[Congressional Record (Bound Edition), Volume 148 (2002), Part 11]
[House]
[Pages 15036-15108]
[From the U.S. Government Publishing Office, www.gpo.gov]




           CONFERENCE REPORT ON H.R. 3009, TRADE ACT OF 2002

  Mr. THOMAS (during consideration of H. Res 507) submitted the 
following conference report and statement on the bill (H.R. 3009) to 
extend the Andean

[[Page 15037]]

Trade Preference Act, to grant additional trade benefits under that 
Act, and for other purposes:

                  Conference Report (H. Rept. 107-624)

  The Committee of conference on the disagreeing votes of the two 
Houses on the amendment of the Senate to the bill (H.R. 3009), to 
extend the Andean Trade Preference Act, to grant additional trade 
benefits under that Act, and for other purposes, having met, after full 
and free conference, have agreed to recommend and do recommend to their 
respective Houses as follows:
  That the House recede from its disagreement to the amendment of the 
Senate and agree to the same with an amendment as follows:
  In lieu of the matter proposed to be inserted by the Senate 
amendment, insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Trade Act of 2002''.

     SEC. 2. ORGANIZATION OF ACT INTO DIVISIONS; TABLE OF 
                   CONTENTS.

       (a) Divisions.--This Act is organized into 5 divisions as 
     follows:
       (1) Division a.--Trade Adjustment Assistance.
       (2) Division b.--Bipartisan Trade Promotion Authority.
       (3) Division c.--Andean Trade Preference Act.
       (4) Division d.--Extension of Certain Preferential Trade 
     Treatment and Other Provisions.
       (5) Division e.--Miscellaneous Provisions.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title.
Sec. 2. Organization of Act into divisions; table of contents.

                DIVISION A--TRADE ADJUSTMENT ASSISTANCE

Sec. 101. Short title.

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

          Subtitle A--Trade Adjustment Assistance For Workers

Sec. 111. Reauthorization of trade adjustment assistance program.
Sec. 112. Filing of petitions and provision of rapid response 
              assistance; expedited review of petitions by secretary of 
              labor.
Sec. 113. Group eligibility requirements.
Sec. 114. Qualifying requirements for trade readjustment allowances.
Sec. 115. Waivers of training requirements.
Sec. 116. Amendments to limitations on trade readjustment allowances.
Sec. 117. Annual total amount of payments for training.
Sec. 118. Provision of employer-based training.
Sec. 119. Coordination with title I of the Workforce Investment Act of 
              1998.
Sec. 120. Expenditure period.
Sec. 121. Job search allowances.
Sec. 122. Relocation allowances.
Sec. 123. Repeal of NAFTA transitional adjustment assistance program.
Sec. 124. Demonstration project for alternative trade adjustment 
              assistance for older workers.
Sec. 125. Declaration of policy; sense of Congress.

           Subtitle B--Trade Adjustment Assistance For Firms

Sec. 131. Reauthorization of program.

          Subtitle C--Trade Adjustment Assistance For Farmers

Sec. 141. Trade adjustment assistance for farmers.
Sec. 142. Conforming amendments.
Sec. 143. Study on TAA for fishermen.

                       Subtitle D--Effective Date

Sec. 151. Effective date.

  TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

Sec. 201. Credit for health insurance costs of individuals receiving a 
              trade readjustment allowance or a benefit from the 
              Pension Benefit Guaranty Corporation.
Sec. 202. Advance payment of credit for health insurance costs of 
              eligible individuals.
Sec. 203. Health insurance assistance for eligible individuals.

                   TITLE III--CUSTOMS REAUTHORIZATION

Sec. 301. Short title.

               Subtitle A--United States Customs Service

  Chapter 1--Drug Enforcement and Other Noncommercial and Commercial 
                               Operations

Sec. 311. Authorization of appropriations for noncommercial operations, 
              commercial operations, and air and marine interdiction.
Sec. 312. Antiterrorist and illicit narcotics detection equipment for 
              the United States-Mexico border, United States-Canada 
              border, and Florida and the Gulf Coast seaports.
Sec. 313. Compliance with performance plan requirements.

     Chapter 2--Child Cyber-smuggling Center of the Customs Service

Sec. 321. Authorization of appropriations for program to prevent child 
              pornography/child sexual exploitation.

                  Chapter 3--Miscellaneous Provisions

Sec. 331. Additional Customs Service officers for United States-Canada 
              Border.
Sec. 332. Study and report relating to personnel practices of the 
              Customs Service.
Sec. 333. Study and report relating to accounting and auditing 
              procedures of the Customs Service.
Sec. 334. Establishment and implementation of cost accounting system; 
              reports.
Sec. 335. Study and report relating to timeliness of prospective 
              rulings.
Sec. 336. Study and report relating to customs user fees.
Sec. 337. Fees for customs inspections at express courier facilities.
Sec. 338. National Customs Automation Program.
Sec. 339. Authorization of appropriations for customs staffing.

                  Chapter 4--Antiterrorism Provisions

Sec. 341. Immunity for United States officials that act in good faith.
Sec. 342. Emergency adjustments to offices, ports of entry, or staffing 
              of the customs service.
Sec. 343. Mandatory advanced electronic information for cargo and other 
              improved Customs reporting procedures.
Sec. 343A. Secure systems of transportation.
Sec. 344. Border search authority for certain contraband in outbound 
              mail.
Sec. 345. Authorization of appropriations for reestablishment of 
              customs operations in New York City.

              Chapter 5--Textile Transshipment Provisions

Sec. 351. GAO audit of textile transshipment monitoring by Customs 
              Service.
Sec. 352. Authorization of appropriations for textile transshipment 
              enforcement operations.
Sec. 353. Implementation of the African Growth and Opportunity Act.

      Subtitle B--Office of the United States Trade Representative

Sec. 361. Authorization of appropriations.

