[Congressional Record (Bound Edition), Volume 147 (2001), Part 10]
[Senate]
[Pages 14458-14490]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HATCH (for himself, Mr. Schumer, and Mr. DeWine):
  S. 1234. A bill to amend title 18, United States Code, to provide 
that certain sexual crimes against children are predicate crimes for 
the interception of communications, and for other purposes; to the 
Committee on the Judiciary.
  Mr. HATCH. Mr. President, the Internet has dramatically changed the 
lives of the American people. The way in which we work, live, play, and 
learn has been forever changed. The benefits this new technology has 
brought to us are truly innumerable. Unfortunately, however, the 
technology has also created some fearful problems. In particular, the 
Internet is fast becoming an increasingly popular means by which 
criminals pursue their nefarious activities.
  Perhaps no criminal activity is as nefarious as sex crimes directed 
at children. And alarmingly, the Internet has proved to be a boon for 
these sexual predators. Before the Internet, these deranged individuals 
operated in the open, lurking near parks or schools in an effort to 
lure children. Now they are able, with almost absolute anonymity and 
from the security of their homes, to reach our children over the 
Internet.
  The result is frightening. According to State and local law 
enforcement officials, the Internet has brought an explosion in sexual 
predator and child pornography activity. Since 1995, the FBI alone has 
investigated more than 4,900 cases involving persons traveling 
interstate for the purpose of engaging in illicit sexual relationships 
with minors and persons involved with the manufacture, dissemination 
and possession of child pornography.
  According to the Bureau, computers have rapidly become one of the 
most prevalent communications devices with which pedophiles and other 
sexual predators share sexually explicit photographic images of minors 
and identify and recruit children for sexually illicit relationships.
  This fact is not lost on the public. When asked about cyber-crime, a 
majority of Americans pointed to child pornography as their biggest 
concern. The Pew Internet & American Life Report Survey found that 92 
percent of Americans are concerned about child pornography. Americans 
are rightly concerned that the Internet does not become a haven for 
those who would commit these horrific crimes.
  The Anti-Sexual Predator Act of 2001, which I am introducing today, 
provides much-needed tools to investigators tracking sexual predators 
and child pornographers. The legislation will be particularly useful to 
investigators tracking sexual predators.
  Although in many cases much of the initial relationship between these 
sexual predators and their child victims takes place online, the 
predators will ultimately seek to have personal contact with the child. 
Thus, the communications will move first to the telephone, and then to 
face to face meetings. The telephone calls between the perpetrators and 
the victims therefore represent a dangerous step in the luring of the 
child. And the more access the sexual predator is allowed to the child 
victim, the greater the chance that the predator will succeed in 
convincing the child to continue the ``relationship'' and agree to 
personal meetings.
  As the laws stand today, investigators do not have access to the 
Federal wiretap statutes to investigate these predators. Absent this 
authority, law enforcement officers, upon discovery of the on-line 
relationship, are left to attempt to gain information about the 
relationship from an often uncooperative or resentful child who 
believes that he or she is ``in love'' with the perpetrator. Providing 
wiretap authority not only will aid law enforcement's efforts to obtain 
evidence of these crimes, it will also help them stop these crimes 
before the predator makes physical contact with the child.
  The Anti-Sexual Predator Act of 2001 will add three predicate 
offenses to the Federal wiretap statute. This addition will enable law 
enforcement to intercept wire and oral communications relating to child 
pornography materials, the coercion and enticement of individuals to 
travel interstate to engage in sexual activity, the transportation of 
minors for the purpose of engaging in sexual activity.
  To be sure, law enforcement will still need to obtain authority from 
a court in order to obtain a wiretap, and the court will authorize the 
wiretap only if the government meets the strict statutory guidelines 
laid out in Title III. Thus, this legislation does nothing to undermine 
the legitimate expectations of privacy of law-abiding American 
citizens.
  This legislation fills a gap in our arsenal against child 
pornographers and sexual predators. I know we all share this goal, and 
I urge my colleagues to join me in expeditiously acting on this 
important 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. 1234

       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 ``Anti-Sexual Predator Act of 
     2001''.

     SEC. 2. AUTHORIZATION OF INTERCEPTION OF COMMUNICATIONS IN 
                   THE INVESTIGATION OF SEXUAL CRIMES AGAINST 
                   CHILDREN.

       (a) Child Pornography.--Section 2516(1)(c) of title 18, 
     United States Code, is amended by inserting ``section 2252A 
     (relating to material constituting or containing child 
     pornography),'' after ``2252 (sexual exploitation of 
     children),''.
       (b) Transportation for Illegal Sexual Activity.--Section 
     2516(1) of title 18, United States Code, is amended--
       (1) by redesignating paragraph (p), as so redesignated by 
     section 434(2) of the Antiterrorism and Effective Death 
     Penalty Act of 1996 (Public Law 104-132; 110 Stat. 1274), as 
     paragraph (q);
       (2) by striking paragraph (p), as so redesignated by 
     section 201(3) of the Illegal Immigration Reform and 
     Immigrant Responsibility Act of 1996 (division C of Public 
     Law 104-208; 110 Stat. 3009-565); and
       (3) by inserting after paragraph (o) the following:
       ``(p) a violation of section 2422 (relating to coercion and 
     enticement) or section 2423 (relating to transportation of 
     minors) of this title, if, in connection with that violation, 
     the sexual activity for which a person may be charged with a 
     criminal offense would constitute a felony offense under 
     chapter 109A or 110 of this title, if that activity took 
     place within the special maritime and territorial 
     jurisdiction of the United States; or''.
                                 ______
                                 
      By Mr. HATCH:
  S. 1235. A bill to make clerical and other technical amendments to 
title 18, United States Code, and other laws relating to crime and 
criminal procedure; to the Committee on the Judiciary.
  Mr. HATCH. 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. 1235

       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 ``Criminal Law Technical 
     Amendments Act of 2001''.

     SEC. 2. TECHNICAL AMENDMENTS RELATING TO CRIMINAL LAW AND 
                   PROCEDURE.

       (a) Missing and Incorrect Words.--
       (1) Correction of garbled sentence.--Section 510(c) of 
     title 18, United States Code, is amended by striking ``fine 
     of under this title'' and inserting ``fine under this 
     title''.
       (2) Insertion of missing words.--Section 981(d) of title 
     18, United States Code, is amended by striking ``proceeds 
     from the sale of this section'' and inserting ``proceeds from 
     the sale of such property under this section''.
       (3)  Correction of incorrect word.--Sections 1425 through 
     1427, 1541 through 1544 and 1546(a) of title 18, United 
     States Code, are each amended by striking ``to facility'' and 
     inserting ``to facilitate''.
       (4) Correcting erroneous amendatory language on executed 
     amendment.--Effective on the date of the enactment of Public

[[Page 14459]]

     Law 103-322, section 60003(a)(13) of such public law is 
     amended by striking ``$1,000,000 or imprisonment'' and 
     inserting ``$1,000,000 and imprisonment''.
       (5) Insertion of missing word.--Section 3286 of title 18, 
     United States Code, is amended by inserting ``section'' 
     before ``2332b''.
       (6) Correction of reference to short title of law.--That 
     section 2332d(a) of title 18, United States Code, which 
     relates to financial transactions is amended by inserting 
     ``of 1979'' after ``Export Administration Act''.
       (7) Elimination of typo.--Section 1992(b) of title 18, 
     United States Code, is amended by striking ``term or years'' 
     and inserting ``term of years''.
       (8) Spelling correction.--Section 2339A(a) of title 18, 
     United States Code, is amended by striking ``or an escape'' 
     and inserting ``of an escape''.
       (9) Section 3553.--Section 3553(e) of title 18, United 
     States Code, is amended by inserting ``a'' before 
     ``minimum''.
       (10) Misspelling in section 205.--Section 205(d)(1)(B) of 
     title 18, United States Code, is amended by striking 
     ``groups's'' and inserting ``group's''.
       (11) Conforming change and inserting missing word in 
     section 709.--The paragraph in section 709 of title 18, 
     United States Code, that begins with ``A person who'' is 
     amended--
       (A) by striking ``A person who'' and inserting ``Whoever''; 
     and
       (B) by inserting ``or'' after the semicolon at the end.
       (12) Error in language being stricken.--Effective on the 
     date of its enactment, section 726(2) of the Antiterrorism 
     and Effective Death Penalty Act of 1996 (Public Law 104-132) 
     is amended--
       (A) in subparagraphs (C) and (E), by striking ``section'' 
     the first place it appears; and
       (B) in subparagraph (G), by striking ``relating to'' the 
     first place it appears.
       (b) Margins, Punctuation, and Similar Errors.--
       (1) Margin error.--Section 1030(c)(2) of title 18, United 
     States Code, is amended so that the margins of subparagraph 
     (B) and each of its clauses, are moved 2 ems to the left.
       (2) Correcting capitalization in language to be stricken.--
     Effective on the date of its enactment, section 607(g)(2) of 
     the Economic Espionage Act of 1996 is amended by striking 
     ``territory'' and inserting ``Territory''.
       (3) Correcting paragraphing.--The material added to section 
     521(a) of title 18, United States Code, by section 607(q) of 
     the Economic Espionage Act of 1996 is amended to appear as a 
     paragraph indented 2 ems from the left margin.
       (4) Subsection placement correction.--Section 1513 of title 
     18, United States Code, is amended by transferring subsection 
     (d) so that it appears following subsection (c).
       (5) Insertion of parenthetical descriptions.--Section 
     2332b(g)(5)(B)(i) of title 18, United States Code, is 
     amended--
       (A) by inserting ``(relating to certain killings in Federal 
     facilities)'' after ``930(c)'';
       (B) by inserting ``(relating to wrecking trains)'' after 
     ``1992''; and
       (C) by striking ``2332c,''.
       (6) Correction to allow for insertion of new subparagraph 
     and correction of erroneous indentation.--Section 1956(c)(7) 
     of title 18, United States Code, is amended--
       (A) in subparagraph (B)(ii), by moving the margin 2 ems to 
     the right;
       (B) by striking ``or'' at the end of subparagraph (D);
       (C) by striking the period at the end of subparagraph (E) 
     and inserting ``; or''; and
       (D) in subparagraph (F), by striking ``Any'' and inserting 
     ``any''.
       (7) Correction of confusing subdivision designation.--
     Section 1716 of title 18, United States Code, is amended--
       (A) in the first undesignated paragraph, by inserting 
     ``(j)(1)'' before ``Whoever'';
       (B) in the second undesignated paragraph--
       (i) by striking ``not more than $10,000'' and inserting 
     ``under this title''; and
       (ii) by inserting ``(2)'' at the beginning of that 
     paragraph;
       (C) by inserting ``(3)'' at the beginning of the third 
     undesignated paragraph; and
       (D) by redesignating subsection (j) as subsection (k).
       (8) Punctuation correction in section 1091.--Section 
     1091(b)(1) of title 18, United States Code, is amended by 
     striking ``subsection (a)(1),'' and inserting ``subsection 
     (a)(1)''.
       (9) Punctuation correction in section 2311.--Section 2311 
     of title 18, United States Code, is amended by striking the 
     period after ``carcasses thereof'' the second place that term 
     appears and inserting a semicolon.
       (10) Syntax correction.--Section 115(b)(2) of title 18, 
     United States Code, is amended by striking ``, attempted 
     kidnapping, or conspiracy to kidnap of a person'' and 
     inserting ``or attempted kidnapping of, or a conspiracy to 
     kidnap, a person''.
       (11) Correcting capitalization in section 982.--Section 
     982(a)(8) of title 18, United States Code, is amended by 
     striking ``Court'' and inserting ``court''.
       (12) Punctuation corrections in section 1029.--Section 1029 
     of title 18, United States Code, is amended--
       (A) in subsection (c)(1)(A)(ii), by striking ``(9),'' and 
     inserting ``(9)''; and
       (B) in subsection (e), by adding a semicolon at the end of 
     paragraph (8).
       (13) Corrections of connectors and punctuation in section 
     1030.--Section 1030 of title 18, United States Code, is 
     amended--
       (A) by striking ``and'' at the end of subsection (c)(2)(A);
       (B) by inserting ``and'' at the end of subsection 
     (c)(2)(B)(iii);
       (C) by striking ``; and'' at the end of subsection 
     (c)(3)(B) and inserting a period;
       (D) by striking the period at the end of subsection 
     (e)(4)(I) and inserting a semicolon; and
       (E) by striking ``and'' at the end of subsection (e)(7).
       (14) Correction of punctuation in section 1032.--Section 
     1032(1) of title 18, United States Code, is amended by 
     striking ``13,'' and inserting ``13''.
       (15) Correction of punctuation in section 1345.--Section 
     1345(a)(1) of title 18, United States Code, is amended--
       (A) in subparagraph (B), by striking ``, or'' and inserting 
     ``; or''; and
       (B) in subparagraph (C), by striking the period and 
     inserting a semicolon.
       (16) Correction of punctuation in section 3612.--Section 
     3612(f)(2)(B) of title 18, United States Code, is amended by 
     striking ``preceding.'' and inserting ``preceding''.
       (17) Correction of indentation in controlled substances 
     act.--Section 402(c)(2) of the Controlled Substances Act (21 
     U.S.C. 842(c)(2)) is amended by moving the margin of 
     subparagraph (C) 2 ems to the left.
       (c) Elimination of Redundancies.--
       (1) Elimination of redundant provision.--Section 2516(1) of 
     title 18, United States Code, is amended--
       (A) by striking the first paragraph (p); and
       (B) by inserting ``or'' at the end of paragraph (o).
       (2) Elimination of duplicate amendments.--Effective on the 
     date of its enactment, paragraphs (1), (2), and (4) of 
     section 601(b), paragraph (2) of section 601(d), paragraph 
     (2) of section 601(f), paragraphs (1) and (2)(A) of section 
     601(j), paragraphs (1) and (2) of section 601(k), subsection 
     (d) of section 602, paragraph (4) of section 604(b), 
     subsection (r) of section 605, and paragraph (2) of section 
     607(j) of the Economic Espionage Act of 1996 are repealed.
       (3) Elimination of extra comma.--Section 1956(c)(7)(D) of 
     title 18, United States Code, is amended--
       (A) by striking ``Code,,'' and inserting ``Code,''; and
       (B) by striking ``services),,'' and inserting 
     ``services),''.
       (4) Repeal of section granting duplicative authority.--
       (A) Section 3503 of title 18, United States Code, is 
     repealed.
       (B) The table of sections at the beginning of chapter 223 
     of title 18, United States Code, is amended by striking the 
     item relating to section 3503.
       (5) Elimination of outmoded reference to parole.--Section 
     929(b) of title 18, United States Code, is amended by 
     striking the last sentence.
       (d) Correction of Outmoded Fine Amounts.--
       (1) In title 18, united states code.--
       (A) In section 492.--Section 492 of title 18, United States 
     Code, is amended by striking ``not more than $100'' and 
     inserting ``under this title''.
       (B) In section 665.--Section 665(c) of title 18, United 
     States Code, is amended by striking ``a fine of not more than 
     $5,000'' and inserting ``a fine under this title''.
       (C) In sections 1924, 2075, 2113(b), and 2236.--
       (i) Section 1924(a) of title 18, United States Code, is 
     amended by striking ``not more than $1,000,'' and inserting 
     ``under this title''.
       (ii) Sections 2075 and 2113(b) of title 18, United States 
     Code, are each amended by striking ``not more than $1,000'' 
     and inserting ``under this title''.
       (iii) Section 2236 of title 18, United States Code, is 
     amended by inserting ``under this title'' after ``warrant, 
     shall be fined'', and by striking ``not more than $1,000''.
       (D) In section 372 and 752.--Sections 372 and 752(a) of 
     title 18, United States Code, are each amended by striking 
     ``not more than $5,000'' and inserting ``under this title''.
       (E) In section 924(e)(1).--Section 924(e)(1) of title 18, 
     United States Code, is amended by striking ``not more than 
     $25,000'' and inserting ``under this title''.
       (2) In the controlled substances act.--
       (A) In section 401.--Section 401(d) of the Controlled 
     Substances Act (21 U.S.C. 841(d)) is amended--
       (i) in paragraph (1), by striking ``and shall be fined not 
     more than $10,000'' and inserting ``or fined under title 18, 
     United States Code, or both''; and
       (ii) in paragraph (2), by striking ``and shall be fined not 
     more than $20,000'' and inserting ``or fined under title 18, 
     United States Code, or both''.
       (B) In section 402.--Section 402(c)(2) of the Controlled 
     Substances Act (21 U.S.C. 842(c)) is amended--
       (i) in subparagraph (A), by striking ``of not more than 
     $25,000'' and inserting ``under title 18, United States 
     Code''; and
       (ii) in subparagraph (B), by striking ``of $50,000'' and 
     inserting ``under title 18, United States Code''.

[[Page 14460]]

       (C) In section 403.--Section 403(d) of the Controlled 
     Substances Act (21 U.S.C. 843(d)) is amended--
       (i) by striking ``of not more than $30,000'' each place 
     that term appears and inserting ``under title 18, United 
     States Code''; and
       (ii) by striking ``of not more than $60,000'' each place it 
     appears and inserting ``under title 18, United States Code''.
       (e) Cross Reference Corrections.--
       (1) Section 3664.--Section 3664(o)(1)(C) of title 18, 
     United States Code, is amended by striking ``section 
     3664(d)(3)'' and inserting ``subsection (d)(5)''.
       (2) Chapter 228.--Section 3592(c)(1) of title 18, United 
     States Code, is amended by striking ``section 36'' and 
     inserting ``section 37''.
       (3) Correcting erroneous cross reference in controlled 
     substances act.-- Section 511(a)(10) of the Controlled 
     Substances Act (21 U.S.C. 881(a)(10)) is amended by striking 
     ``1822 of the Mail Order Drug Paraphernalia Control Act'' and 
     inserting ``422''.
       (4) Correction to reflect cross reference change made by 
     other law.--Effective on the date of its enactment, section 
     601(c)(3) of the Economic Espionage Act of 1996 is amended by 
     striking ``247(d)'' and inserting ``247(e)''.
       (5) Typographical and typeface error in table of 
     chapters.--The item relating to chapter 123 in the table of 
     chapters at the beginning of part I of title 18, United 
     States Code, is amended--
       (A) by striking ``2271'' and inserting ``2721''; and
       (B) so that the item appears in bold face type.
       (6) Section 4104.--Section 4104(d) of title 18, United 
     States Code, is amended by striking ``section 3653 of this 
     title and rule 32(f) of'' and inserting ``section 3565 of 
     this title and the applicable provisions of''.
       (7) Error in amendatory language.--Effective on the date of 
     its enactment, section 583 of the Foreign Operations, Export 
     Financing, and Related Programs Appropriations Act, 1998 (111 
     Stat. 2436) is amended by striking ``Section 2401'' and 
     inserting ``Section 2441''.
       (8) Error in cross reference to court rules.--The first 
     sentence of section 3593(c) of title 18, United States Code, 
     is amended by striking ``rule 32(c)'' and inserting ``rule 
     32''.
       (9) Section 1836.--Section 1836 of title 18, United States 
     Code, is amended--
       (A) in subsection (a), by striking ``this section'' and 
     inserting ``this chapter''; and
       (B) in subsection (b), by striking ``this subsection'' and 
     inserting ``this section''.
       (10) Correction of erroneous cite in chapter 119.--Section 
     2510(10) of title 18, United States Code, is amended by 
     striking ``shall have'' and all that follows through ``United 
     States Code;'' and inserting ``has the meaning given that 
     term in section 3 of the Communications Act of 1934;''.
       (11) Elimination of outmoded cite in section 2339a.--
     Section 2339A(a) of title 18, United States Code, is amended 
     by striking ``2332c,''.
       (12) Correction of references in amendatory language.--
     Effective the date of its enactment, section 115(a)(8)(B) of 
     Public Law 105-119 is amended--
       (A) in clause (i)--
       (i) by striking ``at the end of'' and inserting 
     ``following''; and
       (ii) by striking ``paragraph'' the second place it appears 
     and inserting ``subsection''; and
       (B) in clause (ii), by striking ``subparagraph (A)'' and 
     inserting ``clause (i)''.
       (f) Tables of Sections Corrections.--
       (1) Conforming table of sections to heading of section.--
     The item relating to section 1837 in the table of sections at 
     the beginning of chapter 90 of title 18, United States Code, 
     is amended by striking ``Conduct'' and inserting 
     ``Applicability to conduct''.
       (2) Conforming heading to table of sections entry.--The 
     heading of section 1920 of title 18, United States Code, is 
     amended by striking ``employee's'' and inserting 
     ``employees'''.

     SEC. 3. ADDITIONAL TECHNICALS.

       Title 18, United States Code, is amended--
       (1) in section 922(t)(1)(C), by striking ``1028(d)(1)'' and 
     inserting ``1028(d)'';
       (2) in section 1005--
       (A) in the first undesignated paragraph, by striking 
     ``Act,,'' and inserting ``Act,''; and
       (B) by inserting ``or'' at the end of the third 
     undesignated paragraph;
       (3) in section 1071, by striking ``fine of under this 
     title'' and inserting ``fine under this title'';
       (4) in section 1368(a), by inserting ``to'' after ``serious 
     bodily injury'';
       (5) in section 1956(c)(7)(B)(ii), by inserting ``or'' at 
     the end thereof;
       (6) in section 1956(c)(7)(B)(iii), by inserting a closing 
     parenthesis after ``1978'';
       (7) in subsections (b)(1) and (c) of section 2252A, by 
     striking ``paragraphs'' and inserting ``paragraph''; and
       (8) in section 2254(a)(3), by striking the comma before the 
     period at the end.

     SEC. 4. REPEAL OF OUTMODED PROVISIONS.

       (a) Section 14 of title 18, United States Code, and the 
     item relating thereto in the table of sections at the 
     beginning of chapter 1 of title 18, United States Code, are 
     repealed.
       (b) Section 1261 of such title is amended--
       (1) by striking ``(a) The Secretary'' and inserting ``The 
     Secretary''; and
       (2) by striking subsection (b).
       (c) Section 1821 of such title is amended by striking ``, 
     the Canal Zone''.
       (d) Section 3183 of such title is amended by striking ``or 
     the Panama Canal Zone,''.
       (e) Section 3241 of such title is amended by striking 
     ``United States District Court for the Canal Zone and the''.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Hatch):
  S. 1236. A bill to reduce criminal gang activities; to the Committee 
on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I rise to introduce the Criminal Gang 
Abatement Act of 2001, a bill to give law enforcement additional tools 
to fight the scourge of gang violence.
  This legislation builds on and improves the Violent Crime Control and 
Law Enforcement Act of 1994, the first Federal statute to address 
directly the problem of criminal gangs.
  I am delighted that Senator Hatch joins me in introducing this bill 
and I thank him for his hard work in helping develop the legislation.
  I know that this bill will be familiar to my colleagues. It is 
similar to legislation that was included in the Juvenile Justice bill 
in the last Congress.
  The Senate passed the Juvenile Justice bill overwhelmingly. 
Unfortunately, it did not become law. That is why Senator Hatch and I 
are introducing this gang legislation separately.
  Mr. President, I care deeply about solving the problem of gang 
violence and crime.
  I worked extensively on this problem when I was Mayor of San 
Francisco and have long considered it one of my top priorities.
  I am often struck by how vicious gang crimes can be, and how damaging 
they are to the victims and to the surrounding community.
  Let me give you a couple of recent examples from my own home city of 
San Francisco.
  Last year, gang members tried to rob a passerby with an assault 
weapon from their car. When the victim resisted, the gang shot the 
victim 17 times. The victim survived but will never walk again.
  Only two months before that assault, two rival gangs had a shootout 
in San Francisco's Mission District. An innocent bystander was caught 
in the crossfire and shot through both legs.
  A brave eyewitness gave law enforcement the name of one shooting 
suspect, who was then arrested. The gang then tracked down the witness, 
put a 9 millimeter automatic to his head, and threatened to kill him 
for cooperating with the police.
  I would like to explain how this legislation will help deter and 
punish such crimes, and why Congress should act quickly to pass it.
  First, the bill makes it a separate Federal crime to recruit persons 
to join a criminal street gang with the intent that the recruit 
participate in a Federal drug or violent crime.
  The penalty is up to 10 years in jail. The offender can also be held 
responsible for reimbursing the government's costs in housing, 
maintaining, and treating the minor until the age of 18.
  The purpose of this provision is to deter criminal gang recruitment.
  Such recruitment has continued to grow and grow every year.
  Even while crime has been dropping generally, the number of criminal 
gangs and gang members has spiraled.
  The 1999 Justice Department survey of gangs, the most recent 
available, found that the number of gang members has increased 8 
percent just from 1998.
  In fact, the growth of criminal gangs in the country over the last 20 
years, has been extraordinary.
  Twenty years ago, the gang problem was centered in Los Angeles and 
Chicago. Today, though, there are gangs in all 50 States and the 
District of Columbia.
  In 1980, there were gangs in 286 jurisdictions. Today, they are in 
over 1500 jurisdictions.
  In 1980, there were about 2000 gangs. Today, there are over 26,000 
gangs.
  In 1980, there were about 100,000 gang members. Today, there are 
840,500 gang members.
  Let me read from a Department of Justice publication entitled ``The

[[Page 14461]]

Growth of Youth Gang Problems in the United States: 1970-1998'' that 
was just released a few months ago:

       Youth gang problems in the United States grew dramatically 
     between the 1970's and 1990's, with the prevalence of gangs 
     reaching unprecedented levels. The growth was manifested by a 
     steep increase in the number of cities, counties, and States 
     reporting gang problems. Increases in the number of gang 
     localities were paralleled by increases in the proportions 
     and populations of localities reporting gang problems. There 
     was a shift in regions containing larger numbers of gang 
     cities, with the Old South showing the most dramatic 
     increase. The size of the gang-problem localities also 
     changed, with gang problems spreading to cities, villages, 
     and counties smaller in size than at any time in the past.

  And as gangs have increased, so have all forms of youth violence.
  That is because youngsters who join gangs are much more likely to 
commit violent crimes than similarly situated youngsters who are not in 
gangs.
  Research shows, for example, that young people who join gangs are 
four to six times more likely to engage in criminal behavior when they 
are gang members than when they are not.
  And it is also because gang members are responsible for a large 
proportion of violent crime. They don't just commit one violent crime 
but many.
  One study found, for example, that gang members, who were 14 percent 
of sample, reported committing 89 percent of all serious violent 
offenses in the area.
  Enacting this bill would give law enforcement an important tool to 
deter criminal gang recruitment, thus reducing gang crime.
  The bill makes it a separate Federal crime to use a minor to commit a 
Federal violent crime, and sets penalties for doing so.
  The penalty is twice the maximum term that would otherwise be 
authorized for the offense or, for repeat offenders, three times the 
maximum penalty.
  The bill also increases the minimum penalties for persons using 
minors to distribute drugs.
  Currently, both first-time and repeat offenders can receive a minimum 
of only a year.
  Under the bill, a first-time offender will receive at least 3 years 
and a repeat-offender will receive at least 5 years.
  These provisions are intended to deter gangs from recruiting 
youngsters to commit crimes.
  Gangs recruit minors because they know that children are often not 
fully aware of the consequences of their actions.
  Gangs also know that, if the child is caught, he or she will probably 
receive lighter punishment than an adult.
  Gangs commonly start new recruits as drug lookouts or runners.
  Once the youngsters get older, gangs encourage them to engage in more 
violent activity.
  And young recruits often commit violent crimes to gain the gang's 
respect and improve their status within the gang.
  I am very troubled by the fact that many youngsters, some barely in 
their teens, are lured into gangs by older children and start a life of 
crime even before they start high school.
  One study of eighth graders in 11 cities, found that 9 percent were 
currently gang members and 17 percent said that they had belonged to a 
gang at some point in their lives.
  According to California law enforcement, the average age of a new 
gang recruit in Los Angeles is 11, in San Diego 12-15, and in San 
Francisco 15.
  In Alabama, it is 12-14. In Virginia, it is 13. In Ohio, it is 16.
  In gangs such as the Latin Kings, babies of gang members are 
considered gang members from birth.
  A South Carolina law enforcement officer told us that he recently 
looked into the case of one six-year-old child, who was found wearing 
typical gang attire, holding a gun and beeper, and tattooed with the 
phrase ``Thug Life.''
  I believe that we need to punish gang recruitment of children very 
severely. This bill would do that.
  The bill increases the penalties for gang members who commit drug or 
violent crimes and who use physical force to tamper with witnesses, 
victims, or informants.
  The bill also generally directs the U.S. Sentencing Commission to 
increase penalties for criminal street gang members who commit crimes.
  There is a strong link between gangs and drugs. By fighting gangs, we 
can help reduce the supply of illegal drugs in this country.
  According to the 1999 Justice Department gang survey, almost half of 
youth gang members sell drugs to generate profits for the gang.
  A survey of California law enforcement by my staff found that gang 
members in the States' largest cities are involved in 50 to 90 percent 
of all drug offenses.
  This is confirmed by gang members themselves.
  For example, in one survey of State prison inmates who were gang 
members, almost 70 percent said that they had manufactured, imported, 
or sold drugs as a group.
  Worse, the DOJ 1999 gang survey found that about 40 percent of youth 
gangs are ``drug gangs,'' that is, gangs organized specifically to 
traffic in drugs.
  This is an increase from the 34 percent reported for 1998. The 
increase was particularly pronounced in rural areas.
  There is also a close correlation between gangs and violent crimes.
  For example, gangs commit about half of all violent crimes in 
California's major cities. In some areas of Los Angeles, such as South 
Central and East Los Angeles, gangs account for 70-80 percent of all 
violent crimes.
  The increased penalties in this legislation will help reduce drug and 
violent crimes, including threats against witnesses and informants.
  Currently, under the Federal gang statute, 18 U.S.C. 521, gang 
members can only get enhanced penalties for gang crimes that involve 
drugs or violence.
  The penalty is up to an additional 10 years in jail.
  This bill allows enhanced penalties for crimes that are often 
committed by gang members but which may not involve drugs or violence.
  These crimes include distributing explosives, kidnapping, extortion, 
illegal gambling, money laundering, obstruction of justice, and 
illegally transporting aliens.
  The crimes act as ``predicate'' crimes permitting an additional 
charge of participating in a criminal gang.
  The Federal gang statute is sort of similar in design to the criminal 
RICO statute. That statute permits an additional RICO charge where the 
defendant, as part of his or her criminal conspiracy, commits two or 
more predicate acts.
  The bill ensures that, for gang offenses, offenders can get a 
sentence up to 10 years greater than the maximum term they receive for 
their most serious offense. They can also forfeit property derived from 
the offense.
  The offenses added by the bill are those commonly pursued by gangs.
  One study of gangs in various counties, for example, found that: 44-
67 percent of gang members reported being involved in auto theft; 34-48 
percent in intimidating or assaulting witnesses or victims; and 4-10 
percent in kidnapping.
  Other studies have found that gang extortion is also common.
  Drug gangs commonly use booby traps, that sometimes include 
explosives, to protect their cultivation or manufacturing sites from 
law enforcement authorities and the public.
  Numerous gangs illegally launder their illicit drug profits.
  These include Russian and West African criminal gangs as well as 
street gangs such as the Bloods, Crips, Gangster Disciples, and Latin 
Kings.
  Alien smuggling and harboring is especially prevalent in San 
Francisco, Los Angeles, Boston, and New York.
  Among the worst offenders is the brutal Fuk Ching gang.
  After a police crackdown in New York, law enforcement reports that 
Fuk Ching began to branch out to Chicago, Maryland, and western 
Pennsylvania.
  The changes made by this legislation should help reduce drug and 
violent crimes.
  The Travel Act allows Federal prosecutors to charge certain 
interstate

