do not have the 
resources to offer child care to their employees. Our legislation would 
help to lower the obstacle to on-site child care.
  Mr. President, we believe that this legislation will assist 
businesses in providing attractive, cost-effective tools for recruiting 
and retaining employees in a tight labor market.
  We believe that encouraging businesses to help employees care for 
children will make it easier for parents to be more involved in their 
children's education.
  Most of all, Mr. President, we believe that this bill is good for 
employers and families and will go far in addressing the issue of child 
care for working families of America. I urge all of my colleagues to 
support this important legislation.
                                 ______
                                 
      By Mr. ALLARD:
  S. 100. A bill to amend the Internal Revenue Code of 1986 to repeal 
the state and gift taxes; to the Committee on Finance.


                       time to end the death tax

  Mr. ALLARD. Mr. President, today I am introducing legislation to 
immediately eliminate the estate tax. I fundamentally oppose the estate 
tax. I call it the ``death tax.'' This unfair tax has been a concern of 
mine for some time now.
  Congress has clearly demonstrated its support for easing this burden. 
The Taxpayer Relief Act of 1997 gradually increases the exemption. Last 
year, Congress decided that further action was needed and passed a bill 
that would have eliminated the federal estate tax. Unfortunately, 
President Clinton chose to veto that bill. I look forward to the 
opportunity to work with the new Administration to repeal this unfair 
tax by passing my bill.
  The United States has one of the highest estate taxes in the world. 
While income tax rates have declined in recent decades, estate taxes 
have remained high. Today, the death tax is imposed on estates with 
assets of more than $675,000. The rates begin at 37% and very rapidly 
rise to 55%. Some estates even pay a marginal rate of 60%.
  This issue really hits home for me. Family farms and small businesses 
are two of the groups most affected by the estate tax. I grew up on my 
family's farm in Colorado, and I owned a small business before I came 
to Washington. So, I truly understand the concerns of those who live in 
fear of the impact that this tax will have on their legacy to their 
children.
  The estate tax has resulted in the loss of family farms and family 
businesses across the nation. Many people work their entire lives to 
build a business that they can pass on to their children. When these 
hard-working businessmen and farmers pass away, their families are 
often forced to sell off the business to pay the estate tax. I see this 
as an affront to those who try to pass on the fruits of their lives' 
work to their children.
  The people affected by this tax are not necessarily wealthy. Many 
small business people are cash poor, but asset rich. For example, the 
owner of a small restaurant might have $800,000 of assets, but not much 
cash on hand. Her children will still have to pay an excessive tax on 
the assets. The beer wholesaler, who has invested all of his revenue in 
trucks and storage, might have more than $675,000 in assets. That does 
not make him a cash-wealthy man. Yet, he is still subject to this so-
called ``tax on the wealthy.''
  The death tax also impacts employment and the economy. When a family-
owned farm or a small business closes, the workers lose their jobs. 
Conversely, leaving resources in the economy can create jobs. A recent 
George Mason study found that if the estate tax were phased out over 
five years, the economy would create 198,895 more jobs, and grow by an 
additional $509 billion over a ten-year period.
  Additionally, the estate tax is a disincentive for Americans to save 
their earnings. The government has created a number of tax breaks and 
other incentives for those who save their money: 401(k)s and IRAs--to 
name a few. Yet, the estate tax sends a contradictory message. 
Basically, it says, ``If you don't spend all your savings by the time 
you die, the government will penalize you.'' This tax is no small 
penalty, either. We are talking about some very high tax rates.
  The death tax also represents an unjust double taxation. The savings 
were taxed initially when they were earned. Then, when the saver passes 
away, the government comes along and takes a second cut. There is no 
good reason for the current system--other than the government's desire 
to make a profit at the already trying time of the death of a dear one.
  The current death tax law has a greater effect on the lower end of 
the scale than the higher. Wealthy people can afford lawyers and 
planners to help them plan their estate. Those at the lower end of the 
estate tax scale are often unable to afford sophisticated estate 
planning. So the current law also makes the tax somewhat regressive, 
which is not fair.
  Planning and compliance with the estate tax can consume substantial 
resources. In 1995, the Gallup organization surveyed family firms. 
Twenty-three percent of owners of companies valued over $10 million 
said that they pay more than $50,000 per year in insurance premiums on 
policies to help them pay the eventual bill. To plan for the estate 
tax, the firms also spent an average of $33,000 on lawyers, accountants 
and financial planners, over a period of several years. This is money 
that could have been better spent to expand the business and create new 
jobs--rather than dealing with the death tax.
  The estate tax only raises one percent of federal revenue, yet it 
costs farms, businesses and jobs. No American family should lose their 
farm or business because of the federal government. I support full 
repeal of the federal estate tax.
  Mr. President, I ask unanimous consent that the text of my bill, as 
well as an article that I recently wrote, be entered into the Record.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:

[[Page 487]]



                                 S. 100

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Death Tax Termination Act of 
     2001.''

     SEC. 2. REPEAL OF ESTATE AND GIFT TAXES.

       Subtitle B of the Internal Revenue Code of 1986 (relating 
     to estate, gift, and generation-skipping taxes) is repealed 
     effective with respect to estates of decedents dying, and 
     gifts made, after December 31, 2000.
                                  ____


                  [From the Roll Call, Apr. 27, 1998]

         Estate Tax Reform Must Be First Step to Fixing System

                         (By Sen. Wayne Allard)

       As we approach the new millennium, a consensus has emerged 
     in favor of significant tax reform. Some prefer the flat tax; 
     others advocate the sales tax. A third camp argues that 
     Congress should avoid a complete overhaul and instead work to 
     improve the existing system.
       Whatever path is chosen, it should include elimination of 
     the federal estate tax. Repeal of the estate tax is the first 
     step toward a fairer and flatter tax system.
       Congress has levied estate taxes at various times 
     throughout US history, particularly during war. The current 
     estate tax dates back to 1916, a time when many in Congress 
     were looking for ways to redistribute some of the wealth held 
     by a small number of super-rich families. This first 
     permanent estate tax had a top rate of only 10 percent, and 
     the threshold was high enough to ensure that the tax affected 
     only a tiny fraction of the population.
       Like the rest of our tax code, it did not take long for 
     this limited tax to evolve into a more substantial burden. In 
     only the second year of the tax, the top rate was increased 
     to 25 percent. By 1935, the top rate was 70 percent, and in 
     1941, it reached an all-time high of 77 percent.
       While income tax rates have declined in recent decades, 
     estate taxes have remained high. Today, the top estate tax 
     rate is 55 percent (a top marginal rate of 60 percent is paid 
     by some estates), and the tax is imposed on amounts above the 
     1998 exemption level of $625,000 (value above $625,000 is 
     taxed at an initial rate of 37 percent).
       Generally, the value of all assets held at death is 
     included in the estate for purposes of assessing the tax--
     this includes residences, business assets, stocks, bonds, 
     savings, personal property, etc. Estate tax returns are due 
     within nine months of the decedent's death (a six-month 
     extension is available), and with the exception of certain 
     closely held businesses, the tax is due when the return is 
     filed. The tax is paid by the estate rather than by the 
     beneficiary (in contrast to an inheritance tax).
       Last year's tax bill increased the unified estate and gift 
     tax exemption from $600,000 to $1 million. However, this is 
     done very gradually and does not reach the $1 million level 
     until 2006. The bill also increased the exemption amount for 
     a qualified family-owned business to $1.3 million.
       While both actions are a good first step, they barely 
     compensate for the effects of inflation. The $600,000 
     exemption level was last set in 1987; just to keep pace with 
     inflation the exemption should have risen to $850,000 by 
     1997. Incremental improvements help, but we need more 
     substantial reform.
       The United States retains among the highest estate taxes in 
     the world. Among industrial nations, only Japan has a higher 
     top rate than we do. But Japan's 70 percent rate applies to 
     an inheritance of $16 million or more. The US top rate of 55 
     percent kicks in on estates of $3 million or more. France, 
     the United Kingdom and Ireland all have top rates of 40 
     percent, and the average top rate of Organization for 
     Economic Cooperation and Development countries is only 29 
     percent. Australia, Canada and Mexico presently have no 
     estate taxes.
       The strongest argument that supporters of the estate tax 
     make is that most American families will never have to pay an 
     estate tax. While this is true, it does not justify retention 
     of a tax that causes great harm to family businesses and 
     farms, often constitutes double taxation, limits economic 
     growth consumes significant resources in unproductive tax 
     compliance activities and raises only a tiny portion of 
     federal tax revenues. In other words, the estate tax is not 
     worth all the trouble.
       The estate tax can destroy a family business. This is the 
     most disturbing aspect of the tax. No American family should 
     lose its business or farm because of the estate tax. Current 
     estimates are that more than 70 percent of family businesses 
     do not survive the second generation, and 87 percent do not 
     survive the third generation.
       While there are many reasons for these high numbers, the 
     estate tax is certainly one of them. The estate tax fails to 
     distinguish between cash and non-liquid assets, and since 
     family businesses are often asset-rich and cash poor, they 
     can be forced to sell assets in order to pay the tax. This 
     practice can destroy the business outright, or leave it so 
     strapped for capital that long-term survival is jeopardized.
       Similarly, more and more large ranches and farms are facing 
     the prospect of break-up and sale to developers in order to 
     pay the estate tax. In addition to destroying a family 
     business, this harms the environment.
       The accounting firm Price Waterhouse recently calculated 
     the taxable components of 1995 estates. While 21 percent of 
     assets were corporate stocks and bonds, and another 21 
     percent were mutual fund assets, fully 32 percent of gross 
     estates consisted of ``business assets'' such as stock in 
     closely held businesses, interests in non-corporate 
     businesses and farms and interests, in limited partnerships. 
     In larger estates, this portion rose to 55 percent. Clearly, 
     a substantial portion of taxable estates consists of family 
     businesses.
       The National Center for Policy Analysis reports that a 1995 
     survey by Travis Research Associates found that 51 percent of 
     family businesses would have significant difficulty surviving 
     the estate tax, and 30 percent of respondents said they would 
     have to sell part or all of their business. This is supported 
     by a 1995 Family Business Survey conducted by Matthew 
     Greenwald and Associates which found that 33 percent of 
     family businesses anticipate having to liquidate or sell part 
     of their business to pay the estate tax.
       While some businesses are destroyed by the estate tax, many 
     more expend substantial resources in tax planning and 
     compliance. Those that survive the estate tax often do so by 
     purchasing expensive insurance. A 1995 Gallup survey of 
     family firms found that 23 percent of the owners of companies 
     valued at more than $10 million pay $50,000 or more per year 
     in insurance premiums on policies designed to help them pay 
     the eventual tax bill. The same survey found that family 
     firms estimated they had spent on average more than $33,000 
     on lawyers, accountants and financial planners over a period 
     of six and a half years in order to prepare for the estate 
     tax.
       In fact, one of the great ironies of the estate tax is that 
     an extensive amount of tax planning can very nearly eliminate 
     the tax. This results in a situation in which the very 
     wealthy can end up paying less estate tax than those of more 
     modest means.
       As noted above, life insurance can play a big role in 
     estate planning, but there are also mechanisms such as 
     qualified personal residence trusts, charitable remainder 
     trusts, charitable lead trusts, generation-skipping trusts 
     and the effective use of annual gifts. While these mechanisms 
     may reduce the tax, they waste resources that could be put to 
     much better use growing businesses and creating jobs.
       One of the tenets of a fair tax system is that income is 
     taxed only once. Income should be taxed when it is first 
     earned or realized; it should not be repeatedly retaxed by 
     government. The estate tax violates this tenet. At the time 
     of a person's death, much of his or her savings, business 
     assets or farm assets have already been subjected to federal, 
     state and local tax. These same assets are then taxed again 
     under the estate tax. Price Waterhouse has calculated that 
     those families who will be liable for the estate tax face the 
     prospect of nearly 73 percent of every dollar being taxed 
     away.
       Repeal of the estate tax would benefit the economy. Without 
     the estate tax, greater business resources could be put 
     toward productive economic activities. Recently, the Center 
     for the Study of Taxation commissioned George Mason 
     University professor Richard Wagner to estimate the economic 
     impact of a phase-out of the estate tax.
       Wagner estimated that if the tax is phased out over five 
     years beginning in 1999, the economy would create 189,900 
     more jobs and would grow by an additional $509 billion over a 
     ten-year-period. Similarly, a recent Heritage Foundation 
     study simulated the results of an estate tax repeal under two 
     respected economic models, the Washington University Macro 
     Model, and the Wharton Econometric Model. Under both models, 
     a repeal of the tax is forecast to increase jobs and gross 
     domestic product, as well as reduce the cost of capital.
       One might expect that with all the economic dislocation 
     associated with the estate tax that it raises a significant 
     amount of revenue or accomplishes a redistributionist social 
     policy. In fact, the revenue take is quite modest--
     approximately one percent of federal revenue or $14.7 billion 
     in 1995. And as for social policy, the ability of the federal 
     government to equalize wealth through the estate tax may be 
     quite limited. A 1995 study published by the Rand Corporation 
     found that for the very wealthiest Americans, only 7.5 
     percent of their wealth is attributable to inheritance--the 
     other 92.5 percent is from earnings.
       America is a nation of tremendous economic opportunity. 
     Success is determined principally through hard work and 
     individual initiative. Our tax policy should focus on 
     encouraging greater initiative rather than on attempts to 
     limit inherited wealth.
       The estate tax is a relic. It damages family businesses, 
     harms the economy and constitutes double taxation. It is time 
     for the estate tax to go.
                                 ______
                                 
      By Mr. BINGAMAN:
  S. 101. A bill to improve teacher quality, and for other purposes; to 
the Committee on Health, Education, Labor, and Pensions.

[[Page 488]]




                      QUALITY TEACHERS FOR ALL ACT

  Mr. BINGAMAN. Mr President, today I am pleased to introduce a package 
of bills related to education for consideration in the context of the 
reauthorization of the Elementary and Secondary Education Act 
(``ESEA''). I believe the issue of accountability for results will be 
at the center of our debate this year so I will introduce and speak 
about that bill separately. Nevertheless, I believe that we need to 
increase our investment in education while increasing our expectations 
for results from our schools. In that context, we should be sure to 
target that investment on problems with national implications and 
strategies and programs that we know work. At this time, I am 
introducing three bills that I believe meet that criteria: The Quality 
Teachers for All Act, The National Dropout Prevention Act and the 
Access to High Standards Act. All of these bills provide support for 
efforts on the local level to raise standards for our schools, our 
teachers and our students.
  Improving teacher quality continues to be one of my top priorities in 
the Senate because research indicates that teacher quality is one of 
the most important factors in student achievement. The Quality Teachers 
for All Act addresses the fact that, although the vast majority of our 
teacher's are dedicated, professional and competent, far too many 
schools in America allow classrooms to be lead by teachers with 
insufficient training and qualifications. Unfortunately, it is the 
schools and classrooms with the neediest children who have the largest 
number of unqualified teachers. While we are demanding increased levels 
of performance for our schools and our children, we must also set high 
standards for all our teachers, including those who instruct student 
who must overcome the greatest barriers to learning.
  The Quality Teachers for All Act requires that all teachers in 
schools that receive Title 1 funds be fully qualified. This means that 
they possess necessary teaching skills and demonstrate mastery in the 
subjects that they teach. It provides that an elementary school teacher 
must have state certification, hold a bachelor's degree and demonstrate 
subject matter knowledge, teaching knowledge and teaching skills 
required to teach effectively in reading, writing, mathematics, social 
studies, science and other elements of a liberal arts education. Middle 
and secondary school teachers must have state certification, hold a 
bachelor's degree, and demonstrate competence in all subject areas that 
they teach. This demonstration of competence may be achieved by a high 
level of performance on a rigorous academic subject area test, 
completion of an academic major (or an equal number of courses). The 
bill ensures that low income students are not disproportionately 
impacted by low teaching standards by requiring that teachers in high 
poverty schools be at least as well-qualified, in terms of experience 
and credentials as the instructional staff in schools served by the 
same local educational agency that are not high poverty schools.
  In order to help states and LEAs meet these requirements, the bill 
will provide grants to assist states and LEAs in providing the 
necessary education or training for individuals who are teaching 
without full qualifications. In addition, recognizing that some 
communities have difficulty attracting qualified teachers, the bill 
allows funds to be used to provide financial incentives (i.e., signing 
bonuses) for fully qualified teachers. In addition, the bill supports 
efforts to recruit new teachers by providing allowing funds to be used 
to develop alternative means of certification for highly qualified 
individuals with college degrees wishing to teach, including mid-career 
professionals and former military personnel. The bill also authorizes 
funds to support State efforts to increase the portability of teacher's 
pensions, certification and years of experience so that teachers have 
greater mobility and school districts can fill vacant teaching 
positions with teachers who are fully-qualified. The funds may also be 
used for programs of support for new teachers to ensure that they are 
more likely to remain in the nation's teaching force.
  In order to make parents our partners in our efforts to raise 
teaching standards, this bill requires districts and schools to provide 
parents with information about the qualifications of their child's 
teacher. These provisions build on legislation I authored that became 
part of the Higher Education Act of 1998 requiring a national report 
card on teacher training programs. The parental right to know provision 
in the Quality Teachers for All Act will empower parents by informing 
them of the strengths and weaknesses of their children's teachers, 
helping them to support the push for fully-qualified teachers in every 
classroom.
  The National Dropout Prevention Act is a bill designed to reduce the 
dropout rate in our nation's schools through the use and dissemination 
of effective dropout prevention programs. While much progress has been 
made in encouraging all student to complete high school, the nation 
remains far from its goal of a 90 percent graduation rate for students, 
a goal that was to be attained in the year 2000. In fact, none of the 
states with large and diverse populations have yet come close to this 
goal and dropout rates approaching 50 percent between ninth grade and 
the senior year are commonplace in some of the most disadvantaged of 
our nation's communities. This bill is based on many of the findings of 
the National Hispanic Dropout Project, a group of nationally recognized 
experts assembled in 1996-97 to help find ways of reducing the high 
dropout rates among Hispanic and other at-risk students. The group 
pointed out that there are widespread misconceptions about why so many 
student drop out of school and that there is little familiarity with 
proven drop out prevention programs. Most problematic is the fact that 
there is currently no concerted federal effort to provide or coordinate 
effective and proven dropout prevention programs or oversee the 
multitude of programs that include dropout prevention as a component.
  The Act makes lowering the dropout rate a national priority. A 
national clearinghouse on effective school drop out prevention, 
intervention and reentry programs would be created and efforts to 
prevent students from dropping out would be identified and 
disseminated. The bill provides support and recognition for schools 
engaged in effective dropout prevention efforts. In addition, this bill 
provides funds to pay the startup and implementation costs of 
effective, sustainable, coordinated and whole school dropout prevention 
programs. Funds can be used to implement comprehensive school wide 
reforms, create alternative school programs or create smaller learning 
communities. In addition, grant recipients could contract with 
community-based organizations to assist them in implementing necessary 
services.
  The Access to High Standards Act is intended to help foster the 
continued growth of advanced placement programs throughout the nation 
and to help ensure equal access to these programs for low income 
students. Advanced placement programs already provide rigorous 
academics and valuable college credits at half the high schools in the 
United states, serving over 1.5 million students last year. Many states 
that have advanced placement incentive programs have already had 
tremendous success in increasing participation rates, raising 
achievement and increasing the involvement of low-income and under 
served students. Nevertheless, students, especially low-income 
students, continue to be denied or have limited access to this 
important educational resource. Over forty percent of our nation's 
public schools still do not offer any Advanced Placement courses. As 
many of my colleagues know, college costs have risen many times faster 
than inflation over the last decade, making it difficult for many 
students to afford the high costs of obtaining a college education. 
Advanced placement programs address this issue by giving students an 
opportunity to earn college credit in high school by preparing for and 
passing AP exams. In fact, a single AP English test score of 3 or 
better is worth approximately $500 in tuition at the University of New 
Mexico and the

[[Page 489]]

credits granted to AP students nationwide are worth billions of dollars 
in savings each year.
  By promoting AP courses, we also address the need to raise academic 
standards. AP courses provide schools with high academic standards and 
standardized achievement measures. Participating in AP courses helps 
student prepare for college as they serve to connect curriculum between 
high school and post secondary institutions. And, because the vast 
majority of AP teachers teach several non-AP courses as well, AP 
programs have the effect of raising school wide standards and 
achievement. Of course, there is no single remedy or federal program 
that can hope to address all of the issues that public education must 
face in order to improve the achievement of our students. However, I 
believe that high college costs and low academic standards deserve our 
close attention and I am confident that expansion of advanced placement 
programs will help states address these issues effectively.
  In order to ensure that our children are well-prepared to meet the 
challenges of an increasingly complex and challenging world, it is 
critical to address improving our nation's school with a comprehensive 
effort. The bills I introduce today are designed to build on the 
progress we have made in the past few years to raise standards and 
increase accountability in America's schools. I ask unanimous consent 
to have the bills printed in the Record at the conclusion of my 
remarks. I urge my colleagues to carefully consider supporting passage 
of these bills.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 101

       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 ``Quality Teachers for All 
     Act''.

                        TITLE I--PARENTAL RIGHTS

     SEC. 101. PARENTAL RIGHT TO KNOW.

       Part E of title XIV of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8891 et seq.) is amended by 
     adding at the end the following:

     ``SEC. 14515. TEACHER QUALIFICATIONS.

       ``Any public elementary school or secondary school that 
     receives funds under this Act shall provide to the parents of 
     each student enrolled in the school information regarding--
       ``(1) the professional qualifications of each of the 
     student's teachers, both generally and with respect to the 
     subject area in which the teacher provides instruction; and
       ``(2) the minimum professional qualifications required by 
     the State for teacher certification or licensure.''.

                       TITLE II--TEACHER QUALITY

     SEC. 201. TEACHER QUALITY.

       (a) In General.--Section 1111 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 6311) is amended--
       (1) by redesignating subsections (c) through (g) as 
     subsections (f) through (j), respectively; and
       (2) by inserting after subsection (b) the following:
       ``(c) Teacher Quality.--
       ``(1) State standards and policies.--Each State plan shall 
     contain assurances, with respect to schools served under this 
     part, that--
       ``(A) no student in those schools in the State will be 
     taught for more than 1 year by an elementary school teacher, 
     or for more than 2 consecutive years in the same subject by a 
     secondary school teacher, who has not demonstrated the 
     subject matter knowledge, teaching knowledge, and teaching 
     skill necessary to teach effectively in the subject in which 
     the teacher provides instruction;
       ``(B) the State provides incentives for teachers in those 
     schools to pursue and achieve advanced teaching and subject 
     area content standards;
       ``(C) the State has in place effective mechanisms to ensure 
     that local educational agencies and schools served under this 
     part are able--
       ``(i) to recruit effectively fully qualified teachers;
       ``(ii) to reward financially those teachers and principals 
     whose students have made significant progress toward high 
     academic performance, such as through performance-based 
     compensation systems and access to ongoing professional 
     development opportunities for teachers and administrators; 
     and
       ``(iii) to remove expeditiously incompetent or unqualified 
     teachers consistent with procedures to ensure due process for 
     teachers;
       ``(D) the State aggressively helps those schools, 
     particularly in high need areas, recruit and retain fully 
     qualified teachers;
       ``(E) during the period that begins on the date of 
     enactment of the Quality Teachers for All Act and ends 4 
     years after such date, elementary school and secondary school 
     teachers in those schools will be at least as well qualified, 
     in terms of experience and credentials, as the instructional 
     staff in schools served by the same local educational agency 
     that are not schools served under this part; and
       ``(F) any teacher who meets the standards set by the 
     National Board for Professional Teaching Standards will be 
     considered fully qualified to teach in those schools in any 
     school district or community in the State.
       ``(2) Qualifications of certain instructional staff.--
       ``(A) In general.--Each State plan shall contain assurances 
     that, not later than 4 years after the date of enactment of 
     the Quality Teachers for All Act--
       ``(i) all instructional staff who provide services to 
     students under section 1114 or 1115 will have demonstrated 
     the subject matter knowledge, teaching knowledge, and 
     teaching skill necessary to teach effectively in the subject 
     in which the staff provides instruction, according to the 
     criteria described in this paragraph; and
       ``(ii) funds provided under this part will not be used to 
     support instructional staff--

       ``(I) who provide services to students under section 1114 
     or 1115; and
       ``(II) for whom State qualification or licensing 
     requirements have been waived or who are teaching under an 
     emergency or other provisional credential.

       ``(B) Elementary school instructional staff.--For purposes 
     of making the demonstration described in subparagraph (A)(i), 
     each member of the instructional staff who teaches elementary 
     school students shall, at a minimum--
       ``(i) have State certification (which may include 
     certification obtained through alternative means) or a State 
     license to teach; and
       ``(ii) hold a bachelor's degree and demonstrate subject 
     matter knowledge, teaching knowledge, and teaching skill 
     required to teach effectively in reading, writing, 
     mathematics, social studies, science, and other elements of a 
     liberal arts education.
       ``(C) Middle school and secondary school instructional 
     staff.--For purposes of making the demonstration described in 
     subparagraph (A)(i), each member of the instructional staff 
     who teaches in middle schools and secondary schools shall, at 
     a minimum--
       ``(i) have State certification (which may include 
     certification obtained through alternative means) or a State 
     license to teach; and
       ``(ii) hold a bachelor's degree or higher degree and 
     demonstrate a high level of competence in all subject areas 
     in which the staff member teaches through--

       ``(I) achievement of a high level of performance on 
     rigorous academic subject area tests;
       ``(II) completion of an academic major (or courses totaling 
     an equivalent number of credit hours) in each of the subject 
     areas in which the staff member provides instruction; or
       ``(III) achievement of a high level of performance in 
     relevant subject areas through other professional employment 
     experience.

       ``(D) Teacher aides and other paraprofessionals.--For 
     purposes of subparagraph (A) funds provided under this part 
     may be used to employ teacher aides or other 
     paraprofessionals who do not meet the requirements under 
     subparagraphs (B) and (C) only if such aides or 
     paraprofessionals--
       ``(i) provide instruction only when under the direct and 
     immediate supervision, and in the immediate presence, of 
     instructional staff who meet the criteria of this paragraph; 
     and
       ``(ii) possess particular skills necessary to assist 
     instructional staff in providing services to students served 
     under this Act.
       ``(E) Use of funds.--Each State plan shall contain 
     assurances that, beginning on the date of enactment of the 
     Quality Teachers for All Act, no school served under this 
     part will use funds received under this Act to hire 
     instructional staff who do not fully meet all the criteria 
     for instructional staff described in this paragraph.
       ``(F) Definition.--In this paragraph, the term 
     `instructional staff' includes any individual who has 
     responsibility for providing any student or group of students 
     with instruction in any of the core academic subject areas, 
     including reading, writing, language arts, mathematics, 
     science, and social studies.
       ``(d) Assistance by State Educational Agency.--Each State 
     plan shall describe how the State educational agency will 
     help each local educational agency and school in the State 
     develop the capacity to comply with the requirements of this 
     section.
       ``(e) Corrective Action.--The appropriate State educational 
     agency shall take corrective action consistent with section 
     1116(c)(5)(B)(i), against any local educational agency that 
     does not make sufficient effort to comply with subsection 
     (c). Such corrective action shall be taken regardless of the 
     conditions set forth in section 1116(c)(5)(B)(ii). In a case 
     in which the State fails to take the corrective action, the 
     Secretary shall withhold funds from such State up to an 
     amount equal to that reserved under sections 1003(a) and 
     1603(c).''.
       (b) Instructional Aides.--Section 1119 of Elementary and 
     Secondary Education Act of

[[Page 490]]

     1965 (20 U.S.C. 6320) is amended by striking subsection (i).

     SEC. 202. FULLY QUALIFIED TEACHER IN EVERY CLASSROOM.

       Title I of the Elementary and Secondary Education Act of 
     1965 is amended by inserting after section 1119 (20 U.S.C. 
     6320) the following new sections:

     ``SEC. 1119A. A FULLY QUALIFIED TEACHER IN EVERY CLASSROOM.

       ``(a) Grants.--
       ``(1) In general.--The Secretary may make grants, on a 
     competitive basis, to States or local educational agencies, 
     to assist schools that receive assistance under this part by 
     carrying out the activities described in paragraph (3).
       ``(2) Application.--To be eligible to receive a grant under 
     paragraph (1), a State or local educational agency shall 
     submit an application to the Secretary at such time, in such 
     manner, and containing such information as the Secretary may 
     require.
       ``(3) Uses of funds.--
       ``(A) States.--In order to meet the goal under section 
     1111(c)(2) of ensuring that all instructional staff in 
     schools served under this part have the subject matter 
     knowledge, teaching knowledge, and teaching skill necessary 
     to teach effectively in the subject in which the staff 
     provides instruction, a State may use funds received under 
     this section--
       ``(i) to collaborate with programs that recruit, place, and 
     train fully qualified teachers;
       ``(ii) to provide the necessary education and training, 
     including establishing continuing education programs and 
     paying the costs of tuition at an institution of higher 
     education and other student fees (for programs that meet the 
     criteria under section 203(b)(2)(A)(i) of the Higher 
     Education Act of 1965 (20 U.S.C. 1023(b)(2)(A)(i))), to help 
     teachers or other school personnel who do not meet the 
     necessary qualifications and licensing requirements to meet 
     the requirements, except that in order to qualify for a 
     payment of tuition or fees under this clause an individual 
     shall agree to teach for each of at least 2 subsequent 
     academic years after receiving such degree in a school that--

       ``(I) is located in a school district served by a local 
     educational agency that is eligible in that academic year for 
     assistance under this title; and
       ``(II) for that academic year, has been determined by the 
     Secretary to be a school in which the enrollment of children 
     counted under section 1124(c) exceeds 50 percent of the total 
     enrollment of that school;

       ``(iii) to establish, expand, or improve alternative means 
     of State certification of teachers for highly qualified 
     individuals with a minimum of a baccalaureate degree, 
     including mid-career professionals from other occupations, 
     paraprofessionals, former military personnel, and recent 
     graduates of an institution of higher education with records 
     of academic distinction who demonstrate the potential to 
     become highly effective teachers;
       ``(iv) for projects to increase the portability of teacher 
     pensions or credited years of experience or to promote 
     reciprocity of teacher certification or licensure between or 
     among States, except that no reciprocity agreement developed 
     under this clause or developed using funds provided under 
     this part may lead to the weakening of any State teaching 
     certification or licensing requirement; or
       ``(v) to establish, expand, or improve induction programs 
     designed to support new teachers and promote retention of new 
     teachers in schools served under this part.
       ``(B) Local educational agencies.--In order to meet the 
     goal described in subparagraph (A), a local educational 
     agency may use funds received under this section--
       ``(i) to recruit fully qualified teachers, including 
     through the use of signing bonuses or other financial 
     incentives; and
       ``(ii) to carry out the activities described in clauses 
     (i), (ii), and (v) of subparagraph (A).
       ``(4) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this subsection 
     $500,000,000 for fiscal year 2002 and such sums as may be 
     necessary for each subsequent fiscal year.
       ``(b) Other Assistance.--Notwithstanding any other 
     provision of law, in order to meet the goal described in 
     subsection (a)(3)(A)--
       ``(1) a State receiving assistance under title II, title 
     VI, title II of the Higher Education Act of 1965 (20 U.S.C. 
     1021 et seq.), or the Goals 2000: Educate America Act (20 
     U.S.C. 5801 et seq.) may use such assistance for the 
     activities described in subsection (a)(3)(A); and
       ``(2) a local educational agency receiving assistance under 
     an authority described in paragraph (1) may use such 
     assistance for the activities described in subsection 
     (a)(3)(B).

     ``SEC. 1119B. CERTIFICATION GRANTS.

       ``(a) Grants.--The Secretary may make grants to State 
     educational agencies, local educational agencies, or schools 
     that receive assistance under this part to pay for the 
     Federal share of the cost of providing financial assistance 
     to teachers in such schools who obtain certification from the 
     National Board of Professional Teaching Standards.
       ``(b) Application.--To be eligible to receive a grant under 
     this section an agency or school shall submit an application 
     to the Secretary at such time, in such manner, and containing 
     such information as the Secretary may require.
       ``(c) Eligible Teachers.--To be eligible to receive 
     financial assistance under subsection (a), a teacher shall 
     obtain the certification described in subsection (a).
       ``(d) Federal Share.--The Federal share of the cost 
     described in subsection (a) shall be 50 percent.
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $10,000,000 for fiscal year 2002 and such sums as may be 
     necessary for each subsequent fiscal year.''.

     SEC. 203. LIMITATION.

       Part E of title XIV of the Elementary and Secondary 
     Education Act of 1965, as amended in section 101, is further 
     amended by adding at the end the following:

     ``SEC. 14516. PROHIBITION REGARDING PROFESSIONAL DEVELOPMENT 
                   SERVICES.

       ``None of the funds provided under this Act may be used for 
     any professional development services for a teacher that are 
     not directly related to the curriculum and subjects in which 
     the teacher provides or will provide instruction.''.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Reid):
  S. 102. A bill to provide assistance to address school dropout 
problems; to the Committee on Health, Education, Labor, and Pensions.


                     dropout prevention legislation

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

                                 S. 102

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

     SECTION 1. ASSISTANCE TO ADDRESS SCHOOL DROPOUT PROBLEMS.

       Part D of title I of the Elementary and Secondary Education 
     Act of 1965 (20 U.S.C. 6421 et seq.) is amended by adding at 
     the end the following:

       ``Subpart 4--Assistance to Address School Dropout Problems

     ``SEC. 1441. SHORT TITLE.

       ``This subpart may be cited as the `Dropout Prevention 
     Act'.

     ``SEC. 1442. PURPOSE.

       ``The purpose of this subpart is to provide for school 
     dropout prevention and reentry and to raise academic 
     achievement levels by providing grants, to schools through 
     State educational agencies, that--
       ``(1) challenge all children to attain their highest 
     academic potential; and
       ``(2) ensure that all students have substantial and ongoing 
     opportunities to do so through schoolwide programs proven 
     effective in school dropout prevention.

               ``Chapter 1--Coordinated National Strategy

     ``SEC. 1451. NATIONAL ACTIVITIES.

       ``(a) In General.--The Secretary is authorized--
       ``(1) to collect systematic data on the participation in 
     the programs described in paragraph (2)(C) of individuals 
     disaggregated within each State, local educational agency, 
     and school by gender, by each major racial and ethnic group, 
     by English proficiency status, by migrant status, by students 
     with disabilities as compared to nondisabled students, and by 
     economically disadvantaged students as compared to students 
     who are not economically disadvantaged;
       ``(2) to establish and to consult with an interagency 
     working group which shall--
       ``(A) address inter- and intra-agency program coordination 
     issues at the Federal level with respect to school dropout 
     prevention and middle school and secondary school reentry, 
     assess the targeting of existing Federal services to students 
     who are most at risk of dropping out of school, and the cost-
     effectiveness of various programs and approaches used to 
     address school dropout prevention;
       ``(B) describe the ways in which State and local agencies 
     can implement effective school dropout prevention programs 
     using funds from a variety of Federal programs, including the 
     programs under title I and the School-to-Work Opportunities 
     Act of 1994; and
       ``(C) address all Federal programs with school dropout 
     prevention or school reentry elements or objectives, programs 
     under title I of this Act, the School-to-Work Opportunities 
     Act of 1994, subtitle C of title I of the Workforce 
     Investment Act of 1998, and other programs; and
       ``(3) carry out a national recognition program in 
     accordance with subsection (b) that recognizes schools that 
     have made extraordinary progress in lowering school dropout 
     rates under which a public middle school or secondary school 
     from each State will be recognized.
       ``(b) Recognition Program.--
       ``(1) National guidelines.--The Secretary shall develop 
     uniform national guidelines for the recognition program which 
     shall be used to recognize schools from nominations submitted 
     by State educational agencies.
       ``(2) Eligible schools.--The Secretary may recognize under 
     the recognition program any public middle school or secondary

[[Page 491]]

     school (including a charter school) that has implemented 
     comprehensive reforms regarding the lowering of school 
     dropout rates for all students at that school.
       ``(3) Support.--The Secretary may make monetary awards to 
     schools recognized under the recognition program in amounts 
     determined by the Secretary. Amounts received under this 
     section shall be used for dissemination activities within the 
     school district or nationally.
       ``(c) Capacity Building.--
       ``(1) In general.--The Secretary, through a contract with a 
     non-Federal entity, may conduct a capacity building and 
     design initiative in order to increase the types of proven 
     strategies for dropout prevention and reentry that address 
     the needs of an entire school population rather than a subset 
     of students.
       ``(2) Number and duration.--
       ``(A) Number.--The Secretary may award not more than 5 
     contracts under this subsection.
       ``(B) Duration.--The Secretary may award a contract under 
     this subsection for a period of not more than 5 years.
       ``(d) Support for Existing Reform Networks.--
       ``(1) In general.--The Secretary may provide appropriate 
     support to eligible entities to enable the eligible entities 
     to provide training, materials, development, and staff 
     assistance to schools assisted under this chapter.
       ``(2) Definition of eligible entity.--In this subsection, 
     the term `eligible entity' means an entity that, prior to the 
     date of enactment of the Dropout Prevention Act--
       ``(A) provided training, technical assistance, and 
     materials to 100 or more elementary schools or secondary 
     schools; and
       ``(B) developed and published a specific educational 
     program or design for use by the schools.

       ``Chapter 2--National School Dropout Prevention Initiative

     ``SEC. 1461. PROGRAM AUTHORIZED.

       ``(a) Grants.--
       ``(1) Discretionary grants.--If the sum appropriated under 
     section 1472 for a fiscal year is less than $250,000,000, 
     then the Secretary shall use such sum to award grants, on a 
     competitive basis, to State educational agencies to enable 
     the State educational agencies to award grants under 
     subsection (b).
       ``(2) Formula.--If the sum appropriated under section 1472 
     for a fiscal year equals or exceeds $250,000,000, then the 
     Secretary shall use such sum to make an allotment to each 
     State in an amount that bears the same relation to the sum as 
     the amount the State received under part A of title I for the 
     preceding fiscal year bears to the amount received by all 
     States under such part for the preceding fiscal year.
       ``(3) Definition of state.--In this chapter, the term 
     `State' means each of the several States of the United 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the United States Virgin Islands, Guam, American Samoa, 
     the Commonwealth of the Northern Mariana Islands, the 
     Republic of the Marshall Islands, the Federated States of 
     Micronesia, and the Republic of Palau.
       ``(b) Grants.--From amounts made available to a State under 
     subsection (a), the State educational agency may award grants 
     to public middle schools or secondary schools that serve 
     students in grades 6 through 12, that have school dropout 
     rates which are the highest of all school dropout rates in 
     the State, to enable the schools to pay only the startup and 
     implementation costs of effective, sustainable, coordinated, 
     and whole school dropout prevention programs that involve 
     activities such as--
       ``(1) professional development;
       ``(2) obtaining curricular materials;
       ``(3) release time for professional staff;
       ``(4) planning and research;
       ``(5) remedial education;
       ``(6) reduction in pupil-to-teacher ratios;
       ``(7) efforts to meet State student achievement standards;
       ``(8) counseling and mentoring for at-risk students; and
       ``(9) comprehensive school reform models.
       ``(c) Amount.--
       ``(1) In general.--Subject to subsection (d) and except as 
     provided in paragraph (2), a grant under this chapter shall 
     be awarded--
       ``(A) in the first year that a school receives a grant 
     payment under this chapter, based on factors such as--
       ``(i) school size;
       ``(ii) costs of the model or set of prevention and reentry 
     strategies being implemented; and
       ``(iii) local cost factors such as poverty rates;
       ``(B) in the second such year, in an amount that is not 
     less than 75 percent of the amount the school received under 
     this chapter in the first such year;
       ``(C) in the third year, in an amount that is not less than 
     50 percent of the amount the school received under this 
     chapter in the first such year; and
       ``(D) in each succeeding year in an amount that is not less 
     than 30 percent of the amount the school received under this 
     chapter in the first such year.
       ``(2) Increases.--The Secretary shall increase the amount 
     awarded to a school under this chapter by 10 percent if the 
     school creates smaller learning communities within the school 
     and the creation is certified by the State educational 
     agency.
       ``(d) Duration.--A grant under this chapter shall be 
     awarded for a period of 3 years, and may be continued for a 
     period of 2 additional years if the State educational agency 
     determines, based on the annual reports described in section 
     1467(a), that significant progress has been made in lowering 
     the school dropout rate for students participating in the 
     program assisted under this chapter compared to students at 
     similar schools who are not participating in the program.

     ``SEC. 1462. STRATEGIES AND CAPACITY BUILDING.

       ``Each school receiving a grant under this chapter shall 
     implement research-based, sustainable, and widely replicated, 
     strategies for school dropout prevention and reentry that 
     address the needs of an entire school population rather than 
     a subset of students. The strategies may include--
       ``(1) specific strategies for targeted purposes, such as 
     effective early intervention programs designed to identify 
     at-risk students, effective programs encompassing 
     traditionally underserved students, including racial and 
     ethnic minorities and pregnant and parenting teenagers, 
     designed to prevent such students from dropping out of 
     school, and effective programs to identify and encourage 
     youth who have already dropped out of school to reenter 
     school and complete their secondary education; and
       ``(2) approaches such as breaking larger schools down into 
     smaller learning communities and other comprehensive reform 
     approaches, creating alternative school programs, developing 
     clear linkages to career skills and employment, and 
     addressing specific gatekeeper hurdles that often limit 
     student retention and academic success.

     ``SEC. 1463. SELECTION OF SCHOOLS.

       ``(a) School Application.--
       ``(1) In general.--Each school desiring a grant under this 
     chapter shall submit an application to the State educational 
     agency at such time, in such manner, and accompanied by such 
     information as the State educational agency may require.
       ``(2) Contents.--Each application submitted under paragraph 
     (1) shall--
       ``(A) contain a certification from the local educational 
     agency serving the school that--
       ``(i) the school has the highest number or rates of school 
     dropouts in the age group served by the local educational 
     agency;
       ``(ii) the local educational agency is committed to 
     providing ongoing operational support, for the school's 
     comprehensive reform plan to address the problem of school 
     dropouts, for a period of 5 years; and
       ``(iii) the local educational agency will support the plan, 
     including--

       ``(I) release time for teacher training;
       ``(II) efforts to coordinate activities for feeder schools; 
     and
       ``(III) encouraging other schools served by the local 
     educational agency to participate in the plan;

       ``(B) demonstrate that the faculty and administration of 
     the school have agreed to apply for assistance under this 
     chapter, and provide evidence of the school's willingness and 
     ability to use the funds under this chapter, including 
     providing an assurance of the support of 80 percent or more 
     of the professional staff at the school;
       ``(C) describe the instructional strategies to be 
     implemented, how the strategies will serve all students, and 
     the effectiveness of the strategies;
       ``(D) describe a budget and timeline for implementing the 
     strategies;
       ``(E) contain evidence of coordination with existing 
     resources;
       ``(F) provide an assurance that funds provided under this 
     chapter will supplement and not supplant other Federal, 
     State, and local funds;
       ``(G) describe how the activities to be assisted conform 
     with research-based knowledge about school dropout prevention 
     and reentry; and
       ``(H) demonstrate that the school and local educational 
     agency have agreed to conduct a schoolwide program under 
     section 1114.
       ``(b) State Agency Review and Award.--The State educational 
     agency shall review applications and award grants to schools 
     under subsection (a) according to a review by a panel of 
     experts on school dropout prevention.
       ``(c) Eligibility.--A school is eligible to receive a grant 
     under this chapter if the school is--
       ``(1) a public school (including a public alternative 
     school)--
       ``(A) that is eligible to receive assistance under part A 
     of title I, including a comprehensive secondary school, a 
     vocational or technical secondary school, or a charter 
     school; and
       ``(B)(i) that serves students 50 percent or more of whom 
     are low-income individuals; or
       ``(ii) with respect to which the feeder schools that 
     provide the majority of the incoming students to the school 
     serve students 50 percent or more of whom are low-income 
     individuals; or
       ``(2) participating in a schoolwide program under section 
     1114 during the grant period.

[[Page 492]]

       ``(d) Community-Based Organizations.--A school that 
     receives a grant under this chapter may use the grant funds 
     to secure necessary services from a community-based 
     organization, including private sector entities, if--
       ``(1) the school approves the use;
       ``(2) the funds are used to provide school dropout 
     prevention and reentry activities related to schoolwide 
     efforts; and
       ``(3) the community-based organization has demonstrated the 
     organization's ability to provide effective services as 
     described in section 122 of the Workforce Investment Act of 
     1998.
       ``(e) Coordination.--Each school that receives a grant 
     under this chapter shall coordinate the activities assisted 
     under this chapter with other Federal programs, such as 
     programs assisted under chapter 1 of subpart 2 of part A of 
     title IV of the Higher Education Act of 1965 and the School-
     to-Work Opportunities Act of 1994.

     ``SEC. 1464. DISSEMINATION ACTIVITIES.

       ``Each school that receives a grant under this chapter 
     shall provide information and technical assistance to other 
     schools within the school district, including presentations, 
     document-sharing, and joint staff development.

     ``SEC. 1465. PROGRESS INCENTIVES.

       ``Notwithstanding any other provision of law, each local 
     educational agency that receives funds under title I shall 
     use such funding to provide assistance to schools served by 
     the agency that have not made progress toward lowering school 
     dropout rates after receiving assistance under this chapter 
     for 2 fiscal years.

     ``SEC. 1466. SCHOOL DROPOUT RATE CALCULATION.

       ``For purposes of calculating a school dropout rate under 
     this chapter, a school shall use--
       ``(1) the annual event school dropout rate for students 
     leaving a school in a single year determined in accordance 
     with the National Center for Education Statistics' Common 
     Core of Data, if available; or
       ``(2) in other cases, a standard method for calculating the 
     school dropout rate as determined by the State educational 
     agency.

     ``SEC. 1467. REPORTING AND ACCOUNTABILITY.

       ``(a) Reporting.--In order to receive funding under this 
     chapter for a fiscal year after the first fiscal year a 
     school receives funding under this chapter, the school shall 
     provide, on an annual basis, to the Secretary and the State 
     educational agency a report regarding the status of the 
     implementation of activities funded under this chapter, the 
     outcome data for students at schools assisted under this 
     chapter disaggregated in the same manner as information under 
     section 1451(a) (such as dropout rates), and certification of 
     progress from the eligible entity whose strategies the school 
     is implementing.
       ``(b) Accountability.--On the basis of the reports 
     submitted under subsection (a), the Secretary shall evaluate 
     the effect of the activities assisted under this chapter on 
     school dropout prevention compared to a control group.

     ``SEC. 1468. STATE RESPONSIBILITIES.

       ``(a) Uniform Data Collection.--Within 1 year after the 
     date of enactment of the Dropout Prevention Act, a State 
     educational agency that receives funds under this chapter 
     shall report to the Secretary and statewide, all school 
     district and school data regarding school dropout rates in 
     the State disaggregated in the same manner as information 
     under section 1451(a), according to procedures that conform 
     with the National Center for Education Statistics' Common 
     Core of Data.
       ``(b) Attendance-Neutral Funding Policies.--Within 2 years 
     after the date of enactment of the Dropout Prevention Act, a 
     State educational agency that receives funds under this 
     chapter shall develop and implement education funding formula 
     policies for public schools that provide appropriate 
     incentives to retain students in school throughout the school 
     year, such as--
       ``(1) a student count methodology that does not determine 
     annual budgets based on attendance on a single day early in 
     the academic year; and
       ``(2) specific incentives for retaining enrolled students 
     throughout each year.
       ``(c) Suspension and Expulsion Policies.--Within 2 years 
     after the date of enactment of the Dropout Prevention Act, a 
     State educational agency that receives funds under this 
     chapter shall develop uniform, long-term suspension and 
     expulsion policies (that in the case of a child with a 
     disability are consistent with the suspension and expulsion 
     policies under the Individuals with Disabilities Education 
     Act) for serious infractions resulting in more than 10 days 
     of exclusion from school per academic year so that similar 
     violations result in similar penalties.
       ``(d) Regulations.--The Secretary shall promulgate 
     regulations implementing subsections (a) through (c).

       ``Chapter 3--Definitions; Authorization of Appropriations

     ``SEC. 1471. DEFINITIONS.

       ``In this subpart:
       ``(1) Low-income.--The term `low-income', used with respect 
     to an individual, means an individual determined to be low-
     income in accordance with measures described in section 
     1113(a)(5).
       ``(2) School dropout.--The term `school dropout' has the 
     meaning given the term in section 4(17) of the School-to-Work 
     Opportunities Act of 1994.

     ``SEC. 1472. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     subpart, $250,000,000 for fiscal year 2001 and such sums as 
     may be necessary for each of the 4 succeeding fiscal years, 
     of which--
       ``(1) 10 percent shall be available to carry out chapter 1; 
     and
       ``(2) 90 percent shall be available to carry out chapter 
     2.''.
                                 ______
                                 
      Mr. BINGAMAN (for himself, Mrs. Hutchison, and Ms. Collins):
  S. 103. A bill to provide for advanced placement programs; to the 
Committee on Health, Education, Labor, and Pensions.


                      advanced placement programs

  Mr. BINGAMAN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. ADVANCED PLACEMENT PROGRAMS.

       Title X of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 8001 et seq.) is amended by adding at the end 
     the following:

                 ``PART L--ADVANCED PLACEMENT PROGRAMS

     ``SEC. 10995A. SHORT TITLE.

       ``This part may be cited as the `Access to High Standards 
     Act'.

     ``SEC. 10995B. FINDINGS AND PURPOSES.

       ``(a) Findings.--Congress finds that--
       ``(1) far too many students are not being provided 
     sufficient academic preparation in secondary school, which 
     results in limited employment opportunities, college dropout 
     rates of over 25 percent for the first year of college, and 
     remediation for almost one-third of incoming college 
     freshmen;
       ``(2) there is a growing consensus that raising academic 
     standards, establishing high academic expectations, and 
     showing concrete results are at the core of improving public 
     education;
       ``(3) modeling academic standards on the well-known program 
     of advanced placement courses is an approach that many 
     education leaders and almost half of all States have 
     endorsed;
       ``(4) advanced placement programs already are providing 30 
     different college-level courses, serving almost 60 percent of 
     all secondary schools, reaching over 1,000,000 students (of 
     whom 80 percent attend public schools, 55 percent are 
     females, and 30 percent are minorities), and providing test 
     scores that are accepted for college credit at over 3,000 
     colleges and universities, every university in Germany, 
     France, and Austria, and most institutions in Canada and the 
     United Kingdom;
       ``(5) 24 States are now funding programs to increase 
     participation in advanced placement programs, including 19 
     States that provide funds for advanced placement teacher 
     professional development, 3 States that require that all 
     public secondary schools offer advanced placement courses, 10 
     States that pay the fees for advanced placement tests for 
     some or all students, and 4 States that require that their 
     public universities grant uniform academic credit for scores 
     of 3 or better on advanced placement tests; and
       ``(6) the State programs described in paragraph (5) have 
     shown the responsiveness of schools and students to such 
     programs, raised the academic standards for both students 
     participating in such programs and other children taught by 
     teachers who are involved in advanced placement courses, and 
     shown tremendous success in increasing enrollment, 
     achievement, and minority participation in advanced placement 
     programs.
       ``(b) Purposes.--The purposes of this part are--
       ``(1) to encourage more of the 600,000 students who take 
     advanced placement courses but do not take advanced placement 
     exams each year to demonstrate their achievements through 
     taking the exams;
       ``(2) to build on the many benefits of advanced placement 
     programs for students, which benefits may include the 
     acquisition of skills that are important to many employers, 
     Scholastic Aptitude Tests (SAT) scores that are 100 points 
     above the national averages, and the achievement of better 
     grades in secondary school and in college than the grades of 
     students who have not participated in the programs;
       ``(3) to support State and local efforts to raise academic 
     standards through advanced placement programs, and thus 
     further increase the number of students who participate and 
     succeed in advanced placement programs;
       ``(4) to increase the availability and broaden the range of 
     schools that have advanced placement programs, which programs 
     are

[[Page 493]]

     still often distributed unevenly among regions, States, and 
     even secondary schools within the same school district, while 
     also increasing and diversifying student participation in the 
     programs;
       ``(5) to build on the State programs described in 
     subsection (a)(5) and demonstrate that larger and more 
     diverse groups of students can participate and succeed in 
     advanced placement programs;
       ``(6) to provide greater access to advanced placement 
     courses for low-income and other disadvantaged students;
       ``(7) to provide access to advanced placement courses for 
     secondary school juniors at schools that do not offer 
     advanced placement programs, increase the rate of secondary 
     school juniors and seniors who participate in advanced 
     placement courses to 25 percent of the secondary school 
     student population, and increase the numbers of students who 
     receive advanced placement test scores for which college 
     academic credit is awarded; and
       ``(8) to increase the participation of low-income 
     individuals in taking advanced placement tests through the 
     payment or partial payment of the costs of the advanced 
     placement test fees.

     ``SEC. 10995C. FUNDING DISTRIBUTION RULE.

       ``From amounts appropriated under section 10995H for a 
     fiscal year, the Secretary shall give first priority to 
     funding activities under section 10995F, and shall distribute 
     any remaining funds not so applied according to the following 
     ratio:
       ``(1) Seventy percent of the remaining funds shall be 
     available to carry out section 10995D.
       ``(2) Thirty percent of the remaining funds shall be 
     available to carry out section 10995E.

     ``SEC. 10995D. ADVANCED PLACEMENT PROGRAM GRANTS.