        Subtitle C--United States International Trade Commission

Sec. 371. Authorization of appropriations.

                   Subtitle D--Other trade provisions

Sec. 381. Increase in aggregate value of articles exempt from duty 
              acquired abroad by United States residents.
Sec. 382. Regulatory audit procedures.
Sec. 383. Payment of duties and fees.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY

Sec. 2101. Short title and findings.
Sec. 2102. Trade negotiating objectives.
Sec. 2103. Trade agreements authority.
Sec. 2104. Consultations and assessment.
Sec. 2105. Implementation of trade agreements.
Sec. 2106. Treatment of certain trade agreements for which negotiations 
              have already begun.
Sec. 2107. Congressional Oversight Group.
Sec. 2108. Additional implementation and enforcement requirements.
Sec. 2109. Committee staff.
Sec. 2110. Conforming amendments.
Sec. 2111. Report on impact of trade promotion authority.
Sec. 2112. Interests of small business.
Sec. 2113. Definitions.

                DIVISION C--ANDEAN TRADE PREFERENCE ACT

                  TITLE XXXI--ANDEAN TRADE PREFERENCE

Sec. 3101. Short title.
Sec. 3102. Findings.
Sec. 3103. Articles eligible for preferential treatment.
Sec. 3104. Termination.
Sec. 3105. Report on Free Trade Agreement with Israel.
Sec. 3106. Modification of duty treatment for tuna.
Sec. 3107. Trade benefits under the caribbean basin economic recovery 
              act.
Sec. 3108. Trade benefits under the African Growth and Opportunity Act.

     DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT

       TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

Sec. 4101. Extension of generalized system of preferences.
Sec. 4102. Amendments to generalized system of preferences.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                 TITLE L--MISCELLANEOUS TRADE BENEFITS

                      Subtitle A--Wool Provisions

Sec. 5101. Wool provisions.
Sec. 5102. Duty suspension on wool.

                      Subtitle B--Other Provisions

Sec. 5201. Fund for WTO dispute settlements.
Sec. 5202. Certain steam or other vapor generating boilers used in 
              nuclear facilities.
Sec. 5203. Sugar tariff-rate quota circumvention.

                DIVISION A--TRADE ADJUSTMENT ASSISTANCE

     SEC. 101. SHORT TITLE.

       This division may be cited as the ``Trade Adjustment 
     Assistance Reform Act of 2002''.

[[Page 15038]]

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

          Subtitle A--Trade Adjustment Assistance For Workers

     SEC. 111. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE 
                   PROGRAM.

       (a) Assistance for Workers.--Section 245 of the Trade Act 
     of 1974 (19 U.S.C. 2317) is amended by striking ``October 1, 
     1998, and ending September 30, 2001,'' each place it appears 
     and inserting ``October 1, 2001, and ending September 30, 
     2007,''.
       (b) Assistance for Firms.--Section 256(b) of the Trade Act 
     of 1974 (19 U.S.C. 2346(b)) is amended by striking ``October 
     1, 1998, and ending September 30, 2001'' and inserting 
     ``October 1, 2001, and ending September 30, 2007,''.
       (c) Termination.--Section 285 of the Trade Act of 1974 is 
     amended to read as follows:

     ``SEC. 285. TERMINATION.

       ``(a) Assistance for Workers.--
       ``(1) In general.--Except as provided in paragraph (2), 
     trade adjustment assistance, vouchers, allowances, and other 
     payments or benefits may not be provided under chapter 2 
     after September 30, 2007.
       ``(2) Exception.--Notwithstanding paragraph (1), a worker 
     shall continue to receive trade adjustment assistance 
     benefits and other benefits under chapter 2 for any week for 
     which the worker meets the eligibility requirements of that 
     chapter, if on or before September 30, 2007, the worker is--
       ``(A) certified as eligible for trade adjustment assistance 
     benefits under chapter 2 of this title; and
       ``(B) otherwise eligible to receive trade adjustment 
     assistance benefits under chapter 2.
       ``(b) Other Assistance.--
       ``(1) Assistance for firms.--Technical assistance may not 
     be provided under chapter 3 after September 30, 2007.
       ``(2) Assistance for farmers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     adjustment assistance, vouchers, allowances, and other 
     payments or benefits may not be provided under chapter 6 
     after September 30, 2007.
       ``(B) Exception.--Notwithstanding subparagraph (A), an 
     agricultural commodity producer (as defined in section 
     291(2)) shall continue to receive adjustment assistance 
     benefits and other benefits under chapter 6, for any week for 
     which the agricultural commodity producer meets the 
     eligibility requirements of chapter 6, if on or before 
     September 30, 2007, the agricultural commodity producer is--
       ``(i) certified as eligible for adjustment assistance 
     benefits under chapter 6; and
       ``(ii) is otherwise eligible to receive adjustment 
     assistance benefits under such chapter 6.''.

     SEC. 112. FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE 
                   ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY 
                   SECRETARY OF LABOR.