[[Page 14462]]

crimes such as extortion, bribery, and arson, and for business 
enterprises involving gambling, liquor, drugs, or prostitution.
  This statute was passed in 1961 with Mafia-related criminal activity 
in mind.
  This legislation amends the Travel Act to enable law enforcement to 
respond more effectively to the growing problem of organized, highly 
sophisticated, and mobile criminal street gangs.
  While the Travel Act currently allows law enforcement to target some 
activities, such as drug trafficking, the list is not complete.
  The list needs to be updated to better reflect interstate crimes 
often committed today by gang members.
  Thus, the bill amends the Travel Act to include crimes such as drive-
by shootings, serious assaults, and intimidating witnesses.
  In California's largest cities, gang members commit 80-100 percent of 
all drive-by shootings and around 50 percent of violent crimes.
  The numbers are similar for other states as well.
  A recent survey in Illinois, for example, found that 50 percent of 
the jurisdictions in that state face a serious problem of gang drive-by 
shootings.
  The bill also increases the maximum penalty for most violations of 
the Travel Act from 5 years to 10 and authorizes the death penalty for 
certain homicides that technically do not qualify as murder.
  Defendants who commit violent crimes covered by the act or who try to 
intimidate or retaliate against witnesses can get 20 years. And, if 
they kill someone, they can get life imprisonment or the death penalty.
  The bill should ensure that prosecutors can use the Travel Act to act 
against crimes caused by the new Mafia: organized street gangs.
  The bill would increase the penalties for using or attempting to use 
physical force to intimidate witnesses.
  The bill would increase the maximum punishment for this crime from 10 
years to 20 years.
  The bill would also create a crime of threatening to use physical 
force against a witness.
  Such a threat could be punished by up to 10 years.
  Violent crimes by gang members often go unpunished because witnesses 
are afraid that, if they testify, gangs will kill or hurt them or their 
families.
  For example, the Philadelphia deputy district attorney testified 
before Congress in 1997 that a very high number of the unsolved 
homicides in Philadelphia were unsolved due to gang intimidation.
  One study found that intimidation of victims and witnesses was a 
major problem for 40-50 percent of prosecutors.
  A similar study determined that witness intimidation occurs in at 
least 75 percent of violent crimes in gang-dominated neighborhoods.
  Recently, DOJ estimated that witness intimidation has been growing 
since 1990 and is now a factor in about two-thirds of violent crimes 
committed in some gang-dominated neighborhoods.
  The bill would help deter and punish victim and witness intimidation 
by gangs.
  The bill amends several criminal statutes to address violent crimes 
frequently or typically committed by gangs.
  Crimes include carjacking, assault, manslaughter, racketeering, 
murder-for-hire, and fraud against the United States.
  These amendments make it easier for prosecutors to prove these crimes 
by eliminating or modifying the intent requirement for the crimes or by 
increasing the penalties for violations.
  The bill permits the Attorney General to designate high intensity 
interstate gang activity areas, HIIGAs, and authorizes $100,000,000 for 
each of 7 years for these task forces.
  These provisions are modeled after similar provisions creating high 
intensity drug trafficking areas, HIDTAs.
  HIDTAs are joint efforts of local, State, and Federal law enforcement 
agencies whose leaders work together to assess regional drug threats, 
design strategies to combat those threats, and to develop initiatives 
to implement the strategies.
  HIDTAs are based on an equal partnership between different law 
enforcement agencies.
  HIDTAs integrate and synchronize efforts to reduce drug trafficking.
  They eliminate unnecessary duplication of effort and maximize 
resources.
  And they improve intelligence and information sharing both within and 
between regions.
  HIDTAs are necessary because drug trafficking tends to be 
``headquartered'' in certain areas of the country, from which it 
spreads to other areas.
  Moreover, drug traffickers have been highly organized and developed 
sophisticated interstate and international operations.
  However, both of these points are true for criminal gangs generally.
  While criminal street gangs flourish in certain urban areas such as 
Los Angeles and Chicago, they typically also use these cities as bases 
to invade more rural locales.
  In addition, many gangs have gone from relatively disorganized groups 
of street toughs to highly disciplined, hierarchical ``corporations,'' 
often encompassing numerous jurisdictions.
  The Gangster Disciples Nation, for example, developed a corporate 
structure.
  They had a chairman of the board, two boards of directors, one for 
prisons and one for streets, governors, regents, area coordinators, 
enforcers, and ``shorties,'' youth who staff drug-selling sites and 
help with drug deals.
  From 1987 to 1994, this gang was responsible for killing more than 
200 people. Moreover, one-half of their arrests were for drug offenses 
and only one-third for nonlethal violence.
  In 1996, the Gangster Disciples Nation and other Chicago-based gangs 
were in 110 jurisdictions in 35 States.
  Southern California-based gangs are equally well-dispersed.
  In 1994, gangs claiming affiliation with the Bloods or Crips, both of 
whom are based in Southern California, were in 180 jurisdictions in 42 
states.
  As a result of such dispersal, violent criminal gangs can be found in 
rural areas.
  For example, Washington State law enforcement told us about one gang 
member that they traced from Compton, California to San Francisco, then 
to Portland, Seattle, and Billings, Montana, and finally Sioux Falls, 
South Dakota.
  The Justice Department has found that, from the 1970s to the 1990s, 
the number of small cities or towns, those with populations smaller 
than 10,000, with gangs increased by between 15 to 39 times.
  This is a larger relative increase than for cities with populations 
larger than 10,000.
  In the 1999 National Youth Gang Survey, law enforcement estimated 
that almost 1 of every 5 of gang members in their area were migrants 
from another area.
  In fact, 83 percent of respondents said that the appearance of gang 
members in more suburban or rural areas was caused by migration of 
gangsters from central cities.
  Gang members even travel to countries such as Mexico and El Salvador.
  The Logan Heights Gang in San Diego, for example, is currently 
employed by the Arellano-Felix Cartel to help guard drug shipments in 
Mexico.
  The Logan Heights Gang has also been linked to the killing of 
Cardinal Juan Pasados-Ocampo in Guadalajara in 1993.
  As gangs have spread into rural areas and become more interstate and 
international, it has become more important than ever to ensure 
coordination between local, state, and federal law enforcement to 
combat gangs.
  The HIDTA program has worked well and provides a good model for the 
high intensity interstate gang activity area program that this bill 
creates.
  I expect that the high intensity interstate gang activity area 
program will help reduce the gang problem in the same way that the 
HIDTA program has helped reduce the drug problem.
  The bill also allows serious juvenile drug offenses to be Armed 
Career Criminal Act predicates.

[[Page 14463]]

  This provision ensures that career criminals do not escape higher 
sentences just because their most serious drug offenses occurred when 
they were a juvenile.
  Under this legislation, all armed career criminals will get up to the 
maximum statutory maximum of 15 years in jail, time which may be not 
reduced through suspension or probation.
  The bill makes the gang statute consistent with the Supreme Court's 
recent opinion in Apprendi v. United States.
  In that decision, the Supreme Court held that any fact that increases 
the penalty for a crime beyond the statutory maximum must be treated as 
an element of the offense.
  This decision has caused some problems for law enforcement in 
prosecuting gang crimes.
  This is because the Federal gang statute has been treated as a 
sentence enhancement statute, not a stand-alone criminal offense 
statute.
  Before Apprendi, prosecutors would charge gang members with drug and 
other crimes.
  If they were convicted, they would then ask the court to enhance the 
gang member's sentence because of his or her membership in a criminal 
gang.
  On many occasions, this sentence enhancement would go beyond the 
statutory maximum for the underlying offenses.
  In light of Apprendi, this bill rewrites federal law to ensure that 
prosecutors can charge gang members for a separate offense under the 
federal gang statute.
  In doing so, the bill also makes it easier for prosecutors to charge 
gang members by reducing the membership requirement for a criminal gang 
from a minimum of five members to a minimum of three members.
  The bill authorizes $50,000,000 for 5 years to make grants to 
prosecutors' officers to combat gang crime and youth violence.
  This money will help implement this legislation by ensuring that law 
enforcement has the money to prosecute gang members.
  This is important legislation.
  I urge my colleagues to act quickly to pass it.
  I would also ask unanimous consent that the text of the bill and an 
accompanying section-by-section description be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1236

       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 ``Criminal Gang Abatement Act 
     of 2001''.

     SEC. 2. SOLICITATION OR RECRUITMENT OF PERSONS IN CRIMINAL 
                   STREET GANG ACTIVITY.

       (a) Prohibited Acts.--Chapter 26 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 522. Recruitment of persons to participate in criminal 
       street gang activity

       ``(a) Prohibited Acts.--It shall be unlawful for any person 
     to use any facility in, or travel in, interstate or foreign 
     commerce, or cause another to do so, to recruit, solicit, 
     induce, command, or cause another person to be or remain as a 
     member of a criminal street gang, or conspire to do so, with 
     the intent that the person being recruited, solicited, 
     induced, commanded, or caused to be or remain a member of 
     such gang participate in an offense described in section 
     521(c) of this title.
       ``(b) Penalties.--Any person who violates subsection (a) 
     shall--
       ``(1) be imprisoned not more than 10 years, fined under 
     this title, or both; and
       ``(2) if the person recruited, solicited, induced, 
     commanded, or caused is a minor, at the discretion of the 
     sentencing judge, be liable for any costs incurred by the 
     Federal Government, or by any State or local government, for 
     housing, maintaining, and treating the person until the 
     person attains the age of 18 years.
       ``(c) Definitions.--In this section:
       ``(1) Criminal street gang.--The term `criminal street 
     gang' has the meaning set forth in section 521 of this title.
       ``(2) Minor.--The term `minor' means a person who is less 
     than 18 years of age.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 26 of title 18, United States Code, is 
     amended by adding at the end the following:

``522. Recruitment of persons to participate in criminal street gang 
              activity.''.

     SEC. 3. PENALTIES FOR USE OF MINORS IN CRIMES OF VIOLENCE.

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

     ``Sec. 25. Use of minors in crimes of violence

       ``(a) Penalties.--Whoever, being a person not less than 18 
     years of age, intentionally uses a minor to commit a crime of 
     violence for which such person may be prosecuted in a court 
     of the United States, or to assist in avoiding detection or 
     apprehension for such an offense, shall--
       ``(1) be subject to twice the maximum term of imprisonment 
     and twice the maximum fine that would otherwise be authorized 
     for the offense; and
       ``(2) for the second and any subsequent conviction under 
     this subsection, be subject to three times the maximum term 
     of imprisonment and three times the maximum fine that would 
     otherwise be authorized for the offense.
       ``(b) Definitions.--In this section:
       ``(1) Crime of violence.--The term `crime of violence' has 
     the meaning set forth in section 16 of this title.
       ``(2) Minor.--The term `minor' means a person who is less 
     than 18 years of age.
       ``(3) Uses.--The term `uses' means employs, hires, 
     persuades, induces, entices, or coerces.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 1 of title 18, United States Code, is 
     amended by adding at the end the following:

``25. Use of minors in crimes of violence.''.

     SEC. 4. INCREASED PENALTIES FOR USING MINORS TO DISTRIBUTE 
                   DRUGS.

       Section 420 of the Controlled Substances Act (21 U.S.C. 
     861) is amended--
       (1) in subsection (b), by striking ``one year'' and 
     inserting ``3 years''; and
       (2) in subsection (c), by striking ``one year'' and 
     inserting ``5 years''.

     SEC. 5. CRIMINAL STREET GANGS.

       (a) In General.--Section 521 of title 18, United States 
     Code, is amended to read as follows:

     ``Sec. 521. Criminal street gangs

       ``(a) Definitions.--In this section:
       ``(1) Conviction.--The term `conviction' includes a 
     finding, under Federal or State law, that a person has 
     committed an act of juvenile delinquency involving an offense 
     described in subsection (c).
       ``(2) Criminal street gang.--The term `criminal street 
     gang' means an ongoing group, club, organization, or 
     association of 3 or more persons, whether formal or 
     informal--
       ``(A) that has as 1 of its primary purposes or activities 
     the commission of 1 or more of the offenses described in 
     subsection (c);
       ``(B) the members of which engage, or have engaged within 
     the past 5 years, in a continuing series of offenses 
     described in subsection (c); and
       ``(C) the activities of which affect interstate or foreign 
     commerce.
       ``(3) State.--The term `State' means a State of the United 
     States, the District of Columbia, and any commonwealth, 
     territory, or possession of the United States.
       ``(b) Offense.--
       ``(1) In general.--Whoever during the commission of an 
     offense described in paragraphs (1) through (10) of 
     subsection (c)--
       ``(A) participates in a criminal street gang with knowledge 
     that its members engage in or have engaged in a continuing 
     series of offenses described in subsection (c);
       ``(B) intends to promote or further the felonious 
     activities of the criminal street gang or maintain or 
     increase the person's position in the gang; and
       ``(C) has been convicted within the past 5 years of an 
     offense described in subsection (c),

     shall be imprisoned for a term that is not more than 10 years 
     greater than the maximum term provided by statute for the 
     most serious offense described in paragraphs (1) through (10) 
     of subsection (c) that the person was found to have committed 
     as a basis for the person's conviction under this section.
       ``(2) Construction with other convictions.--A term of 
     imprisonment imposed under this section shall run 
     consecutively with any term imposed upon conviction of 
     another count under the same indictment or information for an 
     offense described in subsection (c).
       ``(3) Forfeiture.--A person convicted under this section 
     shall also forfeit to the United States, notwithstanding any 
     provision of State law, all property, whether real or 
     personal, derived directly or indirectly from the offense, 
     all property used to facilitate the offense, and all property 
     traceable thereto. The forfeiture shall be in accordance with 
     the procedures set forth in the Federal Rules of Criminal 
     Procedure and section 413 of the Controlled Substances Act 
     (21 U.S.C. 853).
       ``(c) Predicate Offenses.--The offenses described in this 
     subsection are as follows:
       ``(1) A Federal felony involving a controlled substance (as 
     defined in section 102 of the Controlled Substances Act (21 
     U.S.C.

[[Page 14464]]

     802)) for which the maximum penalty is not less than 5 years.
       ``(2) A Federal felony crime of violence (as defined in 
     section 16 of this title) against the person of another.
       ``(3) An offense under section 522 of this title.
       ``(4) An offense under section 844 of this title.
       ``(5) An offense under section 875 or 876 of this title.
       ``(6) An offense under section 1084 or 1955 of this title.
       ``(7) An offense under section 1956 of this title, to the 
     extent that the offense is related to an offense involving a 
     controlled substance.
       ``(8) An offense under chapter 73 of this title.
       ``(9) An offense under section 274(a)(1)(A), 277, or 278 of 
     the Immigration and Nationality Act (8 U.S.C. 1324(a)(1)(A), 
     1327, 1328)).
       ``(10) A conspiracy, attempt, or solicitation to commit an 
     offense described in paragraphs (1) through (9).
       ``(11) A State offense that would have been an offense 
     described in paragraphs (1) through (10), if Federal 
     jurisdiction existed.
       (b) Amendment of Special Sentencing Provision.--Section 
     3582(d) of title 18, United States Code, is amended--
       (1) by striking ``chapter 95 (racketeering) or 96 
     (racketeer influenced and corrupt organizations) of this 
     title'' and inserting ``section 521 or 522 (criminal street 
     gangs) of this title, in chapter 95 (racketeering) or 96 
     (racketeer influenced and corrupt organizations) of this 
     title,''; and
       (2) by inserting ``a criminal street gang or'' before ``an 
     illegal enterprise''.
       (c) Conforming Amendment Relating to Orders for 
     Restitution.--Section 3663(c)(4) of title 18, United States 
     Code, is amended by striking ``chapter 46 or chapter 96 of 
     this title'' and inserting ``section 521 of this title, under 
     chapter 46 or 96 of this title,''.

     SEC. 6. INTERSTATE AND FOREIGN TRAVEL OR TRANSPORTATION IN 
                   AID OF CRIMINAL GANGS.

       (a) Travel Act Amendments.--Section 1952 of title 18, 
     United States Code, is amended--
       (1) in subsection (a)--
       (A) by striking ``and thereafter performs or attempts to 
     perform'' and inserting ``and thereafter performs, or 
     attempts or conspires to perform'';
       (B) by striking ``5 years'' and inserting ``10 years''; and
       (C) by inserting ``, and may be sentenced to death'' after 
     ``if death results shall be imprisoned for any term of years 
     or for life'';
       (2) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively;
       (3) by inserting after subsection (a) the following new 
     subsection (b):
       ``(b) Whoever travels in interstate or foreign commerce or 
     uses the mail or any facility 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 
     performs, or attempts or conspires to perform, an act 
     described in this subsection shall be fined under this title, 
     imprisoned not more than 20 years, or both, and if death 
     results, shall be imprisoned for any term of years or for 
     life, and may be sentenced to death.''; and
       (4) in subsection (c), as so redesignated, by inserting 
     ``assault with a deadly weapon, assault resulting in serious 
     bodily injury (as defined in section 1365 of this title), 
     shooting at an occupied dwelling or motor vehicle, 
     intimidation of or retaliation against a witness, victim, 
     juror, or informant,'' after ``extortion, bribery,''.
       (b) Amendment to Sentencing Guidelines.--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 
     increase in the offense level for violations of section 1952 
     of title 18, United States Code, as amended by this section.

     SEC. 7. INCREASED PENALTIES FOR USING PHYSICAL FORCE TO 
                   TAMPER WITH WITNESSES, VICTIMS, OR INFORMANTS.

       (a) In General.--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 against any person, 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; or
       ``(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, supervised release, parole, or release pending 
     judicial proceedings,

     shall be punished as provided in paragraph (3).''; and
       (D) in paragraph (3), as so redesignated--
       (i) by striking ``and'' at the end of subparagraph (A); and
       (ii) by striking subparagraph (B) and inserting the 
     following:
       ``(B) in the case of--
       ``(i) an attempt to murder; or
       ``(ii) the use, or attempted use, of physical force against 
     any person,

     imprisonment for not more than twenty years; and
       ``(C) in the case of the use of the threat of physical 
     force against any person, imprisonment for not more than ten 
     years.'';
       (2) in subsection (b), by striking ``or physical force''; 
     and
       (3) by adding at the end the following:
       ``(j) Whoever conspires to commit any offense under this 
     section shall be subject to the same penalties as those 
     prescribed for the offense the commission of which was the 
     object of the conspiracy.''.
       (b) Retaliating Against a Witness.--Section 1513 of title 
     18, United States Code, is amended by adding at the end the 
     following:
       ``(e) Whoever conspires to commit any offense under this 
     section shall be subject to the same penalties as those 
     prescribed for the offense the commission of which was the 
     object of the conspiracy.''.
       (c) Conforming Amendments.--
       (1) Witness tampering.--Section 1512 of title 18, United 
     States Code, is amended in subsections (b)(3) and (c)(2) by 
     inserting ``supervised release,'' after ``probation''.
       (2) Retaliation against a witness.--Section 1513 of title 
     18, United States Code, is amended in subsections (a)(1)(B) 
     and (b)(2) by inserting ``supervised release,'' after 
     ``probation''.

     SEC. 8. OTHER VIOLENT OFFENSES FREQUENTLY OR TYPICALLY 
                   COMMITTED BY GANGS.

       (a) Carjacking.--Section 2119 of title 18, United States 
     Code, is amended by striking ``, with the intent to cause 
     death or serious bodily harm''.
       (b) Amendments Relating to Violent Crime in Areas of 
     Exclusive Federal Jurisdiction.--
       (1) Assault within maritime and territorial jurisdiction of 
     united states.--Section 113(a)(3) of title 18, United States 
     Code, is amended by striking ``with intent to do bodily 
     harm,''.
       (2) Manslaughter.--Section 1112(b) of title 18, United 
     States Code, is amended by striking ``ten years'' and 
     inserting ``twenty years''.
       (3) Offenses within indian country.--Section 1153(a) of 
     title 18, United States Code, is amended by inserting ``an 
     offense for which the maximum statutory term of imprisonment 
     under section 1363 of this title is greater than five 
     years,'' after ``a felony under chapter 109A,''.
       (4) Racketeer influenced and corrupt organizations.--
     Section 1961(1)(A) of title 18, United States Code, is 
     amended by inserting ``or would have been so chargeable 
     except that the act or threat (other than gambling) was 
     committed in Indian country, as defined in section 1151 of 
     this title, or in any other area of exclusive federal 
     jurisdiction'' after ``chargeable under State law''.
       (c) Amendments to Statutes Punishing Violent Crimes for 
     Hire or in Aid of Racketeering.--
       (1) Murder-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''.
       (2) Violent crimes in aid of racketeering.--Section 1959 of 
     title 18, United States Code, is amended--
       (A) in subsection (a)--
       (i) in paragraph (4)--

       (I) by inserting ``specified in paragraphs (1) through 
     (3)'' after ``threatening to commit a crime of violence''; 
     and
       (II) by striking ``five'' and inserting ``ten'';

       (ii) in paragraph (5), by striking ``ten'' and inserting 
     ``twenty'';
       (iii) in paragraph (6), by striking ``three'' and inserting 
     ``ten''; and
       (B) in subsection (b)--
       (i) by striking ``and'' at the end of paragraph (1);
       (ii) by striking the period at the end of paragraph (2) and 
     inserting ``; and''; and
       (iii) by adding at the end the following new paragraph (3):
       ``(3) `serious bodily injury' has the meaning set forth in 
     section 2119 of this title.''.
       (d) Conspiracy.--Section 371 of title 18, United States 
     Code, is amended--
       (1) by designating the first paragraph as subsection (a);

[[Page 14465]]

       (2) in subsection (a), as so designated, by striking 
     ``either to commit any offense against the United States, 
     or'';
       (3) by striking the second paragraph; and
       (4) by adding at the end the following new subsection:
       ``(b) If two or more persons conspire to commit any offense 
     against the United States, and one or more of such persons do 
     any act to effect the object of the conspiracy, each shall be 
     subject to the same penalties as those prescribed for the 
     most serious offense the commission of which was the object 
     of the conspiracy, except that the penalty of death shall not 
     be imposed.''.

     SEC. 9. SERIOUS JUVENILE DRUG OFFENSES AS PREDICATE FOR ARMED 
                   CAREER CRIMINAL STATUS.

       Section 924(e)(2)(C) of title 18, United States Code, is 
     amended by inserting ``or serious drug offense'' after 
     ``violent felony''.

     SEC. 10. SENTENCING GUIDELINES FOR GANG CRIMES, INCLUDING AN 
                   INCREASE IN OFFENSE LEVEL FOR PARTICIPATION IN 
                   CRIME AS A GANG MEMBER.

       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 eliminate 
     the policy statement in section 5K2.18 of the guidelines 
     regarding section 521 of title 18, United States Code, and 
     instead provide a base offense level in chapter 2 of the 
     guidelines for offenses described in sections 521 and 522 of 
     title 18, United States Code, that reflects the seriousness 
     of these offenses. Such guidelines shall include an 
     appropriate enhancement (which shall be in addition to any 
     other adjustment under chapter 3 of the Federal Sentencing 
     guidelines) for any offense described in section 521 if the 
     offense was both committed in connection with, or in 
     furtherance of, the activities of a criminal street gang and 
     the defendant was a member of the gang at the time of the 
     offense. Such guidelines shall also include an appropriate 
     enhancement (which shall be in addition to any other 
     adjustment under chapter 3 of the Federal Sentencing 
     Guidelines) for a person who, in violating such section 522, 
     recruits, solicits, induces, commands, or causes another 
     person residing in another State to be or remain a member of 
     a criminal street gang, or who crosses a State line with 
     intent to violate such section 522.

     SEC. 11. HIGH INTENSITY INTERSTATE GANG ACTIVITY AREAS.

       (a) Definitions.--In this section:
       (1) Governor.--The term ``Governor'' means a Governor of a 
     State or the Mayor of the District of Columbia.
       (2) High intensity interstate gang activity area.--The term 
     ``high intensity interstate gang activity area'' means an 
     area within a State that is designated as a high intensity 
     interstate gang activity area under subsection (b)(1).
       (3) State.--The term ``State'' means a State of the United 
     States, the District of Columbia, and any commonwealth, 
     territory, or possession of the United States.
       (b) High Intensity Interstate Gang Activity Areas.--
       (1) Designation.--The Attorney General, upon consultation 
     with the Secretary of the Treasury and the Governors of 
     appropriate States, may designate as a high intensity 
     interstate gang activity area a specified area that is 
     located--
       (A) within a State; or
       (B) in more than 1 State.
       (2) Assistance.--In order to provide Federal assistance to 
     a high intensity interstate gang activity area, the Attorney 
     General may--
       (A) facilitate the establishment of a regional task force, 
     consisting of Federal, State, and local law enforcement 
     authorities, for the coordinated investigation, disruption, 
     apprehension, and prosecution of criminal activities of gangs 
     and gang members in the high intensity interstate gang 
     activity area; and
       (B) direct the detailing from any Federal department or 
     agency (subject to the approval of the head of that 
     department or agency, in the case of a department or agency 
     other than the Department of Justice) of personnel to the 
     high intensity interstate gang activity area.
       (3) Criteria for designation.--In considering an area 
     (within a State or within more than 1 State) for designation 
     as a high intensity interstate gang activity area under this 
     section, the Attorney General shall consider--
       (A) the extent to which gangs from the area are involved in 
     interstate or international criminal activity;
       (B) the extent to which the area is affected by the 
     criminal activity of gang members who--
       (i) are located in, or have relocated from, other States; 
     or
       (ii) are located in, or have immigrated (legally or 
     illegally) from, foreign countries;
       (C) the extent to which the area is affected by the 
     criminal activity of gangs that originated in other States or 
     foreign countries;
       (D) the extent to which State and local law enforcement 
     agencies have committed resources to respond to the problem 
     of criminal gang activity in the area, as an indication of 
     their determination to respond aggressively to the problem;
       (E) the extent to which a significant increase in the 
     allocation of Federal resources would enhance local response 
     to gang-related criminal activities in the area; and
       (F) any other criteria that the Attorney General considers 
     to be appropriate.
       (c) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated to 
     carry out this section $100,000,000 for each of fiscal years 
     2002 through 2008, to be used in accordance with paragraph 
     (2).
       (2) Use of funds.--Of amounts made available under 
     paragraph (1) in each fiscal year--
       (A) 60 percent shall be used to carry out subsection 
     (b)(2); and
       (B) 40 percent shall be used to make grants for community-
     based programs to provide crime prevention and intervention 
     services that are designed for gang members and at-risk youth 
     in areas designated pursuant to this section as high 
     intensity interstate gang activity areas.
       (3) Requirement.--
       (A) In general.--The Attorney General shall ensure that not 
     less than 10 percent of amounts made available under 
     paragraph (1) in each fiscal year are used to assist rural 
     States affected as described in subparagraphs (B) and (C) of 
     subsection (b)(3).
       (B) Rural state defined.--In this paragraph, the term 
     ``rural State'' has the meaning given the term in section 
     1501(b) of title I of the Omnibus Crime Control and Safe 
     Streets Act of 1968 (42 U.S.C. 3796bb(b)).

     SEC. 12. AUTHORITY TO MAKE GRANTS TO PROSECUTORS' OFFICES TO 
                   COMBAT GANG CRIME AND YOUTH VIOLENCE.

       (a) In General.--Section 31702 of subtitle Q of title III 
     of the Violent Crime Control and Law Enforcement Act of 1994 
     (42 U.S.C. 13862) is amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(5) to allow the hiring of additional prosecutors, so 
     that more cases can be prosecuted and backlogs reduced;
       ``(6) to provide funding to enable prosecutors to address 
     drug, gang, and youth violence problems more effectively;
       ``(7) to provide funding to assist prosecutors with funding 
     for technology, equipment, and training to assist prosecutors 
     in reducing the incidence of, and increase the successful 
     identification and speed of prosecution of young violent 
     offenders; and
       ``(8) to provide funding to assist prosecutors in their 
     efforts to engage in community prosecution, problem solving, 
     and conflict resolution techniques through collaborative 
     efforts with police, school officials, probation officers, 
     social service agencies, and community organizations.''.
       (b) Authorization of Appropriations.--Section 31707 of 
     subtitle Q of title III of the Violent Crime Control and Law 
     Enforcement Act of 1994 (42 U.S.C. 13867) is amended to read 
     as follows:

     ``SEC. 31707. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     subtitle, $50,000,000 for each of fiscal years 2002 through 
     2006.''.

     SEC. 13. NOTIFICATION AFTER ARREST.

       Section 5033 of title 18, United States Code, is amended by 
     striking ``arresting officer'' each place it appears in the 
     first and second sentences and inserting ``arresting officer 
     or another representative of the Attorney General''.
                                  ____


        Criminal Gang Abatement Act of 2001--Section-by-Section


                               Section 1

       The short title of the bill is the ``Criminal Gang 
     Abatement Act of 2001.''


                               Section 2

       Adds section 522 to Chapter 26 of title 18, which prohibits 
     any person from traveling in, or using any facility in, 
     interstate commerce to recruit or retain a person as a member 
     of a criminal street gang with the intent that the recruited 
     or retained individual participate in an offense described in 
     section 521(c) of the title. Section 521(c) offenses are 
     Federal felonies involving controlled substances for which 
     the maximum penalty is not less than five years, a Federal 
     felony crime of violence involving the use or attempted use 
     of physical force, and conspiracies to commit either of these 
     two offenses.
       The penalties for violating the section include 
     imprisonment for not more than 10 years, fines, or both. In 
     addition, if the individual who was recruited is a minor, the 
     defendant may be held liable for any costs incurred by the 
     Federal, State, or local government for housing, maintaining, 
     and treating the minor until the age of 18.
       The term ``criminal street gang'' is amended in section 5 
     of this bill.


                               Section 3

       Prohibits the intentional use of minors to commit a crime 
     of violence or to assist in avoiding detection or 
     apprehension for such an offense. Any first-time offender 
     shall be subject to twice the maximum term of imprisonment 
     and fine that would otherwise be authorized for the offense. 
     For any second or subsequent conviction under the section, 
     the offender is subject to three times the maximum penalty.

[[Page 14466]]




                               Section 4

       Amends 21 U.S.C. 861 to increase the minimum penalty to 
     three years for any first-time offender who employs or uses a 
     minor to distribute, receive, or avoid detection of a 
     controlled substance in violation of the title or title III. 
     The minimum punishment for a repeat offender is increased to 
     five years.


                               Section 5

       Amends 18 U.S.C. 521 to transform it from a penalty 
     enhancement provision to an offense and, in so doing, also 
     redefines the term ``criminal street gang'' to reduce the 
     membership requirement from ``5 or more persons'' to ``3 or 
     more persons.'' The rewriting of section 521 is in response 
     to Apprendi v. United States, 530 U.S. 466 (2000), in which 
     the Supreme Court held that any fact that increases the 
     penalty for a crime beyond the statutory maximum, other than 
     for a prior conviction, must be treated as an element of the 
     offense.
       The proposed amendment establishes ten predicate offenses 
     in subsection c. Those offenses are: a Federal felony 
     involving a controlled substance for which the maximum 
     penalty is not less than 5 years; a Federal felony crime of 
     violence; an offense under newly created section 522; an 
     offense under section 844, (importation, manufacture, 
     distribution, and storage of explosive materials; an offense 
     under sections 875 or 876, kidnapping and extortion; an 
     offense under section 1084 or 1955, illegal gambling; an 
     offense under section 1956, money laundering, to the extent 
     it relates to an offense involving a controlled substance; an 
     offense under chapter 73 of title 18, obstruction of justice; 
     an offense under section 274(a)(1)(A), 277, or 278 of the 
     Immigration and Nationality Act, illegal transportation of an 
     alien; and a conspiracy, attempt, or solicitation to commit 
     an offense described above.
       Any person who commits one of the predicate offenses while 
     participating in a criminal street gang with the intent of 
     promoting the felonious activities of the gang, and who has 
     been convicted within the past five years of one of the 
     predicate offenses, faces an additional 10-year consecutive 
     sentence for the predicate crime. The bill also provides for 
     the forfeiture of any property derived directly or indirectly 
     from the offense.
       The bill also amends 18 U.S.C. 3582(d) to allow the court 
     to include as part of the sentence for any person convicted 
     under section 521 or 522 an order requiring the offender 
     while in prison to not associate or communicate with a 
     specified person upon a showing of probable cause that the 
     association or communication is for the purpose of enabling 
     the offender to be engaged in illegal activity.