       ``(a) Grants Authorized.--
       ``(1) In general.--From amounts appropriated under section 
     10995H and made available under section 10995C(1) for a 
     fiscal year, the Secretary shall award grants, on a 
     competitive basis, to eligible entities to enable the 
     eligible entities to carry out the authorized activities 
     described in subsection (c).
       ``(2) Duration and payments.--
       ``(A) Duration.--The Secretary shall award a grant under 
     this section for a period of 3 years.
       ``(B) Payments.--The Secretary shall make grant payments 
     under this section on an annual basis.
       ``(3) Definition of eligible entity.--In this section, the 
     term `eligible entity' means a State educational agency, or a 
     local educational agency, in the State.
       ``(b) Priority.--In awarding grants under this section the 
     Secretary shall give priority to eligible entities submitting 
     applications under subsection (d) that demonstrate--
       ``(1) a pervasive need for access to advanced placement 
     incentive programs;
       ``(2) the involvement of business and community 
     organizations in the activities to be assisted;
       ``(3) the availability of matching funds from State or 
     local sources to pay for the cost of activities to be 
     assisted;
       ``(4) a focus on developing or expanding advanced placement 
     programs and participation in the core academic areas of 
     English, mathematics, and science; and
       ``(5)(A) in the case of an eligible entity that is a State 
     educational agency, the State educational agency carries out 
     programs in the State that target--
       ``(i) local educational agencies serving schools with a 
     high concentration of low-income students; or
       ``(ii) schools with a high concentration of low-income 
     students; or
       ``(B) in the case of an eligible entity that is a local 
     educational agency, the local educational agency serves 
     schools with a high concentration of low-income students.
       ``(c) Authorized Activities.--An eligible entity may use 
     grant funds under this section to expand access for low-
     income individuals to advanced placement incentive programs 
     that involve--
       ``(1) teacher training;
       ``(2) preadvanced placement course development;
       ``(3) curriculum coordination and articulation between 
     grade levels that prepare students for advanced placement 
     courses;
       ``(4) curriculum development;
       ``(5) books and supplies; and
       ``(6) any other activity directly related to expanding 
     access to and participation in advanced placement incentive 
     programs particularly for low-income individuals.
       ``(d) Application.--Each eligible entity desiring a grant 
     under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information as the Secretary may require.
       ``(e) Data Collection and Reporting.--
       ``(1) Data collection.--Each eligible entity receiving a 
     grant under this section shall annually report to the 
     Secretary--
       ``(A) the number of students taking advanced placement 
     courses who are served by the eligible entity;
       ``(B) the number of advanced placement tests taken by 
     students served by the eligible entity;
       ``(C) the scores on the advanced placement tests; and
       ``(D) demographic information regarding individuals taking 
     the advanced placement courses and tests disaggregated by 
     race, ethnicity, sex, English proficiency status, and 
     socioeconomic status.
       ``(2) Report.--The Secretary shall annually compile the 
     information received from each eligible entity under 
     paragraph (1) and report to Congress regarding the 
     information.

     ``SEC. 10995E. ONLINE ADVANCED PLACEMENT COURSES.

       ``(a) Grants Authorized.--From amounts appropriated under 
     section 10995H and made available under section 10995C(2) for 
     a fiscal year, the Secretary shall award grants to State 
     educational agencies to enable such agencies to award grants 
     to local educational agencies to provide students with online 
     advanced placement courses.
       ``(b) State Educational Agency Applications.--
       ``(1) Application required.--Each State educational agency 
     desiring a grant under this section shall submit an 
     application to the Secretary at such time, in such manner, 
     and accompanied by such information as the Secretary may 
     require.
       ``(2) Award basis.--The Secretary shall award grants under 
     this section on a competitive basis.
       ``(c) Grants to Local Educational Agencies.--Each State 
     educational agency receiving a grant award under subsection 
     (b) shall award grants to local educational agencies within 
     the State to carry out activities described in subsection 
     (e). In awarding grants under this subsection, the State 
     educational agency shall give priority to local educational 
     agencies that--
       ``(1) serve high concentrations of low-income students;
       ``(2) serve rural areas; and
       ``(3) the State educational agency determines will not have 
     access to online advanced placement courses without 
     assistance provided under this section.
       ``(d) Contracts.--A local educational agency that receives 
     a grant under this section may enter into a contract with a 
     nonprofit or for-profit organization to provide the online 
     advanced placement courses, including contracting for 
     necessary support services.
       ``(e) Uses.--Grant funds provided under this section may be 
     used to purchase the online curriculum, to train teachers 
     with respect to the use of online curriculum, or to purchase 
     course materials.

     ``SEC. 10995F. ADVANCED PLACEMENT INCENTIVE PROGRAM.

       ``(a) Grants Authorized.--From amounts appropriated under 
     section 10995H and made available under section 10995C for a 
     fiscal year, the Secretary shall award grants to State 
     educational agencies having applications approved under 
     subsection (c) to enable the State educational agencies to 
     reimburse low-income individuals to cover part or all of the 
     costs of advanced placement test fees, if the low-income 
     individuals--
       ``(1) are enrolled in an advanced placement class; and
       ``(2) plan to take an advanced placement test.
       ``(b) Award Basis.--In determining the amount of the grant 
     awarded to each State educational agency under this section 
     for a fiscal year, the Secretary shall consider the number of 
     children eligible to be counted under section 1124(c) in the 
     State in relation to the number of such children so counted 
     in all the States.
       ``(c) Information Dissemination.--A State educational 
     agency shall disseminate information regarding the 
     availability of advanced placement test fee payments under 
     this section to eligible individuals through secondary school 
     teachers and guidance counselors.
       ``(d) Applications.--Each State educational agency desiring 
     a grant under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information as the Secretary may require. At a minimum, 
     each State educational agency application shall--
       ``(1) describe the advanced placement test fees the State 
     educational agency will pay on behalf of low-income 
     individuals in the State from grant funds made available 
     under this section;
       ``(2) provide an assurance that any grant funds received 
     under this section, other than funds used in accordance with 
     subsection (e), shall be used only to pay for advanced 
     placement test fees; and
       ``(3) contain such information as the Secretary may require 
     to demonstrate that the State will ensure that a student is 
     eligible for payments under this section, including 
     documentation required under chapter 1 of subpart 2 of part A 
     of title IV of the Higher Education Act of 1965.
       ``(e) Additional Uses of Funds.--If each eligible low-
     income individual in a State pays not more than a nominal fee 
     to take an advanced placement test in a core subject, then a 
     State educational agency may use grant funds made available 
     under this section that remain after advanced placement test 
     fees have been paid on behalf of all eligible low-income 
     individuals in the State, for activities directly related to 
     increasing--
       ``(1) the enrollment of low-income individuals in advanced 
     placement courses;
       ``(2) the participation of low-income individuals in 
     advanced placement courses; and

[[Page 494]]

       ``(3) the availability of advanced placement courses in 
     schools serving high-poverty areas.
       ``(f) Supplement, Not Supplant.--Grant funds provided under 
     this section shall supplement, and not supplant, other non-
     federal funds that are available to assist low-income 
     individuals in paying for the cost of advanced placement test 
     fees.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as are necessary to carry out this section.
       ``(h) Report.--Each State educational agency annually shall 
     report to the Secretary information regarding--
       ``(1) the number of low-income individuals in the State who 
     received assistance under this section; and
       ``(2) any activities carried out pursuant to subsection 
     (e).
       ``(i) Definitions.--In this section:
       ``(1) Advanced placement test.--The term `advanced 
     placement test' includes only an advanced placement test 
     approved by the Secretary for the purposes of this section.
       ``(2) Low-income individual.--The term `low-income 
     individual' has the meaning given the term in section 
     402A(g)(2) of the Higher Education Act of 1965.

     ``SEC. 10995G. DEFINITIONS.

       ``In this part:
       ``(1) Advanced placement incentive program.--The term 
     `advanced placement incentive program' means a program that 
     provides advanced placement activities and services to low-
     income individuals.
       ``(2) Advanced placement test.--The term `advanced 
     placement test' means an advanced placement test administered 
     by the College Board or approved by the Secretary.
       ``(3) High concentration of low-income students.--The term 
     `high concentration of low-income students', used with 
     respect to a State educational agency, local educational 
     agency or school, means an agency or school, as the case may 
     be, that serves a student population 40 percent or more of 
     whom are from families with incomes below the poverty level, 
     as determined in the same manner as the determination is made 
     under section 1124(c)(2).
       ``(4) Low-income individual.--The term `low-income 
     individual' means, other than for purposes of section 10995F, 
     a low-income individual (as defined in section 402A(g)(2) of 
     the Higher Education Act of 1965 who is academically prepared 
     to take successfully an advanced placement test as determined 
     by a school teacher or advanced placement coordinator taking 
     into consideration factors such as enrollment and performance 
     in an advanced placement course or superior academic ability.
       ``(5) Institution of higher education.--The term 
     `institution of higher education' has the meaning given the 
     term in section 101(a) of the Higher Education Act of 1965.
       ``(6) State.--The term `State' means each of the several 
     States of the United States, the District of Columbia, the 
     Commonwealth of Puerto Rico, Guam, American Samoa, the United 
     States Virgin Islands, the Republic of the Marshall Islands, 
     the Federated States of Micronesia, and the Republic of 
     Palau.

     ``SEC. 10995H. AUTHORIZATION OF APPROPRIATIONS.

       ``For the purpose of carrying out this part, there are 
     authorized to be appropriated $50,000,000 for fiscal year 
     2001, and such sums as may be necessary for each of the 4 
     succeeding fiscal years.''.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mr. Reid, Mr. Warner, Ms. Mikulski, 
        Mr. Jeffords, Mrs. Boxer, Mr. Specter, Mrs. Murray, Ms. 
        Collins, Mr. Johnson, Mr. Wellstone, Mr. Leahy, Mr. Kerry, Mr. 
        Durbin, Mr. Inouye, Mr. Akaka, Mr. Sarbanes, Mr. Schumer, Mr. 
        Harkin, Mrs. Clinton, and Mr. Corzine):
  S. 104. A bill to require equitable coverage of prescription 
contraceptive drugs and devices, and contraceptive services under 
health plans; to the Committee on Health, Education, Labor, and 
Pensions.


                 equitable coverage under health plans

  Mr. REID. Mr. President, I am proud to introduce today, with Senator 
Snowe, the Equity in Prescription and Contraception Coverage Act of 
2001 (EPICC).
  Our legislation would require insurers, HMOs and employee health 
benefit plans that offer prescription drug benefits to cover 
contraceptive drugs and devices approved by the FDA. Further, it would 
require these insurers to cover outpatient contraceptive services if a 
plan covers other outpatient services. Lastly, it would prohibit the 
imposition of copays and deductibles for prescription contraceptives or 
outpatient services that are greater than those for other prescription 
drugs.
  Our bill gives Americans on both sides of the abortion debate the 
opportunity to join together in the common goal of preventing 
unintended pregnancies. I am pleased that we have support from both 
pro-life and pro-choice Senators for this bill.
  We are introducing EPICC today--the first legislative day of the 
107th Congress--because equity in prescription contraception coverage 
is long overdue. Senator Snowe and I first introduced this bill in 
1997. Since this time, the Viagra pill went on the market, and one 
month later was covered by most indemnity policies. Birth control 
pills, which have been on the market since 1960, are covered by only 
thirty-three percent of insurance plans.
  Most recently, the U.S. Equal Employment Opportunity Commission 
(EEOC) issued a decision finding that an employer's failure to include 
insurance coverage for prescription contraceptives in an employee 
health benefits plan, when it covers other prescription drugs and 
devices, constitutes unlawful sex discrimination under Title VII of the 
Civil Rights Act of 1964.
  The EEOC ruling is an important step toward ensuring that women have 
access to affordable contraceptives. At the same time, it highlights 
the importance of our legislation because title VII applies only to 
employers; it does not cover insurance providers. An estimated 16 
million Americans obtain health insurance from private insurance other 
than employer-provided plans. Only the enactment of EPICC will ensure 
that contraceptive coverage is offered by insurance providers.
  Our efforts have not been entirely without results. For the past 
three consecutive years, we have passed a provision in the Treasury-
Postal Appropriations bill that requires Federal health plans to cover 
prescription contraceptives. It is time to pass EPICC and extend this 
law to all Americans.
  It is time to pass EPICC because EPICC is about equality for women. 
For all the advances women have made, they still earn 74 cents for 
every dollar a man makes and on top of that, they pay 68 percent more 
in out-of-pocket costs for health care than men. Reproductive health 
care services account for much of this 68 percent difference. You can 
be sure, if men had to pay for contraceptive drugs and devices, the 
insurance industry would cover them.
  It is time to pass EPICC because the health industry has done a poor 
job of responding to women's health needs. According to a study done by 
the Alan Guttmacher Institute, 49 percent of all large-group health 
care plans do not routinely cover any contraceptive method at all, and 
only 15 percent cover all five of the most common contraceptive 
methods. Women are forced to use disposable income to pay for family 
planning services not covered by their health insurance. ``The Pill''--
one of the most common birth control methods, can cost over $300 a 
year. Women who lack disposable income are forced to use less reliable 
methods of contraception.
  It is time to pass EPICC because each year approximately 3 million 
pregnancies, or 50 percent of all pregnancies, in this country are 
unintended. Of these unintended pregnancies, about half end in 
abortion. Reliable family planning methods must be made available if we 
wish to reduce this disturbing number.
  It is time to pass EPICC because insurance companies routinely cover 
more expensive services, including abortions, sterilizations and tubal 
ligations. Yet according to one study in the American Journal of Public 
Health, health plans would accrue enough savings in pregnancy care 
costs to cover oral contraceptives for all users under the plan by 
increasing the number of women who use oral contraceptives by 15 
percent. Studies indicate that for every dollar of public funds 
invested in family planning, four to fourteen dollars of public funds 
is saved in pregnancy and health care-related costs. Not only will a 
reduction in unintended pregnancies reduce abortion rates, it will also 
lead to a reduction in low-birth weight, infant mortality and maternal 
morbidity.
  It is time to pass EPICC because access to contraception will bring 
down the unintended pregnancy rate, ensure good reproductive health for 
women, and reduce the number of abortions. It is vitally important to 
the health of

[[Page 495]]

our country that quality contraception is not beyond the financial 
reach of women. Regardless of where you stand on the abortion issue, 
prevention is the common ground on which we can all stand. I urge you 
to join me in supporting EPICC.
  Ms. SNOWE. Mr. President, I rise today with my colleague from Nevada, 
Senator Harry Reid, to reintroduce the Equity in Prescription Insurance 
and Contraceptive Coverage Act.
  Today is the 28th anniversary of the landmark Roe v. Wade decision--
an anniversary which makes it especially poignant to reintroduce EPICC 
today. There are three million unintended pregnancies every year--half 
of all pregnancies that occur every year in this country. And 
frighteningly, approximately half of all unintended pregnancies end in 
abortion.
  I am firmly pro-choice and I believe in a woman's right to a safe and 
legal abortion when she needs this procedure. But I want abortion to be 
an option that a woman rarely needs.
  The simplest and most effective means of reducing the number of 
abortions is to reduce the number of unintended pregnancies in America. 
And the safest and most effective means of preventing unintended 
pregnancies are with prescription contraceptives. Unfortunately, while 
the vast majority of insurers cover prescription drugs, they treat 
prescription contraceptives very differently. In fact, half of large 
group plans exclude coverage of contraceptives. And only one-third 
cover oral contraceptives--the most popular form of reversible birth 
control.
  When one realizes the insurance ``carve-out'' for these prescriptions 
and related outpatient treatments, it is no longer a mystery why women 
spend 68 percent more than men in out-of-pocket health care costs. No 
woman should have to forgo or rely on inexpensive and less effective 
contraceptives for purely economic reasons, knowing that she risks an 
unintended pregnancy.
  For the last three years Congress has required the health plans 
participating in the Federal Employees Health Benefit Program--the 
largest employer-sponsored health insurance plan in the country--to 
provide prescription contraceptive coverage if they cover prescription 
drugs as a part of their benefits package. The protections we afford to 
Members of Congress, their staff, other federal employees and 
annuitants, and to the approximately two million women of reproductive 
age who are participating in FEHBP need and deserve to be extended to 
the rest of the country.
  Last December 13, the Equal Employment Opportunity Commission ruled 
that excluding contraceptives from health insurance plans is a 
violation of the 1978 Pregnancy Discrimination Act, which requires 
equal treatment of women ``affected by pregnancy, childbirth or related 
medical conditions,'' in all aspects of employment, including fringe 
benefits.
  The EEOC said that the Act also protects women against discrimination 
because they have the ability to become pregnant, not just because they 
are already pregnant. According to the EEOC's ruling, excluding 
contraceptives also amounts to sex discrimination because these 
prescriptions are available only for women. Furthermore, excluding 
contraceptives due to possible increased costs is not valid--under the 
Pregnancy Discrimination Act Congress specifically rejected costs as a 
defense.
  Unfortunately, the ruling only applies to the two cases examined by 
the EEOC and is not a general ``policy guidance'' that would apply to 
all employers. These two particular health plans must cover 
contraceptives, the ruling said, because they already cover a wide 
range of preventive services, including vaccinations, drugs to control 
blood pressure, weight loss medication and preventive dental care.
  Another health plan--one that doesn't cover these services--might not 
be in violation of the law. But most health plans cover similar 
services, and the decision announced in December could be used by other 
women who seek coverage from their employers.
  The Pregnancy Discrimination Act--and this EEOC decision--only 
reaches employers of 15 people or more. The Equity in Prescription 
Insurance Contraceptive Coverage Act reaches all insurance plans, no 
matter the size, and includes individual insurance--not just employer-
sponsored insurance plans.
  The time has come for Congress to act, once and for all, to ensure 
equity in prescription insurance coverage. The EEOC's decision provides 
a powerful impetus for action in Congress, and demonstrates the degree 
of concern through the nation about unfair and discriminatory 
prescription practices. The EEOC decision highlights the problem; I 
believe passage of our legislation in Congress is the solution.
  Unfortunately, the lack of contraceptive coverage in health insurance 
is not news to most women. Countless American women have been shocked 
to learn that their insurance does not cover contraceptives, one of 
their most basic health care needs, even though other prescription 
drugs which are equally valuable to their lives are routinely covered. 
Less than half--49 percent--of all large-group health care plans cover 
any contraceptive method at all and only 15 percent cover the five most 
common reversible birth control methods. HMOs are more likely to cover 
contraceptives, but only 39 percent cover all five reversible methods. 
And ironically, 86 percent of large group plans, preferred provider 
organizations, and HMOs cover sterilization and between 66 and 70 
percent of these different plans do cover abortion.
  Thirteen states require their state-regulated health plans to 
coverage prescription contraceptive: Maryland, Connecticut, Georgia, 
Hawaii, New Hampshire, Nevada, North Carolina, Vermont, California, 
Delaware, Iowa, Rhode Island, and my home state of Maine. We need to 
ensure that this protection is expanded to all states.
  The concept underlying EPICC is simple. This legislation says that if 
insurers cover prescription drugs and devices, they must also cover 
FDA-approved prescription contraceptives. And in conjunction with this, 
EPICC requires health plans which already cover basic health care 
services to also cover outpatient services related to prescription 
contraceptives.
  The bill does not require insurance companies to cover prescription 
drugs. What the bill does say is that if insurers cover prescription 
drugs, they cannot carve prescription contraceptives out of their 
formularies. And it says that insurers which cover outpatient health 
care services cannot limit or exclude coverage of the medical and 
counseling services necessary for effective contraceptive use.
  This bill is good health policy. By helping families to adequately 
space their pregnancies, contraceptives contribute to healthy 
pregnancies and healthy births, reduce rates of maternal complications, 
and reduces the possibility of low-birthweight births.
  Furthermore, the Equity in Prescription Insurance and Contraceptive 
Coverage Act makes good economic sense. We know that contraceptives are 
cost-effective: in the public sector, for every dollar invested in 
family planning, $4 to $14 is saved in health care and related costs. 
And all methods of reversible contraceptives are cost-effective when 
compared to the cost of unintended pregnancy. A sexually active woman 
who uses no contraception costs the health care provider an average of 
$3,225 in a given year. The average cost of an uncomplicated vaginal 
delivery in 1993 was approximately $6,400. and for every 100 women who 
do not use contraceptives in a given year, 85 percent will become 
pregnant.
  Why do insurance companies exclude prescription contraceptive 
coverage from their list of covered benefits--especially when they 
cover other prescription drugs? The tendency of insurance plans to 
cover sterilization and abortion reflects, in part, their long-standing 
tendency to cover surgery and treatment over prevention. But insurers 
do not feel compelled to cover prescription contraceptives because they 
know that most women who lack contraceptive coverage will simply pay 
for them out of pocket. And in order to prevent an unintended 
pregnancy, a woman needs to be on some form of birth control for almost 
30 years of her life.
  The Equity in Prescription Insurance and Contraceptive Coverage Act 
tells

[[Page 496]]

insurance companies that we can no longer tolerate policies that 
disadvantage women and disadvantage our nation. When our bill is 
passed, women will finally be assured of equity in prescription drug 
coverage and health care services. And America's unacceptably high 
rates of unintended pregnancies and abortions will be reduced in the 
process.
  The philosophy behind the bill is that contraceptives should be 
treated no differently than any other prescription drug or device. It 
does not give contraceptives any type of special insurance coverage, 
but instead seeks to achieve equity of treatment and parity of 
coverage. For that reason, the bill specifies that if a plan imposes a 
deductible or cost-sharing requirement on prescription drugs or 
devices, it can impose the same deductible or cost-sharing requirement 
on prescription contraception. But it cannot charge a higher cost-
sharing requirement or deductible on contraceptives. Outpatient 
contraceptive services must also be treated similarly to general 
outpatient health care services.
  Time and time again Americans have expressed the desire for their 
leaders to come together to work on the problems that face us. This 
bill exemplifies that spirit of cooperation. It crosses some very wide 
gulfs and makes some very meaningful changes in policy that will 
benefit countless Americans.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 105. A bill to amend the Agricultural Adjustment Act to prohibit 
the Secretary of Agriculture from basing minimum prices for Class I 
milk on the distance or transportation costs from any location that is 
not within a marketing area, except under certain circumstances, and 
for other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


                           dairy legislation

  Mr. FEINGOLD. Mr. President, I rise today to offer a measure which 
will serve as a first step towards eliminating the inequities borne by 
the dairy farmers of Wisconsin and the upper Midwest under the Federal 
Milk Marketing Order system.
  The Federal Milk Marketing Order system, created nearly 60 years ago, 
establishes minimum prices for milk paid to producers throughout 
various marketing areas in the U.S. For sixty years, this system has 
discriminated against producers in the Upper Midwest by awarding a high 
price to dairy farmers in proportion to the distance of their farms 
from Eau Claire, Wisconsin.
  This legislation is very simple. It identifies the single most 
harmful and unjust feature of the current system, and corrects it.
  Under the current archaic law, the price for fluid milk increases 
depending on the distance from Eau Claire, Wisconsin, even though most 
milk marketing orders do not receive any milk from Wisconsin.
  The bill I introduce today will prohibit the Secretary of Agriculture 
from using distance or transportation costs from any location as the 
basis for pricing milk, unless significant quantities of milk are 
actually transported from that location into the recipient market. The 
Secretary will have to comply with the statutory requirement that 
supply and demand factors be considered as specified in the 
Agricultural Marketing Agreement Act when setting milk prices in 
marketing orders. The fact remains that single-basing-point pricing 
simply cannot be justified based on supply and demand for milk both in 
local and national markets.
  This bill also requires the Secretary to report to Congress on 
specifically which criteria are used to set milk prices. Finally, the 
Secretary will have to certify to Congress that the criteria used by 
the Department do not in any way attempt to circumvent the prohibition 
on using distance or transportation cost as basis for pricing milk.
  This one change is so crucial to Upper Midwest producers, because the 
current system has penalized them for many years. By providing 
disparate profits for producers in other parts of the country and 
creating artificial economic incentives for milk production, Wisconsin 
producers have seen national surpluses rise, and milk prices fall. 
Rather than providing adequate supplies of fluid milk in some parts of 
the country, the prices have led to excess production.
  The prices have provided production incentives beyond those needed to 
ensure a local supply of fluid milk in some regions, leading to an 
increase in manufactured products in those marketing orders. Those 
manufactured products directly compete with Wisconsin's processed 
products, eroding our markets and driving national prices down.
  The perverse nature of this system is further illustrated by the fact 
that since 1995 some regions of the U.S., notably the Central states 
and the Southwest, are producing so much milk that they are actually 
shipping fluid milk north to the Upper Midwest. The high fluid milk 
prices have generated so much excess production, that these markets 
distant from Eau Claire are now encroaching upon not only our 
manufactured markets, but also our markets for fluid milk, further 
eroding prices in Wisconsin.
  The market distorting effects of the fluid price differentials in 
federal orders are manifest in the Congressional Budget Office estimate 
that eliminating the orders would save $669 million over five years. 
Government outlays would fall, CBO concludes, because production would 
fall in response to lower milk prices and there would be fewer 
government purchases of surplus milk. The regions which would gain and 
lose in this scenario illustrate the discrimination inherent to the 
current system. Economic analyses show that farm revenues in a market 
undisturbed by Federal Orders would actually increase in the Upper 
Midwest and fall in most other milk-producing regions.
  While this system has been around since 1937, the practice of basing 
fluid milk price differentials on the distance from Eau Claire was 
formalized in the 1960's, when the Upper Midwest arguably was the 
primary reserve for additional supplies of milk. The idea was to 
encourage local supplies of fluid milk in areas of the country that did 
not traditionally produce enough fluid milk to meet their own needs.
  Mr. President, that is no longer the case. The Upper Midwest is 
neither the lowest cost production area nor a primary source of reserve 
supplies of milk. In many of the markets with higher fluid milk 
differentials, milk is produced efficiently, and in some cases, at 
lower cost than the upper Midwest. Unfortunately, the prices didn't 
adjust with changing economic conditions, most notably the shift of the 
dairy industry away from the Upper Midwest and towards the Southwest, 
specifically California, which now leads the nation in milk production.
  Fluid milk prices should have been lowered to reflect that trend. 
Instead, in 1985, the prices were increased for markets distant from 
Eau Claire. USDA has refused to use the administrative authority 
provided by Congress to make the appropriate adjustments to reflect 
economic realities. They continue to stand behind single-basing-point 
pricing.
  The result has been a decline in the Upper Midwest dairy industry, 
not because they can't produce a product that can compete in the market 
place, but because the system discriminates against them. Today, 
Wisconsin loses dairy farmers at a rate of more than 5 per day. The 
Upper Midwest, with the lowest fluid milk prices, is shrinking as a 
dairy region despite the dairy-friendly climate of the region. Other 
regions with higher fluid milk prices are growing rapidly.
  In an unregulated market with a level playing field, these shifts in 
production might be fair. But in a market where the government is 
setting the prices and providing that artificial advantage to regions 
outside the Upper Midwest, the current system is unconscionable.
  I urge my colleagues to do the right thing and bring reform to this 
out-dated system and work to eliminate the inequities in the current 
milk marketing order pricing system. I ask unanimous consent that the 
text of the bill be printed in the Record.

[[Page 497]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 105

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

     SECTION 1. LOCATION ADJUSTMENTS FOR MINIMUM PRICES FOR CLASS 
                   I MILK.

       Section 8c(5) of the Agricultural Adjustment Act (7 U.S.C. 
     608c(5)), reenacted with amendments by the Agricultural 
     Marketing Agreement Act of 1937, is amended--
       (1) in paragraph (A)--
       (A) in clause (3) of the second sentence, by inserting 
     after ``the locations'' the following: ``within a marketing 
     area subject to the order''; and
       (B) by striking the last 2 sentences and inserting the 
     following: ``Notwithstanding subsection (18) or any other 
     provision of law, when fixing minimum prices for milk of the 
     highest use classification in a marketing area subject to an 
     order under this subsection, the Secretary may not, directly 
     or indirectly, base the prices on the distance from, or all 
     or part of the costs incurred to transport milk to or from, 
     any location that is not within the marketing area subject to 
     the order, unless milk from the location constitutes at least 
     50 percent of the total supply of milk of the highest use 
     classification in the marketing area. The Secretary shall 
     report to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate on the criteria that are used as 
     the basis for the minimum prices referred to in the preceding 
     sentence, including a certification that the minimum prices 
     are made in accordance with the preceding sentence.''; and
       (2) in paragraph (B)(c), by inserting after ``the 
     locations'' the following: ``within a marketing area subject 
     to the order''.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Hutchinson):
  S. 106. A bill to amend the provisions of titles 5 and 28, United 
States Code, relating to equal access to justice, award of reasonable 
costs and fees, taxpayers' recovery of costs, fees, and expenses, 
administrative settlement offers, and for other purposes; to the 
Committee on the Judiciary.


               equal access to justice reform legislation

  Mr. FEINGOLD. Mr. President, I rise today to introduce the Equal 
Access to Justice Reform Amendments of 2001. This legislation contains 
adjustments to the Equal Access to Justice Act (EAJA) that will 
streamline and improve the process of awarding attorney's fees to 
private parties who prevail in litigation against the Federal 
government. This is the now the fourth Congress in which I have 
introduced this legislation. I believe these reforms are an important 
step in reducing the burden of defending government litigation for many 
individuals and small businesses.
  I am very pleased to be joined in introducing this legislation once 
again this year by my friend from Arkansas, Sen. Tim Hutchinson. We 
hope that by working on a bipartisan basis on this important project we 
can improve the chances that it can become law.
  Over the years, members of Congress often speak of ``getting 
government off the backs of the American people.'' Sometimes we 
disagree about when government is a burden and when it is giving a 
helping hand. But all of us in the Senate want to reform government in 
ways that will improve the lives of people all across this nation. The 
legislation we are proposing today deals directly with a problem that 
affects everyday Americans who face legal battles with the federal 
government and prevail. Even if they win in court, they may still lose 
financially because of the expense of paying their attorneys.
  At the outset, it is important to understand what the Equal Access to 
Justice Act is, and why it exists. The premise of this statute is very 
simple. EAJA places individuals and small businesses who face the 
United States Government in litigation on more equal footing with the 
government by establishing guidelines for the award of attorney's fees 
when the individual or small business prevails. Quite simply, EAJA 
acknowledges that the resources available to the federal government in 
a legal dispute far outweigh those available to most Americans. This 
disparity is lessened by requiring the government in certain instances 
to pay the attorneys' fees of successful private parties. By giving 
successful parties the right to seek attorneys' fees from the United 
States, EAJA seeks to prevent small business owners and individuals 
from having to risk their companies or their family savings in order to 
seek justice.
  My interest in this issue predates my election to the Senate. It 
arises from my experience both as a private attorney and a Member of 
the state Senate in my home state of Wisconsin. While in private 
practice, I became aware of how the ability to recoup attorney's fees 
is a significant factor, and often one of the first considered, when 
deciding whether or not to seek redress in the courts or to defend a 
case. Upon entering the Wisconsin State Senate, I authored legislation 
modeled on the federal law, which had been championed by one of my 
predecessors in this body from Wisconsin, Senator Gaylord Nelson. 
Today, section 814.246 of the Wisconsin statutes contains provisions 
similar to the federal EAJA statute.
  It seemed to me then, as it does now, that we should do all that we 
can to help ease the financial burdens on people who need to have their 
claims reviewed and decided by impartial decision makers. To this end, 
I have reviewed the existing federal statutes with an eye toward 
improving them and making them work better. The bill Sen. Hutchinson 
and I are introducing today does a number of things to make EAJA more 
effective for individuals and small business men and women all across 
this country.
  First and most important, this legislation eliminates the provision 
in current law that allows the government to avoid paying attorneys' 
fees when it loses a suit if it can show that its position was 
substantially justified. I believe that this high threshold for 
obtaining attorneys' fees is unfair. If an individual or small business 
battles the federal government in an adversarial proceeding and 
prevails, the government should simply pay the fees incurred. Imagine 
the scenario of a small business that spends time and money dueling 
with the government and wins, only to find out that it must now 
undertake the additional step of litigating the justification of 
government's litigation position. For the government, with its vast 
resources, this second litigation over fees poses little difficulty, 
but for the citizen or small business it may simply not be financially 
feasible.
  Not only is this additional step a financial burden on the private 
litigant, but a 1992 study also reveals that it is unnecessary and a 
waste of government resources. University of Virginia Professor Harold 
Krent on behalf of the Administrative Conference of the United States 
found that only a small percentage of EAJA awards were denied because 
of the substantial justification defense. While it is impossible to 
determine the exact cost of litigating the issue of subtantial 
justification, it is Prof. Krent's opinion, based upon review of cases 
in 1989 and 1990, that while the substantial justification defense may 
save some money, it was not enough to justify the cost of the 
additional litigation. In short, eliminating this often burdensome 
second step is a cost effective step which will streamline recovery 
under EAJA and may very well save the government money in the long run.
  The second part of this legislation that will streamline and improve 
EAJA is a provision designed to encourage settlement and avoid costly 
and protracted litigation. Under the bill, the government can make an 
offer of settlement after an application for fees and other expenses 
has been filed. If the government's offer is rejected and the 
prevailing party seeking recovery ultimately wins a smaller award, that 
party is not entitled to the attorneys' fees and costs incurred after 
the date of the government's offer. Again, this will encourage 
settlement, speed the claims process, and thereby reduce the time and 
expense of the litigation.
  The final improvement to EAJA included in this legislation is the 
removal of the carve out of cases where the prevailing party is 
eligible to get attorneys fees under section 7430 of the Internal 
Revenue Code. Under current law, EAJA is inapplicable in cases where a 
taxpayer prevails against the

[[Page 498]]

government. I was an original cosponsor of a bill that suggested a 
similar reform introduced by Senator Leahy of Vermont in the 105th 
Congress. This provision helps to level the playing field between the 
IRS and everyday citizens. There is no reason that taxpayers should be 
treated differently than any other party that prevails in a case 
against the government. They deserve to have their fees paid if they 
win.
  We all know that the American small business owner has a difficult 
road to make ends meet and that unnecessary or overly burdensome 
government regulation can be a formidable obstacle to doing business. 
It can be the difference between success or failure. The Equal Access 
to Justice Act was conceived and implemented to help balance the 
formidable power of the federal government. It has already helped many 
Americans. The legislation we are offering today will make EAJA more 
effective for more Americans while at the same time helping to deter 
the government from acting in an indefensible and unwarranted manner.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 106

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

     SECTION 1. EQUAL ACCESS TO JUSTICE REFORM.

       (a) Short Title.--This Act may be cited as the ``Equal 
     Access to Justice Reform Amendments of 2001''.
       (b) Award of Costs and Fees.--
       (1) Administrative proceedings.--Section 504(a)(2) of title 
     5, United States Code, is amended by inserting after ``(2)'' 
     the following: ``At any time after the commencement of an 
     adversary adjudication covered by this section, the 
     adjudicative officer may ask a party to declare whether such 
     party intends to seek an award of fees and expenses against 
     the agency should such party prevail.''.
       (2) Judicial proceedings.--Section 2412(d)(1)(B) of title 
     28, United States Code, is amended by inserting after ``(B)'' 
     the following: ``At any time after the commencement of an 
     adversary adjudication covered by this section, the court may 
     ask a party to declare whether such party intends to seek an 
     award of fees and expenses against the agency should such 
     party prevail.''.
       (c) Payment From Agency Appropriations.--
       (1) Administrative proceedings.--Section 504(d) of title 5, 
     United States Code, is amended by adding at the end the 
     following: ``Fees and expenses awarded under this subsection 
     may not be paid from the claims and judgments account of the 
     Treasury from funds appropriated pursuant to section 1304 of 
     title 31.''.
       (2) Judicial proceedings.--Section 2412(d)(4) of title 28, 
     United States Code, is amended by adding at the end the 
     following: ``Fees and expenses awarded under this subsection 
     may not be paid from the claims and judgments account of the 
     Treasury from funds appropriated pursuant to section 1304 of 
     title 31.''.
       (d) Taxpayers' Recovery of Costs, Fees, and Expenses.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code, is amended by striking subsection (f).
       (2) Judicial proceedings.--Section 2412 of title 28, United 
     States Code, is amended by striking subsection (e).
       (e) Offers of Settlement.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code (as amended by subsection (d) of this 
     section), is amended by adding at the end the following:
       ``(f)(1) At any time after the filing of an application for 
     fees and other expenses under this section, an agency from 
     which a fee award is sought may serve upon the applicant an 
     offer of settlement of the claims made in the application. If 
     within 10 days after service of the offer the applicant 
     serves written notice that the offer is accepted, either 
     party may then file the offer and notice of acceptance 
     together with proof of service thereof.
       ``(2) An offer not accepted shall be deemed withdrawn. The 
     fact that an offer is made but not accepted shall not 
     preclude a subsequent offer. If any award of fees and 
     expenses for the merits of the proceeding finally obtained by 
     the applicant is not more favorable than the offer, the 
     applicant shall not be entitled to receive an award for 
     attorneys' fees or other expenses incurred in relation to the 
     application for fees and expenses after the date of the 
     offer.''.
       (2) Judicial proceedings.--Section 2412 of title 28, United 
     States Code (as amended by subsection (d) of this section), 
     is amended by inserting after subsection (d) the following:
       ``(e)(1) At any time after the filing of an application for 
     fees and other expenses under this section, an agency of the 
     United States from which a fee award is sought may serve upon 
     the applicant an offer of settlement of the claims made in 
     the application. If within 10 days after service of the offer 
     the applicant serves written notice that the offer is 
     accepted, either party may then file the offer and notice of 
     acceptance together with proof of service thereof.
       ``(2) An offer not accepted shall be deemed withdrawn. The 
     fact that an offer is made but not accepted shall not 
     preclude a subsequent offer. If any award of fees and 
     expenses for the merits of the proceeding finally obtained by 
     the applicant is not more favorable than the offer, the 
     applicant shall not be entitled to receive an award for 
     attorneys' fees or other expenses incurred in relation to the 
     application for fees and expenses after the date of the 
     offer.''.
       (f) Elimination of Substantial Justification Standard.--
       (1) Administrative proceedings.--Section 504 of title 5, 
     United States Code, is amended--
       (A) in subsection (a)(1), by striking all beginning with 
     ``, unless the adjudicative officer'' through ``expenses are 
     sought''; and
       (B) in subsection (a)(2), by striking ``The party shall 
     also allege that the position of the agency was not 
     substantially justified.''.
       (2) Judicial proceedings.--Section 2412(d) of title 28, 
     United States Code, is amended--
       (A) in paragraph (1)(A), by striking ``, unless the court 
     finds that the position of the United States was 
     substantially justified or that special circumstances make an 
     award unjust'';
       (B) in paragraph (1)(B), by striking ``The party shall also 
     allege that the position of the United States was not 
     substantially justified. Whether or not the position of the 
     United States was substantially justified shall be determined 
     on the basis of the record (including the record with respect 
     to the action or failure to act by the agency upon which the 
     civil action is based) which is made in the civil action for 
     which fees and other expenses are sought.''; and
       (C) in paragraph (3), by striking ``, unless the court 
     finds that during such adversary adjudication the position of 
     the United States was substantially justified, or that 
     special circumstances make an award unjust''.
       (g) Reports to Congress.--
       (1) Administrative proceedings.--Not later than 180 days 
     after the date of the enactment of this Act, the 
     Administrative Conference of the United States shall submit a 
     report to Congress--
       (A) providing an analysis of the variations in the 
     frequency of fee awards paid by specific Federal agencies 
     under the provisions of section 504 of title 5, United States 
     Code; and
       (B) including recommendations for extending the application 
     of such sections to other Federal agencies and administrative 
     proceedings.
       (2) Judicial proceedings.--Not later than 180 days after 
     the date of the enactment of this Act, the Department of 
     Justice shall submit a report to Congress--
       (A) providing an analysis of the variations in the 
     frequency of fee awards paid by specific Federal districts 
     under the provisions of section 2412 of title 28, United 
     States Code; and
       (B) including recommendations for extending the application 
     of such sections to other Federal judicial proceedings.
       (h) Effective Date.--The provisions of this Act and the 
     amendments made by this Act shall take effect 30 days after 
     the date of the enactment of this Act and shall apply only to 
     an administrative complaint filed with a Federal agency or a 
     civil action filed in a United States court on or after such 
     date.

  Mr. HUTCHINSON. Mr. President, I rise today, with my colleague 
Senator Feingold, to introduce the Equal Access to Justice (EAJA) 
Reform Amendments of 2001. I do so because it is my sincere hope that 
the 107th Congress will work in a bi-partisan manner to provide small 
business owners and individuals who prevail in court against the 
federal government with automatic reimbursement for their legal 
expenses--thereby fulfilling the true intent of EAJA when passed in 
1980.
  EAJA's initial premise was to reduce the vast disparity in resources 
and expertise which exists between small business owners or individuals 
and federal agencies and to encourage the government to ensure that the 
claims it pursues are worthy of its efforts. Twenty years ago, former 
Senator Gaylord Nelson, the author of the original, bipartisan EAJA 
bill, clearly explained EAJA's intent when he stated, ``All I can say 
is the taxpayer is injured, and if the taxpayer was correct, and that 
is the finding, then we ought to make the taxpayer whole.'' I commend 
former Senator Nelson. His steadfast commitment to our nation's 
businesses as Chairman of the Senate Small Business Committee is worthy 
of admiration. As

[[Page 499]]

a result of a political compromise, however, the final version of EAJA 
does not provide for an automatic award of attorneys' fees. Rather, it 
provides for an award of attorneys' fees only when an agency or a court 
determines that the government's position was not ``substantially 
justified'' or that ``special circumstances'' exist which would make an 
award unjust.
  Agencies and courts have strayed far from the original intent of EAJA 
by repeatedly using these provisions to avoid awarding attorneys' fees 
to small businesses and individuals who have successfully defended 
themselves. The bill that Senator Feingold and I are introducing today, 
the Equal Access to Justice Reform Amendments of 2001, would amend EAJA 
to provide that a small business owner or individual prevailing against 
the government will be automatically entitled to recover their 
attorneys' fees and expenses incurred in their defense.
  Unfortunately, EAJA is not making the taxpayers of this nation whole 
after they defend themselves against government action. Thus, I ask 
that my colleagues join Senator Feingold and myself in our effort to 
make these American taxpayers whole by cosponsoring and supporting the 
Equal Access to Justice Reform Amendments of 2001.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 107. A bill to allow modified bloc voting by cooperative 
associations of milk producers in connection with a referendum on 
Federal Milk Marketing Order reform; to the Committee on Agriculture, 
Nutrition, and Forestry.


               democracy for dairy producers act of 2001

  Mr. FEINGOLD. Mr. President, I rise to introduce a measure that will 
begin to restore to many dairy farmers throughout the nation, part of 
the market power they have lost in recent years.
  Mr. President, when dairy farmers across the country voted on a 
referendum two years ago--perhaps the most significant change in dairy 
policy in sixty years--they didn't actually get to vote. Instead, their 
dairy marketing cooperatives will cast their votes for them.
  This procedure is called bloc voting and it is used all the time. 
Basically, a Cooperative's Board of Directors decides that, in the 
interest of time, bloc voting will be implemented for that particular 
vote. In the interest of time, but not always in the interest of their 
producer owner-members.
  Mr. President, I do think that bloc voting can be a useful tool in 
some circumstances, but I have serious concerns about its use in every 
circumstance. Farmers in Wisconsin and in other states tell me that 
they do not agree with their Cooperative's view on every vote. Yet, 
they have no way to preserve their right to make their single vote 
count.
  After speaking to farmers and officials at USDA, I have learned that 
if a Cooperative bloc votes, individual members simply have no 
opportunity to voice opinions separately. That seems unfair when you 
consider what a monumental issue is at stake. Coops and their members 
do not always have identical interests. We shouldn't ask farmers to 
ignore that fact.
  Mr. President, the Democracy for Dairy Producers Act of 2001 is 
simple and fair. It provides that a cooperative cannot deny any of its 
members a ballot if one or two or ten or all of the members chose to 
vote on their own.
  This will in no way slow down the process at USDA; implementation of 
any rule or regulation would be able to proceed on schedule. Also, I do 
not expect that this would change the final outcome of any given vote. 
Coops could still cast votes for their members who do not exercise 
their right to vote individually. And to the extent that coops 
represent farmers interest, farmers are likely to vote along with the 
coops, but whether they join the coops or not, farmers deserve the 
right to vote according to their own views.
  I urge my colleagues to return just a little bit of power to 
America's farmers, and a little bit of pure democracy to the vote on 
issues that have such an impact on their future.
  I urge my colleagues to support the Democracy for Dairy Producers 
Act, a dairy bill without regional bias.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 107

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

     SECTION 1. SHORT TITLE.

       The Act may be cited as the ``Democracy for Dairy Producers 
     Act of 2001''.

     SEC. 2. MODIFIED BLOC VOTING.

       (a) In General.--Notwithstanding paragraph (12) of section 
     8c of the Agricultural Adjustment Act (7 U.S.C. 608c), 
     reenacted with amendments by the Agricultural Marketing 
     Agreement Act of 1937, in the case of the referendum 
     conducted as part of the consolidation of Federal milk 
     marketing orders and related reforms under section 143 of the 
     Agricultural Market Transition Act (7 U.S.C. 7253), if a 
     cooperative association of milk producers elects to hold a 
     vote on behalf of its members as authorized by that 
     paragraph, the cooperative association shall provide to each 
     producer, on behalf of which the cooperative association is 
     expressing approval or disapproval, written notice 
     containing--
       (1) a description of the questions presented in the 
     referendum;
       (2) a statement of the manner in which the cooperative 
     association intends to cast its vote on behalf of the 
     membership; and
       (3) information regarding the procedures by which a 
     producer may cast an individual ballot.
       (b) Tabulation of Ballots.--At the time at which ballots 
     from a vote under subsection (a) are tabulated by the 
     Secretary of Agriculture, the Secretary shall adjust the vote 
     of a cooperative association to reflect individual votes 
     submitted by producers that are members of, stockholders in, 
     or under contract with, the cooperative association.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 108. A bill to reduce the number of executive branch political 
appointees; to the Committee on Governmental Affairs.


    legislation to Reduce the Number of Executive Branch Political 
                              Appointments

  Mr. FEINGOLD. Mr. President, I am pleased to reintroduce legislation 
to reduce the number of presidential political appointees. 
Specifically, the bill caps the number of political appointees at 
2,000. The most recent Congressional Budget Office (CBO) estimates of 
this measure is that it would save $382 million over the next five 
years, and $872 million over the next 10 years.
  The bill is based on the recommendations of a number of distinguished 
panels, including most recently, the Twentieth Century Fund Task Force 
on the Presidential Appointment Process. The task force findings are 
only the latest in a long line of recommendations that we reduce the 
number of political appointees in the Executive Branch. For many years, 
the proposal has been included in CBO's annual publication Reducing the 
Deficit: Spending and Revenue Options, and it was one of the central 
recommendations of the National Commission on the Public Service, 
chaired by former Federal Reserve Board Chairman Paul Volcker.
  Between 1980 and 1992, the ranks of political appointees grew 17 
percent, over three times as fast as the total number of Executive 
Branch employees and looking back to 1960 their growth is even more 
dramatic. In his book Thickening Government: Federal Government and the 
Diffusion of Accountability, author Paul Light reports a startling 430 
percent increase in the number of political appointees and senior 
executives in Federal government between 1960 and 1992.
  Mr. President, it is essential that any Administration be able to 
implement the policies that brought it into office in the first place. 
Government must be responsive to the priorities of the electorate. But 
as the Volcker Commission noted, the great increase in the number of 
political appointees in recent years has not made government more 
effective or more responsive to political leadership. Indeed, in their 
report, the Volcker Commission argued that the growing number of 
presidential appointees may ``actually undermine effective presidential 
control of the executive branch.'' The report went on to note that the 
large number of presidential appointees simply cannot be managed 
effectively by any President or White House. The Commission argued that 
this lack of control and political focus ``may actually dilute the

[[Page 500]]

President's ability to develop and enforce a coherent, coordinated 
program and to hold cabinet secretaries accountable.''
  Adding organizational layers of political appointees can also 
restrict access to important resources, while doing nothing to reduce 
bureaucratic impediments.
  In commenting on this problem, author Light noted, ``As this sediment 
has thickened over the decades, presidents have grown increasingly 
distant from the lines of government, and the front lines from them.'' 
Light added that ``Presidential leadership, therefore, may reside in 
stripping government of the barriers to doing its job effectively. . 
.''
  The Volcker Commission also asserted that this thickening barrier of 
temporary appointees between the President and career officials can 
undermine development of a proficient civil service by discouraging 
talented individuals from remaining in government service or even 
pursuing a career in government in the first place.
  Mr. President, former Attorney General Elliot Richardson put it well 
when he noted:

       But a White House personnel assistant sees the position of 
     deputy assistant secretary as a fourth-echelon slot. In his 
     eyes that makes it an ideal reward for a fourth-echelon 
     political type - a campaign advance man, or a regional 
     political organizer. For a senior civil servant, it's irksome 
     to see a position one has spent 20 or 30 years preparing for 
     preempted by an outsider who doesn't know the difference 
     between an audit exception and an authorizing bill.

  Mr. President, the report of the Twentieth Century Fund Task Force on 
the Presidential Appointment Process identified another problem 
aggravated by the excessive number of political appointees, namely the 
increasingly lengthy process of filling these thousands of positions. 
As the Task Force reported, both President Bush and President Clinton 
were into their presidencies for many months before their leadership 
teams were fully in place. The Task Force noted that ``on average, 
appointees in both administrations were confirmed more than eight 
months after the inauguration--one-sixth of an entire presidential 
term.'' By contrast, the report noted that in the presidential 
transition of 1960, ``Kennedy appointees were confirmed, on average, 
two and a half months after the inauguration.''
  In addition to leaving vacancies among key leadership positions in 
government, the appointment process delays can have a detrimental 
effect on potential appointees. The Twentieth Century Fund Task Force 
reported that appointees can ``wait for months on end in a limbo of 
uncertainty and awkward transition from the private to the public 
sector.''
  Mr. President, as we reduce the number of government employees, 
streamline agencies, and make government more responsive, we should 
also right size the number of political appointees, ensuring a 
sufficient number to implement the policies of any Administration 
without burdening the Federal budget with unnecessary, possibly 
counterproductive political jobs.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record immediately following my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 108

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

     SECTION 1. REDUCTION IN NUMBER OF POLITICAL APPOINTEES.

       (a) Definition.--In this section, the term ``political 
     appointee'' means any individual who--
       (1) is employed in a position on the executive schedule 
     under sections 5312 through 5316 of title 5, United States 
     Code;
       (2) is a limited term appointee, limited emergency 
     appointee, or noncareer appointee in the senior executive 
     service as defined under section 3132(a) (5), (6), and (7) of 
     title 5, United States Code, respectively; or
       (3) is employed in a position in the executive branch of 
     the Government of a confidential or policy-determining 
     character under Schedule C of subpart C of part 213 of title 
     5 of the Code of Federal Regulations.
       (b) Limitation.--The President, acting through the Office 
     of Management and Budget and the Office of Personnel 
     Management, shall take such actions as necessary (including 
     reduction in force actions under procedures established under 
     section 3595 of title 5, United States Code) to ensure that 
     the total number of political appointees shall not exceed 
     2,000.
       (c) Effective Date.--This section shall take effect on 
     October 1, 2001.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Jeffords, and Mr. Kohl):
  S. 109. A bill to establish the Dairy Farmer Viability Commission, to 
the Committee on Agriculture, Nutrition, and Forestry.


                       Dairy Farmer Viability Act

  Mr. FEINGOLD. Mr. President, I rise today to introduce the Dairy 
Farmers Viability Act, legislation to establish a Commission to provide 
Congress with legislative and administrative recommendations to address 
dairy farming prices, stability, and marketplace competition and 
concentration.
  As Congress moves to revise the 1996 farm bill, it is of paramount 
importance that we fashion dairy policies to meet the needs of all 
dairy farmers. I have taken the floor a number of times to talk about 
the challenges facing Wisconsin's dairy farmers, and many of those 
challenges are a result of inequities in the current pricing structure 
of milk. While I may disagree on many levels with my friend from 
Vermont, Senator Jeffords, there are a number of issues that face all 
dairy farmers, whether they are in Vermont, Idaho or Wisconsin.
  This commission will help Congress address many of these common 
concerns, such as reducing the concentration in the marketplace, 
increasing competition in rural America, and improving farm-gate 
prices. I hope my colleagues will work with us to move this commission 
forward quickly and help to address the concerns of dairy farmers 
nationwide.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 109

       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 ``Dairy Farmer Viability 
     Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the farm-retail price spread (the difference between 
     farm and retail values) for dairy products has doubled since 
     the early 1980's;
       (2) the price of raw milk sent to the market by dairy 
     producers has fallen to levels received in 1978; and
       (3) the number of family-sized dairy operations has 
     decreased by almost 75 percent in the last 2 decades, with 
     some States losing nearly 10 percent of their dairy farmers 
     in recent months.

     SEC. 3. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established a commission to be 
     known as the ``Dairy Farmer Viability Commission'' (referred 
     to in this Act as the ``Commission'').
       (b) Membership.--
       (1) Composition.--The Commission shall be composed of 15 
     members appointed by the Secretary.
       (2) Prohibition on federal government employment.--A member 
     of the Commission appointed under paragraph (1) shall not be 
     an employee or former employee of the Federal Government.
       (3) Date of appointments.--The appointment of a member of 
     the Commission shall be made as soon as practicable after the 
     date of enactment of this Act.
       (c) Term; Vacancies.--
       (1) Term.--A member shall be appointed for the life of the 
     Commission.
       (2) Vacancies.--A vacancy on the Commission--
       (A) shall not affect the powers of the Commission; and
       (B) shall be filled in the same manner as the original 
     appointment was made.
       (d) Initial Meeting.--Not later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold the initial meeting of the 
     Commission.
       (e) Meetings.--The Commission shall meet at the call of the 
     Chairperson.
       (f) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (g) Chairperson and Vice Chairperson.--The Commission shall 
     select a Chairperson and Vice Chairperson from among the 
     members of the Commission.

     SEC. 4. DUTIES.

       (a) Study.--The Commission shall conduct a study on matters 
     relating to improving the viability of dairy farming.

[[Page 501]]

       (b) Recommendations.--The Commission shall develop 
     recommendations to improve the viability of dairy farming 
     after considering, with respect to dairy industry--
       (1) farm prices;
       (2) competition;
       (3) leverage;
       (4) stability; and
       (5) concentration in the marketplace.
       (c) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall submit to the 
     President and Congress a report that contains--
       (1) a detailed statement of the findings and conclusions of 
     the Commission; and
       (2) the recommendations of the Commission for such 
     legislation and administrative actions as the Commission 
     considers appropriate.

     SEC. 5. POWERS.

       (a) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out this Act.
       (b) Information From Federal Agencies.--
       (1) In general.--The Commission may secure directly from a 
     Federal agency such information as the Commission considers 
     necessary to carry out this Act.
       (2) Provision of information.--On request of the 
     Chairperson of the Commission, the head of the agency shall 
     provide the information to the Commission.
       (c) Postal Services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other agencies of the Federal Government.
       (d) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.

     SEC. 6. COMMISSION PERSONNEL MATTERS.