       (a) Filing of Petitions and Provision of Rapid Response 
     Assistance.--Section 221(a) of the Trade Act of 1974 (19 
     U.S.C. 2271(a)) is amended to read as follows:
       ``(a)(1) A petition for certification of eligibility to 
     apply for adjustment assistance for a group of workers under 
     this chapter may be filed simultaneously with the Secretary 
     and with the Governor of the State in which such workers' 
     firm or subdivision is located by any of the following:
       ``(A) The group of workers (including workers in an 
     agricultural firm or subdivision of any agricultural firm).
       ``(B) The certified or recognized union or other duly 
     authorized representative of such workers.
       ``(C) Employers of such workers, one-stop operators or one-
     stop partners (as defined in section 101 of the Workforce 
     Investment Act of 1998 (29 U.S.C. 2801)), including State 
     employment security agencies, or the State dislocated worker 
     unit established under title I of such Act, on behalf of such 
     workers.
       ``(2) Upon receipt of a petition filed under paragraph (1), 
     the Governor shall--
       ``(A) ensure that rapid response assistance, and 
     appropriate core and intensive services (as described in 
     section 134 of the Workforce Investment Act of 1998 (29 
     U.S.C. 2864)) authorized under other Federal laws are made 
     available to the workers covered by the petition to the 
     extent authorized under such laws; and
       ``(B) assist the Secretary in the review of the petition by 
     verifying such information and providing such other 
     assistance as the Secretary may request.
       ``(3) Upon receipt of the petition, the Secretary shall 
     promptly publish notice in the Federal Register that the 
     Secretary has received the petition and initiated an 
     investigation.''.
       (b) Expedited Review of Petitions by Secretary of Labor.--
     Section 223(a) of such Act (19 U.S.C. 2273(a)) is amended in 
     the first sentence by striking ``60 days'' and inserting ``40 
     days''.

     SEC. 113. GROUP ELIGIBILITY REQUIREMENTS.

       (a) Trade Adjustment Assistance Program.--
       (1) In general.--Section 222 of the Trade Act of 1974 (19 
     U.S.C. 2272) is amended--
       (A) by amending subsection (a) to read as follows:
       ``(a) In General.--A group of workers (including workers in 
     any agricultural firm or subdivision of an agricultural firm) 
     shall be certified by the Secretary as eligible to apply for 
     adjustment assistance under this chapter pursuant to a 
     petition filed under section 221 if the Secretary determines 
     that--
       ``(1) a significant number or proportion of the workers in 
     such workers' firm, or an appropriate subdivision of the 
     firm, have become totally or partially separated, or are 
     threatened to become totally or partially separated; and
       ``(2)(A)(i) the sales or production, or both, of such firm 
     or subdivision have decreased absolutely;
       ``(ii) imports of articles like or directly competitive 
     with articles produced by such firm or subdivision have 
     increased; and
       ``(iii) the increase in imports described in clause (ii) 
     contributed importantly to such workers' separation or threat 
     of separation and to the decline in the sales or production 
     of such firm or subdivision; or
       ``(B)(i) there has been a shift in production by such 
     workers' firm or subdivision to a foreign country of articles 
     like or directly competitive with articles which are produced 
     by such firm or subdivision; and
       ``(ii)(I) the country to which the workers' firm has 
     shifted production of the articles is a party to a free trade 
     agreement with the United States;
       ``(II) the country to which the workers' firm has shifted 
     production of the articles is a beneficiary country under the 
     Andean Trade Preference Act, African Growth and Opportunity 
     Act, or the Caribbean Basin Economic Recovery Act; or
       ``(III) there has been or is likely to be an increase in 
     imports of articles that are like or directly competitive 
     with articles which are or were produced by such firm or 
     subdivision.'';
       (B) by redesignating subsection (b) as subsection (c); and
       (C) by inserting after subsection (a) the following:
       ``(b) Adversely Affected Secondary Workers.--A group of 
     workers (including workers in any agricultural firm or 
     subdivision of an agricultural firm) shall be certified by 
     the Secretary as eligible to apply for trade adjustment 
     assistance benefits under this chapter if the Secretary 
     determines that--
       ``(1) a significant number or proportion of the workers in 
     the workers' firm or an appropriate subdivision of the firm 
     have become totally or partially separated, or are threatened 
     to become totally or partially separated;
       ``(2) the workers' firm (or subdivision) is a supplier or 
     downstream producer to a firm (or subdivision) that employed 
     a group of workers who received a certification of 
     eligibility under subsection (a), and such supply or 
     production is related to the article that was the basis for 
     such certification (as defined in subsection (c) (3) and 
     (4)); and
       ``(3) either--
       ``(A) the workers' firm is a supplier and the component 
     parts it supplied to the firm (or subdivision) described in 
     paragraph (2) accounted for at least 20 percent of the 
     production or sales of the workers' firm; or
       ``(B) a loss of business by the workers' firm with the firm 
     (or subdivision) described in paragraph (2) contributed 
     importantly to the workers' separation or threat of 
     separation determined under paragraph (1).''.
       (b) Definitions.--Section 222(c) of such Act, as 
     redesignated by paragraph (1)(A), is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``subsection (a)(3)'' and inserting ``this section''; and
       (2) by adding at the end the following:
       ``(3) Downstream producer.--The term `downstream producer' 
     means a firm that performs additional, value-added production 
     processes for a firm or subdivision, including a firm that 
     performs final assembly or finishing, directly for another 
     firm (or subdivision), for articles that were the basis for a 
     certification of eligibility under subsection (a) of a group 
     of workers employed by such other firm, if the certification 
     of eligibility under subsection (a) is based on an increase 
     in imports from, or a shift in production to, Canada or 
     Mexico.
       ``(4) Supplier.--The term `supplier' means a firm that 
     produces and supplies directly to another firm (or 
     subdivision) component parts for articles that were the basis 
     for a certification of eligibility under subsection (a) of a 
     group of workers employed by such other firm.''.

     SEC. 114. QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT 
                   ALLOWANCES.

       (a) Clarification of Certain Reductions.--Section 
     231(a)(3)(B) of the Trade Act of 1974 (19 U.S.C. 
     2291(a)(3)(B)) is amended by inserting after ``any 
     unemployment insurance'' the following: ``, except additional 
     compensation that is funded by a State and is not reimbursed 
     from any Federal funds,''.
       (b) Enrollment in Training Requirement.--Section 
     231(a)(5)(A) of such Act (19 U.S.C. 2291(a)(5)(A)) is 
     amended--
       (1) by inserting ``(i)'' after ``(A)'';
       (2) by adding ``and'' after the comma at the end; and
       (3) by adding at the end the following:
       ``(ii) the enrollment required under clause (i) occurs no 
     later than the latest of--
       ``(I) the last day of the 16th week after the worker's most 
     recent total separation from adversely affected employment 
     which meets the requirements of paragraphs (1) and (2),
       ``(II) the last day of the 8th week after the week in which 
     the Secretary issues a certification covering the worker,
       ``(III) 45 days after the later of the dates specified in 
     subclause (I) or (II), if the Secretary determines there are 
     extenuating circumstances that justify an extension in the 
     enrollment period, or
       ``(IV) the last day of a period determined by the Secretary 
     to be approved for enrollment

[[Page 15039]]

     after the termination of a waiver issued pursuant to 
     subsection (c),''.