                               Section 6

       Amends 18 U.S.C. 1952 to increase the maximum penalty for 
     traveling in interstate or foreign commerce or using any 
     facility in interstate or foreign commerce to distribute the 
     proceeds of any unlawful activity or for promoting, managing, 
     establishing, carrying on of any unlawful activity from five 
     years to ten. In addition, the bill authorizes the death 
     penalty for any person convicted of traveling, or using any 
     facility, in foreign or interstate commerce to commit any 
     crime of violence to further an unlawful activity, if that 
     act of violence results in death. Conspiring to violate the 
     section is treated the same as an actual or attempted 
     violation.
       The bill amends the section to include new subsection b, 
     which provides that any person who travels in interstate or 
     foreign commerce or uses any facility in interstate or 
     foreign commerce with the intent to delay or influence the 
     testimony of or prevent from testifying a witness in a State 
     criminal proceeding or who seeks to cause any person to 
     destroy, alter or conceal evidence and thereafter performs, 
     or attempts or conspires to perform, an act described above 
     shall be imprisoned not more than 20 years, fined, or both, 
     and if death results, may be imprisoned for any term of years 
     or for life, or be sentenced to death.
       The proposed section also amends redesignated subsection c 
     by amending ``unlawful activity'' to include assault with a 
     deadly weapon, assault resulting in serious bodily injury, 
     shooting at an occupied dwelling or motor vehicle, and 
     intimidation of or retaliation against a witness, victim, 
     juror, or informant.
       Finally, the bill directs the United States Sentencing 
     Commission to amend the Federal Sentencing Guidelines to 
     provide an appropriate increase in the offense level for 
     violations of the newly amended section.


                               Section 7

       Amends 18 U.S.C. 1512 to increase the penalties for the use 
     of physical force or the threat of physical force with the 
     intent to influence, delay, or prevent the testimony of any 
     person in an official proceeding.
       The bill increases the maximum term of imprisonment for the 
     use of physical force against any person in violation of the 
     section from 10 years to 20 years. In the case of the use of 
     the threat of physical force against any person, the 
     individual may be imprisoned for not more than ten years. 
     Identical penalties are assessed for those who conspire to 
     commit any offense under the section.


                               Section 8

       This section amends various sections of title 18 to address 
     violent offenses frequently or typically committed by gangs. 
     Most of the amendments either eliminate a mens rea 
     requirement or increase the penalty for a violation.
       Subsection a amends 18 U.S.C. 2119 by eliminating the 
     requirement that the offender intend to cause death or 
     serious bodily harm during a carjacking in order to violate 
     the section.
       Subsection b amends: 1. 18 U.S.C. 113(a)(3), dealing with 
     assaults within the maritime and territorial jurisdiction of 
     the United States, by striking the requirement that the 
     offender intend to do bodily harm when assaulting a person 
     with a dangerous weapon; 2. 18 U.S.C. 1112(b), dealing with 
     manslaughter within the maritime and territorial jurisdiction 
     of the United States, by increasing the maximum penalty for 
     voluntary manslaughter from ten years to twenty; 3. 18 U.S.C. 
     1153(a), which deals with offenses committed within Indian 
     country, by including within the list of offenses subject to 
     the same law and penalties as all other persons ``an offense 
     for which the maximum statutory term of imprisonment under 
     section 1363 of this title is greater than five years''; 4. 
     18 U.S.C. 1961(1)(A) by including within the definition of 
     ``racketeering activity'' the illegal activities specified in 
     the section that ``would have been chargeable'' under State 
     law ``except that the act or threat, other than gambling was 
     committed in Indian country, as defined in section 1151 of 
     this title, or in any other area of exclusive Federal 
     jurisdiction''.
       Subsection c amends: 1. 18 U.S.C. 1958(a), dealing with 
     murder-for-hire, by bringing within the scope of the section 
     those who travel, or use any facility, in interstate or 
     foreign commerce with the intent that a felony crime of 
     violence against the person be committed in violation of the 
     laws of any State or the United States. As it currently 
     stands, the section applies only to those who intend that a 
     murder be committed; 2. 18 U.S.C. 1959, which deals with 
     violent crimes in aid of racketeering. The bill increases the 
     penalty for violating various subsections of section 1959. 
     The maximum punishment for threatening to commit a crime of 
     violence is increased from five to ten years; for attempting 
     or conspiring to commit murder or kidnapping is increased 
     from ten to twenty years; and for attempting or conspiring to 
     commit a crime involving maiming, assault with a dangerous 
     weapon, or assault resulting in serious bodily injury is 
     increased from three to ten years. The amendment also 
     incorporates the definition of ``serious bodily injury'' set 
     forth in section 2119 of the title as the term was previously 
     undefined within the section.
       Subsection d amends 18 U.S.C. 371, dealing with 
     conspiracies to commit offenses against or to defraud the 
     United States. The bill strikes the second paragraph of 
     section 371, dealing with conspiracies involving 
     misdemeanors. A second subsection is added that provides that 
     if two or more persons conspire to commit any offense against 
     the United States, and one or more such persons acts on the 
     conspiracy, each shall be subject to the same penalties as 
     those prescribed for the most serious offense that was the 
     object of the conspiracy, except that the penalty of death 
     shall not be imposed.


                               Section 9

       Amends the term ``conviction'' in 18 U.S.C. 924(e)(2)(C), 
     part of the Armed Career Criminal Act, to include an act of 
     juvenile delinquency involving serious drug offenses.


                               Section 10

       Requires the United States Sentencing Commission to amend 
     the Federal sentencing guidelines to eliminate the policy 
     statement in section 5K2.18 dealing with sentence enhancement 
     for gang crimes. As with the amendment to 18 U.S.C. 521 in 
     section 5 of the bill, the deletion is in response to the 
     recent decision in Apprendi v. New Jersey, 530 U.S. 466 
     (2000).
       Instead of the to-be-deleted and no longer appropriate 
     policy statement, the proposed amendment directs the 
     Commission to provide a base offense level for offenses 
     described in 18 U.S.C. 521 and 522 that reflects the 
     seriousness of the offenses-including an appropriate 
     enhancement for any offense described in section 521 
     committed by a member of a criminal street gang in connection 
     with the activities of the gang. The guidelines are also to 
     include an appropriate enhancement for a person who, in 
     violating section 522, recruits, solicits, induces, commands, 
     or causes another person residing in another State to be or 
     remain a member of a criminal street gang, or who crosses a 
     State line with intent to violate section 522.


                               Section 11

       Permits the Attorney General to designate an area as a high 
     intensity interstate gang activity area. The Attorney General 
     makes such designation upon consultation with the Secretary 
     of the Treasury and the Governors of the appropriate States. 
     In making such designation, the Attorney General considers 
     the extent to which gangs from the area are involved in 
     interstate or international criminal activity, the extent to 
     which the area is affected by the criminal activity of gang 
     members who are located in, or have relocated from, other 
     States or foreign countries, the extent to which State and 
     local

[[Page 14467]]

     law enforcement agencies have committed resources to respond 
     to the problem of criminal gang activity in the area, the 
     extent to which a significant increase in the allocation of 
     Federal resources would enhance local response to gang-
     related criminal activity in the area, and any other criteria 
     deemed appropriate.
       After such designation, the Attorney General may provide 
     assistance to the area by facilitating the establishment of a 
     regional task force, consisting of Federal, State, and local 
     law enforcement, for the coordinated investigation, 
     disruption, apprehension, and prosecution of criminal 
     activities of gangs and gang members in the area. In 
     addition, the Attorney General may direct the detailing from 
     any Federal department or agency, subject to the approval of 
     the head of that department or agency of personnel to the 
     high intensity interstate gang activity area.
       The bill authorizes $100,000,000 for each of fiscal years 
     2002 through 2008. Sixty percent of the appropriation is to 
     be used to carry out the activities described above. The 
     remainder is to be used to make grants for community-based 
     programs to provide crime prevention and intervention 
     services that are designed for gang members and at-risk youth 
     in the designated areas. The bill further requires the 
     Attorney General to ensure that not less than 10 percent of 
     the amounts spent each fiscal year are used to assist rural 
     States.


                               Section 12

       Amends the Violent Crime Control and Law Enforcement Act of 
     1994, 42 U.S.C. 13862, to permit additional uses for grants 
     made by the Attorney General under the section. The 
     additional uses are: to hire additional prosecutors; to 
     provide funding to enable prosecutors to address drug, gang, 
     and youth violence problems more effectively; to provide 
     funding to assist prosecutors with funding for technology, 
     equipment, and training; and to provide funding to assist 
     prosecutors in their efforts to engage in community 
     prosecution, problem solving, and conflict resolution 
     techniques through collaborative efforts with police, school 
     officials, probation officers, social service agencies, and 
     community organizations.
       The bill authorizes the appropriation of $50,000,000 for 
     each of fiscal years 2002 through 2006 to carry out the 
     subtitle.


                               Section 13

       Amends 18 U.S.C. 5033 so that government officials, other 
     than the arresting officer, may advise juveniles of their 
     rights, notify the Attorney General, and notify the 
     juvenile's parents of the juvenile's detainment and rights. 
     This provision clarifies a provision that has been 
     interpreted in an overly literal manner by the Ninth Circuit 
     and is now causing numerous problems for law enforcement in 
     that circuit. See United States v. Juvenile (RRA-A), 229 F.3d 
     737, 748 (9th Cir. 2000) (Trott, J., dissenting).
                                 ______
                                 
      By Mr. INOUYE:
  S. 1237. A bill to allow certain individuals of Japanese ancestry who 
were brought forcibly to the United States from countries in Latin 
America during World War II and were interned in the United States to 
be provided restitution under the Civil Liberties Act of 1988, and for 
other purposes; to the Committee on the Judiciary.
  Mr. INOUYE. Mr. President, I rise to introduce the Wartime Parity and 
Justice Act of 2001, the Senate companion bill to H.R. 619. Among other 
things, the bill provides restitution to Latin Americans of Japanese 
ancestry who were brought to the United States, then interned in 
Immigration and Naturalization Service camps during World War II.
  Between December, 1941, to February, 1948, more than 2,000 men, 
women, and children of Japanese ancestry were relocated from thirteen 
Latin American countries to the United States. During World War II, the 
United States had these individuals shipped to the United States to be 
traded with the Japanese Government for American prisoners of war. Of 
this number, approximately 800 were traded for American prisoners of 
war. The remaining individuals were placed in internment camps 
throughout the United States.
  The governments of those thirteen Latin American countries cooperated 
with the United States because they received millions of dollars in 
monetary compensation for their assistance. Much like their Japanese 
American counterparts in the United States, these people were selected 
merely because of their ethnic origin.
  The big difference, however, is that the United States made an effort 
to redress the wrong committed against the Japanese Americans. The 
Civil Liberties Act of 1988, signed into law by President Reagan, 
allowed for monetary compensation of $20,000 and an apology from the 
United States Government to all Japanese Americans interned in camps 
throughout the country. More than 120,000 Japanese Americans were 
placed into these internment camps because they were a ``threat'' to 
national security. To this day, not one case of sabotage or espionage 
by Japanese Americans during World War II has been uncovered by the 
United States Government.
  Japanese Latin Americans were not an eligible class under the Civil 
Liberties Act of 1988 even though they suffered under the same 
conditions experienced by their Japanese American counterparts.
  In 1996, Japanese Latin Americans sued the United States Government 
in Mochizuki v. the United States of America. Through the settlement of 
this case, the Japanese Latin Americans were eventually awarded $5,000 
each, along with a letter of apology signed by President Clinton. The 
settlement agreement explicitly allows for further action by Congress 
to fund Japanese Latin American redress, in light of the fact that 
Japanese Americans were allowed $20,000 under the Civil Liberties Act 
of 1988.
  My bill will allow us to correct this inequity by offering $20,000 to 
eligible Japanese Latin Americans. The Japanese Latin Americans who 
chose to accept their $5,000 award would be offered up to an additional 
$15,000 each. This bill would also reauthorize the educational mandate 
in the Act to continue research and education efforts, ensuring the 
internees' experiences will be remembered, and hopefully, to prevent 
recurrences.
                                 ______
                                 
      By Mr. WELLSTONE (for himself and Mr. Dayton):
  S. 1238. A bill to promote the engagement of young Americans in the 
democratic process through civic education in classrooms, in service 
learning programs, and in student leadership activities, of America's 
public schools; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. WELLSTONE. Mr. President, I hope that colleagues will support a 
bill I am introducing today: the Hubert H. Humphrey Civic Education 
Enhancement Act. Senator Dayton joins me as an original co-sponsor of 
this legislation. As a co-sponsor of Senator Dodd's electoral reform 
bill, I look forward to a debate later this year on a strong electoral 
reform measure that will ensure that all Americans who wish to vote be 
able to do so easily and without facing acts of intimidation and to do 
so using equipment that ensures all votes will be counted. However, as 
we think about reforming the methods through which our democracy is 
practiced on Election Day, we should focus attention on an issue that 
arguably presents a challenge to the vibrancy of that democracy that is 
even more fundamental: the decline of young Americans' engagement in 
public affairs. Turning the tide on political detachment by young 
persons through a new commitment to civic education in our public 
schools is the purpose of the Humphrey Act.
  Civic knowledge, civic intellectual skills, civic participation 
skills, and civic virtue on the part of the American citizenry are all 
crucial for the vitality of a healthy representative democracy. But, 
there is growing evidence that many of our younger citizens are lagging 
in all of the components necessary for their effective engagement in 
public life as they enter adulthood. Because all these skills and 
values are vital to effective citizenship, a multifaceted approach to 
enhancing civic education in our Nation's elementary and secondary 
schools, expressed in the Humphrey Act, is a true national priority.
  There are numerous pieces of evidence for a crisis in civic education 
that threatens the future vibrancy of our democracy. The most recent 
nationwide survey of incoming college freshmen conducted by the Higher 
Education Research Institute at the University of California at Los 
Angeles reports that only 28.1 percent of the students entering college 
in the fall of 2000 reported an interest in ``keeping up to date with 
political affairs.'' This was the lowest level in the 35 year history

[[Page 14468]]

of the survey. In 1966, 60.3 percent of students reported an interest 
in political affairs. In addition, the 1998 National Assessment of 
Educational Progress, NAEP, Civics Assessment revealed startling 
results in terms of American students' competence in civics at grade 
levels 4, 8, and 12. At each grade level the percentage of students 
shown to be ``Below Basic'' outnumbered the percentage in the ``At or 
above Proficient'' and ``Advanced'' levels combined. Thirty-one percent 
of fourth-grade students, thirty percent of eighth-graders, and thirty-
five percent of high school seniors were ``Below Basic'' in their 
civics achievement. And, a 1999 study published by the Lyndon B. 
Johnson School of Public Affairs at The University of Texas at Austin 
showed that the introduction of mandated state assessments in other 
fields, but typically not in civics, has resulted in a reduction in the 
amount of class time spent on civics.
  Moreover, in the years after leaving high school, young Americans are 
becoming less engaged in the democratic process. While 50 percent of 
Americans between the ages of 18 and 25 voted in 1972, only 38 percent 
of that age group voted in 2000. And, according to a Harvard University 
survey published in 2000, 85 percent of young people now say that 
volunteer work is better than political engagement as a way to solve 
important issues. It is this evidence that links this effort directly 
to any serious electoral reform effort. Therefore, it is time for a 
serious national response to all of these troubling indicators on the 
civic health of those that we are relying upon to be thoughtful, active 
citizens in the years ahead. The vibrancy of American elections of the 
future depend upon our revitalizing civic education today.
  It is most appropriate that this legislation focused on enhancing 
civic education would also serve as a memorial to one of the great 
Minnesotans of the twentieth century, Hubert H. Humphrey. As a 
political scientist, Mayor of St. Paul, United States Senator and as 
Vice President of the United States, Hubert H. Humphrey exemplified 
thoroughly the application of civic knowledge, civic intellectual 
skills, civic participation skills, and civic virtue in our 
representative democracy. As a teacher of political science at 
Macalester College, Hubert Humphrey made the case to students that, to 
be effective citizens, they must be informed about the political 
process and be analytical about the issues of their time as they take 
stances on them. By becoming active in party politics and, eventually, 
by running for office, Humphrey was a role model of a participant in 
the democratic experience at the local, State, and national levels. His 
belief in promoting public service was also shown in his nonstop work, 
beginning in his first campaign for President in 1960, in envisioning 
and supporting the Peace Corps program. Finally, Hubert Humphrey stood 
firm in his principles on so many occasions, exemplifying the civic 
virtue that is a crucial ingredient of complete citizenship. His moving 
oratory supporting President Truman's civil rights proposals at the 
1948 Democratic National Convention helped to shift his political party 
and, eventually, the entire nation on one of the fundamental issues of 
his time. He showed fortitude in speech after speech and vote after 
vote on the floor of this Senate in expressing his heartfelt duty to 
support America's neediest citizens. As he put it: ``The moral test of 
government is how that government treats those who are in the dawn of 
life, the children; those who are in the twilight of life, the elderly; 
and those who are in the shadows of life, the sick, the needy and the 
handicapped.'' There simply is no more worthy person to memorialize in 
a new significant national commitment to civic education than Hubert H. 
Humphrey.
  Recognizing that there is no single answer to revitalizing civic 
engagement in young Americans, the Humphrey Act includes five sections, 
each centered on bettering a different aspect of civic education in the 
elementary and secondary schools of America. Together, these five 
components of the Humphrey Act offer a thoughtful step forward in 
American civic education.
  First, in decades past, new and veteran teachers in the field of 
social studies had high-quality professional development opportunities 
made available to them through programs funded by the federal 
government as part of the National Defense Education Act, the Education 
Professional Development Act, the National Science Foundation, and 
other programs designed by the Department of Education. In recent 
years, most of these federally-funded opportunities, particularly 
helpful for new teachers, have disappeared. Social studies teachers, 
most of whom are now nearing retirement age, have told me how crucial 
these programs, generally in the format of summer institutes, were in 
aiding their ability to excite and inform their students about civics. 
We need to offer the same opportunities to younger civics teachers and 
the same benefits of good civics teachers to their students. Therefore, 
the Humphrey Act authorizes, at $25 million annually, summer Civics 
Institutes to promote creative curricula and pedagogy. The 
establishment of a new set of university and college campus-based 
summer institutes for teachers of all grades focused both on enlarging 
the teachers' knowledge of specific content as well as helping them to 
teach civics in exciting ways is a way that the Federal Government can 
play a role in quickly making a difference in enhancing the civics 
classroom for America's students.
  Next, when high in quality, service learning programs have been shown 
to increase student efficacy in public affairs and to enhance students' 
knowledge of how government works and how social change can be brought 
about. For instance, according to a 1997 study, high school students 
who participated in service learning programs have been shown to be 
more engaged in community organizations and to vote than their 
nonparticipant counterparts 15 years after their service learning 
experiences. I know that many of my colleagues have heard stories from 
students and educators engaged in service learning that add depth to 
this data. I will recount just one description of a recent school-based 
service learning program in Huntsville, Alabama, coordinated by the St. 
Paul-based National Youth Leadership Council, that exemplifies the 
power of service learning as a force in civic education. After the 8th 
grade students on a field trip to a historic cemetery discovered that 
it had been ``whites only,'' a second field trip discovered the burial 
site for the town's African-Americans in the 19th century. That 
cemetery was found to be in a deplorable state, with vandalized 
headstones, unmarked graves, and poorly kept records. The students key 
question: ``What are we going to do about it?'' This led to the 
creation of the African American History Project and any number of 
learning experiences emanating out of this service to accurately 
rehabilitate the cemetery: Math classes platted the unmapped cemetery; 
history students undertook oral histories; research on those buried in 
the cemetery took students to the court records and to the pages of a 
19th century black newspaper. One of the results of the endeavor was 
the development of a curriculum on the history of African-Americans in 
Huntsville for third-graders by the middle-school students with the 
assistance of their teachers. In this case, service and learning were 
almost entirely interwoven.
  It is crucial, however, to connect service learning experiences to 
classroom civics curriculum to long-term payoff in terms of promoting 
students' involvement in public affairs. The Humphrey Act would 
increase the authorization of funds for the school-based Learn and 
Serve Program and would authorize Service Learning Institutes dedicated 
to training/retraining service learning teachers. Raising the 
authorization level of the school-based Learn and Serve program to $65 
million would allow an expansion of a program for which the funding 
levels have been flat in recent fiscal years and would enhance states 
and local districts to more sharply link service learning programs to 
civic knowledge and engagement. Moreover, presently there is little 
money left for the professional development of new service

[[Page 14469]]

learning instructors, including mid-career teachers who are interested 
in being retrained in service learning. Therefore, it is important to 
develop a summer campus-based Service Learning Institutes program, to 
parallel the Civics Institutes program. Great strides have been made in 
the field of service learning in recent years even with a limited 
federal investment; it is time for this national investment to increase 
in the interest of the future vitality of our democracy.
  Third, we should do more to encourage local schools' innovation in 
the development of community service programs that explicitly link 
volunteer activities to social change in their communities. Therefore, 
the Humphrey Act incorporates provisions of a bill introduced in the 
House of Representatives by Representative Lindsey Graham to make 
spending on community service programs an allowable use of funds for 
districts under the ``innovative programs'' section of the Elementary 
and Secondary Education Act. Specifically, it would allow local schools 
to use federal money to fund community service programs which ``train 
and mobilize young people to measurably strengthen their communities 
through nonviolence, responsibility, compassion, respect, and moral 
courage.'' I applaud the philosophy and work of Do Something, a 
national organization founded in 1993 guided by the principle that 
young people could change the world if they believed in themselves and 
had the tools to take action. Using a project-centered approach, Do 
Something recognizes young people as effective leaders and, in the 
projects that they have promoted in hundreds of communities linking 
students and caring educators together, they have helped young persons 
turn their ideas into action. This section of the Humphrey Act would 
promote the work of Do Something and other local community service 
endeavors in schools all over the country.
  Next, our Nation's public middle-schools and high schools often miss 
opportunities to develop and support student governments that are 
viable voices for students in the operations of those schools. A 1996 
study by the National Association of Secondary School Principals showed 
that fewer than half of high school students believed that their 
student government ``affects decisions about co-curricular 
activities.'' Barely one-third expressed confidence in those 
governments' ability to ``affect decisions about school rules.'' We 
should also be concerned about the decline in participation in student 
leadership activities. Between 1972 and 1992, student government 
participation fell by 20 percent and work on student publications fell 
by 7 percent. Effective, innovative student government in which the 
representatives of the students are connected to the decision-making 
processes in the school do more than simply enhance the experiences of 
those who are in the elected student leadership positions. It also 
sends the message to those leaders' constituents that participation in 
politics and government can truly make a difference in one's daily 
life. Dynamic student leadership experiences can make a difference in 
promoting the civic education within America's middle-schools and high 
schools. Therefore, this bill develops a competitive grants program to 
provide funding for school districts to use in strengthening student 
government programs. In a similar manner, student engagement in local 
or state government activities or on school boards can be crucial in 
allowing young persons to experience first-hand early in their lives 
that participation does indeed matter. At present, in some communities, 
high school students are explicitly involved in the activities of city 
government and school boards; we should do all we can to make that more 
common. The grant programs in this portion of the Humphrey Act, 
therefore, also may be used to develop innovative programs for student 
engagement in governmental activities.
  Finally, while a variety of civics education enhancement programs 
have been implemented through Federal Government efforts and at the 
state and local level, no comprehensive, national research exists on 
the short- and long-term efficacy of such programs in encouraging civic 
knowledge and other learning or in promoting civic engagement. This 
contrasts with the extensive research on the effectiveness of different 
approaches to the teaching of reading and mathematics that has driven 
decisions about curricula in those fields. Therefore, the final section 
of the legislation authorizes the Department of Education's Office of 
Educational Research and Improvement, OERI, to carry out an extensive 
five-year research project on the frequency and efficacy of different 
approaches employed in civic education, with attention given to their 
effectiveness with different subgroups of students. These include 
traditional classroom-based civics education, the federally-funded ``We 
the People . . . the Citizen and the Constitution'' curricular program, 
experiential learning programs such as the Close Up program, service 
learning, student government, as well as more innovative programs such 
as the ``public works'' approach to civic engagement, designed by the 
Hubert Humphrey Institute of Public Affairs at the University of 
Minnesota, that involve work on common projects of civic benefit with a 
focus on bringing together individuals with ideological, cultural, 
racial, income, and other differences in carrying out the project. So 
that we make wise curricular and funding decisions in the future we 
need to know which approaches, and combinations of approaches, to civic 
education are the most effective in achieving the outcomes we expect.
  We should celebrate the efforts of all who have been involved in the 
civic education of America's students. This bill does not denigrate 
their efforts. But, because the engagement in public affairs by our 
young people is so important for the long-term health of our democracy, 
it is time to take a step forward in establishing a comprehensive new 
federal commitment to civic education. The Humphrey Civic Education 
Enhancement Act combines new commitments to the professional 
development of civics teachers, an increase in funding for school-based 
service learning and the professional development of service learning 
teachers, local innovation in community service programs in schools, 
and an encouragement of a revitalized student involvement in student 
leadership programs and in local government. I am proud that a broad 
range of organizations recognize the need for this legislation and have 
endorsed this bill. These include the National Council of the Social 
Studies, the State Education Agency K-12 Service-Learning Network, the 
National Youth Leadership Council, Do Something, the National Community 
Service Coalition, Earth Force, Youth Service America, the American 
Youth Policy Forum, the National Association of Secondary School 
Principals, and the National Association of Student Councils.
  Hubert Humphrey said, ``It is not enough to merely defend democracy. 
To defend it may be to lose it; to extend it is to strengthen it. 
Democracy is not property; it is an idea.'' Let us extend democracy 
and, in so doing, create a new generation of civic engagement. I 
strongly urge my colleagues to memorialize Hubert H. Humphrey and his 
life of civic engagement with the passage of this legislation.
                                 ______
                                 
      By Mr. HAGEL (for himself, Mr. Ensign, and Mr. Lugar):
  S. 1239. A bill to amend title XVIII of the Social Security Act to 
provide medicare beneficiaries with a drug discount card that ensures 
access to affordable outpatient prescription drugs; to the Committee on 
Finance.
  Mr. HAGEL. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1239

       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 
     Rx Drug Discount and Security Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:


[[Page 14470]]


Sec. 1. Short title; table of contents.
Sec. 2. Voluntary Medicare Outpatient Prescription Drug Discount and 
              Security Program.

``Part D--Voluntary Medicare Outpatient Prescription Drug Discount and 
                            Security Program

``Sec. 1860. Definitions.

      ``Subpart 1--Establishment of Voluntary Medicare Outpatient 
            Prescription Drug Discount and Security Program

``Sec. 1860A. Establishment of program.
``Sec. 1860B. Enrollment.
``Sec. 1860C. Providing enrollment and coverage information to 
              beneficiaries.
``Sec. 1860D. Enrollee protections.
``Sec. 1860E. Annual enrollment fee.
``Sec. 1860F. Benefits under the program.
``Sec. 1860G. Selection of entities to provide prescription drug 
              coverage.
``Sec. 1860H. Payments to eligible entities for administering the 
              catastrophic benefit.
``Sec. 1860I. Determination of income levels.
``Sec. 1860J. Appropriations.

  ``Subpart 2--Establishment of the Medicare Prescription Drug Agency

``Sec. 1860S. Medicare Prescription Drug Agency.
``Sec. 1860T. Commissioner; Deputy Commissioner; other officers.
``Sec. 1860U. Administrative duties of the Commissioner.
``Sec. 1860V. Medicare Competition and Prescription Drug Advisory 
              Board.''.
Sec. 3. Commissioner as member of the board of trustees of the medicare 
              trust funds.
Sec. 4. Exclusion of part D costs from determination of part B monthly 
              premium.
Sec. 5. Medigap revisions.

     SEC. 2. VOLUNTARY MEDICARE OUTPATIENT PRESCRIPTION DRUG 
                   DISCOUNT AND SECURITY PROGRAM.

       (a) Establishment of Program.--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--Voluntary Medicare Outpatient Prescription Drug Discount and 
                            Security Program


                             ``definitions

       ``Sec. 1860. In this part:
       ``(1) Commissioner.--The term `Commissioner' means the 
     Commissioner of Medicare Prescription Drugs appointed under 
     section 1860S(a).
       ``(2) Covered outpatient drug.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `covered outpatient drug' means--
       ``(i) a drug that may be dispensed only upon a prescription 
     and that is described in clause (i) or (ii) of subparagraph 
     (A) of section 1927(k)(2); or
       ``(ii) a biological product or insulin described in 
     subparagraph (B) or (C) of such section.
       ``(B) Exclusions.--
       ``(i) In general.--The term `covered outpatient drug' does 
     not include drugs or classes of drugs, or their medical uses, 
     which may be excluded from coverage or otherwise restricted 
     under section 1927(d)(2), other than those restricted under 
     subparagraph (E) of such section (relating to smoking 
     cessation agents).
       ``(ii) Avoidance of duplicate coverage.--A drug prescribed 
     for an individual that would otherwise be a covered 
     outpatient drug under this part shall not be considered to be 
     such a drug if payment for the drug is available under part A 
     or B (but such drug shall be so considered if such payment is 
     not available because the eligible beneficiary has exhausted 
     benefits under part A or B), without regard to whether the 
     individual is entitled to benefits under part A or enrolled 
     under part B.
       ``(3) Eligible beneficiary.--The term `eligible 
     beneficiary' means an individual who is--
       ``(A) eligible for benefits under part A or enrolled under 
     part B; and
       ``(B) not eligible for prescription drug coverage under a 
     medicaid plan under title XIX.
       ``(4) Eligible entity.--The term `eligible entity' means 
     any entity that the Commissioner determines to be appropriate 
     to provide the benefits under this part, including--
       ``(A) pharmaceutical benefit management companies;
       ``(B) wholesale and retail pharmacy delivery systems;
       ``(C) insurers;
       ``(D) Medicare+Choice organizations;
       ``(E) other entities; or
       ``(F) any combination of the entities described in 
     subparagraphs (A) through (E).
       ``(5) 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 Omnibus Budget Reconciliation Act 
     of 1981) applicable to a family of the size involved.