       (a) Compensation of Members.--A member of the Commission 
     shall be compensated at a rate equal to the daily equivalent 
     of the annual rate of basic pay prescribed for level IV of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which the member is engaged in the performance of the duties 
     of the Commission.
       (b) Travel Expenses.--A member of the Commission shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for an employee of an agency 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from the home or regular place of business 
     of the member in the performance of the duties of the 
     Commission.
       (c) Staff.--
       (1) In general.--The Chairperson of the Commission may, 
     without regard to the civil service laws (including 
     regulations), appoint and terminate an executive director and 
     such other additional personnel as are necessary to enable 
     the Commission to perform the duties of the Commission.
       (2) Confirmation of executive director.--The employment of 
     an executive director shall be subject to confirmation by the 
     Commission.
       (3) Compensation.--
       (A) In general.--Except as provided in subparagraph (B), 
     the Chairperson of the Commission may fix the compensation of 
     the executive director and other personnel without regard to 
     the provisions of chapter 51 and subchapter III of chapter 53 
     of title 5, United States Code, relating to classification of 
     positions and General Schedule pay rates.
       (B) Maximum rate of pay.--The rate of pay for the executive 
     director and other personnel shall not exceed the rate 
     payable for level V of the Executive Schedule under section 
     5316 of title 5, United States Code.
       (d) Detail of Federal Government Employees.--
       (1) In general.--An employee of the Federal Government may 
     be detailed to the Commission without reimbursement.
       (2) Civil service status.--The detail of the employee shall 
     be without interruption or loss of civil service status or 
     privilege.
       (e) Procurement of Temporary and Intermittent Services.--
     The Chairperson of the Commission may procure temporary and 
     intermittent services in accordance with section 3109(b) of 
     title 5, United States Code, at rates for individuals that do 
     not exceed the daily equivalent of the annual rate of basic 
     pay prescribed for level V of the Executive Schedule under 
     section 5316 of that title.

     SEC. 7. FUNDING.

       The Secretary of Agriculture shall provide to the 
     Commission for each fiscal year such sums as are necessary to 
     carry out this Act, to be derived by transfer of a 
     proportionate amount of funds for administrative expenses 
     from each other account for which funds are made available to 
     the Department of Agriculture for administrative expenses for 
     the fiscal year.

     SEC. 8. TERMINATION OF COMMISSION.

       The Commission shall terminate 90 days after the date on 
     which the Commission submits the report of the Commission 
     under section 4(c).
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 110. A bill to repeal the provision of law that provides automatic 
pay adjustments for Members of Congress; to the Committee on 
Governmental Affairs.


            eliminating the automatic pay raise for congress

  Mr. FEINGOLD. Mr. President, I am pleased to re-introduce legislation 
that would put an end to automatic cost-of-living adjustments for 
Congressional pay.
  As my colleagues are aware, it is an unusual thing to have the power 
to raise our own pay. Few people have that ability. Most of our 
constituents do not have that power. And that this power is so unusual 
is good reason for the Congress to exercise that power openly, and to 
exercise it subject to regular procedures that include debate, 
amendment, and a vote on the Record.
  Last year, the Senate initially voted down the conference report on 
the Legislative Branch Appropriations bill. As I noted during the 
debate on that bill, by considering the Treasury-Postal appropriations 
bill as part of that conference report, shielded as it was from 
amendment, the Senate blocked any opportunity to force an open debate 
of a $3,800 pay raise for every Member of the Senate and the House of 
Representatives. This process of pay raises without accountability must 
end.
  The stealth pay raise technique began with a change Congress enacted 
in the Ethics Reform Act of 1989. In section 704 of that Act, Members 
of Congress voted to make themselves entitled to an annual raise equal 
to half a percentage point less than the employment cost index, one 
measure of inflation. Many times, Congress has voted to deny itself the 
raise, and Congress traditionally does that on the Treasury-Postal 
Appropriations bill.
  And by bringing the Treasury-Postal Appropriations bill to the Senate 
floor for the first time last year in a conference report, without 
Senate floor consideration, the majority leadership prevented anyone 
from offering an amendment on that bill to block the pay raise. The 
majority leadership tried to make it impossible even to put Senators on 
record in an up-or-down vote directly for or against the pay raise, 
nearly perfecting the technique of the stealth pay raise.
  The question of how and whether Members of Congress can raise their 
own pay was one that our Founders considered from the beginning of our 
Nation. In August of 1789, as part of the package of 12 amendments 
advocated by James Madison that included what has become our Bill of 
Rights, the House of Representatives passed an amendment to the 
Constitution providing that Congress could not raise its pay without an 
intervening election. Almost exactly 211 years ago, on September 9, 
1789, the Senate passed that amendment. In late September of 1789, 
Congress submitted the amendments to the states.
  Although the amendment on pay raises languished for two centuries, in 
the 1980s, a campaign began to ratify it. While I was a member of the 
Wisconsin state Senate, I was proud to help ratify the amendment. Its 
approval by the Michigan legislature on May 7, 1992, gave it the needed 
approval by three-fourths of the states.
  The 27th Amendment to the Constitution now states: ``No law, varying 
the compensation for the services of the senators and representatives, 
shall take effect, until an election of representatives shall have 
intervened.''
  I try to honor that limitation in my own practices. In my own case, 
throughout my 6-year term, I accept only the rate of pay that Senators 
receive on the date on which I was sworn in as a Senator. And I return 
to the Treasury any additional income Senators get, whether from a 
cost-of-living adjustment or a pay raise we vote for ourselves. I don't 
take a raise until my bosses, the people of Wisconsin, give me one at 
the ballot box. That is the spirit of the 27th Amendment. The stealth 
pay raises like the one that Congress allowed last year, at a minimum, 
certainly violate the spirit of that amendment.
  Mr. President, this practice must end. To address it, I am re-
introducing this bill to end the automatic cost-of-living adjustment 
for Congressional pay. Senators and Congressmen should have to vote up-
or-down to raise Congressional pay. My bill would simply require us to 
vote in the open. We owe our constituents no less.

[[Page 502]]

  Mr. President, I ask unanimous consent that the bill be printed in 
the Record immediately following my remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 110

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

     SECTION 1. ELIMINATION OF AUTOMATIC PAY ADJUSTMENTS FOR 
                   MEMBERS OF CONGRESS.

       (a) In General.--Paragraph (2) of section 601(a) of the 
     Legislative Reorganization Act of 1946 (2 U.S.C. 31) is 
     repealed.
       (b) Technical and Conforming Amendments.--Section 601(a)(1) 
     of such Act is amended--
       (1) by striking ``(a)(1)'' and inserting ``(a)'';
       (2) by redesignating subparagraphs (A), (B), and (C) as 
     paragraphs (1), (2), and (3), respectively; and
       (3) by striking ``as adjusted by paragraph (2) of this 
     subsection'' and inserting ``adjusted as provided by law''.
       (c) Effective Date.--This section shall take effect on 
     February 1, 2003.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Kohl):
  S. 111. A bill to amend the Dairy Production Stabilization Act of 
1983 to ensure that all persons who benefit from the dairy promotion 
and research program contribute to the cost of the program; to the 
Committee on Agriculture, Nutrition, and Forestry.


                      dairy promotion fairness act

  Mr. FEINGOLD. Mr. President, I rise today with my colleague Senator 
Kohl to introduce the ``Dairy Promotion Fairness Act.'' This 
legislation provides equity to domestic producers who have been paying 
into the Promotion Program while importers have gotten a free ride. 
Since the National Dairy Promotion and Research Board conducts only 
generic promotion and general product research, domestic farmers and 
importers alike benefit from these actions. The Dairy Promotion 
Fairness Act requires that all dairy product importers contribute to 
the program.
  This bill supports the dairy marketing board's efforts to educate 
consumers on the nutritional value of dairy products. It also treats 
our farmers fairly--by asking them not to bear the entire financial 
burden for a promotional program that benefits importers and domestic 
producers alike. We have put our own producers at a competitive 
disadvantage for far too long. It's high time importers paid for their 
fair share of the program.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 111

       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 ``Dairy Promotion Fairness 
     Act''.

     SEC. 2. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM.

       (a) Declaration of Policy.--Section 110(b) of the Dairy 
     Production Stabilization Act of 1983 (7 U.S.C. 4501(b)) is 
     amended in the first sentence--
       (1) by inserting after ``commercial use'' the following: 
     ``and on imported dairy products''; and
       (2) by striking ``products produced in the United States.'' 
     and inserting ``products.''.
       (b) Definitions.--Section 111 of the Dairy Production 
     Stabilization Act of 1983 (7 U.S.C. 4502) is amended--
       (1) in subsection (k), by striking ``and'' at the end;
       (2) in subsection (l), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(m) the term `imported dairy product' means any dairy 
     product that is imported into the United States, including 
     dairy products imported into the United States in the form 
     of--
       ``(1) milk and cream and fresh and dried dairy products;
       ``(2) butter and butterfat mixtures;
       ``(3) cheese; and
       ``(4) casein and mixtures; and
       ``(n) the term `importer' means a person that imports an 
     imported dairy product into the United States.''.
       (c) Contingent Representation of Importers on Board.--
     Section 113(b) of the Dairy Production Stabilization Act of 
     1983 (7 U.S.C. 4504(b)) is amended--
       (1) by inserting ``National Dairy Promotion and Research 
     Board.--'' after ``(b)'';
       (2) by designating the first through ninth sentences as 
     paragraphs (1) through (5) and paragraphs (7) through (10), 
     respectively, and indenting appropriately;
       (3) in paragraph (2) (as so designated), by striking 
     ``Members'' and inserting ``Except as provided in paragraph 
     (6), the members''; and
       (4) by inserting after paragraph (5) (as so designated) the 
     following:
       ``(6) Importers.--
       ``(A) In general.--If representation of importers of 
     imported dairy products is required on the Board by another 
     law or a treaty to which the United States is a party, the 
     Secretary shall appoint not more than 2 members who are 
     representatives of importers.
       ``(B) Additional members; procedures.--The members 
     appointed under this paragraph--
       ``(i) shall be in addition to the members appointed under 
     paragraph (2); and
       ``(ii) shall be appointed from nominations submitted by 
     importers under such procedures as the Secretary determines 
     to be appropriate.''.
       (d) Importer Assessment.--Section 113(g) of the Dairy 
     Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is 
     amended--
       (1) by inserting ``Assessments.--'' after ``(g)'';
       (2) by designating the first through fifth sentences as 
     paragraphs (1) through (5), respectively, and indenting 
     appropriately; and
       (3) by adding at the end the following:
       ``(6) Importers.--
       ``(A) In general.--The order shall provide that each 
     importer of imported dairy products shall pay an assessment 
     to the Board in the manner prescribed by the order.
       ``(B) Rate.--The rate of assessment on imported dairy 
     products shall be determined in the same manner as the rate 
     of assessment per hundredweight or the equivalent of milk.
       ``(C) Value of products.--For the purpose of determining 
     the assessment on imported dairy products under subparagraph 
     (B), the value to be placed on imported dairy products shall 
     be established by the Secretary in a fair and equitable 
     manner.''.
       (e) Records.--Section 113(k) of the Dairy Production 
     Stabilization Act of 1983 (7 U.S.C. 4504(k)) is amended in 
     the first sentence by striking ``person receiving'' and 
     inserting ``importer of imported dairy products, each person 
     receiving''.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Kohl, and Mr. Wyden):
  S. 112. A bill to terminate operation of the Extremely Low Frequency 
Communication System of the Navy; to the Committee on Armed Services.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Harkin, Mr. Wellstone, and Mr. 
        Wyden):
  S. 113. A bill to terminate production under the D5 submarine-
launched ballistic missile program and to prohibit the backfit of 
certain Trident I ballistic missile submarines to carry D5 submarine-
launched ballistic missiles; to the Committee on Armed Services.


                          DEFENSE LEGISLATION

  Mr. FEINGOLD. Mr. President, today I am introducing two bills that I 
hope will be a first step in helping to change fundamentally the way we 
think about our national defense.
  As I have said time and again, I strongly support our Armed Forces 
and the excellent work they are doing to combat the new threats of the 
21st century and beyond. I am concerned, however, that we are not 
giving our forces the tools they need to combat these emerging threats. 
Instead, a Cold War mentality continues to permeate the United States 
defense establishment and we still cling to the strategies and weapons 
that we used to fight--and win--the Cold War.
  We have an historic opportunity, Mr. President. There is a new 
President, a new Congress, and a pending Quadrennial Defense Review--
all at the dawn of a new millennium. We should take advantage of this 
opportunity by restructuring our national defense policy to combat the 
threats of the new century instead of continuing to guard against the 
long-defeated perils of the last one.
  In the coming months, I will introduce and support a number of 
initiatives that I hope will help to turn the focus of our national 
defense policy away from the Cold War that has already been won and 
toward fielding a strong, agile force that can meet the emerging 
threats of the new century head on.
  The two bills I am introducing today are a first step toward this 
goal. One of these bills would terminate the operation of the Navy's 
Extremely Low Frequency communications system (Project ELF). The other 
would end production of the Navy's Trident II

[[Page 503]]

submarine-launched ballistic missile and would prohibit certain back-
fits of Trident I submarines.
  Both of these systems were designed to protect the United States 
against an attack by the Soviet Union. Trident submarines, and the 
deadly submarine-launched ballistic missiles they carry, were designed 
specifically to attack targets inside the Soviet Union from waters off 
the continental United States. Project ELF was designed to send short 
one-way messages to ballistic and attack submarines that are submerged 
in deep waters.
  The first bill I am introducing today would terminate operations 
under Project ELF, which is located in Clam Lake, Wisconsin, and 
Republic, Michigan. I would like to thank the senior Senator from 
Wisconsin [Mr. Kohl] and the Senator from Oregon [Mr. Wyden] for 
cosponsoring this bill.
  This bill would terminate operations at Project ELF, while 
maintaining the infrastructure in Wisconsin and Michigan in the event 
that a resumption in operations becomes necessary. If enacted, this 
bill would save taxpayers nearly $14 million per year.
  Project ELF is ineffective and unnecessary in the post-Cold War era. 
Since ELF cannot transmit detailed messages, it serves as an expensive 
``beeper'' system to tell submarines to come to the surface to receive 
messages from other sources, and the subs cannot send a return message 
to ELF in the event of an emergency. It takes ELF four minutes to send 
a three-letter message to a deeply submerged submarine.
  With the end of the Cold War, Project ELF becomes harder and harder 
to justify. Our submarines no longer need to take that extra precaution 
against Soviet nuclear forces. They can now surface on a regular basis 
with less danger of detection or attack. They can also receive more 
complicated messages through very low frequency (VLF) radio waves or 
lengthier messages through satellite systems. It is hard to understand 
why the taxpayers continue to be asked to pay $14 million a year for 
what amounts to a beeper system that tells our submarines to come to 
the surface to receive orders from another, more sophisticated source.
  Further, continued operation of this facility is opposed by most 
residents in my state. The members of the Wisconsin delegation have 
fought hard for years to close down Project ELF; I have introduced 
legislation during each Congress since taking office in 1993 to 
terminate it; and I have even recommended it for closure to the Defense 
Base Closure and Realignment Commission.
  Project ELF has had a turbulent history. Since the idea for ELF was 
first proposed in 1958, the project has been changed or canceled 
several times. Residents of Wisconsin have opposed ELF since its 
inception, but for years we were told that the national security 
considerations of the Cold War outweighed our concerns about this 
installation in our state. Ironically, this system became fully 
operational in 1989--the same year the tide of democracy began to sweep 
across Eastern Europe and the Soviet Union. Now, twelve years later, 
the hammer and sickle has fallen and the Russian submarine fleet is in 
disarray. But Project ELF still remains as a constant, expensive 
reminder to the people of my state that the Department of Defense 
remains focused on the past.
  There also continue to be a number of public health and environmental 
concerns associated with Project ELF. For almost two decades, we have 
received inconclusive data on this project's effects on Wisconsin and 
Michigan residents. In 1984, a U.S. District Court ordered that ELF be 
shut down because the Navy paid inadequate attention to the system's 
possible health effects and violated the National Environmental Policy 
Act. Interestingly, that decision was overturned because U.S. national 
security, at the time, prevailed over public health and environmental 
concerns.
  Numerous medical studies point to a possible link between exposure to 
extremely low frequency electromagnetic fields and a variety of human 
health effects and abnormalities in both animal and plant species.
  In 1999, after six years of research, the National Institute of 
Environmental Health Sciences released a report that did not prove 
conclusively a link between electromagnetic fields and cancer, but the 
report did not disprove it, either. Serious questions remain, Mr. 
President, and many of my constituents are rightly concerned about this 
issue.
  In addition, I have heard from a number of dairy farmers who are 
convinced that the stray voltage associated with ELF transmitters has 
demonstrably reduced milk production. As we continue our efforts to 
produce a sustainable balanced federal budget and reduce the national 
debt, and as the Department of Defense continues to struggle to address 
readiness and other concerns, it is clear that outdated programs such 
as Project ELF should be closed down.
  The second bill I am introducing today would terminate production 
under the Navy's Trident II submarine-launched ballistic missile 
program. It would also prohibit the Navy from moving forward with the 
planned back-fits of two Trident I submarines to carry Trident II 
missiles, which are currently scheduled for 2005 and 2006.
  I am pleased to be joined in this effort by the Senator from Iowa 
[Mr. Harkin], the Senator from Minnesota [Mr. Wellstone], and the 
Senator from Oregon [Mr. Wyden].
  Let me say at the outset that my bill will in no way prevent the Navy 
from maintaining the current arsenal of Trident II missiles. Nor will 
it affect those Trident II missiles that are currently in production.
  Mr. President, the Navy currently has ten Trident II submarines, each 
of which carries 24 Trident II (D5) missiles. Each of these missiles 
contains eight independently targetable nuclear warheads, for a total 
of 192 warheads per submarine. Each warhead packs between 300 to 450 
kilotons of explosive power.
  By comparison, the first atomic bomb that the United States dropped 
on Hiroshima generated 15 kilotons of force. Let's do the math for just 
one fully-equipped Trident II submarine.
  Each warhead can generate up to 450 kilotons of force.
  Each missile has eight warheads, and each submarine has 24 missiles.
  That equals 86.4 megatons of force per submarine. That means that 
each Trident II submarine carries the power to deliver devastation 
which is the equivalent of 5,760 Hiroshimas.
  And that is just one fully equipped submarine. As I noted earlier, 
the Navy currently has ten such submarines.
  Through fiscal year 2001, the Navy will have been authorized to 
purchase 384 Trident II missiles for these submarines. Even taking into 
account the 78 Trident II missiles that have been expended through 
testing through calendar year 2000 and the four more that are scheduled 
to be expended this year, the Navy will still have 302 missiles in 
stock once those authorized to be purchased during FY2001 are 
completed.
  The Navy needs 240 missiles to fully equip ten Trident II submarines 
with 24 missiles each. That leaves 62 ``extra'' missiles in the Navy's 
inventory. And the Navy still plans to buy 41 more missiles over the 
next four years, for a total purchase of 425 missiles. My bill would 
terminate production of these missiles after the currently authorized 
384.
  In addition to the ten Trident II submarines, the Navy also has eight 
Trident I submarines. The Navy plans to remove four of these submarines 
(the Ohio, the Florida, the Michigan, and the Georgia) from strategic 
service in 2003 and 2004 in order to comply with the provisions of the 
START II treaty. Current plans call for the other four Trident I 
submarines to be back-fitted to carry Trident II missiles. One of these 
back-fits began in May 2000 (the Alaska); another is scheduled to begin 
in February 2001 (the Nevada). The Navy wants to back-fit the last two 
Trident I submarines (the Henry M. Jackson and the Alabama) in 2005 and 
2006. My bill would prohibit those last two back-fits. It would not 
affect the back-fits of the Alaska and the Nevada.
  Thus, once the back-fits of the Alaska and the Nevada are completed, 
the Navy will have a fleet of twelve submarines capable of carrying 
Trident II

[[Page 504]]

missiles. This is more than enough firepower to be an effective 
deterrent against the moth-balled Russian submarine fleet and against 
the ballistic missile aspirations of rogue states including China and 
North Korea.
  I recognize that there is still a potential threat from rogue states 
and from independent operators who seek to acquire ballistic missiles 
and other weapons of mass destruction. I also recognize that our 
submarine fleet and our arsenal of strategic nuclear weapons still have 
an important role to play in warding off these threats. Their role, 
however, has diminished dramatically from what it was at the height of 
the Cold War. Our missile procurement and equipment upgrade decisions 
should reflect that change and should reflect the realities of the 
post-Cold War world.
  Our current ballistic missile capability is far superior to that of 
any other country on the globe. And the capability of the Russian 
military--the very force which these missiles were designed to 
counter--is seriously degraded.
  I cannot understand the need for more Trident II missiles and more 
submarines to carry them at a time when the Governments of the United 
States and Russia are in negotiations to implement START II and are 
also discussing a framework for START III. These agreements call for 
reductions in our nuclear arsenal, not increases. To spend scarce 
resources on building more missiles now and on back-fitting two more 
submarines to carry them in the coming years is short-sighted and could 
seriously undermine our efforts to negotiate further arms reductions 
with Russia.
  In conclusion, Mr. President, we should reexamine our national 
defense policy at the earliest possible date. The forthcoming 
Quadrennial Defense Review presents an excellent opportunity to do just 
that. We should not miss this opportunity to begin to transform our 
Armed Forces from the structure and strategies that won the Cold War to 
a fiscally responsible force that is adequately trained and equipped to 
combat the new challenges of the 21st century and beyond. The 
legislation I am introducing today is a step in that direction.
  Mr. President, I ask unanimous consent that both of these bills be 
printed in the Record at the conclusion of my remarks.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 112

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

     SECTION 1. TERMINATION OF OPERATION OF THE EXTREMELY LOW 
                   FREQUENCY COMMUNICATION SYSTEM.

       (a) Termination Required.--The Secretary of the Navy shall 
     terminate the operation of the Extremely Low Frequency 
     Communication System of the Navy.
       (b) Maintenance of Infrastructure.--The Secretary shall 
     maintain the infrastructure necessary for resuming operation 
     of the Extremely Low Frequency Communication System.

                                 S. 113

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

     SECTION 1. TERMINATION OF D5 SUBMARINE-LAUNCHED BALLISTIC 
                   MISSILE PROGRAM.

       (a) Termination of Program.--The Secretary of Defense shall 
     terminate production of D5 submarine-launched ballistic 
     missiles under the D5 submarine-launched ballistic missile 
     program.
       (b) Payment of Termination Costs.--Funds available on or 
     after the date of the enactment of this Act for obligation 
     for the D5 submarine-launched ballistic missile program may 
     be obligated for production under that program only for 
     payment of the costs associated with the termination of 
     production under this Act.

     SEC. 2. PROHIBITION ON D5 TRIDENT II BACKFIT SCHEDULED TO 
                   COMMENCE IN 2005 AND 2006.

       (a) Prohibition on Backfit of Certain Submarines.--The 
     Secretary of Defense may not carry out the modifications of 
     two Trident I submarines to enable such submarines to be 
     deployed with Trident II D5 submarine-launched ballistic 
     missiles that are currently scheduled to commence in 2005 and 
     2006, respectively.
       (b) Prohibition on Use of Funds.--Notwithstanding any other 
     provision of law, no funds appropriated or otherwise made 
     available to the Department of Defense may be obligated or 
     expended for purposes of carrying out the modifications of 
     Trident I submarines described in subsection (a).

     SEC. 3. CURRENT PROGRAM ACTIVITIES.

       Nothing in sections 1 and 2 shall be construed to prohibit 
     or otherwise affect the availability of funds for the 
     following:
       (1) Production of D5 submarine-launched ballistic missiles 
     in production on the date of the enactment of this Act.
       (2) Maintenance after the date of the enactment of this Act 
     of the arsenal of D5 submarine-launched ballistic missiles in 
     existence on such date, including the missiles described in 
     paragraph (1).
                                 ______
                                 
       By Mr. FEINGOLD:
  S. 114. A bill to terminate the Uniformed Services University of the 
Health Sciences; to the Committee on Armed Services.


  terminating the uniformed services university of the health sciences

  Mr. FEINGOLD. Mr. President, I am today re-introducing legislation 
terminating the Uniformed Services University of the Health Sciences 
(USUHS), a medical school run by the Department of Defense. The measure 
is one I proposed when I ran for the U.S. Senate, and was part of a 
larger, 82 point plan to reduce the Federal budget deficit. The most 
recent estimates of the Congressional Budget Office (CBO) project that 
terminating the school would save $273 million over the next five 
years, and when completely phased-out, would generate $450 million in 
savings over five years.
  USUHS was created in 1972 to meet an expected shortage of military 
medical personnel. Today, however, USUHS accounts for only a small 
fraction of the military's new physicians, less than 12 percent in 1994 
according to CBO. This contrasts dramatically with the military's 
scholarship program which provided over 80 percent of the military's 
new physicians in that year.
  Mr. President, what is even more troubling is that USUHS is also the 
single most costly source of new physicians for the military. CBO 
reports that based on figures from 1995, each USUHS trained physician 
costs the military $615,000. By comparison, the scholarship program 
cost about $125,000 per doctor, with other sources providing new 
physicians at a cost of $60,000. As CBO has noted, even adjusting for 
the lengthier service commitment required of USUHS trained physicians, 
the cost of training them is still higher than that of training 
physicians from other sources, an assessment shared by the Pentagon 
itself. Indeed, CBO's estimate of the savings generated by this measure 
also includes the cost of obtaining physicians from other sources.
  The House of Representatives has voted to terminate this program on 
several occasions, and the Vice President's National Performance Review 
joined others, ranging from the Grace Commission to the CBO, in raising 
the question of whether this medical school, which graduated its first 
class in 1980, should be closed because it is so much more costly than 
alternative sources of physicians for the military.
  Mr. President, the real issue we must address is whether USUHS is 
essential to the needs of today's military structure, or if we can do 
without this costly program. The proponents of USUHS frequently cite 
the higher retention rates of USUHS graduates over physicians obtained 
from other sources as a justification for continuation of this program, 
but while a greater percentage of USUHS trained physicians may remain 
in the military longer than those from other sources, the Pentagon 
indicates that the alternative sources already provide an appropriate 
mix of retention rates. Testimony by the Department of Defense before 
the Subcommittee on Force Requirements and Personnel noted that the 
military's scholarship program meets the retention needs of the 
services.
  And while USUHS only provides a small fraction of the military's new 
physicians, it is important to note that relying primarily on these 
other sources has not compromised the ability of military physicians to 
meet the needs of the Pentagon. According to the Office of Management 
and Budget, of the approximately 2,000 physicians serving in Desert 
Storm, only 103, about 5%, were USUHS trained.
  Mr. President, let me conclude by recognizing that USUHS has some

[[Page 505]]

dedicated supporters in the U.S. Senate, and I realize that there are 
legitimate arguments that those supporters have made in defense of this 
institution. The problem, however, is that the federal government 
cannot afford to continue every program that provides some useful 
function.
  This is especially true in the area of defense spending. Many in this 
body argue that the Defense budget is too tight, that a significant 
increase in spending is needed to address concerns about shortfalls in 
recruitment and retention, maintenance backlogs, and other indicators 
of a lower level of readiness.
  Mr. President, the debate over our level of readiness is certainly 
important, and it may well be that more Defense funding should be 
channeled to these specific areas of concern. But before advocates of 
an increased Defense budget ask taxpayers to foot the bill for hundreds 
of billions more in spending, they owe it to those taxpayers to trim 
Defense programs that are not justified.
  In the face of our staggering national debt, we must prioritize and 
eliminate programs that can no longer be sustained with limited federal 
dollars, or where a more cost-effective means of fulfilling those 
functions can be substituted. The future of USUHS continues to be 
debated precisely because it does not appear to pass the higher 
threshold tests which must be applied to all federal spending programs.
  Mr. President, I ask unanimous consent that the text of the 
legislation be printed in the Record immediately following my remarks.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 114

       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 ``Uniformed Services 
     University of the Health Sciences Termination and Deficit 
     Reduction Act of 2001''.

     SEC. 2. TERMINATION OF THE UNIFORMED SERVICES UNIVERSITY OF 
                   THE HEALTH SCIENCES.

       (a) Termination.--
       (1) In general.--The Uniformed Services University of the 
     Health Sciences is terminated.
       (2) Conforming amendments.--
       (A) Chapter 104 of title 10, United States Code, is 
     repealed.
       (B) The table of chapters at the beginning of subtitle A of 
     such title, and at the beginning of part III of such 
     subtitle, are each amended by striking out the item relating 
     to chapter 104.
       (b) Effective Dates.--
       (1) Termination.--The termination of the Uniformed Services 
     University of the Health Sciences under subsection (a)(1) 
     shall take effect on the day after the date of the graduation 
     from the university of the last class of students that 
     enrolled in such university on or before the date of the 
     enactment of this Act.
       (2) Amendments.--The amendments made by subsection (a)(2) 
     shall take effect on the date of the enactment of this Act, 
     except that the provisions of chapter 104 of title 10, United 
     States Code, as in effect on the day before such date, shall 
     continue to apply with respect to the Uniformed Services 
     University of the Health Sciences until the termination of 
     the university under this section.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Leahy, and Mr. Jeffords):
  S. 115. A bill to amend the Internal Revenue Code of 1986 to repeal 
the percentage depletion allowance for certain hardrock mines, and for 
other purposes; to the Committee on Finance.


  legislation to eliminate percentage depletion allowances on public 
                                 lands

  Mr. FEINGOLD. Mr. President, today I am reintroducing legislation to 
eliminate from the federal tax code percentage depletion allowances for 
hardrock minerals mined on federal public lands. I am joined in 
introducing this legislation by my colleagues from Vermont, the senior 
Senator (Mr. Leahy) and the junior Senator (Mr. Jeffords).
  President Clinton proposes the elimination of the percentage 
depletion allowance on public lands in his FY 2001 budget. The 
President's FY 2001 budget estimated that, under this legislation, 
income to the federal treasury from the elimination of percentage 
depletion allowances for hardrock mining on public lands would total 
$410 million over five years, and $823 million over ten years. These 
savings are calculated as the excess amount of federal revenues above 
what would be collected if depletion allowances were limited to sunk 
costs in capital investments. Percentage depletion allowances are 
contained in the tax code for extracted fuel, minerals, metal and other 
mined commodities. These allowances have a combined value, according to 
estimates by the Joint Committee on Taxation, of $4.8 billion.
  Mr. President, these percentage depletion allowances were initiated 
by the Corporation Excise Act of 1909. That's right, Mr. President, 
initiated in 1909. Provisions for a depletion allowance based on the 
value of the mine were made under a 1912 Treasury Department 
regulation, but difficulty in applying this accounting principle to 
mineral production led to the initial codification of the mineral 
depletion allowance in the Tariff Act of 1913. The Revenue Act of 1926 
established percentage depletion much in its present form for oil and 
gas. The percentage depletion allowance was then extended to metal 
mines, coal, and other hardrock minerals by the Revenue Act of 1932, 
and has been adjusted several times since.
  Percentage depletion allowances were historically placed in the tax 
code to reduce the effective tax rates in the mineral and extraction 
industries far below tax rates on other industries, providing 
incentives to increase investment, exploration and output. However, 
percentage depletion also makes it possible to recover many times the 
amount of the original investment.
  There are two methods of calculating a deduction to allow a firm to 
recover the costs of their capital investment: cost depletion, and 
percentage depletion. Cost depletion for the recovery of the actual 
capital investment--the costs of discovery, purchasing, and developing 
a mineral reserve--over the period during which the reserve produces 
income. Using cost depletion, a company would deduct a portion of its 
original capital investment minus any previous deductions, in an amount 
that is equal to the fraction of the remaining recoverable reserves. 
Under this method, the total deductions cannot exceed the original 
capital investment.
  However, under percentage depletion, the deduction for recovery of a 
company's investment is a fixed percentage of ``gross income''--namely, 
sales revenue--from the sale of the mineral. Under this method, total 
deductions typically exceed, let me be clear on that point, Mr. 
President, exceed the capital that the company invested.
  The rates for percentage depletion are quite significant. Section 613 
of the U.S. Code contains depletion allowances for more than 70 metals 
and minerals, at rates ranging from 10 percent to 22 percent.
  In addition to repealing the percentage depletion allowances for 
minerals mined on public lands, Mr. President, my bill also creates a 
new fund, called the Abandoned Mine Reclamation Fund. One fourth of the 
revenue raised by the bill, or approximately $120 million dollars, will 
be deposited into an interest bearing fund in the Treasury to be used 
to clean up abandoned hardrock mines in states that are subject to the 
1872 Mining Law. The Mineral Policy Center estimates that there are 
557,650 hardrock abandoned mine sites nationwide and the cost of 
cleaning them up will range from $32.7 billion to $71.5 billion.
  There are currently no comprehensive federal or state programs to 
address the need to clean up old mine sites. Reclaiming these sites 
requires the enactment of a program with explicit authority to clean up 
abandoned mine sites and the resources to do it. My legislation is a 
first step toward providing the needed authority and resources.
  Mr. President, in today's budget climate we are faced with the 
question of who should bear the costs of exploration, development, and 
production of natural resources: all taxpayers, or the users and 
producers of the resource? For more than a century, the mining industry 
has been paying next to nothing for the privilege of extracting 
minerals from public lands and then abandoning its mines. Now those 
mines are

[[Page 506]]

adding to the nation's environmental and financial burdens. We face 
serious budget choices this fiscal year, yet these subsidies remain a 
persistent tax expenditure that raise the deficit for all citizens or 
shift a greater tax burden to other taxpayers to compensate for the 
special tax breaks provided to the mining industry.
  Mr. President, the measure I am introducing is fairly 
straightforward. It eliminates the percentage depletion allowance for 
hardrock minerals mined on public lands while continuing to allow 
companies to recover reasonable cost depletion.
  Though at one time there may have been an appropriate role for a 
government-driven incentive for enhanced mineral production, there is 
now sufficient reason to adopt a more reasonable depletion allowance 
that is consistent with those given to other businesses.
  Mr. President, the time has come for the Federal Government to get 
out of the business of subsidizing business. We can no longer afford 
its costs in dollars or its cost to the health of our citizens. This 
legislation is one step toward the goal of ending these corporate 
welfare subsidies.
  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. 115

       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 ``Elimination of Double 
     Subsidies for the Hardrock Mining Industry Act of 2001''.

     SEC. 2. REPEAL OF PERCENTAGE DEPLETION ALLOWANCE FOR CERTAIN 
                   HARDROCK MINES.

       (a) In General.--Section 613(a) of the Internal Revenue 
     Code of 1986 (relating to percentage depletion) is amended by 
     inserting ``(other than hardrock mines located on lands 
     subject to the general mining laws or on land patented under 
     the general mining laws)'' after ``In the case of the 
     mines''.
       (b) General Mining Laws Defined.--Section 613 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following:
       ``(f) General Mining Laws.--For purposes of subsection (a), 
     the term `general mining laws' means those Acts which 
     generally comprise chapters 2, 12A, and 16, and sections 161 
     and 162 of title 30 of the United States Code.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 3. ABANDONED MINE RECLAMATION FUND.

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

     ``SEC. 9511. ABANDONED MINE RECLAMATION FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Abandoned Mine Reclamation Trust Fund' (in this section 
     referred to as `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 25 
     percent of the additional revenues received in the Treasury 
     by reason of the amendments made by section 2 of the 
     Elimination of Double Subsidies for the Hardrock Mining 
     Industry Act of 2001.
       ``(c) Expenditures From Trust Fund.--
       ``(1) In general.--Amounts in the Trust Fund shall be 
     available, as provided in appropriation Acts, to the 
     Secretary of the Interior for--
       ``(A) the reclamation and restoration of lands and water 
     resources described in paragraph (2) adversely affected by 
     mineral (other than coal and fluid minerals) and mineral 
     material mining, including--
       ``(i) reclamation and restoration of abandoned surface mine 
     areas and abandoned milling and processing areas,
       ``(ii) sealing, filling, and grading abandoned deep mine 
     entries,
       ``(iii) planting on lands adversely affected by mining to 
     prevent erosion and sedimentation,
       ``(iv) prevention, abatement, treatment, and control of 
     water pollution created by abandoned mine drainage, and
       ``(v) control of surface subsidence due to abandoned deep 
     mines, and
       ``(B) the expenses necessary to accomplish the purposes of 
     this section.
       ``(2) Lands and water resources.--
       ``(A) In general.--The lands and water resources described 
     in this paragraph are lands within States that have land and 
     water resources subject to the general mining laws or lands 
     patented under the general mining laws--
       ``(i) which were mined or processed for minerals and 
     mineral materials or which were affected by such mining or 
     processing, and abandoned or left in an inadequate 
     reclamation status before the date of the enactment of this 
     section,
       ``(ii) for which the Secretary of the Interior makes a 
     determination that there is no continuing reclamation 
     responsibility under State or Federal law, and
       ``(iii) for which it can be established to the satisfaction 
     of the Secretary of the Interior that such lands or resources 
     do not contain minerals which could economically be extracted 
     through remining of such lands or resources.
       ``(B) Certain sites and areas excluded.--The lands and 
     water resources described in this paragraph shall not include 
     sites and areas which are designated for remedial action 
     under the Uranium Mill Tailings Radiation Control Act of 1978 
     (42 U.S.C. 7901 et seq.) or which are listed for remedial 
     action under the Comprehensive Environmental Response 
     Compensation and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.).
       ``(3) General mining laws.--For purposes of paragraph (2), 
     the term `general mining laws' means those Acts which 
     generally comprise chapters 2, 12A, and 16, and sections 161 
     and 162 of title 30 of the United States Code.''.
       (b) Conforming Amendment.--The table of sections for 
     subchapter A of chapter 98 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following:

``Sec. 9511. Abandoned Mine Reclamation Trust Fund.''.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 116. A bill to amend the Reclamation Reform Act of 1982 to clarify 
the acreage limitations and incorporate a means test for certain farm 
operations, and for other purposes; to the Committee on Energy and 
Natural Resources.


                irrigation subsidy reduction act of 2001

  Mr. FEINGOLD. Mr. President, today I am reintroducing a measure that 
I sponsored in the 106th Congress to reduce the amount of federal 
irrigation subsidies received by large agribusiness interests. I 
believe that reforming federal water pricing policy by reducing 
subsidies is important as a means to achieve our broader objectives of 
achieving a truly balanced budget. This legislation is also needed to 
curb fundamental abuses of reclamation law that cost the taxpayer 
millions of dollars every year.


  In 1901, President Theodore Roosevelt proposed legislation, which 
came to be known as the Reclamation Act of 1902, to encourage 
development of family farms throughout the western United States. The 
idea was to provide needed water for areas that were otherwise dry and 
give small farms--those no larger than 160 acres--a chance, with a 
helping hand from the federal government, to establish themselves. 
According to a 1996 General Accounting Office report, since the passage 
of the Reclamation Act, the federal government has spent $21.8 billion 
to construct 133 water projects in the west which provide water for 
irrigation. Irrigators, and other project beneficiaries, are required 
under the law to repay to the federal government their allocated share 
of the costs of constructing these projects.
  However, as a result of the subsidized financing provided by the 
federal government, some of the beneficiaries of federal water projects 
repay considerably less than their full share of these costs. According 
to the 1996 GAO report, irrigators generally receive the largest amount 
of federal financial assistance. Since the initiation of the irrigation 
program in 1902, construction costs associated with irrigation have 
been repaid without interest. The GAO further found, in reviewing the 
Bureau of Reclamation's financial reports, that $16.9 billion, or 78 
percent, of the $21.8 billion of federal investment in water projects 
is considered to be reimbursable. Of the reimbursable costs, the 
largest share--$7.1 billion--is allocated to irrigators. As of 
September 30, 1994 irrigators have repaid only $941 million of the $7.1 
billion they owe. GAO also found that the Bureau of Reclamation will 
likely shift $3.4 billion of the debt owed by irrigators to other users 
of the water projects for repayment.
  There are several reasons why irrigators continue to receive such 
significant subsidies. Under the Reclamation Reform Act of 1982, 
Congress acted

[[Page 507]]

to expand the size of the farms that could receive subsidized water 
from 160 acres to 960 acres. The RRA of 1982 expressly prohibits farms 
that exceed 960 acres in size from receiving federally-subsidized 
water. These restrictions were added to the Reclamation law to close 
loopholes through which federal subsidies were flowing to large 
agribusinesses rather than the small family farmers that Reclamation 
projects were designed to serve. Agribusinesses were expected to pay 
full cost for all water received on land in excess of their 960 acre 
entitlement. Despite the express mandate of Congress, regulations 
promulgated under the Reclamation Reform Act of 1982 have failed to 
keep big agricultural water users from receiving federal subsidies. The 
General Accounting Office and the Inspector General of the Department 
of the Interior continue to find that the acreage limits established in 
law are circumvented through the creation of arrangements such as 
farming trusts. These trusts, which in total acreage well exceed the 
960 acre limit, are comprised of smaller units that are not subject to 
the reclamation acreage cap. These smaller units are farmed under a 
single management agreement often through a combination of leasing and 
ownership.
  In a 1989 GAO report, the activities of six agribusiness trusts were 
fully explored. According to GAO, one 12,345 acre cotton farm (roughly 
20 square miles), operating under a single partnership, was reorganized 
to avoid the 960 acre limitation into 15 separate land holdings through 
18 partnerships, 24 corporations, and 11 trusts which were all operated 
as one large unit. A seventh very large trust was the sole topic of a 
1990 GAO report. The Westhaven trust is a 23,238 acre farming operation 
in California's Central Valley. It was formed for the benefit of 326 
salaried employees of the J.G. Boswell Company. Boswell, GAO found, had 
taken advantage of section 214 of the RRA, which exempts from its 960 
acre limit land held for beneficiaries by a trustee in a fiduciary 
capacity, as long as no single beneficiary's interest exceeds the law's 
ownership limits. The RRA, as I have mentioned, does not preclude 
multiple land holdings from being operated collectively under a trust 
as one farm while qualifying individually for federally subsidized 
water. Accordingly, the J.G. Boswell Company re-organized 23,238 acres 
it held as the Boston Ranch by selling them to the Westhaven Trust, 
with the land holdings attributed to each beneficiary being eligible to 
receive federally subsidized water.
  Before the land was sold to Westhaven Trust, the J.G. Boswell Company 
operated the acreage as one large farm and paid full cost for the 
federal irrigation water delivered for the 18-month period ending in 
May 1989. When the trust bought the land, due to the loopholes in the 
law, the entire acreage became eligible to receive federally subsidized 
water because the land holding attributed to the 326 trust 
beneficiaries range from 21 acres to 547 acres--all well under the 960 
acre limit.
  In the six cases the GAO reviewed in 1989, owners or lessees paid a 
total of about $1.3 million less in 1987 for federal water than they 
would have paid if their collective land holdings were considered as 
large farms subject to the Reclamation Act acreage limits. Had 
Westhaven Trust been required to pay full cost, GAO estimated in 1990, 
it would have paid $2 million more for its water. The GAO also found, 
in all seven of these cases, that reduced revenues are likely to 
continue unless Congress amends the Reclamation Act to close the 
loopholes allowing benefits for trusts.
  The Department of the Interior has acknowledged that these problems 
do exist. Interior published a final rulemaking in 1998 to require farm 
operators who provide services to more than 960 nonexempt acres 
westwide, held by a single trust or legal entity or any combination of 
trusts and legal entities to submit RRA forms to the district(s) where 
such land is located. Water districts are now required to provide 
specific information about farm operators to Interior annually. This 
information is an important step toward enforcing the legislation that 
I am reintroducing today.
  This legislation combines various elements of proposals introduced by 
other members of Congress to close loopholes in the 1982 legislation 
and to impose a $500,000 means-test. This new approach limits the 
amount of subsidized irrigation water delivered to any operation in 
excess of the 960 acre limit which claimed $500,000 or more in gross 
income, as reported on their most recent IRS tax form. If the $500,000 
threshold were exceeded, an income ratio would be used to determine how 
much of the water should be delivered to the user at the full-cost 
rate, and how much at the below-cost rate. For example, if a 961 acre 
operation earned $1 million, a ratio of $500,000 (the means-test value) 
divided by their gross income would determine the full cost rate, thus 
the water user would pay the full cost rate on half of their acreage 
and the below cost rate on the remaining half.
  This means-testing proposal was featured, for the fifth year in a 
row, in the 2000 Green Scissors report. This report is compiled 
annually by Friends of the Earth and Taxpayers for Common Sense and 
supported by a number of environmental, consumer and taxpayer groups. 
The premise of the report is that there are a number of subsidies and 
projects that could be cut to both reduce the deficit and benefit the 
environment. This report underscores what I and many others in the 
Senate have long known: we must eliminate practices that can no longer 
be justified in light of our effort to achieve a truly balanced budget 
and eliminate our national debt. The Green Scissors recommendation on 
means-testing water subsidies indicates that if a test is successful in 
reducing subsidy payments to the highest grossing 10% of farms, then 
the federal government would recover between $440 million and $1.1 
billion per year, or at least $2.2 billion over five years.
  When countless federal programs are subjected to various types of 
means-test to limit benefits to those who truly need assistance, it 
makes little sense to continue to allow large business interests to dip 
into a program intended to help small entities struggling to survive. 
Taxpayers have legitimate concerns when they learn that their hard 
earned tax dollars are being expended to assist large corporate 
interests in select regions of the country who benefit from these 
loopholes, particularly in tight budgetary times. Other users of 
federal water projects, such as the power recipients, should also be 
concerned when they learn that they will be expected to pick up the tab 
for a portion of the funds that irrigators were supposed to pay back. 
The federal water program was simply never intended to benefit these 
large interests, and I hope that legislative efforts, such as the 
measure I am introducing today, will prompt Congress to fully 
reevaluate our federal water pricing policy.
  In conclusion, Mr. President, it is clear that the conflicting 
policies of the federal government in this area are in need of reform, 
and that Congress should act. Large agribusinesses should not be able 
to continue to soak the taxpayers, and should pay their fair share. We 
should act to close these loopholes and increase the return to the 
treasury from irrigators as soon as possible. I ask unanimous consent 
that the text of the measure be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 116

       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 ``Irrigation Subsidy Reduction 
     Act of 2001''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Federal reclamation program has been in existence 
     for over 90 years, with an estimated taxpayer investment of 
     over $70,000,000,000;
       (2) the program has had and continues to have an enormous 
     effect on the water resources and aquatic environments of the 
     western States;
       (3) irrigation water made available from Federal water 
     projects in the West is a very valuable resource for which 
     there are increasing and competing demands;

[[Page 508]]

       (4) the justification for providing water at less than full 
     cost was to benefit and promote the development of small 
     family farms and exclude large corporate farms, but this 
     purpose has been frustrated over the years due to inadequate 
     implementation of subsidy and acreage limits;
       (5) below-cost water prices tend to encourage excessive use 
     of scarce water supplies in the arid regions of the West, and 
     reasonable price increases to the wealthiest western farmers 
     would provide an economic incentive for greater water 
     conservation;
       (6) the Federal Government has increasingly applied 
     eligibility tests based on income for Federal entitlement and 
     subsidy programs, measures that are consistent with the 
     historic approach of the reclamation program's acreage 
     limitations that seek to limit water subsidies to smaller 
     farms; and
       (7) including a means test based on gross income in the 
     reclamation program will increase the effectiveness of 
     carrying out the family farm goals of the Federal reclamation 
     laws.

     SEC. 3. AMENDMENTS.

       (a) Definitions.--Section 202 of the Reclamation Reform Act 
     of 1982 (43 U.S.C. 390bb) is amended--
       (1) by redesignating paragraphs (7), (8), (9), (10), and 
     (11) as paragraphs (9), (10), (11), (12), and (13), 
     respectively;
       (2) in paragraph (6), by striking ``owned or operated under 
     a lease which'' and inserting ``that is owned, leased, or 
     operated by an individual or legal entity and that'';
       (3) by inserting after paragraph (6) the following:
       ``(7) Legal entity.--The term `legal entity' includes a 
     corporation, association, partnership, trust, joint tenancy, 
     or tenancy in common, or any other entity that owns, leases, 
     or operates a farm operation for the benefit of more than 1 
     individual under any form of agreement or arrangement.
       ``(8) Operator.--
       ``(A) In general.--The term `operator'--
       ``(i) means an individual or legal entity that operates a 
     single farm operation on a parcel (or parcel) of land that is 
     owned or leased by another person (or persons) under any form 
     of agreement or arrangement (or agreements or arrangements); 
     and
       ``(ii) if the individual or legal entity--

       ``(I) is an employee of an individual or legal entity, 
     includes the individual or legal entity; or
       ``(II) is a legal entity that controls, is controlled by, 
     or is under common control with another legal entity, 
     includes each such other legal entity.

       ``(B) Operation of a farm operation.--For the purposes of 
     subparagraph (A), an individual or legal entity shall be 
     considered to operate a farm operation if the individual or 
     legal entity is the person that performs the greatest 
     proportion of the decisionmaking for and supervision of the 
     agricultural enterprise on land served with irrigation 
     water.''; and
       (4) by adding at the end the following:
       ``(14) Single farm operation.--
       ``(A) In general.--The term `single farm operation' means 
     the total acreage of land served with irrigation water for 
     which an individual or legal entity is the operator.
       ``(B) Rules for determining whether separate parcels are 
     operated as a single farm operation.--
       ``(i) Equipment- and labor-sharing activities.--The conduct 
     of equipment- and labor-sharing activities on separate 
     parcels of land by separate individuals or legal entities 
     shall not by itself serve as a basis for concluding that the 
     farming operations of the individuals or legal entities 
     constitute a single farm operation.
       ``(ii) Performance of certain services.--The performance by 
     an individual or legal entity of an agricultural chemical 
     application, pruning, or harvesting for a farm operation on a 
     parcel of land shall not by itself serve as a basis for 
     concluding that the farm operation on that parcel of land is 
     part of a single farm operation operated by the individual or 
     entity on other parcels of land.''.
       (b) Identification of Owners, Lessees, and Operators and of 
     Single Farm Operations.--The Reclamation Reform Act of 1982 
     (43 U.S.C. 390aa et seq.) is amended by inserting after 
     section 201 the following:

     ``SEC. 201A. IDENTIFICATION OF OWNERS, LESSEES, AND OPERATORS 
                   AND OF SINGLE FARM OPERATIONS.

       ``(a) In General.--Subject to subsection (b), for each 
     parcel of land to which irrigation water is delivered or 
     proposed to be delivered, the Secretary shall identify a 
     single individual or legal entity as the owner, lessee, or 
     operator.
       ``(b) Shared Decisionmaking and Supervision.--If the 
     Secretary determines that no single individual or legal 
     entity is the owner, lessee, or other individual that 
     performs the greatest proportion of decisionmaking for and 
     supervision of the agricultural enterprise on a parcel of 
     land--
       ``(1) all individuals and legal entities that own, lease, 
     or perform a proportion of decisionmaking and supervision 
     that is equal as among themselves but greater than the 
     proportion performed by any other individual or legal entity 
     shall be considered jointly to be the owner, lessee, or 
     operator; and
       ``(2) all parcels of land of which any such individual or 
     legal entity is the owner, lessee, or operator shall be 
     considered to be part of the single farm operation of the 
     owner, lessee, or operator identified under subsection (1).
       (c) Pricing.--Section 205 of the Reclamation Reform Act of 
     1982 (43 U.S.C. 390ee) is amended by adding at the end the 
     following:
       ``(d) Single Farm Operations Generating More Than $500,000 
     in Gross Farm Income.--
       ``(1) In general.--Notwithstanding subsections (a), (b), 
     and (c), in the case of--
       ``(A) a qualified recipient that reports gross farm income 
     from a single farm operation in excess of $500,000 for a 
     taxable year; or
       ``(B) a limited recipient that received irrigation water on 
     or before October 1, 1981, and that reports gross farm income 
     from a single farm operation in excess of $500,000 for a 
     taxable year;

     irrigation water may be delivered to the single farm 
     operation of the qualified recipient or limited recipient at 
     less than full cost to a number of acres that does not exceed 
     the number of acres determined under paragraph (2).
       ``(2) Maximum number of acres to which irrigation water may 
     be delivered at less than full cost.--The number of acres 
     determined under this subparagraph is the number equal to the 
     number of acres of the single farm operation multiplied by a 
     fraction, the numerator of which is $500,000 and the 
     denominator of which is the amount of gross farm income 
     reported by the qualified recipient or limited recipient in 
     the most recent taxable year.
       ``(3) Inflation adjustment.--
       ``(A) In general.--The $500,000 amount under paragraphs (1) 
     and (2) for any taxable year beginning in a calendar year 
     after 2000 shall be equal to the product of--
       ``(i) $500,000, multiplied by
       ``(ii) the inflation adjustment factor for the taxable 
     year.
       ``(B) Inflation adjustment factor.--The term `inflation 
     adjustment factor' means, with respect to any calendar year, 
     a fraction the numerator of which is the GDP implicit price 
     deflator for the preceding calendar year and the denominator 
     of which is the GDP implicit price deflator for 2000. Not 
     later than April 1 of any calendar year, the Secretary shall 
     publish the inflation adjustment factor for the preceding 
     calendar year.
       ``(C) GDP implicit price deflator.--For purposes of 
     subparagraph (B), the term `GDP implicit price deflator' 
     means the first revision of the implicit price deflator for 
     the gross domestic product as computed and published by the 
     Secretary of Commerce.
       ``(D) Rounding.--If any increase determined under 
     subparagraph (A) is not a multiple of $100, the increase 
     shall be rounded to the next lowest multiple of $100.''.
       (d) Certification of Compliance.--Section 206 of the 
     Reclamation Reform Act of 1982 (43 U.S.C. 390ff) is amended 
     to read as follows:

     ``SEC. 206. CERTIFICATION OF COMPLIANCE.