     SEC. 115. WAIVERS OF TRAINING REQUIREMENTS.

       (a) In General.--Section 231(c) of the Trade Act of 1974 
     (19 U.S.C. 2291(c)) is amended to read as follows:
       ``(c) Waivers of Training Requirements.--
       ``(1) Issuance of waivers.--The Secretary may issue a 
     written statement to an adversely affected worker waiving the 
     requirement to be enrolled in training described in 
     subsection (a)(5)(A) if the Secretary determines that it is 
     not feasible or appropriate for the worker, because of 1 or 
     more of the following reasons:
       ``(A) Recall.--The worker has been notified that the worker 
     will be recalled by the firm from which the separation 
     occurred.
       ``(B) Marketable skills.--The worker possesses marketable 
     skills for suitable employment (as determined pursuant to an 
     assessment of the worker, which may include the profiling 
     system under section 303(j) of the Social Security Act (42 
     U.S.C. 503(j)), carried out in accordance with guidelines 
     issued by the Secretary) and there is a reasonable 
     expectation of employment at equivalent wages in the 
     foreseeable future.
       ``(C) Retirement.--The worker is within 2 years of meeting 
     all requirements for entitlement to either--
       ``(i) old-age insurance benefits under title II of the 
     Social Security Act (42 U.S.C. 401 et seq.) (except for 
     application therefor); or
       ``(ii) a private pension sponsored by an employer or labor 
     organization.
       ``(D) Health.--The worker is unable to participate in 
     training due to the health of the worker, except that a 
     waiver under this subparagraph shall not be construed to 
     exempt a worker from requirements relating to the 
     availability for work, active search for work, or refusal to 
     accept work under Federal or State unemployment compensation 
     laws.
       ``(E) Enrollment unavailable.--The first available 
     enrollment date for the approved training of the worker is 
     within 60 days after the date of the determination made under 
     this paragraph, or, if later, there are extenuating 
     circumstances for the delay in enrollment, as determined 
     pursuant to guidelines issued by the Secretary.
       ``(F) Training not available.--Training approved by the 
     Secretary is not reasonably available to the worker from 
     either governmental agencies or private sources (which may 
     include area vocational education schools, as defined in 
     section 3 of the Carl D. Perkins Vocational and Technical 
     Education Act of 1998 (20 U.S.C. 2302), and employers), no 
     training that is suitable for the worker is available at a 
     reasonable cost, or no training funds are available.
       ``(2) Duration of waivers.--
       ``(A) In general.--A waiver issued under paragraph (1) 
     shall be effective for not more than 6 months after the date 
     on which the waiver is issued, unless the Secretary 
     determines otherwise.
       ``(B) Revocation.--The Secretary shall revoke a waiver 
     issued under paragraph (1) if the Secretary determines that 
     the basis of a waiver is no longer applicable to the worker 
     and shall notify the worker in writing of the revocation.
       ``(3) Agreements under section 239.--
       ``(A) Issuance by cooperating states.--Pursuant to an 
     agreement under section 239, the Secretary may authorize a 
     cooperating State to issue waivers as described in paragraph 
     (1).
       ``(B) Submission of statements.--An agreement under section 
     239 shall include a requirement that the cooperating State 
     submit to the Secretary the written statements provided under 
     paragraph (1) and a statement of the reasons for the 
     waiver.''.
       (b) Conforming Amendment.--Section 231(a)(5)(C) of such Act 
     (19 U.S.C. 2291(a)(5)(C)) is amended by striking 
     ``certified''.

     SEC. 116. AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT 
                   ALLOWANCES.

       (a) Increase in Maximum Number of Weeks.--Section 233(a) of 
     the Trade Act of 1974 (19 U.S.C. 2293(a)) is amended--
       (1) in paragraph (2), by inserting after ``104-week 
     period'' the following: ``(or, in the case of an adversely 
     affected worker who requires a program of remedial education 
     (as described in section 236(a)(5)(D)) in order to complete 
     training approved for the worker under section 236, the 130-
     week period)''; and
       (2) in paragraph (3), by striking ``26'' each place it 
     appears and inserting ``52''.
       (b) Special Rule Relating to Break in Training.--Section 
     233(f) of the Trade Act of 1974 (19 U.S.C. 2293(f)) is 
     amended in the matter preceding paragraph (1) by striking 
     ``14 days'' and inserting ``30 days''.
       (c) Additional Weeks for Individuals in Need of Remedial 
     Education.--Section 233 of the Trade Act of 1974 (19 U.S.C. 
     2293) is amended by adding at the end the following:
       ``(g) Notwithstanding any other provision of this section, 
     in order to assist an adversely affected worker to complete 
     training approved for the worker under section 236 which 
     includes a program of remedial education (as described in 
     section 236(a)(5)(D)), and in accordance with regulations 
     prescribed by the Secretary, payments may be made as trade 
     readjustment allowances for up to 26 additional weeks in the 
     26-week period that follows the last week of entitlement to 
     trade readjustment allowances otherwise payable under this 
     chapter.''.

     SEC. 117. ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING.

       Section 236(a)(2)(A) of the Trade Act of 1974 (19 U.S.C. 
     2296(a)(2)(A)) is amended by striking ``$80,000,000'' and all 
     that follows through ``$70,000,000'' and inserting 
     ``$220,000,000''.