      ``Subpart 1--Establishment of Voluntary Medicare Outpatient 
            Prescription Drug Discount and Security Program


                       ``establishment of program

       ``Sec. 1860A. (a) Provision of Benefit.--The Commissioner 
     shall establish a Medicare Outpatient Prescription Drug 
     Discount and Security Program under which an eligible 
     beneficiary may voluntarily enroll and receive benefits under 
     this part through enrollment with an eligible entity with a 
     contract under this part.
       ``(b) Program To Begin in 2003.--The Commissioner shall 
     establish the program under this part in a manner so that 
     benefits are first provided for months beginning with January 
     2003.
       ``(c) Voluntary Nature of Program.--Nothing in this part 
     shall be construed as requiring an eligible beneficiary to 
     enroll in the program under this part.
       ``(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 Commissioner 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. Except as otherwise 
     provided in this subsection, such process shall be similar to 
     the process for enrollment under part B under section 1837.
       ``(B) Requirement of enrollment.--An eligible beneficiary 
     must enroll under this part in order to be eligible to 
     receive the benefits under this part.
       ``(2) Enrollment periods.--
       ``(A) In general.--Except as provided under subparagraph 
     (B) or (C), an eligible beneficiary may not enroll in the 
     program under this part during any period after the 
     beneficiary's initial enrollment period under part B (as 
     determined under section 1837).
       ``(B) Special enrollment period.--In the case of eligible 
     beneficiaries that have recently lost eligibility for 
     prescription drug coverage under a medicaid plan under title 
     XIX, the Commissioner shall establish a special enrollment 
     period in which such beneficiaries may enroll under this 
     part.
       ``(C) Open enrollment period in 2003 for current 
     beneficiaries.--The Commissioner shall establish a period, 
     which shall begin on the date on which the Commissioner first 
     begins to accept elections for enrollment under this part and 
     shall end on December 31, 2003, during which any eligible 
     beneficiary may--
       ``(i) enroll under this part; or
       ``(ii) enroll or re-enroll under this part after having 
     previously declined or terminated such enrollment.
       ``(3) Period of coverage.--
       ``(A) In general.--Except as provided in subparagraph (B) 
     and subject to subparagraph (C), an eligible beneficiary's 
     coverage under the program under this part shall be effective 
     for the period provided under section 1838, as if that 
     section applied to the program under this part.
       ``(B) Enrollment during open and special enrollment.--
     Subject to subparagraph (C), an eligible beneficiary who 
     enrolls under the program under this part under subparagraph 
     (B) or (C) of paragraph (2) 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 January 1, 2003.
       ``(4) Part d coverage terminated by termination of coverage 
     under parts a and b or eligibility for medical assistance.--
       ``(A) In general.--In addition to the causes of termination 
     specified in section 1838, the Commissioner shall terminate 
     an individual's coverage under this part if the individual 
     is--
       ``(i) no longer enrolled in part A or B; or
       ``(ii) eligible for prescription drug coverage under a 
     medicaid plan under title XIX.
       ``(B) Effective date.--The termination described in 
     subparagraph (A) shall be effective on the effective date 
     of--
       ``(i) the termination of coverage under part A or (if 
     later) under part B; or
       ``(ii) the coverage under title XIX.
       ``(b) Enrollment With Eligible Entity.--
       ``(1) Process.--
       ``(A) In general.--The Commissioner shall establish a 
     process through which an eligible beneficiary who is enrolled 
     under this part 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 Commissioner shall use rules similar to 
     the rules for enrollment and disenrollment with a 
     Medicare+Choice plan under section 1851 (including the 
     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 must enroll with an eligible entity in order to 
     receive benefits under this part. The beneficiary may elect 
     to receive such benefits from the Medicare+Choice 
     organization in which the beneficiary is enrolled if the 
     organization has been awarded a contract under this part.

[[Page 14471]]

       ``(3) Competition.--Eligible entities with a contract under 
     this part shall compete for beneficiaries on the basis of 
     discounts, formularies, pharmacy networks, and other services 
     provided for under the contract.
       ``(c) Enrollment Period for Benefits in 2003.--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 January 
     1, 2003, in order to ensure that coverage under this part is 
     effective as of such date.


    ``providing enrollment and coverage information to beneficiaries

       ``Sec. 1860C. (a) Activities.--The Commissioner shall 
     provide for activities under this part to broadly disseminate 
     information to eligible beneficiaries (and prospective 
     eligible beneficiaries) regarding enrollment under this part 
     and the prescription drug coverage made available by eligible 
     entities with a contract under this part.
       ``(b) Special Rule for First Enrollment Under the 
     Program.--To the extent practicable, the activities described 
     in subsection (a) shall ensure that eligible beneficiaries 
     are provided with such information at least 60 days prior to 
     the first enrollment period described in section 1860B(c).


                         ``enrollee protections

       ``Sec. 1860D. (a) Guaranteed Issue and Nondiscrimination.--
       ``(1) Guaranteed issue.--
       ``(A) In general.--An eligible beneficiary who is eligible 
     to enroll with an eligible entity under section 1860B(b) for 
     prescription drug coverage under this part at a time during 
     which elections are accepted under this part with respect to 
     the coverage shall not be denied enrollment based on any 
     health status-related factor (described in section 2702(a)(1) 
     of the Public Health Service Act) or any other factor.
       ``(B) Medicare+choice limitations permitted.--The 
     provisions of paragraphs (2) and (3) (other than subparagraph 
     (C)(i), relating to default enrollment) of section 1851(g) 
     (relating to priority and limitation on termination of 
     election) shall apply to eligible entities under this 
     subsection.
       ``(2) Nondiscrimination.--An eligible entity offering 
     prescription drug coverage under this part shall not 
     establish a service area in a manner that would discriminate 
     based on health or economic status of potential enrollees.
       ``(b) Dissemination of Information.--
       ``(1) General information.--An eligible entity with a 
     contract under this part shall disclose, in a clear, 
     accurate, and standardized form to each eligible beneficiary 
     enrolled for prescription drug coverage with such entity 
     under this part at the time of enrollment and at least 
     annually thereafter, the information described in section 
     1852(c)(1) relating to such prescription drug coverage. Such 
     information includes the following:
       ``(A) Access to covered outpatient drugs, including access 
     through pharmacy networks.
       ``(B) How any formulary used by the eligible entity 
     functions.
       ``(C) Grievance and appeals procedures.
       ``(2) Disclosure upon request of general coverage, 
     utilization, and grievance information.--Upon request of an 
     eligible beneficiary, the eligible entity shall provide the 
     information described in section 1852(c)(2) (other than 
     subparagraph (D)) to such beneficiary.
       ``(3) Response to beneficiary questions.--Each eligible 
     entity offering prescription drug coverage under this part 
     shall have a mechanism for providing specific information to 
     enrollees upon request. The entity shall make available, 
     through an Internet website and in writing upon request, 
     information on specific changes in its formulary.
       ``(c) Access to Covered Benefits.--
       ``(1) Ensuring pharmacy access.--
       ``(A) In general.--Each eligible entity with a contract 
     under this part shall permit any pharmacy located in the area 
     covered by such contract to participate in the pharmacy 
     network of the eligible entity if the pharmacy agrees to 
     accept such operating terms as the eligible entity may 
     specify, including any fee schedule, requirements relating to 
     covered expenses, and quality standards relating to the 
     provision of prescription drug coverage.
       ``(B) Construction.--Nothing in this paragraph shall be 
     construed as requiring a pharmacy to participate in a 
     pharmacy network of an eligible entity with a contract under 
     this part to participate in any other coverage program of the 
     eligible entity.
       ``(2) Access to negotiated prices for prescription drugs.--
     For requirements relating to the access of an eligible 
     beneficiary to negotiated prices (including applicable 
     discounts), see section 1860F(a).
       ``(3) Requirements on development and application of 
     formularies.--Insofar as an eligible entity with a contract 
     under this part uses a formulary, the following requirements 
     must be met:
       ``(A) Formulary committee.--The eligible entity must 
     establish a pharmaceutical and therapeutic committee that 
     develops the formulary. Such committee shall include at least 
     1 physician and at least 1 pharmacist.
       ``(B) Inclusion of drugs in all therapeutic categories.--
     The formulary must include drugs within all therapeutic 
     categories and classes of covered outpatient drugs (although 
     not necessarily for all drugs within such categories and 
     classes).
       ``(C) Appeals and exceptions to application.--The entity 
     must have, as part of the appeals process under subsection 
     (f)(2), a process for appeals for denials of coverage based 
     on such application of the formulary.
       ``(d) Cost and Utilization Management; Quality Assurance; 
     Medication Therapy Management Program.--
       ``(1) In general.--For purposes of providing access to 
     negotiated benefits under section 1860F(a) and the 
     catastrophic benefit described in section 1860F(b), the 
     eligible entity shall have in place--
       ``(A) an effective cost and drug utilization management 
     program, including appropriate incentives to use generic 
     drugs, when appropriate;
       ``(B) quality assurance measures and systems to reduce 
     medical errors and adverse drug interactions, including a 
     medication therapy management program described in paragraph 
     (2); and
       ``(C) a program to control fraud, abuse, and waste.
       ``(2) Medication therapy management program.--
       ``(A) In general.--A medication therapy management program 
     described in this paragraph is a program of drug therapy 
     management and medication administration provided by a 
     community-based pharmacy that is designed to ensure that 
     prescription drugs made available under this part are 
     appropriately used to achieve therapeutic goals and reduce 
     the risk of adverse events, including adverse drug 
     interactions.
       ``(B) Elements.--Such program shall include--
       ``(i) enhanced beneficiary understanding of such 
     appropriate use through beneficiary education, counseling, 
     and other appropriate means; and
       ``(ii) increased beneficiary adherence with prescription 
     medication regimens through medication refill reminders, 
     special packaging, and other appropriate means.
       ``(C) Development of program in cooperation with licensed 
     pharmacists.--The program shall be developed in cooperation 
     with licensed pharmacists and physicians.
       ``(D) Considerations in pharmacy fees.--An eligible entity 
     with a contract under this part shall establish fees for 
     pharmacists, pharmacies, and others providing services under 
     the medication therapy management program that take into 
     account the resources and time used in implementing the 
     program.
       ``(3) Treatment of accreditation.--Section 1852(e)(4) 
     (relating to treatment of accreditation) shall apply to 
     prescription drug coverage provided under this part with 
     respect to the following requirements, in the same manner as 
     they apply to Medicare+Choice plans under part C with respect 
     to the requirements described in a clause of section 
     1852(e)(4)(B):
       ``(A) Subsection (c)(1) (relating to access to covered 
     benefits).
       ``(B) Subsection (g) (relating to confidentiality and 
     accuracy of enrollee records).
       ``(e) Grievance Mechanism.--Each eligible entity shall 
     provide meaningful procedures for hearing and resolving 
     grievances between the organization (including any entity or 
     individual through which the eligible entity provides covered 
     benefits) and eligible beneficiaries enrolled with the entity 
     under this part in accordance with section 1852(f).
       ``(f) Coverage Determinations, Reconsiderations, and 
     Appeals.--
       ``(1) In general.--An eligible entity shall meet the 
     requirements of section 1852(g) with respect to covered 
     benefits under the prescription drug coverage it offers under 
     this part in the same manner as such requirements apply to a 
     Medicare+Choice organization with respect to benefits it 
     offers under a Medicare+Choice plan under part C.
       ``(2) Appeals of formulary determinations.--Under the 
     appeals process under paragraph (1) an individual who is 
     enrolled with an eligible entity with a contract under this 
     part for prescription drug coverage may appeal any denial of 
     coverage of a prescription drug to obtain coverage for a 
     medically necessary covered outpatient drug that is not on 
     the formulary of the eligible entity (established under 
     subsection (c)) if the prescribing physician determines that 
     the therapeutically similar drug that is on the formulary is 
     not effective for the enrollee or has significant adverse 
     effects for the enrollee.
       ``(g) Confidentiality and Accuracy of Enrollee Records.--An 
     eligible entity shall meet the requirements of section 
     1852(h) with respect to enrollees under this part in the same 
     manner as such requirements apply to a Medicare+Choice 
     organization with respect to enrollees under part C.


                        ``annual enrollment fee

       ``Sec. 1860E. (a) Amount.--
       ``(1) In general.--Except as provided in subsection (c), 
     enrollment under the program under this part is conditioned 
     upon payment of an annual enrollment fee of $25.
       ``(2) Annual percentage increase.--
       ``(A) In general.--In the case of any calendar year 
     beginning after 2003, the dollar amount in paragraph (1) 
     shall be increased by an amount equal to--

[[Page 14472]]

       ``(i) such dollar amount; multiplied by
       ``(ii) the inflation adjustment.
       ``(B) Inflation adjustment.--For purposes of subparagraph 
     (A)(ii), the inflation adjustment for any calendar year is 
     the percentage (if any) by which--
       ``(i) the average per capita aggregate expenditures for 
     covered outpatient drugs in the United States for medicare 
     beneficiaries, as determined by the Commissioner for the 12-
     month period ending in July of the previous year; exceeds
       ``(ii) such aggregate expenditures for the 12-month period 
     ending with July 2003.
       ``(C) Rounding.--If any increase determined under clause 
     (ii) is not a multiple of $1, such increase shall be rounded 
     to the nearest multiple of $1.
       ``(b) Collection of Annual Enrollment Fee.--
       ``(1) In general.--Unless the eligible beneficiary makes an 
     election under paragraph (2), the annual enrollment fee 
     described in subsection (a) 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.
       ``(2) Direct payment.--An eligible beneficiary may elect to 
     pay the annual enrollment fee directly or in any other manner 
     approved by the Commissioner. The Commissioner shall 
     establish procedures for making such an election.
       ``(c) Waiver.--The Commissioner shall waive the enrollment 
     fee described in subsection (a) in the case of an eligible 
     beneficiary whose income is below 200 percent of the poverty 
     line.


                      ``benefits under the program

       ``Sec. 1860F. (a) Access to Negotiated Prices.--
       ``(1) Negotiated prices.--
       ``(A) In general.--Subject to subparagraph (B), each 
     eligible entity with a contract under this part shall provide 
     each eligible beneficiary enrolled with the entity with 
     access to negotiated prices (including applicable discounts) 
     for such prescription drugs as the eligible entity determines 
     appropriate. If such a beneficiary becomes eligible for the 
     catastrophic benefit under subsection (b), the negotiated 
     prices (including applicable discounts) shall continue to be 
     available to the beneficiary for those prescription drugs for 
     which payment may not be made under section 1860H(b). For 
     purposes of this subparagraph, the term `prescription drugs' 
     is not limited to covered outpatient drugs, but does not 
     include any over-the-counter drug that is not a covered 
     outpatient drug.
       ``(B) Limitations.--
       ``(i) Formulary restrictions.--Insofar as an eligible 
     entity with a contract under this part uses a formulary, the 
     negotiated prices (including applicable discounts) for 
     prescription drugs shall only be available for drugs included 
     in such formulary.
       ``(ii) Avoidance of duplicate coverage.--The negotiated 
     prices (including applicable discounts) for prescription 
     drugs shall not be available for any drug prescribed for an 
     eligible beneficiary if payment for the drug is available 
     under part A or B (but such negotiated prices shall be 
     available if payment under part A or B is not available 
     because the beneficiary has not met the deductible or has 
     exhausted benefits under part A or B).
       ``(2) Discount card.--The Commissioner shall develop a 
     uniform standard card format to be issued by each eligible 
     entity that may be used by an enrolled beneficiary to ensure 
     the access of such beneficiary to negotiated prices under 
     paragraph (1).
       ``(3) Ensuring discounts in all areas.--The Commissioner 
     shall develop procedures that ensure that each eligible 
     beneficiary that resides in an area where no eligible entity 
     has been awarded a contract under this part is provided with 
     access to negotiated prices for prescription drugs (including 
     applicable discounts).
       ``(b) Catastrophic Benefit.--
       ``(1) In general.--Subject to paragraph (4) (relating to 
     eligibility for the catastrophic benefit) and any formulary 
     used by the eligible entity with which the eligible 
     beneficiary is enrolled, the catastrophic benefit shall be 
     administered as follows:
       ``(A) Beneficiaries with annual incomes below 200 percent 
     of the poverty line.--In the case of an eligible beneficiary 
     whose modified adjusted gross income (as defined in paragraph 
     (4)(E)) is below 200 percent of the poverty line, the 
     beneficiary shall not be responsible for making a payment for 
     a covered outpatient drug provided to the beneficiary in a 
     year to the extent that 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, exceed $1,200.
       ``(B) Beneficiaries with annual incomes between 200 and 400 
     percent of the poverty line.--In the case of an eligible 
     beneficiary whose modified adjusted gross income (as so 
     defined) exceeds 200 percent, but does not exceed 400 
     percent, of the poverty line, the beneficiary shall not be 
     responsible for making a payment for a covered outpatient 
     drug provided to the beneficiary in a year to the extent that 
     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, 
     exceed $2,500.
       ``(C) Beneficiaries with annual incomes above 400 percent 
     of the poverty line.--In the case of an eligible beneficiary 
     whose modified adjusted gross income (as so defined) exceeds 
     400 percent of the poverty line, the beneficiary shall not be 
     responsible for making a payment for a covered outpatient 
     drug provided to the beneficiary in a year to the extent that 
     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, 
     exceed $5,000.
       ``(2) Annual percentage increase.--
       ``(A) In general.--In the case of any calendar year after 
     2003, the dollar amounts in paragraph (1) shall be increased 
     by an amount equal to--
       ``(i) such dollar amount; multiplied by
       ``(ii) the inflation adjustment determined under section 
     1860E(a)(2)(B) for such calendar year.
       ``(B) Rounding.--If any increase determined under 
     subparagraph (A) is not a multiple of $1, such increase shall 
     be rounded to the nearest multiple of $1.
       ``(3) Eligible entity not at risk for catastrophic 
     benefit.--
       ``(A) In general.--The Commissioner, and not the eligible 
     entity, shall be at risk for the provision of the 
     catastrophic benefit under this subsection.
       ``(B) Provisions relating to payments to eligible 
     entities.--For provisions relating to payments to eligible 
     entities for administering the catastrophic benefit under 
     this subsection, see section 1860H.
       ``(4) Catastrophic benefit not available to certain high 
     income individuals.--
       ``(A) In general.--An eligible beneficiary enrolled under 
     this part whose modified adjusted gross income for a taxable 
     year exceeds 600 percent of the poverty line shall not be 
     eligible for the catastrophic benefit under this subsection.
       ``(B) Beneficiary still eligible for discount benefit.--
     Nothing in subparagraph (A) shall be construed as affecting 
     the eligibility of a beneficiary described in such 
     subparagraph for the benefits under subsection (a).
       ``(C) Procedures for determining modified adjusted gross 
     income.--
       ``(i) In general.--The Commissioner shall establish 
     procedures for determining the modified adjusted gross income 
     of eligible beneficiaries enrolled under this part.
       ``(ii) Consultation.--The Commissioner shall consult with 
     the Secretary of the Treasury in making the determinations 
     described in clause (i).
       ``(iii) Disclosure of information.--Notwithstanding section 
     6103(a) of the Internal Revenue Code of 1986, the Secretary 
     of the Treasury may, upon written request from the 
     Commissioner, disclose to officers and employees of the 
     Medicare Prescription Drug Agency such return information as 
     is necessary to make the determinations described in clause 
     (i). Return information disclosed under the preceding 
     sentence may be used by officers and employees of the 
     Medicare Prescription Drug Agency only for the purposes of, 
     and to the extent necessary in, making such determinations.
       ``(D) Definition of modified adjusted gross income.--In 
     this paragraph, the term `modified adjusted gross income' 
     means adjusted gross income (as defined in section 62 of the 
     Internal Revenue Code of 1986)--
       ``(i) determined without regard to sections 135, 911, 931, 
     and 933 of such Code; and
       ``(ii) increased by the amount of interest received or 
     accrued by the taxpayer during the taxable year which is 
     exempt from tax under such Code.
       ``(5) Ensuring catastrophic benefit in all areas.--The 
     Commissioner shall develop procedures for the provision of 
     the catastrophic benefit under this subsection to each 
     eligible beneficiary that resides in an area where there are 
     no eligible entities that have been awarded a contract under 
     this part.


     ``selection of entities to provide prescription drug coverage

       ``Sec. 1860G. (a) Establishment of Bidding Process.--The 
     Commissioner shall establish a process under which the 
     Commissioner accepts bids from eligible entities and awards 
     contracts to the entities to provide the benefits under this 
     part to eligible beneficiaries in an area.
       ``(b) Submission of Bids.--Each eligible entity desiring to 
     enter into a contract under this part shall submit a bid to 
     the Commissioner at such time, in such manner, and 
     accompanied by such information as the Commissioner may 
     reasonably require.
       ``(c) Awarding of Contracts.--
       ``(1) In general.--The Commissioner shall, consistent with 
     the requirements of this part and the goal of containing 
     medicare program costs, award at least 2 contracts in each 
     area, unless only 1 bidding entity meets the terms and 
     conditions specified by the Commissioner under paragraph (2).
       ``(2) Terms and conditions.--The Commissioner shall not 
     award a contract to an eligible entity under this section 
     unless the Commissioner finds that the eligible entity is in 
     compliance with such terms and conditions as the Commissioner 
     shall specify.

[[Page 14473]]

       ``(3) Comparative merits.--In determining which of the 
     eligible entities that submitted bids that meet the terms and 
     conditions specified by the Commissioner under paragraph (2) 
     to award a contract, the Commissioner shall consider the 
     comparative merits of each of the bids.


  ``payments to eligible entities for administering the catastrophic 
                                benefit

       ``Sec. 1860H. (a) In General.--The Commissioner shall 
     establish procedures for making payments to an eligible 
     entity under a contract entered into under this part for--
       ``(1) providing covered outpatient prescription drugs to 
     beneficiaries eligible for the catastrophic benefit in 
     accordance with subsection (b); and
       ``(2) costs incurred by the entity in administering the 
     catastrophic benefit in accordance with subsection (c).
       ``(b) Payment for Covered Outpatient Prescription Drugs.--
       ``(1) In general.--Except as provided in subsection (c) and 
     subject to paragraph (2), the Commissioner may only pay an 
     eligible entity for covered outpatient drugs furnished by the 
     eligible entity to an eligible beneficiary enrolled with such 
     entity under this part that is eligible for the catastrophic 
     benefit under section 1860F(b).
       ``(2) Limitations.--
       ``(A) Formulary restrictions.--Insofar as an eligible 
     entity with a contract under this part uses a formulary, the 
     Commissioner may not make any payment for a covered 
     outpatient drug that is not included in such formulary.
       ``(B) Negotiated prices.--The Commissioner may not pay an 
     amount for a covered outpatient drug furnished to an eligible 
     beneficiary that exceeds the negotiated price (including 
     applicable discounts) that the beneficiary would have been 
     responsible for under section 1860F(a).
       ``(c) Payment for Administrative Costs.--
       ``(1) Procedures.--The procedures established under 
     subsection (a)(1) shall provide for payment to the eligible 
     entity of an administrative fee for each prescription filled 
     by the entity for an eligible beneficiary--
       ``(A) who is enrolled with the entity; and
       ``(B) to whom subparagraph (A), (B), or (C) of section 
     1860F(b)(1) applies with respect to a covered outpatient 
     drug.
       ``(2) Amount.--The fee described in paragraph (1) shall 
     be--
       ``(A) negotiated by the Commissioner; and
       ``(B) consistent with such fees paid under private sector 
     pharmaceutical benefit contracts.
       ``(d) Secondary Payer Provisions.--The provisions of 
     section 1862(b) shall apply to the benefits provided under 
     this part.


                    ``determination of income levels

       ``Sec. 1860I. (a) Procedures.--The Commissioner shall 
     establish procedures for determining the income levels of 
     eligible beneficiaries for purposes of sections 1860E(c) and 
     1860F(b).
       ``(b) Periodic Redeterminations.--Such income 
     determinations shall be valid for a period (of not less than 
     1 year) specified by the Commissioner.


                            ``Appropriations

       ``Sec. 1860J. 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 enrollment 
     fees collected under section 1860E.

  ``Subpart 2--Establishment of the Medicare Prescription Drug Agency


                  ``medicare prescription drug agency

       ``Sec. 1860S. (a) Establishment.--There is established, as 
     an independent agency in the executive branch of the 
     Government, a Medicare Prescription Drug Agency (in this part 
     referred to as the `Agency').
       ``(b) Duty.--It shall be the duty of the Agency to 
     administer the Medicare Outpatient Prescription Drug Discount 
     and Security Program under subpart 1.


          ``commissioner; deputy commissioner; other officers

       ``Sec. 1860T. (a) Commissioner of Medicare Prescription 
     Drugs.--
       ``(1) Appointment.--There shall be in the Agency a 
     Commissioner of Medicare Prescription Drugs (in this subpart 
     referred to as the `Commissioner') who shall be appointed by 
     the President, by and with the advice and consent of the 
     Senate.
       ``(2) Compensation.--The Commissioner shall be compensated 
     at the rate provided for level I of the Executive Schedule.
       ``(3) Term.--
       ``(A) In general.--The Commissioner shall be appointed for 
     a term of 6 years.
       ``(B) Continuance in office.--In any case in which a 
     successor does not take office at the end of a Commissioner's 
     term of office, such Commissioner may continue in office 
     until the appointment of a successor.
       ``(C) Delayed appointments.--A Commissioner appointed to a 
     term of office after the commencement of such term may serve 
     under such appointment only for the remainder of such term.
       ``(D) Removal.--An individual serving in the office of 
     Commissioner may be removed from office only under a finding 
     by the President of neglect of duty or malfeasance in office.
       ``(4) Responsibilities.--The Commissioner shall be 
     responsible for the exercise of all powers and the discharge 
     of all duties of the Agency, and shall have authority and 
     control over all personnel and activities thereof.
       ``(5) Promulgation of rules and regulations.--
       ``(A) In general.--The Commissioner may prescribe such 
     rules and regulations as the Commissioner determines 
     necessary or appropriate to carry out the functions of the 
     Agency.
       ``(B) Rulemaking.--The regulations prescribed by the 
     Commissioner shall be subject to the rulemaking procedures 
     established under section 553 of title 5, United States Code.
       ``(6) Delegation of authority.--
       ``(A) In general.--The Commissioner may assign duties, and 
     delegate, or authorize successive redelegations of, authority 
     to act and to render decisions, to such officers and 
     employees of the Agency as the Commissioner may find 
     necessary.
       ``(B) Effect of delegation.--Within the limitations of such 
     delegations, redelegations, or assignments, all official acts 
     and decisions of such officers and employees shall have the 
     same force and effect as though performed or rendered by the 
     Commissioner.
       ``(7) Consultation with secretary of health and human 
     services.--The Commissioner and the Secretary shall consult, 
     on an ongoing basis, to ensure the coordination of the 
     programs administered by the Commissioner with the programs 
     administered by the Secretary under this title and under 
     title XIX.
       ``(b) Deputy Commissioner of Medicare Prescription Drugs.--
       ``(1) Appointment.--There shall be in the Agency a Deputy 
     Commissioner of Medicare Prescription Drugs (in this subpart 
     referred to as the `Deputy Commissioner') who shall be 
     appointed by the President, by and with the advice and 
     consent of the Senate.
       ``(2) Term.--
       ``(A) In general.--The Deputy Commissioner shall be 
     appointed for a term of 6 years.
       ``(B) Continuance in office.--In any case in which a 
     successor does not take office at the end of a Deputy 
     Commissioner's term of office, such Deputy Commissioner may 
     continue in office until the entry upon office of such a 
     successor.
       ``(C) Delayed appointment.--A Deputy Commissioner appointed 
     to a term of office after the commencement of such term may 
     serve under such appointment only for the remainder of such 
     term.
       ``(3) Compensation.--The Deputy Commissioner shall be 
     compensated at the rate provided for level II of the 
     Executive Schedule.
       ``(4) Duties.--
       ``(A) In general.--The Deputy Commissioner shall perform 
     such duties and exercise such powers as the Commissioner 
     shall from time to time assign or delegate.
       ``(B) Acting commissioner.--The Deputy Commissioner shall 
     be Acting Commissioner of the Agency during the absence or 
     disability of the Commissioner, unless the President 
     designates another officer of the Government as Acting 
     Commissioner, in the event of a vacancy in the office of the 
     Commissioner.
       ``(c) Chief Actuary.--
       ``(1) Appointment.--
       ``(A) In general.--There shall be in the Agency a Chief 
     Actuary, who shall be appointed by, and in direct line of 
     authority to, the Commissioner.
       ``(B) Qualifications.--The Chief Actuary shall be appointed 
     from individuals who have demonstrated, by their education 
     and experience, superior expertise in the actuarial sciences.
       ``(C) Duties.--The Chief Actuary shall serve as the chief 
     actuarial officer of the Agency, and shall exercise such 
     duties as are appropriate for the office of the Chief Actuary 
     and in accordance with professional standards of actuarial 
     independence.
       ``(2) Compensation.--The Chief Actuary shall be compensated 
     at the highest rate of basic pay for the Senior Executive 
     Service under section 5382(b) of title 5, United States Code.


              ``administrative duties of the commissioner

       ``Sec. 1860U. (a) Personnel.--
       ``(1) In general.--The Commissioner may employ, without 
     regard to chapter 31 of title 5, United States Code, such 
     officers and employees as are necessary to administer the 
     activities to be carried out through the Medicare 
     Prescription Drug Agency.
       ``(2) Flexibility with respect to civil service laws.--
       ``(A) In general.--The staff of the Medicare Prescription 
     Drug Agency shall be appointed without regard to the 
     provisions of title 5, United States Code, governing 
     appointments in the competitive service, and, subject to 
     subparagraph (B), shall be paid without regard to the 
     provisions of chapters 51 and 53 of such title (relating to 
     classification and schedule pay rates).
       ``(B) Maximum rate.--In no case may the rate of 
     compensation determined under subparagraph (A) exceed the 
     rate of basic pay

[[Page 14474]]

     payable for level IV of the Executive Schedule under section 
     5315 of title 5, United States Code.
       ``(b) Budgetary Matters.--
       ``(1) Submission of annual budget.--The Commissioner shall 
     prepare an annual budget for the Agency, which shall be 
     submitted by the President to Congress without revision, 
     together with the President's annual budget for the Agency.
       ``(2) Appropriations requests.--
       ``(A) Staffing and personnel.--Appropriations requests for 
     staffing and personnel of the Agency shall be based upon a 
     comprehensive workforce plan, which shall be established and 
     revised from time to time by the Commissioner.
       ``(B) Administrative expenses.--Appropriations for 
     administrative expenses of the Agency are authorized to be 
     provided on a biennial basis.
       ``(c) Seal of Office.--
       ``(1) In general.--The Commissioner shall cause a Seal of 
     Office to be made for the Agency of such design as the 
     Commissioner shall approve.
       ``(2) Judicial notice.--Judicial notice shall be taken of 
     the seal made under paragraph (1).
       ``(d) Data Exchanges.--
       ``(1) Disclosure of records and other information.--
     Notwithstanding any other provision of law (including 
     subsections (b), (o), (p), (q), (r), and (u) of section 552a 
     of title 5, United States Code)--
       ``(A) the Secretary shall disclose to the Commissioner any 
     record or information requested in writing by the 
     Commissioner for the purpose of administering any program 
     administered by the Commissioner, if records or information 
     of such type were disclosed to the Administrator of the 
     Health Care Financing Administration in the Department of 
     Health and Human Services under applicable rules, 
     regulations, and procedures in effect before the date of 
     enactment of the Medicare Rx Drug Discount and Security Act 
     of 2001; and
       ``(B) the Commissioner shall disclose to the Secretary or 
     to any State any record or information requested in writing 
     by the Secretary to be so disclosed for the purpose of 
     administering any program administered by the Secretary, if 
     records or information of such type were so disclosed under 
     applicable rules, regulations, and procedures in effect 
     before the date of enactment of the Medicare Rx Drug Discount 
     and Security Act of 2001.
       ``(2) Exchange of other data.--The Commissioner and the 
     Secretary shall periodically review the need for exchanges of 
     information not referred to in paragraph (1) and shall enter 
     into such agreements as may be necessary and appropriate to 
     provide information to each other or to States in order to 
     meet the programmatic needs of the requesting agencies.
       ``(3) Routine use.--
       ``(A) In general.--Any disclosure from a system of records 
     (as defined in section 552a(a)(5) of title 5, United States 
     Code) pursuant to this subsection shall be made as a routine 
     use under subsection (b)(3) of section 552a of such title 
     (unless otherwise authorized under such section 552a).
       ``(B) Computerized comparison.--Any computerized comparison 
     of records, including matching programs, between the 
     Commissioner and the Secretary shall be conducted in 
     accordance with subsections (o), (p), (q), (r), and (u) of 
     section 552a of title 5, United States Code.
       ``(4) Timely action.--The Commissioner and the Secretary 
     shall each ensure that timely action is taken to establish 
     any necessary routine uses for disclosures required under 
     paragraph (1) or agreed to under paragraph (2).