       ``(a) In General.--As a condition to the receipt of 
     irrigation water for land in a district that has a contract 
     described in section 203, each owner, lessee, or operator in 
     the district shall furnish the district, in a form prescribed 
     by the Secretary, a certificate that the owner, lessee, or 
     operator is in compliance with this title, including a 
     statement of the number of acres owned, leased, or operated, 
     the terms of any lease or agreement pertaining to the 
     operation of a farm operation, and, in the case of a lessee 
     or operator, a certification that the rent or other fees paid 
     reflect the reasonable value of the irrigation water to the 
     productivity of the land.
       ``(b) Documentation.--The Secretary may require a lessee or 
     operator to submit for the Secretary's examination--
       ``(1) a complete copy of any lease or other agreement 
     executed by each of the parties to the lease or other 
     agreement; and
       ``(2) a copy of the return of income tax imposed by chapter 
     1 of the Internal Revenue Code of 1986 for any taxable year 
     in which the single farm operation of the lessee or operator 
     received irrigation water at less than full cost.''.
       (e) Trusts.--Section 214 of the Reclamation Reform Act of 
     1982 (43 U.S.C. 390nn) is repealed.
       (f) Administrative Provisions.--
       (1) Penalties.--Section 224(c) of the Reclamation Reform 
     Act of 1982 (43 U.S.C. 390ww(c)) is amended--
       (A) by striking ``(c) The Secretary'' and inserting the 
     following:
       ``(c) Regulations; Data Collection; Penalties.--
       ``(1) Regulations; data collection.--The Secretary''; and
       (B) by adding at the end the following:
       ``(2) Penalties.--Notwithstanding any other provision of 
     law, the Secretary shall establish appropriate and effective 
     penalties for failure to comply with any provision of this 
     Act or any regulation issued under this Act.''.
       (2) Interest.--Section 224(i) of the Reclamation Reform Act 
     of 1982 (43 U.S.C. 390ww(i)) is amended by striking the last 
     sentence and inserting the following: ``The interest rate 
     applicable to underpayments shall be equal to the rate 
     applicable to expenditures under section 202(3)(C).''.
       (g) Reporting.--Section 228 of the Reclamation Reform Act 
     of 1982 (43 U.S.C. 390zz)

[[Page 509]]

     is amended by inserting ``operator or'' before ``contracting 
     entity'' each place it appears.
       (h) Memorandum of Understanding.--The Reclamation Reform 
     Act of 1982 (43 U.S.C. 390aa et seq.) is amended--
       (1) by redesignating sections 229 and 230 as sections 230 
     and 231; and
       (2) by inserting after section 228 the following:

     ``SEC. 229. MEMORANDUM OF UNDERSTANDING.

       ``The Secretary, the Secretary of the Treasury, and the 
     Secretary of Agriculture shall enter into a memorandum of 
     understanding or other appropriate instrument to permit the 
     Secretary, notwithstanding section 6103 of the Internal 
     Revenue Code of 1986, to have access to and use of available 
     information collected or maintained by the Department of the 
     Treasury and the Department of Agriculture that would aid 
     enforcement of the ownership and pricing limitations of 
     Federal reclamation law.''.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Jeffords):
  S. 117. A bill to prohibit products that contain dry ultra-filtered 
milk products or casein from being labeled as domestic natural cheese, 
and for other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


                           quality cheese act

  Mr. FEINGOLD. Mr. President, I am pleased to introduce the Quality 
Cheese Act of 2000. This legislation will protect the consumer, save 
taxpayer dollars and provide support to America's dairy farmers, who 
have taken a beating in the marketplace in recent years.
  When Wisconsin consumers have the choice, they will choose natural 
Wisconsin cheese, but the Food and Drug Administration (FDA) and the 
U.S. Department of Agriculture (USDA) may change current law, and 
consumers won't know whether cheese is really all natural or not.
  If the federal government creates a loophole for imitation cheese 
ingredients to be used in U.S. cheese vats, cheese bearing the labels 
``domestic'' and ``natural'' will no longer be truly accurate.
  If USDA and FDA allow a change in federal rules, imitation milk 
proteins known as milk protein concentrate or casein, could be used to 
make cheese in place of the wholesome natural milk produced by cows in 
Wisconsin or other part of the U.S.
  Mr. President, I am deeply concerned by recent efforts to change 
America's natural cheese standard. This effort to allow milk protein 
concentrate and casein into natural cheese products flies in the face 
of logic and could create a loophole for unlimited amounts of 
substandard imported milk proteins to enter U.S. cheese vats.
  My legislation will close this loophole and ensure that consumers can 
be confident that they are buying natural cheese when they see the 
natural label.
  Our dairy farmers have invested heavily in processes that make the 
best quality cheese ingredients, and I am concerned about recent 
efforts to change the law that would penalize them for those efforts by 
allowing lower quality ingredients to flood the U.S. market.
  Over the past decade, cheese consumption has risen at a strong pace 
due to promotional and marketing efforts and investments by dairy 
farmers across the country. Year after year, per capita cheese 
consumption has risen at a steady rate.
  Back in the 1980's, when I served in the Wisconsin State Senate, 
cheese consumption topped 20 pounds per person. During the 1990s 
consumption increased by over 25 percent, and passed 25 pounds per 
person. Last year we saw an even more dramatic increase when per capita 
cheese consumption rose an amazing 1.5 pounds to reach 29.8 pounds.
  This one-year increase amounts to the largest expansion since 1982! I 
am proud to say that my home state of Wisconsin, America's dairyland, 
was one of the main engines behind this growth. After all, when 
consumers see the label ``Wisconsin Cheese,'' they know that it is 
synonymous with quality.
  Over the past two decades consumers have increased their cheese 
consumption due to their understanding, and taste for the quality 
natural cheese produced by America's dairy industry.
  Recent proposals to change to our natural cheese standard could 
decrease consumption of natural cheese. These declines could result 
from concerns about the origin of casein and other forms of dry UF 
milk.
  The vast majority of dry ultra filtered milk originates from 
countries with State Trading Enterprises. Many of these countries 
subsidize their dairy exports through these trading mechanisms, and 
have quality standards that are well below those of the United States.
  While it is difficult to obtain specific numbers about the amount of 
dry UF milk produced in foreign countries, I have heard disturbing 
stories about the conditions under which the casein and milk proteins 
are sometimes produced.
  For the most part, dry UF milk is not produced in the US. In fact, it 
is, for the most part, produced in countries where sanitary standards 
are well below those of the United States.
  These products are sold on the international market, and under the 
proposed rule they could be labeled as natural cheese. This cheap, low 
quality dry UF milk tends to leave cheese greasy and increases 
separation problems.
  The addition of this kind of milk will certainly leave the wholesome 
reputation of ``natural cheese'' significantly tarnished in the eyes of 
the consumer.
  This change would seriously compromise decades of work by America's 
dairy farmers to build up domestic cheese consumption levels. It is 
simply not fair to America's farmers!
  Mr. President, consumers have a right to know if the cheese they buy 
is unnatural. And by allowing unnatural dry UF milk into cheese, we are 
denying consumers the entire picture.
  This legislation will paint the entire picture for the consumer, and 
allow them enough information to select cheese made from truly natural 
ingredients.
  Allowing dry Ultra-Filtered milk into cheeses will have a significant 
adverse impact on dairy producers throughout the United States. Some 
estimate that the annual effect of the change on the dairy farm sector 
of the economy could be more than $100 million.
  The proposed change to our natural cheese standard would also harm 
the American taxpayer.
  If we allow dry UF milk to be used in cheese we will effectively 
permit unrestricted importation of these ingredients into the United 
States. Because there are no tariffs and quotas on these ingredients, 
these heavily subsidized products will displace natural domestic dairy 
ingredients.
  These unnatural domestic dairy products will enter our domestic 
cheese market and may further depress dairy prices paid to American 
dairy producers.
  Low dairy prices result in increased costs to the dairy price support 
program. So, at the same time that U.S. dairy farmers are receiving 
lower prices, the U.S. taxpayer will be paying more for the dairy price 
support program.
  Mr. President, this change does not benefit the dairy farmer, 
consumer or taxpayer. Who then is it good for?
  The obvious answer is nobody.
  America's farmers have invested a tremendous amount of time and 
effort to create the best cheese industry in the world. They should not 
be penalized for their efforts.
  This legislation addresses the concerns of farmers, consumers and 
taxpayers by prohibiting dry ultra-filtered milk from being included in 
America's natural cheese standard.
  Congress must shut the door on any backdoor efforts to stack the deck 
against America's dairy farmers. And we must pass my legislation that 
prevents a loophole that would allow changes that hurt the consumer, 
taxpayer and dairy farmer.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 117

       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 ``Quality Cheese Act of 
     2001''.

[[Page 510]]



     SEC. 2. NATURAL CHEESE STANDARD.

       (a) Findings.--Congress finds that--
       (1)(A) any change in domestic natural cheese standards to 
     allow dry ultra-filtered milk products or casein to be 
     labeled as domestic natural cheese would result in increased 
     costs to the dairy price support program; and
       (B) that change would be unfair to taxpayers, who would be 
     forced to pay more program costs;
       (2) any change in domestic natural cheese standards to 
     allow dry ultra-filtered milk products or casein to be 
     labeled as domestic natural cheese would result in lower 
     revenues for dairy farmers;
       (3) any change in domestic natural cheese standards to 
     allow dry ultra-filtered milk products or casein to be 
     labeled as domestic natural cheese would cause dairy products 
     containing dry ultra-filtered milk or casein to become 
     vulnerable to contamination and would compromise the 
     sanitation, hydrosanitary, and phytosanitary standards of the 
     United States dairy industry; and
       (4) changing the labeling standard for domestic natural 
     cheese would be misleading to the consumer.
       (b) Prohibition.--Section 401 of the Federal Food, Drug, 
     and Cosmetic Act (21 U.S.C. 341) is amended--
       (1) by striking ``Whenever'' and inserting ``(a) 
     Whenever''; and
       (2) by adding at the end the following:
       ``(b) The Commissioner may not use any Federal funds to 
     amend section 133.3 of title 21, Code of Federal Regulations 
     (or any corresponding similar regulation or ruling), to 
     include dry ultra-filtered milk or casein in the definition 
     of the term `milk' or `nonfat milk', as specified in the 
     standards of identity for cheese and cheese products 
     published at part 133 of title 21, Code of Federal 
     Regulations (or any corresponding similar regulation or 
     ruling).''.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 118. A bill to strengthen the penalties for violations of plant 
quarantine laws; to the Committee on Agriculture, Nutrition, and 
Forestry.


      fruit, vegetable, and plant smuggling prevention act of 2001

  Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation 
to strengthen the penalties for organized smuggling of fruits, plants, 
and vegetables into the United States. A felony statute for agriculture 
product smuggling is needed to reflect the serious impact these crimes 
have on our farmers and the entire agriculture industry.
  Recent breaches of the agriculture safeguarding system have proven 
the need for strong criminal penalties for organized smuggling: 
multiple exotic fruit fly infestations have decimated California and 
Florida; the Asian longhorn beetle has been found in New York and 
Illinois; the Asian gypsy moth has been introduced in North Carolina 
and Oregon; and plum pox from Western Europe has devastated peach 
production in Pennsylvania.
  This widespread invasion of foreign species requires a strong federal 
response. The consequences of failing to adequately combat agriculture 
smuggling are clear.
  Until recently, a 72 square mile area of San Diego was under 
quarantine due to an infestation of Mexican Fruit Flies. The quarantine 
effected 1,470 growers of at least 20 specialty crops. The Department 
of Agriculture has encouraged California producers to grow specialty 
fruits and vegetables in an effort to reduce the risk of exotic pest 
introduction from smuggled fruit. Yet, no pre or post harvest treatment 
for many of these crops has been provided by the USDA. As a result of 2 
fruit flies, roughly 150 growers lost virtually their entire harvest--
estimated more than $3 million.


                      Problems with existing laws

  The current system that charges low fines and encourages few 
prosecutions is not a meaningful deterrent for violators. The USDA can 
assess a maximum fine of $1,000 for passenger and cargo violations. For 
an illegal shipper, this is simply a minor cost of doing business and 
not an effective deterrent.
  In addition, the lack of serious penalties for such crimes has 
resulted in a reduced number of criminal investigations, violators 
prosecuted, and sentences given to those convicted.
  The Office of the Inspector General (OIG) of the USDA, the law 
enforcement arm of the Department, has placed a low priority on 
agriculture smuggling violations because they are only misdemeanors and 
the OIG is forced to devote the bulk of its resources to felony 
violations. Of the 4,400 investigations completed since October 1, 
1994, fewer than 50 involved smuggling.
  The sentences given to the relatively few convicted smugglers is also 
effected by the attitude that this is not a serious crime.
  In the State of Washington, two people were caught smuggling 
agricultural products into the country on numerous occasions. Their 
third arrest came after 400 pounds of illegal and infested fruit was 
found in the walls of their station wagon. Despite their repeated 
crimes, the smugglers received only two days of jail time and a fine of 
$1,000.


                        penalties for violations

  This legislation would make it a felony to knowingly and willfully 
smuggle large amounts of agriculture products into the country. Persons 
caught smuggling foreign plant pests, more than 50 pounds of plants, 
more than 5 pounds of plant products, more than 50 pounds of noxious 
weeds, or possession with intent to distribute these products, would be 
punished with imprisonment for up to 5 years, a fine of as much as 
$25,000, or both. Repeat violators would face 10 years of jail time 
and/or a fine of $50,000.
  The legislation would also make smuggling lesser amounts of products 
a misdemeanor crime punishable by one year in jail and/or a $1,000 
fine. Subsequent violations would result in three years of jail time 
and/or a fine of $10,000.
  These penalties will provide law enforcement with the needed tools to 
investigate, arrest, and prosecute individuals and organizations 
engaged in the organized smuggling of agriculture products.


                          property forfeitures

  Another inadequacy in current law is the lack of a specific 
forfeiture provision for agriculture product smuggling. I have been 
told of cases at the San Diego border in which a person has been caught 
smuggling fruits or vegetables across the border. After receiving a 
slap on the wrist from the judicial system, his truck was returned to 
him, and he was allowed to return to his criminal occupation with the 
tools of his trade intact. It is astonishing to me that, not only is 
the government incapable of punishing illegal traffickers of 
agriculture products, but we are unable to take even modest steps to 
prevent recurrences of the same crime.
  According to this legislation, anyone convicted of violating the law 
would forfeit any property used to commit or facilitate the violation. 
They would also forfeit any money acquired through a violation of the 
law. The proceeds of the sale of forfeited property would be used to 
reimburse the costs of the prosecution. Any additional funds would go 
towards the USDA's interdiction efforts.
  I believe that Congress must send a message to our farmers and 
growers that the federal government is committed to protecting the 
agriculture sector from invasive species. We can do this by passing 
this legislation as quickly as possible.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Congressional Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 118

       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 ``Fruit, Vegetable, and Plant 
     Smuggling Prevention Act of 2001''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Plant quarantine law.--The term ``plant quarantine 
     law'' means any of the following provisions of law:
       (A) Subsections (a) through (e) of section 102 of the 
     Department of Agriculture Organic Act of 1944 (7 U.S.C. 
     147a).
       (B) Section 1773 of the Food Security Act of 1985 (7 U.S.C. 
     148f).
       (C) The Golden Nematode Act (7 U.S.C. 150 et seq.).
       (D) The Federal Plant Pest Act (7 U.S.C. 150aa et seq.).
       (E) The Joint Resolution of April 6, 1937 (56 Stat. 57, 
     chapter 69; 7 U.S.C. 148 et seq.).
       (F) The Act of January 31, 1942 (56 Stat. 40, chapter 31; 7 
     U.S.C. 149).
       (G) The Act of August 20, 1912 (commonly known as the 
     ``Plant Quarantine Act'') (37 Stat. 315, chapter 308; 7 
     U.S.C. 151 et seq.).

[[Page 511]]

       (H) The Halogeton Glomeratus Control Act (7 U.S.C. 1651 et 
     seq.).
       (I) The Act of August 28, 1950 (64 Stat. 561, chapter 815; 
     7 U.S.C. 2260).
       (J) The Federal Noxious Weed Act of 1974 (7 U.S.C. 2801 et 
     seq.), other than the first section and section 15 of that 
     Act (7 U.S.C. 2801 note, 2814).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.

     SEC. 3. PENALTIES FOR VIOLATION.

       (a) Criminal Penalties.--
       (1) In general.--A person that knowingly violates a plant 
     quarantine law shall be subject to criminal penalties in 
     accordance with this subsection.
       (2) Felonies.--
       (A) In general.--Subject to subparagraphs (B) and (C), a 
     person shall be imprisoned not more than 5 years, fined not 
     more than $25,000, or both, in the case of a violation of a 
     plant quarantine law involving--
       (i) plant pests;
       (ii) more than 50 pounds of plants;
       (iii) more than 5 pounds of plant products;
       (iv) more than 50 pounds of noxious weeds;
       (v) possession with intent to distribute or sell items 
     described in clause (i), (ii), (iii), or (iv), knowing the 
     items have been involved in a violation of a plant quarantine 
     law; or
       (vi) forging, counterfeiting, or without authority from the 
     Secretary, using, altering, defacing, or destroying a 
     certificate, permit, or other document provided under a plant 
     quarantine law.
       (B) Multiple violations.--On the second and any subsequent 
     conviction of a person of a violation of a plant quarantine 
     law described in subparagraph (A), the person shall be 
     imprisoned not more than 10 years or fined not more than 
     $50,000, or both.
       (C) Intent to harm agriculture of united states.--In the 
     case of a knowing movement in violation of a plant quarantine 
     law by a person of a plant, plant product, biological control 
     organism, plant pest, noxious weed, article, or means of 
     conveyance into, out of, or within the United States, with 
     the intent to harm the agriculture of the United States by 
     introduction into the United States or dissemination of a 
     plant pest or noxious weed within the United States, the 
     person shall be imprisoned not less than 10 nor more than 20 
     years, fined not more than $500,000, or both.
       (3) Misdemeanors.--
       (A) In general.--Subject to subparagraph (B), a person 
     shall be imprisoned not more than 1 year, fined not more than 
     $1,000, or both, in the case of a violation of a plant 
     quarantine law involving--
       (i) 50 pounds or less of plants;
       (ii) 5 pounds or less of plant products; or
       (iii) 50 pounds or less of noxious weeds.
       (B) Multiple violations.--On the second and any subsequent 
     conviction of a person of a violation of a plant quarantine 
     law described in subparagraph (A), the person shall be 
     imprisoned not more than 3 years, fined not more than 
     $10,000, or both.
       (b) Criminal Forfeiture.--
       (1) In general.--In imposing a sentence on a person 
     convicted of a violation of a plant quarantine law, in 
     addition to any other penalty imposed under this section and 
     irrespective of any provision of State law, a court shall 
     order that the person forfeit to the United States--
       (A) any of the property of the person used to commit or to 
     facilitate the commission of the violation (other than a 
     misdemeanor); and
       (B) any property, real or personal, constituting, derived 
     from, or traceable to any proceeds that the person obtained 
     directly or indirectly as a result of the violation.
       (2) Procedures.--All property subject to forfeiture under 
     this subsection, any seizure and disposition of the property, 
     and any proceeding relating to the forfeiture shall be 
     subject to the procedures of section 413 of the Comprehensive 
     Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 
     853), other than subsections (d) and (q).
       (3) Proceeds.--The proceeds from the sale of any forfeited 
     property, and any funds forfeited, under this subsection 
     shall be used--
       (A) first, to reimburse the Department of Justice, the 
     United States Postal Service, and the Department of the 
     Treasury for any costs incurred by the Departments and the 
     Service to initiate and complete the forfeiture proceeding;
       (B) second, to reimburse the Office of Inspector General of 
     the Department of Agriculture for any costs incurred by the 
     Office in the law enforcement effort resulting in the 
     forfeiture;
       (C) third, to reimburse any Federal or State law 
     enforcement agency for any costs incurred in the law 
     enforcement effort resulting in the forfeiture; and
       (D) fourth, by the Secretary to carry out the functions of 
     the Secretary under a plant quarantine law.
       (c) Civil Penalties.--
       (1) In general.--A person that violates a plant quarantine 
     law, or that forges, counterfeits, or, without authority from 
     the Secretary, uses, alters, defaces, or destroys a 
     certificate, permit, or other document provided under a plant 
     quarantine law may, after notice and opportunity for a 
     hearing on the record, be assessed a civil penalty by the 
     Secretary that does not exceed the greater of--
       (A) $50,000 in the case of an individual (except that the 
     civil penalty may not exceed $1,000 in the case of an initial 
     violation of the plant quarantine law by an individual moving 
     regulated articles not for monetary gain), or $250,000 in the 
     case of any other person for each violation, except the 
     amount of penalties assessed under this subparagraph in a 
     single proceeding shall not exceed $500,000; or
       (B) twice the gross gain or gross loss for a violation or 
     forgery, counterfeiting, or unauthorized use, defacing or 
     destruction of a certificate, permit, or other document 
     provided for in the plant quarantine law that results in the 
     person's deriving pecuniary gain or causing pecuniary loss to 
     another person.
       (2) Factors in determining civil penalty.--In determining 
     the amount of a civil penalty, the Secretary--
       (A) shall take into account the nature, circumstance, 
     extent, and gravity of the violation; and
       (B) may take into account the ability to pay, the effect on 
     ability to continue to do business, any history of prior 
     violations, the degree of culpability of the violator, and 
     any other factors the Secretary considers appropriate.
       (3) Settlement of civil penalties.--The Secretary may 
     compromise, modify, or remit, with or without conditions, a 
     civil penalty that may be assessed under this subsection.
       (4) Finality of orders.--
       (A) In general.--An order of the Secretary assessing a 
     civil penalty shall be treated as a final order reviewable 
     under chapter 158 of title 28, United States Code.
       (B) Collection action.--The validity of an order of the 
     Secretary may not be reviewed in an action to collect the 
     civil penalty.
       (C) Interest.--A civil penalty not paid in full when due 
     under an order assessing the civil penalty shall (after the 
     due date) accrue interest until paid at the rate of interest 
     applicable to a civil judgment of the courts of the United 
     States.
       (5) Guidelines for civil penalties.--The Secretary shall 
     coordinate with the Attorney General to establish guidelines 
     to determine under what circumstances the Secretary may issue 
     a civil penalty or suitable notice of warning in lieu of 
     prosecution by the Attorney General of a violation of a plant 
     quarantine law.
       (d) Civil Forfeiture.--
       (1) In general.--There shall be subject to forfeiture to 
     the United States any property, real or personal--
       (A) used to commit or to facilitate the commission of a 
     violation (other than a misdemeanor) described in subsection 
     (a); or
       (B) constituting, derived from, or traceable to proceeds of 
     a violation described in subsection (a).
       (2) Procedures.--
       (A) In general.--Subject to subparagraph (B), the 
     procedures of chapter 46 of title 18, United States Code, 
     relating to civil forfeitures shall apply to a seizure or 
     forfeiture under this subsection, to the extent that the 
     procedures are applicable and consistent with this 
     subsection.
       (B) Performance of duties.--Duties imposed on the Secretary 
     of the Treasury under chapter 46 of title 18, United States 
     Code, shall be performed with respect to seizures and 
     forfeitures under this subsection by officers, employees, 
     agents, and other persons designated by the Secretary of 
     Agriculture.
       (e) Liability for Acts of an Agent.--For the purposes of a 
     plant quarantine law, the act, omission, or failure of an 
     officer, agent, or person acting for or employed by any other 
     person within the scope of employment or office of the 
     officer, agent, or person, shall be considered to be the act, 
     omission, or failure of the other person.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. Chafee):
  S. 119. A bill to provide States with funds to support State, 
regional, and local school construction; to the Committee on Health, 
Education, Labor, and Pensions.


        building, renovating, and constructing kids' schools act

  Ms. SNOWE. Mr. President, I rise today with my friend and colleague, 
Senator Chafee, to introduce the Building, Renovating, Improving, and 
Constructing Kids' Schools (BRICKS) Act--legislation that would address 
our nation's burgeoning need for K-12 school construction, renovation, 
and repair.
  The legislation--which is endorsed by the National Education 
Association and National PTA, and the National Association of State 
Boards of Education--would accomplish this in a fiscally-responsible 
manner while seeking to find the middle ground between those who 
support a very direct, active federal role in school construction, and 
those who are concerned about an expanded federal role in what has 
been--and remains--a state and local responsibility.
  Mr. President, the condition of many of our nation's existing public 
schools

[[Page 512]]

is abysmal even as the need for additional schools and classroom space 
grows. Specifically according to reports issued by the General 
Accounting Office in 1995 and 1996, fully one-third of all public 
schools need extensive repair or replacement.
  As further evidence of this problem, an issue brief prepared by the 
National Center for Education Statistics (NCES) in 1999 stated that the 
average public school in America is 42 years old, with school buildings 
beginning rapid deterioration after 40 years. In addition, the NCES 
brief found that 29 percent of all public schools are in the ``oldest 
condition,'' which means that they were build prior to 1970 and have 
either never been renovated or were renovated prior to 1980.
  Not only are our nation's schools in need of repair and renovation, 
but there is a growing demand for additional schools and classrooms due 
to an ongoing surge in student enrollment. Specifically, according to 
the NCES, at least 2,400 new public schools will need to be built by 
the year 2003 to accommodate our nation's burgeoning school rolls, 
which will grow from a record 52.7 million children today to 54.3 
million by 2008.
  Needless to say, the cost of addressing our nation's need for school 
renovations and construction is enormous. In fact, according to the 
General Accounting Office (GAO), it will cost $112 billion just to 
bring our nation's schools into good overall condition, and a recent 
report by the NEA identified $322 billion in unmet school modernization 
needs. Nowhere is this cost better understood than in my home state of 
Maine, where a 1996 study by the Maine Department of Education and the 
State Board of Education determined that the cost of addressing the 
state's school building and construction needs stood at $637 million.
  Mr. President, we simply cannot allow our nation's schools to fall 
into utter disrepair and obsolescence with children sitting in 
classrooms that have leaky ceilings or rotting walls. We cannot ignore 
the need for new schools as the record number of children enrolled in 
K-12 schools continues to grow.
  Accordingly, because the cost of repairing and building these 
facilities may prove to be more than many state and local governments 
can bear in a short period of time, I believe the federal government 
can and should assist Maine and other state and local governments in 
addressing this growing national crisis.
  Admittedly, not all members support strong federal intervention in 
what has been historically a state and local responsibility. In fact, 
many argue with merit that the best form of federal assistance for 
school construction or other local educational needs would be for the 
federal government to fulfill its commitment to fund 40 percent of the 
cost of special education. This long-standing commitment was made when 
the Individuals with Disabilities Education (IDEA) Act was signed into 
law more than 20 years ago, but the federal government has fallen 
woefully short in upholding its end of the bargain, only recently 
increasing its share above 10 percent.
  Needless to say, I strongly agree with those who argue that the 
federal government's failure to fulfill this mandate represents nothing 
less than a raid on the pocketbook of every state and local government. 
Accordingly, I am pleased that recent efforts in the Congress have 
increased federal funding for IDEA by approximately $3.8 billion over 
the past five years, and I support ongoing efforts to achieve the 40 
percent federal commitment in the near future.
  Yet, even as we work to fulfill this long-standing commitment and 
thereby free-up local resources to address local needs, I believe the 
federal government can do more to assist state and local governments in 
addressing their school construction needs without infringing on local 
control.
  Mr. President, the legislation we are offering today--the ``BRICKS 
Act''--will do just that. Specifically, it addresses our nation's 
school construction needs in a responsible fiscal manner while bridging 
the gap between those who advocate a more activist federal role in 
school construction and those who do not.
  First, our legislation will provide $20 billion in federal loans to 
support school construction, renovation, and repair at the local level. 
By designating that at least one-half of these loan monies must be used 
to pay the interest owed to bondholders on new school construction 
bonds that are issued through the year 2003, the federal government 
will leverage the issuing of new bonds by states and localities that 
would not otherwise be made. In addition, by providing that up to one-
half of the monies may be used for state-wide school construction 
initiatives, the bill provides needed flexibility to ensure that unique 
state and local approaches to school construction will also be 
supported, such as revolving loan funds.
  Of importance, these loan monies--which will be distributed on an 
annual basis using the Title I distribution formula--will become 
available to each state at the request of a Governor. While the federal 
loans can only be used to support bond issues that will supplement, and 
not supplant, the amount of school construction that would have 
occurred in the absence of the loans, there will be no requirement that 
states engage in a lengthy application process that does not even 
assure them of their rightful share of the $20 billion pot.
  Second, our bill ensures that these loans are made by the federal 
government in a fiscally responsible manner that does not cut into the 
Social Security surplus or claim a portion of non-Social Security 
surpluses that may prove ephemeral in the future.
  Specifically, our bill would make these loans to states from the 
Exchange Stabilization Fund (ESF)--a fund that was created through the 
Gold Reserve Act of 1934 and has grown to hold more than $40 billion in 
assets. The principal activity of the fund--which is controlled solely 
by the Secretary of the Treasury--is foreign exchange intervention that 
is intended to limit fluctuations in exchange rates. However, the fund 
has also been used to provide stabilization loans to foreign countries, 
including a $20 billion line of credit to Mexico in 1995 to support the 
peso.
  In light of the controversial manner in which the ESF has been used, 
some have argued that additional constraints should be placed on the 
fund. Still others--including former Federal Reserve Board Governor 
Lawrence B. Lindsey--have stated that, for various reasons, the fund 
should be liquidated.
  Regardless of how one feels about exercising greater constraint over 
the ESF or liquidating it, I believe that if this $40 billion fund can 
be used to bailout foreign currencies, it certainly can be used to help 
America's schools.
  Accordingly, I believe it is appropriate that the $20 billion in 
loans provided by my legislation will be made from the ESF--an amount 
identical to the line of credit that was extended to Mexico by the 
Secretary of the Treasury in 1995. Of importance, these loans will be 
made from the ESF on a progressive, annual basis--not in a sudden or 
immediate manner. Furthermore, these monies will be repaid to the fund 
to ensure that the ESF is compensated for the loans it makes.
  Although the ESF will recoup all of the monies it lends, it should 
also be noted that my proposal ensures that states and local 
governments will not be forced to pay excessive interest, or that they 
will be forced to repay over an unreasonable period of time. In fact, 
if the federal government fails to substantially increase its share of 
IDEA funding, states will incur no interest at all!
  Specifically, to encourage the federal government to meet its funding 
commitment for IDEA--and to compensate states for the fact that every 
dollar in forgone IDEA funding is a dollar less that they have for 
school construction or other local needs--our bill would impose no 
interest on BRICKS loans during the first five years provided the 40 
percent funding commitment is not met.
  Thereafter, the interest rate is pegged to the federal share of IDEA:

[[Page 513]]

zero in any year that the federal government fails to fund at least 20 
percent of the cost of IDEA; 2.5 percent--the long-term projected 
inflation rate--in years that the federal share falls between 20 and 30 
percent; 3.5 percent in years the federal share is 30 to 40 percent; 
and 4.5 percent in years the full 40 percent share is achieved.
  Combined, these provisions will minimize the cost of these loans to 
the states, and maximize the utilization of these loans for school 
construction, renovation, and repair.
  Mr. President, by providing low-interest loans to states and local 
governments to support school construction, I believe that our bill 
represents a fiscally-responsible, centrist solution to a national 
problem.
  For those who support a direct, active federal role in school 
construction, our bill provides substantial federal assistance by 
dedicating $20 billion to leverage a significant amount of new school 
construction bonds. For those who are concerned about the federal 
government becoming overly-engaged in an historically state and local 
responsibility--and thereby stepping on local control--my bill directs 
that the monies provided to states will be repaid, and that no onerous 
applications or demands are placed on states to receive their share of 
these monies.
  Mr. President, I urge that my colleagues support the ``BRICKS Act''--
legislation that is intended to bridge the gap between competing 
philosophies on the federal role in school construction. Ultimately, if 
we work together, we can make a tangible difference in the condition of 
America's schools without turning it into a partisan or ideological 
battle that is better suited to sound bites than actual solutions.
  Thank you, Mr. President. I ask unanimous consent that the letters of 
support from the NEA, PTA, NASBE, and Jim Rier, the Chairman of the 
Maine State Board of Education, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                               National Education Association,

                                    Washington, DC, July 13, 2000.
     Sen. Olympia Snowe,
     U.S. Senate, Washington, DC.
       Dear Senator Snowe: On behalf of the National Education 
     Association's (NEA) 2.5 million members, we would like to 
     thank you for your leadership in introducing a revised 
     version of the Building, Renovating, Improving, and 
     Constructing Kids' Schools (BRICKS) Act.
       As you known, our nation's schools are in desperate need of 
     repair and renovation. Too many students attend classes in 
     overcrowded buildings with leaky roofs, faulty wiring, and 
     outdated plumbing. A recently-released NEA study documents 
     more than $300 billion in unmet infrastructure and technology 
     needs, nearly three times the level estimated in previous 
     research by the General Accounting Office.
       NEA believes the revised BRICKS Act offers a meaningful 
     avenue for assisting schools. The bill would make available 
     $20 billion in guaranteed funding over 15 years to provide 
     low-interest--and in many cases zero interest--school 
     modernization loans to states and schools. According to a 
     preliminary Department of Education analysis, the BRICKS Act 
     would provide schools with a benefit of $465 for each $1,000 
     in bonds.
       We are pleased that the BRICKS Act would allow up to 50 
     percent of federal funds to be used for payment of actual 
     construction costs or the principal portion of loans, as well 
     as the interest costs. We also appreciate the provision 
     allowing those states with laws that prohibit borrowing to 
     pay the interest costs on school bonds to use 100 percent of 
     their BRICKS loans for state revolving loan funds or other 
     state administered school modernization programs.
       NEA believes it is essential to enact meaningful school 
     modernization assistance this year. We thank you for your 
     leadership in this area and look forward to continuing to 
     work with you toward passage of bipartisan school 
     modernization legislation.
           Sincerely,
                                           Mary Elizabeth Teasley,
     Director of Government Relations.
                                  ____



                                                National PTA,

                                        Chicago, IL, July 7, 2000.
     Hon. Lincoln D. Chafee,
     U.S. Senate, Washington, DC.
     Hon. Olympia J. Snowe,
     U.S. Senate, Washington, DC.
       Dear Senators Chafee and Snowe: On behalf of the 6.5 
     million parents, teachers, students, and other child 
     advocates who are members of the National PTA, I am writing 
     to support the Building, Renovating, Improving, and 
     Constructing Kids' Schools (BRICKS) Act, which you plan to 
     introduce next week.
       We thank you for your leadership in proposing this 
     initiative, which acknowledges the federal government's 
     responsibility to help schools repair and renovate their 
     facilities. As you are aware, the U.S. General Accounting 
     Office has estimated that the cost of fixing the structural 
     problems in schools across the nation will cost more than 
     $112 billion. If new schools are built to accommodate 
     overcrowding, and if schools's technology, wiring, and 
     infrastructure needs are added in, this estimate would exceed 
     $200 billion dollars.
       This is a problem schools cannot address without a 
     partnership with the federal government, and National PTA 
     supports a variety of approaches to address this growing 
     crisis. In addition to endorsing the BRICKS bill, National 
     PTA is supporting the Public School Repair and Renovation 
     Act, which would provide tax credits to pay the interest on 
     school modernization bonds and create a grant and loan 
     program for emergency repairs in high-need districts; and 
     also the America's Better Classrooms Act, which would provide 
     $22 billion over two years in zero interest school 
     construction and modernization bonds.
       Under BRICKS, nearly $20 billion would be available over 15 
     years to provide low interest, and in many cases zero 
     interest, loans to States for interest payments on their 
     school modernization bonds. We are pleased that the proposal 
     will allow increased flexibility in using the federal funds 
     for interest payments, as well as for other state-
     administered programs that assist state entities or local 
     governments pay for the construction or repair of schools.
       National PTA is committed to helping enact a federal school 
     modernization proposal this Congress. We believe the BRICKS 
     Act should be promoted as one of the ways the federal 
     government can assist schools, and we thank you for your 
     leadership in this area. We look forward to continuing to 
     work with you toward formulation and passage of bipartisan 
     school modernization legislation.
           Sincerely,
                                                      Vicki Rafel,
     Vice President for Legislation.
                                  ____

         National Association of State Boards of Education,
                                    Alexandria, VA, July 18, 2000.
     Hon. Olympia Snowe,
     U.S. Senate, Washington, DC.
       Dear Senator Snowe: The National Association of State 
     Boards of Education (NASBE) is a private nonprofit 
     association representing state and territorial boards of 
     education. Our principal objectives are to strengthen state 
     leadership in education policy-making, promote excellence in 
     the education of all students, advocate equality of access to 
     educational opportunity, and assure responsible governance of 
     public education.
       We are writing to applaud your efforts to provide federal 
     assistance to states for school construction. The 
     deterioration of America's school infrastructure has reached 
     crisis proportions. At least one-third of all U.S. schools 
     are in need of extensive repairs or replacement and 60% have 
     at least one major building deficiency such as cracked 
     foundations, leaky roofs, or crumbling walls. We cannot 
     expect our children to learn much less excel in such decrepit 
     and unsafe environments.
       The more than $112 billion needed to renovate and/or repair 
     existing school facilities has simply overwhelmed state and 
     local resources. This national problem demands federal 
     attention and we are encouraged that your office is 
     attempting to address this need by proposing a $20 billion 
     federal loan program.
       Your legislation, the Building, Renovating, Improving, and 
     Constructing Kids' Schools Act (BRICKS), will leverage new 
     school construction expenditures at the state and local 
     levels and provides flexibility to integrate this assistance 
     with the variety of solutions states have already undertaken, 
     such as revolving funds, to enhance the financing of school 
     construction.
       We appreciate your efforts and attention to address this 
     critical situation. NASBE is encouraged by your actions and 
     we look forward to working with your office to foster a 
     partnership between federal, state and local entities to 
     improve the learning conditions of American children.
           Sincerely,
                                        Brenda Lilienthal Welburn,
     Executive Director.
                                  ____



                                     State Board of Education,

                                      Augusta, ME, April 29, 2000.
     Sen. Olympia J. Snowe,
     U.S. Senate, Washington, DC.
       Dear Senator Snowe: The age and condition of our nation's 
     public schools are an expanding crisis and should be of great 
     concern to all. Decades of neglect, unfunded maintenance 
     programs, constrained state and municipal budgets, shifting 
     populations, technology requirements, and programmatic 
     changes have combined to weaken the infrastructure of public 
     education. As you are well aware, a 1995 GAO report estimated 
     that just repairing existing school facilities

[[Page 514]]

     would cost $112 billion. In addition, building new facilities 
     to meet the demands of program and increased enrollments 
     could cost another $73 billion. We have allowed the condition 
     of our schools to deteriorate to a point that there are now 
     critical implications for the health and safety of our 
     students and staff who occupy those buildings. A number of 
     states have launched major efforts to address their school 
     facilities needs. The task is huge and beyond the ability of 
     most local and even state resources.
       Unfortunately, Maine mirrors the nation. A Facilities 
     Inventory Study, conducted in 1996 by the Department of 
     Education and the University of Maine's Center for Research 
     and Evaluation, identified approximately $650 million in 
     needed facility improvements. Of particular concern was the 
     need for over $60 million in serious health and safety 
     related improvements as well as an additional $150 million in 
     other renovation and upgrades required.
       In response to Maine's survey of over 700 buildings, 
     Governor King appointed a Commission to develop a plan to 
     address the needs identified. Their report was delivered to 
     the Maine Legislature in February 1998, and the 
     recommendations were enacted in April 1998. Maine has 
     responded to address the identified needs with significant 
     state and local resources. However, even as we develop policy 
     and resources to aggressively address those needs, our 
     concern grows.
       Progressing from the condition survey to a detailed 
     engineering and environmental analysis of the conditions 
     causes even greater alarm. Roofs that were reported as 
     leaking in the survey are found to have serious structural 
     integrity problems with greater safety risks for occupants as 
     well as more complex and costly solutions. indoor air quality 
     problems in the survey grow from increased air exchange 
     solutions to more complex ones due to mold and microbial 
     growth in the interior walls. Again, this poses increased 
     health risk for students and staff. As we learn more about 
     the problems, our concerns grow and the necessary resources 
     increase. The critical health and safety needs from the 1996 
     survey ($60 million) have grown to over $86 million in our 
     latest project estimates. Many more projects are yet to be 
     identified.
       Applications for Major Capital Construction projects were 
     received in August of 1999 from over 100 buildings throughout 
     Maine. Even with a major new commitment of over $200 million 
     from this Session of the Maine Legislature we will only be 
     able to address approximately 20 of those projects over the 
     next two years. More will be applying in the next two-year 
     cycle that begins in July 2001.
       Although school construction and modernization is and 
     should remain primarily a state and local responsibility, 
     states and school districts cannot meet the current urgent 
     needs alone. Federal assistance in the form of reduced or low 
     interest loans as you have included in S1992, the BRICKS ACT, 
     responds to the urgent need and could provide a critical 
     component to a comprehensive but flexible approach to address 
     Maine's, as well as the nation's, school facilities needs. As 
     currently proposed, your legislation would allow the 
     flexibility to address the renovation and upgrade of existing 
     facilities as well as provide relief for overcrowding and 
     insufficient program space where major capital construction 
     is required. It creates an effective local/state/federal 
     partnership, while leaving decisions about which schools to 
     build or repair up to states and local school units. In 
     Maine, that would allow us to strengthen our Revolving 
     Renovation Fund (created to aid local units in the upgrade 
     and renovation of existing buildings), and it would enhance 
     our bonding capacity for long term debt commitment to major 
     capital construction projects.
       Structurally unfit, environmentally deficient, or 
     overcrowded classrooms impair student achievement, diminish 
     student discipline, and compromise student safety. Although 
     not cited often, the learning environment does affect the 
     quality of education and our ability to help students achieve 
     high standards.
       The National Association of State Boards of Education has 
     identified school construction as one of its priority issues. 
     I serve as Vice-Chair of their Governmental Affairs Committee 
     and would be happy to enlist their help in focusing the 
     nation's attention on the poor condition of our schools and 
     the need for comprehensive federal assistance. If you have 
     questions or need information from NASBE please contact David 
     Griffith, Director of Governmental Affairs at 703-684-4000. 
     As Chairman of the Maine State Board of Education and the 
     Governor's School Facilities Commission I am available and 
     would be pleased to participate in any way you think 
     appropriate to outline Maine's innovative and comprehensive 
     school facilities program, and to elaborate on how federal 
     assistance could best complement state and local efforts to 
     address our school construction needs.
       It was an honor to meet you in March during NASBE's 
     Legislative Conference. I look forward to working with you in 
     support of a federal partnership with state and local school 
     units to provide a safe, healthy, and effective learning 
     environment for all.
           Sincerely,
                                        James E. Rier, Jr., Chair,
                                   Maine State Board of Education.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 120. A bill to establish a demonstration project to increase 
teacher salaries and employee benefits for teachers who enter into 
contracts with local educational agencies to serve as master teachers; 
to the Committee on Health, Education, Labor, and Pensions.


                          master teacher bill

  Mrs. FEINSTEIN. Mr. President, today I am introducing a bill to 
create a demonstration grant program to help school districts create 
master teacher positions.
  The bill authorizes $100 million for a five-year demonstration 
program under which the Secretary of Education would award competitive 
grants to school districts to create master teacher positions. Federal 
funds would be equally matched by states and local governments so that 
$200 million total would be available. Under the bill, 6,600 master 
teacher positions could be created if each master teacher were paid 
$30,000 on top of the current average teacher's salary.
  As defined in this bill, a master teacher is one who is credentialed; 
has at least five years of teaching experience; is judged to be an 
excellent teacher by administrators and teachers who are knowledgeable 
about the individual's performance; is currently teaching; and enters 
into a contract and agrees to serve at least five more years.
  The master teacher would help other teachers to improve instruction, 
strengthen other teachers' skills, mentor less experienced teachers, 
develop curriculum, and provide other professional development.
  The goal of this bill is for districts to pay each master teacher up 
to $30,000 on top of his or her regular salary. Nationally, the average 
teacher salary is $40,574. In California, it is $45,317. School 
principals receive $76,768 on average nationally and $72,805 in 
California. School superintendents nationally earn $106,122 and in 
California, $102,054. The purpose of the master teacher concept in this 
bill is to pay teachers a salary closer to that of an administrator to 
keep good teachers in teaching.
  The bill requires State and/or local districts to match federal funds 
dollar for dollar. It requires the U.S. Department of Education to give 
priority to school districts with a high proportion of economically 
disadvantaged students and to ensure that grants are awarded to a wide 
range of districts in terms of the size and location of the school 
district, the ethnic and economic composition of students, and the 
experience of the districts' teachers.
  There are several reasons we need this bill.
  Beginning teachers face overwhelming challenges in their first year, 
but in the real world, they get little guidance or support, in a year 
that will have a profound impact on the rest of their professional 
career. They often feel ``out there'' and ``alone,'' thrown into an 
unfamiliar school and classroom with a room full of new faces. By the 
current sink-or-swim method, new teachers often find themselves ill 
equipped to deal with the educational and disciplinary tasks of their 
first year.
  A new teacher can get experienced guidance from a master teacher who 
is paired with the new teacher. The master teacher can help plan 
lessons, improve instructional methods, and deal with discipline 
problems. Having this kind of professional support can give these new 
teachers the skills and confidence to stay in teaching.
  Second, master teacher programs can bring more prestige to teaching 
as a profession, by increasing the teacher's salary, by rewarding 
experience, and by giving teachers opportunities to supervise others. A 
master teacher designation is a way to recognize outstanding ability 
and performance, and to reward the good teachers. A master teacher 
position can give teachers a professional goal, a higher level to 
pursue. A 1996 report by the National Commission for Teaching and 
American's Future said that creating new career paths for teachers is 
one of the best

[[Page 515]]

ways to give educators the respect they deserve and to ensure that 
proven teaching methods spread quickly and broadly.
  In one survey of teachers which asked which factors make teachers 
stay in teaching, 79 percent of teachers said that respect for the 
teaching profession is needed in order to retain qualified teachers. 
Eighty percent said that formal mentoring programs for beginning 
teachers is key (Scholastic/Chief State School Officers' Teacher Voices 
Survey, 2000). Over 70 percent of teachers said that more planning time 
with peers is needed to keep teachers in the classroom. This amendment 
should help.
  Because of the higher pay and enhanced prestige, a master teacher 
program can help to recruit and retain teachers. Mentor systems provide 
new teachers with a support network, someone to turn to. Studies 
indicate higher retention rates among new teachers who participate in 
mentoring programs. According to Yvonne Gold of California State 
University-Long Beach, 25 percent of beginning teachers do not teach 
more than two years and nearly 40 percent leave in the first five 
years. In the Rochester, New York, system, the teacher retention rate 
was nearly double the national average five years after establishing a 
mentoring program.
  As Jay Matthews wrote in the May 16, 2000, Washington Post, programs 
like this ``can provide a large boost to the profession's image for a 
relatively small amount of money.'' These programs can keep good 
teachers in the classroom, instead of losing them to school 
administration or industry.
  Higher salaries and prestige for master teachers could deter the 
drain from the classrooms.
  Another reason for this bill is that teacher mentoring programs can 
make teacher performance more accountable. A master teacher can help 
novice teachers improve their teaching and get better student 
achievement. ``Teachers cannot be held accountable for knowledge based, 
client-oriented decisions if they do not have access to knowledge, as 
well as opportunities for consultation and evaluation of their work,'' 
said Adam Urbanski, President of the Rochester, New York, Teachers 
Association. He went on: ``Unsatisfactory teacher performance often 
stems from inadequate and incompetent supervision. Administrators often 
lack the training and the resources to supervise teachers and improve 
the performance of those who are in serious trouble.''
  Good teachers are key to learning. Lower math test scores have been 
correlated with the percentage of math teachers on emergency permits 
and higher math test scores were linked both to the teachers' 
qualifications and to their years of teaching experience, according to 
``Professional Development for Teachers, 2000.''
  This bill could be very helpful in California where one-fifth of our 
teachers will leave the profession in three years, according to an 
article in the February 9, 2000, Los Angeles Times. One-half of our 
teachers are over age 44.
  California will need 300,000 new teachers by 2010. ``More students to 
teach, smaller classes, and teachers leaving or retiring means that 
California school districts are now having to hire a record 26,000 new 
teachers each year,'' says the report, ``Teaching and California's 
Future, 2000.'' California's enrollment is growing at three times the 
national rate. With these kinds of demands, understaffing often leads 
to under qualified and new teachers entering the classroom. We have to 
do all we can to attract and retain good teachers.
  The true beneficiaries of master teacher programs are the students 
and that is, of course, my fundamental goal. As stated in Rochester's 
teaching manual, the goal is ``to improve student outcomes by 
developing and maintaining the highest quality of teaching, providing 
teachers with career options that do not require them to leave teaching 
to assume additional responsibilities and leadership roles.''
  I believe this bill can begin to provide teachers the real 
professional support they need, can attract and retain teachers and can 
bring to the teaching profession the prestige it deserves.
  I urge my colleagues to join us in support of this bill.
  I ask unanimous consent that this bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 120

       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 ``Master Teacher Act of 
     2001''.

     SEC. 2. MASTER TEACHER DEMONSTRATION PROJECT.

       (a) Definitions.--In this section:
       (1) Local educational agency.--The term ``local educational 
     agency'' has the meaning given the term in section 14101 of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     8801).
       (2) Master teacher.--The term ``master teacher'' means a 
     teacher who--
       (A) is licensed or credentialed under State law;
       (B) has been teaching for at least 5 years in a public or 
     private school or institution of higher education;
       (C) is selected upon application, is judged to be an 
     excellent teacher, and is recommended by administrators and 
     other teachers who are knowledgeable of the individual's 
     performance;
       (D) at the time of submission of such application, is 
     teaching and based in a public school;
       (E) assists other teachers in improving instructional 
     strategies, improves the skills of other teachers, performs 
     mentoring, develops curriculum, and offers other professional 
     development; and
       (F) enters into a contract with the local educational 
     agency to continue to teach and serve as a master teacher for 
     at least 5 additional years.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (b) Establishment of Demonstration Project.--
       (1) In general.--Not later than July 1, 2002, the Secretary 
     shall conduct a demonstration project under which the 
     Secretary shall award competitive grants to local educational 
     agencies to increase teacher salaries and employee benefits 
     for teachers who enter into contracts with the local 
     educational agencies to serve as master teachers.
       (2) Requirements.--In awarding grants under the 
     demonstration project, the Secretary shall--
       (A) ensure that grants are awarded under the demonstration 
     project to a diversity of local educational agencies in terms 
     of size of school district, location of school district, 
     ethnic and economic composition of students, and experience 
     of teachers; and
       (B) give priority to local educational agencies in school 
     districts that have schools with a high proportion of 
     economically disadvantaged students.
       (c) Applications.--In order to receive a grant under the 
     demonstration project, a local educational agency shall 
     submit an application to the Secretary that contains--
       (1) an assurance that funds received under the grant will 
     be used in accordance with this section; and
       (2) a detailed description of how the local educational 
     agency will use the grant funds to pay the salaries and 
     employee benefits for positions designated by the local 
     educational agency as master teacher positions.
       (d) Matching Requirement.--The Secretary may not award a 
     grant to a local educational agency under the demonstration 
     project unless the local educational agency agrees that, with 
     respect to costs to be incurred by the agency in carrying out 
     activities for which the grant was awarded, the agency shall 
     provide (directly, through the State, or through a 
     combination thereof) in non-Federal contributions an amount 
     equal to the amount of the grant awarded to the agency.
       (e) Study and Report.--
       (1) In general.--Not later than July 1, 2005, the Secretary 
     shall conduct a study and transmit a report to Congress 
     analyzing the results of the demonstration project conducted 
     under this section.
       (2) Contents of report.--The report shall include--
       (A) an analysis of the results of the project on--
       (i) the recruitment and retention of experienced teachers;
       (ii) the effect of master teachers on teaching by less 
     experienced teachers;
       (iii) the impact of mentoring new teachers by master 
     teachers; and
       (iv) the impact of master teachers on student achievement; 
     and
       (B) recommendations regarding--
       (i) continuing or terminating the demonstration project; 
     and
       (ii) establishing a grant program to expand the project to 
     additional local educational agencies and school districts.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $100,000,000, 
     for the period of fiscal years 2002 through 2006.

[[Page 516]]


                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Graham):
  S. 121. A bill to establish an Office of Children's Services within 
the Department of Justice to coordinate and implement Government 
actions involving unaccompanied alien children, and for other purposes; 
to the Committee on the Judiciary.


                Unaccompanied Alien Child Protection Act

  Mrs. FEINSTEIN. Mr. President. I rise today to introduce legislation 
to change the way unaccompanied immigrant children are treated while in 
the custody of the Immigration and Naturalization Service (INS). If 
enacted, the Unaccompanied Alien Child Protection Act of 2001 would 
ensure that the federal government addresses the special needs of 
thousands of unaccompanied alien children who enter the U.S. It will 
ensure that these children have a fair opportunity to obtain 
humanitarian relief.
  Central throughout this legislation are two concepts: The United 
States government has a fundamental responsibility to protect 
unaccompanied children in its custody; and in all proceedings and 
actions, the government's ultimate priority should be to protect the 
best interests of children.
  The Unaccompanied Alien Child Protection Act of 2001 would ensure 
that children who are apprehended by the INS are treated humanely and 
appropriately by transferring jurisdiction over their welfare from the 
INS Detention and Deportation division to a newly created Office of 
Children's Services within the Department of Justice.
  This legislation would also centralize responsibility for the care 
and custody of unaccompanied children in this new Office of Children's 
Services. By doing so, it would resolve the conflict of interest 
inherent in the current system--that is, the INS retains custody of 
children and is charged with their care while, at the same time, it 
seeks their deportation.
  Under this bill, the Office of Children's Services would be required 
to establish standards for the custody, release, and detention of 
children, ensuring that children are housed in appropriate shelters or 
foster care rather than juvenile jails. In 1999, the INS held some 
2,000 children in juvenile jails even though they had never committed a 
crime. Equally as important, the bill would require the Office to 
establish clear guidelines and uniformity for detention alternatives 
such as shelter care, foster care, and other child custody 
arrangements.
  The bill would improve unaccompanied aliens' access to existing 
options for permanent protection when U.S. immigration and child 
welfare authorities believe such protection is warranted.
  Finally, the Unaccompanied Alien Child Protection Act would provide 
unaccompanied minors with access to legal counsel, who would ensure 
that the children appear at all immigration proceedings and assist them 
as the INS and immigration court consider their cases. The bill would 
also provide the children with access to a guardian ad litem to ensure 
that they are properly placed in a safe and caring environment. The 
guardian ad litem would also work to ensure that each child's best 
interests are protected throughout the process.
  Let me turn for a moment to the issue of access to counsel. Children, 
even more than adults, have incredible difficulty understanding the 
complexities of the asylum system without the assistance of counsel. 
Despite this reality, most children in INS detention are overlooked and 
unrepresented. Without legal representation, children are at risk of 
being returned to their home countries where they may face further 
human rights abuses.
  I am aware of two cases that demonstrate the compelling need for 
counsel on behalf of these children. The first case involves two 17-
year old boys from China. Li and Wang, who were apprehended on an 
island near Guam and had been in INS custody for almost two years. 
During their detention in Guam, the two boys testified in federal court 
against the smugglers who brought them to Guam. In their testimony, 
they described being beaten by the smugglers even before leaving China, 
and stated that others were beaten during the trip to Guam. In the 
spring of 2000, the two boys were brought to a corrections facility in 
Los Angeles and detained in the INS section of that facility. This is 
where the similarity in their cases end.
  Mr. President, while both of the boys would face danger from the 
smugglers if they returned to China because of their testimony, only 
one was granted asylum. Li applied for asylum and was denied. He was 
not represented by counsel at his hearing. Despite the fact that the 
INS trial attorney mentioned that Li had testified in federal court 
against the smugglers, the judge did not include this information in 
her decision on the claim. Luckily for Li, an attorney overheard the 
hearing, and after speaking with Li, agreed to appeal his asylum claim. 
Li is still being held in a Los Angeles corrections facility. The story 
is different for Wang. Wang had an attorney and won his asylum hearing. 
But INS is appealing the decision so Wang remains in a Los Angeles 
corrections facility, as well.
  Mr. President, these cases demonstrate the pressing need for legal 
representation of children. Had he been represented by counsel and if 
his testimony would have been incorporated into his case, Li may have 
won his asylum claim. Instead, a 17-year-old boy unfamiliar with our 
immigration system and our language was forced to navigate the complex 
court system alone.
  According to Human Rights Watch, children detained by the INS, 
whether in secure detention or less restrictive settings, often have 
great difficulty obtaining information about their legal rights. On a 
1998 visit to the Berks County Juvenile Detention Center in Reading, 
Pennsylvania, Human Rights Watch staff found that none of the children 
they interviewed had received information from the INS or the 
facility's staff about their rights or the legal services available to 
them.
  Unaccompanied alien children are among the most vulnerable of the 
immigrant population; many have often entered the country under 
traumatic circumstances. They are young and alone, subject to abuse and 
exploitation. These unaccompanied children are unable to articulate 
their fears, their views, or testify to their needs as accurately as 
adults can.
  Despite these facts, U.S. immigration laws and policies have been 
developed and implemented without caring about their effect on 
children, particularly on unaccompanied alien children.
  Sadly, the INS detains more than 5,000 children nationwide each year. 
They are apprehended for not having proper documentation at ports-of-
entry into the United States. Their detention may last for months--or 
sometimes for years--as they undergo complex and arduous immigration 
proceedings.
  Under current immigration law, these children are forced to struggle 
through a system designed primarily for adults, even though they lack 
the capacity to understand nuanced legal principles and procedures. 
Children who may very well be eligible for relief are often vulnerable 
to being deported back to the very abusive situations from which they 
fled before they are able to make their case before the INS or an 
immigration judge.
  Under current law, the INS is responsible for the apprehension, 
detention, care, placement, legal protection, and deportation of 
unaccompanied children. I believe that these are conflicting 
responsibilities that undercut the best interests of the child. Too 
often, the INS has fallen short in fulfilling the protection side of 
these responsibilities.
  The INS uses a variety of facilities to house children. Some are held 
in children's shelters in which children are offered some of the 
services they need but still may experience prolonged detention, lack 
of access to counsel, and other troubling conditions.
  The INS relies on juvenile correctional facilities to house many 
children, even in the absence of any criminal wrongdoing. Today, one 
out of every three children in INS custody is detained in secure, jail-
like facilities. These facilities are highly inappropriate, 
particularly for children who have already experienced painful trauma 
in their homelands.