     SEC. 118. PROVISION OF EMPLOYER-BASED TRAINING.

       (a) In General.--Section 236(a)(5)(A) of the Trade Act of 
     1974 (19 U.S.C. 2296(a)(5)(A)) is amended to read as follows:
       ``(A) employer-based training, including--
       ``(i) on-the-job training, and
       ``(ii) customized training,''.
       (b) Reimbursement.--Section 236(c)(8) of such Act (19 
     U.S.C. 2296(c)(8)) is amended to read as follows:
       ``(8) the employer is provided reimbursement of not more 
     than 50 percent of the wage rate of the participant, for the 
     cost of providing the training and additional supervision 
     related to the training,''.
       (c) Definition.--Section 236 of such Act (19 U.S.C. 2296) 
     is amended by adding at the end the following new subsection:
       ``(f) For purposes of this section, the term `customized 
     training' means training that is--
       ``(1) designed to meet the special requirements of an 
     employer or group of employers;
       ``(2) conducted with a commitment by the employer or group 
     of employers to employ an individual upon successful 
     completion of the training; and
       ``(3) for which the employer pays for a significant portion 
     (but in no case less than 50 percent) of the cost of such 
     training, as determined by the Secretary.''.

     SEC. 119. COORDINATION WITH TITLE I OF THE WORKFORCE 
                   INVESTMENT ACT OF 1998.

       Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is 
     amended by inserting before the period at the end of the 
     first sentence the following: ``, including the services 
     provided through one-stop delivery systems described in 
     section 134(c) of the Workforce Investment Act of 1998 (29 
     U.S.C. 2864(c))''.

     SEC. 120. EXPENDITURE PERIOD.

       Section 245 of the Trade Act of 1974 (19 U.S.C. 2317), as 
     amended by section 111(a) of this Act, is further amended by 
     amending subsection (b) to read as follows:
       ``(b) Period of Expenditure.--Funds obligated for any 
     fiscal year to carry out activities under sections 235 
     through 238 may be expended by each State receiving such 
     funds during that fiscal year and the succeeding two fiscal 
     years.''.

     SEC. 121. JOB SEARCH ALLOWANCES.

       Section 237 of the Trade Act of 1974 (19 U.S.C. 2297) is 
     amended to read as follows:

     ``SEC. 237. JOB SEARCH ALLOWANCES.

       ``(a) Job Search Allowance Authorized.--
       ``(1) In general.--An adversely affected worker covered by 
     a certification issued under subchapter A of this chapter may 
     file an application with the Secretary for payment of a job 
     search allowance.
       ``(2) Approval of applications.--The Secretary may grant an 
     allowance pursuant to an application filed under paragraph 
     (1) when all of the following apply:
       ``(A) Assist adversely affected worker.--The allowance is 
     paid to assist an adversely affected worker who has been 
     totally separated in securing a job within the United States.
       ``(B) Local employment not available.--The Secretary 
     determines that the worker cannot reasonably be expected to 
     secure suitable employment in the commuting area in which the 
     worker resides.
       ``(C) Application.--The worker has filed an application for 
     the allowance with the Secretary before--
       ``(i) the later of--

       ``(I) the 365th day after the date of the certification 
     under which the worker is certified as eligible; or
       ``(II) the 365th day after the date of the worker's last 
     total separation; or

       ``(ii) the date that is the 182d day after the date on 
     which the worker concluded training, unless the worker 
     received a waiver under section 231(c).
       ``(b) Amount of Allowance.--
       ``(1) In general.--An allowance granted under subsection 
     (a) shall provide reimbursement to the worker of 90 percent 
     of the cost of necessary job search expenses as prescribed by 
     the Secretary in regulations.
       ``(2) Maximum allowance.--Reimbursement under this 
     subsection may not exceed $1,250 for any worker.
       ``(3) Allowance for subsistence and transportation.--
     Reimbursement under this subsection may not be made for 
     subsistence and transportation expenses at levels exceeding 
     those allowable under section 236(b) (1) and (2).
       ``(c) Exception.--Notwithstanding subsection (b), the 
     Secretary shall reimburse any adversely affected worker for 
     necessary expenses incurred by the worker in participating in 
     a job search program approved by the Secretary.''.

     SEC. 122. RELOCATION ALLOWANCES.

       Section 238 of the Trade Act of 1974 (19 U.S.C. 2298) is 
     amended to read as follows:

     ``SEC. 238. RELOCATION ALLOWANCES.

       ``(a) Relocation Allowance Authorized.--
       ``(1) In general.--Any adversely affected worker covered by 
     a certification issued under subchapter A of this chapter may 
     file an application for a relocation allowance with the 
     Secretary, and the Secretary may grant the relocation 
     allowance, subject to the terms and conditions of this 
     section.
       ``(2) Conditions for granting allowance.--A relocation 
     allowance may be granted if all of the following terms and 
     conditions are met:
       ``(A) Assist an adversely affected worker.--The relocation 
     allowance will assist an adversely affected worker in 
     relocating within the United States.
       ``(B) Local employment not available.--The Secretary 
     determines that the worker cannot reasonably be expected to 
     secure suitable

[[Page 15040]]

     employment in the commuting area in which the worker resides.
       ``(C) Total separation.--The worker is totally separated 
     from employment at the time relocation commences.
       ``(D) Suitable employment obtained.--The worker--
       ``(i) has obtained suitable employment affording a 
     reasonable expectation of long-term duration in the area in 
     which the worker wishes to relocate; or
       ``(ii) has obtained a bona fide offer of such employment.
       ``(E) Application.--The worker filed an application with 
     the Secretary before--
       ``(i) the later of--

       ``(I) the 425th day after the date of the certification 
     under subchapter A of this chapter; or
       ``(II) the 425th day after the date of the worker's last 
     total separation; or