      ``medicare competition and prescription drug advisory board

       ``Sec. 1860V. (a) Establishment of Board.--There is 
     established a Medicare Prescription Drug Advisory Board (in 
     this section referred to as the `Board').
       ``(b) Advice on Policies; Reports.--
       ``(1) Advice on policies.--On and after the date the 
     Commissioner takes office, the Board shall advise the 
     Commissioner on policies relating to the Medicare Outpatient 
     Prescription Drug Discount and Security Program under subpart 
     1.
       ``(2) Reports.--
       ``(A) In general.--With respect to matters of the 
     administration of subpart 1, the Board shall submit to 
     Congress and to the Commissioner of Medicare Prescription 
     Drugs such reports as the Board determines appropriate. Each 
     such report may contain such recommendations as the Board 
     determines appropriate for legislative or administrative 
     changes to improve the administration of such subpart. Each 
     such report shall be published in the Federal Register.
       ``(B) Maintaining independence of board.--The Board shall 
     directly submit to Congress reports required under 
     subparagraph (A). No officer or agency of the United States 
     may require the Board to submit to any officer or agency of 
     the United States for approval, comments, or review, prior to 
     the submission to Congress of such reports.
       ``(c) Structure and Membership of the Board.--
       ``(1) Membership.--The Board shall be composed of 7 members 
     who shall be appointed as follows:
       ``(A) Presidential appointments.--
       ``(i) In general.--Three members shall be appointed by the 
     President, by and with the advice and consent of the Senate.
       ``(ii) Limitation.--Not more than 2 such members may be 
     from the same political party.
       ``(B) Senatorial appointments.--Two members (each member 
     from a different political party) shall be appointed by the 
     President pro tempore of the Senate with the advice of the 
     Chairman and the Ranking Minority Member of the Committee on 
     Finance of the Senate.
       ``(C) Congressional appointments.--Two members (each member 
     from a different political party) shall be appointed by the 
     Speaker of the House of Representatives, with the advice of 
     the Chairman and the Ranking Minority Member of the Committee 
     on Ways and Means of the House of Representatives.
       ``(2) Qualifications.--The members 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 Board.
       ``(d) Terms of Appointment.--
       ``(1) In general.--Subject to paragraph (2), each member of 
     the Board shall serve for a term of 6 years.
       ``(2) Continuance in office and staggered terms.--
       ``(A) Continuance in office.--A member appointed to a term 
     of office after the commencement of such term may serve under 
     such appointment only for the remainder of such term.
       ``(B) Staggered terms.--The terms of service of the members 
     initially appointed under this section shall begin on January 
     1, 2002, and expire as follows:
       ``(i) Presidential appointments.--The terms of service of 
     the members initially appointed by the President shall expire 
     as designated by the President at the time of nomination, 1 
     each at the end of--

       ``(I) 2 years;
       ``(II) 4 years; and
       ``(III) 6 years.

       ``(ii) Senatorial appointments.--The terms of service of 
     members initially appointed by the President pro tempore of 
     the Senate shall expire as designated by the President pro 
     tempore of the Senate at the time of nomination, 1 each at 
     the end of--

       ``(I) 3 years; and
       ``(II) 6 years.

       ``(iii) Congressional appointments.--The terms of service 
     of members initially appointed by the Speaker of the House of 
     Representatives shall expire as designated by the Speaker of 
     the House of Representatives at the time of nomination, 1 
     each at the end of--

       ``(I) 4 years; and
       ``(II) 5 years.

       ``(C) Reappointments.--Any person appointed as a member of 
     the Board may not serve for more than 8 years.
       ``(D) Vacancies.--Any member appointed to fill a vacancy 
     occurring before the expiration of the term for which the 
     member's predecessor was appointed shall be appointed only 
     for the remainder of that term. A member may serve after the 
     expiration of that member's term until a successor has taken 
     office. A vacancy in the Board shall be filled in the manner 
     in which the original appointment was made.
       ``(e) Chairperson.--A member of the Board shall be 
     designated by the President to serve as Chairperson for a 
     term of 4 years, coincident with the term of the President, 
     or until the designation of a successor.
       ``(f) Expenses and Per Diem.--Members of the Board shall 
     serve without compensation, except that, while serving on 
     business of the Board away from their homes or regular places 
     of business, members may be allowed travel expenses, 
     including per diem in lieu of subsistence, as authorized by 
     section 5703 of title 5, United States Code, for persons in 
     the Government employed intermittently.
       ``(g) Meeting.--
       ``(1) In general.--The Board shall meet at the call of the 
     Chairperson (in consultation with the other members of the 
     Board) not less than 4 times each year to consider a specific 
     agenda of issues, as determined by the Chairperson in 
     consultation with the other members of the Board.
       ``(2) Quorum.--Four members of the Board (not more than 3 
     of whom may be of the same political party) shall constitute 
     a quorum for purposes of conducting business.
       ``(h) Federal Advisory Committee Act.--The Board shall be 
     exempt from the provisions of the Federal Advisory Committee 
     Act (5 U.S.C. App.).
       ``(i) Personnel.--
       ``(1) Staff director.--The Board shall, without regard to 
     the provisions of title 5, United States Code, relating to 
     the competitive service, appoint a Staff Director who shall 
     be paid at a rate equivalent to a rate established for the 
     Senior Executive Service under section 5382 of title 5, 
     United States Code.
       ``(2) Staff.--
       ``(A) In general.--The Board may employ, without regard to 
     chapter 31 of title 5, United States Code, such officers and 
     employees as are necessary to administer the activities to be 
     carried out by the Board.

[[Page 14475]]

       ``(B) Flexibility with respect to civil service laws.--
       ``(i) In general.--The staff of the Board shall be 
     appointed without regard to the provisions of title 5, United 
     States Code, governing appointments in the competitive 
     service, and, subject to clause (ii), shall be paid without 
     regard to the provisions of chapters 51 and 53 of such title 
     (relating to classification and schedule pay rates).
       ``(ii) Maximum rate.--In no case may the rate of 
     compensation determined under clause (i) exceed the rate of 
     basic pay payable for level IV of the Executive Schedule 
     under section 5315 of title 5, United States Code.
       ``(j) Authorization of Appropriations.--There are 
     authorized to be appropriated, out of the Federal 
     Supplemental Medical Insurance Trust Fund established under 
     section 1841, and the general fund of the Treasury, such sums 
     as are necessary to carry out the purposes of this 
     section.''.
       (b) 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 
     section, 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 section.
       (c) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect on the date of enactment of this Act.
       (2) Timing of initial appointments.--The Commissioner and 
     Deputy Commissioner of Medicare Prescription Drugs may not be 
     appointed before March 1, 2002.

     SEC. 3. COMMISSIONER AS MEMBER OF THE BOARD OF TRUSTEES OF 
                   THE MEDICARE TRUST FUNDS.

       (a) In General.--Section 1841(b) of the Social Security Act 
     (42 U.S.C. 1395t(b)) is amended by striking ``and the 
     Secretary of Health and Human Services, all ex officio,'' and 
     inserting ``, the Secretary of Health and Human Services, and 
     the Commissioner of Medicare Prescription Drugs, all ex 
     officio,''.
       (b) Effective Date.--The amendment made by this subsection 
     shall take effect on March 1, 2002.

     SEC. 4. 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 Voluntary Medicare Outpatient Prescription Drug 
     Discount and Security Program under part D.''.

     SEC. 5. 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) Modernization of Medicare Supplemental Policies.--
       ``(1) Promulgation of model regulation.--
       ``(A) NAIC model regulation.--If, within 9 months after the 
     date of enactment of the Medicare Rx Drug Discount and 
     Security 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 package classified as 
     `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 package is replaced with 
     coverage for outpatient prescription drugs that complements 
     but does not duplicate the benefits for outpatient 
     prescription drugs that beneficiaries are otherwise entitled 
     to under this title;
       ``(ii) a uniform format is used in the policy with respect 
     to such revised benefits; and
       ``(iii) such revised standards meet any additional 
     requirements imposed by the Medicare Rx Drug Discount and 
     Security Act of 2001;

     subsection (g)(2)(A) shall be applied in each State, 
     effective for policies issued to policy holders on and after 
     January 1, 2003, 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 `2003 
     NAIC Model Regulation').
       ``(B) Regulation by the secretary.--If the NAIC does not 
     make the changes in the 1991 NAIC Model Regulation within the 
     9-month period specified in subparagraph (A), the Secretary 
     shall promulgate, not later than 9 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 January 1, 2003, 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 `2003 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 under part D of this title are changed 
     and the Secretary determines, in consultation with the NAIC, 
     that changes in the 2003 NAIC Model Regulation or 2003 
     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 `I' 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 2003 NAIC Model Regulation or 2003 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.''.
                                 ______
                                 
      By Mr. BENNETT:
  S. 1240. A bill to provide for the acquisition of land and 
construction of an interagency administrative and visitor facility at 
the entrance to American Fork Canyon, Utah, and for other purposes; to 
the Committee on Energy and Natural Resources.
  Mr. BENNETT. Mr. President, I rise today to introduce the Timpanogos 
Interagency Land Exchange Act of 2001.
  Before I explain the details of my legislation I would like to share 
with my colleagues a bit of the area's history. So everyone understands 
the lay of the land, Timpanogos Cave is in American Fork Canyon, which 
is a 45-50 minute drive south of Salt Lake City. Now that my colleagues 
have a general idea of the location let me share some information on 
the designation of the cave. After being solicited by a group of Utahns 
familiar with Timpanogos Cave, President Warren G. Harding, invoking 
the Antiquities Act, designated the Timpanogos Cave National Monument 
on October 14, 1922. It just so happens that today is the 77th 
anniversary of the dedication of the Timpanogos Cave National Monument. 
The dedication took place on July 25, 1924. The Secretary of the 
Interior at that time, Hubert Work, invited a group of journalists from 
New York City on a five week tour of the recently created national 
parks and monuments in the west. Ostensibly, the tour had been 
organized to publicize the features of the new parks of the quickly 
growing National Park Service. After spending over a month visiting 
National Parks, the group arrived at Timpanogos Cave National Monument 
of the 25th of July where Mr. Alvah Davison, a noted New York 
publisher, gave the dedication speech.
  I believe it is fitting on the 77th anniversary of the dedication of 
the Timpanogos Cave National Monument to introduce legislation that 
will enhance the unique visitor experience at this site. The Timpanogos 
Interagency Land Exchange Act of 2001 authorizes the exchange of 266 
acres of United States Forest Service land for 37 acres of private 
land. This newly acquired land will serve as the site for a new visitor 
center and administrative offices of the Pleasant Grove Ranger district 
of the Uinta National Forest and the

[[Page 14476]]

Timpanogos Cave National Monument. My legislation also authorizes the 
construction of the new interagency facility. This new facility, which 
will be located near the mouth of American Fork Canyon in the town of 
Highland, UT, will not only benefit the visiting public, but will also 
result in better coordination between the NPS and USFS.
  The land exchange requires the Secretary of Agriculture's approval 
and must conform with the ``Uniform Appraisal Standards for Federal 
Land Acquisitions.'' Furthermore, the exchange is being conducted with 
a private landowner who is willing to trade his property for various 
USFS parcels on the Uinta National Forest.
  The necessity for this legislation is ten years overdue. The original 
visitor center at Timpanogos Cave was built as part of the NPS's 
Mission '66 program. Unfortunately it burned down in 1991. In 1992, as 
an emergency measure, the NPS began use of a 20 foot by 60 foot double-
wide trailer to serve temporarily as a make-shift visitor center. The 
trailer still serves today as the visitor center. The trailer is not 
suitable for the monument's annual visitation of 125,000 people. On 
high visitation days the center is easily overrun by the public. 
Additionally, the center suffers from rock-fall that has caused 
significant damage to the roof of the trailer and raises obvious safety 
issues.
  The NPS will not be the only beneficiary of this new site. As I 
stated before,the Pleasant Grove Ranger District of the Uinta National 
Forest will also be getting a new home. Currently, the Pleasant Grove 
Ranger District is housed in a 1950's era building that was not 
designed for today's staffing requirements or modern day computer and 
communications needs. It is simply too small and too outdated. The new 
facility will meet the space needs of the ranger district and be more 
technology friendly. Furthermore, the public now will be able to visit 
one conveniently located office to inquire about NPS and USFS 
activities.
  I view the Timpanogos Interagency Land Exchange Act of 2001 as simple 
legislation that will correct a decade old problem. I look forward to 
working with the Committee on Energy and Natural Resources to move this 
legislation quickly.
                                 ______
                                 
      By Mr. SPECTER:
  S. 1241. A bill to amend the Fair Labor Standards Act of 1938 to 
permit certain youth to perform certain work with wood products; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
introduce legislation designed to permit certain youths, those exempt 
from attending school, between the ages of 14 and 18 to work in 
sawmills under special safety conditions and close adult supervision. I 
introduced identical measures in the 105th and 106th Congresses. 
Similar legislation introduced by my distinguished colleague, 
Representative Joseph R. Pitts, has already passed in the House twice 
before. I am hopeful the Senate will also enact this important issue.
  As the former Chairman of the Labor, Health and Human Services and 
Education Appropriations Subcommittee, I have strongly supported 
increased funding for the enforcement of the important child safety 
protections contained in the Fair Labor Standards Act. I also believe, 
however, that accommodation must be made for youths who are exempt from 
compulsory school-attendance laws after the eighth grade. It is 
extremely important that youths who are exempt from attending school be 
provided with access to jobs and apprenticeships in areas that offer 
employment where they live.
  The need for access to popular trades is demonstrated by the Amish 
community. In 1998, I toured an Amish sawmill in Lancaster County, PA, 
and had the opportunity to meet with some of my Amish constituency. In 
December 2000, Representative Pitts and I held a meeting in Gap, PA, 
with over 20 members of the Amish community to hear their concerns on 
this issue. On May 3, 2001, I chaired a hearing of the Labor, Health 
and Human Services and Education Appropriations Subcommittee to examine 
these issues.
  At the hearing the Amish explained that while they once made their 
living almost entirely by farming, they have increasingly had to expand 
into other occupations as farmland has disappeared in many areas due to 
pressure from development. As a result, many of the Amish have come to 
rely more and more on work in sawmills to make their living. The Amish 
culture expects youth, upon the completion of their education at the 
age of 14, to begin to learn a trade that will enable them to become 
productive members of society. In many areas, work in sawmills is one 
of the major occupations available for the Amish, whose belief system 
limits the types of jobs they may hold. Unfortunately, these youths are 
currently prohibited by law from employment in this industry until they 
reach the age of 18. This prohibition threatens both the religion and 
lifestyle of the Amish.
  Under my legislation, youths would not be allowed to operate power 
machinery, but would be restricted to performing activities such as 
sweeping, stacking wood, and writing orders. My legislation requires 
that the youths must be protected from wood particles or flying debris 
and wear protective equipment, all while under strict adult 
supervision. The Department of Labor must monitor these safeguards to 
insure that they are enforced.
  The Department of Justice has raised serious concerns under the 
Establishment Clause with the House legislation. The House measure 
conferred benefits only to a youth who is a ``member of a religious 
sect or division thereof whose established teachings do not permit 
formal education beyond the eighth grade.'' By conferring the 
``benefit'' of working in a sawmill only to the adherents of certain 
religions, the Department argues that the bill appears to impermissibly 
favor religion to ``irreligion.'' In drafting my legislation, I 
attempted to overcome such an objection by conferring permission to 
work in sawmills to all youths who ``are exempted from compulsory 
education laws after the eighth grade.'' Indeed, I think a broader 
focus is necessary to create a sufficient range of vocational 
opportunities for all youth who are legally out of school and in need 
of vocational opportunities.
  I also believe that the logic of the Supreme Court's 1972 decision in 
Wisconsin v. Yoder supports my bill. In Yoder, the Court held that 
Wisconsin's compulsory school attendance law requiring children to 
attend school until the age of 16 violated the Free Exercise Clause. 
The Court found that the Wisconsin law imposed a substantial burden on 
the free exercise of religion by the Amish since attending school 
beyond the eighth grade ``contravenes the basic religious tenets and 
practices of the Amish faith.'' I believe a similar argument can be 
made with respect to Amish youth working in sawmills. As their 
population grows and their subsistence through an agricultural way of 
life decreases, trades such as sawmills become more and more crucial to 
the continuation of their lifestyle. Barring youths from the sawmills 
denies these youths the very vocational training and path to self-
reliance that was central to the Yoder Court's holding that the Amish 
do not need the final two years of public education.
  I offer my legislation with the hope that my colleagues will work 
with me to provide relief for the Amish community. I am pleased to have 
received a commitment on the Senate floor from Senator Kennedy, 
Chairman of the Committee on Health, Education, Labor, and Pensions, to 
hold a hearing on this issue, and I urge the timely consideration of my 
bill by the full Senate.
                                 ______
                                 
      By Mr. GRAHAM (for himself, Mr. Murkowski, Mr. Reid, Mr. Nelson 
        of Florida, Mr. Inhofe, Mr. Warner, and Mr. Burns):
  S. 1243. A bill to amend the Internal Revenue Code of 1986 to treat 
spaceports like airports under the exempt facility bond rules; to the 
Committee on Finance.
  Mr. GRAHAM. Mr. President, today I am introducing with my colleagues, 
Senators Murkowski, Reid of Nevada, Nelson of Florida, Inhofe, Warner 
and Burns legislation entitled the Spaceport Equality Act.

[[Page 14477]]

  Currently airports, high speed rail, seaports, mass transit, and 
other transportation projects can raise money through the issuance of 
tax-exempt bonds. The Spaceport Equality Act amends the Internal 
Revenue Code to clarify that spaceports enjoy the same favorable tax 
treatment.
  The U.S. aerospace industry manufactures nearly 70 percent of the 
world's satellites, but only 40 percent of the satellites that enter 
the atmosphere are launched by this country. Our Nation's spaceports 
are a vital component of the infrastructure needed to expand and 
enhance the U.S. role in the international space arena. The Spaceport 
Equality Act is an important step in increasing our competitive 
position in this emerging industry.
  This bill will stimulate investment in expanding and modernizing our 
Nation's space launch facilities by lowering the cost of financing 
spaceport construction and renovation. Upon enactment, the bill will 
increase U.S. launch capacity, and enhance both our economic and 
national security.
  The commercial space market is expected to become increasingly more 
competitive in the next decade. The ability to have a robust space 
launch capability is in our best interests economically as well as 
strategically.
  My proposal does not provide direct Federal spending to our 
commercial space transportation industry. Instead, it creates the 
conditions necessary to stimulate private sector capital investment in 
infrastructure. This bill offers Congress the chance to help open a new 
age to space, where the States and local communities can themselves 
take part in space transportation.
  To be state of the art in space requires state of the art financing 
on the ground. I urge my colleagues in the Senate to join us in this 
important effort by co-sponsoring this bill.
  I ask unanimous consent that the text of the bill and a short summary 
of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1243

       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 ``Spaceport Equality Act''.

     SEC. 2. SPACEPORTS TREATED LIKE AIRPORTS UNDER EXEMPT 
                   FACILITY BOND RULES.

       (a) In General.--Paragraph (1) of section 142(a) of the 
     Internal Revenue Code of 1986 (relating to exempt facility 
     bonds) is amended to read as follows:
       ``(1) airports and spaceports,''.
       (b) Treatment of Ground Leases.--Paragraph (1) of section 
     142(b) of the Internal Revenue Code of 1986 (relating to 
     certain facilities must be governmentally owned) is amended 
     by adding at the end the following new subparagraph:
       ``(C) Special rule for spaceport ground leases.--For 
     purposes of subparagraph (A), spaceport property which is 
     located on land owned by the United States and which is used 
     by a governmental unit pursuant to a lease (as defined in 
     section 168(h)(7)) from the United States shall be treated as 
     owned by such unit if--
       ``(i) the lease term (within the meaning of section 
     168(i)(3)) is at least 15 years, and
       ``(ii) such unit would be treated as owning such property 
     if such lease term were equal to the useful life of such 
     property.''.
       (c) Definition of Spaceport.--Section 142 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new subsection:
       ``(l) Spaceport.--
       ``(1) In general.--For purposes of subsection (a)(1), the 
     term `spaceport' means--
       ``(A) any facility directly related and essential to 
     servicing spacecraft, enabling spacecraft to launch or 
     reenter, or transferring passengers or space cargo to or from 
     spacecraft, but only if such facility is located at, or in 
     close proximity to, the launch site or reentry site, and
       ``(B) any other functionally related and subordinate 
     facility at or adjacent to the launch site or reentry site at 
     which launch services or reentry services are provided, 
     including a launch control center, repair shop, maintenance 
     or overhaul facility, and rocket assembly facility.
       ``(2) Additional terms.--For purposes of paragraph (1)--
       ``(A) Space cargo.--The term `space cargo' includes 
     satellites, scientific experiments, other property 
     transported into space, and any other type of payload, 
     whether or not such property returns from space.
       ``(B) Spacecraft.--The term `spacecraft' means a launch 
     vehicle or a reentry vehicle.
       ``(C) Other terms.--The terms `launch', `launch site', 
     `launch services', `launch vehicle', `payload', `reenter', 
     `reentry services', `reentry site', and `reentry vehicle' 
     shall have the respective meanings given to such terms by 
     section 70102 of title 49, United States Code (as in effect 
     on the date of enactment of this subsection).''.
       (d) Exception From Federally Guaranteed Bond Prohibition.--
     Paragraph (3) of section 149(b) of the Internal Revenue Code 
     of 1986 (relating to exceptions) is amended by adding at the 
     end the following new subparagraph:
       ``(E) Exception for spaceports.--Paragraph (1) shall not 
     apply to any exempt facility bond issued as part of an issue 
     described in paragraph (1) of section 142(a) to provide a 
     spaceport in situations where--
       ``(i) the guarantee of the United States (or an agency or 
     instrumentality thereof) is the result of payment of rent, 
     user fees, or other charges by the United States (or any 
     agency or instrumentality thereof), and
       ``(ii) the payment of the rent, user fees, or other charges 
     is for, and conditioned upon, the use of the spaceport by the 
     United States (or any agency or instrumentality thereof).''.
       (e) Conforming Amendment.--The heading for section 142(c) 
     of the Internal Revenue Code of 1986 is amended by inserting 
     ``, Spaceports,'' after ``Airports''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
                                  ____


                       The Spaceport Equality Act


                       Description of Present Law

       Present law allows exempt facility bonds to be issued to 
     finance certain transportation facilities, such as airports, 
     docks and wharves, mass commuting facilities, high speed 
     intercity rail facilities, and storage or training facilities 
     directly related to the foregoing. Except for high-speed 
     intercity rail facilities, these facilities must be owned by 
     a governmental unit to be eligible for such financing. Exempt 
     facility bonds for airports, docks and wharves, and 
     governmentally-owned, high-speed intercity rail facilities 
     are not subject to the private activity bond volume cap. Only 
     25% of the exempt facility bonds for a privately-owned, high-
     speed intercity rail facility require private activity bond 
     volume cap.
       Airports.--Treasury Department regulations provide that 
     airport property eligible for exempt facility bond financing 
     includes facilities that are directly related and essential 
     to the servicing of aircraft, enabling aircraft to take off 
     and land, and transferring passengers or cargo to or from 
     aircraft, but only if the facilities are located at, or in 
     close proximity to, the take-off and landing area. The 
     regulations also provide that airports include other 
     functionally related and subordinate facilities at or 
     adjacent to the airport, such as terminals, hangers, loading 
     facilities, repair shops, maintenance or overhaul facilities, 
     and land-based navigational aids such as radar installations. 
     Facilities, the primary function of which is manufacturing 
     rather than transportation, are not eligible for exempt 
     facility bond financing.
       Public Use Requirement.--Treasury Department regulations 
     provide generally that, in order to qualify as an exempt 
     facility, the facility must serve or be available on a 
     regular basis for general public use, or be part of a 
     facility so used, as contrasted with similar types of 
     facilities that are constructed for the exclusive use of a 
     limited number of nongovernmental persons in their trades or 
     businesses. For example, a private dock or wharf leased to 
     and serving only a single manufacturing plant would not 
     qualify as a facility for general public use, but a hangar or 
     repair facility at a municipal airport, or a dock or a wharf, 
     would qualify even if it is leased or permanently assigned to 
     a single nongovernmental person provided that person directly 
     serves the general public, such as a common passenger carrier 
     or freight carrier. Certain facilities, such as sewage and 
     solid waste disposal facilities, are treated in all events as 
     serving a general public use although they may be part of a 
     nonpublic facility, such as a manufacturing facility used in 
     the trade of business of a single manufacturer.
       Federally Guaranteed Bonds.--Bonds directly or indirectly 
     guaranteed by the United States (or any agency or instrument 
     thereof) are not tax-exempt. The Treasury Department has not 
     issued detailed regulations interpreting the prohibition of 
     federal guarantees and the scope of the prohibition is 
     unclear.


                 Explanation of Spaceport Equality Act

       The Spaceport Equality Act clarifies that spaceports are 
     eligible for exempt facility bond financing to the same 
     extent as airports. As in the case of airports, the 
     facilities must be owned by a governmental unit to be 
     eligible for such financing.
       The term ``spaceport'' includes facilities directly related 
     and essential to servicing spacecraft, enabling spacecraft to 
     take off or land, and transferring passengers or space cargo 
     door from spacecraft, but only if the facilities are located 
     at, or in close proximity to, the launch site. Space cargo 
     includes satellites, scientific experiments, and other 
     property transported into space, whether or not the cargo 
     will return from space. The term ``spaceport'' also includes 
     other functionally related and subordinate

[[Page 14478]]

     facilities at or adjacent to the spaceport, such as launch 
     control centers, repair shops, maintenance or overhaul 
     facilities, and rocket assembly facilities that must be 
     located at or adjacent to the launch site. The term 
     ``spaceport'' further includes storage facilities directly 
     related to any governmentally-owned spaceport (including a 
     spaceport owned by the U.S. Government.
       It is intended that spaceports shall be treated in all 
     respects as serving the general public and will therefore 
     satisfy the public use requirements contained in present 
     Treasury Department regulations. It is also intended that the 
     use of spaceport facilities by the federal government will 
     not prevent the spaceport facilities from being treated as 
     serving the general public, will not prevent the spaceport 
     from being treated as owned by a government unit, and will 
     not otherwise render such facilities ineligible for exempt 
     facility bond financing. In addition, the amendment specifies 
     that payment by the federal government of rent, user fees, or 
     other charges for the use of spaceport property will not be 
     taken into account in determining whether bonds for 
     spacesports are federally guaranteed as long as such payments 
     are conditioned on the use of such property and not payable 
     unconditionally and in all events.
                                 ______
                                 
      By Mr. KENNEDY (for himself, Ms. Snowe, Mr. Rockefeller, Mr. 
        Chafee, Ms. Collins, Mr. Daschle, Mr. Baucus, Mr. Breaux, Mr. 
        Torricelli, Mrs. Lincoln, Mr. Graham, Mr. Bingaman, Mr. Kerry, 
        Mrs. Clinton, and Mr. Corzine).
  S. 1244. A bill to amend titles XIX and XXI of the Social Security 
Act to provide for FamilyCare coverage for parents of enrolled 
children, and for other purposes; to the Committee on Finance.
  Mr. KENNEDY. Mr. President, it's a privilege to join Senator Snowe 
and Senator Rockefeller and many others in introducing the Family Care 
Act of 2001 to expand health coverage to millions of families.
  Families across America get up every day, go to work, play by the 
rules, and still cannot afford the health insurance they need to stay 
healthy and protect themselves when serious illness strikes. Family 
Care is a practical, common-sense solution for millions of hardworking 
families, and it deserves to be a national priority.
  The legislation we are introducing today will provide health 
insurance to millions of Americans. And it does so without creating a 
new program or a new bureaucracy. It builds on the existing Children's 
Health Insurance Program. By allowing children and their parents to be 
covered, we can reduce the number of uninsured Americans by one-third.
  Four years ago we worked together, Republicans and Democrats, to 
expand coverage to uninsured children in families whose income is too 
high for Medicaid but not enough to afford private health insurance. 
The Children's Health Insurance Program has already brought quality 
health care to over 3 million children, and many more are eligible.
  Our bill is an important step to build on that initiative. Over 80 
percent of children who are uninsured or enrolled in Medicaid or CHIP 
have uninsured parents. Expanding CHIP to cover parents as well as 
children will make a huge difference to millions of working families.
  We also need to do more to help sign up the large number of children 
who are already eligible for health coverage but have never enrolled. 
The numbers are dramatic. Ninety-five percent of low-income uninsured 
children are eligible for Medicaid or CHIP. If we can sign up these 
children, we can give almost every child in America a real chance at a 
healthy childhood.
  Our legislation includes steps to make it easier for families to 
register and stay covered. Patients will enroll, and will enroll their 
children, too.
  We also know that many families lose coverage because complicated 
applications and burdensome requirements make it hard to stay insured. 
Our bill sees that families will have a simple application and that 
they won't have to enroll over and over again. It also makes sure that 
families they aren't excluded because that have simple assets like 
cars.
  I am pleased that this legislation has so much support in the Finance 
Committee. In addition to Senator Snowe, we have the support of every 
single Democrat in that committee. I hope that we can move on this 
legislation before the August recess.
  These are long-overdue steps to give millions more Americans the 
health coverage they deserve. It's a significant step toward the day 
when every man, woman and child in America has affordable health 
coverage. The Nation needs both, and I'm hopeful that Congress will 
enact both as soon as possible.
  I ask unanimous consent that the text of the bill and letters of 
support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1244

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

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

       (a) Short Title.--This Act may be cited as the ``FamilyCare 
     Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title of title; table of contents.
Sec. 2. Renaming of title XXI program.
Sec. 3. FamilyCare coverage of parents under the medicaid program and 
              title XXI.
Sec. 4. Automatic enrollment of children born to title XXI parents.
Sec. 5. Optional coverage of legal immigrants under the medicaid 
              program and title XXI.
Sec. 6. Optional coverage of children through age 20 under the medicaid 
              program and title XXI.
Sec. 7. Application of simplified title XXI procedures under the 
              medicaid program.
Sec. 8. Improving welfare-to-work transition under the medicaid 
              program.
Sec. 9. Elimination of 100 hour rule and other AFDC-related eligibility 
              restrictions.
Sec. 10. State grant program for market innovation.
Sec. 11. Limitations on conflicts of interest.
Sec. 12. Increase in CHIP allotment for each of fiscal years 2002 
              through 2004.
Sec. 13. Demonstration programs to improve medicaid and CHIP outreach 
              to homeless individuals and families.
Sec. 14. Technical and conforming amendments to authority to pay 
              medicaid expansion costs from title XXI appropriation.
Sec. 15. Additional CHIP revisions.

     SEC. 2. RENAMING OF TITLE XXI PROGRAM.

       (a) In General.--The heading of title XXI of the Social 
     Security Act (42 U.S.C. 1397aa et seq.) is amended to read as 
     follows:

                   ``TITLE XXI--FAMILYCARE PROGRAM''.

       (b) Program References.--Any reference in any provision of 
     Federal law or regulation to ``SCHIP'' or ``State children's 
     health insurance program'' under title XXI of the Social 
     Security Act shall be deemed a reference to the FamilyCare 
     program under such title.

     SEC. 3. FAMILYCARE COVERAGE OF PARENTS UNDER THE MEDICAID 
                   PROGRAM AND TITLE XXI.

       (a) Incentives To Implement FamilyCare Coverage.--
       (1) Under medicaid.--
       (A) Establishment of new optional eligibility category.--
     Section 1902(a)(10)(A)(ii) of the Social Security Act (42 
     U.S.C. 1396a(a)(10)(A)(ii)) is amended--
       (i) by striking ``or'' at the end of subclause (XVII);
       (ii) by adding ``or'' at the end of subclause (XVIII); and
       (iii) by adding at the end the following:

       ``(XIX) who are individuals described in subsection (k)(1) 
     (relating to parents of categorically eligible children);''.

