[Congressional Record (Bound Edition), Volume 147 (2001), Part 11]
[Senate]
[Pages 15362-15379]
[From the U.S. Government Publishing Office, www.gpo.gov]



                                 ______
                                 
      By Mr. EDWARDS:
  S. 1292. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit against income tax for dry and wet cleaning equipment which uses 
non-hazardous primary process solvents; to the Committee on Finance.
  Mr. EDWARDS. Madam President, I rise today to introduce the Small 
Business Pollution Prevention and Opportunity Act. This legislation 
would help address a matter of great concern to all Americans who care 
about water quality and the environment.
  Toxic and flammable solvents are used in ninety-five percent of the 
35,000 small dry cleaning businesses in our country. Dry-cleaned 
clothes are the primary source of toxins entering our homes, 
endangering our health. These solvents often leak from storage tanks or 
spill onto the ground, contaminating the property on which dry cleaning 
businesses are located. This contamination has resulted in part in the 
large number of brownfields sites across our country. These dry 
cleaning solvents are regulated by numerous State and Federal agencies, 
causing dry cleaners and neighboring businesses to be concerned about 
the health of their workers and the dangers of property contamination.
  An innovative scientist, Dr. Joseph M. DeSimone of North Carolina, 
developed an environmentally-friendly alternative to these solvents. He 
and his graduate students have developed a process to clean clothes 
using liquid carbon dioxide and special detergents. This safer dry 
cleaning method has been commercially available since February 1999, 
with several machines in operation around the country that have 
successfully cleaned half a million pounds of clothes in over 10,000 
cleaning cycles at shops in various states across the Nation.
  The Small Business Pollution Prevention and Opportunity Act would 
provide new and existing dry cleaners a 20 percent tax credit as an 
incentive to switch to an environmentally-friendly and energy efficient 
technology. Dry cleaners in Enterprise Zones would receive a 40 percent 
tax credit. The tax credit would also be extended to wet cleaning 
fabric cleaners who use water-based systems to effectively clean 40 
percent of ``dry clean only'' garments.
  This new technology is becoming increasingly recognized as a safer, 
cleaner alternative to traditional dry cleaning. The U.S. Environmental 
Protection Agency, EPA, has issued a case study declaring liquid carbon 
dioxide as a viable alternative to dry cleaning. R&D Magazine named Dr. 
DeSimone's technology one of the 100 most innovative technologies that 
will change our everyday lives. For his innovation, Dr. DeSimone 
received the Presidential Green Chemistry Challenge Award in 1997. The 
EPA as well as the National Science Foundation, NSF, has funded Dr. 
DeSimone's research.
  Now that environmentally beneficial technologies like liquid carbon 
dioxide and wet cleaning are commercially available, it makes sense to 
provide a modest incentive to encourage dry cleaners to utilize them. 
The benefits to small business dry cleaners, consumers, employees, and 
the environment would be enormous. This bill's approach provides 
incentives, not additional regulations, for dry cleaners. The goal of 
the bill is to protect and enhance the dry cleaning industry, not 
reinvent or harm it.

[[Page 15363]]

  I encourage my colleagues to join me in supporting this legislation. 
It is the right thing to do for 35,000 small businesses, millions of 
dry cleaning consumers, and for our environment.
                                 ______
                                 
      By Mr. CRAIG (for himself and Mr. Hagel):
  S. 1293. A bill to amend the Internal Revenue Code of 1986 to provide 
incentives for the voluntary reduction, avoidance, and sequestration of 
greenhouse gas emissions and to advance global climate science and 
technology development and deployment; to the Committee on Finance.
                                 ______
                                 
      By Mr. MURKOWSKI (for himself, Mr. Craig, Mr. Hagel, Mr. 
        Domenici, Mr. Roberts, and Mr. Bond):
  S. 1294. A bill to establish a new national policy designed to manage 
the risk of potential climate change, ensure long-term energy security, 
and to strengthen provisions in the Energy Policy Act of 1992 and the 
Federal Nonnuclear Energy Research and Development Act of 1974 with 
respect to potential climate change; to the Committee on Energy and 
Natural Resources.
  Mr. CRAIG. Madam President, let me first thank my colleagues, 
Senators Murkowski, Hagel, and Domenici, for their work on this very 
important legislation. I enjoyed working with them and their staffs on 
this analytically complex issue. The results of our patience and hard 
work are two companion pieces of legislation that will provide the 
underpinning for a path forward on the climate change issue that will 
meet the nation's and global needs for economic progress, while 
ensuring our nation's energy and national security. In addition, it 
will provide a sound basis for productive engagement with our friends 
and allies that share the same needs.
  The first bill is the Climate Change Tax Amendments of 2001 which is 
essentially the same as S. 1777 that I introduced in the 106th 
Congress. This bill is an important element of the approach we should 
take as a nation because current U.S. tax policy treats capital 
formation--including investments that can increase energy efficiency 
and reduce emissions--harshly compared with other industrialized 
countries and our own recent past. Slower capital cost recovery means 
that facilities deploying new advanced technology will not be put in 
place as quickly, if at all.
  Based on our current understanding of the science available on 
climate change, I remain convinced that it is still premature for our 
government to mandate stringent controls on carbon dioxide emissions 
and pick winners and losers in technology. This bill assures that there 
will be a true partnership between tax policy and technology innovation 
in both research and deployment.
  Although the science of climate change has progressed rather 
dramatically over the last five years, many trenchant questions remain 
about what is happening to our climate system. However, the climate 
change issue is at a crossroads. We can and must make decisions on how 
to proceed. The bills introduced today ensure a more focused and 
coordinated effort to understand the outstanding and formidable 
scientific issues associated with climate change. While pursuing 
answers to those questions, the bills also create a comprehensive and 
systematic program to achieve the goals of reducing, avoiding, or 
sequesting greenhouse gas emissions. That program is manifest in both 
the technological research and development effort authorized in the 
Risk Management bill and a comprehensive and systematic approach that 
aggressively encourages voluntary actions to reduce, avoid, or 
sequester greenhouse gas emissions.
  To bolster and strengthen the voluntary action program we have 
proposed tax incentives in the companion Tax Amendment bill that should 
also stimulate the creative ways to reduce, avoid, or sequester 
greenhouse gas emissions without creating drag on future economic 
growth. Although some special interest groups have criticized voluntary 
programs as ineffective, my colleagues and I do not believe that past 
efforts were as clearly designed and planned or aggressively promoted 
as we have proposed in this legislation.
  The companion bill is the Climate Change Risk Management Act of 2001. 
This bill has as its roots in S. 1776 and S. 882, two bills that were 
introduced in the 106th Congress with the expressed intent to forge 
consensus on this issue. The principal objectives of the current 
legislation are to encourage the research, development, and deployment 
of the technologies that can meet our needs and the needs of developing 
nations. A key focus are the technologies that can help us reduce, 
avoid or sequester emissions of greenhouse gases. In addition the bill 
also encourages deployment of technologies that can sequester 
greenhouse gases in the atmosphere. This approach is essential to 
assure that we can fully use all of our domestic resources to their 
fullest. This must include coal and nuclear power.
  An essential element in this legislation is the active engagement of 
developing countries. Our policy must recognize the legitimate needs of 
our bilateral trading partners to use their resources and meet the 
needs of their people. For too long the climate policy debate has been 
fixated on assigning blame and inflicting pain. This is harmful and 
counterproductive. Our best technology must be made available and our 
research activities must focus on developing country needs as well as 
our own.
  Moreover, we believe that the President has chosen the right path 
forward on this issue and we are committed to working with his Cabinet 
level task force on finding effective, technologically based approaches 
to attacking this important environmental and economic issue.
  Although these bills are comprehensive, there are still more steps 
Congress can and will take in the immediate future to ensure we are 
doing all that is reasonably and responsibly possible. For example, a 
key piece of this puzzle is better government-wide coordination of 
scientific efforts to solve the remaining mysteries of climate change. 
A strong and consistent recommendation from the National Academy of 
Sciences has been for us to solve this problem.
  Because that issue includes Federal agency ``turf battles,'' 
legislative committee jurisdictional constraints prevented us from 
fully addressing that issue in these bills. However, we will have this, 
and other key pieces (such as traffic congestion, agricultural, forest 
management, and ocean sequestration) not currently getting sufficient 
attention, ready to complete a comprehensive package on climate change 
before the end of the 107th Congress.
  But for now, the bills we introduce today are an important and 
aggressive attempt to shape and implement policy on climate change. It 
is a responsible effort to work with our friends and allies to:
  1. Develop better policy mechanisms for assessing the effects of 
greenhouse gas emissions; 2. accelerate development and deployment of 
climate response technology; 3. facilities international deployment of 
U.S. technology to mitigate climate change to the developing world; 4. 
advance climate science to reduce uncertainties in key areas; and 5. 
improve public access to government information on climate science.
  All involved in this debate must stop politicizing science and help 
us get to the point where the issue is confidently understood. The 
American people have a right to know the whole truth on this issue. The 
success of any future government response to climate change depends on 
that more than anything else.
  I ask unanimous consent that the bill texts along with section-by-
section analyses be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

                                S. 1293

       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 ``Climate Change Tax 
     Amendments of 2001''.

[[Page 15364]]



     SEC. 2. PERMANENT TAX CREDIT FOR RESEARCH AND DEVELOPMENT 
                   REGARDING GREENHOUSE GAS EMISSIONS REDUCTION, 
                   AVOIDANCE, OR SEQUESTRATION.

       (a) In General.--Section 41(h) of the Internal Revenue Code 
     of 1986 (relating to termination) is amended by adding at the 
     end the following:
       ``(3) Exception for certain research.--Paragraph (1)(B) 
     shall not apply in the case of any qualified research 
     expenses if the research--
       ``(A) has as one of its purposes the reducing, avoiding, or 
     sequestering of greenhouse gas emissions, and
       ``(B) has been reported to the Department of Energy under 
     section 1605(b) of the Energy Policy Act of 1992.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     applies with respect to amounts paid or incurred after the 
     date of enactment of this Act, except that such amendment 
     shall not take effect unless the Climate Change Risk 
     Management Act of 2001 is enacted into law.

     SEC. 3. TAX CREDIT FOR GREENHOUSE GAS EMISSIONS FACILITIES.

       (a) Allowance of Greenhouse Gas Emissions Facilities 
     Credit.--Section 46 of the Internal Revenue Code of 1986 
     (relating to amount of credit) is amended by striking ``and'' 
     at the end of paragraph (2), by striking the period at the 
     end of paragraph (3) and inserting ``, and'', and by adding 
     at the end the following:
       ``(4) the greenhouse gas emissions facilities credit.''.
       (b) Amount of Credit.--Subpart E of part IV of subchapter A 
     of chapter 1 of the Internal Revenue Code of 1986 (relating 
     to rules for computing investment credit) is amended by 
     inserting after section 48 the following:

     ``SEC. 48A. CREDIT FOR GREENHOUSE GAS EMISSIONS FACILITIES.

       ``(a) In General.--For purposes of section 46, the 
     greenhouse gas emissions facilities credit for any taxable 
     year is the applicable percentage of the qualified investment 
     in a greenhouse gas emissions facility for such taxable year.
       ``(b) Greenhouse Gas Emissions Facility.--For purposes of 
     subsection (a), the term `greenhouse gas emissions facility' 
     means a facility of the taxpayer--
       ``(1)(A) the construction, reconstruction, or erection of 
     which is completed by the taxpayer, or
       ``(B) which is acquired by the taxpayer if the original use 
     of such facility commences with the taxpayer,
       ``(2) the operation of which--
       ``(A) replaces the operation of a facility of the taxpayer,
       ``(B) reduces, avoids, or sequesters greenhouse gas 
     emissions on a per unit of output basis as compared to such 
     emissions of the replaced facility, and
       ``(C) uses the same type of fuel (or combination of the 
     same type of fuel and biomass fuel) as was used in the 
     replaced facility,
       ``(3) with respect to which depreciation (or amortization 
     in lieu of depreciation) is allowable, and
       ``(4) which meets the performance and quality standards (if 
     any) which--
       ``(A) have been jointly prescribed by the Secretary and the 
     Secretary of Energy by regulations,
       ``(B) are consistent with regulations prescribed under 
     section 1605(b) of the Energy Policy Act of 1992, and
       ``(C) are in effect at the time of the acquisition of the 
     facility.
       ``(c) Applicable Percentage.--For purposes of subsection 
     (a), the applicable percentage is one-half of the percentage 
     reduction, avoidance, or sequestration of greenhouse gas 
     emissions described in subsection (b)(2) and reported and 
     certified under section 1605(b) of the Energy Policy Act of 
     1992.
       ``(d) Qualified Investment.--For purposes of subsection 
     (a), the term `qualified investment' means, with respect to 
     any taxable year, the basis of a greenhouse gas emissions 
     facility placed in service by the taxpayer during such 
     taxable year, but only with respect to that portion of the 
     investment attributable to providing production capacity not 
     greater than the production capacity of the facility being 
     replaced.
       ``(e) Qualified Progress Expenditures.--
       ``(1) Increase in qualified investment.--In the case of a 
     taxpayer who has made an election under paragraph (5), the 
     amount of the qualified investment of such taxpayer for the 
     taxable year (determined under subsection (d) without regard 
     to this subsection) shall be increased by an amount equal to 
     the aggregate of each qualified progress expenditure for the 
     taxable year with respect to progress expenditure property.
       ``(2) Progress expenditure property defined.--For purposes 
     of this subsection, the term `progress expenditure property' 
     means any property being constructed by or for the taxpayer 
     and which it is reasonable to believe will qualify as a 
     greenhouse gas emissions facility which is being constructed 
     by or for the taxpayer when it is placed in service.
       ``(3) Qualified progress expenditures defined.--For 
     purposes of this subsection--
       ``(A) Self-constructed property.--In the case of any self-
     constructed property, the term `qualified progress 
     expenditures' means the amount which, for purposes of this 
     subpart, is properly chargeable (during such taxable year) to 
     capital account with respect to such property.
       ``(B) Non-self-constructed property.--In the case of non-
     self-constructed property, the term `qualified progress 
     expenditures' means the amount paid during the taxable year 
     to another person for the construction of such property.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Self-constructed property.--The term `self-
     constructed property' means property for which it is 
     reasonable to believe that more than half of the construction 
     expenditures will be made directly by the taxpayer.
       ``(B) Non-self-constructed property.--The term `non-self-
     constructed property' means property which is not self-
     constructed property.
       ``(C) Construction, etc.--The term `construction' includes 
     reconstruction and erection, and the term `constructed' 
     includes reconstructed and erected.
       ``(D) Only construction of greenhouse gas emissions 
     facility to be taken into account.--Construction shall be 
     taken into account only if, for purposes of this subpart, 
     expenditures therefor are properly chargeable to capital 
     account with respect to the property.
       ``(5) Election.--An election under this subsection may be 
     made at such time and in such manner as the Secretary may by 
     regulations prescribe. Such an election shall apply to the 
     taxable year for which made and to all subsequent taxable 
     years. Such an election, once made, may not be revoked except 
     with the consent of the Secretary.''
       (c) Recapture.--Section 50(a) of the Internal Revenue Code 
     of 1986 (relating to other special rules) is amended by 
     adding at the end the following:
       ``(6) Special rules relating to greenhouse gas emissions 
     facility.--For purposes of applying this subsection in the 
     case of any credit allowable by reason of section 48A, the 
     following shall apply:
       ``(A) General rule.--In lieu of the amount of the increase 
     in tax under paragraph (1), the increase in tax shall be an 
     amount equal to the investment tax credit allowed under 
     section 38 for all prior taxable years with respect to a 
     greenhouse gas emissions facility (as defined by section 
     48A(b)) multiplied by a fraction whose numerator is the 
     number of years remaining to fully depreciate under this 
     title the greenhouse gas emissions facility disposed of, and 
     whose denominator is the total number of years over which 
     such facility would otherwise have been subject to 
     depreciation. For purposes of the preceding sentence, the 
     year of disposition of the greenhouse gas emissions facility 
     property shall be treated as a year of remaining 
     depreciation.
       ``(B) Property ceases to qualify for progress 
     expenditures.--Rules similar to the rules of paragraph (2) 
     shall apply in the case of qualified progress expenditures 
     for a greenhouse gas emissions facility under section 48A, 
     except that the amount of the increase in tax under 
     subparagraph (A) of this paragraph shall be substituted in 
     lieu of the amount described in such paragraph (2).
       ``(C) Application of paragraph.--This paragraph shall be 
     applied separately with respect to the credit allowed under 
     section 38 regarding a greenhouse gas emissions facility.''
       (d) Technical Amendments.--
       (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
     1986 is amended by striking ``and'' at the end of clause 
     (ii), by striking the period at the end of clause (iii) and 
     inserting ``, and'', and by adding at the end the following:
       ``(iv) the portion of the basis of any greenhouse gas 
     emissions facility attributable to any qualified investment 
     (as defined by section 48A(d)).''
       (2) Section 50(a)(4) of such Code is amended by striking 
     ``and (2)'' and inserting ``, (2), and (6)''.
       (3) The table of sections for subpart E of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 48 the 
     following:

``Sec. 48A. Credit for greenhouse gas emissions facilities.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, under rules similar to the rules 
     of section 48(m) of the Internal Revenue Code of 1986 (as in 
     effect on the day before the date of the enactment of the 
     Revenue Reconciliation Act of 1990).
       (f) Study of Additional Incentives for Voluntary Reduction, 
     Avoidance, or Sequestration of Greenhouse Gas Emissions.--
       (1) In general.--The Secretary of the Treasury and the 
     Secretary of Energy shall jointly study possible additional 
     incentives for, and removal of barriers to, voluntary, non 
     recoupable expenditures for the reduction, avoidance, or 
     sequestration of greenhouse gas emissions. For purposes of 
     this subsection, an expenditure shall be considered voluntary 
     and non recoupable if the expenditure is not recoupable--
       (A) from revenues generated from the investment, determined 
     under generally accepted accounting standards (or under the

[[Page 15365]]

     applicable rate-of-return regulation, in the case of a 
     taxpayer subject to such regulation), or
       (B) from any tax or other financial incentive program 
     established under Federal, State, or local law.
       (2) Report.--Within 6 months of the date of enactment of 
     this Act, the Secretary of the Treasury and the Secretary of 
     Energy shall jointly report to Congress on the results of the 
     study described in paragraph (1), along with any 
     recommendations for legislative action.
       (g) Scope and Impact.--
       (1) Policy.--In order to achieve the broadest response for 
     reduction, avoidance, or sequestration of greenhouse gas 
     emissions and to ensure that the incentives established by or 
     pursuant to this Act do not advantage one segment of an 
     industry to the disadvantage of another, it is the sense of 
     Congress that such incentives should be available for 
     individuals, organizations, and entities, including both for-
     profit and non-profit institutions.
       (2) Level playing field study and report.--
       (A) In general.--The Secretary of the Treasury and the 
     Secretary of Energy shall jointly study possible additional 
     measures that would provide non-profit entities (such as 
     municipal utilities and energy cooperatives) with economic 
     incentives for greenhouse gas emissions facilities comparable 
     to those incentives provided to taxpayers under the 
     amendments made to the Internal Revenue Code of 1986 by this 
     Act.
       (B) Report.--Within 6 months after the date of enactment of 
     this Act, the Secretary of the Treasury and the Secretary of 
     Energy shall jointly report to Congress on the results of the 
     study described in subparagraph (A), along with any 
     recommendations for legislative action.
                                  ____


 The Climate Change Tax Amendments of 2001--Section-by-Section Analysis

       A bill to amend the Internal Revenue Code of 1986 to 
     provide incentives for the voluntary reduction avoidance, and 
     sequestration of greenhouse gas emissions and to advance 
     global climate science and technology development.
       Section 1 designates the short title as the ``Climate 
     Change Tax Amendments.''
       Section 2 extends on a permanent basis the tax credit for 
     research and development in the case of R & D involving 
     climate change.
       In order for a research expense to qualify for the credit, 
     it must; have as one of its purposes the reducing or 
     sequestering of greenhouse gases; and have been reported to 
     DOE under Sec. 1605(b) of the Energy Policy Act of 1992.
       This tax credit applies with respect to amounts incurred 
     after the Act becomes law, and only if the Climate Change 
     Risk Management Act of 2001 also becomes law.
       Section 3 provides for investment tax credits for 
     greenhouse-gas-emission reduction facilities.
     Greenhouse Gas Emissions Facility Credit
       The amount of the credit would be calculated based upon the 
     amount of greenhouse gas emission reductions reported and 
     certified under section 1605(b) of the Energy Policy Act. The 
     credit would be equal to one-half of the applicable 
     percentage of the qualified investment in a ``reduced 
     greenhouse gas emissions facility.''
       For example, if a taxpayer replaces a coal-fired generator 
     with a more efficient one that reduced greenhouse gas 
     emissions by 18 percent, compared to the retired unit, the 
     taxpayer would be entitled to a tax credit of 9 percent of 
     qualified investment in that ``reduced greenhouse gas 
     emissions facility''. Such facility is defined as a facility 
     of the taxpayer: the construction, reconstruction; or 
     erection of which is completed by the taxpayer; or the 
     facility may be acquired by the taxpayer if the original use 
     of the facility commences with the taxpayer; which replaces 
     an existing facility of the taxpayer; which reduces 
     greenhouse gas emissions (on a per unit of output basis) as 
     compared to the facility it replaces; which uses the same 
     type of fuel as the facility it replaces; the depreciation 
     (or amortization in lieu of depreciation) of which is 
     allowable; which meets performance and quality standards (if 
     any) jointly prescribed by the Secretaries of Treasury and 
     Energy; and are consistent with regulations prescribed under 
     Sec. 1605 (b) of the Energy Policy Act (relating to voluntary 
     reporting of greenhouse gas emission reductions).
       Only that portion of the investment attributable to 
     providing production capacity not greater than the production 
     capacity of the facility being replaced qualifies for the 
     credit.
       While unit efficiencies could be achieved if the credit 
     were allowed for replacing a unit with another that burned a 
     different fuel, such incentive for fuel shifting does not 
     directly stimulate efficiency technology development for each 
     fuel type. The objective is to improve efficiencies ``within 
     a fuel;'' not to encourage fuel shifting ``between fuels.''
     Qualified Progress Expenditure Credit
       With respect to qualified progress expenditures, the amount 
     of the qualified investment for the taxable year shall be 
     increased by the aggregate of each qualified progress 
     expenditure for the taxable year with respect to progress 
     expenditure property. Progress expenditure property is 
     defined as any property being constructed by or for the 
     taxpayer and which it is reasonable to believe will qualify 
     as a reduced greenhouse gas emission facility.
     Election
       A taxpayer may elect to take the tax credit in such a 
     manner (i.e. as an investment credit, or as qualified 
     progress expenditures) as the Secretary may be regulations 
     prescribe. The election will apply to the taxable year for 
     which it was made and to all subsequent taxable years. Such 
     an election, once made, may not be revoked except with the 
     consent of the Secretary.
     Recapture Where Facility is Prematurely Disposed of
       If the facility is disposed of before the end of the 
     facility's depreciation period (or ``useful life'' for tax 
     purposes) the taxpayer will be assessed an increase in tax 
     equal to the greenhouse gas emissions facility investment tax 
     credit allowed for all prior taxable years multiplied by a 
     fraction whose numerator is the number of years remaining to 
     fully depreciate the facility to be disposed of, and whose 
     denominator is the total number of years over which the 
     facility would otherwise have been subject to depreciation.
       Similar rules apply in the case in which the taxpayer 
     elected credit for progress expenditures and the property 
     thereafter ceases to qualify for such credit.
     Effective Date
       Amendments made to the Internal Revenue Code apply to 
     property placed in service after the date of enactment of 
     this Act.
     Study of Additional Incentives for Voluntary Reduction of 
         Greenhouse Gas Emissions
       The Secretary of Energy and the Secretary of Transportation 
     are directed to study, and report upon to Congress along with 
     any recommendations for legislative action, possible 
     additional incentives for and removal of barriers to 
     voluntary non-recoupable expenditures on the reduction of 
     greenhouse gas emissions. An expenditure qualifies if it is 
     voluntary and not recoupable: from revenues generated from 
     the investment; determined under generally accepted 
     accounting standards; under the applicable rate-of-return 
     regulation (in the case of a taxpayer subject to such 
     regulations); from any tax or other financial incentive 
     program established under federal, State, or local law; and 
     pursuant to any credit-trading or other mechanism established 
     under any international agreement or protocol that is in 
     force.
     Incentives for Non-profit Institutions
       The Secretary of the Treasury and the Secretary of Energy 
     are directed to jointly study possible additional measures 
     that would provide non-profit entities, such as municipal 
     utilities and energy co-operatives, with economic incentives 
     for greenhouse gas emission reductions comparable to the 
     incentives provided to taxpayers under the amendments made to 
     the Internal Revenue Code by this Act. Within six months of 
     the date of enactment, the Secretary of the Treasury and the 
     Secretary of Energy shall jointly report to Congress on the 
     results of the study along with any recommendations for 
     legislative action.
                                  ____


                                S. 1294

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Climate Change Risk 
     Management Act of 2001''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) human activities, namely energy production and use, 
     contribute to increasing concentrations of greenhouse gases 
     in the atmosphere, which may ultimately contribute to global 
     climate change beyond that resulting from natural 
     variability;
       (2) although the science of global climate change has been 
     advanced in the past ten years, the timing and magnitude of 
     climate change-related impacts on the United States cannot 
     currently be predicted with any reasonable certainty;
       (3) furthermore, a recent National Research Council review 
     of climate change science suggests that without an 
     understanding of the sources and degree of uncertainty 
     regarding climate change and its impacts, decision-makers 
     could fail to define the best ways to manage the risk of 
     climate change;
       (4) despite this uncertainty, the potential impacts from 
     human-induced climate change pose a substantial risk that 
     should be managed in a responsible manner;
       (5) given that the bulk of greenhouse gas emissions from 
     human activities result from energy production and use, 
     national and international energy policy decisions made now 
     and in the longer-term future will influence the extent and 
     timing of any climate change and resultant impacts from 
     climate change later this century;
       (6) the characteristics of greenhouse gases and the 
     physical nature of the climate system require that 
     stabilization of atmospheric greenhouse gas concentrations at 
     any future level must be a long-term effort undertaken on a 
     global basis;
       (7) the characteristics of existing energy-related 
     infrastructure and capital suggest

[[Page 15366]]

     that effective greenhouse gas management efforts will depend 
     on the development of long-term, cost-effective technologies 
     and practices that can be demonstrated and deployed 
     commercially in the United States and around the world;
       (8) environmental progress, energy security, economic 
     prosperity, and satisfaction of basic human needs are 
     interrelated, particularly in developing countries;
       (9) developing countries will constitute the major source 
     of greenhouse gas emissions in the 21st century and the minor 
     source of increases in such emissions;
       (10) any program to address the risks of climate change 
     that does not fully include developing nations as integral 
     participants will be ineffective; and
       (11) a new long-term, technology-based, cost-effective, 
     flexible, and global strategy to ensure long-term energy 
     security and manage the risk of climate change is needed, and 
     should be promoted by the United States in its domestic and 
     international activities in this regard.

     SEC. 3. DEFINITIONS.

       Title XVI of the Energy Policy Act of 1992 (42 U.S.C. 
     13381, et seq.) is amended by inserting before section 1601 
     the following:

     ``SEC. 1600 DEFINITIONS.

       ``(a) Agricultural Activity.--The term `agricultural 
     activity' means livestock production, cropland cultivation, 
     biogas and other waste material recovery and nutrient 
     management.
       ``(b) Climate System.--The term ``climate system' means the 
     totality of the atmosphere, hydrosphere, biosphere and 
     geosphere and their interactions.
       ``(c) Climate Change.--The term `climate change' means a 
     change in the state of the climate system attributed directly 
     or indirectly to human activity which is in addition to 
     natural climate variability observed over comparable time 
     periods.
       ``(d) Emissions.--The term `emissions' means the net 
     release of greenhouse gases and/or their precursors into the 
     atmosphere over a specified area and period of time, after 
     taking into account any reductions due to greenhouse gas 
     sequestration.
       ``(e) Greehouse Gases.--The term `greenhouse gases' means 
     those gaseous and aerosol constituents of the atmosphere, 
     both natural and anthropogenic, that absorb and re-emit 
     infrared radiation.
       ``(f) Sequestration.--The term `sequestration' means any 
     process, activity or mechanism which removes a greenhouse gas 
     or its precursor from the atmosphere or from emissions 
     streams.
       ``(g) Forest Products.--The term `forest products' means 
     all products or goods manufactured from trees.
       ``(h) Forestry Activity.--
       ``(1) In general.--The term `forestry activity' means any 
     ownership or management action that has a discernible impact 
     on the use and productivity of forests.
       ``(2) Inclusions.--Forestry activities include, but are not 
     limited to, the establishment of trees on an area not 
     previously forested, the establishment of trees on an area 
     previously forested if a net carbon benefit can be 
     demonstrated, enhanced forest management (including thinning, 
     stand improvement, fire protection, weed control, nutrient 
     application, pest management, and other silvicultural 
     practices), forest protection or conservation if a net carbon 
     benefit can be demonstrated, and production or use of biomass 
     energy (including the use of wood, grass or other biomass in 
     lieu of fossil fuel).
       ``(3) Exclusions.--The term `forestry activity' does not 
     include a land use change associated with--
       ``(A) an act of war; or
       ``(B) an act of nature, including floods, storms, 
     earthquakes, fires, hurricanes, and tornadoes.''.

     SEC. 4. NATIONAL CLIMATE CHANGE STRATEGY.

       ``(a) In General.--Section 1601 of the Energy Policy Act of 
     1992 (42 U.S.C. 13381) is amended to read as follows:

     ``SEC. 1601. NATIONAL CLIMATE CHANGE STRATEGY.