       ``(ii) the date that is the 182d day after the date on 
     which the worker concluded training, unless the worker 
     received a waiver under section 231(c).
       ``(b) Amount of Allowance.--The relocation allowance 
     granted to a worker under subsection (a) includes--
       ``(1) 90 percent of the reasonable and necessary expenses 
     (including, but not limited to, subsistence and 
     transportation expenses at levels not exceeding those 
     allowable under section 236(b) (1) and (2) specified in 
     regulations prescribed by the Secretary, incurred in 
     transporting the worker, the worker's family, and household 
     effects; and
       ``(2) a lump sum equivalent to 3 times the worker's average 
     weekly wage, up to a maximum payment of $1,250.
       ``(c) Limitations.--A relocation allowance may not be 
     granted to a worker unless--
       ``(1) the relocation occurs within 182 days after the 
     filing of the application for relocation assistance; or
       ``(2) the relocation occurs within 182 days after the 
     conclusion of training, if the worker entered a training 
     program approved by the Secretary under section 236(b) (1) 
     and (2).''.

     SEC. 123. REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE 
                   PROGRAM.

       (a) In General.--Subchapter D of chapter 2 of title II of 
     such Act (19 U.S.C. 2331) is repealed.
       (b) Conforming Amendments.--
       (1) Section 225(b) (1) and (2) of the Trade Act of 1974 (19 
     U.S.C. 2275(b) (1) and (2)) is amended by striking ``or 
     subchapter D'' each place it appears.
       (2) Section 249A of such Act (19 U.S.C. 2322) is repealed.
       (3) The table of contents of such Act is amended--
       (A) by striking the item relating to section 249A; and
       (B) by striking the items relating to subchapter D of 
     chapter 2 of title II.
       (4) Section 284(a) of such Act is amended by striking ``or 
     section 250(c)''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to petitions filed under chapter 2 of 
     title II of the Trade Act of 1974, on or after the date that 
     is 90 days after the date of enactment of this Act.
       (2) Workers certified as eligible before effective date.--
     Notwithstanding subsection (a), a worker receiving benefits 
     under chapter 2 of title II of the Trade Act of 1974 shall 
     continue to receive (or be eligible to receive) benefits and 
     services under chapter 2 of title II of the Trade Act of 
     1974, as in effect on the day before the amendments made by 
     this section take effect under subsection (a), for any week 
     for which the worker meets the eligibility requirements of 
     such chapter 2 as in effect on such date.

     SEC. 124. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE 
                   ADJUSTMENT ASSISTANCE FOR OLDER WORKERS.

       (a) Demonstration Program.--Chapter 2 of title II of the 
     Trade Act of 1974 (19 U.S.C. 2271 et seq.) is amended by 
     striking section 246 and inserting the following new section:

     ``SEC. 246. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE 
                   ADJUSTMENT ASSISTANCE FOR OLDER WORKERS.

       ``(a) In General.--
       ``(1) Establishment.--Not later than 1 year after the date 
     of enactment of the Trade Adjustment Assistance Reform Act of 
     2002, the Secretary shall establish an alternative trade 
     adjustment assistance program for older workers that provides 
     the benefits described in paragraph (2).
       ``(2) Benefits.--
       ``(A) Payments.--A State shall use the funds provided to 
     the State under section 241 to pay, for a period not to 
     exceed 2 years, to a worker described in paragraph (3)(B), 50 
     percent of the difference between--
       ``(i) the wages received by the worker from reemployment; 
     and
       ``(ii) the wages received by the worker at the time of 
     separation.
       ``(B) Health insurance.--A worker described in paragraph 
     (3)(B) participating in the program established under 
     paragraph (1) is eligible to receive, for a period not to 
     exceed 2 years, a credit for health insurance costs under 
     section 35 of the Internal Revenue Code of 1986, as added by 
     section 201 of the Trade Act of 2002.
       ``(3) Eligibility.--
       ``(A) Firm eligibility.--
       ``(i) In general.--The Secretary shall provide the 
     opportunity for a group of workers on whose behalf a petition 
     is filed under section 221 to request that the group of 
     workers be certified for the alternative trade adjustment 
     assistance program under this section at the time the 
     petition is filed.
       ``(ii) Criteria.--In determining whether to certify a group 
     of workers as eligible for the alternative trade adjustment 
     assistance program, the Secretary shall consider the 
     following criteria:

       ``(I) Whether a significant number of workers in the 
     workers' firm are 50 years of age or older.
       ``(II) Whether the workers in the workers' firm possess 
     skills that are not easily transferable.
       ``(III) The competitive conditions within the workers' 
     industry.

       ``(iii) Deadline.--The Secretary shall determine whether 
     the workers in the group are eligible for the alternative 
     trade adjustment assistance program by the date specified in 
     section 223(a).
       ``(B) Individual Eligibility.--A worker in the group that 
     the Secretary has certified as eligible for the alternative 
     trade adjustment assistance program may elect to receive 
     benefits under the alternative trade adjustment assistance 
     program if the worker--
       ``(i) is covered by a certification under subchapter A of 
     this chapter;
       ``(ii) obtains reemployment not more than 26 weeks after 
     the date of separation from the adversely affected 
     employment;
       ``(iii) is at least 50 years of age; and
       ``(iv) earns not more than $50,000 a year in wages from 
     reemployment;
       ``(v) is employed on a full-time basis as defined by State 
     law in the State in which the worker is employed; and
       ``(vi) does not return to the employment from which the 
     worker was separated.
       ``(4) Total amount of payments.--The payments described in 
     paragraph (2)(A) made to a worker may not exceed $10,000 per 
     worker during the 2-year eligibility period.
       ``(5) Limitation on other benefits.--Except as provided in 
     section 238(a)(2)(B), if a worker is receiving payments 
     pursuant to the program established under paragraph (1), the 
     worker shall not be eligible to receive any other benefits 
     under this title.
       ``(b) Termination.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     payments may be made by a State under the program established 
     under subsection (a)(1) after the date that is 5 years after 
     the date on which such program is implemented by the State.
       ``(2) Exception.--Notwithstanding paragraph (1), a worker 
     receiving payments under the program established under 
     subsection (a)(1) on the termination date described in 
     paragraph (1) shall continue to receive such payments 
     provided that the worker meets the criteria described in 
     subsection (a)(3)(B).''.
       (b) Table of Contents.--The Trade Act of 1974 (U.S.C. et 
     seq.) is amended in the table of contents by inserting after 
     the item relating to section 245 the following new item:

``Sec. 246.  Demonstration project for alternative trade adjustment 
              assistance for older workers.''.