       (B) Parents described.--Section 1902 of the Social Security 
     Act is further amended by inserting after subsection (j) the 
     following:
       ``(k)(1)(A) Individuals described in this paragraph are 
     individuals--
       ``(i) who are the parents of an individual who is under 19 
     years of age (or such higher age as the State may have 
     elected under section 1902(l)(1)(D)) and who is eligible for 
     medical assistance under subsection (a)(10)(A);
       ``(ii) who are not otherwise eligible for medical 
     assistance under such subsection, under section 1931, or 
     under a waiver approved under section 1115 or otherwise 
     (except under subsection (a)(10)(A)(ii)(XIX)); and
       ``(iii) whose family income exceeds the income level 
     applicable under the State plan under part A of title IV as 
     in effect as of July 16, 1996, but does not exceed the 
     highest income level applicable to a child in the family 
     under this title.
       ``(B) In establishing an income eligibility level for 
     individuals described in this paragraph, a State may vary 
     such level consistent with the various income levels 
     established under subsection (l)(2) based on the ages of 
     children described in subsection (l)(1) in order to ensure, 
     to the maximum extent possible, that such individuals shall 
     be enrolled in the same program as their children.
       ``(C) An individual may not be treated as being described 
     in this paragraph unless, at

[[Page 14479]]

     the time of the individual's enrollment under this title, the 
     child referred to in subparagraph (A)(i) of the individual is 
     also enrolled under this title.
       ``(D) In this subsection, the term `parent' includes an 
     individual treated as a caregiver for purposes of carrying 
     out section 1931.
       ``(2) In the case of a parent described in paragraph (1) 
     who is also the parent of a child who is eligible for child 
     health assistance under title XXI, the State may elect (on a 
     uniform basis) to cover all such parents under section 2111 
     or under this title.''.
       (C) Enhanced matching funds available if certain conditions 
     met.--Section 1905 of the Social Security Act (42 U.S.C. 
     1396d) is amended--
       (i) in the fourth sentence of subsection (b), by striking 
     ``or subsection (u)(3)'' and inserting ``, (u)(3), or 
     (u)(4)''; and
       (ii) in subsection (u)--

       (I) by redesignating paragraph (4) as paragraph (6), and
       (II) by inserting after paragraph (3) the following:

       ``(4) For purposes of subsection (b) and section 
     2105(a)(1):
       ``(A) FamilyCare parents.--The expenditures described in 
     this subparagraph are the expenditures described in the 
     following clauses (i) and (ii):
       ``(i) Parents.--If the conditions described in clause (iii) 
     are met, expenditures for medical assistance for parents 
     described in section 1902(k)(1) and for parents who would be 
     described in such section but for the fact that they are 
     eligible for medical assistance under section 1931 or under a 
     waiver approved under section 1115.
       ``(ii) Certain pregnant women.--Expenditures for medical 
     assistance for pregnant women under section 1902(l)(1)(A) in 
     a family the income of which exceeds the income level 
     applicable under section 1902(l)(2)(A) to a family of the 
     size involved as of January 1, 2000.
       ``(iii) Conditions.--The conditions described in this 
     clause are the following:
       ``(I) The State has a State child health plan under title 
     XXI which (whether implemented under such title or under this 
     title) has an effective income level for children that is at 
     least 200 percent of the poverty line.
       ``(II) Such State child health plan does not limit the 
     acceptance of applications, does not use a waiting list for 
     children who meet eligibility standards to qualify for 
     assistance, and provides benefits to all children in the 
     State who apply for and meet eligibility standards.
       ``(III) The State plans under this title and title XXI do 
     not provide coverage for parents with higher family income 
     without covering parents with a lower family income.
       ``(IV) The State does not apply an income level for parents 
     that is lower than the effective income level (expressed as a 
     percent of the poverty line) that has been specified under 
     the State plan under title XIX (including under a waiver 
     authorized by the Secretary or under section 1902(r)(2)), as 
     of January 1, 2000, to be eligible for medical assistance as 
     a parent under this title.
       ``(iv) Definitions.--For purposes of this subsection:
       ``(I) The term `parent' has the meaning given such term for 
     purposes of section 1902(k)(1).
       ``(II) The term `poverty line' has the meaning given such 
     term in section 2110(c)(5).''.
       (D) Appropriation from title xxi allotment for certain 
     medicaid expansion costs.--Subparagraph (B) of section 
     2105(a)(1) of the Social Security Act, as amended by section 
     14(a), is amended to read as follows:
       ``(B) FamilyCare parents.--Expenditures for medical 
     assistance that is attributable to expenditures described in 
     section 1905(u)(4)(A).''.
       (E) Only counting enhanced portion for coverage of 
     additional pregnant women.--Section 1905 of the Social 
     Security Act (42 U.S.C. 1396d) is amended--
       (i) in the fourth sentence of subsection (b), by inserting 
     ``(except in the case of expenditures described in subsection 
     (u)(5))'' after ``do not exceed'';
       (ii) in subsection (u), by inserting after paragraph (4) 
     (as inserted by subparagraph (C)), the following:
       ``(5) For purposes of the fourth sentence of subsection (b) 
     and section 2105(a), the following payments under this title 
     do not count against a State's allotment under section 2104:
       ``(A) Regular fmap for expenditures for pregnant women with 
     income above january 1, 2000 income level and below 185 
     percent of poverty.--The portion of the payments made for 
     expenditures described in paragraph (4)(A)(ii) that 
     represents the amount that would have been paid if the 
     enhanced FMAP had not been substituted for the Federal 
     medical assistance percentage.''.
       (2) Under title xxi.--
       (A) FamilyCare coverage.--Title XXI of the Social Security 
     Act (42 U.S.C. 1397aa et seq.) is amended by adding at the 
     end the following:

     ``SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PARENTS OF 
                   TARGETED LOW-INCOME CHILDREN.

       ``(a) Optional Coverage.--Notwithstanding any other 
     provision of this title, a State child health plan may 
     provide for coverage, through an amendment to its State child 
     health plan under section 2102, of FamilyCare assistance for 
     individuals who are targeted low-income parents in accordance 
     with this section, but only if--
       ``(1) the State meets the conditions described in section 
     1905(u)(4)(A)(iii); and
       ``(2) the State elects to provide medical assistance under 
     section 1902(a)(10)(A)(ii)(XIX), under section 1931, or under 
     a waiver under section 1115 to individuals described in 
     section 1902(k)(1)(A)(i) and elects an applicable income 
     level for such individuals that consistent with paragraphs 
     (1)(B) and (2) of section 1902(k), ensures to the maximum 
     extent possible, that those individuals shall be enrolled in 
     the same program as their children if their children are 
     eligible for coverage under title XIX (including under a 
     waiver authorized by the Secretary or under section 
     1902(r)(2)).''.
       ``(b) Definitions.--For purposes of this title:
       ``(1) FamilyCare assistance.--The term `FamilyCare 
     assistance' has the meaning given the term child health 
     assistance in section 2110(a) as if any reference to targeted 
     low-income children were a reference to targeted low-income 
     parents.
       ``(2) Targeted low-income parent.--The term `targeted low-
     income parent' has the meaning given the term targeted low-
     income child in section 2110(b) as if the reference to a 
     child were deemed a reference to a parent (as defined in 
     paragraph (3)) of the child; except that in applying such 
     section--
       ``(A) there shall be substituted for the income level 
     described in paragraph (1)(B)(ii)(I) the applicable income 
     level in effect for a targeted low-income child;
       ``(B) in paragraph (3), January 1, 2000, shall be 
     substituted for July 1, 1997; and
       ``(C) in paragraph (4), January 1, 2000, shall be 
     substituted for March 31, 1997.
       ``(3) Parent.--The term `parent' includes an individual 
     treated as a caregiver for purposes of carrying out section 
     1931.
       ``(4) Optional treatment of pregnant women as parents.--A 
     State child health plan may treat a pregnant woman who is not 
     otherwise a parent as a targeted low-income parent for 
     purposes of this section but only if the State has 
     established an income level under section 1902(l)(2)(A)(i) 
     for pregnant women that is at least 185 percent of the income 
     official poverty line described in such section.
       ``(c) References to Terms and Special Rules.--In the case 
     of, and with respect to, a State providing for coverage of 
     FamilyCare assistance to targeted low-income parents under 
     subsection (a), the following special rules apply:
       ``(1) Any reference in this title (other than subsection 
     (b)) to a targeted low-income child is deemed to include a 
     reference to a targeted low-income parent.
       ``(2) Any such reference to child health assistance with 
     respect to such parents is deemed a reference to FamilyCare 
     assistance.
       ``(3) In applying section 2103(e)(3)(B) in the case of a 
     family provided coverage under this section, the limitation 
     on total annual aggregate cost-sharing shall be applied to 
     the entire family.
       ``(4) In applying section 2110(b)(4), any reference to 
     `section 1902(l)(2) or 1905(n)(2) (as selected by a State)' 
     is deemed a reference to the income level applicable to 
     parents under section 1931 or under a waiver approved under 
     section 1115, or, in the case of a pregnant woman described 
     in subsection (b)(4), the income level established under 
     section 1902(l)(2)(A).
       ``(5) In applying section 2102(b)(3)(B), any reference to 
     children is deemed a reference to parents.''.
       (B) Additional allotment for states providing familycare.--
       (i) In general.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by inserting after subsection 
     (c) the following:
       ``(d) Additional Allotments for State Providing 
     FamilyCare.--
       ``(1) Appropriation; total allotment.--For the purpose of 
     providing additional allotments to States to provide 
     FamilyCare coverage under section 2111, there is 
     appropriated, out of any money in the Treasury not otherwise 
     appropriated--
       ``(A) for fiscal year 2002, $2,000,000,000;
       ``(B) for fiscal year 2003, $2,000,000,000;
       ``(C) for fiscal year 2004, $3,000,000,000;
       ``(D) for fiscal year 2005, $3,000,000,000;
       ``(E) for fiscal year 2006, $6,000,000,000;
       ``(F) for fiscal year 2007, $7,000,000,000;
       ``(G) for fiscal year 2008, $8,000,000,000;
       ``(H) for fiscal year 2009, $9,000,000,000;
       ``(I) for fiscal year 2010, $10,000,000,000; and
       ``(J) for fiscal year 2011 and each fiscal year thereafter, 
     the amount of the allotment provided under this paragraph for 
     the preceding fiscal year increased by the percentage 
     increase (if any) in the medical care expenditure category of 
     the Consumer Price Index for All Urban Consumers (United 
     States city average).
       ``(2) State and territorial allotments.--
       ``(A) In general.--In addition to the allotments provided 
     under subsections (b) and (c), subject to paragraphs (3) and 
     (4), of the amount available for the additional allotments 
     under paragraph (1) for a fiscal year, the Secretary shall 
     allot to each State with a State child health plan approved 
     under this title--

[[Page 14480]]

       ``(i) in the case of such a State other than a commonwealth 
     or territory described in clause (ii), the same proportion as 
     the proportion of the State's allotment under subsection (b) 
     (determined without regard to subsection (f)) to 98.95 
     percent of the total amount of the allotments under such 
     section for such States eligible for an allotment under this 
     subparagraph for such fiscal year; and
       ``(ii) in the case of a commonwealth or territory described 
     in subsection (c)(3), the same proportion as the proportion 
     of the commonwealth's or territory's allotment under 
     subsection (c) (determined without regard to subsection (f)) 
     to 1.05 percent of the total amount of the allotments under 
     such section for commonwealths and territories eligible for 
     an allotment under this subparagraph for such fiscal year.
       ``(B) Availability and redistribution of unused 
     allotments.--In applying subsections (e) and (f) with respect 
     to additional allotments made available under this 
     subsection, the procedures established under such subsections 
     shall ensure such additional allotments are only made 
     available to States which have elected to provide coverage 
     under section 2111.
       ``(3) Use of additional allotment.--Additional allotments 
     provided under this subsection are not available for amounts 
     expended before October 1, 2001. Such amounts are available 
     for amounts expended on or after such date for child health 
     assistance for targeted low-income children, as well as for 
     FamilyCare assistance.
       ``(4) Requiring election to provide familycare coverage.--
     No payments may be made to a State under this title from an 
     allotment provided under this subsection unless the State has 
     made an election to provide FamilyCare assistance.''.
       (ii) Conforming amendments.--Section 2104 of the Social 
     Security Act (42 U.S.C. 1397dd) is amended--

       (I) in subsection (a), by inserting ``subject to subsection 
     (d),'' after ``under this section,'';
       (II) in subsection (b)(1), by inserting ``and subsection 
     (d)'' after ``Subject to paragraph (4)''; and
       (III) in subsection (c)(1), by inserting ``subject to 
     subsection (d),'' after ``for a fiscal year,''.

       (C) No cost-sharing for pregnancy-related benefits.--
     Section 2103(e)(2) of the Social Security Act (42 U.S.C. 
     1397cc(e)(2)) is amended--
       (i) in the heading, by inserting ``and pregnancy-related 
     services'' after ``preventive services''; and
       (ii) by inserting before the period at the end the 
     following: ``and for pregnancy-related services''.
       (3) Effective date.--The amendments made by this subsection 
     apply to items and services furnished on or after October 1, 
     2001, whether or not regulations implementing such amendments 
     have been issued.
       (b) Rules for Implementation Beginning With Fiscal Year 
     2005.--
       (1) Required coverage of familycare parents.--Section 
     1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 
     1396a(a)(10)(A)(i)) is amended--
       (A) by striking ``or'' at the end of subclause (VI);
       (B) by striking the semicolon at the end of subclause (VII) 
     and insert ``, or''; and
       (C) by adding at the end the following:

       ``(VIII) who are described in subsection (k)(1) (or would 
     be described if subparagraph (A)(ii) of such subsection did 
     not apply) and who are in families with incomes that do not 
     exceed 100 percent of the poverty line applicable to a family 
     of the size involved;''.

       (2) Expansion of availability of enhanced match under 
     medicaid for pre-chip expansions.--Paragraph (4) of section 
     1905(u) of the Social Security Act (42 U.S.C. 1396d(u)), as 
     inserted by subsection (a)(1)(C), is amended--
       (A) by amending clause (ii) of subparagraph (A) to read as 
     follows:
       ``(ii) Certain pregnant women.--Expenditures for medical 
     assistance for pregnant women under section 1902(l)(1)(A) in 
     a family the income of which exceeds the 133 percent of the 
     income official poverty line.''; and
       (B) by adding at the end the following:
       ``(B) Children in families with income above medicaid 
     mandatory level not previously described.--The expenditures 
     described in this subparagraph are expenditures (other than 
     expenditures described in paragraph (2) or (3)) for medical 
     assistance made available to any child who is eligible for 
     assistance under section 1902(a)(10)(A) (other than under 
     clause (i)) and the income of whose family exceeds the 
     minimum income level required under subsection 1902(l)(2) 
     (or, if higher, the minimum level required under section 1931 
     for that State) for a child of the age involved (treating any 
     child who is 19 or 20 years of age as being 18 years of 
     age).''.
       (3) Offset of additional expenditures for enhanced match 
     for pre-chip expansion; elimination of offset for required 
     coverage of familycare parents.--
       (A) In general.--Section 1905(u)(5) of the Social Security 
     Act (42 U.S.C. 1396d(u)(5)), as added by subsection 
     (a)(1)(E), is amended--
       (i) by amending subparagraph (A) to read as follows:
       ``(A) Regular fmap for expenditures for pregnant women with 
     income above 133 percent of poverty.--The portion of the 
     payments made for expenditures described in paragraph 
     (4)(A)(ii) that represents the amount that would have been 
     paid if the enhanced FMAP had not been substituted for the 
     Federal medical assistance percentage.''; and
       (ii) by adding at the end the following:
       ``(B) FamilyCare parents under 100 percent of poverty.--
     Payments for expenditures described in paragraph (4)(A)(i) in 
     the case of parents whose income does not exceed 100 percent 
     of the income official poverty line applicable to a family of 
     the size involved.
       ``(C) Regular fmap for expenditures for certain children in 
     families with income above medicaid mandatory level.--The 
     portion of the payments made for expenditures described in 
     paragraph (4)(B) that represents the amount that would have 
     been paid if the enhanced FMAP had not been substituted for 
     the Federal medical assistance percentage.''.
       (B) Conforming amendments.--Subparagraph (B) of section 
     2105(a)(1) of the Social Security Act, as amended by section 
     14(a) and subsection (a)(1)(D), is amended to read as 
     follows:
       ``(B) Certain familycare parents and others.--Expenditures 
     for medical assistance that is attributable to expenditures 
     described in section 1905(u)(4), except as provided in 
     section 1905(u)(5).''.
       (4) Effective date.--The amendments made by this subsection 
     apply as of October 1, 2004, to fiscal years beginning on or 
     after such date and to expenditures under the State plan on 
     and after such date, whether or not regulations implementing 
     such amendments have been issued.
       (c) Making Title XXI Base Allotments Permanent.--Section 
     2104(a) of the Social Security Act (42 U.S.C. 1397dd(a)) is 
     amended--
       (1) by striking ``and'' at the end of paragraph (9);
       (2) by striking the period at the end of paragraph (10) and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(11) for fiscal year 2008 and each fiscal year 
     thereafter, the amount of the allotment provided under this 
     subsection for the preceding fiscal year increased by the 
     percentage increase (if any) in the medical care expenditure 
     category of the Consumer Price Index for All Urban Consumers 
     (United States city average).''.
       (d) Optional Application of Presumptive Eligibility 
     Provisions to Parents.--Section 1920A of the Social Security 
     Act (42 U.S.C. 1396r-1a) is amended by adding at the end the 
     following:
       ``(e) A State may elect to apply the previous provisions of 
     this section to provide for a period of presumptive 
     eligibility for medical assistance for a parent (as defined 
     for purposes of section 1902(k)(1)) of a child with respect 
     to whom such a period is provided under this section.''.
       (e) Conforming Amendments.--
       (1) Eligibility categories.--Section 1905(a) of the Social 
     Security Act (42 U.S.C. 1396d(a)) is amended, in the matter 
     before paragraph (1)--
       (A) by striking ``or'' at the end of clause (xii);
       (B) by inserting ``or'' at the end of clause (xiii); and
       (C) by inserting after clause (xiii) the following:
       ``(xiv) who are parents described (or treated as if 
     described) in section 1902(k)(1),''.
       (2) Income limitations.--Section 1903(f)(4) of the Social 
     Security Act (42 U.S.C. 1396b(f)(4)) is amended--
       (A) effective October 1, 2004, by in- 
     serting ``1902(a)(10)(A)(i)(VIII),'' after 
     ``1902(a)(10)(A)(i)(VII),''; and
       (B) by inserting ``1902(a)(10)(A)(ii)(XIX),'' after 
     ``1902(a)(10)(A)(ii)(XVIII),''.
       (3) Conforming amendment relating to no waiting period for 
     pregnant women.--Section 2102(b)(1)(B) of the Social Security 
     Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
       (A) by striking ``, and'' at the end of clause (i) and 
     inserting a semicolon;
       (B) by striking the period at the end of clause (ii) and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(iii) may not apply a waiting period (including a waiting 
     period to carry out paragraph (3)(C)) in the case of a 
     targeted low-income parent who is pregnant.''.

     SEC. 4. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO TITLE XXI 
                   PARENTS.

       Section 2102(b)(1) of the Social Security Act (42 U.S.C. 
     1397bb(b)(1)) is amended by adding at the end the following:



       ``(C) Automatic eligibility of children born to a parent 
     being provided familycare.--Such eligibility standards shall 
     provide for automatic coverage of a child born to an 
     individual who is provided assistance under this title in the 
     same manner as medical assistance would be provided under 
     section 1902(e)(4) to a child described in such section.''.

     SEC. 5. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE 
                   MEDICAID PROGRAM AND TITLE XXI.

       (a) Medicaid Program.--Section 1903(v) of the Social 
     Security Act (42 U.S.C. 1396b(v)) is amended--

[[Page 14481]]

       (1) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''; and
       (2) by adding at the end the following:
       ``(4)(A) A State may elect (in a plan amendment under this 
     title) to provide medical assistance under this title, 
     notwithstanding sections 401(a), 402(b), 403, and 421 of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996, for aliens who are lawfully residing in the 
     United States (including battered aliens described in section 
     431(c) of such Act) and who are otherwise eligible for such 
     assistance, within any of the following eligibility 
     categories:
       ``(i) Pregnant women.--Women during pregnancy (and during 
     the 60-day period beginning on the last day of the 
     pregnancy).
       ``(ii) Children.--Children (as defined under such plan), 
     including optional targeted low-income children described in 
     section 1905(u)(2)(B).
       ``(iii) Parents.--If the State has elected the eligibility 
     category described in clause (ii), caretaker relatives who 
     are parents (including individuals treated as a caregiver for 
     purposes of carrying out section 1931) of children (described 
     in such clause or otherwise) who are eligible for medical 
     assistance under the plan.
       ``(B) In the case of a State that has elected to provide 
     medical assistance to a category of aliens under subparagraph 
     (A), no debt shall accrue under an affidavit of support 
     against any sponsor of such an alien on the basis of 
     provision of assistance to such category and the cost of such 
     assistance shall not be considered as an unreimbursed 
     cost.''.
       (b) Title XXI.--Section 2107(e)(1) of the Social Security 
     Act (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end 
     the following:
       ``(E) Section 1903(v)(4) (relating to optional coverage of 
     categories of lawful resident alien children and parents), 
     but only with respect to an eligibility category under this 
     title, if the same eligibility category has been elected 
     under such section for purposes of title XIX.''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2001, and apply to medical 
     assistance and child health assistance furnished on or after 
     such date, whether or not regulations implementing such 
     amendments have been issued.

     SEC. 6. OPTIONAL COVERAGE OF CHILDREN THROUGH AGE 20 UNDER 
                   THE MEDICAID PROGRAM AND TITLE XXI.

       (a) Medicaid.--
       (1) In general.--Section 1902(l)(1)(D) of the Social 
     Security Act (42 U.S.C. 1396a(l)(1)(D)) is amended by 
     inserting ``(or, at the election of a State, 20 or 21 years 
     of age)'' after ``19 years of age''.
       (2) Conforming amendments.--
       (A) Section 1902(e)(3)(A) of the Social Security Act (42 
     U.S.C. 1396a(e)(3)(A)) is amended by inserting ``(or 1 year 
     less than the age the State has elected under subsection 
     (l)(1)(D))'' after ``18 years of age''.
       (B) Section 1902(e)(12) of the Social Security Act (42 
     U.S.C. 1396a(e)(12)) is amended by inserting ``or such higher 
     age as the State has elected under subsection (l)(1)(D)'' 
     after ``19 years of age''.
       (C) Section 1920A(b)(1) of the Social Security Act (42 
     U.S.C. 1396r-1a(b)(1)) is amended by inserting ``or such 
     higher age as the State has elected under section 
     1902(l)(1)(D)'' after ``19 years of age''.
       (D) Section 1928(h)(1) of the Social Security Act (42 
     U.S.C. 1396s(h)(1)) is amended by inserting ``or 1 year less 
     than the age the State has elected under section 
     1902(l)(1)(D)'' before the period at the end.
       (E) Section 1932(a)(2)(A) of the Social Security Act (42 
     U.S.C. 1396u-2(a)(2)(A)) is amended by inserting ``(or such 
     higher age as the State has elected under section 
     1902(l)(1)(D))'' after ``19 years of age''.
       (b) Title XXI.--Section 2110(c)(1) of the Social Security 
     Act (42 U.S.C. 1397jj(c)(1)) is amended by inserting ``(or 
     such higher age as the State has elected under section 
     1902(l)(1)(D))''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2001, and apply to medical 
     assistance and child health assistance provided on or after 
     such date, whether or not regulations implementing such 
     amendments have been issued.

     SEC. 7. APPLICATION OF SIMPLIFIED TITLE XXI PROCEDURES UNDER 
                   THE MEDICAID PROGRAM.

       (a) Application Under Medicaid.--
       (1) In general.--Section 1902(l) of the Social Security Act 
     (42 U.S.C. 1396a(l)) is amended--
       (A) in paragraph (3), by inserting ``subject to paragraph 
     (5)'', after ``Notwithstanding subsection (a)(17),''; and
       (B) by adding at the end the following:
       ``(5) With respect to determining the eligibility of 
     individuals under 19 years of age (or such higher age as the 
     State has elected under paragraph (1)(D)) for medical 
     assistance under subsection (a)(10)(A) and, separately, with 
     respect to determining the eligibility of individuals for 
     medical assistance under subsection (a)(10)(A)(i)(VIII) or 
     (a)(10)(A)(ii)(XIX), notwithstanding any other provision of 
     this title, if the State has established a State child health 
     plan under title XXI--
       ``(A) the State may not apply a resource standard;
       ``(B) the State shall use the same simplified eligibility 
     form (including, if applicable, permitting application other 
     than in person) as the State uses under such State child 
     health plan with respect to such individuals;
       ``(C) the State shall provide for initial eligibility 
     determinations and redeterminations of eligibility using 
     verification policies, forms, and frequency that are no less 
     restrictive than the policies, forms, and frequency the State 
     uses for such purposes under such State child health plan 
     with respect to such individuals; and
       ``(D) the State shall not require a face-to-face interview 
     for purposes of initial eligibility determinations and 
     redeterminations unless the State requires such an interview 
     for such purposes under such child health plan with respect 
     to such individuals.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     apply to determinations of eligibility made on or after the 
     date that is 1 year after the date of the enactment of this 
     Act, whether or not regulations implementing such amendments 
     have been issued.
       (b) Presumptive Eligibility.--
       (1) In general.--Section 1920A(b)(3)(A)(i) of the Social 
     Security Act (42 U.S.C. 1396r-1a(b)(3)(A)(i)) is amended by 
     inserting ``a child care resource and referral agency,'' 
     after ``a State or tribal child support enforcement 
     agency,''.
       (2) Application to presumptive eligibility for pregnant 
     women under medicaid.--Section 1920(b) of the Social Security 
     Act (42 U.S.C. 1396r-1(b)) is amended by adding at the end 
     after and below paragraph (2) the following flush sentence:

     ``The term `qualified provider' includes a qualified entity 
     as defined in section 1920A(b)(3).''.
       (3) Application under title xxi.--
       (A) In general.--Section 2107(e)(1)(D) of the Social 
     Security Act (42 U.S.C. 1397gg(e)(1)) is amended to read as 
     follows:
       ``(D) Sections 1920 and 1920A (relating to presumptive 
     eligibility).''.
       (B) Conforming elimination of resource test.--Section 
     2102(b)(1)(A) of such Act (42 U.S.C. 1397bb(b)(1)(A)) is 
     amended--
       (i) by striking `` and resources (including any standards 
     relating to spenddowns and disposition of resources)''; and
       (ii) by adding at the end the following: ``Effective 1 year 
     after the date of the enactment of the FamilyCare Act of 
     2001, such standards may not include the application of a 
     resource standard or test.''.
       (c) Automatic Reassessment of Eligibility for Title XXI and 
     Medicaid Benefits for Children Losing Medicaid or Title XXI 
     Eligibility.--
       (1) Loss of medicaid eligibility.--Section 1902(a) of the 
     Social Security Act (42 U.S.C. 1396a(a)) is amended--
       (A) by striking the period at the end of paragraph (65) and 
     inserting ``; and'', and
       (B) by inserting after paragraph (65) the following:
       ``(66) provide, in the case of a State with a State child 
     health plan under title XXI, that before medical assistance 
     to a child (or a parent of a child) is discontinued under 
     this title, a determination of whether the child (or parent) 
     is eligible for benefits under title XXI shall be made and, 
     if determined to be so eligible, the child (or parent) shall 
     be automatically enrolled in the program under such title 
     without the need for a new application.''.
       (2) Loss of title xxi eligibility and coordination with 
     medicaid.--Section 2102(b) (42 U.S.C. 1397bb(b)) is amended--
       (A) in paragraph (3), by redesignating subparagraphs (D) 
     and (E) as subparagraphs (E) and (F), respectively, and by 
     inserting after subparagraph (C) the following:
       ``(D) that before health assistance to a child (or a parent 
     of a child) is discontinued under this title, a determination 
     of whether the child (or parent) is eligible for benefits 
     under title XIX is made and, if determined to be so eligible, 
     the child (or parent) is automatically enrolled in the 
     program under such title without the need for a new 
     application;'';
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Coordination with medicaid.--The State shall 
     coordinate the screening and enrollment of individuals under 
     this title and under title XIX consistent with the following:
       ``(A) Information that is collected under this title or 
     under title XIX which is needed to make an eligibility 
     determination under the other title shall be transmitted to 
     the appropriate administering entity under such other title 
     in a timely manner so that coverage is not delayed and 
     families do not have to submit the same information twice. 
     Families shall be provided the information they need to 
     complete the application process for coverage under both 
     titles and be given appropriate notice of any determinations 
     made on their applications for such coverage.
       ``(B) If a State does not use a joint application under 
     this title and such title, the State shall--
       ``(i) promptly inform a child's parent or caretaker in 
     writing and, if appropriate, orally, that a child has been 
     found likely to be eligible under title XIX;

[[Page 14482]]

       ``(ii) provide the family with an application for medical 
     assistance under such title and offer information about what 
     (if any) further information, documentation, or other steps 
     are needed to complete such application process;
       ``(iii) offer assistance in completing such application 
     process; and
       ``(iv) promptly transmit the separate application under 
     this title or the information obtained through such 
     application, and all other relevant information and 
     documentation, including the results of the screening 
     process, to the State agency under title XIX for a final 
     determination on eligibility under such title.
       ``(C) Applicants are notified in writing of--
       ``(i) benefits (including restrictions on cost-sharing) 
     under title XIX; and
       ``(ii) eligibility rules that prohibit children who have 
     been screened eligible for medical assistance under such 
     title from being enrolled under this title, other than 
     provisional temporary enrollment while a final eligibility 
     determination is being made under such title.
       ``(D) If the agency administering this title is different 
     from the agency administering a State plan under title XIX, 
     such agencies shall coordinate the screening and enrollment 
     of applicants for such coverage under both titles.
       ``(E) The coordination procedures established between the 
     program under this title and under title XIX shall apply not 
     only to the initial eligibility determination of a family but 
     also to any renewals or redeterminations of such 
     eligibility.''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) apply to individuals who lose eligibility under the 
     medicaid program under title XIX, or under a State child 
     health insurance plan under title XXI, respectively, of the 
     Social Security Act on or after October 1, 2001 (or, if 
     later, 60 days after the date of the enactment of this Act), 
     whether or not regulations implementing such amendments have 
     been issued.
       (d) Provision of Medicaid and CHIP Applications and 
     Information Under the School Lunch Program.--Section 
     9(b)(2)(B) of the Richard B. Russell National School Lunch 
     Act (42 U.S.C. 1758(b)(2)(B)) is amended--
       (1) by striking ``(B) Applications'' and inserting ``(B)(i) 
     Applications''; and
       (2) by adding at the end the following:
       ``(ii)(I) Applications for free and reduced price lunches 
     that are distributed pursuant to clause (i) to parents or 
     guardians of children in attendance at schools participating 
     in the school lunch program under this Act shall also contain 
     information on the availability of medical assistance under 
     title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 
     and of child health and FamilyCare assistance under title XXI 
     of such Act, including information on how to obtain an 
     application for assistance under such programs.
       ``(II) Information on the programs referred to in subclause 
     (I) shall be provided on a form separate from the application 
     form for free and reduced price lunches under clause (i).''.
       (e) 12-Months Continuous Eligibility.--
       (1) Medicaid.--Section 1902(e)(12) of the Social Security 
     Act (42 U.S.C. 1396a(e)(12)) is amended--
       (A) by striking ``At the option of the State, the plan 
     may'' and inserting ``The plan shall'';
       (B) by striking ``an age specified by the State (not to 
     exceed 19 years of age)'' and inserting ``19 years of age (or 
     such higher age as the State has elected under subsection 
     (l)(1)(D)) or, at the option of the State, who is eligible 
     for medical assistance as the parent of such a child''; and
       (C) in subparagraph (A), by striking ``a period (not to 
     exceed 12 months) '' and inserting ``the 12-month period 
     beginning on the date''.
       (2) Title XXI.--Section 2102(b)(2) of such Act (42 U.S.C. 
     1397bb(b)(2)) is amended by adding at the end the following: 
     ``Such methods shall provide 12-months continuous eligibility 
     for children under this title in the same manner that section 
     1902(e)(12) provides 12-months continuous eligibility for 
     children described in such section under title XIX. If a 
     State has elected to apply section 1902(e)(12) to parents, 
     such methods may provide 12-months continuous eligibility for 
     parents under this title in the same manner that such section 
     provides 12-months continuous eligibility for parents 
     described in such section under title XIX.''.
       (3) Effective date.--
       (A) In general.--The amendments made by this subsection 
     shall take effect on October 1, 2001 (or, if later, 60 days 
     after the date of the enactment of this Act), whether or not 
     regulations implementing such amendments have been issued.