[[Page 517]]

  There is currently no provision of federal law providing guidance for 
the placement of unaccompanied alien children. In 1987, the Flores v. 
Reno settlement agreement on behalf of minors in INS detention 
established the nationwide policy for the detention, release, and 
treatment of children in the custody of INS. The Flores agreement 
requires that the INS treat minors with dignity, respect, and special 
concern for their particular vulnerability. It also requires the INS to 
place each detained minor in the least restrictive setting appropriate 
to the child's age and special needs.
  In response to Flores, the INS issued regulations that permitted its 
officers to detain children in secure facilities only in limited 
circumstances. The INS officers were required to provide written notice 
to the child of the reasons for such placement. More importantly, the 
regulations required the INS to segregate immigration detainees from 
juvenile criminal offenders.
  Although INS officials have contended that these children are placed 
in these facilities largely because they are charged with other 
offenses, the INS statistics do not bear out this claim. In fiscal year 
1999, only 19 percent of the children placed in secure detention were 
chargeable or adjudicated as delinquents.
  According to non-governmental organizations (NGOs) such as Human 
Rights Watch and the Women's Commission on Refugee Women and Children, 
the INS regularly violates these regulations. The NGOs contend that all 
too often children are placed in jail-like facilities for seemingly 
arbitrary reasons, seldom notified of the reasons why, and forced to 
share rooms and have extensive contact with convicted juvenile 
offenders.
  I was also astonished to learn that many of these children, some as 
young as four and five years old, are placed behind multiple layers of 
locked doors, surrounded by walls and barbed wire. They are strip 
searched, patted down, placed in solitary confinement for punishment, 
forced to wear prison uniforms and shackles, and are forbidden to keep 
personal objects. Often they have no one to speak with because of the 
language barrier.
  The Unaccompanied Alien Child Protection Act of 2001 would ensure 
that the particular needs of the thousands of unaccompanied alien 
children who enter INS custody each year are met and that these 
children have a fair opportunity to obtain immigration relief when 
eligible.
  In 1999, the INS held approximately 4,600 children under the age of 
18 in its custody. Some of these children fled human rights abuses or 
armed conflict in their home countries, some were victims of child 
abuse or had otherwise lost the support and protection of their 
families, some came to the United States to join family members, and 
some came to escape economic deprivation.
  Many of these children came from troubled and war-torn countries 
around the world, including the Peoples Republic of China, Honduras, 
Afghanistan, Somalia, Sierra Leone, Colombia, Guatemala, Cuba, former 
Yugoslavia, and others. They range in age from toddlers to teenagers. 
Some traveled to the United States alone, while others were accompanied 
by unrelated adults.
  Sadly, a significant number are victims of smuggling or trafficking 
rings. In one recent instance, Phanupong Khaisri, a two-year old Thai 
child, was brought to the U.S. by two individuals falsely claiming to 
be his parents, but who were actually part of a major alien trafficking 
ring. The INS was prepared to deport the child back to Thailand. It was 
not until Members of Congress and the local Thai community had 
intervened, however, that the INS decided to allow the child to remain 
in the U.S. until the agency could provide proper medical attention and 
determine what course of action would be in his best interest. Now his 
case is before a federal district court judge who will determine 
whether he should be eligible to apply for asylum.
  The Unaccompanied Alien Child Protection Act aims to prevent 
situations like this from recurring by centralizing the care and 
custody of unaccompanied children into a new Office of Children's 
Services within the INS, but outside the jurisdiction of the District 
Directors. By doing so, the Act resolves the conflict of interest 
inherent in the current system--that is, the INS retains custody of 
children and is charged with their care while, at the same time, it 
seeks their deportation.
  Mr. President, I would like to take a moment to share with you a few 
other examples of how the federal government has fallen short in the 
manner in which we handle vulnerable unaccompanied minors. One would 
think that our country would treat unaccompanied minors with the 
sensitivity and care their situations demand. Unfortunately, in too 
many instances, that has not been the case. Too often, these children 
are often treated like adults and, under the worst circumstances, like 
criminals.
  Xaio Ling, a young girl from China who spoke no English, was detained 
by the INS at the Berks County Juvenile Detention Center. The INS 
placed her among children guilty of violent crimes, including rape and 
murder. Xaio was never guilty of any crime, and yet she slept in a 
small concrete cell, was subjected to humiliating strip searches, and 
forced to wear handcuffs. She was forbidden to keep any of her clothes 
or possessions and, under the policies of the Berks Center, Xaio was 
not allowed to laugh--not that she had anything to laugh about.
  Imagine the fear this child had to endure: thrust into a system she 
did not understand, given no legal aid, placed in jail that housed 
juveniles with serious criminal convictions, including murder, car 
jacking, rape, and drug trafficking. She did not speak English and was 
unable to speak to any staff who knew her language, and she had to 
submit to strip searches. It is hard to believe that our country would 
have allowed this innocent child to be treated in such a horrible 
manner.
  Situations like that of this young Chinese girl make a compelling 
case for changes in the way our nation treats unaccompanied alien 
children. Under the legislation I have introduced today, this youngster 
never would have been placed in a detention center with criminal 
offenders. Rather, she would have immediately been placed in shelter 
care, foster care, or a home more appropriate for her situation. She 
would have been provided an attorney for her immigration proceedings 
and a social worker would have been appointed as guardian ad litem to 
ensure that her needs were being met. Sadly, this young girl was given 
none of these options.
  Neither was a 16 year-old boy from Colombia, who fled Colombia to 
escape a life of violence on the streets of Bogota, where FARC 
guerillas attempted to recruit him and the F-2 branch of the Colombian 
government harassed him in its attempt to get rid of street children. 
Fearing for his life, he fled Colombia for Venezuela where he lived 
without shelter or sufficient food. In search of a safer life, he 
sneaked into the machine room of a cargo ship bound for the United 
States. He was lucky to survive; many other stowaways were thrown 
overboard when discovered by the ship's crew.
  The boy remained on the ship from November 1998 until March 1999, 
when he arrived in Philadelphia. He was soon turned over to the INS and 
placed into the same detention center in which the young Chinese girl 
was held. He, too, was kept with criminal offenders. He did not 
understand English, which created a myriad of problems because he was 
unable to understand what was expected of him in the detention center. 
He was held in an inappropriately punitive environment for six months.
  I have one last story to share with you today. Placed on a boat bound 
for the United States by her very own parents, a 15-year-old girl fled 
China's rigid family planning laws. Under these laws she was denied 
citizenship, education, and medical care. She came to this country 
alone and desperate. And what did our immigration authorities do when 
they found her? They held her in a juvenile jail in Portland, Oregon. 
She was held for eight months and was detained for an additional four 
months after being granted political asylum. At her asylum hearing, the 
young girl

[[Page 518]]

could not wipe away the tears from her face because her hands were 
chained to her waist. According to her lawyer, ``her only crime was 
that her parents had put her on a boat so she could get a better life 
over here.''
  Mr. President, for years children's rights and human rights activists 
have implored Congress to improve the way our immigration system 
handles unaccompanied minors--just like the ones whose stories I have 
just told. I believe my bill would do just that.
  We cannot continue to allow children, who come to our country, often 
traumatized and guilty of no crime, to be held in jails and treated 
like criminals. We cannot continue to allow children, scared and 
helpless, to be thrown into a system they do not understand without 
sufficient legal aid and a guardian to look after their best interests. 
We must adhere to the principles of our justice system. What kind of 
message do we send when we deprive children who come to our country 
seeking refuge of their basic rights and protections?
  As a nation that holds our democratic ideals and constitutional 
rights paramount, how then can we continue to avert our attention from 
repeated violations of some of the most basic human rights against 
children who have no voice in the immigration system? We should be 
outraged that children who come to the U.S. alone, many against their 
will, are subjected to such inhumane, excessive conditions.
  I am proud to have the support of the United States Catholic 
Conference and the Women's Commission on Refugee Women and Children, 
with whom I have worked closely to develop this legislation.
  I urge my colleagues to join with me by cosponsoring this important 
measure.
                                 ______
                                 
      Mr. CAMPBELL:
  S. 122. A bill to prohibit a State from determining that a ballot 
submitted by an absent uniformed services voter was improperly or 
fraudulently cast unless that State finds clear and convincing evidence 
of fraud, and for other purposes; to the Committee on Rules and 
Administration.


              Armed Services Voting Rights Protection Act

  Mr. CAMPBELL. Mr. President, today I introduce the ``Armed Services 
Voting Rights Protection Act of 2001.''
  This important legislation takes a two pronged approach to help 
address the technical problems that resulted in far too many of the 
ballots cast by those serving in our nation's Armed Services being 
thrown out in the last election.
  The first part of the bill would amend the Uniformed and Overseas 
Citizens Absentee Voting Act of 1986 to help protect the voting rights 
of our armed services members. This first part is companion language to 
a bill, H.R. 159, that has been introduced in the 107th Congress by 
Representative Bob Riley of Alabama.
  Specifically, this part of the bill would prohibit a state from 
determining that an absentee ballot submitted by a uniformed services 
voter has been improperly cast unless the state finds clear and 
convincing evidence of fraud. It states that the lack of a witness 
signature, address, postmark, or other identifying information cannot 
not be considered clear and convincing evidence of fraud unless there 
is other evidence or information. Further, it is designed to have no 
effect on filing deadlines as determined by the states.
  The second part of the Armed Services Voting Rights Protection Act 
directs the United States Postal Service to conduct joint studies with 
each of the branches of our Armed Services to examine what went wrong 
during the last election that caused so many of the ballots cast by our 
nation's Soldiers, Sailors, Airmen and Marines to be thrown out, often 
for minor technical reasons. It directs the U.S. Postal Service and the 
Armed Services to report back to congress within 120 days of the 
enactment of this Act with recommendations about how to improve the 
U.S. Post Office's interface with the Armed Services and help prevent a 
repeat performance where so many overseas military ballots were thrown 
out. It also directs them to implement the changes that can be done 
without changing current law and recommend further changes in law that 
Congress may want to consider. These efforts should also help improve 
the overall day-to-day relationship between the Armed Services and 
Postal Service.
  The need for this bill is clear. While ballots were being counted 
during the most recent presidential election, an army of trial lawyers 
was sent out in a coordinated effort to systematically eliminate many 
of the votes cast by Americans serving in our nation's Armed Services 
overseas. These efforts to throw out ballots, usually for minor 
technical reasons, were all too successful. We need to do what we can 
to make sure it does not happen again.
  As a veteran and a member of the Senate Veterans Affairs Committee, I 
believe throwing out votes cast by those serving in the Armed Services 
over technicalities is simply wrong on the most fundamental level. Our 
nation's Marines, Sailors, Airmen and Soldiers serve on the front lines 
in the defense of our great nation and constitutional democracy. To 
toss out so many of their ballots, and especially those cast by those 
serving at the forefront of our defense by being underway at sea or 
serving in remote hardship posts, is no way to show appreciation for 
their service.
  Many Americans, myself included, are deeply concerned that the last 
election sent a clear signal to those serving in the Armed Forces that 
even though they may be putting their very lives on the line in the 
defense of our nation, and are duty bound to obey orders issued by 
their Commander in Chief, the President of the United States, there is 
a good chance that their right to have a voice, through a vote, in the 
selection of that President may be eliminated by the most minor of 
technicalities. This situation is made even worse by the fact that the 
very technical problems that may disqualify their ballots, like lack of 
access to postal marks, are often well beyond the control of individual 
Sailors, Soldiers, Marines and Airmen.
  In order to vote, most of our fellow Americans serving in the Armed 
Services already have to jump through more hoops that the average 
citizen. We must do what we can to make it easier for them to jump 
through those hoops, rather that using these hoops as a way to trip up 
their right to vote.
  Late last year, our nation witnessed an unprecedented assault on 
votes cast by our nation's Soldiers, Sailors, Airmen and Marines, and 
especially those serving overseas. The Armed Services Voting Rights 
Protection Act would be an important step in making sure that it does 
not happen again. I urge my colleagues to support this legislation.
  I ask unanimous consent that the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 122

       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 ``Armed Services Voting Rights 
     Protection Act of 2001''.

     SEC. 2. STANDARD FOR INVALIDATION OF BALLOTS CAST BY ABSENT 
                   UNIFORMED SERVICES VOTERS IN FEDERAL ELECTIONS.

       (a) In General.--Section 102 of the Uniformed and Overseas 
     Citizens Absentee Voting Act (42 U.S.C. 1973ff-1) is 
     amended--
       (1) by striking ``Each State'' and inserting ``(a) In 
     General.--Each State''; and
       (2) by adding at the end the following new subsection:
       ``(b) Standards for Invalidation of Certain Ballots.--
       ``(1) In general.--A State may not refuse to count a ballot 
     submitted in an election for Federal office by an absent 
     uniformed services voter on the grounds that the ballot was 
     improperly or fraudulently cast unless the State finds clear 
     and convincing evidence of fraud in the preparation or 
     casting of the ballot by the voter.
       ``(2) Clear and convincing evidence.--For purposes of this 
     subsection, the lack of a witness signature, address, 
     postmark, or other identifying information may not be 
     considered clear and convincing evidence of fraud (absent any 
     other information or evidence).
       ``(3) No effect on filing deadlines under state law.--
     Nothing in this subsection may be construed to affect the 
     application to ballots submitted by absent uniformed services 
     voters of any ballot submission deadline applicable under 
     State law.''.

[[Page 519]]

       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply with respect to ballots described in section 
     102(b) of the Uniformed and Overseas Citizens Absentee Voting 
     Act (as added by such subsection) that are submitted with 
     respect to elections that occur after the date of enactment 
     of this Act.

     SEC. 3. STUDY AND REPORT BY THE POSTAL SERVICE ON IMPROVING 
                   THE SUBMISSION OF ABSENTEE BALLOTS BY ABSENT 
                   UNIFORMED SERVICES VOTERS IN ELECTIONS FOR 
                   FEDERAL OFFICE.

       (a) Study.--
       (1) In General.--The Postal Service shall conduct a study 
     to determine each reason for which an absentee ballot of an 
     absent uniformed services voter (as defined in paragraph (1) 
     of section 107 of the Uniformed and Overseas Citizens 
     Absentee Voting Act (42 U.S.C. 1973ff-6)) was not counted in 
     the general election for Federal office (as defined in 
     paragraph (3) of such section) held in 2000.
       (2) Consultation.--In conducting the study under this 
     subsection, the Postal Service shall consult with the head of 
     the executive department designated under section 101(a) of 
     the Uniformed and Overseas Citizens Absentee Voting Act (42 
     U.S.C. 1973ff), and the Secretaries of Defense, 
     Transportation, Commerce, and Health and Human Services.
       (b) Unpostmarked Ballots.--In conducting the study under 
     subsection (a), if the Postal Service finds that a reason for 
     which an absentee ballot was not counted is that the ballot 
     was not postmarked, then the Postal Service shall--
       (1) determine the reason that the ballot was not 
     postmarked; and
       (2) develop recommendations on ways to ensure that such 
     ballots will be postmarked in the future.
       (c) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Postal Service shall submit to 
     Congress a report on the study conducted under subsection (a) 
     that contains--
       (1) any reason determined under paragraph (1) of subsection 
     (b) and any recommendations developed under paragraph (2) of 
     such subsection; and
       (2) such recommendations for legislative or administrative 
     action as the Postal Service determines appropriate.
  Mrs. FEINSTEIN (for herself and Mr. Voinovich):
  S. 123. A bill to amend the Higher Education Act of 1965 to extend 
loan forgiveness for certain loans to Head Start teachers; to the 
Committee on Health, Education, Labor, and Pensions.


                    head start teachers act of 2001

  Mrs. FEINSTEIN. Mr. President: I rise today with my colleague from 
Ohio, Senator Voinovich, to introduce legislation to expand the federal 
loan forgiveness program to include Head Start teachers.
  Head Start is one of the most important federal programs because it 
has the potential to reach children early in their formative years when 
their cognitive skills are just developing. We know that poor children 
disproportionately start school behind their peers--they are less 
likely to count to 10 or to recite the alphabet.
  Providing low-income children with access to programs that encourage 
cognitive learning and prepare them to enter school ready to learn is 
important. Head Start is one example of a Federal program that has the 
potential to reach every low-income child; to help every eligible child 
learn to count to ten and begin to recite the alphabet.
  Many of our Nation's youngsters, however, enter elementary school 
without the basic skills necessary to succeed. Often these children lag 
behind their peers throughout their academic career.
  As taxpayers, we will spend millions on efforts to help these 
children catch up. Many of these children will never catch up.
  Several studies confirm the importance of providing low-income 
children with the opportunity early on to gain basic cognitive skills:

  A study conducted on a preschool program in Chicago showed that for 
every dollar invested, $8 was saved by society in projected costs. 
Additionally, 26 percent more children were likely to finish high 
school and 40 percent were less likely to repeat a grade.
  The National Head Start Association found that for every dollar 
invested in Head Start, at least $2.50 is saved because these children 
need less remedial education and are less likely to be on welfare 
programs or involved with the juvenile justice system than non-Head 
Start peers.
  The Rand Corporation found that for every dollar invested in early 
childhood learning programs, taxpayers save between $4 and $7 later by 
reducing the need for alcohol and drug treatment programs, special 
education programs, mental health services, and the likelihood of 
incarceration.

  We can save millions by providing low-income children with access to 
quality preschool where they will gain the necessary cognitive skills 
to succeed in school and life.
  In order to give every child a head start in life, we must continue 
to recruit qualified teachers to the Head Start field who have 
demonstrated knowledge and teaching skills in reading, writing, early 
childhood development, and other areas of the preschool curriculum with 
a particular focus on cognitive learning. Obtaining and maintaining 
teachers with such qualifications is the only way to jump-start 
cognitive learning and to ensure that our youngsters start elementary 
school ready to learn.
  Several recent studies confirm the importance of investing in the 
education and training of those who work with preschoolers.
  A study conducted by the National Research Council at the request of 
the U.S. Department of Education recommends that:

       Each group of children in an early childhood education and 
     care program should be assigned a teacher who has a 
     bachelor's degree with specialized education related to early 
     childhood. . . . Progress toward a high-quality teaching 
     force will require substantial public and private support and 
     incentive programs, including innovative education programs, 
     scholarship and loan programs, and compensation commensurate 
     with the expectations of college graduates.

  The Head Start 2010 National Advisory Panel presided over fifteen 
national hearings and open forums. The panel found:

       There was a tremendous amount of testimony about the fact 
     that, despite increases resulting from Federal quality set-
     aside funding, relatively low salaries and poor or non-
     existent benefits make it difficult to attract and retain 
     qualified staff over the long term. Witnesses stated that 
     many staff positions remain vacant and turnover is likely to 
     worsen if compensation does not improve significantly . . . 
     comments included passionate exhortations for greater 
     investment in staff, observing that, in Head Start . . . the 
     quality of the program is tied directly to the quality of the 
     staff.

  Many Head Start programs are losing qualified teachers to local 
school districts because the pay is better, and working in an 
elementary or secondary school assists these teachers in qualifying to 
receive up to $5,000 of their federal loans forgiven. Every teacher 
Head Start loses impacts access to services for our nation's most 
vulnerable youngsters.
  I believe that leveling the playing field by offering Head Start 
teachers the same loan forgiveness benefit currently afforded to 
elementary and secondary school teachers could encourage more college 
graduates to enter the field.
  Following the recommendations of the Head Start 2010 National 
Advisory Panel and the National Research Council, I believe we must 
create programs to encourage highly educated and trained individuals to 
commit to long-term careers in the Head Start arena.
  To encourage recent graduates, current Head Start teachers without a 
degree, and college students to enter and remain in the Head Start 
field, I am introducing legislation that will expand the federal loan 
forgiveness program to include Head Start teachers. In exchange for 5 
years of service, a Head Start teacher could receive up to $5,000 of 
their federal Stafford loan forgiven.
  I believe we must continue to improve the Head Start program such 
that children leave the program able to count to ten, to recognize 
sizes and colors, and can begin to recite the alphabet, to name a few 
indicators of cognitive learning. To ensure cognitive learning, we must 
also continue to raise the standards for Head Start teachers. Offering 
Head Start teachers similar compensation for their educational 
achievements and expenses afforded to other teachers should be a 
priority of this Congress.
  Mr. President, I ask unanimous consent that the text of the bill now 
appear in the Record.

[[Page 520]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 123

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

     SECTION 1. LOAN FORGIVENESS FOR HEAD START TEACHERS.

       (a) Short Title.--This section may be cited as the ``Loan 
     Forgiveness for Head Start Teachers Act of 2001''.
       (b) Head Start Teachers.--Section 428J of the Higher 
     Education Act of 1965 (20 U.S.C 1078-10) is amended--
       (1) in subsection (b), by amending paragraph (1) to read as 
     follows:
       ``(1)(A) has been employed--
       ``(i) as a full-time teacher for 5 consecutive complete 
     school years in a school that qualifies under section 
     465(a)(2)(A) for loan cancellation for Perkins loan 
     recipients who teach in such a school; or
       ``(ii) as a Head Start teacher for 5 consecutive complete 
     program years under the Head Start Act; and
       ``(B)(i) if employed as a secondary school teacher, is 
     teaching a subject area that is relevant to the borrower's 
     academic major as certified by the chief administrative 
     officer of the public or nonprofit private secondary school 
     in which the borrower is employed;
       ``(ii) if employed as an elementary school teacher, has 
     demonstrated, as certified by the chief administrative 
     officer of the public or nonprofit private elementary school 
     in which the borrower is employed, knowledge and teaching 
     skills in reading, writing, mathematics, and other areas of 
     the elementary school curriculum; and
       ``(iii) if employed as a Head Start teacher, has 
     demonstrated knowledge and teaching skills in reading, 
     writing, early childhood development, and other areas of a 
     preschool curriculum, with a focus on cognitive learning; 
     and'';
       (2) in subsection (g), by adding at the end the following:
       ``(3) Head start.--An individual shall be eligible for loan 
     forgiveness under this section for service described in 
     clause (ii) of subsection (b)(1)(A) only if such individual 
     received a baccalaureate or graduate degree on or after the 
     date of enactment of the Loan Forgiveness for Head Start 
     Teachers Act of 2001.''; and
       (3) by adding at the end the following:
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     for fiscal year 2007 and succeeding fiscal years to carry out 
     loan repayment under this section for service described in 
     clause (ii) of subsection (b)(1)(A).''.
       (c) Conforming Amendments.--Section 428J of such Act (20 
     U.S.C. 1078-10) is amended--
       (1) in subsection (c)(1), by inserting ``or fifth complete 
     program year'' after ``fifth complete school year of 
     teaching'';
       (2) in subsection (f), by striking ``subsection (b)'' and 
     inserting ``subsection (b)(1)(A)(i)'';
       (3) in subsection (g)(1)(A), by striking ``subsection 
     (b)(1)(A)'' and inserting ``subsection (b)(1)(A)(i)''; and
       (4) in subsection (h), by inserting ``except as part of the 
     term `program year','' before ``where''.

  Mr. VOINOVICH. Mr. President, I rise today to join my friend and 
colleague, Senator Feinstein, in introducing legislation which will 
encourage young teachers to go into early childhood education, 
encourage further learning and credentialing of early learning 
educators, and lead to better education for our nation's youngest 
children.
  There is no more important time in a child's life than their earliest 
years. Scientific research tells us that babies are born with 100 
billion neurons, or brain cells, that are waiting to make connections, 
or synapses, with one another. These synapses empower the brain and 
dictate healthy development and future learning. By the time a baby is 
three, 1,000 trillion connections have been made--twice as many 
synapses as most adults have.
  However, at age 11, children start eliminating those brain 
connections that have not been used, thus decreasing their potential 
for learning and development.
  To maximize their learning potential, we must begin to teach our 
children the necessary skills before they reach kindergarten. 
Researchers have found that focusing on these earliest years can make 
the greatest difference in a child's development and learning, and I 
know of few other programs that provide the same focus as Head Start.
  Our bill, the Loan Forgiveness for Head Start Teachers Act of 2001, 
is designed to encourage currently enrolled and incoming college 
students working on a Bachelor's or a Master's degree to pursue a 
career as a Head Start teacher. In exchange for a 5-year teaching 
commitment in a qualified Head Start program, a college graduate with a 
minimum of a bachelor's degree could receive up to $5,000 in 
forgiveness for their federal Stafford student loan.
  When I was Governor of Ohio, we invested heavily in Head Start so 
that there was room for every eligible child in Ohio. Because of our 
efforts, Ohio is 4th in the nation in terms of children served by Head 
Start with nearly 38,000 students served in the year 2000.
  I have carried my passion for early childhood education with me to 
the U.S. Senate. I continue to believe that it is absolutely critical 
that we do more to help our young people prepare to begin school and it 
is why I was pleased to work with Senators Jeffords and Stevens to help 
pass the Early Learning Opportunities Act of 2000. Still, we must now 
do more to help those teachers who educate our youngest children.
  The results of a survey undertaken by the U.S. Department of Health 
and Human Services over the past two years has shown a significant 
correlation between the quality of education a child receives and the 
amount of education that child's teacher possesses. That is, the more 
education a teacher has, the more effectively they teach their students 
cognitive skills, and the more likely that students are to act upon 
those skills.
  Current federal law requires that 50 percent of all Head Start 
teachers must have an associate, bachelor's, or advanced degree in 
early childhood education or a related field with teaching experience 
by 2003. Under Ohio law, by 2007, all Head Start teachers must have at 
least an associates degree. The more education our teachers have, the 
better off our children will be. Unfortunately, as we all know, 
education is expensive.
  In Ohio today, only 11.3 percent (242) of the 2,126 Head Start 
teachers employed in the state have a bachelor's degree. Additionally, 
less than one percent (20) of Ohio's Head Start teachers have a 
graduate degree. We must do more to help our teachers afford the 
education that will be used to help educate our children.
  Recruiting and retaining Head Start and early childhood teachers 
continues to be a challenge for Ohio and other states. The Loan 
Forgiveness for Head Start Teachers Act of 2001 will help communities, 
schools and other funded Head Start providers to meet the challenge of 
recruiting and retaining high quality teachers. It is one of the best 
ways that I know of where we can make a real difference in the lives of 
our most precious resource--our children.
  I am pleased to have been able to work with the National Head Start 
Association and Ohio Head Start Association, and my colleague Senator 
Feinstein, on this legislation, and I urge my colleagues to join as co-
sponsors of this bill.
                                 ______
                                 
      By Mr. JOHNSON (for himself, Mr. Kennedy, Mr. Dorgan, Mr. 
        Bingaman, Mr. Feingold, Mr. Leahy, Mr. Inouye, Mr. Kerry, and 
        Mr. Daschle):
  S. 125. A bill to provide substantial reductions in the price of 
prescription drugs for Medicare beneficiaries; to the Committee on 
Finance.
  Mr. JOHNSON. Mr. President, I am pleased to introduce the 
``Prescription Drug Fairness for Seniors Act of 2001'', legislation 
that addresses the critical issue facing our older Americans--the cost 
of their prescription drugs. Studies have shown that older Americans 
spend almost three times as much of their income on health care than 
those under the age of 65, and more than three-quarters of Americans 
aged 65 and over are taking prescription drugs. Even more alarming is 
the fact that seniors and others who buy their own prescription drugs, 
are forced to pay over twice as much for their drugs as are the drug 
manufactures' most favored customers, such as the federal government 
and large HMOs.
  The ``Prescription Drug Fairness for Seniors Act'' will protect 
senior citizens and disabled individuals from drug price discrimination 
and make prescription drugs available to Medicare beneficiaries at 
substantially reduced prices. The legislation achieves these goals by 
allowing pharmacies that

[[Page 521]]

serve Medicare beneficiaries to purchase prescription drugs at prices 
equal to those of the pharmaceutical companies' most favored customers. 
Estimated to reduce prescription drug prices for seniors by over 40%, 
this bill will help those seniors who often times have to make 
devastating choices between buying food or medications. Choices that no 
human being should have to make.
  Research and development of new drug therapies is an important and 
necessary tool towards improving a person's quality of life. But due to 
the high price tag that often accompanies the latest drug therapies, 
seniors are often left without access to these new therapies, and 
ultimately, in far too many instances, without access to medication at 
all. This legislation is an important step towards restoring the access 
to affordable medications for our Medicare beneficiaries.
  While this may not be the magic bullet that meets all of the long 
term needs of providing Medicare prescription drug coverage, it does 
provide a mechanism for immediate relief from rising drug costs. 
Working together, reaching across the aisle, we can use this time of 
unparalleled prosperity to do the right thing by our seniors. We should 
do it this year for their sake, and for the sake of the future of 
Medicare.
  I look forward to working on this important issue in the months to 
come and hope that Congress will work swiftly in a bipartisan manner to 
enact legislation that will benefit millions of senior citizens and 
disabled individuals across our nation.
                                 ______
                                 
      By Mr. CLELAND (for himself, Mr. Miller, Mr. Inouye, Mr. 
        Torricelli, Mr. Bingaman, and Mr. Harkin):
  S. 126. A bill to authorize the President to present a gold medal on 
behalf of Congress to former President Jimmy Carter and his wife 
Rosalynn Carter in recognition of their service to the Nation; to the 
Committee on Banking, Housing, and Urban Affairs.


   Authorizing the President to present the Gold Medal on behalf of 
    Congress to Former President Jimmy Carter and Former First Lady 
                            Rosalynn Carter

  Mr. CLELAND. Mr. President, I rise today to introduce a bill that 
would authorize the President to present a Gold Medal on behalf of 
Congress to former President Jimmy Carter and former First Lady 
Rosalynn Carter in recognition of their service to the Nation. I would 
like to thank Senators Miller, Inouye, Torricelli, Bingaman and Harkin 
for co-sponsoring this bill and extend an invitation to all our other 
colleagues to join us in supporting this legislation to award these two 
great Americans with Congress' highest honor.
  It is widely agreed that President Jimmy Carter and his wife Rosalynn 
Carter have distinguished records of public service to the American 
people and the international community. Internationally, the Carters 
have been involved in a number of public service initiatives ranging 
from combating famine in Sub-Sahara Africa and encouraging better 
health care in Third World nations to serving as mediators in an effort 
to end civil wars in half a dozen countries. President Carter has 
monitored numerous foreign elections in an effort to spread democracy 
throughout the world.
  A Congressional Gold Medal awarded by Congress will show the 
appreciation of the American public for the many contributions that 
President and Mrs. Carter have made, including service in public office 
from the state legislature to the White House. Jimmy and Rosalynn 
continue to promote human rights worldwide due to their active 
involvement in the nonprofit Carter Center in Atlanta that has 
initiated projects in more than 65 countries to resolve conflicts, 
promote human rights, build democracy, improve health care worldwide, 
and revitalize urban areas. In addition, the Carters serve as 
volunteers for Habitat for Humanity, which helps low income families 
build their own homes.
  I hope that other members of Congress will join me and Senators 
Miller, Inouye, Torricelli, Bingaman, and Harkin in recognizing 
President and Mrs. Carter for their distinguished records of public 
service by awarding them the Congressional Gold Medal. Thank you, Mr. 
President.
  Mr. President I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 126

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

     SECTION 1. FINDINGS.

       The Congress finds that--
       (1) both former President Jimmy Carter and his wife 
     Rosalynn Carter have distinguished records of public service 
     to the American people and to the international community;
       (2) the peacemaking efforts of President Jimmy Carter as a 
     mediator in the Arab-Israeli dispute culminated in the Camp 
     David Accords signed by Egypt and Israel, which provided the 
     foundation for a settlement of the Middle East dispute that 
     had eluded peacemakers for more than 3 decades;
       (3) President Jimmy Carter was instrumental in the passage 
     of the Alaska National Interest Lands Conservation Act (16 
     U.S.C. 3101 et seq.), one of the most significant pieces of 
     environmental legislation ever approved by Congress;
       (4) in establishing his presidential library, President 
     Jimmy Carter sought to create a center for the service of 
     humanity in areas as diverse as politics, health care, human 
     rights, and democracy;
       (5) Jimmy and Rosalynn Carter epitomize the American 
     quality of voluntarism in action through their countless 
     public service activities in their home State of Georgia, the 
     rest of the United States, and throughout the world, 
     including their work for Habitat for Humanity, which helps 
     needy people in the United States and other countries 
     renovate and build homes for themselves; and
       (6) together, Jimmy and Rosalynn Carter have dedicated 
     their lives to promoting national pride and to bettering the 
     quality of life in the United States and throughout the 
     world.

     SEC. 2. CONGRESSIONAL GOLD MEDAL.

       (a) Presentation Authorized.--The President is authorized 
     to present at the Capitol, on behalf of the Congress, a gold 
     medal of appropriate design to former President Jimmy Carter 
     and his wife Rosalynn Carter in recognition of their service 
     to the Nation.
       (b) Design and Striking.--For the purpose of the 
     presentation referred to in subsection (a), the Secretary of 
     the Treasury (hereafter in this Act referred to as the 
     ``Secretary'') shall strike a gold medal with suitable 
     emblems, devices, and inscriptions, to be determined by the 
     Secretary.
       (c) Subsequent Arrangements for Presentation.--Subsection 
     (a) shall not be construed as providing the consent of the 
     House of Representatives or the Senate for the use of any 
     particular part of the Capitol or the grounds of the Capitol 
     for purposes of the presentation referred to in subsection 
     (a).

     SEC. 3. DUPLICATE MEDALS.

       Under such regulations as the Secretary may prescribe, the 
     Secretary may strike and sell duplicates in bronze of the 
     gold medal struck pursuant to section 2 at a price sufficient 
     to cover the costs of the medals (including labor, materials, 
     dies, use of machinery, and overhead expenses) and the cost 
     of the gold medal.

     SEC. 4. NATIONAL MEDALS.

       The medals struck under this Act are national medals for 
     purposes of chapter 51 of title 31, United States Code.

     SEC. 5. FUNDING AND PROCEEDS OF SALE.

       (a) Authorization.--There is hereby authorized to be 
     charged against the United States Mint Public Enterprise Fund 
     an amount not to exceed $30,000 to pay for the cost of the 
     medals authorized by this Act.
       (b) Proceeds of Sale.--Amounts received from the sale of 
     duplicate bronze medals under section 3 shall be deposited in 
     the United States Mint Public Enterprise Fund.
                                 ______
                                 
      Mr. McCAIN (for himself, Mr. Cleland, Mrs. Hutchison, and Mr. 
        Murkowski):
  S. 127. A bill to give American companies, American workers, and 
American ports the opportunity to compete in the United States cruise 
market; to the Committee on Commerce, Science, and Transportation.


                the united states ship cruise vessel act

  Mr. McCAIN. Mr. President, today Senators Hutchison, Cleland, 
Murkowski, and I are introducing the United States Cruise Vessel Act. 
The purpose of this bill is to provide increased domestic cruise 
opportunities for the American cruising public by temporarily reducing 
barriers to operation in the domestic cruise market. I want to start by 
thanking Senators Hutchison, Cleland, and Murkowski for once again 
joining me in an effort to rebuild our nation's cruise ship industry.

[[Page 522]]

  While we made great progress in advancing our goals during the last 
Congress, our efforts were blocked by the special interests of a small 
group of shipbuilders who prefer the status quo that allows them to 
dominate the small market for large U.S.-built cruise ships without the 
fear of competition. The bill that we are introducing today was passed 
out of the Senate Commerce Committee unanimously during the last 
Congress. It represents months, if not years, of work by a large cross 
section of our nation's maritime industry to reach agreement on how 
best to jump-start our nation's fleet of U.S. flagged cruise vessels 
and provide them the tools they need to compete in the world market.
  The measure we are introducing today would allow for the immediate 
expansion of the domestic fleet by allowing operators to bring existing 
cruise ships under the U.S. flag as long as they agree to build 
additional vessels in the United States. The measure would also provide 
increased opportunities for U.S. mariners to serve at sea. This becomes 
more critical annually, as we face greater difficulties in meeting our 
national defense sealift need for qualified merchant mariners. We need 
to provide more opportunities for U.S. merchant mariners to serve at 
sea and this measure can lead to those opportunities. Finally, the 
measure would lead to increased work for our nation's shipyards and 
build on the limited construction plans for large cruise ships 
currently underway.
  I want to highlight some of the major provisions of the bill in order 
to ensure that the legislation we are introducing today is not confused 
with previous measures that allowed for the operation of foreign 
flagged vessels in the U.S. domestic market. The bill we are 
introducing today provides a two-year window of opportunity to 
encourage the immediate reflagging of large cruise vessels under the 
United States flag for operation in the domestic cruise trades. The 
bill would allow the Secretary of Transportation to issue permits for 
the limited operation of foreign-built cruise vessels in the domestic 
trades if applications are received within two years of the date of 
enactment of this legislation.
  To be eligible for reflagging and operation in the U.S. domestic 
cruise trades, a cruise vessel must have been delivered after January 
1, 1980, and be at least 20,000 gross registered tons, have no fewer 
than 800 passenger berths, provide a full range of overnight 
accommodations, dining, and entertainment services, comply with the 
Safety of Life at Sea requirements for a fixed smoke detection and 
sprinkler system in the accommodation areas, and be constructed 
according to internationally accepted construction standards. This will 
help ensure that any foreign flag vessels reflagged to take advantage 
of the bill are modern and safe.
  To be eligible to enter the domestic market, the vessel must be owned 
by a citizen of the United States as defined in section 2 of the 
Shipping Act, 1916 (46 U.S.C. 802) or section 12106(e) of title 46 
United States Code.
  The bill would assist the U.S. ship repair industry and would require 
foreign built cruise vessels entering the domestic market to have all 
repair, maintenance, alteration and other work required for operation 
under the U.S. flag, as well as regular repair and maintenance work, 
performed in a U.S. shipyard.
  Prior to allowing a foreign built vessel to be reflagged and utilized 
in the domestic market, the bill would require the operator of a 
reflagged vessel to enter into a binding contract with U.S. shipyards 
for the construction of at least one more vessel than the total number 
of vessels they will operate in the domestic cruise market. The 
contract must provide for a total number of passenger berths equal to 
or greater than the number operated in the domestic market by that 
operator. Additionally, the replacement vessels must be at least 20,000 
gross registered tons and have no fewer than 800 passenger berths.
  The bill would require the first replacement vessel to be delivered 
within five years of the date the foreign-built vessel commences 
operation in the domestic trade and that each additional vessel be 
delivered within two years of the preceding vessel. Foreign built 
vessels are required to leave the domestic market two years after the 
replacement vessel or vessels are delivered.
  The bill would require the Secretary to Transportation to insure that 
the coastwise business of a U.S. built vessel operator is not harmed by 
the operation of a foreign-built vessel in the domestic market. The 
Secretary, after reviewing the proposed itineraries of foreign-built 
vessels in the domestic market, as well as taking into consideration 
public comments, is required to determine if there will be an adverse 
impact on the operation of a U.S.-built vessel. The Secretary is 
required to consider the scope of the vessel's itineraries, the 
duration of the cruise, the size of the vessel and the retail per diem 
of the vessel. If there is a conflict, the operator of a foreign-built 
vessel must change the vessel's itinerary in order to remove the 
conflict to the satisfaction of the Secretary.
  The slow and limited growth of the U.S. domestic cruise market 
demands that we put aside special interests and pass this measure at 
the first available opportunity. I can assure my colleagues that as 
Chairman, the Senate Committee will continue to work with all members 
interested in the future of a U.S. flagged cruise fleet to further 
address any concerns with the bill. But I would also ask all members to 
compare the limited growth of our domestic fleet to the dynamic growth 
in the international cruise market in hopes that they will realize that 
without actions soon, the U.S. fleet will be left behind.
  The bill we are introducing today will stimulate growth and 
opportunity within the domestic cruise ship trade with the 
beneficiaries being U.S. port cities and business, and as I have often 
said, the millions of American citizens who want to be able to enjoy 
cruising between U.S. ports.
  I hope my colleagues will join Senators Hutchison, Cleland, 
Murkowski, and me to help advance this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 127

       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 SECTIONS.

       (a) Short Title.--This Act may be cited as the ``United 
     States Cruise Vessel Act''.
       (b) Table of Sections.--The table of sections for this Act 
     is as follows:

Sec. 1. Short title; table of sections.
Sec. 2. Definitions.

         TITLE I--OPERATIONS UNDER CERTIFICATE OF DOCUMENTATION

Sec. 101. Domestic cruise vessel.
Sec. 102. Repairs requirement.
Sec. 103. Construction requirement.
Sec. 104. Certain operations prohibited.
Sec. 105. Priorities within domestic markets.
Sec. 106. Report.
Sec. 107. Enforcement

                       TITLE II--OTHER PROVISIONS

Sec. 201. Application with Jones Act and other Acts.
Sec. 202. Glacier Bay and other National Park Service area permits.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Eligible cruise vessel.--The term ``eligible cruise 
     vessel'' means a cruise vessel that--
       (A) was delivered after January 1, 1980;
       (B) is at least 20,000 gross registered tons;
       (C) has no fewer than 800 passenger berths;
       (D) is owned by a person that is a citizen of the United 
     States for the purpose of operating a vessel in the coastwise 
     trade within the meaning of section 2 of the Shipping Act, 
     1916 (46 U.S.C. 802) or section 12106(e) of title 46, United 
     States Code;
       (E) provides a full range of overnight accommodations, 
     entertainment, dining, and other services for its passengers;
       (F) has a fixed smoke detection and sprinkler system 
     installed throughout the accommodation and service spaces, or 
     will have such a system installed within the time period 
     required by the 1992 Amendments to the Safety of Life at Sea 
     Convention of 1974; and
       (G) meets the eligibility requirements for a certificate of 
     inspection under section 1137(a) of the Coast Guard 
     Authorization Act of 1996 (46 U.S.C. App. 1187 nt.), and 
     complies with the applicable international agreements and

[[Page 523]]

     associated guidelines referred to in section 1137(a)(2) of 
     that Act (46 U.S.C. 1187 nt.).
       (2) Itinerary.--The term ``itinerary'' means the route 
     travelled by a cruise vessel on a single voyage that begins 
     at the first port at which passengers on that voyage embark, 
     includes each port at which the vessel calls before the last 
     port at which passengers on that voyage disembark, and ends 
     at that last port of disembarkation. For purposes of this 
     paragraph, the term ``embark'' and ``disembark'' have the 
     meaning given those terms in section 4.80a(a)(4) of title 19, 
     Code of Federal Regulations (as such section is in effect on 
     the date of enactment of this Act).
       (3) Operator.--The term ``operator'' means the owner, 
     operator, or charterer.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Transportation.
       (5) United States shipyard.--The term ``United States 
     shipyard'' means a shipyard located in the United States.
       (6) United States.--The term ``United States'' has the 
     meaning given that term in section 2101(44) of title 46, 
     United States Code.

         TITLE I--OPERATIONS UNDER CERTIFICATE OF DOCUMENTATION

     SEC. 101. DOMESTIC CRUISE VESSEL.

       (a) In General.--Notwithstanding the provisions of section 
     8 of the Act of June 19, 1886 (46 U.S.C. App. 289), section 
     27 of the Act of June 5, 1920, commonly known as the Jones 
     Act, (46 U.S.C. App. 883), section 27A of that Act, (46 
     U.S.C. App. 883-1), and section 12106 of title 46, United 
     States Code, the Secretary shall issue a certificate of 
     documentation with a temporary coastwise endorsement for an 
     eligible cruise vessel not built in the United States to 
     operate in domestic itineraries in the transportation of 
     passengers in the coastwise trade between ports in the United 
     States if the vessel meets the requirements of this title.
       (b) Termination of Authority.--The authority of the 
     Secretary to issue a certificate of documentation under 
     subsection (a) begins on the day after the date of enactment 
     of this Act and terminates on the day that is 24 months after 
     that date.
       (c) Application Only Required.--Notwithstanding subsection 
     (b), the Secretary may issue a certificate of documentation 
     under subsection (a) more than 24 months after the date of 
     enactment of this Act if--
       (1) the Secretary received the application for the 
     certificate of documentation before the end of that 24-month 
     period; and
       (2) the vessel otherwise meets the requirements of this 
     title.
       (d) Rights under Application Not Transferrable.--The right 
     to receive a certification of documentation pursuant to an 
     application described in subsection (c) may not be 
     transferred by the applicant to any other person. For 
     purposes of this subsection, the transfer of that right to a 
     successor in interest to the applicant in connection with the 
     reorganization, restructuring, acquisition, or sale of the 
     applicant's business shall not be considered another person.

     SEC. 102. REPAIRS REQUIREMENT.

       (a) In General.--The Secretary may not issue a certificate 
     of documentation under section 101(a) for an eligible cruise 
     vessel unless the operator establishes to the satisfaction of 
     the Secretary that--
       (1) any repair, maintenance, alteration, or other 
     preparation of the vessel for operation under a certificate 
     of documentation issued under section 101(a) have been, or 
     will be, performed in a United States shipyard; and
       (2) any repair, maintenance, or alteration of the vessel 
     after a certificate of documentation is issued under that 
     section will be performed in a United States shipyard.
       (b) Waiver.--The Secretary may waive the requirements of 
     subsection (a) if the Secretary finds that the repair, 
     maintenance, alterations, or other preparation services are 
     not available in the United States or if an emergency 
     dictates that the vessel proceed to a foreign port.

     SEC. 103. CONSTRUCTION REQUIREMENT.

       (a) Construction Contract Required.--
       (1) In general.--Except as provided in paragraph (2), a 
     vessel for which a certificate of documentation has been 
     issued under section 101(a) may not commence operations in 
     the coastwise trade until the operator of that vessel 
     executes a contract with one or more United States shipyards 
     for the construction of a total of 2 or more cruise vessels 
     with a total combined berth or stateroom capacity equal to at 
     least the total combined berth or stateroom capacity of that 
     vessel. If certificates of documentation are issued under 
     section 101(a) for more than 1 vessel for an operator, the 
     construction contract required by the preceding sentence 
     shall provide for the construction of 1 more vessel than the 
     number of vessels for which certificates of documentation are 
     issued with a total combined berth or stateroom capacity 
     equal to at least the total combined berth or stateroom 
     capacity of the vessels for which the certificates of 
     documentation are issued.
       (2) Demonstration of capability required.--For purposes of 
     this subsection, a construction contract for which financing 
     is not provided under title XI of the Merchant Marine Act, 
     1936 (46 U.S.C. App. 1101 et seq.) shall not be recognized as 
     meeting the requirements of paragraph (1) unless both the 
     operator and the shipyard are capable of completing the 
     contract. For purposes of this paragraph--
       (A) an operator shall be considered to be capable of 
     completing such a contract if the operator meets the 
     standards set forth in sections 298.12, 298.13, and 298.14 of 
     title 46, Code of Federal Regulations; and
       (B) a shipyard shall be considered to be capable of 
     completing such a contract if the shipyard meets the 
     standards set forth in section 298.32(a) of that title.
       (b) Minimum Size Requirement.--For purposes of this 
     section, a contract for the construction of a vessel shall be 
     disregarded if that vessel--
       (1) will be less than 20,000 gross registered tons; or
       (2) will have fewer than 800 passenger berths.
       (c) Contract Terms.--
       (1) In general.--The contract required by subsection (a) 
     shall provide for delivery of the first such vessel not later 
     than 60 months after the date on which operations of the 
     vessel for which the certificate of documentation was issued 
     commence, and shall contain any other provisions required by 
     the Secretary for purposes of this subsection. If the 
     contract provides for the construction of more than 1 vessel, 
     it shall provide for delivery of each vessel subsequent to 
     the first not later than 24 months after delivery of the 
     immediately preceding vessel.
       (2) Extension of time periods for impossibility of 
     performance.--If the commencement of construction or the 
     completion of construction is prevented or delayed by 
     circumstances that would be recognized as providing a defense 
     of impossibility-of-performance by the shipyard under 
     applicable contract law, each time period in this Act related 
     to delivery of a vessel by that shipyard shall be extended 
     for whatever period of time the circumstance on which the 
     defense is predicated continues to exist.
       (d) Expiration of Coastwise Endorsement.--The coastwise 
     endorsement for an eligible cruise vessel under section 
     101(a) shall expire 24 months after the delivery date for the 
     replacement vessel or vessels for that eligible cruise 
     vessel. For purposes of this subsection, the term 
     ``replacement vessel or vessels'' means 1 or more vessels the 
     operator of the eligible cruise vessel is obligated to 
     construct in the United States under the contract described 
     in subsection (a) with respect to the eligible cruise vessel 
     that have at least the same number of passenger berths as the 
     eligible cruise vessel, or they, replace.
       (e) Reflagging Under Foreign Registry.--Notwithstanding 
     section 9(c) of the Shipping Act, 1916 (46 U.S.C. App. 808), 
     the operator of an eligible cruise vessel issued a 
     certificate of documentation with a temporary coastwise 
     endorsement under section 101(a), or a cruise vessel 
     constructed under a contract described in subsection (a) of 
     this section, may place that vessel under foreign registry.

     SEC. 104. CERTAIN OPERATIONS PROHIBITED.

       Neither an eligible cruise vessel operating in domestic 
     itineraries under a certificate of documentation issued under 
     section 101(a) nor a vessel constructed under a contract 
     described in section 103(a) may--
       (1) operate as a ferry;
       (2) regularly carry for hire both passengers and vehicles 
     or other cargo; or
       (3) operate between or among the islands of Hawaii.

     SEC. 105. PRIORITIES WITHIN DOMESTIC MARKETS.

       (a) Notification of Secretary.--
       (1) New vessels.--Any person eligible under section 12102 
     of title 46, United States Code, to document a vessel under 
     chapter 121 of that title that enters into a contract with a 
     United States shipyard for the construction of a cruise 
     vessel that--
       (A) will be at least 20,000 gross registered tons,
       (B) will have no fewer than 800 passenger berths, and
       (C) is otherwise eligible for a certificate of 
     documentation and a coastwise trade endorsement,
     shall notify the Secretary, at such time and in such manner 
     and form as the Secretary may require, of the construction of 
     that vessel not less than 2 full calendar years before the 
     earliest date on which the vessel is intended to commence 
     operations.
       (2) Reconstruction.--The notification requirement of 
     paragraph (1) also applies to any such person that enters 
     into a contract with a United States shipyard for the 
     reconstruction of any vessel, including a vessel that has a 
     certificate of documentation under chapter 121 of title 46, 
     United States Code, will, after reconstruction, will be that 
     size and capacity and be eligible for such an endorsement.
       (b) Priority to U.S.-Built Vessels.--The Secretary shall 
     give priority to any cruise vessel described in subsection 
     (a) over any other cruise vessel of comparable operations in 
     a comparable market under a certificate of documentation 
     issued under section 101(a) if the Secretary, after notice 
     and an opportunity for public comment, determines that the 
     employment in the coastwise trade of the vessel issued a 
     certificate of documentation under section 101(a) will 
     adversely affect the coastwise trade business of any person 
     operating a vessel not documented under section 101(a) in the 
     coastwise trade.