       ``(a) In General.--The President, in consultation with 
     appropriate Federal agencies and the Congress, shall develop 
     and implement a national strategy to manage the risks posed 
     by potential climate change.
       ``(b) Goal.--The strategy shall be consistent with the 
     United Nations Framework Convention on Climate Change, done 
     at New York on May 9, 1992, in a manner that--
       ``(1) does not result in serious harm to the U.S. economy;
       ``(2) adequately provides for the energy security of the 
     U.S.;
       ``(3) establishes and maintains U.S. leadership with 
     respect to climate change-related scientific research, 
     development and deployment of advanced energy technology; and
       ``(4) will result in a reduction in the ratio that the net 
     U.S. greenhouse gas emissions bears to the U.S. gross 
     domestic production.
       ``(c) Elements.--The strategy shall include short-term and 
     long-term strategies, programs and policies that--
       ``(1) enhance the scientific knowledge base for 
     understanding and evaluation of natural and human-induced 
     climate change, including the role of climate feedbacks and 
     all climate forcing agents;
       ``(2) improve scientific observation, modeling, analysis 
     and prediction of climate change and its impacts, and the 
     economic, social and environmental risks posed by such 
     impacts;
       ``(3) assess the economic, social, and environmental costs 
     and benefits of current and potential options to reduce, 
     avoid, or sequester greenhouse gas emissions;
       ``(4) develop and implement market-directed policies that 
     reduce, avoid or sequester greenhouse gas emissions, 
     including--
       ``(i) cost-effective Federal, State, tribal, and local 
     policies, programs, standards and incentives;
       ``(ii) policies and incentives to speed development, 
     deployment and consumer adoption of advanced energy 
     technologies in the U.S. and throughout the world; and
       ``(iii) removal of regulatory barriers that impede the 
     development, deployment and consumer adoption of advanced 
     energy technologies into the U.S. and throughout the world; 
     and
       ``(iv) participation in international institutions, or the 
     support of international activities, that are established or 
     conducted to facilitate effective measures to implement the 
     United Nations Framework Convention on Climate Change;
       ``(5) advance areas where bilateral or multilateral 
     cooperation and investment would lead to adoption of advanced 
     technologies for use within developing countries to reduce, 
     avoid or sequester greenhouse gas emissions;
       ``(6) identify activities and policies that provide for 
     adaptation to natural and human-induced climate change;
       ``(7) recommend specific legislative or administrative 
     activities giving preference to cost-effective and 
     technologically feasible measures that will--
       ``(A) result in a reduction in the ratio that the net U.S. 
     greenhouse gas emissions bears to the U.S. gross domestic 
     product;
       ``(B) avoid adverse short-term and long-term economic and 
     social impacts on the United States; and
       ``(C) foster such changes in institutional and technology 
     systems as are necessary to mitigate or adapt to climate 
     change and its impacts in the short-term and the long-term;
       ``(8) designate federal, state, tribal or local agencies 
     responsible for carrying out recommended activities and 
     programs, and identify interagency entities or activities 
     that may be needed to coordinate actions carried out 
     consistent with this strategy.
       ``(d) Consultation.--This strategy shall be developed in a 
     manner that provides for meaningful participation by, and 
     consultation among, Federal, State, tribal, and local 
     government agencies, non-governmental organizations, 
     academia, scientific bodies, industry, the public, and other 
     interested parties.
       ``(e) Biannual Report.--No later than one year after the 
     date of enactment of this section, and at the end of each 
     second year thereafter, the President shall submit to 
     Congress a report that includes--
       ``(1) a description of the national climate change strategy 
     and its goals and Federal programs and activities intended to 
     carry out this strategy through mitigation, adaption, and 
     scientific research activities;
       ``(2) an evaluation of Federal programs and activities 
     implemented as part of this strategy against the goals and 
     implementation dates outlined in the strategy;
       ``(3) a description of changes to Federal programs or 
     activities implemented to carry out this strategy, in light 
     of new knowledge of climate change and its impacts and costs 
     or benefits, or technological capacity to improve mitigation 
     or adaption activities;
       ``(4) a description of all Federal spending on climate 
     change for the current fiscal year and each of the five years 
     previous, categorized by Federal agency and program function 
     (including scientific research, energy research and 
     development, regulation, education and other activities);
       ``(5) an estimate of the budgetary impact for the current 
     fiscal year and each of the five years previous of any 
     Federal tax credits, tax deductions or other incentives 
     claimed by taxpayers that are directly or indirectly 
     attributable to greenhouse gas emissions reduction 
     activities; and
       ``(6) an estimate of the amount, in metric tons, of 
     greenhouse gas emissions reduced, avoided or sequestered 
     directly or indirectly as a result of each spending program 
     or tax credit, deduction, or other incentive for the current 
     fiscal year and each of the five years previous.
       ``(f) Review by National Academies.--
       ``(1) In general.--Not later than 90 days after the date of 
     publication of each biannual report as directed by this 
     section, the President shall commission the National 
     Academies to conduct a review of the national climate change 
     strategy and implementation plan required by this section.
       ``(2) Criteria.--The National Academies' review shall 
     evaluate the goals and recommendations contained in the 
     national climate change strategy report in light of--
       ``(A) new or improved scientific knowledge regarding 
     climate change and its impacts;
       ``(B) new understanding of human social and economic 
     responses to climate change, and responses of natural 
     ecosystems to climate change;
       ``(C) advancements in energy technologies that reduce, 
     avoid, or sequester greenhouse gases or otherwise mitigate 
     the risks of climate change;
       ``(D) new or revised understanding of economic costs and 
     benefits of mitigation or adaption activities; and

[[Page 15367]]

       ``(E) the existence of alternative policy options that 
     could achieve the strategy goals at lower economic, 
     environmental, or social cost.
       ``(3) Report.--The National Academies shall prepare and 
     submit to Congress and the President a report concerning the 
     results of such review, along with any recommendations as 
     appropriate. Such report shall also be made available to the 
     public.
       ``(4) Definition.--For the purposes of this section, the 
     term `National Academies' means the National Research 
     Council, the National Academy of Sciences, the National 
     Academy of Engineering, and the Institute of Medicine.''.
       (b) Conformng Amendment.--Section 1103(b) of the Global 
     Climate Protection Act of 1987 (15 U.S.C. 2901) is amended by 
     inserting ``, the Department of Energy, and other Federal 
     agencies as appropriate'' after ``Environmental Protection 
     Agency''.

     SEC. 5. CLIMATE TECHNOLOGY RESEARCH, DEVELOPMENT, 
                   DEMONSTRATION AND DEPLOYMENT PROGRAM.

       (a) In General.--Section 1604 of the Energy Policy Act of 
     1992 (42 U.S.C. 13384) is amended to read as follows:

     ``SEC. 1604. CLIMATE TECHNOLOGY RESEARCH, DEVELOPMENT, 
                   DEMONSTRATION AND DEPLOYMENT PROGRAM.

       ``(a) In General.--The Secretary, in consultation with the 
     Advisory Board established under section 2302, shall 
     establish a long-term Climate Technology Research, 
     Development, Demonstration, and Deployment Program, in 
     accordance with sections 3001 and 3002.
       ``(b) Program Objectives.--The program shall conduct a 
     long-term research, development, demonstration and deployment 
     program to foster technologies and practices that--
       ``(1) reduce or avoid anthropogenic emissions of greenhouse 
     gases;
       ``(2) remove and sequester greenhouse gases from emissions 
     streams; and
       ``(3) remove and sequester greenhouse gases from the 
     atmosphere.
       ``(c) Program Plan.--Not later than 1 year after the date 
     of enactment of this Act, the Secretary shall prepare and 
     submit to the Congress a 10-year program plan to guide 
     activities under this section. Thereafter, the Secretary 
     shall biennially update and resubmit the program plan to the 
     Congress. In preparing the program plan, the Secretary 
     shall--
       ``(1) include quantitative technology performance and 
     carbon emissions reduction goals, schedule milestones, 
     technology approaches, Federal funding requirements, and non-
     Federal cost sharing requirements;
       ``(2) consult with appropriate representatives of industry, 
     institutions of higher education, Department of Energy 
     national laboratories, and professional, scientific and 
     technical societies;
       ``(3) take into consideration how the Federal Government, 
     acting through the Secretary, can be effective in ensuring 
     the availability of such technologies when they are needed 
     and how the Federal Government can most effectively cooperate 
     with the private sector in the accomplishment of the goals 
     set forth in subsection (b); and
       ``(4) consider how activities funded under the program can 
     be complementary to, and not duplicative of, existing 
     research and development activities within the Department.
       ``(d) Solicitation--Not later than 1 year after the date of 
     submission of the 10-year program plan, the Secretary shall 
     solicit proposals for conducting activities consistent with 
     the 10-year program plan and select one or more proposals not 
     later than 180 days after such solicitations.
       ``(e) Proposals--Proposals may be submitted by applicants 
     or consortia from industry, institutions of higher education, 
     or Department of Energy national laboratories. At minimum, 
     each proposal shall also include the following;
       ``(1) a multi-year management plan that outlines how the 
     proposed research, development, demonstration and deployment 
     activities will be carried out;
       ``(2) quantitative technology goals and greenhouse gas 
     emission reduction targets that can be used to measure 
     performance against program objectives;
       ``(3) the total cost of the proposal for each year in which 
     funding is requested, and a breakdown of those costs by 
     category;
       ``(4) evidence that the applicant has in existence or has 
     access to--
       ``(i) the technical capability to enable it to make use of 
     existing research support and facilities in carrying out the 
     research objectives of the proposal;
       ``(ii) a multi-disciplinary research staff experienced in 
     technologies or practices able to sequester, avoid, or 
     capture greenhouse gas emissions;
       ``(iii) access to facilities and equipment to enable the 
     conduct of laboratory-scale testing or demonstration of 
     technologies or related processes undertaken through the 
     program; and
       ``(iv) commitment for matching funds and other resources 
     from non-Federal sources, including cash, equipment, 
     services, materials, appropriate technology transfer 
     activities, and other assets directly related to the cost of 
     the proposal;
       ``(5) evidence that the proposed activities are 
     supplemental to, and not duplicative of, existing research 
     and development activities carried out, funded, or otherwise 
     supported by the Department;
       ``(6) a description of the technology transfer mechanisms 
     and industry partnerships that the applicant will use to make 
     available research results to industry and to other 
     researchers;
       ``(7) a statement whether the unique capabilities of 
     Department of Energy national laboratories warrant 
     collaboration with those laboratories, and the extent of any 
     such collaboration proposed; and
       ``(8) demonstrated evidence of the ability of the applicant 
     to undertake and complete the proposed project, including the 
     successful introduction of the technology into commerce.
       ``(f) Selection of Proposals.--From the proposals 
     submitted, the Secretary shall select for funding one or more 
     proposals that will best accomplish the program objectives 
     outlined in this section.
       ``(g) Annual Report.--The Secretary shall prepare and 
     submit an annual report to Congress that--
       ``(1) demonstrates that the program objectives are 
     adequately focused, peer-reviewed for merit, and not 
     unnecessarily duplicative of the science and technology 
     research being conducted by other Federal agencies and 
     programs,
       ``(2) states whether the program as conducted in the prior 
     year addresses an adequate breadth and range of technologies 
     and solutions to address anthropogenic climate change; and
       ``(3) evaluates the quantitative progress of funded 
     proposals toward the program objectives outlined in this 
     section, and the technology and greenhouse gas emission 
     reduction, avoidance or sequestration goals as described in 
     their respective proposals.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this subtitle 
     $200,000,000 for each of fiscal years 2002 through 2011, to 
     remain available until expended.''.
       (b) Conforming Amendments.--Section 6 of the Federal 
     Nonnuclear Energy Research and Development Act of 1974 (42 
     U.S.C. 5905) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3) by striking the period at the end and 
     inserting ``, and''; and
       (C) by adding at the end the following:
       ``(4) solutions to the effective management of greenhouse 
     gas emissions in the long term by the development of 
     technologies and practices designed to--
       ``(A) reduce or avoid anthropogenic emissions of greenhouse 
     gases;
       ``(B) remove and sequester greenhouse gases from emissions 
     streams; and
       ``(C) remove and sequester greenhouse gases from the 
     atmosphere.''; and
       (2) in subsection (b)--
       (A) in paragraph (2), by striking ``subsection (a)(1) 
     through (3)'' and inserting ``paragraphs (1) through (4) of 
     subsection (a)''; and
       (B) in paragraph (3)--
       (i) in subparagraph (R), by striking ``and'' at the end;
       (ii) in subparagraph (S), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(T) to pursue a long-term climate technology strategy 
     designed to demonstrate a variety of technologies by which 
     stabilization of greenhouse gases might be best achieved, 
     including accelerated research, development, demonstration 
     and deployment of--
       ``(i) renewable energy systems;
       ``(ii) advanced fossil energy technology;
       ``(iii) advanced nuclear power plant design;
       ``(iv) fuel cell technology for residential, industrial and 
     transportation applications;
       ``(v) carbon sequestration practices and technologies, 
     including agricultural and forestry practices that store and 
     sequester carbon;
       ``(vi) efficient electrical generation, transmission and 
     distribution technologies; and
       ``(vii) efficient end use energy technologies.''.

     SEC. 6. INTERNATIONAL ENERGY TECHNOLOGY DEPLOYMENT PROGRAM.

       Section 1608 of the Energy Policy Act of 1992 (42 U.S.C. 
     13387) is amended by striking subsection (l) and inserting 
     the following:
       ``(l) International Energy Technology Deployment Program.--
       ``(1) Definitions--In this subsection:
       ``(A) International energy deployment project.--The term 
     `international energy deployment project' means a project to 
     construct an energy production facility outside the United 
     States--
       ``(i) the output of which will be consumed outside the 
     United States; and
       ``(ii) the deployment of which will result in a greenhouse 
     gas reduction per unit of energy produced when compared to 
     the technology that would otherwise be implemented of--
       ``(I) 10 percentage points or more, in the case of a unit 
     placed in service before January 1, 2010;
       ``(II) 20 percentage points or more, in the case of a unit 
     placed in service after December 31, 2009, and before January 
     1, 2020; or

[[Page 15368]]

       ``(III) 30 percentage points or more, in the case of a unit 
     placed in service after December 31, 2019, and before January 
     1, 2030.
       ``(C) Qualifying international energy deployment project.--
     The term `qualifying international energy deployment project' 
     means an international energy deployment project that--
       ``(i) is submitted by a United States firm to the Secretary 
     in accordance with procedures established by the Secretary by 
     regulation;
       ``(ii) uses technology that has been successfully developed 
     or deployed in the United States, or in another country as a 
     result of a partnership with a company based in the United 
     States;
       ``(iii) meets the criteria of subsection (k);
       ``(iv) is approved by the Secretary, with notice of the 
     approval being published in the Federal Register; and
       ``(v) complies with such terms and conditions as the 
     Secretary establishes by regulation.
       ``(D) United States.--The term `United States', when used 
     in a geographical sense, means the 50 States, the District of 
     Columbia, Puerto Rico, Guam, the Virgin Islands, American 
     Samoa, and the Commonwealth of the Northern Mariana Islands.
       ``(2) Pilot program for financial assistance.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of this Act, the Secretary shall, by regulation, 
     provide for a pilot program for financial assistance for 
     qualifying international energy deployment projects.
       ``(B) Selection criteria.--After consultation with the 
     Secretary of State, the Secretary of Commerce, and the United 
     States Trade Representative, the Secretary shall select 
     projects for participation in the program based solely on the 
     criteria under this title and without regard to the country 
     in which the project is located.
       ``(C) Financial assistance.--
       ``(i) In general.--A United States firm that undertakes a 
     qualifying international energy deployment project that is 
     selected to participate in the pilot program shall be 
     eligible to receive a loan or a loan guarantee from the 
     Secretary.
       ``(ii) Rate of interest.--The rate of interest of any loan 
     made under clause (i) shall be equal to the rate for Treasury 
     obligations then issued for periods of comparable maturities.
       ``(iii) Amount.--The amount of a loan or a loan guarantee 
     under clause (i) shall not exceed 50 percent of the total 
     cost of the qualified international energy deployment 
     project.
       ``(iv) Developed countries.--Loans or loan guarantees made 
     for projects to be located in a developed country, as listed 
     in Annex I of the United Nations Framework Convention on 
     Climate Change, shall require at least a 50-percent 
     contribution toward the total cost of the loan or loan 
     guarantee by the host country.
       ``(v) Developing counties.--Loans or loan guarantees made 
     for projects to be located in a developing country (those 
     countries not listed in Annex I of the United Nations 
     Framework Convention on Climate Change) shall require at 
     least a 10-percent contribution toward the total cost of the 
     loan or loan guarantee by the host country.
       ``(vi) Capacity building research.--Proposals made for 
     projects to be located in a developing country may include a 
     research component intended to build technological capacity 
     within the host country. Such research must be related to the 
     technologies being deployed and must involve both an 
     institution in the host country and an industry, university 
     or national laboratory participant from the United States. 
     The host institution must contribute at least 50 percent of 
     funds provided for the capacity building research.
       ``(D) Coordination with other programs.--A qualifying 
     international energy deployment project funded under this 
     section shall not be eligible as a qualifying clean coal 
     technology under section 415 of the Clean Air Act (42 U.S.C. 
     7651n).
       ``(E) Report.--Not later than 5 years after the date of 
     enactment of this section, the Secretary shall submit to the 
     President and the Congress a report on the results of the 
     pilot projects.
       ``(F) Recommendation.--Not later than 60 days after 
     receiving the report under subparagraph (E), the Secretary 
     shall submit to Congress a recommendation concerning whether 
     the financial assistance program under this section should be 
     continued, expanded, reduced, or eliminated.
       ``(G) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $100,000,000 for each of fiscal years 2002 through 2011, to 
     remain available until expended.''.