     SEC. 125. DECLARATION OF POLICY; SENSE OF CONGRESS.

       (a) Declaration of Policy.--Congress reiterates that, under 
     the trade adjustment assistance program under chapter 2 of 
     title II of the Trade Act of 1974, workers are eligible for 
     transportation, childcare, and healthcare assistance, as well 
     as other related assistance under programs administered by 
     the Department of Labor.
       (b) Sense of Congress.--It is the sense of Congress that 
     the Secretary of Labor, working independently and in 
     conjunction with the States, should, in accordance with 
     section 225 of the Trade Act of 1974, provide more specific 
     information about benefit allowances, training, and other 
     employment services, and the petition and application 
     procedures (including appropriate filing dates) for such 
     allowances, training, and services, under the trade 
     adjustment assistance program under chapter 2 of title II of 
     the Trade Act of 1974 to workers who are applying for, or are 
     certified to receive, assistance under that program, 
     including information on all other Federal assistance 
     available to such workers.

           Subtitle B--Trade Adjustment Assistance For Firms

     SEC. 131. REAUTHORIZATION OF PROGRAM.

       Section 256(b) of chapter 3 of title II of the Trade Act of 
     1974 (19 U.S.C. 2346(b)) is amended to read as follows:
       ``(b) There are authorized to be appropriated to the 
     Secretary $16,000,000 for each of fiscal years 2003 through 
     2007, to carry out the Secretary's functions under this 
     chapter in connection with furnishing adjustment assistance 
     to firms. Amounts appropriated under this subsection shall 
     remain available until expended.''.

          Subtitle C--Trade Adjustment Assistance For Farmers

     SEC. 141. TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.

       (a) In General.--Title II of the Trade Act of 1974 (19 
     U.S.C. 2251 et seq.) is amended by adding at the end the 
     following new chapter:

             ``CHAPTER 6--ADJUSTMENT ASSISTANCE FOR FARMERS

     ``SEC. 291. DEFINITIONS.

       ``In this chapter:
       ``(1) Agricultural commodity.--The term `agricultural 
     commodity' means any agricultural commodity (including 
     livestock) in its raw or natural state.
       ``(2) Agricultural commodity producer.--The term 
     `agricultural commodity producer' has the same meaning as the 
     term `person' as prescribed by regulations promulgated under 
     section 1001(5) of the Food Security Act of 1985 (7 U.S.C. 
     1308(5)).

[[Page 15041]]

       ``(3) Contributed importantly.--
       ``(A) In general.--The term `contributed importantly' means 
     a cause which is important but not necessarily more important 
     than any other cause.
       ``(B) Determination of contributed importantly.--The 
     determination of whether imports of articles like or directly 
     competitive with an agricultural commodity with respect to 
     which a petition under this chapter was filed contributed 
     importantly to a decline in the price of the agricultural 
     commodity shall be made by the Secretary.
       ``(4) Duly authorized representative.--The term `duly 
     authorized representative' means an association of 
     agricultural commodity producers.
       ``(5) National average price.--The term `national average 
     price' means the national average price paid to an 
     agricultural commodity producer for an agricultural commodity 
     in a marketing year as determined by the Secretary.
       ``(6) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.

     ``SEC. 292. PETITIONS; GROUP ELIGIBILITY.

       ``(a) In General.--A petition for a certification of 
     eligibility to apply for adjustment assistance under this 
     chapter may be filed with the Secretary by a group of 
     agricultural commodity producers or by their duly authorized 
     representative. Upon receipt of the petition, the Secretary 
     shall promptly publish notice in the Federal Register that 
     the Secretary has received the petition and initiated an 
     investigation.
       ``(b) Hearings.--If the petitioner, or any other person 
     found by the Secretary to have a substantial interest in the 
     proceedings, submits not later than 10 days after the date of 
     the Secretary's publication under subsection (a) a request 
     for a hearing, the Secretary shall provide for a public 
     hearing and afford such interested person an opportunity to 
     be present, to produce evidence, and to be heard.
       ``(c) Group Eligibility Requirements.--The Secretary shall 
     certify a group of agricultural commodity producers as 
     eligible to apply for adjustment assistance under this 
     chapter if the Secretary determines--
       ``(1) that the national average price for the agricultural 
     commodity, or a class of goods within the agricultural 
     commodity, produced by the group for the most recent 
     marketing year for which the national average price is 
     available is less than 80 percent of the average of the 
     national average price for such agricultural commodity, or 
     such class of goods, for the 5 marketing years preceding the 
     most recent marketing year; and
       ``(2) that increases in imports of articles like or 
     directly competitive with the agricultural commodity, or 
     class of goods within the agricultural commodity, produced by 
     the group contributed importantly to the decline in price 
     described in paragraph (1).
       ``(d) Special Rule for Qualified Subsequent Years.--A group 
     of agricultural commodity producers certified as eligible 
     under section 293 shall be eligible to apply for assistance 
     under this chapter in any qualified year after the year the 
     group is first certified, if the Secretary determines that--
       ``(1) the national average price for the agricultural 
     commodity, or class of goods within the agricultural 
     commodity, produced by the group for the most recent 
     marketing year for which the national average price is 
     available is equal to or less than the price determined under 
     subsection (c)(1); and
       ``(2) the requirements of subsection (c)(2) are met.
       ``(e) Determination of Qualified Year and Commodity.--In 
     this chapter:
       ``(1) Qualified year.--The term `qualified year', with 
     respect to a group of agricultural commodity producers 
     certified as eligible under section 293, means each 
     consecutive year after the year in which the group is 
     certified and in which the Secretary makes the determination 
     under subsection (c) or (d), as the case may be.
       ``(2) Classes of goods within a commodity.--In any case in 
     which there are separate classes of goods within an 
     agricultural commodity, the Secretary shall treat each class 
     as a separate commodity in determining group eligibility, the 
     national average price, and level of imports under this 
     section and section 296.