[[Page 524]]

       (c) Factors Considered.--In determining and assigning 
     priorities, the Secretary shall consider, among other factors 
     determined by the Secretary to be appropriate--
       (A) the scope of a vessel's itinerary, including--
       (i) the ports between which it operates; and
       (ii) the duration of the cruise;
       (B) the time frame within which the vessel will serve a 
     particular itinerary;
       (C) the size of the vessel; and
       (D) the retail per diem of the vessel.
       (d) Implementation.--
       (1) Intinerary submission required.--The Secretary shall 
     require the operator of each vessel issued a certificate of 
     documentation under section 101(a) to submit, in April of 
     each year, a proposed itinerary for that vessel for cruise 
     itineraries for the calendar year beginning 20 months after 
     the date on which the itinerary is required to be submitted.
       (2) Publication and Comment.--
       (A) Publication.--The Secretary shall cause any itinerary 
     submitted under paragraph (1), and any late submission or 
     revision submitted under paragraph (3), to be published in 
     the Federal Register.
       (B) Comment period.--The Secretary shall receive and 
     consider comments from the public on any itinerary published 
     under subparagraph (A) for a period of 30 days after the date 
     on which the itinerary is published.
       (3) Revisions and later submissions.--The Secretary shall 
     permit late submissions and revisions of submissions after 
     the final list of approved itineraries is published under 
     paragraph (4)(C)(iii) and before the start date of a 
     requested itinerary.
       (4) Scheduling.--
       (A) Action by secretary.--Within 30 days after the close of 
     the comment period on an itinerary published under paragraph 
     (2)(A), the Secretary shall--
       (i) review the itineraries submitted to the Secretary for 
     compliance with the priorities established by this section;
       (ii) advise affected cruise vessel operators of any 
     specific itinerary that is not available and the reason it is 
     not available; and
       (iii) publish a proposed list of approved itineraries.
       (B) Operators' appeals.--The operator of any eligible 
     cruise vessel may appeal the Secretary's decision under 
     subparagraph (A)(ii) within 30 days after the Secretary 
     advises the operator of the decision.
       (C) Resolution of conflicts.--As soon as practicable after 
     the end of the 30-day period described in subparagraph (B), 
     the Secretary shall--
       (i) resolve any appeals and consider new itinerary 
     proposals;
       (ii) advise cruise vessel operators who responded under 
     subparagraph (B) of the Secretary's decision with respect to 
     the appeal or the new itinerary proposal; and
       (iii) publish a final list of approved itineraries.

     SEC. 106. REPORT.

       The Secretary shall issue an annual report on the number of 
     vessels operating under certificate of documentations granted 
     under section 101(a), and on the progress of construction on 
     vessels to replace those vessels under section 103.

     SEC. 107. ENFORCEMENT.

       (a) Breach of Construction Contract by Operator.--The 
     Secretary shall revoke a temporary coastwise endorsement 
     issued under section 101(a)(2) for a vessel if the operator 
     of that vessel commits a serious breach of the construction 
     contract required by section 103(a). The revocation shall 
     take effect at the conclusion of the last voyage on the last 
     cruise itinerary approved by the Secretary before the 
     Secretary made the determination to revoke the endorsement.
       (b) Breach of Construction Contract by Shipyard.--
       (1) In general.--If a shipyard commits a serious breach of 
     a construction contract required by section 103(a) with an 
     operator of a vessel for which a certificate of documentation 
     granted under section 101(a)--
       (A) the operator shall notify the Secretary immediately of 
     the breach; and
       (B) the operator may continue to operate that vessel as if 
     the contract were in effect for a period of 24 months after 
     notification of the Secretary on the condition that the 
     operator will make good faith efforts during that 24-month 
     period to execute a contract with a United States shipyard 
     for the construction of the vessels that were to have been 
     constructed under that contract.
       (2) Good faith effort required.--If the Secretary 
     determines at any time during that 24-month period that the 
     operator has ceased to make good faith efforts to execute 
     such a contract, then the Secretary shall immediately 
     terminate the operator's authority to continue operations 
     under this paragraph.
       (c) Substantial Breaches Only.--For purposes of subsections 
     (a) and (b), the term ``serious breach of contract'' means a 
     breach of contract for which an appropriate remedy under 
     section 2-703 or 2-711 of the Uniform Commercial Code, as 
     promulgated by the National Conference of Commissioners on 
     Uniform State Law, is cancellation by the seller or buyer, 
     respectively.

                       TITLE II--OTHER PROVISIONS

     SEC. 201. APPLICATION WITH JONES ACT AND OTHER ACTS.

       (a) In General.--Nothing in this Act affects or otherwise 
     modifies the authority contained in--
       (1) Public Law 87-77 (46 U.S.C. App. 289b) authorizing the 
     transportation of passengers and merchandise in Canadian 
     vessels between ports in Alaska and the United States; or
       (2) Public Law 98-563 (46 U.S.C. App. 289c) permitting the 
     transportation of passengers between Puerto Rico and other 
     United States ports.
       (3) Section 27A of the Act of the Merchant Marine Act, 1920 
     (46 U.S.C. App. 883-1).
       (4) Section 8109 of the Department of Defense 
     Appropriations Act, 1998.
       (b) Jones Act.--Except as in section 101(a), nothing in 
     this Act affects or modifies the Merchant Marine Act, 1920 
     (46 U.S.C. App. 861 et seq.).

     SEC. 202. GLACIER BAY AND OTHER NATIONAL PARK SERVICE AREA 
                   PERMITS.

       (a) In General.--The Secretary of the Interior, after 
     consultation with the Secretary of Transportation, shall 
     issue new or otherwise available permits to United States-
     flag vessels carrying passengers for hire to enter Glacier 
     Bay or any other area within the jurisdiction of the National 
     Park Service. Any such permit shall not affect the rights of 
     any person that, on the date of enactment of this Act, holds 
     a valid permit to enter Glacier Bay or such other area.
       (b) New Permits Not Authorized.--Subsection (a) does not 
     authorize the Secretary of the Interior to issue new permits, 
     but, if new permits are authorized under any other provision 
     of law, they shall be awarded in accordance with subsection 
     (a).
                                 ______
                                 
      By Mr. CLELAND:
  S. 129. A bill to amend title 38, United States Code, to provide for 
the payment of a monthly stipend to the surviving parents (known as 
``Gold Star Parents'') of members of the Armed Forces who die during a 
period of war; to the Committee on Veterans' Affairs.


                     gold star parents annuity act

  Mr. CLELAND. Mr. President, I rise today to introduce the Gold Star 
Parents Annuity Act. The use of the Gold Star to denote the death of a 
service member or members in a family was started during World War I by 
President Woodrow Wilson. The idea behind the Gold Star was that it 
could symbolize the family's devotion and pride in the ultimate 
sacrifice for their country made by their family member instead of the 
sense of personal loss that is represented by the traditional mourning 
symbols.
  The Gold Star Parents Annuity Act provides for an annuity of $125 a 
month payable to each individual who has received a Gold Star Lapel 
pin, which is awarded to parents who have had a child die honorably in 
service to our country. Payments are to be divided equally among 
parents when there is more than one surviving parent. The receipt of 
this pension will not deprive anyone of the right to any other 
pensions, benefit, right or privilege that they are entitled to under 
any existing or future law. Furthermore, these special pension payments 
will not be subject to any attachment, execution, levy, tax lien or 
detention under any process. I believe this measure would provide a 
needed increase in income for many parents who have lost children in 
service to our country.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 129

       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 ``Gold Star Parents Annuity 
     Act''.

     SEC. 2. SPECIAL PENSION FOR GOLD STAR PARENTS.

       (a) In General.--(1) Chapter 15 of title 38, United States 
     Code, is amended by adding at the end the following new 
     subchapter:

         ``SUBCHAPTER V--SPECIAL PENSION FOR GOLD STAR PARENTS

     ``Sec. 1571. Gold Star parents

       ``(a) The Secretary shall pay monthly to each person who 
     has received a Gold Star lapel button under section 1126 of 
     title 10 as a parent of a person who died in a manner 
     described in subsection (a) of that section a special pension 
     in an amount determined under subsection (b).
       ``(b) The amount of special pension payable under this 
     section with respect to the death of any person shall be $125 
     per month. In any case in which there is more than one parent 
     eligible for special pension under this section with respect 
     to the death of a person, the Secretary shall divide the 
     payment equally among those eligible parents.

[[Page 525]]

       ``(c) The receipt of special pension under this section 
     shall not deprive any person of any other pension or other 
     benefit, right, or privilege to which such person is or may 
     hereafter be entitled under any existing or subsequent law. 
     Special pension under this section shall be paid in addition 
     to all other payments under laws of the United States.
       ``(d) Special pension under this section shall not be 
     subject to any attachment, execution, levy, tax lien, or 
     detention under any process whatever.
       ``(e) For purposes of this section, the term `parent' has 
     the meaning provided in section 1126(d)(2) of title 10.''.
       (2) The table of sections at the beginning of such chapter 
     is amended by adding at the end the following:

         ``subchapter v--special pension for gold star parents

``1571. Gold Star parents.''.

       (b) Effective Date.--Section 1571 of title 38, United 
     States Code, as added by subsection (a), shall take effect on 
     October 1, 2001.
                                 ______
                                 
      By Mr. JOHNSON (for himself and Ms. Collins):
  S. 131. A bill to amend title 38, United States Code, to modify the 
annual determination of the rate of the basic benefit of active duty 
educational assistance under the Montgomery GI Bill, and for other 
purposes; to the Committee on Veterans' Affairs.


              VETERANS' HIGHER EDUCATION OPPORTUNITIES ACT

  Mr. JOHNSON. Mr. President, I am pleased today to join Senator Susan 
Collins (R-ME) in introducing the Veterans' Higher Education 
Opportunities Act. Last year, Senator Collins and I introduced similar 
legislation, S. 2419, that received broad, bipartisan support in 
Congress and among the veterans and higher education communities. Our 
goal with this year's legislation remains the same: to modernize the 
Montgomery GI Bill and help veterans achieve their goals of higher 
education.
  The 1944 GI Bill of Rights is one of the most important pieces of 
legislation ever passed by Congress. No program has been more 
successful in increasing educational opportunities for our country's 
veterans while also providing a valuable incentive for the best and 
brightest to make a career out of military service. This bill has 
allowed eight million veterans to finish high school and 2.3 million 
service members to attend college.
  Unfortunately, the current GI Bill can no longer deliver these 
results and fails in its promise to veterans, new recruits and the men 
and women of the armed services. The Veterans' Higher Education 
Opportunities Act will modernize the GI Bill and ensure its viability 
as education costs continue to increase.
  Over 96 percent of recruits currently sign up for the Montgomery GI 
Bill and pay $1,200 out of their first year's pay to guarantee 
eligibility. But only one-half of these military personnel use any of 
the current Montgomery GI Bill benefits. This is evidence that the 
current GI Bill simply does not meet their needs. The main reason why 
military personnel no longer use the GI Bill is because GI Bill 
benefits have not kept pace with increased costs of education.
  There is consensus among national higher education and veterans 
associations that at a minimum, the GI Bill should pay the costs of 
attending the average four-year public institution as a commuter 
student. The current Montgomery GI Bill benefit pays a little more than 
half of that cost.
  The Veterans' Higher Education Opportunities Act creates that 
benchmark by indexing the GI Bill to the costs of attending the average 
four-year public institution as a commuter student. This benchmark cost 
will be updated annually by the College Board in order for the GI Bill 
to keep pace with increasing costs of education.
  The Veterans' Higher Education Opportunities Act is truly a 
bipartisan effort to address recruitment and retention in the armed 
forces. In addition, the Veterans' Higher Education Opportunities Act 
has the overwhelming support of the Partnership for Veterans' 
Education--a coalition of the nation's leading veterans groups and 
higher education organizations including the VFW, the American Council 
on Education, the Non Commissioned Officers Association, the National 
Association of State Universities and Land Grant Colleges, and The 
Retired Officers Association.
  As the parent of a son who serves in the Army, these military 
``quality of life'' issues are of particular concern to me. Making the 
GI Bill pay for viable educational opportunity makes as much sense 
today as it did following World War II. In fact, a study conducted on 
beneficiaries of the original GI Bill shows that the cost to benefit 
ratio of the GI Bill was an astounding 12.5 to 1. That means that our 
nation gained more than $12.50 in benefits for every dollar invested in 
college or graduate education for veterans.
  Congress and the President took an important step last year toward 
improving the Montgomery GI Bill by passing into law the Veterans 
Benefits and Health Care Improvement Act of 2000. This law increases 
the monthly education benefit to $650 and increases educational 
benefits of veterans survivors and dependents. These changes are long 
overdue, and the next step in restoring the effectiveness of the 
Montgomery GI Bill is through the Veterans' Higher Education 
Opportunities Act and the creation of a true benchmark for veterans 
educational benefits.
  The very modest cost of improving the GI Bill will help our military 
and our society. I look forward to working with incoming Veterans 
Administration Secretary Anthony Principi, Senator Collins and my 
colleagues in the Senate, and interested Members of the House of 
Representatives on passage of the Veterans' Higher Education 
Opportunities Act.
  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. 131

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Veterans' Higher Education 
     Opportunities Act of 2001''.

     SEC. 2. MODIFICATION OF ANNUAL DETERMINATION OF BASIC BENEFIT 
                   OF ACTIVE DUTY EDUCATIONAL ASSISTANCE UNDER THE 
                   MONTGOMERY GI BILL.

       (a) Basic Benefit.--Section 3015 of title 38, United States 
     Code, is amended--
       (1) in subsection (a)(1), by striking ``of $650 (as 
     increased from time to time under subsection (h))'' and 
     inserting ``equal to the average monthly costs of tuition and 
     expenses for commuter students at public institutions of 
     higher education that award baccalaureate degrees (as 
     determined under subsection (h))''; and
       (2) in subsection (b)(1) by striking ``of $528 (as 
     increased from time to time under subsection (h))'' and 
     inserting ``equal to 75 percent of the average monthly costs 
     of tuition and expenses for commuter students at public 
     institutions of higher education that award baccalaureate 
     degrees (as determined under subsection (h))''.
       (b) Determination of Average Monthly Costs.--Subsection (h) 
     of that section is amended to read as follows:
       ``(h)(1) Not later than September 30 each year, the 
     Secretary shall determine the average monthly costs of 
     tuition and expenses for commuter students at public 
     institutions of higher education that award baccalaureate 
     degrees for purposes of subsections (a)(1) and (b)(1) for the 
     succeeding fiscal year. The Secretary shall determine such 
     costs utilizing information obtained from the College Board 
     or information provided annually by the College Board in its 
     annual survey of institutions of higher education.
       ``(2) In determining the costs of tuition and expenses 
     under paragraph (1), the Secretary shall take into account 
     the following:
       ``(A) Tuition and fees.
       ``(B) The cost of books and supplies.
       ``(C) The cost of board.
       ``(D) Transportation costs.
       ``(E) Other nonfixed educational expenses.
       ``(3) A determination made under paragraph (1) in a year 
     shall take effect on October 1 of that year and apply with 
     respect to basic educational assistance allowances payable 
     under this section for the fiscal year beginning in that 
     year.
       ``(4) Not later than September 30 each year, the Secretary 
     shall publish in the Federal Register the average monthly 
     costs of tuition and expenses as determined under paragraph 
     (1) in that year.
       ``(5) For purposes of this section, the term `institution 
     of higher education' has the meaning given that term in 
     section 101 of the Higher Education Act of 1965 (20 U.S.C. 
     1001).''.
       (c) Stylistic Amendment.--Subsection (b) of that section is 
     further amended in the matter preceding paragraph (1) by 
     striking ``as provided in the succeeding subsections of this 
     section'' and inserting ``as otherwise provided in this 
     section''.

[[Page 526]]

       (d) Effective Date.--(1) Except as provided in paragraph 
     (2), the amendments made by this section shall take effect on 
     October 1, 2001.
       (2) The Secretary of Veterans Affairs shall make the 
     determination required by subsection (h) of section 3015 of 
     title 38, United States Code (as amended by subsection (b) of 
     this section), and such determination shall go into effect, 
     for fiscal year 2002.

  Ms. COLLINS. Mr. President, I am delighted to join with my friend and 
colleague, Senator Johnson, in introducing the Veterans' Higher 
Education Opportunities Act of 2001. This legislation, which is an 
updated version of the measure we introduced in the 106th Congress, 
will provide our veterans with expanded educational opportunities at a 
reasonable cost. Endorsed by the Partnership for Veterans Education, a 
broad coalition including over 40 veterans service organizations and 
education associations, our legislation provides a new model for 
today's G.I. Bill that is logical, fair, and worthy of a nation that 
values both higher education and our veterans.
  The original G.I. Bill was enacted in 1944. As a result of this 
initiative, 7.8 million World War II veterans were able to take 
advantage of post-service education and training opportunities, 
including more than 2 million veterans who went on to college. My own 
father was among those veterans who served bravely in World War II and 
then came back home to resume his education with assistance from the 
G.I. Bill.
  Since that time, the G.I. Bill has seen a number of changes but has 
continued to assist millions of veterans in taking advantage of the 
educational opportunities they put on hold in order to serve their 
country. New laws were enacted to provide educational assistance to 
those who served in Korea and Vietnam, as well as to those who served 
during the period in between. Since the change to an all-volunteer 
service, additional adjustments to these programs were made, leading up 
to the enactment of the Montgomery G.I. Bill in 1985.
  The Montgomery G.I. Bill has served our country well over the past 15 
years. However, the value of the educational benefit assistance it 
provides has greatly eroded over time due to inflation and the 
escalating cost of higher education. Military recruiters indicate that 
the program's benefits no longer serve as a strong incentive to join 
the military; nor do they serve as a retention tool valuable enough to 
persuade men and women to stay in the military and defer the full or 
part-time pursuit of their higher education until a later date. Perhaps 
most important, the program is losing its value as a means to help our 
men and women in uniform readjust to civilian life after military 
service.
  This point really hit home for me when I met last year with 
representatives of the Maine State Approving Agency (SAA) for Veterans 
Education Programs. They told me of the ever-increasing difficulties 
that service members are facing in using the G.I. Bill's benefits for 
education and training.
  For example, the Maine representatives told me that the majority of 
today's veterans are married and have children. Yet, the Montgomery 
G.I. Bill often does not cover the cost of tuition to attend a public 
institution, let alone the other costs associated with the pursuit of 
higher education and those required to help support a family.
  The basic benefit program of the Vietnam era G.I. Bill provided $493 
per month in 1981 to a veteran with a spouse and two children. Before 
the reforms of last year, a veteran in identical circumstances received 
only $43 more, a mere 8% increase over a time period when inflation has 
nearly doubled, and a dollar buys only half of what it once purchased. 
In constant dollars, the amount was the second-lowest level of 
assistance ever extended under the G.I. Bill to those who served in the 
defense of our country.
  While we made progress last year in increasing stipend levels under 
the G.I. Bill, the reforms fell drastically short of allocating 
sufficient funds to cover the current cost of higher education. 
Moreover, the increase failed to address the structural reforms needed 
to ensure that the G.I. Bill provides sufficient funds for the 
education of our nation's veterans long into the 21st Century.
  To address these problems, we are offering a modern version of the 
Montgomery G.I. Bill. Our new model establishes a sensible, easily 
understood benchmark for G.I. Bill benefits. The benchmark sets G.I. 
Bill benefits at ``the average monthly costs of tuition and expenses 
for commuter students at public institutions of higher education that 
award baccalaureate degrees.'' This common sense provision would serve 
as the foundation upon which future education stipends for all veterans 
would be based and would set benefits at a level sufficient to provide 
veterans the education promised to them at recruitment.
  The current G.I. Bill now provides nine monthly $650 stipends per 
year for four years. The total benefit is $23,400. Under the new 
benchmark established by this legislation, the monthly stipend for this 
academic year would be $1025, producing a new total benefit of $36,900 
for the four academic years. By using our benchmark, which is updated 
annually by the College Board, the G.I. Bill benefits will truly 
reflect the current cost of higher education.
  Mr. President, today's G.I. Bill is woefully under-funded and does 
not provide the financial support necessary for our veterans to meet 
their educational goals. The legislation that we are proposing would 
fulfill the promise made to our nation's veterans, help with recruiting 
and retention of men and women in our military, and reflect current 
costs of higher education. Now is the time to enact these modest 
improvements to the basic benefit program of the Montgomery G.I. Bill. 
I urge all Members of the Senate to join Senator Johnson and myself in 
support of the Veterans' Higher Education Opportunities Act.
                                 ______
                                 
      Mr. JOHNSON (for himself, Mr. Inouye, Mr. Kennedy, Mr. Baucus, 
        Mr. Reid, Mr. Dorgan, Mr. Daschle, Ms. Snowe and Mr. Conrad):
  S. 132. A bill to amend the Internal Revenue Code of 1986 to provide 
that housing assistance provided under the Native American Housing 
Assistance and Self-Determination Act of 1996 be treated for purposes 
of the low-income housing credit in the same manner as comparable 
assistance; to the Committee on Finance.


                     low income housing tax credits

  Mr. JOHNSON. Mr. President, I rise today to introduce legislation 
which will correct an unintended oversight in the federal 
administration of Native American housing programs, allowing Indian 
tribes to once again access Low-Income Housing Tax Credits (LIHTCs) for 
housing development in some of this nation's most under-served 
communities.
  In the 104th Congress, the Native American Housing Assistance and 
Self-Determination Act (NAHASDA) was signed into law, separating Indian 
housing from public housing and providing block grants to tribes and 
their tribally designated housing authorities. Prior to passage of 
NAHASDA, Indian tribes receiving HOME block grant funds were able to 
use those funds to leverage the Low Income Housing Tax Credits 
distributed by states on a competitive basis. Unfortunately, unlike 
HOME funds, block grants to tribes under the new NAHASDA are defined as 
federal funds and cannot be used for accessing LIHTCs.
  The fact that tribes cannot use their new block grant funds to access 
a program (LIHTC) which they formerly could access is an unintended 
consequence of taking Indian Housing out of Public Housing at HUD and 
setting up the otherwise productive and much needed NAHASDA system. The 
legislation I am introducing today is limited in scope and redefines 
NAHASDA funds, restoring tribal eligibility for the LIHTC by putting 
NAHASDA funds on the same footing as HOME funds. With this technical 
correction, there would be no change to the LIHTC programs--tribes 
would compete for LIHTCs with all other entities at the state level, 
just as they did prior to NAHASDA.
  This technical corrections legislation is a minor but much needed fix 
to a

[[Page 527]]

valuable program that will restore equity to housing development across 
the country. The South Dakota Housing Development Authority has 
enthusiastically endorsed this legislation out of concern for equitable 
treatment of every resident of our state and to reinforce the proven 
success of the LIHTC program for housing development in rural and lower 
income communities.
  I have joined many of my colleagues in past efforts to preserve and 
increase the Low-Income Housing Tax Credit program which benefits every 
state, and I ask my colleagues to recognize the importance of 
maintaining fairness in access to this program emphasized through this 
legislation and encourage my colleagues to support passage of this 
vital legislation.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 132

       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 ``Low Income Housing Tax 
     Credit for Native Americans Act''.

     SEC. 2. CERTAIN NATIVE AMERICAN HOUSING ASSISTANCE 
                   DISREGARDED IN DETERMINING WHETHER BUILDING IS 
                   FEDERALLY SUBSIDIZED FOR PURPOSES OF THE LOW-
                   INCOME HOUSING CREDIT.

       (a) In General.--Subparagraph (E) of section 42(i)(2) of 
     the Internal Revenue Code of 1986 (relating to determination 
     of whether building is federally subsidized) is amended--
       (1) in clause (i), by inserting ``or the Native American 
     Housing Assistance and Self-Determination Act of 1996 (25 
     U.S.C. 4101 et seq.) (as in effect on the date of the 
     enactment of the Low Income Housing Tax Credit for Native 
     Americans Act)'' after ``this subparagraph)'', and
       (2) in the subparagraph heading, by inserting ``or native 
     american housing assistance'' after ``home assistance''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mr. BAUCUS:
  S. 133. A bill to amend the Internal Revenue code of 1986 to make 
permanent the exclusion for employer-provided educational assistance 
programs, and for other purposes; to the Committee on Finance.


                  Employee educational assistance act

  Mr. BAUCUS. Mr. President, I rise today to introduce legislation to 
make permanent a temporary tax code provision that permits employers to 
pay for their employees' college tuition costs without the employee 
having to pay tax on the amount of the assistance. Senator Grassley 
joins me as an original co-sponsor of the legislation.
  Since its inception in 1979, section 127 of the tax code has enabled 
thousands of employers to promote continuing education among their 
employees and enabled millions of workers to advance their job skills 
without incurring additional taxes.
  Under current law, an employer may provide up to $5,250 per year in 
tuition assistance to its employees without any reduction in the 
employee's take-home pay. This simple rule applies regardless of 
whether the classes undertaken are necessary to maintain an employee's 
job or to qualify for a new job. Without section 127, only those 
courses that directly relate to the employee's current job can be 
subsidized without additional taxes.
  Section 127 has increased upward mobility for workers in an efficient 
manner that is supported by workers, educators and business. Workers 
can improve their job skills and prepare themselves for increased 
responsibility. Businesses can maintain qualified employees and help 
them advance within the organization. Educators and other students 
benefit from having students with real world experience participating 
in the classroom.
  Congress has recognized the strength of section 127. In 1997 the 
Senate voted to make the provision permanent. In the 106th Congress, 
all 20 members of the Finance Committee sponsored legislation to make 
section 127 permanent. So why hasn't the legislation been enacted? 
While it is difficult to be sure, bills including permanent extension 
always come back from a conference with the House of Representatives as 
a short extension with no coverage for graduate courses. Our hope is 
that this year will be different.
  There are two principal flaws in section 127. First, the benefit is 
scheduled to expire on December 31, 2001. The provision has been 
extended ten times since it original enactment. During 1995, the 
provision was expired and, even though reenacted in 1996, employers 
were not sure at the end of 1995 whether or not to report as income 
their employee-assistance program. We have had this provision in the 
Code long enough to know that it works and we should make it permanent. 
The bill Senator Grassley and I introduce today would do just that.
  The second flaw is that the program is limited to employer assistance 
for undergraduate courses. If an employer wants to provide funds for 
its employees to attend graduate school, then the employee has to 
increase his or her wages income and tax liability. For example, 
suppose a bank has an employee who wants to pursue an MBA. The employee 
earns $30,000 per year and pays $3,000 in federal income taxes. If the 
tuition costs $4,000, all of which is paid by the employer, then the 
worker has to pay 15 percent of the value of the assistance, or $600 in 
income taxes. This can be a strong disincentive for low and moderate 
income workers to accept an employer-sponsored tuition assistance 
offer.
  The importance of graduate education has increased dramatically in 
the past two decades. For an increasing number of positions, graduate 
coursework is essential. For an increasing number of employers, 
providing graduate education is necessary to retain employees who are 
capable of doing work at higher levels, for more compensation. The bill 
would permit exclusion of employer-provided tuition benefits for 
undergraduate and graduate education.
  Section 127 is one of the most successful education programs the 
federal government has ever undertaken. The legislation I am 
introducing today expands the program to graduate education and makes 
the provision permanent. I urge my colleagues to work with Senator 
Grassley and me as we seek to enact this legislation.
  Mr. GRASSLEY: Mr. President, today I am joining with Senator Max 
Baucus in introducing a bill that would make permanent the exclusion 
for employer-provided educational assistance under Sec. 127 of the 
Internal Revenue Code. Section 127 allows public or private employers 
to provide up to $5,250 per year to each of their employees in tax-free 
reimbursement for tuition, books and fees for job or non-job related 
education. Section 127 is a purely private-sector initiative and the 
one vehicle that encourages employer investment and assistance in 
providing educational assistance to its workers. There is no 
bureaucracy administering this program--it is run through the 
generosity of private sector employers who provide educational 
opportunities to their employees in the interest of raising workforce 
productivity and making their businesses more competitive. Like other 
types of benefits, Sec. 127 employer-provided educational assistance 
must be provided on a nondiscriminatory basis and may not favor highly-
compensated employees.
  The Revenue Act of 1978 created Sec. 127 and established employer-
provided educational assistance as excludable for any type of course, 
other than a hobby or a sport. Prior to 1978, only specific ``job-
related'' education was excludable from taxable income. The provision 
has been extended numerous times since its inception. It is time for 
the exclusion to become permanent.
  I commend the leadership of Senator Max Baucus for bringing this bill 
before the Senate and I am proud to be a cosponsor of the bill. I hope 
the rest of our colleagues in the Senate will join in supporting the 
enactment of this bill.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 134. A bill to ban the importation of large capacity ammunition 
feeding devices; to the Committee on the Judiciary.

[[Page 528]]




       large capacity ammunition magazine import ban act of 2001

  Mrs. FEINSTEIN. Mr. President, I rise to re-introduce the same ban on 
importing large capacity ammunition magazines that passed both Houses 
of Congress in 1999 during the Juvenile Justice debate.
  That amendment passed the Senate by voice vote after a Motion to 
Table failed 59-39.
  The same provision, offered by then-Judiciary Chairman Henry Hyde on 
the House floor, passed by voice vote as an amendment to the House 
Juvenile Justice Gun Bill.
  Nevertheless, these clips continue to flood into the country, because 
the Juvenile Justice bill became stalled in Conference, and never got 
to the President's desk.
  It is time to take care of this once and for all--outside of 
politics, and outside of partisan bickering over other provisions. We 
simply cannot stand by and watch millions of these killer clips flood 
our shores.
  Large-capacity ammunition clips are ammunition feeding devices, such 
as clips, magazines, drums and belts, which hold more than ten rounds 
of ammunition.
  The 1994 assault weapons ban prohibited the domestic manufacture of 
these devices, but foreign companies are still sending them to our 
shores by the hundreds of thousands.
  As the author of the 1994 provision, I can assure you that this was 
not our intent. We intended to ban the future manufacture of all high 
capacity clips, leaving only a narrow clause allowing for the 
importation of clips already on their way to this country.
  Instead, due to the grandfather clause inserted into the 1994 
legislation, BATF has allowed millions of foreign clips into this 
country, with no true method of determining date of manufacture. 
Between March 1998 and March 1999, BATF approved more than 11.4 million 
large-capacity clips for importation into America.
  By voting for the amendment to the Juvenile Justice bill in 1999, a 
significant majority of this body has already agreed that it is both 
illogical and irresponsible to permit foreign companies to sell items 
to the American public--particularly items that are so often used for 
deadly purposes--that U.S. companies are prohibited from selling.
  Supporting this legislation once again will simply finish what we 
already started during the juvenile justice debate, and bring foreign 
companies into greater compliance with the original intent of the 1994 
law.
  Opposing this bill would effectively allow foreign companies to 
continue to flout our laws, while domestic companies remain in 
compliance.
  Let me just outline a bit of the history behind this issue.
  Because of strong NRA opposition to the 1994 assault weapons ban and 
fears that businesses with inventories of the newly illegal products 
would be adversely impacted, we carved out a clause during negotiations 
to allow pre-existing guns and clips to remain on the shelves of stores 
across this country.
  This so-called ``grandfather clause'' was also meant to allow guns 
and clips already on their way to this country to get here. Some 
Senators did not want to penalize companies that already had shipments 
in transit.
  But it has now been more than six years, and these companies have had 
more than enough time to ship their pre-existing supplies of clips to 
the United States. Without question, many of these clips now flooding 
this country were made after the 1994 ban took effect. But because the 
ATF cannot tell when the clips were made, they must allow their import.
  In 1998, President Clinton stopped the importation of most copycat 
assault weapons to this country with an Executive Order. However, the 
Justice Department advised us that the President does not have the 
authority to ban importation of big clips. As a result, millions of 
high capacity ammunition magazines continue to flow onto our shores and 
into the hands of criminals and, indeed, our children.
  These clips come from at least 17 different countries, from Austria 
to Zimbabwe.
  They come in sizes ranging from 15 rounds per clip to 30, 75, 90, or 
even 250 rounds per clip. In one recent one-year period:

       20,000 clips of 250-rounds came from England;
       Two million 15-round magazines came from Italy;
       5,000 clips of 70-rounds came from the Czech Republic.

  And the list goes on, and on, and on.
  Mr. President, 75, 90 and even 250-round clips have no sporting 
purpose. They are not used for self defense. They have only one use--
the purposeful killing of other men, women and children.
  The legislation I re-introduce today will stop the flow of these 
clips into this country. I know that we cannot eliminate these clips 
from existence. But we can make them harder to obtain and, over time, 
dry up their supply.
  These big clips allow disgruntled workers, angry children and 
psychopathic killers to exponentially increase the damage of their 
crimes. Let me give you just two examples.
  In the now famous Springfield, Oregon shooting, a 15 year-old gunman 
with a 30-round clip killed two people and injured 22 more. Two dead, 
22 wounded, all from one ammunition clip. It was only when his clip was 
finally empty and he had to pause to change clips that a fellow student 
was able to tackle and subdue him. Just imagine if the clip had held 75 
rounds. Or 90. Or 250.
  In the Jonesboro, Arkansas shooting, the two boys were armed with ten 
guns, one of which was a Universal carbine equipped with a 15-round 
killer clip. All 15 of the bullets in the killer clip were fired--more 
rounds than in all of the other nine guns combined. Five people were 
killed, ten other wounded.
  Mr. President, in passing this legislation, we will not put an end to 
all incidents of gun violence now or in the near future. But we will 
begin to limit the destructive power of that violence. It will not stop 
every troubled child or adult who decides to commit an act of violence 
from doing so, but we can limit the tools used to carry out that act.
  Passing this bill will not infringe on the legitimate rights of any 
adult gun owner or prevent a son or daughter from protecting the family 
from harm. It will not create a new category of banned guns.
  But it will save some lives. It is just that simple. So let us do our 
best to ensure that the next time a troubled or vengeful child decides 
to strike out at his classmates, he cannot so easily find a gun that 
fires a hundred rounds a minute, or holds dozens of armor-piercing 
bullets.
  Mr. President, I urge any of my colleagues who remain skeptical to 
look beyond the opposition rhetoric and into the heart of this 
legislation. And I urge them to look into their own hearts, and to 
realize that there are some things we can do to keep future Littletons 
from happening. This legislation is one of them.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record following the statement.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 134

       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 ``Large Capacity Ammunition 
     Magazine Import Ban Act of 2001''.

     SEC. 2. BAN ON IMPORTING LARGE CAPACITY AMMUNITION FEEDING 
                   DEVICES.

       Section 922(w) of title 18, United States Code, is 
     amended--
       (1) in paragraph (1), by striking ``(1) Except as provided 
     in paragraph (2)'' and inserting ``(1)(A) Except as provided 
     in subparagraph (B)'';
       (2) in paragraph (2), by striking ``(2) Paragraph (1)'' and 
     inserting ``(B) Subparagraph (A)'';
       (3) by inserting before paragraph (3) the following new 
     paragraph:
       ``(2) It shall be unlawful for any person to import a large 
     capacity ammunition feeding device.''; and
       (4) in paragraph (4)--
       (A) by striking ``(1)'' each place it appears and inserting 
     ``(1)(A)''; and

[[Page 529]]

       (B) by striking ``(2)'' and inserting ``(1)(B)''.

     SEC. 3. CONFORMING AMENDMENT.

       Section 921(a)(31) of title 18, United States Code, is 
     amended by striking ``manufactured after the date of 
     enactment of the Violent Crime Control and Law Enforcement 
     Act of 1994''.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Jeffords, Mr. Cochran, Mrs. 
        Boxer, and Ms. Landrieu):
  S. 135. A bill to amend title XVIII of the Social Security Act to 
improve payments for direct graduate, medical education under the 
medicare program; to the Committee on Finance.


        correcting the direct graduate medical education formula

  Mrs. FEINSTEIN. Mr. President, I rise today to introduce legislation 
to reform the longstanding inequity in the Medicare Direct Graduate 
Medical Education (DGME) formula that has unfairly compensated many 
teaching hospitals across the country in the past 15 years.
  The Medicare DGME payment compensates teaching hospitals for many of 
the costs related to the graduate training of physicians.
  This legislation is timely as many of our nation's 400 teaching 
hospitals are in the midst of a serious financial crisis.
  Over 72 percent of all teaching hospitals are currently operating 
with negative margins, according to the Association of American Medical 
Colleges. Approximately 42 percent of the 100 major teaching hospitals 
could be operating at a loss by 2002.
  Teaching hospitals are losing millions of dollars annually.
  The University of Pennsylvania reported a $200 million deficit in 
1999.
  In Massachusetts, Beth Israel Deaconess Medical Center, Brigham and 
Women's Hospital, Massachusetts General Hospital, and the New England 
Medical Center posted operating losses for the six month period of 
October 1998 to March 1999 totaling more than $63 million.
  The University of Minnesota sold its hospital to a private company in 
1997 because ``it was bleeding red ink,'' according to the university's 
senior Vice-President for health sciences.
  Wayne State University in Michigan lost nearly $200 million in 1998 
and 1999.
  Georgetown University lost $83 million in 1999, $62 million in 1998, 
and $57 million in 1997.
  In my State, the University of California Los Angeles (UCLA) has seen 
its net income plunge $50 million and bottom out close to zero.
  The University of California San Francisco faces a $25 million loss 
over the next year.
  Excluding the University of California San Francisco, all University 
of California teaching hospitals collectively lost $90 million in net 
income since 1997.
  Many factors are to blame for the financial crisis of our nation's 
teaching hospitals.
  Balanced Budget Act of 1997:
  The Balanced Budget Act (BBA) of 1997 took a major blow at teaching 
hospitals, significantly cutting federal Medicare payments.
  The cuts included in BBA 1997, for example, have meant a loss of $25 
million over three years to UCLA.
  Penetration of Managed Care:
  Managed care payments to many teaching hospitals barely cover costs. 
Twenty-eight percent of all privately insured Americans are enrolled in 
an HMO. In California, this number is 88 percent.
  For example, California's capitation rate is one of the lowest in the 
nation. The average capitation rate in the State reached its peak in 
1993 at $45 per month. Last year, the rate sunk to $29, while the cost 
of living jumped 25.2 percent.
  Increasing Number of Uninsured:
  The number of uninsured has exploded. Today, 44 million Americans are 
without health insurance, California alone has 7 million uninsured 
residents.
  The high rate of uninsured impacts teaching hospitals because they 
are a major safety net provider--teaching hospitals provide 
approximately 44 percent of all care to the indigent. This means that 
when our nation's uninsured require medical care for complicated and 
complex pathologies, they find their way to teaching hospitals.
  Academic medical centers affiliated with the University of 
California, for example, are the second largest safety net for a State 
that has the fourth highest uninsured rate in the country.
  These are three examples of the forces behind the financial crisis of 
our nation's teaching hospitals. Low DGME payments further erode and 
destabilize the health care system.
  Academic medical centers have three major responsibilities and 
missions--teaching, research, and patient care--which cause them to 
incur costs unique to such facilities. ``If just one leg of that three-
legged stool is weak, it [academic medical centers] becomes 
destabilized,'' said Dr. Gerald Levey, UCLA's provost for health 
sciences. Low DGME payments are weakening teaching hospitals' ability 
to train future physicians.
  Teaching hospitals account for only 6 percent of the nation's 5,000 
hospitals. Despite the small number of teaching hospitals, they are a 
major provider of care. Teaching hospitals house: Forty percent of all 
neonatal intensive care units; fifty-three percent of pediatric 
intensive care units; and seventy percent of all burn units.
  Teaching hospitals also handle: Twenty percent of all inpatient 
admissions; twenty-two percent of outpatient visits; nineteen percent 
of surgical operations, including 82 percent of all open heart 
surgeries; sixteen percent of emergency visits; and nineteen percent of 
all births.
  The bottom line is that the financial crisis faced by teaching 
hospitals is impacting patient access to and quality of care.
  California has been particularly impacted by this financial crisis.
  Let me tell you how an outpatient eye clinic at the University of 
California, San Francisco has been impacted by the financial crisis 
facing teaching hospitals.
  The clinic has a patient mix that is approximately 70 percent 
Medicare and 30 percent Medi-Cal. Due in part to historically low DGME 
payments, the clinic has had to decrease the number of staff, increase 
patient load, and cut faculty salaries by 15 percent. The number of 
patients seen on an average day, for example, has increased from 12 per 
half day to 18. Less time with each patient compromises quality of 
care.
  According to a 1965 Medicare rule, Medicare paid for its share of 
DGME costs based on each hospital's ``Medicare allowable costs.'' This 
allowed for open-ended reimbursement.
  Congress changed the methodology used to determine payments in 1986, 
and retroactively established Fiscal Year 1985 as the base year for all 
future calculations for DGME payments. The problem, which created this 
disparity in payments, is that some teaching hospitals narrowly 
interpreted the law and did not claim such expenses as faculty costs 
and benefits in 1985.
  Submitted claims for 1985 were then used to determine a ``base 
formula'' for each teaching hospital. The base formula determined for 
each teaching hospital in 1985 has been used to determine all DGME 
payments since 1985 and disadvantages many teaching hospitals.
  To give you an idea of the large variation in payments, 10 percent of 
teaching hospitals had per-resident payments of more than $98,800 in 
1995, whereas the average payment for another 10 percent was below 
$37,400. The national mean in 1995 was $62,700.
  A study conducted last year based on data from the Health Care 
Financing Administration (HCFA) further highlights the variations among 
teaching hospitals. The study shows that: Beth Israel Medical Center in 
Manhattan received an average Medicare payment of $57,010 a year for 
each resident it trains. In comparison, Columbia-Presbyterian Medical 
Center in Manhattan received an average of $24,444 per resident.
  Even when cost-of-living and training expenses are presumably similar 
(both hospitals are in Manhattan), there is great variation in the 
payment received by hospitals for training residents.
  Additional examples of variations in payments include: Montefiore 
Medicare

[[Page 530]]

Center in the Bronx received an average of $55,073 per resident; 
Massachusetts General Hospital in Boston received an average of $29,843 
per resident; Cleveland Clinic Hospital received an average of $16,118 
per resident, and the University of California, Los Angeles Medical 
Center received an average of $11,908 per resident.
  In an attempt to level the playing field, the Balanced Budget 
Refinement Act of 1999 (BRA) contained provision that created a 70 
floor and a 140 percent ceiling for Medicare DGME payments. The 
Medicare, Medicaid, and SCHIP Improvement Act of 2000 also contained 
provision to increase the floor to 85 percent in 2002.
  While Congress has begun to address the issue of variations in DGME 
payments by implementing a floor and a ceiling for payments in 1999 and 
2000, more must be done.
  I believe all teaching hospitals should receive reimbursement from 
Medicare that equal the national average. Bringing all teaching 
hospitals up to the national average, without undermining the financial 
stability of those teaching hospitals currently receiving payments 
above the national average, could help stabilize our nation's health 
care system.
  The legislation that I am introducing today takes good steps to 
reduce variations in DGME and restore stability to the system.
  As established in current law, the floor for Medicare reimbursements 
for teaching hospitals would equal 85 percent by Fiscal Year 2002. Over 
a period of four years (from FY 2003-2006), this legislation would 
bring teaching hospitals that are currently reimbursed by Medicare 
below the national average up to the national average.
  The phase in is as follows:
  Beginning in Fiscal Year 2003 and 2004, the floor would be increased 
to 90 percent.
  In Fiscal Year 2005 the floor would be increased to 95 percent.
  By Fiscal Year 2006, all teaching hospitals would be receiving per 
resident payments that equal at least 100 percent of the national 
average. Those teaching hospitals receiving payments above the national 
average would be held harmless.
  Approximately thirty-eight States benefit under the proposed 
legislation. Teaching hospitals in several states will benefit over the 
next several years due in combination to the proposed legislation and 
the changes made in both 1999 and 2000 to increase the floor for DGME 
payments.
  California to Benefit:
  California will gain approximately $61.5 million over the next 6 
years as a result of this legislation and the changes made to the DGME 
floor in 1999 and 2000.
  For example, the University of California Medical Centers will gain 
$16.3 million over six years. The medical center at the University of 
Davis will gain $3.2 million; the medical center at the University of 
Irvine will gain $1.6 million; UCLA's medical center will gain $5.8 
million; the medical center at the University of San Diego will gain 
$1.8 million; and the medical center at the University of San Francisco 
will gain approximately $3.9 million.
  This is merely an example of State impact under the proposed 
legislation. These numbers are significant. Many of our nation's 
teaching hospitals would greatly benefit under the proposed 
legislation.
  The proposed legislation would use new money to move teaching 
hospitals below the national average up to the average. Less than $500 
million over 4 years would be borrowed from the Medicare Part A Trust 
fund to pay for the increase in Medicare payments to direct graduate 
medical education. So as to keep the Medicare Part A Trust Fund solvent 
beyond 2025, this legislation authorizes the Senate to appropriate to 
the Trust Fund annually an amount equal to what is taken out to 
reimburse teaching hospitals at this higher rate.
  Teaching hospitals rely heavily on DGME payments to train and support 
their medical students and faculty.
  For example, medical education funding in California helps support 
108 hospitals that train more than 6,700 residents over three-to-five 
year periods. California received $75.1 million in DGME payments in 
1997.
  Many of the nation's teaching hospitals will be forced to close down 
beds and lower the quality of care they provide. UCLA has had to lay 
off 300 employees in the past few years due to budget constraints.
  In a statement issued April 2000 by the Association of American 
Medical Colleges (AMC), the association said that:

       To enhance the credibility of the payment system and to 
     eliminate inequities in payment levels, the AMC believes that 
     payments to any hospital whose per resident DGME amount is 
     below the national average per resident DGME payment levels 
     (adjusted for local variability in cost of living wages) 
     should be raised closer to the national average; additional 
     funding resources should be used to accomplish this 
     adjustment.

  This legislation does just that--over a period of four years, 
teaching hospitals receiving payments below the national average will 
be brought up to the national average using new money. It is that 
simple.
  ``Teaching hospitals are a national resource,'' says Albert 
Carnesale, Chancellor of UCLA. I agree with Chancellor Carnesale. I 
believe that the vitality of our nation's teaching hospitals should be 
of highest concern to Congress.
  As our nation's uninsured rate continues to grow and the population 
continues to explode, we must work to ensure that we have an adequate 
supply of physicians to provide medical care. Training physicians and 
providing teaching hospitals with the funds necessary to offer this 
training should be of highest priority.
  I believe that a teaching hospital's ability to serve their 
communities and train physicians will be further compromised if we do 
not enact this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 135

       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 ``Direct Graduate Medical 
     Education Improvement Act of 2001''.

     SEC. 2. ESTABLISHMENT OF A FLOOR FOR THE LOCALITY ADJUSTED 
                   NATIONAL AVERAGE PER RESIDENT AMOUNT DURING 
                   FISCAL YEARS 2003 THROUGH 2006.

       (a) In General.--Section 1886(h)(2)(D)(iii) of the Social 
     Security Act (42 U.S.C. 1395ww(h)(2)(D)(iii)), as amended by 
     section 511 of the Medicare, Medicaid, and SCHIP Benefits 
     Improvement and Protection Act of 2000 (as enacted into law 
     by section 1(a)(6) of Public Law 106-554), is amended to read 
     as follows:
       ``(iii) Floor for locality adjusted national average per 
     resident amount.--

       ``(I) In general.--The approved FTE resident amount for a 
     hospital for a cost reporting period beginning during a 
     fiscal year shall not be less than the applicable percentage 
     of the locality adjusted national average per resident amount 
     computed under subparagraph (E) for the hospital for that 
     period.
       ``(II) Applicable percentage.--In this clause, the term 
     `applicable percentage' means, in the case of a cost 
     reporting period beginning during--

       ``(aa) fiscal year 2001, 70 percent;
       ``(bb) fiscal year 2002, 85 percent;
       ``(cc) fiscal year 2003 or 2004, 90 percent;
       ``(dd) fiscal year 2005, 95 percent; and
       ``(ee) fiscal year 2006, 100 percent.''.
       (b) Authorization of Appropriations.--For each fiscal year 
     (beginning with fiscal year 2003), there are authorized to be 
     appropriated to the Federal Hospital Insurance Trust Fund 
     established under section 1817 of the Social Security Act (42 
     U.S.C. 1395i) an amount equal to the amount by which 
     expenditures under such Trust Fund are increased for the 
     fiscal year by reason of the enactment of items (cc), (dd), 
     and (ee) of section 1886(h)(2)(D)(iii)(II) of such Act (42 
     U.S.C. 1395ww(h)(2)(D)(iii)(II)), as added by subsection (a).
                                 ______
                                 
      By Mr. GRAMM:
  S. 136. A bill to amend the Omnibus trade and Competitiveness Act of 
1988 to extend trade negotiating and trade agreement implementing 
authority; to the Committee on Finance.
  S. 137. A bill to authorize negotiation of free trade agreements with 
countries of the Americas, and for other purposes; to the Committee on 
Finance.

[[Page 531]]

  S. 138. A bill to authorize negotiation for the accession of Chile to 
the North American Free Trade Agreement, and for other purposes; to the 
Committee on Finance.
  S. 140. A bill to authorize negotiation for the accession of United 
Kingdom to the North American Free Trade Agreement, and for other 
purposes; to the Committee on Finance.


                     FOUR TRADE POLICY INITIATIVES

  Mr. GRAMM. Mr. President, trade has been very good for America and 
her people. Trade is our game, and we excel at it. In 1999, Americans 
exported a record $956 billion in goods and services. No other country 
even came close.
  Trade has brought untold benefits to our people not the least of 
which are high-paying jobs, increased consumer choice, increased 
economic competitiveness. When Pericles spoke of Athens in his Funeral 
Oration, he might well have been speaking of us: ``The magnitude of our 
city draws the produce of the world into our harbor, so that to the 
Athenian the fruits of other countries are as familiar a luxury as 
those of his own.'' Those who peddle defeatism as they clamor for 
protectionist measures are subverting our best means of growth. As 
President Reagan warned in 1988, ``protectionism is destructionism.''
  Let me point out to my colleagues that it is not just the United 
States that profits. The whole world has benefitted from the expansion 
of trade among nations. Trade has been a wealth-generating machine the 
likes of which the world has never seen. By committing ourselves to an 
open world trade system, the US and its partners unleashed increasing 
economic growth and prosperity and brought hope and freedom to more 
people than any victory in any war in history. It is no wonder that the 
world trading system we know of as the WTO--formerly the GATT--has gone 
from a handful of nations in 1948 to some 140 nations today.
  My fervent goal has been to keep world trade expanding so that more 
people in more nations can enjoy what Pericles aptly called the 
``fruits'' of trade. We in America have been at the vanguard of trade 
liberalization efforts, both globally and regionally. We must continue 
that trend. Unfortunately, over recent years this nation has slid into 
an unwise hiatus in moving new global or regional trade liberalization 
initiatives. But this year, with a new President, committed to trade, 
we have a new opportunity before us. Now is the time for us to reassert 
our leadership, to set the pace for trade expansion throughout our 
hemisphere and throughout the world.
  Today I am introducing four pieces of legislation intended to get us 
started. The first bill, the Fast-Track Trade Negotiating Authority 
Act, would provide the President with much-needed fast track authority, 
so that he may expand trade by entering into trade agreements with our 
partners around the world. Fast track is key to unleashing the wealth-
generating machine of trade still further, to all corners of the world. 
It is long past time to reauthorize this critical provision.
  The second measure, the Americas Free Trade Act, would lead to the 
extension of free trade from Alaska to Cape Horn in our own hemisphere. 
It would provide the President with fast track authority for 
implementation of free trade agreements with any or all of the 33 other 
nations of the Western Hemisphere, for the benefit of its more than 800 
million residents. According to the 1994 agreement among the leaders of 
the Western Hemisphere, the Free Trade Agreement of the Americas should 
be concluded by 2005. Having fast track authority in hand will give our 
President the ability to move the FTAA talks forward dramatically and 
successfully.
  Both the third bill, the Chile NAFTA Accession Act, and the fourth 
bill, the United Kingdom NAFTA Accession Act, seek to build bridges 
with key trading partners in order to spur larger trade liberalization 
efforts. Chile is a critical trading partner in South America who has 
been knocking at the NAFTA door for some time. The United Kingdom is a 
key partner in Western Europe who by joining NAFTA can help keep Europe 
from erecting protectionist walls against the rest of the world. 
Agreements with these two important nations can keep trade 
liberalization moving forward.
  Mr. President, my commitment to this cause is longstanding. In 1986 I 
introduced legislation to begin negotiations for a free trade agreement 
with Mexico. In 1987, I introduced a bill that laid out a framework for 
negotiating a North American free trade area--a bill which later served 
as the basis for an amendment I offered to the 1988 trade bill and 
adopted by the Senate that authorized the negotiation of the NAFTA. In 
1989, I once again introduced trade legislation and called for a free 
agreement encompassing the entire Western Hemisphere. I have introduced 
similar legislation in each Congress since then. It is my hope that the 
bills I am introducing today will serve as the basis for successful 
trade legislation in the 107th Congress.
  I ask unanimous consent that the text of the Fast Track Trade 
Negotiating Authority Act, the Americas Free Trade Act, the Chile NAFTA 
Accession Act, and the United Kingdom NAFTA Accession Act, together 
with a summary of these bills, be printed in the Record.
  There being no objection, the materials were ordered to be printed in 
the Record, as follows:
       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 ``Fast Track Trade Negotiating 
     Authority Act''.

     SEC 2. AMENDMENTS TO TRADE NEGOTIATING AUTHORITY.

       (a) Extension.--Section 1102(a)(1)(A), (b)(1), and (c)(1) 
     of the Omnibus Trade and Competitiveness Act of 1988 (19 
     U.S.C. 2902(a)(1)(A), (b)(1), and (c)(1)) are amended by 
     striking ``June 1, 1993'' each place it appears and inserting 
     ``December 31, 2004''.
       (b) Conforming Amendment.--
       (1) Section 1102(a)(1) and (b)(1) of such Act are amended 
     by striking ``purposes, policies, and objectives of this 
     title'' each place it appears and inserting ``policies and 
     objectives of the United States''.
       (2) Section 1102(a)(2)(A) of such Act is amended by 
     striking ``August 23, 1988'' each place it appears and 
     inserting ``January 22, 2001''.
       (3) Subsections (b)(2) and (c)(3)(A) of section 1102 of 
     such Act are amended by striking ``applicable objectives 
     described in section 1101 of this title'' each place it 
     appears and inserting ``policies and objectives of the United 
     States''.
       (4) Subsection (d)(2)(B) of section 1102 of such Act is 
     amended by striking ``applicable purposes, policies, and 
     objectives of this title'' and inserting ``policies and 
     objectives of the United States''.
       (5) Section 1103(b)(1)(A) of such Act is amended by 
     striking ``June 1, 1991'' and inserting ``December 31, 
     2004''.
       (6) Subsection (a)(2)(B)(i) of section 1103 of such Act is 
     amended by striking ``applicable purposes, policies, and 
     objectives of this title'' and inserting ``policies and 
     objectives of the United States''.
                                  ____

       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 ``Americas Free Trade Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The countries of the Western Hemisphere have enjoyed 
     more success in the twentieth century in the peaceful conduct 
     of their relations among themselves than have the countries 
     in the rest of the world.
       (2) The economic prosperity of the United States and its 
     trading partners in the Western Hemisphere is increased by 
     the reduction of trade barriers.
       (3) Trade protection endangers economic prosperity in the 
     United States and throughout the Western Hemisphere and 
     undermines civil liberty and constitutionally limited 
     government.
       (4) The successful establishment of a North American Free 
     Trade Area sets the pattern for the reduction of trade 
     barriers throughout the Western Hemisphere, enhancing 
     prosperity in place of the cycle of increasing trade barriers 
     and deepening poverty that results from a resort to 
     protectionism and trade retaliation.
       (5) The reduction of government interference in the foreign 
     and domestic sectors of a nation's economy and the 
     concomitant promotion of economic opportunity and freedoms 
     promote civil liberty and constitutionally limited 
     government.
       (6) Countries that observe a consistent policy of free 
     trade, the promotion of free enterprise and other economic 
     freedoms (including effective protection of private property 
     rights), and the removal of barriers to foreign direct 
     investment, in the context of constitutionally limited 
     government and

[[Page 532]]

     minimal interference in the economy, will follow the surest 
     and most effective prescription to alleviate poverty and 
     provide for economic, social, and political development.