     SEC. 7. NATIONAL GREENHOUSE GAS EMISSIONS REGISTRY.

       Section 1605 of the Energy Policy Act of 1992 (42 U.S.C. 
     13385) is amended--
       (1) by amending the second sentence of subsection (a) to 
     read as follows: ``The Secretary shall annually update and 
     analyze such inventory using available data, including, 
     beginning in calendar year 2001, information collected as a 
     result of voluntary reporting under subsection (b). The 
     inventory shall identify for calendar year 2001 and 
     thereafter the amount of emissions reductions attributed to 
     those reported under subsection (b)'';
       (2) by amending subsection (b)(1) (B) and (C) to read as 
     follows--
       ``(B) annual reductions or avoidance of greenhouse gas 
     emissions and carbon sequestration achieved through any 
     measures, including agricultural activities, co-generation, 
     appliance efficiency, energy efficiency, forestry activities 
     that increase carbon sequestration stocks (including the use 
     of forest products), fuel switching, management of crop 
     lands, grazing lands, grasslands, drylands, manufacture or 
     use of vehicles with reduced greenhouse gas emissions, 
     methane recovery, ocean seeding, use of renewable energy, 
     chlorofluorocarbon capture and replacement, and power plant 
     heat rate improvement; and
       ``(C) reductions in, or avoidance of, greenhouse gas 
     emissions achieved as a result of voluntary activities 
     domestically, or internationally, plant or facility closings, 
     and State or Federal requirements.''.
       (3) by striking in the first sentence of subsection (b)(2) 
     the word ``entities'' and inserting ``persons or entities'' 
     and in the second sentence of such subsection, by inserting 
     after ``Persons'' the words ``or entities'';
       (4) by inserting in the second sentence of subsection 
     (b)(4) the words ``persons or'' before ``entity'';
       (5) by adding after subsection (b)(4) the following new 
     paragraphs--
       ``(5) Recognition of voluntary greenhouse gas emissions 
     reduction, avoidance, or sequestration.--To encourage new and 
     increased voluntary efforts to reduce, avoid, or sequester 
     emissions of greenhouse gases, the Secretary shall develop 
     and establish a program of giving annual public recognition 
     to all reporting persons and entities demonstrating 
     voluntarily achieved greenhouse gases reduction, avoidance, 
     or sequestration, pursuant to the voluntary collections and 
     reporting guidelines issued under this section. Such 
     recognition shall be based on the information certified, 
     subject to section 1001 of title 18, United States Code, by 
     such persons or entities for accuracy as provided in 
     paragraph 2 of this subsection, and shall include such 
     information reported prior to the enactment of this 
     paragraph. At a minimum such recognition shall annually be 
     published in the Federal Register.
       ``(6) Review and revision of guidelines.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this subparagraph, the Secretary of Energy, 
     acting through the Administrator of the Energy Information 
     Administration, shall conduct a review of guidelines 
     established under this section regarding the accuracy and 
     reliability of reports of greenhouse gas reductions and 
     related information.
       ``(B) Contents.--The review shall include the consideration 
     of the need for any amendments to such guidelines, 
     including--
       ``(i) a random or other verification process using the 
     authorities available to the Secretary under other provisions 
     of law;
       ``(ii) a range of reference cases for reporting of project-
     based activities in sectors, including the measures specified 
     in subparagraph (1)(B) of this subsection, and the inclusion 
     of benchmark and default methodologies and best practices for 
     use as reference cases for eligible projects;
       ``(iii) issues, such as comparability, that are associated 
     with the option of reporting on an entity-wide basis or on an 
     activity or project basis; and
       ``(iv) safeguards to address the possibility of reporting, 
     inadvertently or otherwise, of some or all of the same 
     greenhouse gas emissions reductions by more than one 
     reporting entity or person and to make corrections where 
     necessary;
       ``(v) provisions that encourage entities or persons to 
     register their certified, by appropriate and credible means, 
     baseline emissions levels on an annual basis, taking into 
     consideration all of their reports made under this section 
     prior to the enactment of this paragraph;
       ``(vi) procedures and criteria for the review and 
     registration of ownership of all or part of any reported and 
     verified emissions reductions relative to a reported baseline 
     emissions level under this section; and
       ``(vii) accounting provisions needed to allow for changes 
     in registration of ownership of emissions reductions 
     resulting from a voluntary private transaction between 
     reporting entities or persons.

     For the purposes of this paragraph, the term ``reductions'' 
     means any and all activities taken by a reporting entity or 
     person that reduce, avoid or sequester greenhouse gas 
     emissions, or sequester greenhouse gases from the atmosphere.
       ``(C) Economic analysis.--The review should consider the 
     costs and benefits of any such amendments, the effect of such 
     amendments on participation in this program, including by 
     farmers and small businesses, and the need to avoid creating 
     undue economic advantages or disadvantages for persons or 
     entities in the private sector. The review should provide, 
     where appropriate, a range of reasonable options that are 
     consistent with the voluntary nature of this section and that 
     will help further the purposes of this section.
       ``(D) Public comment and submission of report.--The 
     findings of the review shall be

[[Page 15369]]

     made available in draft form for public comment for at least 
     45 days, and a report containing the findings of the review 
     shall be submitted to Congress and the President no later 
     than one year after date of enactment of this section.
       ``(E) Revision of guidelines.--If the Secretary, after 
     consultation with the Administrator, finds, based on the 
     study results, that changes to the program are likely to be 
     beneficial and cost effective in improving the accuracy and 
     reliability of reported greenhouse gas reductions and related 
     information, are consistent with the voluntary nature of this 
     section, and further the purposes of this section, the 
     Secretary shall propose and promulgate changes to program 
     guidelines based with such findings. In carrying out the 
     provisions of this paragraph, the Secretary shall consult 
     with the Secretary of Agriculture and the Administrator of 
     the Small Business Administration to encourage greater 
     participation by small business and farmers in addressing 
     greenhouse gas emission reductions and reporting such 
     reductions.
       ``(F) Periodic review and revision of guidelines.--The 
     Secretary shall thereafter review and revise these guidelines 
     at least once every 5 years, following the provisions for 
     economic analysis, public review, and revision set forth in 
     subsections (C) through (E) of this section.''.
       (6) in subsection (c), by inserting ``the Secretary of the 
     Department of Agriculture, the Secretary of the Department of 
     Commerce, the Administrator of the Energy Information 
     Administration, and'' before ``the Administrator''; and
       (7) by adding at the end the following:
       ``(d) Public Awareness Program.--
       ``(1) In general.--The Secretary shall create and implement 
     a public awareness program to educate all persons in the 
     United States of--
       ``(A) the direct benefits of engaging in voluntary 
     greenhouse gas emissions reduction measures and having the 
     emissions reductions certified under this section and 
     available for use therein; and
       ``(B) the ease of use of the forms and procedures for 
     having emissions reductions certified under this section.
       ``(2) Agricultural and small business outreach.--The 
     Secretary of Agriculture and the Administrator of the Small 
     Business Administration shall assist the Secretary in 
     creating and implementing a targeted public awareness program 
     to encourage voluntary participation by small businesses and 
     farmers.''.

     SEC. 8. REVIEW OF FEDERALLY FUNDED ENERGY TECHNOLOGY RESEARCH 
                   AND DEVELOPMENT.

       (a) In General.--Title XVI of the Energy Policy Act of 1992 
     (42 U.S.C. 13381 et seq.) is amended by adding the following 
     new section:

     ``SEC. 1610. REVIEW OF FEDERALLY FUNDED ENERGY TECHNOLOGY 
                   RESEARCH AND DEVELOPMENT.

       ``(a) Department of energy Review.--
       ``(1) In general.--The Secretary shall review annually all 
     federally funded research and development activities carried 
     out with respect to energy technology; and submit to a report 
     to Congress by October 15 of each year.
       ``(2) Assessment of technology readiness and barriers to 
     deployment.--As part of this review, the Secretary shall--
       ``(A) assess the status and readiness (including the 
     potential commercialization) of each energy technology and 
     any regulatory or market barriers to deployment;
       ``(B) consider--
       ``(i) the length of time it will take for deployment and 
     use of the energy technology and for the technology to have a 
     meaningful impact on emission reductions;
       ``(ii) the cost of deploying the energy technology; and
       ``(iii) the safety of the energy technology;
       ``(C) assess the available resource base for any energy 
     resources used by the energy technology, and the potential 
     for expanded sustainable use of the resource base; and
       ``(D) recommend to Congress any changes in law or 
     regulation deemed appropriate by the Secretary to hasten 
     deployment and use of the energy technology.
       (b) Energy Technology Research and Development 
     Clearinghouse.--The Secretary shall establish an information 
     clearinghouse to facilitate the transfer and dissemination of 
     the results of federally funded research and development 
     activities being carried out on energy technology subject to 
     any restrictions or safeguards established for national 
     security or the protection of intellectual property rights 
     (including trade secrets and confidential business 
     information protected under section 552(b)(4) of title 5, 
     United States Code).''.
       (c) Technical Amendment.--The table of contents of the 
     Energy Policy Act of 1992 (106 Stat. 2776) is amended by 
     inserting after the item relating to section 1609 the 
     following:

``Sec. 1610. Review of federally funded energy technology research and 
              development.''.

     SEC. 9. OFFICE OF APPLIED ENERGY TECHNOLOGY AND GREENHOUSE 
                   GAS-MANAGEMENT.

       Section 1603 of the Energy Policy Act of 1992 (42 U.S.C. 
     13383) is amended to read as follows:

     ``SEC. 1603. OFFICE OF APPLIED ENERGY TECHNOLOGY AND 
                   GREENHOUSE GAS MANAGEMENT.

       ``(a) Establishment.--There is established by this section 
     in the Department of Energy an Office of Applied Energy 
     Technology and Greenhouse Gas Management.
       ``(b) Function.--The Office shall--
       ``(1) establish appropriate quantitative performance and 
     deployment goals for energy technologies that reduce, avoid, 
     or sequester emissions of greenhouse gases, provided that 
     such goals are consistent with any national climate change 
     strategy;
       ``(2) manage domestic and international energy technology 
     demonstration and deployment programs for energy technologies 
     that reduce, avoid or sequester emissions of greenhouse 
     gases, including those authorized under this title; provided 
     that such programs supplement and do not replace existing 
     energy research and development activities within the 
     Department;
       ``(3) facilitate the development of domestic and 
     international cooperative research and development agreements 
     (as that term is defined in section 12(d)(1) of the 
     Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
     3710a(d)(1))), or similar cooperative, cost-shared 
     partnerships with non-Federal organizations to accelerate the 
     rate of domestic and international demonstration and 
     deployment of energy technologies that reduce, avoid or 
     sequester emissions of greenhouse gases;
       ``(4) conduct necessary programs of monitoring, 
     experimentation, and analysis of the technological, 
     scientific, and economic viability of energy technologies 
     that reduce, avoid, or sequester greenhouse gas emissions; 
     and
       ``(5) coordinate issues, policies, and activities for the 
     Department regarding climate change and related energy 
     matters pursuant to this title, and coordinate the issuance 
     of such reports as may be required under this title.
       ``(c) Director.--The Secretary shall appoint a director of 
     the Office, who--
       ``(1) shall report to the Secretary;
       ``(2) shall be compensated at no less than level IV of the 
     Executive Schedule; and
       ``(3) at the request of the Committees of the Senate and 
     House of Representatives with appropriation and legislative 
     jurisdiction over programs and activities of the Department 
     of Energy, shall report to Congress on the activities of the 
     Office.
       ``(d) Duties.--The Director shall, in addition to 
     performing all functions necessary to carry out the functions 
     of the Office--
       ``(1) in the absence of the Secretary's representative for 
     interagency and multilateral policy discussions of global 
     climate change, including the activities of the Committee on 
     Earth and Environmental Sciences as established by the Global 
     Change Research Act of 1990 (15 U.S.C. 2921 et seq.);
       ``(2) participate, in cooperation with other federal 
     agencies, in the development and monitoring of domestic and 
     international policies for their effects on any kind of 
     climate change globally and domestically and on the 
     generation, reduction, avoidance, and sequestration of 
     greenhouse gases;
       ``(3) develop and implement a balanced, scientific, non-
     advocacy educational and informational public awareness 
     program on--
       ``(A) potential climate change, including any known adverse 
     and beneficial effects on the United States and the economy 
     of the United States and the world economy, taking into 
     consideration whether those effects are known or expected to 
     be temporary, long-term, or permanent;
       ``(B) the role of national energy policy in the 
     determination of current and future emissions of greenhouse 
     gases, particularly measures that develop advanced energy 
     technologies, improve energy efficiency, or expand the use of 
     renewable energy or alternative fuels; and
       ``(C) the development of voluntary means and measures to 
     mitigate or minimize significant adverse effects of climate 
     change and, where appropriate, to adapt, to the greatest 
     extent practicable, to climate change;
       ``(4) provide, consistent with applicable provisions of 
     law, public access to all information on climate change, 
     effects of climate change, and adaptation to climate change; 
     and
       ``(5) in accordance with all law administered by the 
     Secretary and other applicable Federal law and contracts, 
     including patent and intellectual property laws, and in 
     furtherance of the United Nations Framework Convention on 
     Climate Change--
       ``(i) identify for, and transfer, deploy, diffuse, and 
     apply to, Parties to such Convention, including the United 
     States, any technologies, practices, or processes which 
     reduce, avoid, or sequester emissions of greenhouse gases if 
     such technologies, practices or processes have been developed 
     with funding from the Department of Energy or any of its 
     facilities or laboratories; and
       ``(ii) support reasonable efforts by the Parties to such 
     convention, including the United States, to identify and 
     remove legal, trade, financial, and other barriers to the use 
     and application of any technologies, practices, or processes 
     which reduce, avoid, or sequester emissions of greenhouse 
     gases.''.

     SEC. 10. COORDINATION OF GLOBAL CHANGE RESEARCH.