     SEC. 8. IMPROVING WELFARE-TO-WORK TRANSITION UNDER THE 
                   MEDICAID PROGRAM.

       (a) Making Provision Permanent.--
       (1) In general.--Subsection (f) of section 1925 of the 
     Social Security Act (42 U.S.C. 1396r-6) is repealed.
       (2) Conforming amendment.--Section 1902(e)(1) of the Social 
     Security Act (42 U.S.C. 1396a(e)(1)) is repealed.
       (b) State Option of Initial 12-Month Eligibility.--Section 
     1925 of the Social Security Act (42 U.S.C. 1396r-6) is 
     amended--
       (1) in subsection (a), by adding at the end the following:
       ``(5) Option of 12-month initial eligibility period.--A 
     State may elect to treat any reference in this subsection to 
     a 6-month period (or 6 months) as a reference to a 12-month 
     period (or 12 months). In the case of such an election, 
     subsection (b) shall not apply.''; and
       (2) in subsection (b)(1), by inserting ``and subsection 
     (a)(5)'' after ``paragraph (3)''.
       (c) Simplification.--
       (1) Removal of administrative reporting requirements for 
     additional 6-month extension.--Section 1925(b)(2) of the 
     Social Security Act (42 U.S.C. 1396r-6(b)(2)) is amended--
       (A) by striking subparagraph (B);
       (B) in subparagraph (A)(i)--
       (i) in the heading, by striking ``and requirements'';
       (ii) by striking ``(I)'' and all that follows through 
     ``(II)'' and inserting ``(i)'';
       (iii) by striking ``, and (III)'' and inserting ``and 
     (ii)'';
       (iv) by redesignating such subparagraph as subparagraph (A) 
     (with appropriate indentation); and
       (C) in subparagraph (A)(ii)--
       (i) in the heading, by striking ``reporting requirements 
     and'';
       (ii) by striking ``notify the family of the reporting 
     requirement under subparagraph (B)(ii) and'' and inserting 
     ``provide the family with notification of''; and
       (iii) by redesignating such subparagraph as subparagraph 
     (B) (with appropriate indentation).
       (2) Removal of requirement for previous receipt of medical 
     assistance.--Section 1925(a)(1) of the Social Security Act 
     (42 U.S.C. 1396r-6(a)(1)) is amended--
       (A) by inserting ``but subject to subparagraph (B)'' after 
     ``any other provision of this title'';
       (B) by redesignating the matter after ``Requirement.--'' as 
     a subparagraph (A) with the heading ``In general.--'' and 
     with the same indentation as subparagraph (B) (as added by 
     subparagraph (C)); and
       (C) by adding at the end the following:
       ``(B) State option to waive requirement for 3 months 
     previous receipt of medical assistance.--A State may, at its 
     option, elect also to apply subparagraph (A) in the case of a 
     family that had applied for and was eligible for such aid for 
     fewer than 3 months during the 6 immediately preceding months 
     described in such subparagraph.''.
       (3) Permitting increase or waiver of 185 percent of poverty 
     earning limit.--Section 1925(b)(3)(A)(iii)(III) of the Social 
     Security Act (42 U.S.C. 1396r-6(b)(3)(A)(iii)(III)) is 
     amended--
       (A) by inserting ``(at its option)'' after ``the State''; 
     and
       (B) by inserting ``(or such higher percent as the State may 
     specify)'' after ``185 percent''.
       (4) Exemption for states covering needy families up to 185 
     percent of poverty.--Section 1925 of the Social Security Act 
     (42 U.S.C. 1396r-6), as amended by subsection (a), is 
     amended--
       (A) in each of subsections (a)(1) and (b)(1), by inserting 
     ``but subject to subsection (f),'' after ``Notwithstanding 
     any other provision of this title,''; and
       (B) by adding at the end the following:
       ``(f) Exemption for State Covering Needy Families Up to 185 
     Percent of Poverty.--
       ``(1) In general.--At State option, the provisions of this 
     section shall not apply to a State that uses the authority 
     under section 1902(a)(10)(A)(ii)(XIX), section 1931(b)(2)(C), 
     or otherwise to make medical assistance available under the 
     State plan under this title to eligible individuals described 
     in section 1902(k)(1), or all individuals described in 
     section 1931(b)(1), and who are in families with gross 
     incomes (determined without regard to work-related child care 
     expenses of such individuals) at or below 185 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.
       ``(2) Application to other provisions of this title.--The 
     State plan of a State described in paragraph (1) shall be 
     deemed to meet the requirements of section 
     1902(a)(10)(A)(i)(I).''.
       (d) Effective Date.--The amendments made by this section 
     take effect on October 1, 2001, whether or not regulations 
     implementing such amendments have been issued.

     SEC. 9. ELIMINATION OF 100 HOUR RULE AND OTHER AFDC-RELATED 
                   ELIGIBILITY RESTRICTIONS.

       (a) In General.--Section 1931(b)(1)(A)(ii) of the Social 
     Security Act (42 U.S.C. 1396u- 1(b)(1)(A)(ii)) is amended by 
     inserting ``other than the requirement that the child be 
     deprived of parental support or care by reason of the death, 
     continued absence from the home, incapacity, or unemployment 
     of a parent,'' after ``section 407(a),''.
       (b) Conforming Amendment.--Section 1905(a) of the Social 
     Security Act (42 U.S.C. 1396d(a)) is amended, in the matter 
     before paragraph (1), in clause (ii), by striking ``if such 
     child is (or would, if needy, be) a dependent child under 
     part A of title IV''.

[[Page 14483]]

       (c) Effective Date.--The amendments made by this section 
     apply to eligibility determinations made on or after October 
     1, 2001, whether or not regulations implementing such 
     amendments have been issued.

     SEC. 10. STATE GRANT PROGRAM FOR MARKET INNOVATION.

       (a) In General.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     establish a program (in this section referred to as the 
     ``program'') to award demonstration grants under this section 
     to States to allow States to demonstrate the effectiveness of 
     innovative ways to increase access to health insurance 
     through market reforms and other innovative means. Such 
     innovative means may include any of the following:
       (1) Alternative group purchasing or pooling arrangements, 
     such as purchasing cooperatives for small businesses, 
     reinsurance pools, or high risk pools.
       (2) Individual or small group market reforms.
       (3) Consumer education and outreach.
       (4) Subsidies to individuals, employers, or both, in 
     obtaining health insurance.
       (b) Scope; Duration.--The program shall be limited to not 
     more than 10 States and to a total period of 5 years, 
     beginning on the date the first demonstration grant is made.
       (c) Conditions for Demonstration Grants.--
       (1) In general.--The Secretary may not provide for a 
     demonstration grant to a State under the program unless the 
     Secretary finds that under the proposed demonstration grant--
       (A) the State will provide for demonstrated increase of 
     access for some portion of the existing uninsured population 
     through a market innovation (other than merely through a 
     financial expansion of a program initiated before the date of 
     the enactment of this Act);
       (B) the State will comply with applicable Federal laws;
       (C) the State will not discriminate among participants on 
     the basis of any health status-related factor (as defined in 
     section 2791(d)(9) of the Public Health Service Act (42 
     U.S.C. 300gg-91(d)(9)), except to the extent a State wishes 
     to focus on populations that otherwise would not obtain 
     health insurance because of such factors; and
       (D) the State will provide for such evaluation, in 
     coordination with the evaluation required under subsection 
     (d), as the Secretary may specify.
       (2) Application.--The Secretary shall not provide a 
     demonstration grant under the program to a State unless--
       (A) the State submits to the Secretary such an application, 
     in such a form and manner, as the Secretary specifies;
       (B) the application includes information regarding how the 
     demonstration grant will address issues such as governance, 
     targeted population, expected cost, and the continuation 
     after the completion of the demonstration grant period; and
       (C) the Secretary determines that the demonstration grant 
     will be used consistent with this section.
       (3) Focus.--A demonstration grant proposal under this 
     section need not cover all uninsured individuals in a State 
     or all health care benefits with respect to such individuals.
       (d) Evaluation.--The Secretary shall enter into a contract 
     with an appropriate entity outside the Department of Health 
     and Human Services to conduct an overall evaluation of the 
     program at the end of the program period. Such evaluation 
     shall include an analysis of improvements in access, costs, 
     quality of care, or choice of coverage, under different 
     demonstration grants.
       (e) Option To Provide for Initial Planning Grants.--
     Notwithstanding the previous provisions of this section, 
     under the program the Secretary may provide for a portion of 
     the amounts appropriated under subsection (f) (not to exceed 
     $5,000,000) to be made available to any State for initial 
     planning grants to permit States to develop demonstration 
     grant proposals under the previous provisions of this 
     section.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated $100,000,000 for each fiscal year to carry 
     out this section. Amounts appropriated under this subsection 
     shall remain available until expended.
       (g) State Defined.--In this section, the term ``State'' has 
     the meaning given such term for purposes of title XIX of the 
     Social Security Act (42 U.S.C. 1396 et seq.).

     SEC. 11. LIMITATIONS ON CONFLICTS OF INTEREST.

       (a) Limitation on Conflicts of Interest in Marketing 
     Activities.--
       (1) Title xxi.--Section 2105(c) of the Social Security Act 
     (42 U.S.C. 300aa-5(c)) is amended by adding at the end the 
     following:
       ``(8) Limitation on expenditures for marketing 
     activities.--Amounts expended by a State for the use of an 
     administrative vendor in marketing health benefits coverage 
     to low-income children under this title shall not be 
     considered, for purposes of subsection (a)(2)(D), to be 
     reasonable costs to administer the plan unless the following 
     conditions are met with respect to the vendor:
       ``(A) The vendor is independent of any entity offering the 
     coverage in the same area of the State in which the vendor is 
     conducting marketing activities.
       ``(B) No person who is an owner, employee, consultant, or 
     has a contract with the vendor either has any direct or 
     indirect financial interest with such an entity or has been 
     excluded from participation in the program under this title 
     or title XVIII or XIX or debarred by any Federal agency, or 
     subject to a civil money penalty under this Act.''.
       (b) Prohibition of Affiliation With Debarred Individuals.--
       (1) Medicaid.--Section 1903(i) of the Social Security Act 
     (42 U.S.C. 1396b(i))is amended--
       (A) by striking the period at the end of paragraph (20) and 
     inserting ``; or''; and
       (B) by inserting after paragraph (20) the following:
       ``(21) with respect to any amounts expended for an entity 
     that receives payments under the plan unless--
       ``(A) no person with an ownership or control interest (as 
     defined in section 1124(a)(3)) in the entity is a person that 
     is debarred, suspended, or otherwise excluded from 
     participating in procurement or non-procurement activities 
     under the Federal Acquisition Regulation; and
       ``(B) such entity has not entered into an employment, 
     consulting, or other agreement for the provision of items or 
     services that are material to such entity's obligations under 
     the plan with a person described in subparagraph (A).''.
       (2) Title xxi.--Section 2107(e)(1) of the Social Security 
     Act (42 U.S.C. 1397gg(e)(1)), as amended by sections 5(b) and 
     7(b)(3), is further amended--
       (A) in subparagraph (B), by striking ``and (17)'' and 
     inserting ``(17), and (21)''; and
       (B) by adding at the end the following:
       ``(F) Section 1902(a)(67) (relating to prohibition of 
     affiliation with debarred individuals).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to expenditures made on or after October 1, 2001, 
     whether or not regulations implementing such amendments have 
     been issued.

     SEC. 12. INCREASE IN CHIP ALLOTMENT FOR EACH OF FISCAL YEARS 
                   2002 THROUGH 2004.

       Paragraphs (5), (6), and (7) of section 2104(a) of the 
     Social Security Act (42 U.S.C. 1397dd(a)) are amended by 
     striking ``$3,150,000,000'' each place it appears and 
     inserting ``$4,150,000,000''.

     SEC. 13. DEMONSTRATION PROGRAMS TO IMPROVE MEDICAID AND CHIP 
                   OUTREACH TO HOMELESS INDIVIDUALS AND FAMILIES.

       (a) Authority.--The Secretary of Health and Human Services 
     may award demonstration grants to not more than 7 States (or 
     other qualified entities) to conduct innovative programs that 
     are designed to improve outreach to homeless individuals and 
     families under the programs described in subsection (b) with 
     respect to enrollment of such individuals and families under 
     such programs and the provision of services (and coordinating 
     the provision of such services) under such programs.
       (b) Programs for Homeless Described.--The programs 
     described in this subsection are as follows:
       (1) Medicaid.--The program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.).
       (2) CHIP.--The program under title XXI of the Social 
     Security Act (42 U.S.C. 1397aa et seq.).
       (3) TANF.--The program under part of A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.).
       (4) SAMHSA block grants.--The program of grants under part 
     B of title XIX of the Public Health Service Act (42 U.S.C. 
     300x-1 et seq.).
       (5) Food stamp program.--The program under the Food Stamp 
     Act of 1977 (7 U.S.C. 2011 et seq.).
       (6) Workforce investment act.--The program under the 
     Workforce Investment Act of 1999 (29 U.S.C. 2801 et seq.).
       (7) Welfare-to-work.--The welfare-to-work program under 
     section 403(a)(5) of the Social Security Act (42 U.S.C. 
     603(a)(5)).
       (8) Other programs.--Other public and private benefit 
     programs that serve low-income individuals.
       (c) Appropriations.--For the purposes of carrying out this 
     section, there is appropriated for fiscal year 2002, out of 
     any funds in the Treasury not otherwise appropriated, 
     $10,000,000, to remain available until expended.

     SEC. 14. TECHNICAL AND CONFORMING AMENDMENTS TO AUTHORITY TO 
                   PAY MEDICAID EXPANSION COSTS FROM TITLE XXI 
                   APPROPRIATION.

       (a) Authority To Pay Medicaid Expansion Costs From Title 
     XXI Appropriation.--Section 2105(a) of the Social Security 
     Act (42 U.S.C. 1397ee(a)) is amended to read as follows:
       ``(a) Allowable Expenditures.--
       ``(1) In general.--Subject to the succeeding provisions of 
     this section, the Secretary shall pay to each State with a 
     plan approved under this title, from its allotment under 
     section 2104, an amount for each quarter equal to the 
     enhanced FMAP of the following expenditures in the quarter:
       ``(A) Child health assistance under medicaid.--Expenditures 
     for child health assistance under the plan for targeted low-
     income children in the form of providing medical assistance 
     for expenditures described in the fourth sentence of section 
     1905(b).

[[Page 14484]]

       ``(B) Reserved.--[reserved].
       ``(C) Child health assistance under this title.--
     Expenditures for child health assistance under the plan for 
     targeted low-income children in the form of providing health 
     benefits coverage that meets the requirements of section 
     2103.
       ``(D) Assistance and administrative expenditures subject to 
     limit.--Expenditures only to the extent permitted consistent 
     with subsection (c)--
       ``(i) for other child health assistance for targeted low-
     income children;
       ``(ii) for expenditures for health services initiatives 
     under the plan for improving the health of children 
     (including targeted low-income children and other low-income 
     children);
       ``(iii) for expenditures for outreach activities as 
     provided in section 2102(c)(1) under the plan; and
       ``(iv) for other reasonable costs incurred by the State to 
     administer the plan.
       ``(2) Order of payments.--Payments under a subparagraph of 
     paragraph (1) from a State's allotment for expenditures 
     described in each such subparagraph shall be made on a 
     quarterly basis in the order of such subparagraph in such 
     paragraph.
       ``(3) No duplicative payment.--In the case of expenditures 
     for which payment is made under paragraph (1), no payment 
     shall be made under title XIX.''.
       (b) Conforming Amendments.--
       (1) Section 1905(u).--Section 1905(u)(1)(B) of the Social 
     Security Act (42 U.S.C. 1396d(u)(1)(B)) is amended by 
     inserting ``and section 2105(a)(1)'' after ``subsection 
     (b)''.
       (2) Section 2105(c).--Section 2105(c)(2)(A) of the Social 
     Security Act (42 U.S.C. 1397ee(c)(2)(A)) is amended by 
     striking ``subparagraphs (A), (C), and (D) of''.
       (c) Effective Date.--The amendments made by this section 
     shall be effective as if included in the enactment of the 
     Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 
     251), whether or not regulations implementing such amendments 
     have been issued.

     SEC. 15. ADDITIONAL CHIP REVISIONS.

       (a) Limiting Cost-Sharing to 2.5 Percent for Families with 
     Income Below 150 Percent of Poverty.--Section 2103(e)(3)(A) 
     of the Social Security Act (42 U.S.C. 1397cc(e)(3)(A)) is 
     amended--
       (1) by striking ``and'' at the end of clause (i);
       (2) by striking the period at the end of clause (ii) and 
     inserting ``; and''; and
       (3) by adding at the end the following new clause:
       ``(iii) total annual aggregate cost-sharing described in 
     clauses (i) and (ii) with respect to all such targeted low-
     income children in a family under this title that exceeds 2.5 
     percent of such family's income for the year involved.''.
       (b) Reporting of Enrollment Data.--
       (1) Quarterly reports.--Section 2107(b)(1) of such Act (42 
     U.S.C. 1397gg(b)(1)) is amended by adding at the end the 
     following: ``In quarterly reports on enrollment required 
     under this paragraph, a State shall include information on 
     the age, gender, race, ethnicity, service delivery system, 
     and family income of individuals enrolled.''.
       (2) Annual reports.--Section 2108(b)(1)(B)(i) of such Act 
     (42 U.S.C. 1397hh(b)(1)(B)(i)) is amended by inserting 
     ``primary language of enrollees,'' after ``family income,''.
       (c) Employer Coverage Waiver Changes.--Section 2105(c)(3) 
     of such Act (42 U.S.C. 1397ee(c)(3)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii) and indenting appropriately;
       (2) by designating the matter beginning with ``Payment may 
     be made'' as a subparagraph (A) with the heading ``In 
     general'' and indenting appropriately; and
       (3) by adding at the end the following new subparagraphs:
       ``(B) Application of requirements.--In carrying out 
     subparagraph (A)--
       ``(i) the Secretary shall not require a minimum employer 
     contribution level that is separate from the requirement of 
     cost-effectiveness under subparagraph (A)(i), but a State 
     shall identify a reasonable minimum employer contribution 
     level that is based on data demonstrating that such a level 
     is representative to the employer-sponsored insurance market 
     in the State and shall monitor employer contribution levels 
     over time to determine whether substitution is occurring and 
     report the findings in annual reports under section 2108(a);
       ``(ii) the State shall establish a waiting period of at 
     least 6 months without group health coverage, but may 
     establish reasonable exceptions to such period and shall not 
     apply such a waiting period to a child who is provided 
     coverage under a group health plan under section 1906;
       ``(iii) subject to clause (iv), the State shall provide 
     satisfactory assurances that the minimum benefits and cost-
     sharing protections established under this title are 
     provided, either through the coverage under subparagraph (A) 
     or as a supplement to such coverage; and
       ``(iv) coverage under such subparagraph shall not be 
     considered to violate clause (iii) because it does not comply 
     with requirements relating to reviews of health service 
     decisions if the enrollee involved is provided the option of 
     being provided benefits directly under this title.
       ``(C) Access to external review process.--In carrying out 
     subparagraph (A), if a State provides coverage under a group 
     health plan that does not meet the following external review 
     requirements, the State must give applicants and enrollees 
     (at initial enrollment and at each redetermination of 
     eligibility) the option to obtain health benefits coverage 
     other than through that group health plan:
       ``(i) The enrollee has an opportunity for external review 
     of a--

       ``(I) delay, denial, reduction, suspension, or termination 
     of health services, in whole or in part, including a 
     determination about the type or level of services; and
       ``(II) failure to approve, furnish, or provide payment for 
     health services in a timely manner.

       ``(ii) The external review is conducted by the State or a 
     impartial contractor other than the contractor responsible 
     for the matter subject to external review.
       ``(iii) The external review decision is made on a timely 
     basis in accordance with the medical needs of the patient. If 
     the medical needs of the patient do not dictate a shorter 
     time frame, the review must be completed--

       ``(I) within 90 calendar days of the date of the request 
     for internal or external review; or
       ``(II) within 72 hours if the enrollee's physician or plan 
     determines that the deadline under subclause (I) could 
     seriously jeopardize the enrollee's life or health or ability 
     to attain, maintain, or regain maximum function (except that 
     a State may extend the 72-hour deadline by up to 14 days if 
     the enrollee requests an extension).

       ``(iv) The external review decision shall be in writing.
       ``(v) Applicants and enrollees have an opportunity--

       ``(I) to represent themselves or have representatives of 
     their choosing in the review process;
       ``(II) timely review their files and other applicable 
     information relevant to the review of the decision; and
       ``(III) fully participate in the review process, whether 
     the review is conducted in person or in writing, including by 
     presenting supplemental information during the review 
     process.''.

       (d) Effective Date.--The amendments made by this section 
     apply as of October 1, 2001, whether or not regulations 
     implementing such amendments have been issued.
                                  ____



                                  National Women's Law Center,

                                    Washington, DC, July 24, 2001.
     Hon. Edward M. Kennedy,
     Hon. Olympia Snowe,
     U.S. Senate, Washington, DC.
       Dear Senators Kennedy and Snowe: We would like to thank you 
     for your leadership in introducing the ``FamilyCare Act of 
     2001,'' which would allow states to provide health insurance 
     coverage for millions of women. This is such a critical 
     women's health issue that over one hundred organizations 
     working on women's health throughout the nation have endorsed 
     the bill. The list of these organizations follows:

Organizations Addressing Women's Health That Endorse the FamilyCare Act 
                                of 2001

     9to5 National Association of Working Women
     AFL-CIO
     Abortion Access Project
     Abortion Rights Fund of Western Massachusetts
     ACCESS/Women's Health Rights Coalition
     African American Women Evolving
     Alan Guttmacher Institute
     American Association of University Women
     American College of Nurse-Midwives
     American College of Obstetricians and Gynecologists
     American Counseling Association
     American Federation of Teachers
     American Medical Women's Association
     American Public Health Association
     Americans for Democratic Action
     Association of Maternal and Child Health Programs
     Association of Reproductive Health Professionals
     Boston Women's Health Book Collective
     California Women's Law Center
     Catholics for a Free Choice
     Center for Community Change
     Center for Reproductive Law and Policy
     Center for Women Policy Studies
     Central Conference of American Rabbis
     Child Care Law Center
     Choice USA
     Church Women United
     Coalition of Labor Union Women
     Connecticut Association for Human Services
     Connecticut Sexual Assault Crisis Services
     Connecticut Women's Health Campaign
     Contact Center
     FamiliesUSA
     Family Planning Advocates of New York State
     Family Violence Prevention Fund
     Family Voices
     Feminist Majority
     Feminist Women's Health Center
     Florida NOW
     Friends of Midwives, CT
     Hadassah
     Human Rights Campaign

[[Page 14485]]

     Human Services Coalition of Dade County
     Jewish Women International
     Jewish Women's Coalition, Inc.
     Juneau Pro-Choice Coalition
     Justice for Women Working Group of the National Council of 
         Churches
     Lutheran Office for Governmental Affairs, ELCA
     McAuley Institute
     Maine Women's Health Campaign
     March of Dimes
     Mexican American Legal Defense and Education Fund
     Ms. Foundation for Women
     National Abortion and Reproductive Rights Action League
     National Abortion Federation
     National Asian Women's Health Organization
     National Association of Commissions on Women
     National Association of Community Health Centers, Inc.
     National Association of Nurse Practitioners in Women's Health
     National Association of Public Hospitals and Health Systems
     National Association of Social Workers
     National Black Nurses Association
     National Black Women's Health Project
     National Center for Policy Research for Women and Families
     National Center on Poverty Law
     National Center on Women and Aging
     National Coalition Against Domestic Violence
     National Council of Churches of Christ in the USA
     National Council of Jewish Women
     National Council of Women's Organizations
     National Family Planning and Reproductive Health Association
     National Health Law Program
     National Hispanic Council on Aging
     National Hispanic Medical Association
     National Network of Abortion Funds
     National Organization for Women
     National Partnership for Women and Families
     National Training Center on Domestic and Sexual Violence
     National Women's Health Network
     National Women's Law Center
     National Women's Political Caucus
     New York Affiliate of the National Abortion and Reproductive 
         Rights Action League (NARAL/NY)
     Northwest Connecticut Chapter of the Older Women's League
     Northwest Women's Law Center
     NOW Legal Defense and Educational Fund
     Ohio Empowerment Coalition
     Oregon Law Center
     Planned Parenthood Federation of America
     Progressive Leadership Alliance of Nevada
     Project WISE/Project Inform
     Religious Coalition for Reproductive Choice
     Religious Network of Equality for Women
     Service Employees International Union
     Society for Women's Health Research
     Texas Council on Family Violence
     Union of American Hebrew Congregations
     Unitarian Universalist Association of
     Congregations
     Welfare Law Center
     Welfare Rights Initiative
     Westchester Coalition for Legal Abortion
     Wider Opportunities for Women
     Women Employed
     Women Empowered Against Violence, Incorporated
     Women Leaders Online
     Women of Reform Judaism
     Women Work!
     Women's Emergency Network
     Women's International Public Health Network
     Working for Equality and Economic Liberation
     YWCA of the USA
     Zeta Phi Beta Sorority
           Sincerely,
     Marcia D. Greenberger,
       Co-President.
     Regan Ralph,
       Vice President, Women's Health and Reproductive Rights.
                                  ____



                               American Academy of Pediatrics,

                                    Washington, DC, July 24, 2001.
     Hon. Edward M. Kennedy,
     U.S. Senate,
     Washington, DC.
       Dear Senator Kennedy: On behalf of the 55,000 members of 
     the American Academy of Pediatrics, I am writing to express 
     the Academy's strong support of the Family Care Act of 2001. 
     This legislation takes critical steps to ensure that every 
     child in the United States has access to affordable quality 
     health care. We are pleased that you and your colleagues have 
     put this measure forward and we look forward to working with 
     you in the coming months to ensure that the bill's provisions 
     become law.
       In addition to the important expansion of coverage options 
     under Medicaid and SCHIP, including those for pregnant women 
     and immigrant children and their families, we strongly 
     endorse the numerous components of the legislation that will 
     make getting enrolled, and staying enrolled, in Medicaid and 
     SCHIP simpler for children and families. By expanding the 
     types of entities that are able to perform presumptive 
     eligibility determinations, consolidating application and 
     enrollment procedures and providing for automatic 
     redetermination of eligibility, states can ensure that 
     children and families have seamless access to quality care.
       We appreciate your continued attention to the health care 
     needs of our nation's children. If we can be of assistance in 
     your efforts, please do not hesitate to contact me at (202) 
     347-8600.
           Sincerely,

                                                Graham Newson,

                                                         Director,
     Department of Federal Affairs.
                                  ____



                                American Hospital Association,

                                    Washington, DC, July 24, 2001.
     Hon. Edward M. Kennedy,
     Chairman, Committee on Health, Education, Labor, and 
         Pensions, U.S. Senate, Russell Building, Washington, DC.
       Dear Chairman Kennedy: The American Hospital Association 
     (AHA), which represents 5,000 hospitals, health care systems, 
     networks, and other providers of care, shares your goal of 
     expanding access to health care coverage for the nation's 
     over 42 million uninsured Americans. As you know, eight out 
     of every 10 uninsured persons lives in a working family. Ten 
     million of the uninsured are children. The uninsured are 
     concentrated disproportionately in low-income families. And 
     while health care coverage by itself does not guarantee good 
     health or access to appropriate health services, the absence 
     of health care coverage is a major contributor to poor 
     health.
       AHA supports an array of legislative proposals that would 
     expand coverage to low-income people, including those that 
     would build on current programs such as Medicaid and the 
     State Children's Health Insurance Program (S-CHIP), and those 
     that would use changes in the tax code to bolster coverage. 
     Therefore, AHA strongly supports the objective of your 
     bipartisan legislation, the Family Care Act of 2001, 
     sponsored with Senator Snowe. Your legislation embraces, as 
     one option, expanding state options to allow coverage of the 
     parents of children covered by S-CHIP. We support provisions 
     that would improve state options for Medicaid coverage for 
     children, pregnant women, and those making the transition 
     from welfare to work. Furthermore, we applaud your provisions 
     that would simplify applications, increased outreach 
     activities, and create state grant programs to encourage 
     market innovation in health care insurance. AHA believes 
     these are good first steps toward lowering the number of the 
     uninsured.
       In addition to expanding public programs, AHA supports 
     other measures that utilize the tax code to make health care 
     insurance more affordable for low-income working families. 
     Toward that end, AHA also supports the bipartisan REACH Act 
     drafted by Senators Jeffords, Snowe, Frist, Chafee, Breaux, 
     Lincoln and Carper; and the bipartisan Fair Care for the 
     Uninsured Act (S. 683) sponsored by Senators Santorum and 
     Torricelli. Both of these bills would establish refundable 
     tax credits to help low-income families purchase health care 
     insurance.
       Our nation's hospitals see every day that the absence of 
     health coverage is a significant barrier to care, reducing 
     the likelihood that people will get appropriate preventive, 
     diagnostic and chronic care. AHA supports your efforts to 
     help more low-income families to get the health care coverage 
     they need and deserve. We thank you for your leadership and 
     we look forward to working with you to advance the Family 
     Care Act of 2001.
           Sincerely,
                                                     Rick Pollack,
     Executive Vice President.
                                  ____

                                           National Association of


                                         Children's Hospitals,

                                    Alexandria, VA, July 24, 2001.
     Hon. Edward Kennedy,
     Hon. Olympia Snowe,
      U.S. Senate, Washington, DC.
       Dear Senator Kennedy and Senator Snowe: On behalf of the 
     National Association of Children's Hospitals (N.A.C.H.), 
     which represents over 100 children's hospitals nationwide, I 
     want to express our strong support for your introduction of 
     the ``FamilyCare Act of 2001.''
       As providers of care to all children, regardless of their 
     economic status, children's hospitals devote more than 40% of 
     their patient care to children who rely on Medicaid or are 
     uninsured, and more than three-fourths of their patient-care 
     to children with chronic and congenital conditions. These 
     hospitals have extensive experience in assisting families to 
     enroll eligible children in Medicaid and SCHIP. They are 
     keenly aware of the importance of addressing the challenges 
     that states face in enrolling this often hard to reach 
     population of eligible children.
       In particular, N.A.C.H. appreciates your efforts to 
     simplify and coordinate the application process for SCHIP and 
     Medicaid, as well as to provide new tools for states to use 
     in identifying and enrolling families. We strongly support 
     your provision guaranteeing continuous 12-month eligibility 
     for children and parents, which will address one major 
     problem in assuring coverage for eligible children.
       N.A.C.H. also applauds your provisions that continue 
     children's coverage as the first

[[Page 14486]]

     priority of the SCHIP program, including (1) requiring states 
     to first cover children up to 200% of poverty and eliminating 
     waiting lists in the SCHIP program before covering parents, 
     and (2) requiring every child who loses coverage under 
     Medicaid or SCHIP to be automatically screened for other 
     avenues of eligibility and if found eligible, enrolled 
     immediately in that program.
       N.A.C.H. further supports your legislation's provision to 
     give states additional flexibility under SCHIP and Medicaid 
     to cover legal immigrant children. In states with high 
     proportions of uninsured children, such as California, Texas 
     and Florida, the federal government's bar on coverage of 
     legal immigrant children helps contribute to the fact that 
     Hispanic children represent the highest rate of uninsured 
     children of all major racial and ethnic minority groups. Your 
     provision to ensure coverage of legal immigrant children 
     would be extremely useful in improving this situation.
       N.A.C.H. greatly appreciates your efforts to provide all 
     children with the best possible chance at starting out and 
     staying healthy. We welcome and look forward to working with 
     you to pass the ``FamilyCare Act of 2001.''
           Sincerely,
                                            Lawrence A. McAndrews,
     President and CEO.
                                  ____



                                               March of Dimes,

                                    Washington, DC, July 24, 2001.
     Hon. Edward Kennedy,
     U.S. Senate, Washington, DC.
       Dear Senator Kennedy: On behalf of more than 3 million 
     volunteers and 1600 staff members of the March of Dimes, I 
     want to commend you for introducing the ``Family Care Act of 
     2001.'' The March of Dimes is committed to increasing access 
     to appropriate and affordable health care for women, infants 
     and children and supports the targeted approach to expanding 
     the State Children's Health Insurance Program contained in 
     the Family Care proposal.
       The ``Family Care Act of 2001'' contains a number of 
     beneficial provisions that would expand and improve SCHIP. 
     The March of Dimes strongly supports giving states the option 
     to cover low-income pregnant women in Medicaid and SCHIP 
     programs with an enhanced matching rate. We understand that 
     Family Care would allow states to cover uninsured parents of 
     children enrolled in Medicaid and SCHIP as well as uninsured 
     first-time pregnant women. SCHIP is the only major federally-
     funded program that denies coverage to pregnant women while 
     providing coverage to their infants and children. We know 
     prenatal care improves birth outcomes. Expanding health 
     insurance coverage for low-income pregnant women has 
     bipartisan support in both the House and Senate.
       The March of Dimes also supports Family Care provisions to 
     require automatic enrollment of children born to SCHIP 
     parents; automatic screening of every child who loses 
     coverage under Medicaid or SCHIP to determine eligibility for 
     other health programs; and distribution of information on the 
     availability of Medicaid and SCHIP through the school lunch 
     program. The March of Dimes also supports giving states the 
     option to provide Medicaid and SCHIP benefits to children and 
     pregnant women who arrived legally to the United States after 
     August 23, 1996, and to people ages 19 and 20. The National 
     Governors Association recently endorsed this proposal as part 
     of its legislation policy platform.
       Finally, we commend you for raising issues such as the 
     elimination of assets tests in Medicaid and CHIP for parents 
     and children as well as providing for guaranteed continuous 
     12-month eligibility for parents and children enrolled in 
     Medicaid and CHIP. While controversial, we hope states would 
     voluntarily adopt these provisions which would provide the 
     kind of continuity that is so important for keeping families 
     insured.
       We thank you for your leadership in introducing the 
     ``Family Care Act of 2001'' and are eager to work with you to 
     achieve approval of this much needed legislation.
           Sincerely,
     Anna Eleanor Roosevelt,
       Vice Chair, Board of Trustees; Chair, National Public 
     Affairs Committee.
     Dr. Jennifer L. Howse,
       President.