     SEC. 3. FREE TRADE AREA FOR THE WESTERN HEMISPHERE.

       (a) In General.--The President shall take action to 
     initiate negotiations to obtain trade agreements with the 
     sovereign countries located in the Western Hemisphere, the 
     terms of which provide for the reduction and ultimate 
     elimination of tariffs and other nontariff barriers to trade, 
     for the purpose of promoting the eventual establishment of a 
     free trade area for the entire Western Hemisphere.
       (b) Reciprocal Basis.--An agreement entered into under 
     subsection (a) shall be reciprocal and provide mutual 
     reductions in trade barriers to promote trade, economic 
     growth, and employment.
       (c) Bilateral or Multilateral Basis.--Agreements may be 
     entered into under subsection (a) on a bilateral basis with 
     any foreign country described in that subsection or on a 
     multilateral basis with all of such countries or any group of 
     such countries.

     SEC. 4. FREE TRADE WITH FREE CUBA.

       (a) Restrictions Prior to Restoration of Freedom in Cuba.--
     The provisions of this Act shall not apply to Cuba unless the 
     President certifies to Congress that--
       (1) freedom has been restored in Cuba; and
       (2) the claims of United States citizens for compensation 
     for expropriated property have been appropriately addressed.
       (b) Standards for the Restoration of Freedom in Cuba.--The 
     President shall not make the certification that freedom has 
     been restored in Cuba, for purpose of subsection (a), unless 
     the President determines that--
       (1) a constitutionally guaranteed democratic government has 
     been established in Cuba with leaders chosen through free and 
     fair elections;
       (2) the rights of individuals to private property have been 
     restored and are effectively protected and broadly exercised 
     in Cuba;
       (3) Cuba has a currency that is fully convertible 
     domestically and internationally;
       (4) all political prisoners have been released in Cuba; and
       (5) the rights of free speech and freedom of the press in 
     Cuba are effectively guaranteed.
       (c) Priority for Free Trade With Free Cuba.--Upon making 
     the certification described in subsection (a), the President 
     shall give priority to the negotiation of a free trade 
     agreement with Cuba.

     SEC. 5 INTRODUCTION AND FAST-TRACK CONSIDERATION OF 
                   IMPLEMENTING BILLS.

       (a) Introduction in House and Senate.--When the President 
     submits to Congress a bill to implement a trade agreement 
     described in section 3, the bill shall be introduced (by 
     request) in the House and the Senate as described in section 
     151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
       (b) Restrictions on Content.--A bill to implement a trade 
     agreement described in section 3--
       (1) shall contain only provisions that are necessary to 
     implement the trade agreement; and
       (2) may not contain any provision that establishes (or 
     requires or authorizes the establishment of) a labor or 
     environmental protection standard or amends (or requires or 
     authorizes an amendment of) any labor or environmental 
     protection standard set forth in law or regulation.
       (c) Point of Order in Senate--
       (1) Applicability to all legislative forms of implementing 
     bill.--For the purposes of this subsection, the term 
     ``implementing bill'' means the following:
       (A) The bill.--A bill described in subsection (a), without 
     regard to whether that bill originated in the Senate or the 
     House of Representatives.
       (B) Amendment.--An amendment to a bill referred to in 
     subparagraph (A).
       (C) Conference report.--A conference report on a bill 
     referred to in subparagraph (A).
       (D) Amendment between houses.--An amendment between the 
     Houses of Congress in relation to a bill referred to in 
     subparagraph (A).
       (E) Motion.--A motion in relation to an item referred to in 
     subparagraph (A), (B), (C), or (D).
       (2) Making of point of order.--
       (A) Against single item.--When the Senate is considering an 
     implementing bill, a Senator may make a point of order 
     against any part of the implementing bill that contains 
     material in violation of a restriction under subsection (b).
       (B) Against several items.--Notwithstanding any other 
     provision of law or rule of the Senate, when the Senate is 
     considering an implementing bill, it shall be in order for a 
     Senator to raise a single point of order that several 
     provisions of the implementing bill violate subsection (b). 
     The Presiding Officer may sustain the point of order as to 
     some or all of the provisions against which the Senator 
     raised the point of order.
       (3) Effect of sustainment of point of order.--
       (A) Against single item.--If a point of order made against 
     a part of an implementing bill under paragraph (2)(A) is 
     sustained by the Presiding Officer, the part of the 
     implementing bill against which the point of order is 
     sustained shall be deemed stricken.
       (B) Against several items.--In the case of a point of order 
     made under paragraph (2)(B) against several provisions of an 
     implementing bill, only those provisions against which the 
     Presiding Officer sustains the point of order shall be deemed 
     stricken.
       (C) Stricken matter not in order as amendment.--Matter 
     stricken from an implementing bill under this paragraph may 
     not be offered as an amendment to the implementing bill (in 
     any of its forms described in paragraph (1)) from the floor.
       (4) Waivers and appeals.--
       (A) Waivers.--Before the Presiding Officer rules on a point 
     of order under this subsection, any Senator may move to waive 
     the point of order as it applies to some or all of the 
     provisions against which the point of order is raised. Such a 
     motion to waive is amendable in accordance with the rules and 
     precedents of the Senate.
       (B) Appeals.--After the Presiding Officer rules on a point 
     of order under this subsection, any Senator may appeal the 
     ruling of the Presiding Officer on the point of order as it 
     applies to some or all of the provisions on which the 
     Presiding Officer ruled.
       (C) Three-fifths majority required.--
       (i) Waivers.--A point of order under this subsection is 
     waived only by the affirmative vote of at least the requisite 
     majority.
       (ii) Appeals.--A ruling of the Presiding Officer on a point 
     of order under this subsection is sustained unless at least 
     the requisite majority votes not to sustain the ruling.
       (iii) Requisite majority.--For purposes of clauses (i) and 
     (ii), the requisite majority is three-fifths of the Members 
     of the Senate, duly chosen and sworn.
       (d) Applicability of Fast Track Procedures.--Section 151 of 
     the Trade Act of 1974 (19 U.S.C. 2191) is amended--
       (1) in subsection (b)(1)--
       (A) by inserting ``section 5 of the Americas Free Trade 
     Act,'' after ``the Omnibus Trade and Competitiveness Act of 
     1988,''; and
       (B) by amending subparagraph (C) to read as follows:
       ``(C) if changes in existing laws or new statutory 
     authority is required to implement such trade agreement or 
     agreements or such extension, provisions, necessary to 
     implement such trade agreement or agreements or such 
     extension, either repealing or amending existing laws or 
     providing new statutory authority.''; and
       (2) in subsection (c)(1), in inserting ``or under section 5 
     of the Americas Free Trade Act,'' after ``the Uruguay Round 
     Agreements Act,''.
                                  ____


                                 S. 138

       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 ``Chile-NAFTA Accession Act''.

     SEC. 2. ACCESSION OF CHILE TO THE NORTH AMERICAN FREE TRADE 
                   AGREEMENT.

       (a) In General.--Subject to section 3, the President is 
     authorized to enter into an agreement described in subsection 
     (b) and the provisions of section 151(c) of the Trade Act of 
     1974 (19 U.S.C. 2191(c)) shall apply with respect to a bill 
     to implement such agreement if such agreement is entered into 
     on or before December 31, 2002.
       (b) Agreement Described.--An agreement described in this 
     subsection means an agreement that--
       (1) provides for the accession of Chile to the North 
     American Free Trade Agreement; or
       (2) is a bilateral agreement between the United States and 
     Chile that provides for the reduction and ultimate 
     elimination of tariffs and other nontariff barriers to trade 
     and the eventual establishment of a free trade area between 
     the United States and Chile.

     SEC. 3. INTRODUCTION AND FAST-TRACK CONSIDERATION OF 
                   IMPLEMENTING BILL.

       (a) Introduction in House and Senate.--When the President 
     submits to Congress a bill to implement a trade agreement 
     described in section 2, the bill shall be introduced (by 
     request) in the House and the Senate as described in section 
     151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).
       (b) Restrictions on Content.--A bill to implement a trade 
     agreement described in section 2--
       (1) shall contain only provisions that are necessary to 
     implement the trade agreement; and
       (2) may not contain any provision that establishes (or 
     requires or authorizes the establishment of) a labor or 
     environmental protection standard or amends (or requires or 
     authorizes an amendment of) any labor or environmental 
     protection standard set forth in law or regulation.
       (c) Point of Order in Senate--
       (1) Applicability to all legislative forms of implementing 
     bill.--For the purposes of this subsection, the term 
     ``implementing bill'' means the following:
       (A) The bill.--A bill described in subsection (a), without 
     regard to whether that

[[Page 533]]

     bill originated in the Senate or the House of 
     Representatives.
       (B) Amendment.--An amendment to a bill referred to in 
     subparagraph (A).
       (C) Conference report.--A conference report on a bill 
     referred to in subparagraph (A).
       (D) Amendment between houses.--An amendment between the 
     houses of Congress in relation to a bill referred to in 
     subparagraph (A).
       (E) Motion.--A motion in relation to an item referred to in 
     subparagraph (A), (B), (C), or (D).
       (2) Making of point of order.--
       (A) Against single item.--When the Senate is considering an 
     implementing bill, a Senator may make a point of order 
     against any part of the implementing bill that contains 
     material in violation of a restriction under subsection (b).
       (B) Against several items.--Notwithstanding any other 
     provision of law or rule of the Senate, when the Senate is 
     considering an implementing bill, it shall be in order for a 
     Senator to raise a single point of order that several 
     provisions of the implementing bill violate subsection (b). 
     The Presiding Officer may sustain the point of order as to 
     some or all of the provisions against which the Senator 
     raised the point of order.
       (3) Effect of sustainment of point of order.--
       (A) Against single item.--If a point of order made against 
     a part of an implementing bill under paragraph (2)(A) is 
     sustained by the Presiding Officer, the part of the 
     implementing bill against the point of order is sustained 
     shall be deemed stricken.
       (B) Against several items.--In the case of a point of order 
     made under paragraph (2)(B) against several provisions of an 
     implementing bill, only those provisions against which the 
     Presiding Officer sustains the point of order shall be deemed 
     stricken.
       (C) Stricken matter not in order as amendment.--Matter 
     stricken from an implementing bill under this paragraph may 
     not be offered as an amendment to the implementing bill (in 
     any of its forms described in paragraph (1)) from the floor.
       (4) Waivers and appeals.--
       (A) Waivers.--Before the Presiding Officer rules on a point 
     of order under this subsection, any Senator may move to waive 
     the point of order as it applies to some or all of the 
     provisions against which the point of order is raised. Such a 
     motion to waive is amendable in accordance with the rules and 
     precedents of the Senate.
       (B) Appeals.--After the Presiding Officer rules on a point 
     of order under this subsection, any Senator may appeal the 
     ruling of the Presiding Officer on the point of order as it 
     applies to some or all of the provisions on which the 
     Presiding Officer ruled.
       (C) Three-fifths majority required.--
       (i) Waivers.--A point of order under this subsection is 
     waived only by the affirmative vote of at least the requisite 
     majority.
       (ii) Appeals.--A ruling of the Presiding Officer on a point 
     of order under this subsection is sustained unless at least 
     the requisite majority votes not to sustain the ruling.
       (iii) Requisite majority.--For purposes of clauses (i) and 
     (ii), the requisite majority is three-fifths of the Members 
     of the Senate, duly chosen and sworn.
       (d) Applicability of Fast Track Procedures.--Section 151 of 
     the Trade Act of 1974 (19 U.S.C. 2191) is amended--
       (1) in subsection (b)(1)--
       (A) by inserting ``section 3 of the Chile-NAFTA Accession 
     Act,'' after ``the Omnibus Trade and Competitiveness Act of 
     1988,''; and
       (B) by amending subparagraph (C) to read as follows:
       ``(C) if changes in existing laws or new statutory 
     authority is required to implement such trade agreement or 
     agreements or such extension, provisions, necessary to 
     implement such trade agreement or agreements or such 
     extension, either repealing or amending existing laws or 
     providing new statutory authority.''; and
       (2) in subsection (c)(1), by inserting ``or under section 3 
     of the Chile-NAFTA Accession Act,'' after ``the Uruguay Round 
     Agreements Act,''.
                                  ____


                                 S. 140

       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 ``United Kingdom-NAFTA 
     Accession Act''.

     SEC. 2. ACCESSION OF UNITED KINGDOM TO THE NORTH AMERICAN 
                   FREE TRADE AGREEMENT.

       (a) In General.--Subject to section 3, the President is 
     authorized to enter into an agreement described in subsection 
     (b) and the provisions of section 151(c) of the Trade Act of 
     1974 (19 U.S.C. 2191(c)) shall apply with respect to a bill 
     to implement such agreement if such agreement is entered into 
     on or before December 31, 2003.
       (b) Agreement Described.--An agreement described in this 
     subsection means an agreement that--
       (1) provides for the accession of United Kingdom to the 
     North American Free Trade Agreement; or
       (2) is a bilateral agreement between the United States and 
     United Kingdom that provides for the reduction and ultimate 
     elimination of tariffs and other nontariff barriers to trade 
     and the eventual establishment of a free trade area between 
     the United States and United Kingdom.

     SEC. 3. INTRODUCTION AND FAST-TRACK CONSIDERATION OF 
                   IMPLEMENTING BILL.

       (a) Introduction in House and Senate.--When the President 
     submits to Congress a bill to implement a trade agreement 
     described in section 2, the bill shall be introduced (by 
     request) in the House and the Senate as described in section 
     151(c) of the Trade Act of 1974 (19 U.S.C. 2191(c)).


       (b) Restrictions on Content.--A bill to implement a trade 
     agreement described in section 2--
       (1) shall contain only provisions that are necessary to 
     implement the trade agreement; and
       (2) may not contain any provision that establishes (or 
     requires or authorizes the establishment of) a labor or 
     environmental protection standard or amends (or requires or 
     authorizes an amendment of) any labor or environmental 
     protection standard set forth in law or regulation.
       (c) Point of Order in Senate--
       (1) Applicability to all legislative forms of implementing 
     bill.--For the purposes of this subsection, the term 
     ``implementing bill'' means the following:
       (A) The bill.--A bill described in subsection (a), without 
     regard to whether that bill originated in the Senate or the 
     House of Representatives.
       (B) Amendment.--An amendment to a bill referred to in 
     subparagraph (A).
       (C) Conference Report.--A conference report on a bill 
     referred to in subparagraph (A).
       (D) Amendment between houses.--An amendment between the 
     Houses of Congress in relation to a bill referred to in 
     subparagraph (A).
       (E) Motion.--A motion in relation to an item referred to in 
     subparagraph (A), (B), (C), or (D).
       (2) Making of point of order.--
       (A) Against single item.--When the Senate is considering an 
     implementing bill, a Senator may make a point of order 
     against any part of the implementing bill that contains 
     material in violation of a restriction under subsection (b).
       (B) Against several items.--Notwithstanding any other 
     provision of law or rule of the Senate, when the Senate is 
     considering an implementing bill, it shall be in order for a 
     Senator to raise a single point of order that several 
     provisions of the implementing bill violate subsection (b). 
     The Presiding Officer may sustain the point of order as to 
     some or all of the provisions against which the Senator 
     raised the point of order.
       (3) Effect of sustainment of point of order.--
       (A) Against single item.--If a point of order made against 
     a part of an implementing bill under paragraph (2)(A) is 
     sustained by the Presiding Officer, the part of the 
     implementing bill against which the point of order is 
     sustained shall be deemed stricken.
       (B) Against several items.--In the case of a point of order 
     made under paragraph (2)(B) against several provisions of an 
     implementing bill, only those provisions against which the 
     Presiding Officer sustains the point of order shall be deemed 
     stricken.
       (C) Stricken matter not in order as amendment.--Matter 
     stricken from an implementing bill under this paragraph may 
     not be offered as an amendment to the implementing bill (in 
     any of its forms described in paragraph (1)) from the floor.
       (4) Waivers and appeals.--
       (A) Waivers.--Before the Presiding Officer rules on a point 
     of order under this subsection, any Senator may move to waive 
     the point of order as it applies to some or all of the 
     provisions against which the point of order is raised. Such a 
     motion to waive is amendable in accordance with the rules and 
     precedents of the Senate.
       (B) Appeals.--After the Presiding Officer rules on a point 
     of order under this subsection, any Senator may appeal the 
     ruling of the Presiding Officer on the point of order as it 
     applies to some or all of the provisions on which the 
     Presiding Officer ruled.
       (C) Three-fifths majority required.--
       (i) Waivers.--A point of order under this subsection is 
     waived only by the affirmative vote of at least the requisite 
     majority.
       (ii) Appeals.--A ruling of the Presiding Officer on a point 
     of order under this subsection is sustained unless at least 
     the requisite majority votes not to sustain the ruling.
       (iii) Requisite majority.--For purposes of clauses (i) and 
     (ii), the requisite majority is three-fifths of the Members 
     of the Senate, duly chosen and sworn.
       (d) Applicability of Fast Track Procedures.--Section 151 of 
     the Trade Act of 1974 (19 U.S.C. 2191) is amended--
       (1) in subsection (b)(1)--
       (A) by inserting ``section 3 of the United Kingdom-NAFTA 
     Accession Act,'' after ``the Omnibus Trade and 
     Competitiveness Act of 1988,''; and
       (B) by amending subparagraph (C) to read as follows:
       ``(C) if changes in existing laws or new statutory 
     authority is required to implement such trade agreement or 
     agreements or such

[[Page 534]]

     extension, provisions, necessary to implement such trade 
     agreement or agreements or such extension, either repealing 
     or amending existing laws or providing new statutory 
     authority.''; and
       (2) in subsection (c)(1), by inserting ``or under section 3 
     of the United Kingdom-NAFTA Accession Act,'' after ``the 
     Uruguay Round Agreements Act,''.
                                  ____


                Summary of Four Trade Policy Initiatives


               fast track trade negotiating authority act

       Authorizes the President to enter into bilateral or 
     multilateral trade agreements.
       Reauthorizes traditional fast track authority procedures 
     for implementing legislation for such agreements as long as 
     agreements are entered into by December 31, 2004.
       Updates existing outdated negotiating objectives to 
     encompass policies and objectives of the United States.


                        americas free trade act

       Directs the President to initiate negotiations for trade 
     agreements with the nations of the Western Hemisphere to 
     promote a free trade area for the Hemisphere.
       Bars the application of the Act to Cuba until the President 
     certifies that freedom has been restored in Cuba and US 
     expropriation claims have been addressed, at which time 
     priority is given to a trade agreement with Cuba.
       Applies fast-track procedures to implementing legislation 
     for such agreements.
       Limits implementing legislation to those provisions 
     necessary to implement an agreement, and bars the inclusion 
     of provisions setting labor or environmental standards or 
     amending existing labor or environmental law.
       Provides a point of order against provisions that do not 
     meet these two limitations.


                       chile nafta accession act

       Authorizes the President to enter into an agreement with 
     Chile that provides for Chile's accession into NAFTA, or 
     consists of a US/Chile bilateral free trade agreement.
       Applies fast-track procedures to implementing legislation 
     for such an agreement as long as the agreement is entered 
     into by December 31, 2002.
       Limits implementing legislation to those provisions 
     necessary to implement the agreement, and bars the inclusion 
     of provisions setting labor or environmental standards or 
     amending existing labor or environmental law.
       Provides a point of order against provisions that do not 
     meet these two limitations.


                   united kingdom nafta accession act

       Authorizes the President to enter into an agreement with 
     the United Kingdom that provides for the United Kingdom's 
     accession into NAFTA, or consists of a US/UK bilateral free 
     trade agreement.
       Applies fast-track procedures to implementing legislation 
     for such an agreement as long as the agreement is entered 
     into by December 31, 2003.
       Limits implementing legislation to those provisions 
     necessary to implement the agreement, and bars the inclusion 
     of provisions setting labor or environmental standards or 
     amending existing labor or environmental law.
       Provides a point of order against provisions that do not 
     meet these two limitations.
                                 ______
                                 
      By Mr. BENNETT:
  S. 139. A bill to assist in the preservation of archaeological, 
paleontological, zoological, geological, and botanical artifacts 
through construction of a new facility for the University of Utah 
Museum of Natural History, Salt Lake City, Utah; to the Committee on 
Energy and Natural Resources.


          utah public lands artifact preservation act of 2001

  Mr. BENNETT. Mr. President, I rise today to introduce my first bill 
of the 107th Congress, the ``Utah Public Lands Artifact Preservation 
Act of 2001.''
  Utah's public lands are a treasure trove of the natural and cultural 
history of the west. Over a century of scientific exploration and 
research of these public lands have unearthed Native American 
artifacts, fossilized remains of prehistoric life-forms, and other 
objects of botanical and geological significance. Fortunately, these 
unique and remarkable finds now comprise a substantial portion of the 
collection of the University of Utah Museum of Natural History.
  The University of Utah Museum of Natural History collection contains 
more than one million objects and artifacts from the field of 
archaeology, botany, geology, paleontology, and zoology. It is one of 
the largest and most comprehensive collections in the region and is 
internationally significant. Over 75 percent of the collection was 
recovered from lands managed by the Bureau of Land Management, Bureau 
of Reclamation, National Park Service, United States Fish and Wildlife 
Service, and United States Forest Service.
  Currently the home of the Museum of Natural History is the library 
where I studied while I was a student at the University of Utah. 
Although I have fond memories of the time I spent in the library, it is 
an unfit home for the museum. As we all know, the needs of a library 
and the needs of a museum are very different. The current facility is 
not large enough to accommodate the museum's annual level of 
visitation. Additionally, space to display the collection is severely 
limited and the facilities to store the collection are unsuitable for a 
museum, Clearly, the Museum of Natural History needs an appropriate 
structure to exhibit, research, and house its collection.
  This legislation will result in an enhanced museum experience that 
will be more meaningful, educational, and accessible to the public and 
scientific researchers. Furthermore, the collection will no longer be 
jeopardized by inadequate facilities. The new museum will contain 
proper facilities for storage and research.
  I believe the strength of this project lies in the fact that its 
success will rely upon a public-private partnership among the state of 
Utah, the federal government, and hundreds of private individuals and 
foundations. Already, unprecedented support has been given by the Emma 
Eccles Jones Foundation for this project. I expect there will be many 
generous offers of support in the near future to make this project a 
success.
  I believe that this legislation is an exciting opportunity to 
showcase the many treasures that Utah's public lands contain. I look 
forward to working with my colleagues in the Senate and the new 
administration to pass this legislation this session.
                                 ______
                                 
      By Mr. McCAIN:
  S. 141. A bill to provide for enhanced safety, public awareness, and 
environmental protection in pipeline transportation, and for other 
purposes; to the Committee on Commerce, Science, and Transportation.


                    pipeline safety improvement act

  Mr. McCAIN. Mr. President, today I am introducing the Pipeline Safety 
Improvement Act of 2001. I am very pleased to be joined in sponsoring 
this important transportation safety legislation by Senators Murray, 
Hollings, Hutchison, Bingaman, Domenici, and Breaux. This bill, which 
is identical to the measure approved unanimously by the Senate last 
year but which failed to be sent to the President, is being introduced 
today to demonstrate our strong, continued commitment to improving 
pipeline transportation safety. We urge our colleagues to join us in 
our efforts to help remedy identified safety problems and improve 
pipeline safety for all Americans.
  As most of my colleagues well know, the Senate worked long and hard 
during the last Congress to produce comprehensive pipeline safety 
legislation. As a result of our bipartisan efforts, we unanimously 
approved pipeline safety improvement legislation last September. 
Unfortunately, the House failed to approve a pipeline safety measure 
and the Congress thus failed in its efforts to improve pipeline safety. 
As a result, the unacceptable status quo under which at least 16 
fatalities have occurred remains the law of the land. I am hopeful that 
this new Congress will act quickly to take the overdue action necessary 
to improve pipeline safety before any more lives are lost.
  Mr. President, let me be clear from the outset that I continue to 
support passage of the strongest pipeline safety bill possible. As 
such, I will be very eager to receive safety improvement 
recommendations from the new Administration. Indeed, I look forward to 
working with the Administration, the House of Representatives, safety 
advocates, industry and other concerned citizens to advance a sound 
legislative proposal that can be signed into law.
  Although pipeline safety legislation was not enacted last year as we 
had hoped, the President did issue an executive order requiring a 
number of safety actions by pipeline operators. Further, the Department 
of Transportation (DOT) also issued a number of

[[Page 535]]

regulations during the past few months. The Administration's actions 
will be carefully considered by the Commerce Committee and we will work 
to ensure our legislation reflects the Administration's actions, as 
appropriate, as we advance the legislation to the full Senate.
  The following highlights some of the major provisions of the 
legislation we are reintroducing today:
  The bill would require the implementation of pipeline safety 
recommendations issued last March by the Department of Transportation 
Inspector General to the Research and Special Programs Administration 
(RSPA). The legislation would statutorily require the Secretary of 
Transportation, the RSPA Administrator and the Director of the Office 
of Pipeline Safety to respond to NTSB pipeline safety recommendations 
within 90 days of receipt. The bill would require pipeline operators to 
submit to the Secretary of Transportation a plan designed to improve 
the qualifications for pipeline personnel. At a minimum, the 
qualification plan would have to demonstrate that pipeline employees 
have the necessary knowledge to safely and properly perform their 
assigned duties and would require testing and periodic reexamination of 
the employees' qualifications.
  The legislation would require DOT to issue regulations mandating 
pipeline operators to periodically determine the adequacy of their 
pipelines to safely operate and to implement integrity management 
programs to reduce those identified risks. The regulations would, at a 
minimum, require operators to: base their integrity management plans on 
risk assessments that they conduct; periodically assess the integrity 
of their pipelines; and, take steps to prevent and mitigate unintended 
releases, such as improving leak detection capabilities or installing 
restrictive flow devices.
  The bill also would require pipeline operators to carry out a 
continuing public education program that would include activities to 
advise municipalities, school districts, businesses, and residents of 
pipeline facility locations on a variety of pipeline safety-related 
matters. It would also direct pipeline operators to initiate and 
maintain communication with State emergency response commissions and 
local emergency planning committees and to share with these entities 
information critical to addressing pipeline safety issues, including 
information on the types of product transported and efforts by the 
operator to mitigate safety risks.
  The legislation directs the Secretary to develop and implement a 
comprehensive plan for the collection and use of pipeline data in a 
manner that would enable incident trend analysis and evaluations of 
operator performance. Operators would be required to report incident 
releases greater than five gallons, compared to the current reporting 
requirement of 42 gallons. In addition, the Secretary would be directed 
to establish a national depository of data to be administered by the 
Bureau of Transportation Statistics in cooperation with RSPA.
  Given the critical importance of technology applications in promoting 
transportation safety across all modes of transportation, the 
legislation directs the Secretary to include as part of the 
Department's research and development (R&D) efforts a focus on 
technologies to improve pipelines safety, such as through internal 
inspection devices and leak detection. Further, the legislation 
includes provisions advanced last year by Senator Bingaman, myself, and 
others, to provide for a collaborative R&D effort directed by the 
Department of Transportation with the assistance of the Department of 
Energy and the National Academy of Sciences.
  The bill provides for a three year authorization in funding for 
federal pipeline safety activities and the pipeline state grant 
program. The authorization levels in particular will be carefully 
reviewed as the bill proceeds through the legislation process. We must 
ensure sufficient funding is authorized to carry out critical pipeline 
safety activities and to advance research and development efforts.
  The legislation requires operators, in the event of an accident, to 
make available to the DOT or NTSB all records and information 
pertaining to the accident and to assist in the investigation to the 
extent reasonable. It also includes provisions to ensure that if an 
accident occurs, a review is carried out to ensure the operator's 
employees can safely perform their duties.
  Finally, to ensure pipeline employees are afforded the same whistle-
blower protections as are provided to employees in other modes of 
transportation, the legislation includes protections for pipeline 
personnel, similar to those protections provided to aviation-related 
employees last year in the Wendell H. Ford Aviation and Investment 
Reform Act for the 21st Century, P.L. 106-181.
  Again Mr. President, I will be interested in receiving additional 
recommendations to further strengthen federal pipeline safety policy. I 
hope this Congress can act expeditiously to approve comprehensive 
pipeline safety legislation. We simply cannot afford another missed 
opportunity to address identified pipeline safety shortcomings.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 141

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

     SECTION 1. SHORT TITLE; AMENDMENT OF TITLE 49, UNITED STATES 
                   CODE.

       (a) Short Title.--This Act may be cited as the ``Pipeline 
     Safety Improvement Act of 2001''.
       (b) Amendment of Title 49, United States Code.--Except as 
     otherwise expressly provided, whenever in this Act an 
     amendment or repeal is expressed in terms of an amendment to, 
     or a repeal of, a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of title 49, United States Code.

     SEC. 2. IMPLEMENTATION OF INSPECTOR GENERAL RECOMMENDATIONS.

       (a) In General.--Except as otherwise required by this Act, 
     the Secretary shall implement the safety improvement 
     recommendations provided for in the Department of 
     Transportation Inspector General's Report (RT-2000-069).
       (b) Reports by the Secretary.--Not later than 90 days after 
     the date of enactment of this Act, and every 90 days 
     thereafter until each of the recommendations referred to in 
     subsection (a) has been implemented, the Secretary shall 
     transmit to the Committee on Commerce, Science, and 
     Transportation of the Senate and the Committee on 
     Transportation and Infrastructure of the House of 
     Representatives a report on the specific actions taken to 
     implement such recommendations.
       (c) Reports by the Inspector General.--The Inspector 
     General shall periodically transmit to the Committees 
     referred to in subsection (b) a report assessing the 
     Secretary's progress in implementing the recommendations 
     referred to in subsection (a) and identifying options for the 
     Secretary to consider in accelerating recommendation 
     implementation.

     SEC. 3. NTSB SAFETY RECOMMENDATIONS.

       (a) In General.--The Secretary of Transportation, the 
     Administrator of Research and Special Program Administration, 
     and the Director of the Office of Pipeline Safety shall fully 
     comply with section 1135 of title 49, United States Code, to 
     ensure timely responsiveness to National Transportation 
     Safety Board recommendations about pipeline safety.
       (b) Public Availability.--The Secretary, Administrator, or 
     Director, respectively, shall make a copy of each 
     recommendation on pipeline safety and response, as described 
     in sections 1135 (a) and (b) of title 49, United States Code, 
     available to the public at reasonable cost.
       (c) Reports to Congress.--The Secretary, Administrator, or 
     Director, respectively, shall submit to the Congress by 
     January 1 of each year a report containing each 
     recommendation on pipeline safety made by the Board during 
     the prior year and a copy of the response to each such 
     recommendation.

     SEC. 4. QUALIFICATIONS OF PIPELINE PERSONNEL.

       (a) Qualification Plan.--Each pipeline operator shall make 
     available to the Secretary of Transportation, or, in the case 
     of an intrastate pipeline facility operator, the appropriate 
     State regulatory agency, a plan that is designed to enhance 
     the qualifications of pipeline personnel and to reduce the 
     likelihood of accidents and injuries. The plan shall be made 
     available not more than 6 months after the date of enactment 
     of this Act, and the operator shall revise or update the plan 
     as appropriate.

[[Page 536]]

       (b) Requirements.--The enhanced qualification plan shall 
     include, at a minimum, criteria to demonstrate the ability of 
     an individual to safely and properly perform tasks identified 
     under section 60102 of title 49, United States Code. The plan 
     shall also provide for training and periodic reexamination of 
     pipeline personnel qualifications and provide for 
     requalification as appropriate. The Secretary, or, in the 
     case of an intrastate pipeline facility operator, the 
     appropriate State regulatory agency, may review and certify 
     the plans to determine if they are sufficient to provide a 
     safe operating environment and shall periodically review the 
     plans to ensure the continuation of a safe operation. The 
     Secretary may establish minimum standards for pipeline 
     personnel training and evaluation, which may include written 
     examination, oral examination, work performance history 
     review, observation during performance on the job, on the job 
     training, simulations, or other forms of assessment.
       (c) Report to Congress.--
       (1) In general.--The Secretary shall submit a report to the 
     Congress evaluating the effectiveness of operator 
     qualification and training efforts, including--
       (A) actions taken by inspectors;
       (B) recommendations made by inspectors for changes to 
     operator qualification and training programs; and
       (C) industry responses to those actions and 
     recommendations.
       (2) Criteria.--The Secretary may establish criteria for use 
     in evaluating and reporting on operator qualification and 
     training for purposes of this subsection.
       (3) Due date.--The Secretary shall submit the report 
     required by paragraph (1) to the Congress 3 years after the 
     date of enactment of this Act.

     SEC. 5. PIPELINE INTEGRITY INSPECTION PROGRAM.

       Section 60109 is amended by adding at the end the 
     following:
       ``(c) Integrity Management.--
       ``(1) General requirement.--The Secretary shall promulgate 
     regulations requiring operators of hazardous liquid pipelines 
     and natural gas transmission pipelines to evaluate the risks 
     to the operator's pipeline facilities in areas identified 
     pursuant to subsection (a)(1), and to adopt and implement a 
     program for integrity management that reduces the risk of an 
     incident in those areas. The regulations shall be issued no 
     later than one year after the Secretary has issued standards 
     pursuant to subsections (a) and (b) of this section or by 
     December 31, 2002, whichever is sooner.
       ``(2) Standards for program.--In promulgating regulations 
     under this section, the Secretary shall require an operator's 
     integrity management plan to be based on risk analysis and 
     each plan shall include, at a minimum--
       ``(A) periodic assessment of the integrity of the pipeline 
     through methods including internal inspection, pressure 
     testing, direct assessment, or other effective methods;
       ``(B) clearly defined criteria for evaluating the results 
     of the periodic assessment methods carried out under 
     subparagraph (A) and procedures to ensure identified problems 
     are corrected in a timely manner; and
       ``(C) measures, as appropriate, that prevent and mitigate 
     unintended releases, such as leak detection, integrity 
     evaluation, restrictive flow devices, or other measures.
       ``(3) Criteria for program standards.--In deciding how 
     frequently the integrity assessment methods carried out under 
     paragraph (2)(A) must be conducted, an operator shall take 
     into account the potential for new defects developing or 
     previously identified structural defects caused by 
     construction or installation, the operational characteristics 
     of the pipeline, and leak history. In addition, the Secretary 
     may establish a minimum testing requirement for operators of 
     pipelines to conduct internal inspections.
       ``(4) State role.--A State authority that has an agreement 
     in effect with the Secretary under section 60106 is 
     authorized to review and assess an operator's risk analyses 
     and integrity management plans required under this section 
     for interstate pipelines located in that State. The reviewing 
     State authority shall provide the Secretary with a written 
     assessment of the plans, make recommendations, as 
     appropriate, to address safety concerns not adequately 
     addressed in the operator's plans, and submit documentation 
     explaining the State-proposed plan revisions. The Secretary 
     shall carefully consider the State's proposals and work in 
     consultation with the States and operators to address safety 
     concerns.
       ``(5) Monitoring implementation.--The Secretary of 
     Transportation shall review the risk analysis and program for 
     integrity management required under this section and provide 
     for continued monitoring of such plans. Not later than 2 
     years after the implementation of integrity management plans 
     under this section, the Secretary shall complete an 
     assessment and evaluation of the effects on safety and the 
     environment of extending all of the requirements mandated by 
     the regulations described in paragraph (1) to additional 
     areas. The Secretary shall submit the assessment and 
     evaluation to Congress along with any recommendations to 
     improve and expand the utilization of integrity management 
     plans.
       ``(6) Opportunity for local input on integrity 
     management.--Within 18 months after the date of enactment of 
     the Pipeline Safety Improvement Act of 2001, the Secretary 
     shall, by regulation, establish a process for raising and 
     addressing local safety concerns about pipeline integrity and 
     the operator's pipeline integrity plan. The process shall 
     include--
       ``(A) a requirement that an operator of a hazardous liquid 
     or natural gas transmission pipeline facility provide 
     information about the risk analysis and integrity management 
     plan required under this section to local officials in a 
     State in which the facility is located;
       ``(B) a description of the local officials required to be 
     informed, the information that is to be provided to them and 
     the manner, which may include traditional or electronic 
     means, in which it is provided;
       ``(C) the means for receiving input from the local 
     officials that may include a public forum sponsored by the 
     Secretary or by the State, or the submission of written 
     comments through traditional or electronic means;
       ``(D) the extent to which an operator of a pipeline 
     facility must participate in a public forum sponsored by the 
     Secretary or in another means for receiving input from the 
     local officials or in the evaluation of that input; and
       ``(E) the manner in which the Secretary will notify the 
     local officials about how their concerns are being 
     addressed.''.

     SEC. 6. ENFORCEMENT.

       (a) In General.--Section 60112 is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) General Authority.--After notice and an opportunity 
     for a hearing, the Secretary of Transportation may decide a 
     pipeline facility is hazardous if the Secretary decides 
     that--
       ``(1) operation of the facility is or would be hazardous to 
     life, property, or the environment; or
       ``(2) the facility is, or would be, constructed or 
     operated, or a component of the facility is, or would be, 
     constructed or operated with equipment, material, or a 
     technique that the Secretary decides is hazardous to life, 
     property, or the environment.''; and
       (2) by striking ``is hazardous,'' in subsection (d) and 
     inserting ``is, or would be, hazardous,''.

     SEC. 7. PUBLIC EDUCATION, EMERGENCY PREPAREDNESS, AND 
                   COMMUNITY RIGHT TO KNOW.

       (a) Section 60116 is amended to read as follows:

     ``Sec. 60116. Public education, emergency preparedness, and 
       community right to know

       ``(a) Public Education Programs.--
       ``(1) Each owner or operator of a gas or hazardous liquid 
     pipeline facility shall carry out a continuing program to 
     educate the public on the use of a one-call notification 
     system prior to excavation and other damage prevention 
     activities, the possible hazards associated with unintended 
     releases from the pipeline facility, the physical indications 
     that such a release may have occurred, what steps should be 
     taken for public safety in the event of a pipeline release, 
     and how to report such an event.
       ``(2) Within 12 months after the date of enactment of the 
     Pipeline Safety Improvement Act of 2001, each owner or 
     operator of a gas or hazardous liquid pipeline facility shall 
     review its existing public education program for 
     effectiveness and modify the program as necessary. The 
     completed program shall include activities to advise affected 
     municipalities, school districts, businesses, and residents 
     of pipeline facility locations. The completed program shall 
     be submitted to the Secretary or, in the case of an 
     intrastate pipeline facility operator, the appropriate State 
     agency and shall be periodically reviewed by the Secretary 
     or, in the case of an intrastate pipeline facility operator, 
     the appropriate State agency.
       ``(3) The Secretary may issue standards prescribing the 
     elements of an effective public education program. The 
     Secretary may also develop material for use in the program.
       ``(b) Emergency Preparedness.--
       ``(1) Operator liaison.--Within 12 months after the date of 
     enactment of the Pipeline Safety Improvement Act of 2001, an 
     operator of a gas transmission or hazardous liquid pipeline 
     facility shall initiate and maintain liaison with the State 
     emergency response commissions, and local emergency planning 
     committees in the areas of pipeline right-of-way, established 
     under section 301 of the Emergency Planning and Community 
     Right-To-Know Act of 1986 (42 U.S.C. 11001) in each State in 
     which it operates.
       ``(2) Information.--An operator shall, upon request, make 
     available to the State emergency response commissions and 
     local emergency planning committees, and shall make available 
     to the Office of Pipeline Safety in a standardized form for 
     the purpose of providing the information to the public, the 
     information described in section 60102(d), the operator's 
     program for integrity management, and information about 
     implementation of that program. The information about the 
     facility shall also include, at a minimum--

[[Page 537]]

       ``(A) the business name, address, telephone number of the 
     operator, including a 24-hour emergency contact number;
       ``(B) a description of the facility, including pipe 
     diameter, the product or products carried, and the operating 
     pressure;
       ``(C) with respect to transmission pipeline facilities, 
     maps showing the location of the facility and, when 
     available, any high consequence areas which the pipeline 
     facility traverses or adjoins and abuts;
       ``(D) a summary description of the integrity measures the 
     operator uses to assure safety and protection for the 
     environment; and
       ``(E) a point of contact to respond to questions from 
     emergency response representative.
       ``(3) Smaller communities.--In a community without a local 
     emergency planning committee, the operator shall maintain 
     liaison with the local fire, police, and other emergency 
     response agencies.
       ``(4) Public access.--The Secretary shall prescribe 
     requirements for public access, as appropriate, to this 
     information, including a requirement that the information be 
     made available to the public by widely accessible 
     computerized database.
       ``(c) Community Right To Know.--Not later than 12 months 
     after the date of enactment of the Pipeline Safety 
     Improvement Act of 2001, and annually thereafter, the owner 
     or operator of each gas transmission or hazardous liquid 
     pipeline facility shall provide to the governing body of each 
     municipality in which the pipeline facility is located, a map 
     identifying the location of such facility. The map may be 
     provided in electronic form. The Secretary may provide 
     technical assistance to the pipeline industry on developing 
     public safety and public education program content and best 
     practices for program delivery, and on evaluating the 
     effectiveness of the programs. The Secretary may also provide 
     technical assistance to State and local officials in applying 
     practices developed in these programs to their activities to 
     promote pipeline safety.
       ``(d) Public Availability of Reports.--The Secretary 
     shall--
       ``(1) make available to the public--
       ``(A) a safety-related condition report filed by an 
     operator under section 60102(h);
       ``(B) a report of a pipeline incident filed by an operator;
       ``(C) the results of any inspection by the Office of 
     Pipeline Safety or a State regulatory official; and
       ``(D) a description of any corrective action taken in 
     response to a safety-related condition reported under 
     subparagraph (A), (B), or (C); and
       ``(2) prescribe requirements for public access, as 
     appropriate, to integrity management program information 
     prepared under this chapter, including requirements that will 
     ensure data accessibility to the greatest extent feasible.''.
       (b) Safety Condition Reports.--Section 60102(h)(2) is 
     amended by striking ``authorities.'' and inserting 
     ``officials, including the local emergency responders.''.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     601 is amended by striking the item relating to section 60116 
     and inserting the following:

``60116. Public education, emergency preparedness, community right to 
              know.''.

     SEC. 8. PENALTIES.

       (a) Civil Penalties.--Section 60122 is amended--
       (1) by striking ``$25,000'' in subsection (a)(1) and 
     inserting ``$500,000'';
       (2) by striking ``$500,000'' in subsection (a)(1) and 
     inserting ``$1,000,000'';
       (3) by adding at the end of subsection (a)(1) the 
     following: ``The preceding sentence does not apply to 
     judicial enforcement action under section 60120 or 60121.''; 
     and
       (4) by striking subsection (b) and inserting the following:
       ``(b) Penalty Considerations.--In determining the amount of 
     a civil penalty under this section--
       ``(1) the Secretary shall consider--
       ``(A) the nature, circumstances, and gravity of the 
     violation, including adverse impact on the environment;
       ``(B) with respect to the violator, the degree of 
     culpability, any history of prior violations, the ability to 
     pay, any effect on ability to continue doing business; and
       ``(C) good faith in attempting to comply; and
       ``(2) the Secretary may consider--
       ``(A) the economic benefit gained from the violation 
     without any discount because of subsequent damages; and
       ``(B) other matters that justice requires.''.
       (b) Excavator Damage.--Section 60123(d) is amended--
       (1) by striking ``knowingly and willfully'';
       (2) by inserting ``knowingly and willfully'' before 
     ``engages'' in paragraph (1); and
       (3) striking paragraph (2)(B) and inserting the following:
       ``(B) a pipeline facility, is aware of damage, and does not 
     report the damage promptly to the operator of the pipeline 
     facility and to other appropriate authorities; or''.
       (c) Civil Actions.--Section 60120(a)(1) is amended to read 
     as follows:
       ``(1) On the request of the Secretary of Transportation, 
     the Attorney General may bring a civil action in an 
     appropriate district court of the United States to enforce 
     this chapter, including section 60112 of this chapter, or a 
     regulation prescribed or order issued under this chapter. The 
     court may award appropriate relief, including a temporary or 
     permanent injunction, punitive damages, and assessment of 
     civil penalties considering the same factors as prescribed 
     for the Secretary in an administrative case under section 
     60122.''.

     SEC. 9. STATE OVERSIGHT ROLE.

       (a) State Agreements With Certification.--Section 60106 is 
     amended--
       (1) by striking ``General Authority.--'' in subsection (a) 
     and inserting ``Agreements Without Certification.--'';
       (2) by redesignating subsections (b), (c), and (d) as 
     subsections (c), (d), and (e); and
       (3) by inserting after subsection (a) the following:
       ``(b) Agreements With Certification.--
       ``(1) In general.--If the Secretary accepts a certification 
     under section 60105 of this title and makes the determination 
     required under this subsection, the Secretary may make an 
     agreement with a State authority authorizing it to 
     participate in the oversight of interstate pipeline 
     transportation. Each such agreement shall include a plan for 
     the State authority to participate in special investigations 
     involving incidents or new construction and allow the State 
     authority to participate in other activities overseeing 
     interstate pipeline transportation or to assume additional 
     inspection or investigatory duties. Nothing in this section 
     modifies section 60104(c) or authorizes the Secretary to 
     delegate the enforcement of safety standards prescribed under 
     this chapter to a State authority.
       ``(2) Determinations required.--The Secretary may not enter 
     into an agreement under this subsection, unless the Secretary 
     determines that--
       ``(A) the agreement allowing participation of the State 
     authority is consistent with the Secretary's program for 
     inspection and consistent with the safety policies and 
     provisions provided under this chapter;
       ``(B) the interstate participation agreement would not 
     adversely affect the oversight responsibilities of intrastate 
     pipeline transportation by the State authority;
       ``(C) the State is carrying out a program demonstrated to 
     promote preparedness and risk prevention activities that 
     enable communities to live safely with pipelines;
       ``(D) the State meets the minimum standards for State one-
     call notification set forth in chapter 61; and
       ``(E) the actions planned under the agreement would not 
     impede interstate commerce or jeopardize public safety.
       ``(3) Existing agreements.--If requested by the State 
     Authority, the Secretary shall authorize a State Authority 
     which had an interstate agreement in effect after January, 
     1999, to oversee interstate pipeline transportation pursuant 
     to the terms of that agreement until the Secretary determines 
     that the State meets the requirements of paragraph (2) and 
     executes a new agreement, or until December 31, 2002, 
     whichever is sooner. Nothing in this paragraph shall prevent 
     the Secretary, after affording the State notice, hearing, and 
     an opportunity to correct any alleged deficiencies, from 
     terminating an agreement that was in effect before enactment 
     of the Pipeline Safety Improvement Act of 2001 if--
       ``(A) the State Authority fails to comply with the terms of 
     the agreement;
       ``(B) implementation of the agreement has resulted in a gap 
     in the oversight responsibilities of intrastate pipeline 
     transportation by the State Authority; or
       ``(C) continued participation by the State Authority in the 
     oversight of interstate pipeline transportation has had an 
     adverse impact on pipeline safety.''.
       (b) Ending Agreements.--Subsection (e) of section 60106, as 
     redesignated by subsection (a), is amended to read as 
     follows:
       ``(e) Ending Agreements.--
       ``(1) Permissive termination.--The Secretary may end an 
     agreement under this section when the Secretary finds that 
     the State authority has not complied with any provision of 
     the agreement.
       ``(2) Mandatory termination of agreement.--The Secretary 
     shall end an agreement for the oversight of interstate 
     pipeline transportation if the Secretary finds that--
       ``(A) implementation of such agreement has resulted in a 
     gap in the oversight responsibilities of intrastate pipeline 
     transportation by the State authority;
       ``(B) the State actions under the agreement have failed to 
     meet the requirements under subsection (b); or
       ``(C) continued participation by the State authority in the 
     oversight of interstate pipeline transportation would not 
     promote pipeline safety.
       ``(3) Procedural requirements.--The Secretary shall give 
     the notice and an opportunity for a hearing to a State 
     authority before ending an agreement under this section. The 
     Secretary may provide a State an opportunity to correct any 
     deficiencies before ending an agreement. The finding and 
     decision to end the agreement shall be published in the 
     Federal Register and may not become effective for at least 15 
     days after the date of publication unless the Secretary finds 
     that continuation of an agreement poses an imminent 
     hazard.''.

[[Page 538]]



     SEC. 10. IMPROVED DATA AND DATA AVAILABILITY.

       (a) In General.--Within 12 months after the date of 
     enactment of this Act, the Secretary shall develop and 
     implement a comprehensive plan for the collection and use of 
     gas and hazardous liquid pipeline data to revise the causal 
     categories on the incident report forms to eliminate 
     overlapping and confusing categories and include 
     subcategories. The plan shall include components to provide 
     the capability to perform sound incident trend analysis and 
     evaluations of pipeline operator performance using normalized 
     accident data.
       (b) Report of Releases Exceeding 5 Gallons.--Section 
     60117(b) is amended--
       (1) by inserting ``(1)'' before ``To'';
       (2) redesignating paragraphs (1) and (2) as subparagraphs 
     (A) and (B);
       (3) inserting before the last sentence the following:
       ``(2) A person owning or operating a hazardous liquid 
     pipeline facility shall report to the Secretary each release 
     to the environment greater than five gallons of the hazardous 
     liquid or carbon dioxide transported. This section applies to 
     releases from pipeline facilities regulated under this 
     chapter. A report must include the location of the release, 
     fatalities and personal injuries, type of product, amount of 
     product release, cause or causes of the release, extent of 
     damage to property and the environment, and the response 
     undertaken to clean up the release.
       ``(3) During the course of an incident investigation, a 
     person owning or operating a pipeline facility shall make 
     records, reports, and information required under subsection 
     (a) of this section or other reasonably described records, 
     reports, and information relevant to the incident 
     investigation, available to the Secretary within the time 
     limits prescribed in a written request.''; and
       (4) indenting the first word of the last sentence and 
     inserting ``(4)'' before ``The Secretary'' in that sentence.
       (c) Penalty Authorities.--(1) Section 60122(a) is amended 
     by striking ``60114(c)'' and inserting ``60117(b)(3)''.
       (2) Section 60123(a) is amended by striking ``60114(c),'' 
     and inserting ``60117(b)(3),''.
       (d) Establishment of National Depository.--Section 60117 is 
     amended by adding at the end the following:
       ``(l) National Depository.--The Secretary shall establish a 
     national depository of data on events and conditions, 
     including spill histories and corrective actions for specific 
     incidents, that can be used to evaluate the risk of, and to 
     prevent, pipeline failures and releases. The Secretary shall 
     administer the program through the Bureau of Transportation 
     Statistics, in cooperation with the Research and Special 
     Programs Administration, and shall make such information 
     available for use by State and local planning and emergency 
     response authorities and the public.''.

     SEC. 11. RESEARCH AND DEVELOPMENT.