       (a) Definitions.--As used in this section, the term--

[[Page 15370]]

       (1) ``Committee'' means the Committee on Earth and 
     Environmental Sciences established under Section 102 of the 
     Global Change Research Act of 1990 (15 U.S.C. 2933).
       (2) ``Program'' means the United States Global Change 
     Research Program established under Section 103 of the Global 
     Change Research Act of 1990 (15 U.S.C. 2933).
       (b) Coordination of Climate Observation Activities.--At the 
     direction of the Committee, the Director of the Program shall 
     develop and implement activities within the Program that--
       (1) coordinate system design and implementation and 
     operation of a multi-user, multi-purpose long-term climate 
     observing system for the measurement and monitoring of 
     relevant climatic variables;
       (2) carry out basic research, development and deployment of 
     innovative scientific techniques and instruments (both in-
     situ and space-based) for measurement and monitoring of 
     relevant climatic variables;
       (3) coordinate Program activities to ensure the integrity 
     and continuity of data records; including--
       (i) calibration and inter-comparison of multiple 
     instruments that measure the same climatic variable or set of 
     variables;
       (ii) backup instruments to ensure data record continuity; 
     and
       (iii) documentation of changes in instruments, observing 
     practices, observing locations, sampling rates, processing 
     algorithms and other changes;
       (4) establish ongoing activities for the development, 
     implementation, operation and management of climate-specific 
     observational programs, with special emphasis on activities 
     that seek the most efficient and reliable means of observing 
     the climate system;
       (5) coordinate activities of the Program that contribute to 
     the design, implementation, operation, and data management 
     activities of international climate system observation 
     networks; and
       (6) establish and maintain a free and openly accessible 
     national data management system for the storage, maintenance, 
     and archival of climate observation data, with an emphasis on 
     facilitating access to, use of and interpretation of such 
     data by the scientific research community and the public.
       (c) Coordination of Climate Modeling Activities.--At the 
     direction of the Committee, the Director of the Program shall 
     develop and implement activities within the Program that--
       (1) establish and periodically revise a national climate 
     system modeling strategy designed to position the United 
     States as a world leader in all aspects of climate system 
     modeling;
       (2) coordinate Program activities designed to carry out 
     such a national climate system modeling strategy;
       (3) carry out basic research, development and deployment of 
     innovative computational techniques for climate system 
     modeling;
       (4) develop the intellectual and computational capacity to 
     carry out climate system modeling activities to assess the 
     potential consequences of climate change on the United 
     States;
       (5) carry out the continued development and inter-
     comparison of United States climate models with special 
     emphasis on activities that--
       (i) establish the ability of United States climate models 
     so successfully reproduce the historical climate 
     observational record;
       (ii) incorporate new climate system processes or improve 
     spatial or temporal resolution of climate model simulations;
       (iii) develop standardized tools and structures for climate 
     model output, evaluation and programming design;
       (iv) improve the accuracy and completeness of supporting 
     data sets used to drive climate models; and
       (v) reduce uncertainty in assessments of climate change and 
     its impacts on the United States;
       (6) coordinate activities of the Program that contribute to 
     the design, implementation, operation, and data analysis 
     activities of international climate system modeling inter-
     comparisons and assessments; and
       (7) establish and maintain a free and openly accessible 
     national data management system for the storage, maintenance, 
     and archival of climate model code, auxiliary data, and 
     results, with an emphasis on facilitating access to, use of 
     and interpretation of such data by the scientific research 
     community and the public.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of fiscal years 2002 through 2004, to remain available 
     until expended, and thereafter such sums as are necessary.
       (e) Use of Existing Infrastructure.--In carrying out new 
     activities under subsections (b) and (c) of this section, the 
     Program shall, where possible, use and incorporate existing 
     Program activities and resources, such as Program Working 
     Groups.
                                  ____


 Climate Change Risk Management Act of 2001 Section-by-Section Analysis

     Section 1--Short Title
     Section 2--Findings
     Section 3--Definitions
     Section 4--National Climate Change Strategy
       Amends Section 1601 of the Energy Policy Act of 1992 to 
     require the President, in consultation with Federal agencies 
     and the Congress, to develop a national strategy to manage 
     the risks posed by potential climate change. The goal of such 
     strategy would be to implement the UN Framework Convention on 
     Climate Change in a manner that 1. does not cause serious 
     harm to the U.S. economy; 2. establishes and maintains U.S. 
     leadership in scientific research and technology development; 
     and 3. results in annual net reductions of U.S. greenhouse 
     gas emissions as measured against the U.S. gross domestic 
     production. Requires a biannual report to Congress on the 
     strategy and programs to implement the strategy, following 
     review and evaluation of the strategy by the National 
     Academies in light of new information on the science, 
     technology, or economics of climate change.
     Section 5--Climate Technology Research, Development, and 
         Demonstration Program
       Amends Section 1604 of the Energy Policy Act of 1992 to 
     establish a new energy technology program within the 
     Department of Energy to further development and deployment of 
     technologies to reduce, avoid or sequester greenhouse gas 
     emissions. Authorizes $2 billion over ten years for 
     competitive multi-year grant awards that foster development 
     and deployment of existing and new energy efficient, fossil, 
     nuclear, renewable and sequestration technologies.
     Section 6--International Energy Technology Deployment Program
       Establishes a new international energy technology 
     deployment pilot program under Section 1608 of the Energy 
     Policy Act of 1992 to assist developing countries in meeting 
     development goals with fewer greenhouse gas emissions. 
     Authorizes $1 billion over ten years for loans or loan 
     guarantees to be made to firms or consortia that construct 
     energy production facilities outside the United States, 
     provided such facilities result in gains in energy efficiency 
     and reductions in greenhouse gas emissions relative to 
     existing technologies.
     Section 7--National Greenhouse Gas Emissions Registry
       Amends Section 1605 of the Energy Policy Act of 1992 to 
     provide for development of national registry of greenhouse 
     gas emissions baselines and actions to voluntarily reduce 
     emissions. Modeled after several state initiatives already 
     under way, this section provides for the Secretary of Energy 
     to initiate a stakeholder-led process to develop new 
     guidelines for the existing voluntary emissions reduction 
     reporting system (``1605(b)'') that improve the accuracy and 
     reliability of voluntary reports made to this program, 
     establish consistent reporting procedures and independent 
     verification, and allow for registration of emissions 
     baselines and emissions reductions made against such 
     baselines. Includes provisions to encourage participation by 
     small businesses and farmers. Upon completion of review of 
     guidelines, provides for public comment and revision of 
     guidelines if cost-effective.
     Section 8--Review of Federally Funded Energy Technology 
         Research and Development
       Adds a new Section 1610 to the Energy Policy Act of 1992 to 
     provide for a regular review of federally funded energy 
     technology research and development, including the programs 
     authorized in this bill. The review will consider cost, 
     safety, resource availability, technology readiness, 
     including potential for commercial application, and barriers 
     to deployment in widespread use. Also establishes an ``Energy 
     Technology R&D Clearinghouse'' to disseminate to the private 
     sector and the public information on energy technology 
     research and development activities within the Department of 
     Energy, as well as technologies available for deployment 
     through public-private partnerships.
     Section 9--Office of Applied Energy Technology and Greenhouse 
         Gas Management
       Amends Section 1603 of the Energy Policy Act of 1992 to 
     create a new office within the Department of Energy to manage 
     applied energy technology activities, public-private 
     partnerships, and activities to reduce, avoid, or sequester 
     greenhouse gases. In addition to administering the programs 
     authorized by this bill, the Office will supplement existing 
     activities of the Department by working to increase the rate 
     at which new energy technologies are applied, developed and 
     deployed for widespread use. The Office will also function to 
     coordinate domestic and international cooperative energy 
     research, development, demonstration and deployment 
     activities within the Department and participate in 
     interagency activities with respect to climate change 
     research and technology programs.
     Section 10--Coordination of Global Change Research
       Provides the Director of the U.S. Global Change Research 
     Program (USGCRP) with new authority for the purposes of 
     coordinating and strengthening scientific research with 
     respect to climate observation systems and climate modeling, 
     as suggested by recent National Academy reports on the state 
     of U.S. climate change research. Authorizes $50 million in 
     new funding for each of fiscal years 2002 through 2004, and 
     such sums as are necessary thereafter. Requires that the 
     Program utilize where possible existing Working

[[Page 15371]]

     Groups and other resources in laboratory activities.

  Mr. HAGEL. Mr. President, I am proud to join my colleagues Senators 
Frank Murkowski and Larry Craig today I introducing legislation that 
takes a comprehensive approach to domestic efforts on climate change.
  This legislation provides a forward-looking, balanced approach to 
address the challenge of climate change. There's a lot we can do, and 
this legislation lays out a comprehensive approach that will reduce 
greenhouse gas emissions without damaging the U.S. economy. It provides 
an incentive-based, market oriented framework that will produce 
results. It focuses on developing advanced technologies to reduce, 
sequester or avoid greenhouse gas emissions. These technologies are the 
long term answer to this challenge. And it focuses our scientific 
research in this area.
  Specifically, the Climate Change Risk Management Act of 2001 provides 
for: a national climate change strategy; new funding to advance the 
research, development and deployment of new technologies to reduce, 
avoid or sequester greenhouse gas emissions $2 billion over 10 years; 
the creation of a national registry of voluntary actions that have been 
taken to reduce, avoid or sequester greenhouse gas emissions; a pilot 
program to assist in the exports of advanced technology to developing 
countries, $1 billion over 10 years for a loan program; better 
coordination of federal scientific research; an office in the 
Department of Energy to coordinate the R&D efforts for new 
technologies, that is accountable to the Secretary, the President and 
the Congress.
  This legislation is very consistent with the approach presented by 
President Bush and builds on the efforts that Senators Murkowski, 
Craig, and I--along with Senator Byrd and others--have pursued for some 
time to advance our efforts in the area of climate change. I am pleased 
that Senators Pete Domenici, Pat Roberts, and Christopher Bond are also 
original cosponsors of this legislation.
                                 ______
                                 
      By Mr. LEVIN (for himself and Mr. Thomas):
  S. 1295. A bill to amend title 18, United States Code, to revise the 
requirements for procurement of products of Federal Prison Industries 
to meet needs for Federal agencies, and for other purposes; to the 
Committee on the Judiciary.
  Mr. LEVIN. Madam President, I am pleased to be joined by Senator 
Craig Thomas in introducing the Federal Prison Industries Competition 
in Contracting Act. Our bill is based on a straightforward premise: it 
is unfair for Federal Prison Industries to deny citizens in the private 
sector an opportunity to compete for sales to their own government.
  I repeat: the bill that we are introducing today, if enacted, would 
do nothing more than permit private sector companies to compete for 
Federal contracts that are paid for with their tax dollars. It may seem 
incredible that they are denied this opportunity today, but that is the 
law, because if Federal Prison Industries says that it wants a 
contract, it gets that contract, regardless whether a company in the 
private sector may offer to provide the product better, cheaper, and 
faster.
  This bill would not limit the ability of Federal Prison Industries to 
sell its products to Federal agencies. It would simply say that these 
sales should be made on a competitive, rather than a sole-source basis.
  FPI also has a significant advantage in any competition with the 
private sector, since FPI pays inmates less than two dollars an hour, 
far below the minimum wage and a small fraction of the wage paid to 
most private sector workers in competing industries. And of course, the 
taxpayers provide a direct subsidy to Federal Prison Industries 
products by picking up the cost of feeding, clothing, and housing the 
inmates who provide the labor. Given those advantages, there is no 
reason why we should still require Federal agencies to purchase 
products from FPI even when they are more expensive and of a lower 
quality than competing commercial items. I can think of no reason why 
private industry should be prohibited from competing for these Federal 
agency contracts.
  We have made several changes to this bill since it was introduced in 
the 106th Congress. The three new sections are intended to address new 
abuses by FPI that have arisen in the last few years: section 3 of the 
bill would prohibit FPI from granting prison workers access to 
classified information or information that is protected under the 
Privacy Act; section 4 of the bill would clarify that private sector 
businesses and their employees must be permitted to compete for federal 
subcontracts as well as prime contracts; and section 5 of the bill 
would clarify that the general prohibition on sales of prison-made 
goods into private commerce is also intended to apply to sales of 
services.
  These changes should strengthen the bill and reinforce its underlying 
intent.
  Federal Prison Industries has repeatedly claimed that it provides a 
quality product at a price that is competitive with current market 
prices. Indeed, the Federal Prison Industries statute requires them to 
do so. That statute states that FPI may provide to Federal agencies 
products that ``meet their requirements'' at price that do not ``exceed 
current market prices''.
  Yet, FPI remains unwilling to compete with private sector businesses 
and their employees, or even to permit Federal agencies to compare 
their products and prices with those available in the private sector. 
Indeed, FPI has tried to prohibit Federal agencies from conducting 
market research, as they would ordinarily do, to determine whether the 
price and quality or FPI products is comparable to what is available in 
the commercial marketplace. Instead, Federal agencies are directed to 
contact FPI, which acts as the sole arbiter of whether the product 
meets the agency's requirements.
  The reason for FPI's position is obvious: it is much easier to gain 
market share by fiat than it is to compete for business. Under FPI's 
current interpretation of the law, it need not offer the best product 
at the best price; it is sufficient for it to offer an adequate product 
at an adequate price, and insist upon its right to make the sale. 
Indeed, FPI currently advertises that it offers Federal agencies ``ease 
in purchasing'' through ``a procurement with no bidding necessary.''
  The result of the FPI's status as a mandatory source is not unlike 
the result of other sole-source contracting: the taxpayers frequently 
pay too much and receive an inferior product for their money. When FPI 
sets its prices, it does not even attempt to match the best price 
available in the commercial sector; instead, it claims to have charged 
a ``market price'' whenever it can show that at least some vendors in 
the private sector charges as high a price. As GAO reported in August 
1998, ``The only limit the law imposes on FPI's price is that it may 
not exceed the upper end of the current market price range.''
  The result is frustrating to private sector businesses and their 
employees who are denied an opportunity to complete for Federal 
business, as well as to the Federal agencies who are forced to buy FPI 
products. One letter that I received from a frustrated vendor stated 
with regard to UNICOR--the trade name used by Federal Prison 
Industries:

       If the Air Force would purchase a completed unit as 
     described in UNICOR's solicitation directly from a . . . 
     manufacturer we estimate the cost will be approximately 
     $6,500. UNICOR is going to purchase a kit for $9,259 and add 
     their assembly and administrative costs to the unit. If 
     UNICOR only adds $1,500 to the total cost of the unit, it 
     will cost the Air Force $10,759. This is 66 percent higher 
     than the current market price. If the Air Force purchases 
     8,000 units over the next five years it will cost the 
     taxpayers an additional $34,072,000 over what it would cost 
     if they dealt directly with a manufacturer.

  A letter from a second frustrated vendor stated, also with regard to 
UNICOR:

       UNICOR bid on this item and simply because UNICOR did bid, 
     I was told that the award had to be given to UNICOR. UNICOR 
     won the bid at $45 per unit. My company bid $22 per unit. The 
     way I see it, the government just overspend my tax dollars to 
     the tune of $1,978. The total amount of my bid was less than 
     that. Do you seriously believe that this type or procurement 
     is cost-effective?

[[Page 15372]]

       I lost business, and my tax dollars were misused because of 
     unfair procurement practices mandated by federal regulations. 
     This is a prime example, and I am certain not the only one, 
     of how the procurement system is being misused and small 
     businesses in this country are being excluded from 
     competition, with the full support of federal regulations and 
     the seeming approval of Congress. It is far past the time to 
     curtail this `company' known as Federal Prison Industries and 
     require them to be competitive for the benefit of all 
     taxpayers.