                              The Catholic Health Association,

                                    Washington, DC, July 24, 2001.
     Hon. Edward M. Kennedy,
     Russell Senate Office Building,
     U.S. Senate, Washington, DC.
       Dear Senator Kennedy: On behalf of the Catholic Health 
     Association of the United States (CHA), the national 
     leadership organization of more than 2,000 Catholic 
     healthcare sponsors, systems, facilities, and related 
     organizations, I write to thank you for your efforts to 
     expand health coverage for uninsured low-income families. CHA 
     shares your commitment to the goal of accessible and 
     affordable care for all, and we strongly support the ``Family 
     Care Act of 2001'' as an important step toward that goal.
       The ``Family Care Act of 2001'' would allow states to 
     extend Medicaid and State Children's Health Insurance Program 
     (SCHIP) coverage to parents of children already eligible for 
     these programs. Most of these individuals are working but do 
     not have incomes sufficient to afford the high cost of 
     private insurance. Family Care is a cost-effective way to 
     address this problem. Not only would it reduce the number of 
     uninsured parents but it would also improve enrollment of 
     uninsured low-income children in Medicaid and SCHIP at a time 
     when more than 10 million children still do not have health 
     coverage. While a number of states have already initiated 
     efforts to expand SCHIP to parents and to eliminate 
     enrollment barriers, much more needs to be done. Moreover, 
     the additional funding called for in your bill is essential 
     if states are to proceed with the assurance of federal 
     support for their coverage expansion efforts.
       We are also pleased that your bill would address gaps in 
     Medicaid and SCHIP coverage for pregnant women and legal 
     immigrants.
       Catholic hospitals and healthcare systems provide inpatient 
     and outpatient care in 48 states and more than 360 local 
     areas. Every day we see the impact that lack of health 
     insurance has on families' access to coordinated and high-
     quality health care. With a substantial federal surplus, 
     Congress and the administration simply must make addressing 
     this problem a national priority. We applaud your leadership 
     in introducing the ``Family Care Act of 2001'' and look 
     forward to working with you and your colleagues to advance 
     this important bill.
           Sincerely,
                                       Rev. Michael D. Place, STD,
     President and CEO.
                                  ____



                                       Childrens Defense Fund,

                                    Washington, DC, July 24, 2001.
     Hon. Edward M. Kennedy,
     U.S. Senate, Russell Senate Office Building,
     Washington, DC.
       Dear Senator Kennedy: We are taking this opportunity to 
     thank you for your work on the FamilyCare Act and your 
     intention to introduce the bill in the current Congress. This 
     proposal has the strong support of the Children's Defense 
     Fund because it provides and strengthens health care coverage 
     for uninsured children and their parents. Building on the 
     successes of Medicaid and the Children's Health Insurance 
     Program (CHIP), this legislation will increase coverage for 
     uninsured children, provide funding for health insurance 
     coverage for the uninsured parents of Medicaid and CHIP-
     eligible children, and simplify the enrollment process for 
     Medicaid and CHIP to make the programs more family friendly.
       We look forward to working with you for passage of the 
     FamilyCare Act by the Congress.
           Sincerely,
                                                   Gregg, Haifley,
                                  Deputy Director Health Division.
                                 ______
                                 
      By Mr. KENNEDY:
  S. 1247. A bill to establish a grant program to promote emotional and 
social development and school readiness; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. KENNEDY. Mr. President, I am proud to introduce the Foundations 
for Learning Act. I want to thank my son, Patrick for his leadership in 
developing this legislation. This bill is an extremely important piece 
of legislation that addresses the whole child's early development.
  There is no question that healthy emotional and social development 
are critical to school success. The development of curiosity, self-
direction, the ability to cooperate with peers and to exhibit self-
control are essential before a child can be ready to learn. Children 
whose lives are threatened by socioeconomic disadvantage, violence, 
family disruption and diagnosed disabilities are at a severe 
disadvantage in the classroom. There is no question these children 
cannot perform at their highest academic potential.
  While we are all concerned about reading readiness and children's 
readiness to learn, we cannot ignore the underlying factors that enable 
them to learn. We know that children cannot learn when they are hungry 
or sleepy, but rarely do we stop to think about their emotional ability 
to learn. Children who are angry, afraid or cannot control their own 
emotions, or have no sense of self-direction, and ability to resolve 
conflicts with peers are not ready to learn either.
  Last month, a national study reported that children who receive more 
than 30 hours per week of non-parental child care exhibit higher levels 
of aggressive behavior than those who spend less than 10 hours per week 
in comparable settings. The study called national attention to the 
quality of child

[[Page 14487]]

care that parents entrust the care of their young children to. It also 
rekindled the Nation's interest in the early years and how these years 
contribute to a young children's development. As we debate investments 
in early care and education, we must not underestimate the need to look 
at the social and emotional readiness of the child that leads to later 
academic readiness.
  Studies are showing that increasing numbers of children are 
unprepared to cope with the demand of school, not because they lack the 
academic tools, but because they lack the social skills and emotional 
self-regulation necessary to succeed. In a survey of kindergarten 
teachers, 46 percent said that at least half of their class had 
difficulty following directions, 34 percent reported half of the class 
or more had difficulty working as part of a group, and 20 percent said 
at least half of the class had problems with social skills. Is it a 
surprise that children who cannot follow simple directions and get 
along with their peers cannot learn to read?
  According to the latest data, 61 percent of children under age 4 are 
in regularly scheduled child care. With such a high percentage of our 
youngest children in child care and with such certainty as we have that 
early care and education has a long-lasting if not permanent impact on 
an individual's social and academic development, we cannot deny the 
necessity of ensuring that those providers are equipped to work with 
all of our children including those with emotional and behavioral 
problems.
  Neither can we deny that the most important relationship in a child's 
life is the one with his or her parents. It is absolutely essential to 
the child's future success that the parent-child relationship be as 
healthy as possible. Without a close, dependable relationship with a 
healthy and responsible adult, a child's potential for growth could be 
severely and permanently impaired. We must provide high quality 
education and support not only for children but also for their parents.
  The goal of this legislation is to enable all children to enter 
school ready to learn by focusing on the social and emotional 
development of children ages 0-5. The bill would accomplish this by: 
providing family support initiatives such as parent training and home 
visitation to provide intensive early interventions to families of at-
risk children; providing consultations and professional development 
opportunities for child care workers and hiring of behavioral 
specialists by early childhood service providers and the development of 
curriculum for use in early childhood settings; providing early 
intervention services to at-risk children to promote their emotional 
and social development; and by developing community resources and 
linkages between early childhood service providers to enhance the 
quality of services to children.
  This bill will help communities lay the foundation for school 
readiness by providing funding to integrate emotional and social 
development support services into early childhood programs and 
strengthening the capacity of parents to constructively manage behavior 
problems.
  Study after study had shown that intervention can work to increase 
the quality of early care and educational experiences that children 
receive. Study after study has shown that financial resources are 
essential to improving quality of early care and education. Study after 
study has shown that investments in young children can save costs of 
adolescents' incarceration tomorrow. Investing in young children is 
well worth the investment. If we're serious about adequately preparing 
our children for school and for life, we must provide communities, 
families, child care providers with the necessary resources to support 
the development of a healthy whole child.
  I hope that my colleagues will join me in supporting and pushing this 
important legislation.
                                 ______
                                 
      By Mr. KERRY (for himself, Mr. Chafee, Mr. Reed, Mr. Jeffords, 
        Mr. Sarbanes, Mr. Leahy, Mr. Wellstone, Mr. Dayton, Mrs. 
        Feinstein, Mr. Levin, Mr. Schumer, Mr. Durbin, Ms. Stabenow, 
        Mrs. Boxer, Mr. Kennedy, Mr. Corzine, and Mr. Dodd):
  S. 1248. A bill to establish a National Housing Trust Fund in the 
Treasury of the United States to provide for the development of decent, 
safe, and affordable, housing for low-income families, and for other 
purposes; to the Committee on Banking, Housing, and Urban Affairs.
  Mr. KERRY. Mr. President, our Nation is facing an affordable housing 
crisis. Recent changes in the housing market have limited the 
availability of affordable housing across the country while the growth 
in our economy in the last decade has dramatically increased the cost 
of housing that remains. That is why, along with sixteen cosponsors, I 
am proposing to address the severe shortage of affordable housing by 
introducing legislation that will establish a National Affordable 
Housing Trust Fund.
  The Affordable Housing Trust Fund that is established in this 
legislation would create an affordable housing production program, 
ensuring that new rental units are built for those who most need 
assistance extremely low-income families, including working families. 
The goal is to create long-term affordable, mixed-income developments 
in areas with the greatest opportunities for low-income families. 
Seventy-five percent of Trust Fund assistance will be given out, based 
on need, through matching grants to states. The States will allocate 
funds on a competitive basis to projects that meet Federal 
requirements, such as mixed-income projects and long-term 
affordability, and to address local needs. The remainder of the funding 
will be competitively awarded by the Department of Housing and Urban 
Development, HUD, to intermediaries such as the Enterprise Foundation, 
which will be required to leverage private funds. A portion of the 
Trust Fund will be used to promote home ownership activities for low-
income Americans.
  Funding for the Trust Fund would be drawn from excess revenue 
generated by the Federal Housing Administration and Government National 
Mortgage Administration beyond the amounts necessary to ensure their 
safety and soundness. These Federal housing programs generate billions 
of dollars in excess income, which currently go to the general Treasury 
for use on other Federal priorities. It is time to stop taking housing 
money out of housing programs. These excess funds should be used to 
help alleviate the current housing crisis. According to current 
projections, approximately $5.7 billion will be available for the Trust 
Fund in the first year and $2 billion will be available each year 
thereafter.
  The need for affordable housing is great. While many Americans have 
benefitted from the growing economy over the past decade, it has also 
fueled a dramatic increase in the cost of housing. Many working 
families have been unable to keep up with these increases. HUD 
estimates that more than five million American households have what is 
considered ``worst case'' housing needs. Many of these families are 
spending more than half their income for housing or are living in 
severely substandard housing. Since 1990, the number of families who 
have ``worst case'' housing needs has increased by 12 percent, that's 
600,000 more American families that cannot afford a decent and safe 
place to live. Recent growth in our economy also has squeezed many 
working families out of tight housing markets across the country. On 
average, a person needs to earn more than $11 per hour just to afford 
the median rent on a two-bedroom apartment in the United States. There 
is not one metropolitan area in the country where a minimum wage earner 
can afford to pay the rent for a two-bedroom apartment. This hourly 
figure is dramatically higher in many metropolitan areas, an hourly 
wage of $22 is needed in San Francisco; $21 on Long Island; $17 in 
Boston; $16 in the D.C. area; $14 in Seattle and Chicago; and, $13 in 
Atlanta.
  Mikala Bembery is a single mother with two boys who now lives in 
Framingham, MA. Her family's housing story is not unique for many low-
and

[[Page 14488]]

moderate income families in Massachusetts and across the nation. In 
1995, Mikala lost her full-time job and could not make the rent on the 
fair market apartment in which she and her children lived. While she 
quickly got a part-time job, for the next two years, the Bembery family 
was forced to live with friends or in rooming houses because they did 
not initially qualify for either a shelter or a Federal Section 8 
subsidy. Finally, after appealing HUD's decision and months of delay, 
Mikala was given a Section 8 voucher for her family. You would think 
that obtaining a Section 8 voucher would allow the Bembery family to 
find affordable housing. However, because there is a dramatic shortage 
of affordable housing in Massachusetts, it took several months of 
searching to find a new apartment for her family. Every available 
apartment was viewed by hundreds of people and landlords were able to 
pick and choose whom they wanted. Because of Mikala's strong work 
history, she and her family were finally able to move into a new 
apartment two years after she lost her full time job. Although, Mikala 
kept working and her children stayed in school throughout their ordeal, 
this family is still struggling to rebuild their lives.
  Working families in this country are increasingly finding themselves 
unable to afford housing. A person trying to live in Boston would have 
to make more than $35,000, annually, just to afford a 2-bedroom 
apartment. This means teachers, janitors, social workers, police 
officers and other full time workers may have trouble affording even a 
modest 2-bedroom apartment.
  At the same time, there has been a tremendous decline in the 
available stock of affordable housing. Between 1993 and 1995, there was 
a 900,000 decline in the number of affordable rental units available to 
very low-income families. From 1996 to 1998, there was another 19 
percent decline in the number of affordable housing units. This 
amounted to a dramatic reduction of 1.3 million affordable housing 
units available to low-income Americans. Making matters worse, many 
current affordable housing providers are deciding to opt-out of their 
Section 8 contracts or are prepaying their HUD-insured mortgages. These 
decisions have limited further the availability of affordable housing 
across the country. Many more providers will be able to opt-out of 
their Section 8 contracts in the next few years, further limiting the 
availability of affordable housing in our nation. This decline has 
already forced many working families eligible for Section 8 vouchers in 
Boston, Massachusetts to live outside the City there is no affordable 
housing available.
  The loss of affordable housing has exacerbated the housing crisis in 
this country, and the Federal Government must take action. We have the 
resources, yet we are not devoting these resources to fix the problem. 
Despite the fact that more families are unable to afford housing, we 
have decreased federal spending on critical housing programs over time. 
Between 1978 and 1995, the number of households receiving housing 
assistance was increased by almost three million. From 1978 through 
1984, we provided an additional 230,000 families with housing 
assistance each year. This number dropped significantly to 126,000 
additional households each year from 1985 through 1995.
  In 1996, this Nation's housing policy went all the way back to square 
one--not only was there no increase in families receiving housing 
assistance, but the number of assisted units actually decreased. From 
1996 to 1998, the number of HUD assisted households dropped by 51,000.
  During this time of rising rents, increased housing costs, and the 
loss of affordable housing units, it is incomprehensible that we are 
not doing more to increase the amount of housing assistance available 
to working families. Unfortunately, President Bush and Republicans in 
the Congress have again failed to assist working families in obtaining 
decent affordable housing. From fiscal year 1995 to fiscal year 1999, 
Republicans in control of the Congress diverted or rescinded more than 
$20 billion from federal housing programs for other uses.
  This year, many Republicans in the Congress and the Bush 
Administration have supported more than $2 billion in additional cuts 
for the Department of Housing and Urban Development budget. These cuts 
include terminating the Drug Elimination Program, reducing funding for 
the Community Development Block Grant, and funds incremental Section 8 
vouchers for 53,500 fewer families. Thankfully, under the leadership of 
the Democrats in the Senate and Chairman Barbara Mikulski, the worst of 
these cuts have been restored in the Senate FY 2002 VA-HUD and 
Independent Agencies Appropriations bill. Nevertheless, we still have 
much more work to do. The Commonwealth of Massachusetts is expected to 
receive a reduction in federal assistance at a time when my State has 
the greatest need. The future is even bleaker. These reductions at HUD 
follow the enactment of a tax plan that will make it almost impossible 
for any significant increases in the HUD's budget over the next decade. 
We need to bring housing resources back up to where they belong and the 
National Affordable Housing Trust Fund will provide desperately needed 
funds to begin production of affordable housing in the United States. 
Enacting the Housing Trust Fund legislation is an important step in the 
right direction to add resources to housing and to help begin producing 
housing again.
  We can no longer ignore the lack of affordable housing, and the 
impact it is having on families and children around the country. It is 
not clear to me why this lack of housing has not caused more uproar. 
How many families need to be pushed out of their homes and into the 
streets, before action is taken. I believe it is time for our Nation to 
take a new path, one that ensures that every American, especially our 
children, has the opportunity to live in decent and safe housing. 
Everyone knows that decent housing, along with neighborhood and living 
environment, play enormous roles in shaping young lives. Federal 
housing assistance, has benefitted millions of low-income children 
across the nation and has helped in developing stable home 
environments. However, too many children currently live in families 
that have substandard housing or are homeless. These children are less 
likely to do well in school and less likely to be productive citizens. 
Because of the positive affect that this legislation would have on 
America's children, the Trust Fund was included in the Act to Leave No 
Child Behind, a comprehensive proposal by the Children's Defense Fund 
to assist in the development of our Nation's children.
  I also believe that our Nation deserves a program that would assist 
in maintaining the affordable housing stock that already exists. I am 
working with Senator James Jeffords in developing legislation to help 
preserve our affordable housing stock. It is my hope that this 
legislation will be taken up and passed this Congress so that we can 
avoid losing any more affordable units. However, we must also focus on 
producing additional housing, which is exactly what this Housing Trust 
Fund will do.
  I urge you to support this legislation which restores our commitment 
to providing affordable housing for all families. We can no longer turn 
our backs on those families who struggle every day just to put a roof 
over their heads.
  Mr. LEAHY. Mr. President, I rise today in support of the National 
Affordable Housing Trust Fund Act of 2001. This is an important piece 
of legislation that will help address the lack of affordable housing 
available in our Nation today.
  For far too long we have neglected our Nation's stock of affordable 
housing, allowing too many properties to fall by the wayside. Between 
1995 to 1997 the nation lost 370,000 affordable rental units, nearly 5 
percent of the housing available to low-income families. These homes 
were lost to deterioration, demolition, or simply because landlords 
opted out of Federal programs in order to secure more lucrative rents.
  Unfortunately these units were not replaced at a pace adequate enough 
to address the need. Our most vulnerable

[[Page 14489]]

populations, the low-income, the elderly, and working families, have 
been left with the difficult task of finding an apartment or a house 
that they can afford. Roughly five million households in the United 
States have ``worst case'' housing needs. These families are spending 
over 50 percent of their incomes on rent alone, leaving precious little 
to put groceries on the table, gas in their cars, or buy clothes for 
their kids.
  In my home State of Vermont, the situation is no different. 
Production of new housing has stalled, prices for rental units have 
dramatically increased, and rental vacancy rates are at an all time 
low. The competition for housing, any housing at all, is so great that 
many low and middle-income families must stay in hotels, school dorms, 
and homeless shelters until they can find a permanent place. This 
results in a huge personal and emotional loss to the families and 
drives up the needs for additional State and Federal social services 
dollars to help these people in their time of crisis.
  For those fortunate enough to find an apartment available for rent, 
few are able to afford the rent that the market demands. It is 
estimated that the average person would have to earn over $11 dollars 
per hour to afford a two bedroom apartment at the Fair Market Rent.
  While Vermont has a dedicated community of State officials, no profit 
organizations, advocates and affordable housing developers working to 
ensure the housing needs of our State's population are met, the 
resources are simply not available to construct the number of units 
necessary to alleviate the problem. As a result the number of homeless 
families in the state are rising.
  In Chittenden County, Vermont's most populous region, the number of 
families seeking services from homeless shelters has risen 400 percent 
in three years, over half of these families are working families, 
unable to afford a place to live even while holding down a job. This is 
a trend we see spreading throughout the state. We cannot allow this to 
continue.
  The creation of a National Affordable Housing Trust Fund will go a 
long way to help address this situation. By harnessing revenues 
generated by other Federal housing programs, States, communities and 
non-profit organizations, will be able to leverage local funds for new 
housing construction in the most needy areas.
  I cannot think of a time in recent history when it has been more 
important to reaffirm the federal government's commitment to the 
housing needs of this country, and I am proud to rise as a cosponsor of 
this bill. There is a long road ahead of us in our endeavor to create a 
National Affordable Housing Trust Fund, and I look forward to working 
with my colleagues to ensure that the final product is fair and 
equitable to all regions of the country, including rural and small 
states.
  I urge my colleagues to join me in support of this legislation.
                                 ______
                                 
      By Mr. WELLSTONE (for himself, Mrs. Murray, Mr. Schumer, Mr. 
        Dodd, Mr. Dayton, Mrs. Clinton, and Mr. Inouye):
  S. 1249. A bill to promote the economic security and safety of 
victims of domestic and sexual violence, and for other purposes; to the 
Committee on Finance.
  Mr. WELLSTONE. Mr. President, along with my colleagues, Senators 
Murray, Schumer, Dodd, Dayton, Clinton and Inouye, I am introducing 
legislation that if adopted would have a most profound and even life-
saving effect on people who are victims of domestic and sexual violence 
and their families. It is called the Victims' Economic Security and 
Safety Act. Similar to the Battered Women's Economic Security and 
Safety Act, which I introduced last session, the legislation 
acknowledges that the impact of domestic and sexual violence extends 
far beyond the moment the abuse occurs. It strikes at the heart of 
victims' and their families' economic self sufficiency. As a result, 
many victims are unable to provide for their own or their children's 
safety. Too often they are forced to choose between protecting 
themselves from abuse and keeping a roof over their head. This is a 
choice that no mother should have to make. Nor should any person face 
the double tragedy of first being abused and then losing a job, health 
insurance or any other means of self sufficiency because they were 
abused.
  In response to this cycle of violence and dependence, and in response 
to domestic and sexual violence's devastating impact on a victim's 
financial independence, this legislation would help to ensure the 
economic security of victims of domestic violence, sexual assault and 
stalking so they are better able to provide permanent safety for 
themselves and their children and so they are not forced, because of 
economic dependence, to stay in an abusive relationship. In the fight 
against violence against women, and after the passage of the Violence 
Against Women Act of 2000, this legislation is a next, critical step.
  The link between poverty and domestic and sexual abuse is clear. For 
example, according to the United States Conference of Mayors, domestic 
violence is the fourth leading cause of homelessness. A 2000 study 
conducted by the Manpower Research and Development Corporation of 
Minnesota's welfare program, the Minnesota Family Investment Program, 
showed that 49 percent of single-parent long term recipients were in 
abusive relationships while they were receiving or had recently been 
receiving MFIP benefits. A 1998 GAO study found that when compared with 
women who report never experiencing abuse, women who report having been 
abused experience more spells of unemployment; greater job turnover; 
and significantly higher rates of receipt of welfare, Medicaid and food 
stamps.
  Economic dependence is a clear reason people who are in abusive 
relationships may return to abusers or even may not be able to leave 
abusive situations in the first place. Abusers will go to great lengths 
to sabotage their partner's ability to have a job or get an education 
so that their partners will remain dependent on them. If we want 
battered women and victims of sexual violence to be able to escape the 
dangerous, often life-threatening situations in which they are trapped, 
they need the economic means to do so. Yet, victims of domestic and 
sexual violence face very serious challenges to self-sufficiency every 
day.
  Multiple studies of domestic violence victims who were working while 
being abused found that as many as 60 percent of respondents said they 
had been reprimanded at work for behaviors related to the abuse, such 
as being late to work, and as many as 52 percent said they had lost 
their jobs because of the abuse. Almost 50 percent of sexual assault 
survivors reported they had lost their jobs or were forced to quit in 
the aftermath of the assaults. A study from the National WorkPlace 
Resource Center on Domestic Violence found that abusive husbands and 
partners harass 74 percent of employed battered women at work.
  The effects of this are felt not only by the victims of such abuse 
and their families, but also by employers and the nation as a whole. 
From the perspective of employers, a 1999 CNN report found that 37 
percent of domestic violence victims said that domestic violence 
impacted their ability to do their job and 24 percent said it caused 
them to be late for work. A survey of employers confirmed this--49 
percent of corporate executives said that domestic violence harmed 
their company's productivity. The Bureau of National Affairs has 
estimated that domestic violence costs employers between $3 billion and 
$5 billion in lost time and productivity each year. Ninety-four percent 
of corporate security and safety directors at companies nationwide rank 
domestic violence as a high security concern, and homicide continues to 
be the leading cause of death of women in the workplace. The United 
States Department of Labor, in 2000 reported that Domestic Violence 
accounted for 27 percent of all incidents of workplace violence.
  More generally, prior to 1994, the Congress gathered years of 
testimony

[[Page 14490]]

and evidence as to the negative impact of gender violence in the 
national economy and found that gender violence costs the economy $10 
billion per year.
  Victims need to be able to deal with these problems without fear of 
being fired and without fear of losing their livelihoods and their 
children's livelihoods. Corporations, too, need to be able to ensure 
their employee's safety and productivity. That is the goal of this 
legislation. VESSA would help break down the economic barriers that 
prevent victims from leaving their batterer or abuser, protect victims 
from violence in the workplace and mitigate the negative economic 
effects of violence on employers and on the national economy.
  The bill would provide emergency leave for employees who need to 
address the effects of domestic and sexual assault. That way, if a 
victim had to go to court to get a restraining order or leave work to 
find shelter, the victim could take limited leave without facing the 
prospect of being fired, demoted or financially penalized.
  The bill would also extend unemployment compensation to people who 
are forced to leave their job to provide for their safety or their 
children's safety. As mentioned above, homicide is the leading cause of 
death for women in the workplace, 15 percent of these deaths are due to 
domestic violence, 11 percent of all rapes occur at the workplace. 
These grim statistics do not begin to address the many women that are 
physically injured or otherwise harassed at work each day. Often, the 
only way to escape that kind of brutal stalking is for a victim to 
leave her job so she can relocate to a safer place. In circumstances in 
which a victim is forced to leave a job to ensure her own safety, 
unemployment compensation should be available to her, so that she does 
not have to make the terrible choice of risking her safety to ensure 
her livelihood.
  Further, VESSA would prohibit discrimination in employment against 
victims because of domestic and sexual assault. Victims should not be 
fired or passed over for promotions for reasons beyond their control. 
Maintaining a victim's dependence is the insidious goal of an abuser. 
The abuser must never be rewarded for his crime and a victim should 
never face severe punishment because of being abused.
  The bill would also prohibit insurance providers from discriminating 
against such victims because of a history of domestic and sexual 
assault. Such discrimination only forces people to lie about their 
victimization and avoid medical treatment until it is too late. It 
punishes victims for a perpetrator's crime.
  Finally, the bill recognizes the positive role that companies can 
play in helping victims of domestic and sexual violence at the same 
time that they can increase their own productivity. It would provide a 
tax credit to businesses that implement workplace safety and education 
programs to combat violence against women.
  For women attempting to escape a violent environment, this 
legislation could be a lifeline. I urge that all my colleagues support 
it so that we can help ensure that no more women are forced to trade 
their family's personal safety for their economic livelihood. I urge 
that my colleagues support it so that no more women have to face the 
double violation of first being assaulted and second losing their job 
or their self-sufficiency because of it. In what seems to many like a 
hopeless situation, we can take very strong actions to improve the 
safety and the lives of the millions of victims of domestic and sexual 
violence. The cycle too many people face can end. Today we have the 
opportunity not just to help victims escape violence, but also to 
provide for so many people a light at the end of a very dark tunnel. 
Today we can give victims hope that they will not only survive, but 
that they will be able to maintain or regain their independence and 
have a safe, happy and productive future. I urge my colleagues to join 
me in support of this bill and to cosponsor this bill.
  Mrs. MURRAY. Mr. President, I am proud to join with my colleagues, 
Senators Wellstone and Schumer, to introduce the Victims Economic 
Safety and Security Act, VESSA. VESSA will help our country take the 
next step forward to protest victims of domestic violence. In 1994, our 
country took a dramatic step forward by passing the historic Violence 
Against Women Act, VAWA. This landmark legislation brought together 
social service providers, victim advocates, law enforcement, and the 
courts to respond to the immediate threat of violence. VAWA has been a 
success in meeting the immediate challenges. But there is still work to 
be done.
  Between 1993 and 1998 the average annual number of physical attacks 
on intimate partners was 1,082,110. Eighty-seven percent of these were 
committed against women. According to recent government estimates, more 
than 900,000 women are raped every year in the United States. Women who 
are victims of abuse are especially vulnerable to changes in 
employment, pay, and benefits. Because of these factors they need legal 
protection.
  Today, it's time to take the next step. Our bill will protect victims 
who are forced to flee their jobs. Today a woman can receive 
unemployment compensation if she leaves her job because her husband 
must relocate. But if that same woman must leave her job because she's 
fleeing abuse, she can't receive unemployment compensation. That's 
wrong, and our bill will protect those victims.
  Our bill will also protect victims by allowing them unpaid time to 
get the help they need. Today, a woman can use the Family Medical Leave 
Act, FMLA, to care for a sick or injured spouse. But a woman cannot use 
FMLA leave to go to court to stop abuse. Our bill will correct these 
fatal flaws.
  Finally, our bill will protect victims of domestic violence from 
insurance discrimination. Insurance companies have classified domestic 
violence as a high risk behavior. That punishes women who are victims. 
Once again, women must sacrifice their economic safety net if they 
choose to come forward and seek help from violence. Title IV of VESSA 
would prohibit discrimination in all lines of insurance against victims 
of domestic violence, stalking and sexual assault.
  I am proud of the guidance we've received from advocates in crafting 
this legislation. I want to thank them for their efforts and their 
commitment to breaking the cycle of violence. I want to particularly 
acknowledge the efforts of the advocates in Washington State who have 
provided invaluable input in drafting this legislation. Without the 
grassroots support for our communities, we couldn't have passed VAWA in 
the first place. Their support and leadership will help us take this 
critical next step in passing VESSA.

                          ____________________