       (a) Innovative Technology Development.--
       (1) In general.--As part of the Department of 
     Transportation's research and development program, the 
     Secretary of Transportation shall direct research attention 
     to the development of alternative technologies--
       (A) to expand the capabilities of internal inspection 
     devices to identify and accurately measure defects and 
     anomalies;
       (B) to inspect pipelines that cannot accommodate internal 
     inspection devices available on the date of enactment;
       (C) to develop innovative techniques measuring the 
     structural integrity of pipelines;
       (D) to improve the capability, reliability, and 
     practicality of external leak detection devices; and
       (E) to develop and improve alternative technologies to 
     identify and monitor outside force damage to pipelines.
       (2) Cooperative.--The Secretary may participate in 
     additional technological development through cooperative 
     agreements with trade associations, academic institutions, or 
     other qualified organizations.
       (b) Pipeline Safety and Reliability Research and 
     Development.--
       (1) In General.--The Secretary of Transportation, in 
     coordination with the Secretary of Energy, shall develop and 
     implement an accelerated cooperative program of research and 
     development to ensure the integrity of natural gas and 
     hazardous liquid pipelines. This research and development 
     program--
       (A) shall include materials inspection techniques, risk 
     assessment methodology, and information systems surety; and
       (B) shall complement, and not replace, the research program 
     of the Department of Energy addressing natural gas pipeline 
     issues existing on the date of enactment of this Act.
       (2) Purpose.--The purpose of the cooperative research 
     program shall be to promote pipeline safety research and 
     development to--
       (A) ensure long-term safety, reliability and service life 
     for existing pipelines;
       (B) expand capabilities of internal inspection devices to 
     identify and accurately measure defects and anomalies;
       (C) develop inspection techniques for pipelines that cannot 
     accommodate the internal inspection devices available on the 
     date of enactment;
       (D) develop innovative techniques to measure the structural 
     integrity of pipelines to prevent pipeline failures;
       (E) develop improved materials and coatings for use in 
     pipelines;
       (F) improve the capability, reliability, and practicality 
     of external leak detection devices;
       (G) identify underground environments that might lead to 
     shortened service life;
       (H) enhance safety in pipeline siting and land use;
       (I) minimize the environmental impact of pipelines;
       (J) demonstrate technologies that improve pipeline safety, 
     reliability, and integrity;
       (K) provide risk assessment tools for optimizing risk 
     mitigation strategies; and
       (L) provide highly secure information systems for 
     controlling the operation of pipelines.
       (3) Areas.--In carrying out this subsection, the Secretary 
     of Transportation, in coordination with the Secretary of 
     Energy, shall consider research and development on natural 
     gas, crude oil and petroleum product pipelines for--
       (A) early crack, defect, and damage detection, including 
     real-time damage monitoring;
       (B) automated internal pipeline inspection sensor systems;
       (C) land use guidance and set back management along 
     pipeline rights-of-way for communities;
       (D) internal corrosion control;
       (E) corrosion-resistant coatings;
       (F) improved cathodic protection;
       (G) inspection techniques where internal inspection is not 
     feasible, including measurement of structural integrity;
       (H) external leak detection, including portable real-time 
     video imaging technology, and the advancement of computerized 
     control center leak detection systems utilizing real-time 
     remote field data input;
       (I) longer life, high strength, non-corrosive pipeline 
     materials;
       (J) assessing the remaining strength of existing pipes;
       (K) risk and reliability analysis models, to be used to 
     identify safety improvements that could be realized in the 
     near term resulting from analysis of data obtained from a 
     pipeline performance tracking initiative;
       (L) identification, monitoring, and prevention of outside 
     force damage, including satellite surveillance; and
       (M) any other areas necessary to ensuring the public safety 
     and protecting the environment.
       (4) Points of contact.--
       (A) In general.--To coordinate and implement the research 
     and development programs and activities authorized under this 
     subsection--
       (i) the Secretary of Transportation shall designate, as the 
     point of contact for the Department of Transportation, an 
     officer of the Department of Transportation who has been 
     appointed by the President and confirmed by the Senate; and
       (ii) the Secretary of Energy shall designate, as the point 
     of contact for the Department of Energy, an officer of the 
     Department of Energy who has been appointed by the President 
     and confirmed by the Senate.
       (B) Duties.--
       (i) The point of contact for the Department of 
     Transportation shall have the primary responsibility for 
     coordinating and overseeing the implementation of the 
     research, development, and demonstration program plan under 
     paragraphs (5) and (6).
       (ii) The points of contact shall jointly assist in 
     arranging cooperative agreements for research, development 
     and demonstration involving their respective Departments, 
     national laboratories, universities, and industry research 
     organizations.
       (5) Research and development program plan.--Within 240 days 
     after the date of enactment of this Act, the Secretary of 
     Transportation, in coordination with the Secretary of Energy 
     and the Pipeline Integrity Technical Advisory Committee, 
     shall prepare and submit to the Congress a 5-year program 
     plan to guide activities under this subsection. In preparing 
     the program plan, the Secretary shall consult with 
     appropriate representatives of the natural gas, crude oil, 
     and petroleum product pipeline industries to select and 
     prioritize appropriate project proposals. The Secretary may 
     also seek the advice of utilities, manufacturers, 
     institutions of higher learning, Federal agencies, the 
     pipeline research institutions, national laboratories, State 
     pipeline safety officials, environmental organizations, 
     pipeline safety advocates, and professional and technical 
     societies.
       (6) Implementation.--The Secretary of Transportation shall 
     have primary responsibility for ensuring the 5-year plan 
     provided for in paragraph (5) is implemented as intended. In 
     carrying out the research, development, and demonstration 
     activities under this paragraph, the Secretary of 
     Transportation and the Secretary of Energy may use, to the 
     extent authorized under applicable provisions of law, 
     contracts, cooperative agreements, cooperative research and 
     development agreements under the Stevenson-Wydler Technology 
     Innovation Act of 1980 (15 U.S.C. 3701 et seq.), grants, 
     joint ventures, other transactions, and any other form of

[[Page 539]]

     agreement available to the Secretary consistent with the 
     recommendations of the Advisory Committee.
       (7) Reports to congress.--The Secretary of Transportation 
     shall report to the Congress annually as to the status and 
     results to date of the implementation of the research and 
     development program plan. The report shall include the 
     activities of the Departments of Transportation and Energy, 
     the national laboratories, universities, and any other 
     research organizations, including industry research 
     organizations.

     SEC. 12. PIPELINE INTEGRITY TECHNICAL ADVISORY COMMITTEE.

       (a) Establishment.--The Secretary of Transportation shall 
     enter into appropriate arrangements with the National Academy 
     of Sciences to establish and manage the Pipeline Integrity 
     Technical Advisory Committee for the purpose of advising the 
     Secretary of Transportation and the Secretary of Energy on 
     the development and implementation of the 5-year research, 
     development, and demonstration program plan under section 
     11(b)(5). The Advisory Committee shall have an ongoing role 
     in evaluating the progress and results of the research, 
     development, and demonstration carried out under that 
     section.
       (b) Membership.--The National Academy of Sciences shall 
     appoint the members of the Pipeline Integrity Technical 
     Advisory Committee after consultation with the Secretary of 
     Transportation and the Secretary of Energy. Members appointed 
     to the Advisory Committee should have the necessary 
     qualifications to provide technical contributions to the 
     purposes of the Advisory Committee.

     SEC. 13. AUTHORIZATION OF APPROPRIATIONS.

       (a) Gas and Hazardous Liquids.--Section 60125(a) is amended 
     to read as follows:
       ``(a) Gas and Hazardous Liquid.--To carry out this chapter 
     and other pipeline-related damage prevention activities of 
     this title (except for section 60107), there are authorized 
     to be appropriated to the Department of Transportation--
       ``(1) $26,000,000 for fiscal year 2002, of which 
     $20,000,000 is to be derived from user fees for fiscal year 
     2002 collected under section 60301 of this title; and
       ``(2) $30,000,000 for each of the fiscal years 2003 and 
     2004 of which $23,000,000 is to be derived from user fees for 
     fiscal year 2003 and fiscal year 2004 collected under section 
     60301 of this title.''.
       (b) Grants to States.--Section 60125(c) is amended to read 
     as follows:
       ``(c) State Grants.--Not more than the following amounts 
     may be appropriated to the Secretary to carry out section 
     60107--
       ``(1) $17,000,000 for fiscal year 2002, of which 
     $15,000,000 is to be derived from user fees for fiscal year 
     2002 collected under section 60301 of this title; and
       ``(2) $20,000,000 for the fiscal years 2003 and 2004 of 
     which $18,000,000 is to be derived from user fees for fiscal 
     year 2003 and fiscal year 2004 collected under section 60301 
     of this title.''.
       (c) Oil Spills.--Sections 60525 is amended by redesignating 
     subsections (d), (e), and (f) as subsections (e), (f), (g) 
     and inserting after subsection (c) the following:
       ``(d) Oil Spill Liability Trust Fund.--Of the amounts 
     available in the Oil Spill Liability Trust Fund, $8,000,000 
     shall be transferred to carry out programs authorized in this 
     Act for fiscal year 2002, fiscal year 2003, and fiscal year 
     2004.''.
       (d) Pipeline Integrity Program.--(1) There are authorized 
     to be appropriated to the Secretary of Transportation for 
     carrying out sections 11(b) and 12 of this Act $3,000,000, to 
     be derived from user fees under section 60125 of title 49, 
     United States Code, for each of the fiscal years 2002 through 
     2006.
       (2) Of the amounts available in the Oil Spill Liability 
     Trust Fund established by section 9509 of the Internal 
     Revenue Code of 1986 (26 U.S.C. 9509), $3,000,000 shall be 
     transferred to the Secretary of Transportation to carry out 
     programs for detection, prevention and mitigation of oil 
     spills under sections 11(b) and 12 of this Act for each of 
     the fiscal years 2002 through 2006.
       (3) There are authorized to be appropriated to the 
     Secretary of Energy for carrying out sections 11(b) and 12 of 
     this Act such sums as may be necessary for each of the fiscal 
     years 2002 through 2006.

     SEC. 14. OPERATOR ASSISTANCE IN INVESTIGATIONS.

       (a) In General.--If the Department of Transportation or the 
     National Transportation Safety Board investigate an accident, 
     the operator involved shall make available to the 
     representative of the Department or the Board all records and 
     information that in any way pertain to the accident 
     (including integrity management plans and test results), and 
     shall afford all reasonable assistance in the investigation 
     of the accident.
       (b) Corrective Action Orders.--Section 60112(d) is 
     amended--
       (1) by inserting ``(1)'' after ``Corrective Action 
     Orders.--''; and
       (2) by adding at the end the following:
       ``(2) If, in the case of a corrective action order issued 
     following an accident, the Secretary determines that the 
     actions of an employee carrying out an activity regulated 
     under this chapter, including duties under section 60102(a), 
     may have contributed substantially to the cause of the 
     accident, the Secretary shall direct the operator to relieve 
     the employee from performing those activities, reassign the 
     employee, or place the employee on leave until--
       ``(A) the Secretary determines that the employee's 
     performance of duty in carrying out the activity did not 
     contribute substantially to the cause of the accident; or
       ``(B) the Secretary determines the employee has been re-
     qualified or re-trained as provided for in section 4 of the 
     Pipeline Safety Improvement Act of 2001 and can safely 
     perform those activities.
       ``(3) Disciplinary action taken by an operator under 
     paragraph (2) shall be in accordance with the terms and 
     conditions of any applicable collective bargaining agreement 
     to the extent it is not inconsistent with the requirements of 
     this section.''.

     SEC. 15. PROTECTION OF EMPLOYEES PROVIDING PIPELINE SAFETY 
                   INFORMATION.

       (a) In General.--Chapter 601 is amended by adding at the 
     end the following:

     ``Sec. 60129. Protection of employees providing pipeline 
       safety information

       ``(a) Discrimination Against Pipeline Employees.--No 
     pipeline operator or contractor or subcontractor of a 
     pipeline may discharge an employee or otherwise discriminate 
     against an employee with respect to compensation, terms, 
     conditions, or privileges of employment because the employee 
     (or any person acting pursuant to a request of the 
     employee)--
       ``(1) provided, caused to be provided, or is about to 
     provide (with any knowledge of the employer) or cause to be 
     provided to the employer or Federal Government information 
     relating to any violation or alleged violation of any order, 
     regulation, or standard of the Research and Special Programs 
     Administration or any other provision of Federal law relating 
     to pipeline safety under this chapter or any other law of the 
     United States;
       ``(2) has filed, caused to be filed, or is about to file 
     (with any knowledge of the employer) or cause to be filed a 
     proceeding relating to any violation or alleged violation of 
     any order, regulation, or standard of the Administration or 
     any other provision of Federal law relating to pipeline 
     safety under this chapter or any other law of the United 
     States;
       ``(3) testified or is about to testify in such a 
     proceeding; or
       ``(4) assisted or participated or is about to assist or 
     participate in such a proceeding.
       ``(b) Department of Labor Complaint Procedure.--
       ``(1) Filing and notification.--A person who believes that 
     he or she has been discharged or otherwise discriminated 
     against by any person in violation of subsection (a) may, not 
     later than 90 days after the date on which such violation 
     occurs, file (or have any person file on his or her behalf) a 
     complaint with the Secretary of Labor alleging such discharge 
     or discrimination. Upon receipt of such a complaint, the 
     Secretary of Labor shall notify, in writing, the person named 
     in the complaint and the Administrator of the Research and 
     Special Programs Administration of the filing of the 
     complaint, of the allegations contained in the complaint, of 
     the substance of evidence supporting the complaint, and of 
     the opportunities that will be afforded to such person under 
     paragraph (2).
       ``(2) Investigation; preliminary order.--
       ``(A) In general.--Not later than 60 days after the date of 
     receipt of a complaint filed under paragraph (1) and after 
     affording the person named in the complaint an opportunity to 
     submit to the Secretary of Labor a written response to the 
     complaint and an opportunity to meet with a representative of 
     the Secretary to present statements from witnesses, the 
     Secretary of Labor shall conduct an investigation and 
     determine whether there is reasonable cause to believe that 
     the complaint has merit and notify in writing the complainant 
     and the person alleged to have committed a violation of 
     subsection (a) of the Secretary's findings. If the Secretary 
     of Labor concludes that there is reasonable cause to believe 
     that a violation of subsection (a) has occurred, the 
     Secretary shall accompany the Secretary's findings with a 
     preliminary order providing the relief prescribed by 
     paragraph (3)(B). Not later than 30 days after the date of 
     notification of findings under this paragraph, either the 
     person alleged to have committed the violation or the 
     complainant may file objections to the findings or 
     preliminary order, or both, and request a hearing on the 
     record. The filing of such objections shall not operate to 
     stay any reinstatement remedy contained in the preliminary 
     order. Such hearings shall be conducted expeditiously. If a 
     hearing is not requested in such 30-day period, the 
     preliminary order shall be deemed a final order that is not 
     subject to judicial review.
       ``(B) Requirements.--
       ``(i) Required showing by complainant.--The Secretary of 
     Labor shall dismiss a complaint filed under this subsection 
     and shall not conduct an investigation otherwise required 
     under subparagraph (A) unless the complainant makes a prima 
     facie showing that any behavior described in paragraphs (1) 
     through (4) of subsection (a) was a contributing factor in 
     the unfavorable personnel action alleged in the complaint.
       ``(ii) Showing by employer.--Notwithstanding a finding by 
     the Secretary that the

[[Page 540]]

     complainant has made the showing required under clause (i), 
     no investigation otherwise required under subparagraph (A) 
     shall be conducted if the employer demonstrates, by clear and 
     convincing evidence, that the employer would have taken the 
     same unfavorable personnel action in the absence of that 
     behavior.
       ``(iii) Criteria for determination by Secretary.--The 
     Secretary may determine that a violation of subsection (a) 
     has occurred only if the complainant demonstrates that any 
     behavior described in paragraphs (1) through (4) of 
     subsection (a) was a contributing factor in the unfavorable 
     personnel action alleged in the complaint.
       ``(iv) Prohibition.--Relief may not be ordered under 
     subparagraph (A) if the employer demonstrates by clear and 
     convincing evidence that the employer would have taken the 
     same unfavorable personnel action in the absence of that 
     behavior.
       ``(3) Final order.--
       ``(A) Deadline for issuance; settlement agreements.--Not 
     later than 120 days after the date of conclusion of a hearing 
     under paragraph (2), the Secretary of Labor shall issue a 
     final order providing the relief prescribed by this paragraph 
     or denying the complaint. At any time before issuance of a 
     final order, a proceeding under this subsection may be 
     terminated on the basis of a settlement agreement entered 
     into by the Secretary of Labor, the complainant, and the 
     person alleged to have committed the violation.
       ``(B) Remedy.--If, in response to a complaint filed under 
     paragraph (1), the Secretary of Labor determines that a 
     violation of subsection (a) has occurred, the Secretary of 
     Labor shall order the person who committed such violation 
     to--
       ``(i) take affirmative action to abate the violation;
       ``(ii) reinstate the complainant to his or her former 
     position together with the compensation (including back pay) 
     and restore the terms, conditions, and privileges associated 
     with his or her employment; and
       ``(iii) provide compensatory damages to the complainant.

     If such an order is issued under this paragraph, the 
     Secretary of Labor, at the request of the complainant, shall 
     assess against the person whom the order is issued a sum 
     equal to the aggregate amount of all costs and expenses 
     (including attorney's and expert witness fees) reasonably 
     incurred, as determined by the Secretary of Labor, by the 
     complainant for, or in connection with, the bringing the 
     complaint upon which the order was issued.
       ``(C) Frivolous complaints.--If the Secretary of Labor 
     finds that a complaint under paragraph (1) is frivolous or 
     has been brought in bad faith, the Secretary of Labor may 
     award to the prevailing employer a reasonable attorney's fee 
     not exceeding $1,000.
       ``(4) Review.--
       ``(A) Appeal to court of appeals.--Any person adversely 
     affected or aggrieved by an order issued under paragraph (3) 
     may obtain review of the order in the United States Court of 
     Appeals for the circuit in which the violation, with respect 
     to which the order was issued, allegedly occurred or the 
     circuit in which the complainant resided on the date of such 
     violation. The petition for review must be filed not later 
     than 60 days after the date of issuance of the final order of 
     the Secretary of Labor. Review shall conform to chapter 7 of 
     title 5, United States Code. The commencement of proceedings 
     under this subparagraph shall not, unless ordered by the 
     court, operate as a stay of the order.
       ``(B) Limitation on collateral attack.--An order of the 
     Secretary of Labor with respect to which review could have 
     been obtained under subparagraph (A) shall not be subject to 
     judicial review in any criminal or other civil proceeding.
       ``(5) Enforcement of order by secretary of labor.--Whenever 
     any person has failed to comply with an order issued under 
     paragraph (3), the Secretary of Labor may file a civil action 
     in the United States district court for the district in which 
     the violation was found to occur to enforce such order. In 
     actions brought under this paragraph, the district courts 
     shall have jurisdiction to grant all appropriate relief, 
     including, but not to be limited to, injunctive relief and 
     compensatory damages.
       ``(6) Enforcement of order by parties.--
       ``(A) Commencement of action.--A person on whose behalf an 
     order was issued under paragraph (3) may commence a civil 
     action against the person to whom such order was issued to 
     require compliance with such order. The appropriate United 
     States district court shall have jurisdiction, without regard 
     to the amount in controversy or the citizenship of the 
     parties, to enforce such order.
       ``(B) Attorney fees.--The court, in issuing any final order 
     under this paragraph, may award costs of litigation 
     (including reasonable attorney and expert witness fees) to 
     any party whenever the court determines such award costs is 
     appropriate.
       ``(c) Mandamus.--Any nondiscretionary duty imposed by this 
     section shall be enforceable in a mandamus proceeding brought 
     under section 1361 of title 28, United States Code.
       ``(d) Nonapplicability To Deliberate Violations.--
     Subsection (a) shall not apply with respect to an employee of 
     a pipeline, contractor or subcontractor who, acting without 
     direction from the pipeline contractor or subcontractor (or 
     such person's agent), deliberately causes a violation of any 
     requirement relating to pipeline safety under this chapter or 
     any other law of the United States.
       ``(e) Contractor Defined.--In this section, the term 
     `contractor' means a company that performs safety-sensitive 
     functions by contract for a pipeline.''.
       (b) Civil Penalty.--Section 60122(a) is amended by adding 
     at the end the following:
       ``(3) A person violating section 60129, or an order issued 
     thereunder, is liable to the Government for a civil penalty 
     of not more than $1,000 for each violation. The penalties 
     provided by paragraph (1) do not apply to a violation of 
     section 60129 or an order issued thereunder.''.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     601 is amended by adding at the end the following:

``60129. Protection of employees providing pipeline safety 
              information.''.

     SEC. 16. STATE PIPELINE SAFETY ADVISORY COMMITTEES.

       Within 90 days after receiving recommendations for 
     improvements to pipeline safety from an advisory committee 
     appointed by the Governor of any State, the Secretary of 
     Transportation shall respond in writing to the committee 
     setting forth what action, if any, the Secretary will take on 
     those recommendations and the Secretary's reasons for acting 
     or not acting upon any of the recommendations.

     SEC. 17. FINES AND PENALTIES.

       The Inspector General of the Department of Transportation 
     shall conduct an analysis of the Department's assessment of 
     fines and penalties on gas transmission and hazardous liquid 
     pipelines, including the cost of corrective actions required 
     by the Department in lieu of fines, and, no later than 6 
     months after the date of enactment of this Act, shall provide 
     a report to the Senate Committee on Commerce, Science, and 
     Transportation and the House Committee on Transportation and 
     Infrastructure on any findings and recommendations for 
     actions by the Secretary or Congress to ensure the fines 
     assessed are an effective deterrent for reducing safety 
     risks.

     SEC. 18. STUDY OF RIGHTS-OF-WAY.

       The Secretary of Transportation is authorized to conduct a 
     study on how best to preserve environmental resources in 
     conjunction with maintaining pipeline rights-of-way. The 
     study shall recognize pipeline operators' regulatory 
     obligations to maintain rights-of-way and to protect public 
     safety.
                                 ______
                                 
      By Mr. JOHNSON (for himself, Mr. Grassley, Mr. Thomas, and Mr. 
        Daschle)
  S. 142. A bill to amend the Packers and Stockyards Act, 1921, to make 
unlawful for a packer to own, feed, or control livestock intended for 
slaughter, to the Committee on Agriculture, Nutrition, and Forestry.


                amending the packers and stockyards act

                                 S. 142

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

                                 S. 142

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

     SECTION 1. PROHIBITION ON PACKERS OWNING, FEEDING, OR 
                   CONTROLLING LIVESTOCK.

       (a) In General.--Section 202 of the Packers and Stockyards 
     Act, 1921 (7 U.S.C. 192), is amended--
       (1) by redesignating subsections (f) and (g) as subsections 
     (g) and (h), respectively;
       (2) by inserting after subsection (e) the following:
       ``(f) Own, feed, or control livestock intended for 
     slaughter (for more than 14 days prior to slaughter and 
     acting through the packer or a person that directly or 
     indirectly controls, or is controlled by or under common 
     control with, the packer), except that this subsection shall 
     not apply to--
       ``(1) a cooperative, if a majority of the ownership 
     interest in the cooperative is held by active cooperative 
     members that--
       ``(A) own, feed, or control livestock; and
       ``(B) provide the livestock to the cooperative for 
     slaughter; or
       ``(2) a packer that is owned or controlled by producers of 
     a type of livestock, if during a calendar year the packer 
     slaughters less than 2 percent of the head of that type of 
     livestock slaughtered in the United States; or''; and
       (3) in subsection (h) (as so redesignated), by striking 
     ``or (e)'' and inserting ``(e), or (f)''.
       (b) Effective Date.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by subsection (a) take effect on the date of enactment 
     of this Act.
       (2) Transition rules.--In the case of a packer that on the 
     date of enactment of this

[[Page 541]]

     Act owns, feeds, or controls livestock intended for slaughter 
     in violation of section 202(f) of the Packers and Stockyards 
     Act, 1921 (as amended by subsection (a)), the amendments made 
     by subsection (a) apply to the packer--
       (A) in the case of a packer of swine, beginning on the date 
     that is 18 months after the date of enactment of this Act; 
     and
       (B) in the case of a packer of any other type of livestock, 
     beginning as soon as practicable, but not later than 180 
     days, after the date of enactment of this Act, as determined 
     by the Secretary of Agriculture.
                                 ______
                                 
      By Mr. GRAMM (for himself, Mr. Schumer, Mr. Hagel, Mr. Enzi, Mr. 
        Bennett, Mr. Bunning, Mr. Bond, Mr. Torricelli, Mr. Allard, and 
        Mr. Crapo):
  S. 143. A bill to amend the Securities Act of 1933 and the Securities 
Exchange Act of 1934, to reduce securities fees in excess of those 
requires to fund the operations of the Securities and Exchange 
Commission, to adjust compensation provisions for employees of the 
Commission, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.


               competitive market supervision act of 2001

  Mr. GRAMM. Mr. President, today I am joined by Senator Schumer, 
together with Senators Hagel, Enzi, Bennett, Bunning, Bond, Torricelli, 
Allard, and Crapo in introducing the Competitive Market Supervision Act 
of 2001. This important legislation will reduce the excess fees 
collected by the Securities and Exchange Commission (SEC). At the same 
time, the legislation will guarantee that the SEC is fully funded by 
fee collections, allowing fee adjustments to meet appropriated amounts. 
This legislation, moreover, will level unaffected the funds available 
for appropriations purposes by walling off the offsetting fee 
collections that are expected under current law.
  Under current budget estimates, this legislation will result in a 
reduction of fee collections by more than $1 billion in the first year 
and by about $8 billion over the next 5 years.
  A second key element of the bill is that it will extend to the SEC 
the same salary authority for its employees as is exercised by the 
Federal banking agencies.
  A similar bill, S. 2107, which included the identical provisions of 
the bill I am introducing today, was approved by the Senate Banking, 
Housing, and Urban Affairs Committee last year.


                   reduction of securities user fees

  The original objective of the user fees collected by the Commission 
was to provide a funding source for the agency's operations. However, 
increases in stock market volume and valuation have spawned revenues 
that far surpass what is needed to operate the agency. In fiscal year 
2000, to fund a budget of $375 million, the SEC collected $2.27 
billion. According to the most recent Congressional Budget Office (CBO) 
projections, the savings to investors and issuers from this legislation 
will be approximately $8 billion over 5 years, and nearly $14 billion 
over ten years, without reducing funds available for the SEC or for 
necessary appropriations.
  Rather than user fees, these revenues have become taxes on savings 
and investment, taxes that lower the returns of every investor who buys 
stock, owns a mutual fund, or plans to use Individual Retirement 
Accounts, 401(k) plans, or pensions to fund retirement. Furthermore, 
excess Section 6(b) fees are particularly harmful since these taxes are 
imposed at the beginning of the investment cycle, subtracting from the 
economy monies that could be leveraged into several times their value 
to finance efforts to create jobs, develop new products, and build 
America.
  Section 2 of the bill amends Section 6(b) of the Securities Act of 
1933 to lower registration fee rates. In addition, this section 
eliminates the general revenue portion of the registration fee. The 
offsetting collection rate is set at $67 per $1 million of securities 
registered for FY 2002-06, and at $33 per $1 million for FY 2007 and 
thereafter. Section 3 reduces merger and tender fee rates in Section 
13(e)(3) and Section 14(g) of the Securities Exchange Act of 1934 from 
one fiftieth percent under current law to $67 per $1 million of 
securities involved for the period FY 2002-06, and reduces rates 
further to $33 per $1 million for FY 2007 and thereafter, and all fees 
are also reclassified from general revenues to offsetting collections. 
It is important to harmonize the fee registration, and merger and 
tender fee rates so as to provide no distortions or inject any 
unintended incentives into the managerial decision as to when a merger 
should occur.
  Under Section 4, all transactions included in Section 31 of the 
Securities Exchange Act of 1934 are consolidated, with the same fee 
rate applied to each as an offsetting collection. Transaction fees in 
any particular fiscal year will be set in appropriations acts at a rate 
estimated to collect the target dollar amount set in Section 4 for that 
year. The target dollar amount is calculated to approximate the amount 
of transaction fees required so that, when combined with anticipated 
registration and merger/tender fees, total offsetting collections will 
approximately equal the offsetting collections anticipated under 
current law. If the most recent projections prove accurate, this will 
reduce transaction fee rates by as much as two-thirds.
  I would note that the fee targets established under Section 4 are 
based upon the most recent budget estimates available. It is my 
intention to adjust those targets prior to Committee action on the bill 
as new budget estimates become available in the next few weeks.


                authority of sec to adjust to fee rates

  Given the difficulty in predicting fee revenues, it is also important 
to provide a framework that ensures full funding for the SEC. 
Therefore, Section 5 of this legislation provides the Commission with 
the authority to adjust fee rates to ensure that the agency is fully 
funded in the event that reductions in market valuations or volume 
produce revenues below the legislated targets. In addition, Section 5 
requires the agency to lower fee rates when fees are projected to bring 
in revenues that are in excess of the cap on fee collections laid out 
in the bill. To provide a safeguard against misuse of the authority 
granted in Section 5, the legislation requires the agency to report to 
Congress before it exercises any authority to adjust fees.


                         sec pay comparability

  Section 6 of the bill amends the Securities Exchange Act of 1934 to 
extend to the SEC the same authority provided to the federal bank 
regulators to adjust base rates of compensation for all of its 
employees. Under existing law, the Commission may do this only for its 
economists. The provisions allow parity among the Commission and 
Federal banking agency compensation programs. This change is 
particularly timely since under the terms of the Gramm-Leach-Bliley 
Act, in many institutions, examiners from the SEC will be working along 
side examiners from the federal banking regulators. Without this pay 
comparability, we could witness a drain of talent from the SEC toward 
the other examiners. An amendment also is made to the Federal Deposit 
Insurance Act to bring the SEC within the consultation and information-
sharing requirements of other agencies mentioned at 12 U.S.C. 1833b 
with respect to rates of employee compensation. A further technical 
amendment to section 1833b deletes references to entities that have 
been abolished.
  The legislation assures that reductions, if any, in the base pay of a 
Commission employee represented by a labor organization with exclusive 
recognition in accordance with Chapter 71 of Title 5 of the United 
States Code, result from negotiations between such organization and 
Commission management, rather than by reason of the enactment of this 
amendment.
  Mr. President, I look forward to early and favorable consideration of 
the Competitive Market Supervision Act of 2001. I ask that a summary of 
the provisions of the bill and bill text be included in the Record.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:

                                 S. 143

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

[[Page 542]]



     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Competitive Market Supervision Act of 2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Reduction in registration fee rates; elimination of general 
              revenue component.
Sec. 3. Reduction in merger and tender fee rates; reclassification as 
              offsetting collections.
Sec. 4. Reduction in transaction fees; elimination of general revenue 
              component.
Sec. 5. Adjustments to fee rates.
Sec. 6. Comparability provisions.
Sec. 7. Effective date.

     SEC. 2. REDUCTION IN REGISTRATION FEE RATES; ELIMINATION OF 
                   GENERAL REVENUE COMPONENT.

       Section 6(b) of the Securities Act of 1933 (15 U.S.C. 
     77f(b)) is amended--
       (1) by striking paragraph (2) and inserting the following:
       ``(2) Fee payment required.--At the time of filing a 
     registration statement, the applicant shall pay to the 
     Commission a fee that shall be equal to the amount determined 
     under the rate established by paragraph (3). The Commission 
     shall publish in the Federal Register notices of the fee rate 
     applicable under this section for each fiscal year.'';
       (2) by striking paragraph (3);
       (3) by redesignating paragraphs (4) and (5) as paragraphs 
     (3) and (4), respectively;
       (4) in paragraph (3), as redesignated--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), the rate determined under this paragraph is a rate 
     equal to the following amount per $1,000,000 of the maximum 
     aggregate price at which the securities are proposed to be 
     offered:
       ``(i) $67 for each of fiscal years 2002 through 2006.
       ``(ii) $33 for fiscal year 2007 and each fiscal year 
     thereafter.''; and
       (B) in subparagraph (B), by striking ``this paragraph (4)'' 
     and inserting ``this paragraph''; and
       (5) by striking paragraph (4), as redesignated, and 
     inserting the following:
       ``(4) Pro rata application of rate.--The rate required by 
     this subsection shall be applied pro rata to amounts and 
     balances equal to or less than $1,000,000.''.

     SEC. 3. REDUCTION IN MERGER AND TENDER FEE RATES; 
                   RECLASSIFICATION AS OFFSETTING COLLECTIONS.

       (a) Section 13.--Section 13(e)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78m(e)(3)) is amended to read 
     as follows:
       ``(3) Fees.--
       ``(A) In general.--At the time of the filing of any 
     statement that the Commission may require by rule pursuant to 
     paragraph (1), the person making the filing shall pay to the 
     Commission a fee equal to--
       ``(i) $67 for each $1,000,000 of the value of the 
     securities proposed to be purchased, for each of fiscal years 
     2002 through 2006; and
       ``(ii) $33 for each $1,000,000 of the value of securities 
     proposed to be purchased, for fiscal year 2007 and each 
     fiscal year thereafter.
       ``(B) Reduction.--The fee required by this paragraph shall 
     be reduced with respect to securities in an amount equal to 
     any fee paid with respect to any securities issued in 
     connection with the proposed transaction under section 6(b) 
     of the Securities Act of 1933, or the fee paid under that 
     section shall be reduced in an amount equal to the fee paid 
     to the Commission in connection with such transaction under 
     this paragraph.
       ``(C) Limitation; deposit of fees.--
       ``(i) Limitation.--Except as provided in subparagraph (D), 
     no amounts shall be collected pursuant to this paragraph for 
     any fiscal year, except to the extent provided in advance in 
     appropriations Acts.
       ``(ii) Deposit of fees.--Fees collected during any fiscal 
     year pursuant to this paragraph shall be deposited and 
     credited as offsetting collections in accordance with 
     appropriations Acts.
       ``(D) Lapse of appropriations.--If, on the first day of a 
     fiscal year, a regular appropriation to the Commission has 
     not been enacted for that fiscal year, the Commission shall 
     continue to collect fees (as offsetting collections) under 
     this paragraph at the rate in effect during the preceding 
     fiscal year, until such a regular appropriation is enacted.
       ``(E) Pro rata application of rate.--The rate required by 
     this paragraph shall be applied pro rata to amounts and 
     balances equal to or less than $1,000,000.''.
       (b) Section 14.--
       (1) Preliminary proxy solicitations.--Section 14(g)(1) of 
     the Securities Exchange Act of 1934 (15 U.S.C. 78n(g)(1)) is 
     amended--
       (A) in subparagraph (A), by striking ``Commission the 
     following fees'' and all that follows through the end of the 
     subparagraph and inserting ``Commission--
       ``(i) for preliminary proxy solicitation material involving 
     an acquisition, merger, or consolidation, if there is a 
     proposed payment of each or transfer of securities or 
     property to shareholders, a fee equal to--

       ``(I) $67 for each $1,000,000 of such proposed payment, or 
     of the value of such securities or other property proposed to 
     be transferred, for each of fiscal years 2002 through 2006; 
     and
       ``(II) $33 for each $1,000,000 of such proposed payment, or 
     of the value of such securities or other property proposed to 
     be transferred, for fiscal year 2007 and each fiscal year 
     thereafter; and

       ``(ii) for preliminary proxy solicitation material 
     involving a proposed sale or other disposition of 
     substantially all of the assets of a company, a fee equal 
     to--

       ``(I) $67 for each $1,000,000 of the cash or of the value 
     of any securities or other property proposed to be received 
     upon such sale or disposition, for each of fiscal years 2002 
     through 2006; and
       ``(II) $33 for each $1,000,000 of the cash or of the value 
     of any securities or other property proposed to be received 
     upon such sale or disposition, for fiscal year 2007 and each 
     fiscal year thereafter.'';

       (B) in subparagraph (B), by inserting ``Reduction.--'' 
     before ``The fee''; and
       (C) by adding at the end the following:
       ``(C) Limitation; deposit of fees.--
       ``(i) Limitation.--Except as provided in subparagraph (D), 
     no amounts shall be collected pursuant to this paragraph for 
     any fiscal year, except to the extent provided in advance in 
     appropriations Acts.
       ``(ii) Deposit of fees.--Fees collected during any fiscal 
     year pursuant to this paragraph shall be deposited and 
     credited as offsetting collections in accordance with 
     appropriations Acts.
       ``(D) Lapse of appropriations.--If, on the first day of a 
     fiscal year, a regular appropriation to the Commission has 
     not been enacted for that fiscal year, the Commission shall 
     continue to collect fees (as offsetting collections) under 
     this paragraph at the rate in effect during the preceding 
     fiscal year, until such a regular appropriation is enacted.
       ``(E) Pro rata application of rate.--The rate required by 
     this paragraph shall be applied pro rata to amounts and 
     balances equal to or less than $1,000,000.''.
       (2) Other filings.--Section 14(g)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78n(g)(3)) is amended--
       (A) by striking ``At the time'' and inserting the 
     following: ``Other filings.--
       ``(A) Fee rate.--At the time'';
       (B) by striking ``the Commission a fee of'' and all that 
     follows through ``The fee'' and inserting the following: 
     ``the Commission a fee equal to--
       ``(i) $67 for each $1,000,000 of the aggregate amount of 
     cash or of the value of securities or other property proposed 
     to be offered, for each of fiscal years 2002 through 2006; 
     and
       ``(ii) $33 for each $1,000,000 of the aggregate amount of 
     cash or of the value of securities or other property proposed 
     to be offered, for fiscal year 2007 and each fiscal year 
     thereafter.
       ``(B) Reduction.--The fee required under subparagraph 
     (A)''; and
       (C) by adding at the end the following:
       ``(C) Limitation; deposit of fees.--
       ``(i) Limitation.--Except as provided in subparagraph (D), 
     no amounts shall be collected pursuant to this paragraph for 
     any fiscal year, except to the extent provided in advance in 
     appropriations Acts.
       ``(ii) Deposit of fees.--Fees collected during any fiscal 
     year pursuant to this paragraph shall be deposited and 
     credited as offsetting collections in accordance with 
     appropriations Acts.
       ``(D) Lapse of appropriations.--If, on the first day of a 
     fiscal year, a regular appropriation to the Commission has 
     not been enacted for that fiscal year, the Commission shall 
     continue to collect fees (as offsetting collections) under 
     this paragraph at the rate in effect during the preceding 
     fiscal year, until such a regular appropriation is enacted.
       ``(E) Pro rata application of rate.--The rate required by 
     this paragraph shall be applied pro rata to amounts and 
     balances equal to or less than $1,000,000.''.

     SEC. 4. REDUCTION IN TRANSACTION FEES; ELIMINATION OF GENERAL 
                   REVENUE COMPONENT.

       Section 31 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78ee) is amended--
       (1) by striking subsections (b) through (d) and inserting 
     the following:
       ``(b) Transaction Fees.--
       ``(1) In general.--Each national securities exchange and 
     national securities association shall pay to the Commission a 
     fee at a rate equal to the transaction offsetting collection 
     rate described in paragraph (2) of the aggregate dollar 
     amount of sales of securities (other than bonds, debentures, 
     and other evidences of indebtedness)--
       ``(A) transacted on such national securities exchange;
       ``(B) transacted by or through any member of such 
     association otherwise than on a national securities exchange 
     of securities registered on such an exchange; and
       ``(C) transacted by or through any member of such 
     association otherwise than on a national securities exchange 
     of securities that are subject to prompt last sale reporting 
     pursuant to the rules of the Commission or a registered 
     national securities association, excluding any sales for 
     which a fee is paid under subparagraph (B).
       ``(2) Fee rate.--
       ``(A) Transaction offsetting collection rate.--For purposes 
     of this subsection, the `transaction offsetting collection 
     rate' for a fiscal year--

[[Page 543]]

       ``(i) is the uniform rate required to reach the transaction 
     fee cap for that fiscal year; and
       ``(ii) shall become effective on the later of the beginning 
     of that fiscal year or the date of enactment of 
     appropriations legislation setting such rate.
       ``(B) Transaction fee cap.--For purposes of this paragraph, 
     the `transaction fee cap' shall be equal to--
       ``(i) $497,000,000 for fiscal year 2002;
       ``(ii) $607,000,000 for fiscal year 2003;
       ``(iii) $706,000,000 for fiscal year 2004;
       ``(iv) $896,000,000 for fiscal year 2005;
       ``(v) $1,094,000,000 for fiscal year 2006;
       ``(vi) $554,000,000 for fiscal year 2007;
       ``(vii) $580,000,000 for fiscal year 2008;
       ``(viii) $719,000,000 for fiscal year 2009; and
       ``(ix) $884,000,000 for fiscal year 2010 and each fiscal 
     year thereafter.
       ``(c) Limitation; Deposit of Fees.--
       ``(1) Limitation.--Except as provided in subsection (d), no 
     amount may be collected pursuant to subsection (b) for any 
     fiscal year, except to the extent provided in advance in 
     appropriation Acts.
       ``(2) Deposit of fees.--Fees collected during any fiscal 
     year pursuant to this section shall be deposited and credited 
     as offsetting collections in accordance with appropriations 
     Acts.
       ``(d) Lapse of Appropriations.--If, on the first day of a 
     fiscal year, a regular appropriation to the Commission has 
     not been enacted for that fiscal year, the Commission shall 
     continue to collect fees (as offsetting collections) under 
     this section at the rate in effect during the preceding 
     fiscal year (prior to adjustments, if any, under subsections 
     (b) and (c) of section 5 of the Competitive Market 
     Supervision Act), until such a regular appropriation is 
     enacted.'';
       (2) in subsection (e), by striking ``subsections (b), (c), 
     and (d)'' and inserting ``subsection (b)''; and
       (3) in subsection (g), by striking ``rates'' and inserting 
     ``rate''.

     SEC. 5. ADJUSTMENTS TO FEE RATES.

       (a) Estimates of Collections.--
       (1) Fee projections.--The Securities and Exchange 
     Commission (hereafter in this Act referred to as the 
     ``Commission'') shall, 1 month after submission of its 
     initial report under subsection (e)(1) and on a monthly basis 
     thereafter, project the aggregate amount of fees from all 
     sources likely to be collected by the Commission during the 
     current fiscal year.
       (2) Submission of information.--Each national securities 
     exchange and national securities association shall file with 
     the Commission, not later than 10 days after the end of each 
     month--
       (A) an estimate of the fee required to be paid pursuant to 
     section 31 of the Securities Exchange Act of 1934 by such 
     national securities exchange or national securities 
     association for transactions and sales occurring during such 
     month; and
       (B) such other information and documents as the Commission 
     may require, as necessary or appropriate to project the 
     aggregate amount of fees pursuant to paragraph (1).
       (b) Floor for Total Fee Collections.--If, at any time after 
     the end of the first half of the fiscal year, the Commission 
     projects under subsection (a) that the aggregate amount of 
     fees collected by the Commission will, during that fiscal 
     year, fall below an amount equal to the floor for total fee 
     collections, the Commission may by order, subject to 
     subsection (e), increase the fee rate established under 
     section 31 of the Securities Exchange Act of 1934 to the 
     extent necessary to bring estimated collections to an amount 
     equal to the floor for total fee collections. Such increase 
     shall apply only to transactions and sales occurring on or 
     after the effective date specified in such order through 
     August 31 of that fiscal year. Such increase shall not affect 
     the obligation of each national securities exchange and 
     national securities association to pay the Commission the fee 
     required by section 31 of the Securities Exchange Act of 1934 
     at the fee rate in effect prior to the effective date of such 
     order for transactions and sales occurring prior to the 
     effective date of such order. In exercising its authority 
     under this subsection, the Commission shall not be required 
     to comply with the provisions of section 553 of title 5, 
     United States Code.
       (c) Cap on Total Fee Collections.--If, at any time after 
     the end of the first half of the fiscal year, the Commission 
     projects under subsection (a) that the aggregate amount of 
     fees collected by the Commission will exceed the cap on total 
     fee collections by more than 5 percent during any fiscal 
     year, the Commission shall by order, subject to subsection 
     (e), decrease the fee rate or suspend collection of fees 
     under section 31 of the Securities Exchange Act of 1934 to 
     the extent necessary to bring estimated collections to an 
     amount equal to the cap on total fee collections. Such 
     decrease or suspension shall apply only to transactions and 
     sales occurring on or after the effective date specified in 
     such order through August 31 of that fiscal year. Such 
     decrease or suspension shall not affect the obligation of 
     each national securities exchange and national securities 
     association to pay the Commission the fee required by section 
     31 of the Securities Exchange Act of 1934 at the fee rate in 
     effect prior to the effective date of such order for 
     transactions and sales occurring prior to the effective date 
     of such order. In exercising its authority under this 
     subsection, the Commission shall not be required to comply 
     with the provisions of section 553 of title 5, United States 
     Code.
       (d) Definitions.--For purposes of this section--
       (1) the term ``floor for total fee collections'' means the 
     greater of--
       (A) the total amount appropriated to the Commission for 
     fiscal year 2002 (adjusted annually, based on the annual 
     percentage change, if any, in the Consumer Price Index for 
     all urban consumers, as published by the Department of 
     Labor); or
       (B) the amount authorized for the Commission pursuant to 
     section 35 of the Securities Exchange Act of 1934 (15 U.S.C. 
     78kk), if applicable; and
       (2) the term ``cap on total fee collections'' means--
       (A) for fiscal years 2002 through 2010, the baseline amount 
     for aggregate offsetting collections for such fiscal year 
     under section 6(b) of the Securities Act of 1933 and section 
     31 of the Securities Exchange Act of 1934, as projected for 
     such fiscal year by the Congressional Budget Office pursuant 
     to section 257 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 in its most recently published report of 
     its baseline projection before the date of enactment of this 
     Act; and
       (B) for fiscal years 2011 and thereafter, the amount 
     authorized for the Commission pursuant to section 35 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78kk).
       (e) Reports to Congress; Judicial Review; Notice.--
       (1) Initial report.--Not later than 90 days after the date 
     of enactment of this Act, the Commission shall report to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives to explain the methodology used by the 
     Commission to make projections under subsection (a). Not 
     later than 30 days after the beginning of each fiscal year, 
     the Commission may report to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives on 
     revisions to the methodology used by the Commission to make 
     projections under subsection (a) for such fiscal year and 
     subsequent fiscal years.
       (2) Judicial review; reports of intent to act.--The 
     determinations made and the actions taken by the Commission 
     under this subsection shall not be subject to judicial 
     review. Not later than 45 days before taking action under 
     subsection (b) or (c), the Commission shall report to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives on its intent to take such action.
       (3) Notice.--Not later than 30 days before taking action 
     under subsection (b) or (c), the Commission shall notify each 
     national securities exchange and national securities 
     association of its intent to take such action.

     SEC. 6. COMPARABILITY PROVISIONS.

       (a) Securities and Exchange Commission Employees.--
       (1) In general.--Section 4(b) of the Securities Exchange 
     Act of 1934 (15 U.S.C. 78d(b)) is amended--
       (A) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) Appointment and compensation.--
       ``(A) In general.--The Commission may appoint and fix the 
     compensation of such officers, attorneys, economists, 
     examiners, and other employees as may be necessary for 
     carrying out its functions under this Act.
       ``(B) Rates of pay.--Rates of basic pay for all employees 
     of the Commission may be set and adjusted by the Commission 
     without regard to the provisions of chapter 51 or subchapter 
     III of chapter 53 of title 5, United States Code.
       ``(C) Comparability.--The Commission may provide additional 
     compensation and benefits to employees of the Commission if 
     the same type of compensation or benefits are then being 
     provided by any agency referred to under section 1206(a) of 
     the Financial Institutions Reform, Recovery, and Enforcement 
     Act of 1989 (12 U.S.C. 1833b) or, if not then being provided, 
     could be provided by such an agency under applicable 
     provisions of law, rule, or regulation. In setting and 
     adjusting the total amount of compensation and benefits for 
     employees, the Commission shall consult with, and seek to 
     maintain comparability with, the agencies referred to under 
     section 1206(a) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b).''; 
     and
       (B) by redesignating paragraph (3) as paragraph (2).
       (2) Employees represented by labor organizations.--To the 
     extent that any employee of the Commission is represented by 
     a labor organization with exclusive recognition in accordance 
     with chapter 71 of title 5, United States Code, no reduction 
     in base pay of such employee shall be made by reason of 
     enactment of this subsection.
       (b) Reporting on Information by the Commission.--Section 
     1206 of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 1833b) is amended--
       (1) by inserting ``(a) In General.--'' before ``The Federal 
     Deposit'';

[[Page 544]]

       (2) by striking ``the Thrift Depositor Protection Oversight 
     Board of the Resolution Trust Corporation''; and
       (3) by adding at the end the following:
       ``(b) In establishing and adjusting schedules of 
     compensation and benefits for employees of the Securities and 
     Exchange Commission under applicable provisions of law, the 
     Commission shall inform the heads of the agencies referred to 
     under subsection (a) and Congress of such compensation and 
     benefits and shall seek to maintain comparability with such 
     agencies regarding compensation and benefits.''.
       (c) Technical Amendments.--
       (1) Section 3132(a)(1) of title 5, United States Code, is 
     amended--
       (A) in subparagraph (C), by striking ``or'' after the 
     semicolon;
       (B) in subparagraph (D), by inserting ``or'' after the 
     semicolon; and
       (C) by adding at the end the following:
       ``(E) the Securities and Exchange Commission.''.
       (2) Section 5373(a) of title 5, United States Code, is 
     amended--
       (A) in paragraph (2), by striking ``or'' after the 
     semicolon;
       (B) in paragraph (3), by striking the period and inserting 
     ``; or''; and
       (C) by adding at the end the following:
       ``(4) section 4(b) of the Securities Exchange Act of 
     1934.''.

     SEC. 7. EFFECTIVE DATE.

       (a) In General.--Subject to subsection (b), this Act and 
     the amendments made by this Act shall become effective on 
     October 1, 2001.
       (b) Exceptions.--The authorities provided by section 
     13(e)(3)(D), section 14(g)(1)(D), section 14(g)(3)(D), and 
     section 31(d) of the Securities Exchange Act of 1934, as so 
     designated by this Act, shall not apply until October 1, 
     2002.
                                  ____


 Section-by-Section Analysis of the Competitive Market Supervision Act 
                                of 2001

     Section 1. Short title
       Designates this title as the ``Competitive Market 
     Supervision Act of 2001.''
     Section 2. Reduction in registration fees; elimination of 
         general revenue component
       Registration fee rates in Section 6(b) of the Securities 
     Act of 1933 (15 U.S.C. 77f(b)) are reduced. The general 
     revenue portion of the registration fee is eliminated. The 
     offsetting collection rate is set at $67 per $1 million of 
     securities registered for FY 2002-2006, and at $33 per $1 
     million for FY 2007 and thereafter.
     Section 3. Reduction in merger and tender fees; 
         reclassification as offsetting collections
       Section 3 reduces merger and tender fee rates in Section 
     13(e)(3) and Section 14(g) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78m(e)(3) and 78n(g), respectively) from one 
     fiftieth percent under current law, to $67 per $1 million of 
     securities involved for the period FY 2002-2006, and reduces 
     rates further to $33 per $1 million for FY 2007 and 
     thereafter. All fees are reclassified from general revenues 
     to offsetting collections.
     Section 4. Reduction in transaction fees; elimination of 
         general revenue component
       Under this section, all transactions included in Section 31 
     of the Securities Exchange Act of 1934 are consolidated, with 
     the same fee rate applied to each as an offsetting 
     collection. Transaction fees in any particular fiscal year 
     will be set in appropriations acts at a rate estimated to 
     collect the target dollar amount set for that year. The 
     target dollar amount is calculated to appropriate the amount, 
     when combined with anticipated registration and merger/tender 
     fees, that will approximately equal the offsetting 
     collections anticipated to be produced under current law.
     Section 5. Adjustment to fee rates
       The Commission is given authority to increase or decrease 
     transaction fee rates after the first half of the fiscal year 
     if projections show that either the cap or floor for total 
     fee collections will be breached. To provide a safeguard 
     against misuse of the authority granted in Section 5, the 
     legislation requires the agency to report to Congress before 
     it exercises any authority to adjust fees.
     Section 6. Comparability provisions
       Section 6(a) amends Section 4(b) of the Securities Exchange 
     Act of 1934 (15 U.S.C. 78d(b)) to authorize, but not require, 
     the SEC to compensate its employees according to a scale 
     outside the Federal Government's General Schedule (GS) rates. 
     Pursuant to this authority, the SEC may provide additional 
     compensation and benefits to its employees on the same 
     comparable basis as do the agencies referred to under Section 
     1206(a) of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 1833b). Such agencies 
     include the Federal banking agencies, the National Credit 
     Union Administration, the Federal Housing Finance Board, and 
     the Farm Credit Administration. The amendment ensures that 
     reductions, if any, in base pay for an employee of the SEC 
     represented by a labor organization with exclusive 
     recognition in accordance with Chapter 71 of Title 5 of the 
     United States Code, result from negotiations between such 
     organizations and SEC management, as opposed to by reason of 
     the enactment of this amendment.
       In establishing and adjusting schedules of compensation and 
     benefits for its employees, Section 6(b) requires the SEC to 
     inform the heads of the agencies mentioned above and must 
     seek to maintain comparability with such agencies regarding 
     compensation and benefits. A technical change is made to 
     strike from Section 1206(a) the reference to the Thrift 
     Depositor Protection Oversight Board of the Resolution Trust 
     Corporation, which was abolished on December 31, 1995. 
     Section 6(c) provides certain conforming amendments to Title 
     5 of the United States Code to reflect changes made under 
     subsection (a).
     Section 7. Effective date
       In general, the effective date is October 1, 2001. However, 
     certain fee reductions will not become effective until 
     October 1, 2002.
                                 ______
                                 
      By Mr. THURMOND:
  S.J. Res. 1. A joint resolution proposing an amendment to the 
Constitution of the United States relating to voluntary school prayer; 
to the Committee on the Judiciary.
  Mr. THURMOND. Mr. President, today, I am introducing the voluntary 
school prayer constitutional amendment. This bill is identical to S.J. 
Res. 73, which I introduced in the 98th Congress at the request of 
then-President Reagan and have reintroduced every Congress since.
  This proposal has received strong support from both sides of the 
aisle and is of vital importance to our Nation. It would restore the 
right to pray voluntarily in public schools--a right which was freely 
exercised under our Constitution until the 1960's, when the Supreme 
Court ruled to the contrary.
  Also, in 1985, the Supreme Court ruled an Alabama statute 
unconstitutional which authorized teachers in public schools to provide 
``a period of silence . . . for meditation or voluntary prayer'' at the 
beginning of each day. As I stated when that opinion was issued and 
repeat again: the Supreme Court has too broadly interpreted the 
Establishment Clause of the First Amendment and, in doing so, has 
incorrectly infringed on the rights of those children--and their 
parents--who wish to observe a moment of silence for religious or other 
purposes.
  Until the Supreme Court ruled in the Engel and Abington School 
District decisions, the Establishment Clause of the First Amendment was 
generally understood to prohibit the Federal Government from officially 
approving, or holding in special favor, any particular religious faith 
or denomination. In crafting that clause, our Founding Fathers sought 
to prevent what had originally caused many colonial Americans to 
emigrate to this country--an official, State religion. At the same 
time, they sought, through the Free Exercise Clause, to guarantee to 
all Americans the freedom to worship God without government 
interference or restraint. In their wisdom, they recognized that true 
religious liberty precludes the government from both forcing and 
preventing worship.
  As Supreme Court Justice William Douglas once stated: ``We are a 
religious people whose institutions presuppose a Supreme Being.'' 
Nearly every President since George Washington has proclaimed a day of 
public prayer. Moreover, we, as a Nation, continue to recognize the 
Deity in our Pledge of Allegiance by affirming that we are a Nation 
``under God.'' Our currency is inscribed with the motto, ``In God We 
Trust''. In this Body, we open the Senate and begin our workday with 
the comfort and stimulus of voluntary group prayers. I would note that 
this practice has been upheld as constitutional by the Supreme Court.
  It is unreasonable that the opportunity for the same beneficial 
experience is denied to the boys and girls who attend public schools. 
This situation simply does not comport with the intentions of the 
framers of the Constitution and is, in fact, antithetical to the rights 
of our youngest citizens to freely exercise their respective religions. 
It should be changed, without further delay.
  The Congress should swiftly pass this resolution and send it to the 
States for ratification. This amendment to the Constitution would 
clarify that it does not prohibit vocal, voluntary prayer in the public 
school and other public institutions. It emphatically states that no 
person may be required to participate in any prayer. The government 
would be precluded from drafting school prayers. This well-crafted

[[Page 545]]

amendment enjoys the support of an overwhelming number of Americans.
  I strongly urge my colleagues to support prompt consideration and 
approval of this legislation during this Congress.
  I ask unanimous consent that the legislation be printed in the 
Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 1

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled (two-thirds of 
     each House concurring therein), That the following article is 
     proposed as an amendment to the Constitution of the United 
     States, which shall be valid to all intents and purposes as 
     part of the Constitution when ratified by the legislatures of 
     three-fourths of the several States within seven years after 
     the date of its submission by the Congress:

                              ``Article --

       ``Nothing in this Constitution shall be construed to 
     prohibit individual or group prayer in public schools or 
     other public institutions. No person shall be required by the 
     United States or by any State to participate in prayer. 
     Neither the United States nor any State shall compose the 
     words of any prayer to be said in public schools.''.

                          ____________________