  I am a strong supporter of the idea of putting federal inmates to 
work. I understand that a strong prison work program not only reduces 
inmate idleness and prison disruption, but can also help build a work 
ethic, provide job skills, and enable prisoners to return to product 
society upon their release.
  However, I believe that a prison work program must be conducted in a 
manner that is sensitive to the need not to unfairly eliminate the jobs 
of hard-working citizens who have not committed crimes. FPI will be 
able to achieve this result only if it diversifies its product lines 
and avoids the temptation to build its workforce by continuing to 
displace private sector jobs in its traditional lines of work. For this 
reason, I have been working since 1990 to try to help Federal Prison 
Industries to identify new markets that it can expand into without 
displacing private sector jobs, with a particular emphasis on markets 
for products that are currently imported.
  Avoiding competition is the easy way out, but it isn't the right way 
for FPI, it isn't the right way for the private sector workers whose 
jobs FPI is taking, and it isn't the right way for the taxpayer, who 
will continue to pay more and get less as a result of the mandatory 
preference for FPI goods. We need to have jobs for prisoners, but can 
no longer afford to allow FPI to designate whose jobs it will take, and 
when it will take them. Competition will be better for FPI, better for 
the taxpayer, and better for working men and women around the country.
  The fight to allow private industry to compete against Federal Prison 
Industries is far from over, but I am optimistic that it can be won in 
this Congress.
  Mr. THOMAS. Madam President, today I am pleased to join Senator Levin 
in introducing a bill that will further my efforts to limit government 
competition with the private sector. Senator Levin and I propose to 
eliminate the mandatory contracting requirement that Federal agencies 
are subject to when it comes to products made by the Federal Prison 
Industries, FPI. Under law, all Federal agencies are required to 
purchase products made by the FPI. Simply put, this bill will require 
the FPI to compete with the private sector for Federal contracts.
  Currently, the FPI employs approximately 22,000 Federal prisoners or 
roughly 20 percent of all Federal prisoners. These prisoners are 
responsible for producing a diverse range of products for the FPI, 
ranging from office furniture to clothing. The remaining 80 percent of 
Federal prisoners, who work, do so in and around Federal prisons.
  While Senator Levin and I believe that it is important to keep 
prisoners working, we do not believe that this effort should unduly 
harm or conflict with law-abiding businesses. This bill seeks to 
minimize the unfair competition that private sector companies face with 
the FPI.
  The FPI's mandatory source requirement not only undercuts private 
business throughout America, but its mandatory source preference 
oftentimes costs American tax payers more money. I believe American 
taxpayers would be alarmed to learn of the preferential treatment that 
the FPI enjoys when it comes to Federal contracts.
  As I said before, Senator Levin and I support the goal of keeping 
prisoners busy while serving their time in prison. However, if we allow 
competition in Federal contracts, the FPI will be required to focus its 
efforts in product areas that don't unfairly compete with the private 
sector. Clearly, competitive bidding is a reasonable process that will 
ensure taxpayer's dollars are being spent justly.
  Of particular note, our bill allows contracting officers, within each 
Federal agency, the ability to select the FPI for contracts if he/she 
believes that the FPI can meet that particular agency's requirements 
and the product is offered at a fair and reasonable price. Currently, 
the FPI prohibits Federal agencies from conducting market research to 
determine whether the price and quality of its products is comparable 
to those available in the private sector. The above outlined provision 
in our bill seeks to place the control of government procurement in the 
hands of contracting officers, rather than in the hands of the FPI.
  In addition to establishing a competitive procedure for the 
procurement of products, we include a provision that allows the 
Attorney General to grant a waiver to this process if a particular 
contract is deemed essential to the safety and effective administration 
of a particular prison.
  I am confident that by allowing competition for government contracts 
our bill will save tax dollars. As Congress looks for additional cost 
saving practices, the elimination of the FPI's mandatory source 
preference will bring about numerous improvements, not just in cost 
savings, but also a streamlining of the FPI's products.
                                 ______
                                 
      By Mr. DODD:
  S. 1296. A bill to provide for the protection of the due process 
rights of United States citizens (including United States 
servicemembers) before foreign tribunals, including the International 
Criminal Court, for the prosecution of war criminals, and for other 
purposes; to the Committee on Foreign Relations.
  Mr. DODD. Madam President, the Nuremberg Trial of the leading Nazi 
war criminals following World War II was a landmark in the struggle to 
deter and punish crimes of war and genocide, setting the stage for the 
Geneva and Genocide Conventions. It was also largely an American 
initiative. Justice Robert Jackson's team drove the process of drafting 
the indictments, gathering the evidence and conducting this 
extraordinary case.
  My father, Thomas J. Dodd, served as Executive Trial Counsel at 
Nuremberg, it was among his proudest accomplishments. But it was also 
part of a common theme that ran through a lifetime of public service. 
He believed that America had a special role to help make the rule of 
law relevant in every corner of the globe. I believe that he would have 
endorsed President Clinton's decision to sign the Rome Statute last 
December on behalf of the United States. President Clinton did so 
knowing full well that much work remains to be done before the United 
States can become a party to the U.N. convention establishing an 
International Criminal Court, ICC.
  The Bush administration is currently reviewing its options with 
respect to the Rome Statute and with respect to the ongoing preparatory 
work that is necessary to make the court operational once sixty parties 
have ratified. The so called American Service-
members' Protection Act of 2001 sponsored by Senators Helms and 
Congressman DeLay in the Senate and House, respectively, if enacted 
into law, will severely limit the Bush administration's options for 
interacting with our friends and allies about issues directly related 
to the ICC, as well as have a major impact on possible United States 
participation in the ICC at some date in the future. Among other 
things, their legislation would prevent the U.S. from helping to 
prosecute war criminals before the ICC even on a case-by-case basis. 
Elie Wiesel has written that this legislation would erase America's 
Nuremberg legacy ``by ensuring that the U.S. will never again join the 
community of nations to hold accountable those who commit war crimes 
and genocide. A vote for this legislation would signal U.S. acceptance 
of impunity for the world's worst atrocities.''
  That is why I am introducing ``The American Citizens Protection and 
War Criminal Prosecution Act of 2001.'' The American Citizens 
Protection Act, today in the Senate to both protect America's Nuremberg 
legacy while at the same time safeguarding the rights of American 
citizens brought before foreign tribunals. My friend and House

[[Page 15373]]

colleague, William Delahunt of Massachusetts is also introducing a 
companion bill in the House today. Our bill calls for active U.S. 
diplomatic efforts to ensure that the ICC functions properly, mandates 
the assertion of U.S. jurisdiction over American citizens and bars the 
surrender of U.S. citizens to the ICC once the United States has acted. 
Unlike the American Servicemembers' Protection Act, however, The 
American Citizens Protection Act allows the United States to help 
prosecute war criminals and it does not effectively end U.S. 
participation in U.N. peacekeeping or authorize going to war to obtain 
the release of certain persons detained by the ICC.
  I believe that the bill that has been introduced today in the House 
and Senate strikes the right balance between protecting our citizens 
and our men and women in the armed forces who may be traveling or 
deployed abroad, and preserving United States leadership and advocacy 
of universal adherence to principles of international justice and the 
rule of law. I hope that the Bush administration will review carefully 
provisions of this bill, because I believe taken together they address 
the administration's concerns about the Rome Statute without doing 
damage to our national interest or future foreign policy objectives. I 
look forward to working with Administration officials and with my 
colleagues on this important issue in the coming weeks.
                                 ______
                                 
      By Mr. DURBIN (for himself and Mr. Reed):
  S. 1297. A bill to require comprehensive health insurance coverage 
for childhood immunization; to the Committee on Health, Education, 
Labor, and Pensions.
  Mr. DURBIN. Madam President, I rise today to kick off National 
Immunization Awareness Month by introducing legislation to expand 
access to affordable childhood and adolescent immunizations. I am 
pleased that my colleague, Senator Reed, joins me in this initiative.
  Immunization against vaccine-preventable disease is perhaps the most 
powerful health care and public health achievement of the 20th Century. 
Remarkable advances in the science of vaccine development and 
widespread immunization efforts have led to a substantial reduction in 
the incidence of infectious disease. Today, vaccination coverage is at 
record high levels. Smallpox has been eradicated; polio has been 
eliminated from the Western Hemisphere; and measles, pertussis and Hib 
invasive disease have been reduced to record lows.
  The bill I introduce today builds on these successes. ``The 
Comprehensive Insurance Coverage of Childhood Immunization Act of 
2001,'' ensures that all health plans cover the recommended childhood 
and adolescent immunizations. This improvement is simple, it is cost 
effective, and it is long overdue.
  More than 3.6 million children currently insured in the private 
sector are not covered for the recommended immunizations. Millions more 
have partial insurance for some of the recommended vaccines, but not 
all. Even if private coverage is complete, cost-sharing may be a 
significant barrier for many families.
  A number of reputable studies confirm these statistics. The Institute 
of Medicine found in its report of last year that ``While most private 
health plans provide some form of immunization coverage, this coverage 
varies by type of plan, as well as by vaccine. Enrollment in a private 
plan does not guarantee that immunizations will be provided as a plan 
benefit.'' Results from a 1999 William M. Mercer/Partnership for 
Prevention survey of employer sponsored health plans found that about 
one of five employer-sponsored plans does not cover childhood 
immunizations, and out of four does not cover adolescent immunizations. 
And researchers at the George Washington University recently collected 
data on the immunization coverage policies of five health care 
companies, four national and one regional, that suggest significant 
variation by type of plan, as well as by vaccine.
  The States have enacted some requirements to address these gaps in 
coverage, albeit limited. Only about 28 states have laws requiring that 
insurers cover childhood immunizations to some degree. Coverage 
standards vary considerably from state to state. And, as we know, 
employers that self-insure are generally exempt from state insurance 
regulation under the federal Employee Retirement Income Security Act. 
Approximately 50 million private-insured individuals are covered by 
self-insured plans.
  These gaps are not insignificant. The private sector is a critical 
partner in vaccine delivery. Almost half, 45 percent, of all vaccine is 
delivered in the private sector. Certainly most health plans do provide 
some immunization coverage, but there is a just no reason why every 
child who has private insurance should not have access to such a basic, 
essential benefit. This is not only a flaw in our health system, it is 
simply illogical and irresponsible.
  This is the 21st Century. We have long since learned how important 
immunizations are to the health of children and adolescents and to 
entire communities. At the beginning of the 20th century, infectious 
diseases were widely prevalent in the United States and exacted an 
enormous toll on the population. For example, in 1900, 21,064 smallpox 
cases were reported, and 894 patients died. In 1920, 469,924 measles 
cases were reported, and 7,575 patients died; 147,991 diphtheria cases 
were reported, and 13,170 patients died. In 1922, 107,473 pertussis 
cases were reported, and 5,099 patients died. Today these numbers are 
unheard of, and overall U.S. vaccination coverage is at record high 
levels.
  But despite the dramatic declines in vaccine-preventable diseases, 
such diseases persist, particularly in developing countries but also in 
our own.
  Just this past June, the Chicago Sun Times reported that a new study 
found ``distressingly low'' vaccination rates in a South Side Chicago 
neighborhood of Englewood. Twenty-six percent of children under the age 
of three have not been vaccinated for measles in this community. In 
1999, the measles preschool vaccination rate for all of Chicago was 86 
percent, down from 90 percent in 1996. In many pockets of the city, 
such as Englewood, rates are much lower than average. It was just a 
little over a decade ago that such low vaccination rates led to an 
epidemic of the highly contagious disease. In 1990 there were more than 
4,200 cases of measles and 15 deaths in the Chicago area.
  It is also important to keep in mind that an estimated 11,000 
children are born each day in the United States. Every year, 
approximately 170,000 of these babies are born into families with 
private health insurance that does not cover immunizations. Each one of 
these children needs up to 20 doses of vaccine by age two to be 
protected against childhood diseases.
  We must remain vigilant. Insuring universal age-appropriate vaccine 
coverage requires a strong and consistent partnership among State, 
local and Federal Governments, vaccine industry leaders, private and 
public health insurers and policymakers. From the beginning, 
immunization financing was explicitly structured to be a Federal/State/
private-sector partnership. In 1955, under President Eisenhower, the 
Federal Government began Federal funding for immunization when he 
signed the Poliomyelitis Vaccination Assistance Act. This support was 
expanded in the 1960's under Kennedy when the Vaccination Assistance 
Act created the National Immunization Program at CDC. Over the years, 
Federal support for vaccine purchase and assistance to states for 
immunization activities has grown.
  Today, Federal and State grants, the State Children's Health 
Insurance Program, the Vaccines for Children's Program and private-
sector health plans and providers together provide a comprehensive 
approach to get our Nation's children immunized. This system is the 
result of a concerted effort to fill in the gaps in coverage. But the 
system must adapt to new science and new social conditions. Shifting 
finance patterns require all partners to adapt to minimize system 
instability. For example, last year, after the Institute of

[[Page 15374]]

Medicine reported that Federal funding has waned and that the public 
system was becoming increasingly unstable, Congress increased the 
appropriation for immunization infrastructure and vaccine purchase 
grants.
  The public system cannot do it alone. Maintaining high immunization 
rates is a public health responsibility that must be shared by both the 
public and private sector. Most Americans rely on a system of insurance 
for their care. Most children today receive their immunization services 
from private-sector providers.
  The National Vaccine Advisory Committee, the Institute of Medicine 
and the American Academy of Pediatrics have recommended that all health 
plans should offer first-dollar coverage for recommended childhood 
vaccines. The provisions of this bill have been supported by a broad 
coalition of groups for many years, including Every Child by Two, the 
Children's Defense Fund, the American Public Health Association and 
Partnership for Prevention. Yet still today, many health plans and 
insurers do not cover all immunizations fully as a covered benefit.
  The Comprehensive Insurance Coverage of Childhood Immunization Act 
implements these long-standing recommendations by requiring all health 
plans--including groups, individual, and ERISA--cover all vaccines for 
children and adolescents that are recommended by the Advisory Committee 
on Immunization Practices. The Advisory Committee on Immunization 
Practices' recommendations are the standard of care. It is the 
Committee's Congressionally-mandated job to provide advice and guidance 
to the Secretary, the Assistant Secretary for Health, and the Centers 
for Disease Control and Prevention, CDC, on the most effective means to 
prevent vaccine-preventable diseases.
  The Act also directs that health plans cover immunizations without a 
copayment or deductible. Out-of-pocket costs have been identified as a 
barrier to proper immunization. In 2001, the cost of fully immunizing 
one child is approximately $627, with almost half of that cost 
resulting from the newly-recommended pneumococcal conjugate vaccine 
series. New vaccines and new combination vaccines currently under 
development will significantly increase this cost in the future. The 
U.S. Task Force on Community Preventive Services found that reducing 
out-of-pocket costs can result in increases in vaccination coverage by 
improving availability of vaccines and increasing demand for 
vaccinations. More than a dozen studies have documented the 
effectiveness of reducing out-of-pocket costs and the resulting 
improvement in vaccination outcomes.
  Another obvious barrier to appropriate immunization is the lack of 
private coverage itself. Studies have shown that providers are more 
likely to refer children with less private insurance coverage to other 
sites for vaccination, and referral practices are known to have an 
adverse effect on both the timing and the rate of immunization. Service 
utilization studies within public health clinics indicate that some 
low-income parents use public clinics because of the reduced cost, even 
though they might prefer to receive immunizations from regular private 
providers. This certainly places an unfair burden on parents who have 
to take their children to different sites for care. It makes it even 
harder for families to keep track of their children's complicated 
immunization schedule. And it may result in missed opportunities to 
immunize children who are lacking needed shots. Studies of the 
implementation of the Vaccines for Children Program have indicated that 
referrals to health departments decrease when free vaccines are 
provided to private providers, suggesting that both parents and 
providers take advantage of the free vaccines. The Comprehensive 
Insurance Coverage of Childhood Immunization Act will help parents 
avoid unnecessary referrals due to lack of coverage or financial 
barriers and retain their child's medical home.
  This practice of referral to public clinics also shifts the cost of 
vaccinating children from the private sector to taxpayers. Through the 
Federal Vaccines for Children Program, children with health insurance 
that does not cover immunization may receive vaccines at a Federally 
Qualified Health Center or a Rural Health Clinic. Vaccines at these 
clinics are also supported by federal grants to states for vaccine 
purchase through the Federal discretionary National Immunization 
program. States also fund the purchase and distribution of vaccines. 
When the private sector fails--the public sector picks up the tab.
  For this reason, the Congressional Budget Office found that this 
legislation will increase the budget surplus by $70 million dollars 
over five years and $150 million dollars over 10 years. This savings is 
somewhat offset by the reduction in Federal tax receipts, but still 
saves $20 million over five years and costs less than $35 million over 
10 years. There is no doubt that the States would see similar savings. 
Many States contribute up to 30 percent of the public sector vaccine 
purchase bill. This means that State funds, like Federal funds, are 
picking up the tab for kids with private insurance. And the CBO found 
that the new requirement would have a negligible effect on health 
insurance premiums, increasing premium costs, if at all, by no more 
than 0.1 percent.
  Private providers should find comprehensive childhood vaccination 
cost-effective as well. Immunizations are one of the rare health 
services that have been proven to save money. The Measles-Mumps 
Rubella, MMR, vaccine saves $10.30 in direct medical costs for every $1 
dollar invested. The diphtheria and tetanus toxoids and pertussis DTP 
vaccine saves $8.50 for every $1 dollar spent. The Haemophilus 
influenzae type b (Hib) vaccine saves $1.40 per dollar. The Inactivated 
Polio Vaccine, IPV, saves $3.03 for every $1 dollar investment. These 
figure are all direct medical savings.
  It is rare that we have policy decisions that are this easy to make. 
The Comprehensive Insurance Coverage of Childhood Immunization Act will 
help millions of working families afford the immunization they need to 
protect their children. It represents a shared responsibility that we 
all have to our communities. Like safe food and clean water, high 
immunization rates safeguard all of us. I urge my colleagues to support 
this legislation and to act promptly to pass it on behalf of American 
families.
                                 ______
                                 
      By Mr. HARKIN (for himself, Mr. Specter, Mr. Kennedy, Mr. Biden 
        and Mrs. Clinton):
  S. 1298. A bill to amend title XIX of the Social Security Act to 
provide individuals with disabilities and older Americans with equal 
access to community-based attendant services and supports, and for 
other purposes; to the Committee on Finance.
  Mr. HARKIN. Madam President, just a few days ago, the Nation 
celebrated the 11th anniversary of the Americans with Disabilities Act, 
ADA. When we passed the ADA, we told Americans with disabilities that 
the door to equal opportunity was finally open.
  And the ADA has opened doors of opportunity, plenty of them. 
Americans with disabilities now expect to be treated as full citizens, 
with all the rights and responsibilities that entails. And they are 
participating in American life like never before in our Nation's 
history.
  Indeed, eleven years after the passing of the ADA we have a lot to 
celebrate.
  But we also have a lot of work to do. We need to make sure our 
Federal policies further the principle of independence for all that we 
agreed on eleven ago. For example, a few years ago Congress recognized 
that in order for people with disabilities to join the workforce, we 
would need to remove the disincentives to work embedded in our Medicaid 
and Social Security statutes. After passage of the Ticket to Work and 
Work Incentives bill, people with disabilities should no longer have to 
choose between going to work and receiving necessary health care 
services.
  Today, Senator Specter and I introduce a bill that reflects another 
policy I am sure we can all agree on. In order to go work or live in 
their own homes, Americans with disabilities and older

[[Page 15375]]

Americans need access to community-based services and supports. 
Unfortunately, under current Federal Medicaid policy, the deck is 
stacked against community living. The purpose of our bill is to level 
the playing field and give eligible individuals equal access to 
community-based services and supports.
  The Medicaid Community-Based Attendant Services and Supports Act does 
three things. First, the bill amends Title XIX of the Social Security 
Act to provide a new Medicaid plan benefit that would give individuals 
who are eligible for nursing home and ICF-MR services equal access to 
community-based attendant services and supports.
  Second, for a limited time, States would have the opportunity to 
receive an enhanced match rate for community attendant services and 
supports and for certain administrative activities to help them reform 
their long term care systems.
  Third, the bill provides State with financial assistance to support 
``real choice systems change initiatives'' that include specific action 
steps for the provision of community-based long term community services 
and supports.
  Finally, the bill establishes a demonstration project to evaluate 
service coordination and cost sharing approaches with respect to the 
provision of services and supports to daily eligible individuals with 
disabilities under the age of 65.
  States are already out ahead of us here in Washington on this issue. 
Spending under the Medicaid home and community based waiver program has 
grown tenfold in the past ten years. Every State offers certain 
services under home and community based waivers. Almost 30 States are 
now providing the personal care optional benefit through their Medicaid 
programs. More than 2\1/2\ times more people are served in home and 
community-based settings than in institutional settings.
  The States have realized that community based care is both popular 
and cost effective, and community-based attendant services and supports 
are a key component of a successful program.
  However, despite this marked progress, home and community based 
services are unevenly distributed within and across States and only 
reach a small percentage of eligible individuals.
  The numbers speak volumes. Only about 27 percent of long term care 
funds expended under Medicaid, and only about 9 percent of all funds 
expended under the program, pay for services and supports in home and 
community-based settings. That means that right low a large majority of 
Medicaid long term care funding is not being used to further 
independence. In fiscal year 2000, only 3 States spent 50 percent or 
more of their long term care funds under the Medicaid program on home 
and community-based care. And that means that individuals do not have 
equal access to community based care.
  Of course, numbers only tell a part of the story. This bill is about 
real people in real communities. Take the example of a friend of mine 
in Iowa. Dan Piper works at a hardware store. He has his own apartment 
and just bought a VCR. He also has Down's syndrome and diabetes. For 
years Dan has received services through a community waiver program. 
But, last year, his community-based supports were threatened because he 
wasn't sure he'd be able to find a provider to deliver the optional 
waiver service. The result? He almost had to sacrifice his independence 
just to get services. Today, Dan works and contributes to the economy 
as both a wage earner and a consumer. But, tomorrow, he could be forced 
into a nursing home, far from his roommate, his job and his family. 
That's why our Federal policy must foster comprehensive and consistent 
access to community-based services and supports in the most integrated 
setting appropriate.
  Federal Medicaid policy should reflect the consensus that Americans 
with disabilities should have the equal opportunity to contribute to 
our communities and participate in our society as full citizens. That 
means people should have access to certain types of services in the 
community so that they don't have to sacrifice their full participation 
in society simply because they need a catheter or help getting out of 
the house in the morning or assistance with medication, or some other 
basic service.
  So, where do we begin? To start, States need time and money to reform 
their long term care systems. Last year, Senator Specter and I worked 
hard to fund the systems change grants included in Title II of MiCASSA 
through the Labor-HHS appropriations bill. We included $70 million in 
grant money to help States reform their long term care programs through 
systems change initiatives and nursing home transition.
  I am very pleased that Secretary Thompson has supported the 
development and implementation of these grants and included them as 
part of the President's New Freedom Initiative for people with 
disabilities. As I understand it, all but two of the eligible States 
and territories have submitted application to HCFA. This is a great 
start. And it shows the need for a Federal commitment to this issue. 
Senator Specter and I will work with the Administration and others to 
ensure that another round of these grants will be available in FY 2002.
  Over the past several months, we have also spent some time revising 
the bill we introduced last Congress. The new version of MiCASSA allows 
States to phase in the new Medicaid plan benefit over a period of 5 
years and provides enhanced math dollars to encourage States to start 
their reforms as soon as possible. As anyone in the private business 
world well knows, in order to deliver a better service in a more 
efficient manner there has to be a strong initial investment. Our bill 
does just that. We also include a new program to help States pay for 
people with severe disabilities who are more expensive to serve in the 
community than the average eligible individual. And, we require a 
demonstration project to look at cost-sharing between dually Medicaid 
and Medicare recipients.
  The rest of the bill looks a lot like last year. Community-based 
services and supports help people do tasks that they would do 
themselves, if they did not have a disability. Our bill would allow any 
person eligible for nursing home services to use the money for 
community attendant services and supports. Those services and supports 
include help with things like eating, bathing, grooming, toileting, and 
transferring in and out of a wheelchair.
  Community-based services and supports are the lowest-cost and most 
consumer friendly services in the long-term care spectrum. They can be 
provided by a variety of people, including friends and neighbors of the 
recipient. In many instances, with supervision, the consumer can direct 
his or her own care and manage his or her own attendants. This cuts 
down on expensive administrative overhead and the current practice of 
relying on medical personnel such as nurses to coordinate a person's 
care. States can save money and redirect medically-oriented care to 
those who need it most.
  Not only is home and community-based care what people want, it can 
also be far less expensive. There is a wide variation in the cost of 
supporting people with disabilities in the community because 
individuals have different levels of need. But, for the average person, 
the annual cost of home and community based services is less than one-
half the average cost of institutional care.
  And, I would be remiss not to mention the importance of quality 
services and supports. Wherever a person receives Medicaid services and 
supports, health and safety should be guaranteed. We should build a 
system that has strong quality controls. The bill includes the same 
quality protections as last year, but also emphasizes the importance of 
developing a strong and able workforce in the grants section.
  As I said, States have made a great deal of progress in this area. 
But there is much more to do. The enthusiastic response to the systems 
change grants shows just how much States need help to reform their long 
term care systems

[[Page 15376]]

to implement the principles of independence, community living, and 
economic opportunity. The Supreme Court found that, to the extent 
Medicaid dollars are used to pay for a person's long term care, that 
person has a right to receive those services in the most integrated 
setting appropriate. We in Congress have a responsibility to help 
States meet their obligations under Olmstead. It's up to the Federal 
Government to provide national leadership and adequate resources.
  Community-based attendant services and supports allow people with 
disabilities to lead independent lives, have jobs, and participate in 
the community. Some will become taxpayers, some will do volunteer work, 
some will get an education, some will participate in recreational and 
other community activities. All will experience a better quality of 
life, and a better chance to take part in the American dream.
  I urge my colleagues and their staff to study our proposal over the 
break. I hope there will be hearings and action on this bill in the 
next year.
  This bill will open the door to full participation by people with 
disabilities in our workplaces, our economy, and our American Dream, 
and I urge all my colleagues to support us on this issue. I thank the 
cosponsors of this bill. Senator Kennedy and Senator Specter have been 
leaders on disability issues for a long time. And I also thank Senator 
Clinton and Senator Biden for joining me on this very important issue.
                                 ______
                                 
      By Mr. DOMENICI (for himself, Mrs. Clinton, Mr. Reid, Mrs. Boxer, 
        Ms. Mikulski, Mr. Bingaman, and Mrs. Hutchison):
  S. 1299. A bill to amend the Safe Drinking Water Act to establish a 
program to provide assistance to small communities for use in carrying 
out projects and activities necessary to achieve or maintain compliance 
with drinking water standards; to the Committee on Environment and 
Public Works.
  Mr. DOMENICI. Madam President, I stand before you today to introduce 
a piece of legislation that will help move many States forward toward 
compliance with the arsenic drinking water standards the EPA 
Administrator intends to finalize in February. It has been said that 
``a government must not waiver once it has chosen its course. It must 
not look to the left or to the right, but instead must go forward.'' 
This is the situation we find ourselves in today, our government has 
chosen a course and now we have no choice but to move forward.
  My bill, the Community Drinking Water Assistance Act, authorizes $1.9 
billion dollars to be made directly available to local communities and 
Tribes through the EPA. EPA would award grants to communities and 
Tribes needing assistance for projects, activities, technical 
assistance, or for training and certifying system operators. The 
criteria for awarding grants would be directly based on financial need 
and per capita costs of complying with the drinking water standards.
  A new arsenic standard was promulgated in the waning hours of the 
Clinton Administration. While I do not fault the Bush administration 
for what they inherited, I must admit that I was disappointed when 
Administrator Whitman set a maximum standard without further scientific 
basis. It seemed illogical for Ms. Whitman to announce that the 
National Academy of Sciences would further review the health effects 
associated with arsenic, while simultaneously placing herself in a box 
that would set the maximum standard at 20 parts per billion. It would 
have been more logical to have waited for the studies to be completed 
before announcing what the standard would or would not be.
  The course has been set and I would just like to take a moment to 
highlight what this course will mean for New Mexicans. First and 
foremost, Arsenic is naturally occurring in New Mexico. In fact, New 
Mexico has some of the highest levels of arsenic in the Nation, yet has 
a lower than average incidence of the diseases associated with arsenic. 
Nonetheless, for all systems in New Mexico to be in compliance with a 
standard of 20 parts per billion, we are looking at a minimum price tag 
of $127 million. What this means to small community water users is more 
staggering. The average cost to water users, in small systems serving 
less than 1,000 people, is $57.46, and this is for a standard of 20 
parts per billion! The numbers are even more staggering for a 10 part 
per billion standard.
  The New Mexico Environment Department estimates that if the standard 
is set at 10 parts per billion, approximately 25 percent of New 
Mexico's water systems will be affected. The price tag for compliance 
could fall between $400 million and $500 million in initial capital 
expenditures. Annual operating costs will easily fall anywhere between 
$16 and $21 million. Additionally, large water system users will see an 
average monthly water bill increase between $38 and $42 and small 
system users will see an average water bill increase of $91.
  The costs of complying with either of these standards could well put 
small rural systems out of business, which is the exact opposite of 
what we should be trying to accomplish, providing a safe and reliable 
supply of drinking water to rural America. Many New Mexicans cannot 
afford a minimum $57.46 rate increase in their monthly water bill.
  We live in a society that is dedicated to the removal of risk. 
Generally, when we get unintended consequences associated with risk 
averse decisions, the government stands ready with band-aids in every 
size. We still do not have a sound scientific basis suggesting what the 
actual arsenic standard should be. Therefore, to be ``on the safe 
side'' and remove risk, the government has chosen to set an arbitrary 
standard that will increase costs to water users, particularly in the 
West, by extreme proportions. Therefore, I do not assume that it is 
unfair to also ask that the government put itself in a position to 
offer financial assistance to these communities so that they can make 
the necessary repairs in their water systems to comply with this law. 
This is the only way to move forward on the course that has been set.
  Mrs. CLINTON. Will the Senator yield? I would be honored to be an 
original cosponsor of that legislation.
  Mr. DOMENICI. I ask unanimous consent Senator Clinton and Senator 
Reid be added as cosponsors.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. And Senator Boxer.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. See all this great bipartisanship.
  Mr. DOMENICI. 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. 1299

       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 ``Community Drinking Water 
     Assistance Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) drinking water standards proposed and in effect as of 
     the date of enactment of this Act will place a large 
     financial burden on many public water systems, especially 
     those public water systems in rural communities serving small 
     populations;
       (2) the limited scientific, technical, and professional 
     resources available in small communities complicate the 
     implementation of regulatory requirements;
       (3) small communities often cannot afford to meet water 
     quality standards because of the expenses associated with 
     upgrading public water systems and training personnel to 
     operate and maintain the public water systems;
       (4) small communities do not have a tax base for dealing 
     with the costs of upgrading their public water systems;
       (5) small communities face high per capita costs in 
     improving drinking water quality;
       (6) small communities would greatly benefit from a grant 
     program designed to provide funding for water quality 
     projects;
       (7) as of the date of enactment of this Act, there is no 
     Federal program in effect that adequately meets the needs of 
     small, primarily rural communities with respect to public 
     water systems; and
       (8) since new, more protective arsenic drinking water 
     standards proposed by the Clinton and Bush administrations, 
     respectively, are expected to be implemented in

[[Page 15377]]

     2006, the grant program established by the amendment made by 
     this Act should be implemented in a manner that ensures that 
     the implementation of those new standards is not delayed.

     SEC. 3. ASSISTANCE FOR SMALL PUBLIC WATER SYSTEMS.

       (a) Definition of Indian Tribe.--Section 1401(14) of the 
     Safe Drinking Water Act (42 U.S.C. 300f(14)) is amended in 
     the second sentence by striking ``1452,'' and inserting 
     ``1452 and part G,''.
       (b) Establishment of Program.--The Safe Drinking Water Act 
     (42 U.S.C. 300f et seq.) is amended by adding at the end the 
     following:

          ``PART G--ASSISTANCE FOR SMALL PUBLIC WATER SYSTEMS

     ``SEC. 1471. DEFINITIONS.

       ``In this part:
       ``(1) Eligible activity.--
       ``(A) In general.--The term `eligible activity' means a 
     project or activity concerning a small public water system 
     that is carried out by an eligible entity to comply with 
     drinking water standards.
       ``(B) Inclusions.--The term `eligible activity' includes--
       ``(i) obtaining technical assistance; and
       ``(ii) training and certifying operators of small public 
     water systems.
       ``(C) Exclusion.--The term `eligible activity' does not 
     include any project or activity to increase the population 
     served by a small public water system, except to the extent 
     that the Administrator determines such a project or activity 
     to be necessary to--
       ``(i) achieve compliance with a national primary drinking 
     water regulation; and
       ``(ii) provide a water supply to a population that, as of 
     the date of enactment of this part, is not served by a safe 
     public water system.
       ``(2) Eligible entity.--The term `eligible entity' means a 
     small public water system that--
       ``(A) is located in a State or an area governed by an 
     Indian Tribe; and
       ``(B)(i) if located in a State, serves a community that, 
     under affordability criteria established by the State under 
     section 1452(d)(3), is determined by the State to be--
       ``(I) a disadvantaged community; or
       ``(II) a community that may become a disadvantaged 
     community as a result of carrying out an eligible activity; 
     or
       ``(ii) if located in an area governed by an Indian Tribe, 
     serves a community that is determined by the Administrator, 
     under affordability criteria published by the Administrator 
     under section 1452(d)(3) and in consultation with the 
     Secretary, to be--
       ``(I) a disadvantaged community; or
       ``(II) a community that the Administrator expects to become 
     a disadvantaged community as a result of carrying out an 
     eligible activity.
       ``(3) Program.--The term `Program' means the small public 
     water assistance program established under section 1472(a).
       ``(4) Secretary.--The term `Secretary' means the Secretary 
     of Health and Human Services, acting through the Director of 
     the Indian Health Service.
       ``(5) Small public water system.--The term `small public 
     water system' means a public water system (including a 
     community water system and a noncommunity water system) that 
     serves--
       ``(A) a community having a population of not more than 
     200,000; or
       ``(B) the city of Albuquerque, New Mexico.

     ``SEC. 1472. SMALL PUBLIC WATER SYSTEM ASSISTANCE PROGRAM.

       ``(a) Establishment.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this part, the Administrator shall establish a 
     program to provide grants to eligible entities for use in 
     carrying out projects and activities to comply with drinking 
     water standards.
       ``(2) Priority.--The Administrator shall award grants under 
     the Program to eligible entities based on--
       ``(A) first, the financial need of the community for the 
     grant assistance, as determined by the Administrator; and
       ``(B) second, with respect to the community in which the 
     eligible entity is located, the per capita cost of complying 
     with drinking water standards, as determined by the 
     Administrator.
       ``(b) Application Process.--
       ``(1) In general.--An eligible entity that seeks to receive 
     a grant under the Program shall submit to the Administrator, 
     on such form as the Administrator shall prescribe (not to 
     exceed 3 pages in length), an application to receive the 
     grant.
       ``(2) Components.--The application shall include--
       ``(A) a description of the eligible activities for which 
     the grant is needed;
       ``(B) a description of the efforts made by the eligible 
     entity, as of the date of submission of the application, to 
     comply with drinking water standards; and
       ``(C) any other information required to be included by the 
     Administrator.
       ``(3) Review and approval of applications.--
       ``(A) In general.--On receipt of an application under 
     paragraph (1), the Administrator shall forward the 
     application to the Council.
       ``(B) Approval or disapproval.--Not later than 90 days 
     after receiving the recommendations of the Council under 
     subsection (e) concerning an application, after taking into 
     consideration the recommendations, the Administrator shall--
       ``(i) approve the application and award a grant to the 
     applicant; or
       ``(ii) disapprove the application.
       ``(C) Resubmission.--If the Administrator disapproves an 
     application under subparagraph (B)(ii), the Administrator 
     shall--
       ``(i) inform the applicant in writing of the disapproval 
     (including the reasons for the disapproval); and
       ``(ii) provide to the applicant a deadline by which the 
     applicant may revise and resubmit the application.
       ``(c) Cost Sharing.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Federal share of the cost of carrying out an eligible 
     activity using funds from a grant provided under the Program 
     shall not exceed 90 percent.
       ``(2) Waiver.--The Administrator may waive the requirement 
     to pay the non-Federal share of the cost of carrying out an 
     eligible activity using funds from a grant provided under the 
     Program if the Administrator determines that an eligible 
     entity is unable to pay, or would experience significant 
     financial hardship if required to pay, the non-Federal share.
       (d) Enforcement and Implementation of Standards.--
       (1) In general.--Subject to paragraph (2), the 
     Administrator shall not enforce any standard for drinking 
     water under this Act (including a regulation promulgated 
     under this Act) against an eligible entity during the period 
     beginning on the date on which the eligible entity submits an 
     application for a grant under the Program and ending, as 
     applicable, on----
       (A) the deadline specified in subsection (b)(3)(C)(ii), if 
     the application is disapproved and not resubmitted; or
       (B) the date that is 3 years after the date on which the 
     eligible entity receives a grant under this part, if the 
     application is approved.
       (2) Arsenic standards.--No standard for arsenic in drinking 
     water promulgated under this Act (including a standard in any 
     regulation promulgated before the date of enactment of this 
     part) shall be implemented or enforced by the Administrator 
     in any State until the earlier of January 1, 2006 or such 
     date as the Administrator certifies to Congress that----
       (A) the Program has been implemented in the state; and
       (B) the State has made substantial progress, as determined 
     by the Administrator in consultation with the Governor of the 
     State, in complying with drinking water standards under this 
     Act.
       (e) Role of Council.--The Council shall----
       (1) review applications for grants from eligible entities 
     received by the Administrator under subsection (b); and
       (2) for each application, recommend to the Administrator 
     whether the application should be approved or disapproved.

     SEC. 1473. AUTHORIZATION OF APPROPRIATIONS.

       ``There is authorized to be appropriated to carry out this 
     part $1,900,000,000 for the period of fiscal years 2001 
     through 2006.''
                                 ______
                                 
      By Mr. BOND:
  S. 1301. A bill to amend the Federal Food, Drug, and Cosmetic Act to 
improve the safety and efficacy of pharmaceuticals for children; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. BOND. Madam President, I rise today to introduce a bill I call 
the ``Better Medicine for Children Act.''
  This legislation deals with a problem that pediatricians have been 
confronted with for years, while doctors have a huge variety and choice 
of medicines to prescribe for different medical conditions, they don't 
always have enough specific information on how well these drugs work in 
children.
  The Food and Drug Administration tells us that for about 70 to 80 
percent of all drugs on the market, we do not have sufficient pediatric 
information. The FDA has identified more than 400 drugs which are used 
in children for whom we need more data.
  Without pediatric testing for a specific drug, we may now know the 
proper dose to give to children of different ages or sizes. Without 
testing, we may not know if the drug is as effective as it is in 
adults, or even if it works in children at all. Almost all health care 
practitioners have faced difficult issues because of this scarcity of 
pediatric drug information.
  I want to share a story I have been told that points out exactly how 
important this pediatric information can be. This real story involves 
an 18-month-old little boy who was in an intensive care unit following 
some serious surgery. He was under sedation from a drug known as 
propofol. At that

[[Page 15378]]

time, we did not have much specific information on how this drug 
affected children, but some doctors prescribed the drug for children 
anyway because they honestly thought it was the best option. For this 
infant, it clearly was not, because of an adverse reaction to the drug, 
that baby developed acidosis and had a heart rhythm disturbance, 
causing a truly life-threatening incident. Fortunately, this little boy 
did recover. But this was by no means a sure thing.
  Back in 1997, Congress decided to deal with this problem. We passed a 
law that gave pharmaceutical companies a strong incentive to do more 
pediatric testing so we can get this crucial information. If the 
company agreed to perform needed pediatric studies on a drug, and did 
the study exactly as requested by the Food and Drug Administration, the 
company would get a six-month extension on that drug's patent.
  The results have been amazing. Hundreds of pediatric drug studies are 
underway and are producing huge amounts of new drug information for 
kids.
  One example of new information is the drug propofol, the very drug I 
mentioned earlier that caused a serious problem for the 18-month-old 
boy in the ICU. What they found in extensive pediatric studies done on 
propofol as a result of the new incentive is that the drug is more 
dangerous than other alternatives that could be used to sedate 
pediatric ICU patients.
  So because of this testing, propofol would not be used in the same 
situation today. And that little boy wouldn't have had a life-
threatening incident.
  So if this incentive exists, and all of this new pediatric testing is 
being done, what's the problem?
  Well, there are actually at least three problems. My legislation will 
deal with each of them.
  First, the incentives expire at the end of this year. My ``Better 
Medicine for Children Act'' will extend this important and successful 
program for five more years.
  Second, because the incentive used to encourage pediatric testing is 
an extended patent life, there's actually no incentive to do pediatric 
studies in drugs whose patent or patents have already expired. My 
legislation will authorize $200 million in funding so that tests can be 
performed on these off-patent drugs. The need here is great, of the 
400-plus drugs the FDA has singled out for further pediatric study, 
more than one-third are off-patent.
  With regard to these first two pieces of my bill, I should note my 
debt to legislation introduced by Senators Dodd and DeWine, from which 
I have based some of my bill. Senators Dodd and DeWine were the 
original authors of this critical legislation back in 1997. They had a 
good idea and a good bill then, and they have a good idea and good 
legislation now. In fact, as a cosponsor of their bill I am pleased to 
report that the Dodd-DeWine bill was approved earlier today by the 
Senate HELP Committee.
  But my legislation goes beyond other approaches and has a new and 
unique provision which is not in the Dodd-DeWine bill, and which 
addresses a third critical problem. This problem is that the new wave 
of pediatric testing has actually given us relatively little 
information about how pharmaceuticals affect the youngest children, 
particularly neonates. This is true because neonates aren't usually 
included in initial pediatric drug studies for medical or ethical 
reasons.
  You would think that as we are talking about legislation to help 
``children'' or ``kids,'' that would be helping all children. This 
certainly should be our expectation, but it is not the case. 
Unfortunately, the huge success this legislation has had in a broad 
sense masks the fact that the law doesn't help neonates, those babies 
less than one month old, and other younger children nearly as much.
  An excerpt from testimony the American Academy of Pediatrics provided 
in a HELP Committee hearing last March puts it simply: ``. . . this 
population'', and here they are talking about neonates, ``has not 
benefitted significantly from the pediatric studies provision . . .''
  Why is this the case? At times, I believe the FDA actually may not 
have asked for enough information in neonates or younger age groups--in 
other words, the agency may have just gotten lazy. That problem should 
be correctable, and in fact it is addressed by the Dodd-DeWine bill. 
The Dodd-DeWine legislation tries to make sure the FDA always asks for 
studies in neonates when it is appropriate to do so.
  But as important as that step is, I don't believe it is enough. 
Because there are other reasons, beyond simply FDA not asking, why 
neonates cannot, at times, be included in initial pediatric studies.
  There may be scientific reasons why the FDA may not always be able to 
ask for neonate studies. For example, as part of a drug test you may 
need to take regular blood samples from a test subject.
  But a neonate only has so much blood, and at some point, too many 
blood tests could actually create a health problem. However, at some 
time in the future, the technology may well be developed enough to 
enable us to do this testing with smaller amounts of blood.
  At other times, the FDA may not request studies that include the 
youngest children because of ethical concerns. If we are lacking 
information that gives us some clue how a neonate might react to a 
particular drug, perhaps drug information in a nearby age-group, for 
example, it may actually be dangerous to test a drug in young children. 
In a report released January that evaluated the entire pediatric 
incentive provision, the FDA uses the example of neurotropic drugs as 
ones we may not want to test in the youngest children without more 
information. But once this other information is developed, these 
studies may be possible.
  The end result of all this is that we simply do not perform drug 
tests in the youngest kids as much. And because of that, we simply 
don't get as much useful information for younger children that can be 
put on a drug's label.
  The drug I discussed earlier today, propofol, is a great example. I 
spoke about an 18-month-old little boy who, several years ago, had a 
serious problem when given the drug propofol. Today, a similar 18-
month-old boy would not be given propofol under the same circumstances 
because of what we have learned from the pediatric studies performed in 
the interim. But propofol is a example of a drug that has now been 
tested in some children, about which we have learned some very 
important things, but has not yet been fully tested in the youngest 
children. Propofol is nonetheless used in younger children, even in 
neonates, but it has only been labeled far enough to include 2-month-
olds.
  Now, will these companies go back and actually do the studies in the 
younger kids? Almost certainly not.
  Under current law, you only get one incentive period, one bite at the 
apple. That's it. If the last few decades have taught us anything, it 
is that pediatric studies just do not get done unless there is an 
economic incentive. Yet with the pediatric incentive already used for 
these drugs, the younger kids are out of luck.
  What makes it worse for these younger kids is that there is almost no 
commercial incentive to study drugs in these age-groups. The raw size 
of this young population is so small, obviously even smaller than the 
population of children as a whole, that there is hardly ever sufficient 
market incentive for a drug company to perform the studies needed to 
help the youngest children.
  Again, the FDA reports says it well: ``Once pediatric exclusivity is 
granted for studies in older pediatric age groups, section 505A does 
not provide an adequate incentive to conduct later studies in the 
younger age groups . . . This has left some age groups, especially 
neonates, unstudied, even where the need for the drug in those age 
groups is great.''
  Children this young are almost certainly facing less-than-optimal 
health care outcomes--and perhaps even health risks--because they are 
still being prescribed propofol and similar drugs that haven't been 
tested in their

[[Page 15379]]

age group. Of course, we may never know for sure what's happening with 
some of these drugs. Because, unless we find a way to produce a study 
in this age group, we will never know for sure how this drug works for 
the youngest children.
  My legislation contains a provision that--in limited circumstances--
would provide drug companies with a second patent extension to serve as 
an incentive to study drugs in the youngest groups of children. I 
believe this could serve as the incentive to make sure these younger 
children share fully in the positive results of this legislation.
  However, understanding the various concerns about possible abuse of a 
second incentive, increased prices, and high profits, my second 
incentive is carefully limited.
  First, the patent extension that serves as the incentive to perform 
studies in neonates and other young children is three months rather 
than six. While neonates and infants are extremely important age 
groups, it is an inescapable fact that there simply aren't as many of 
these young children running around as there are kids in general. Given 
this, and the legitimate concerns about marginally raising drug prices 
by keeping generic drugs off the market longer, I believe that limiting 
the neonatal incentive to three months is reasonable.
  Second, unlike the existing pediatric incentives, my proposed second 
incentive period would not be available to drugs going through the FDA 
approval process. If a drug company is doing pediatric studies prior to 
a drug's approval, it should be able to plan a sequential set of 
studies as part of the first set of pediatric tests.
  Finally, the possibility of a second incentive period is restricted 
to drugs that fit one of two categories. First, drugs which cannot 
initially be studied in neonates or other young children because it is 
necessary to pursue sequential studies for scientific, medical, or 
ethical reasons. Second, drugs for which new uses have been discovered 
and for which drug studies in young children were not originally 
expected to be useful could qualify for a second incentive period.
  Given these limits, my expectation is that the majority of drugs 
would not qualify for a second patent extension if my legislation were 
to pass. A significant enough amount to make a difference in young 
children's lives, yes. Enough to produce a tidal wave of additional 
patent extensions, no.
  The FDA, from their January report, actually recommended that 
Congress consider the general idea I am talking about: ``When there is 
a need to proceed in a sequential manner for the development of 
pediatric information, FDA should have the option of issuing a second 
Written Request for the conduct of studies in the relevant younger age 
group(s). For this option to be meaningful, the second Written Request, 
after receiving the studies to an initial Written Request and pediatric 
exclusivity awarded, would be linked with a meaningful incentive to 
sponsors.''
  Before 1997, we had a serious lack of information for children 
generally, so we provided an incentive to study drugs in children. We 
now have a lack of information for the youngest children, why not 
approve a second patent extension period to provide a new incentive for 
this age group? To me, this simply makes sense.
  Separately, my bill also contains some provisions to improve the 
government, institutional, and human infrastructure needed to support 
pediatric drug testing. This includes a Dodd-DeWine provision to create 
a new Office of Pediatric Therapeutics within the Food and Drug 
Administration to monitor and facilitate the new pediatric drug 
testing. Furthermore, my bill will direct the National Institutes of 
Health to use programs that support young pediatric researchers to 
ensure there is an adequate supply of pediatric pharmacology experts to 
support the revolution in pediatric drug research.
  Finally, this bill modifies some specific language in the Dodd-DeWine 
legislation to ensure that the $200 million fund designed to study 
drugs that have lost all patent life, and thus are not helped by the 
patent extension incentives--truly focuses on the highest-priority 
drugs.
  Even with limited information, we have good medicine for children 
right now. But with more studies and information, we can, and must, 
produce better medicine for children.

                          ____________________