     ``SEC. 293. DETERMINATIONS BY SECRETARY OF AGRICULTURE.

       ``(a) In General.--As soon as practicable after the date on 
     which a petition is filed under section 292, but in any event 
     not later than 40 days after that date, the Secretary shall 
     determine whether the petitioning group meets the 
     requirements of section 292 (c) or (d), as the case may be, 
     and shall, if the group meets the requirements, issue a 
     certification of eligibility to apply for assistance under 
     this chapter covering agricultural commodity producers in any 
     group that meets the requirements. Each certification shall 
     specify the date on which eligibility under this chapter 
     begins.
       ``(b) Notice.--Upon making a determination on a petition, 
     the Secretary shall promptly publish a summary of the 
     determination in the Federal Register, together with the 
     Secretary's reasons for making the determination.
       ``(c) Termination of Certification.--Whenever the Secretary 
     determines, with respect to any certification of eligibility 
     under this chapter, that the decline in price for the 
     agricultural commodity covered by the certification is no 
     longer attributable to the conditions described in section 
     292, the Secretary shall terminate such certification and 
     promptly cause notice of such termination to be published in 
     the Federal Register, together with the Secretary's reasons 
     for making such determination.

     ``SEC. 294. STUDY BY SECRETARY OF AGRICULTURE WHEN 
                   INTERNATIONAL TRADE COMMISSION BEGINS 
                   INVESTIGATION.

       ``(a) In General.--Whenever the International Trade 
     Commission (in this chapter referred to as the `Commission') 
     begins an investigation under section 202 with respect to an 
     agricultural commodity, the Commission shall immediately 
     notify the Secretary of the investigation. Upon receipt of 
     the notification, the Secretary shall immediately conduct a 
     study of--
       ``(1) the number of agricultural commodity producers 
     producing a like or directly competitive agricultural 
     commodity who have been or are likely to be certified as 
     eligible for adjustment assistance under this chapter, and
       ``(2) the extent to which the adjustment of such producers 
     to the import competition may be facilitated through the use 
     of existing programs.
       ``(b) Report.--Not later than 15 days after the day on 
     which the Commission makes its report under section 202(f), 
     the Secretary shall submit a report to the President setting 
     forth the findings of the study described in subsection (a). 
     Upon making the report to the President, the Secretary shall 
     also promptly make the report public (with the exception of 
     information which the Secretary determines to be 
     confidential) and shall have a summary of the report 
     published in the Federal Register.

     ``SEC. 295. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY 
                   PRODUCERS.

       ``(a) In General.--The Secretary shall provide full 
     information to agricultural commodity producers about the 
     benefit allowances, training, and other employment services 
     available under this title and about the petition and 
     application procedures, and the appropriate filing dates, for 
     such allowances, training, and services. The Secretary shall 
     provide whatever assistance is necessary to enable groups to 
     prepare petitions or applications for program benefits under 
     this title.
       ``(b) Notice of Benefits.--
       ``(1) In general.--The Secretary shall mail written notice 
     of the benefits available under this chapter to each 
     agricultural commodity producer that the Secretary has reason 
     to believe is covered by a certification made under this 
     chapter.
       ``(2) Other notice.--The Secretary shall publish notice of 
     the benefits available under this chapter to agricultural 
     commodity producers that are covered by each certification 
     made under this chapter in newspapers of general circulation 
     in the areas in which such producers reside.
       ``(3) Other federal assistance.--The Secretary shall also 
     provide information concerning procedures for applying for 
     and receiving all other Federal assistance and services 
     available to workers facing economic distress.

     ``SEC. 296. QUALIFYING REQUIREMENTS FOR AGRICULTURAL 
                   COMMODITY PRODUCERS.

       ``(a) In General.--
       ``(1) Requirements.--Payment of a trade adjustment 
     allowance shall be made to an adversely affected agricultural 
     commodity producer covered by a certification under this 
     chapter who files an application for such allowance within 90 
     days after the date on which the Secretary makes a 
     determination and issues a certification of eligibility under 
     section 293, if the following conditions are met:
       ``(A) The producer submits to the Secretary sufficient 
     information to establish the amount of agricultural commodity 
     covered by the application filed under subsection (a) that 
     was produced by the producer in the most recent year.
       ``(B) The producer certifies that the producer has not 
     received cash benefits under any provision of this title 
     other than this chapter.
       ``(C) The producer's net farm income (as determined by the 
     Secretary) for the most recent year is less than the 
     producer's net farm income for the latest year in which no 
     adjustment assistance was received by the producer under this 
     chapter.
       ``(D) The producer certifies that the producer has met with 
     an Extension Service employee or agent to obtain, at no cost 
     to the producer, information and technical assistance that 
     will assist the producer in adjusting to import competition 
     with respect to the adversely affected agricultural 
     commodity, including--
       ``(i) information regarding the feasibility and 
     desirability of substituting 1 or more alternative 
     commodities for the adversely affected agricultural 
     commodity; and
       ``(ii) technical assistance that will improve the 
     competitiveness of the production and marketing of the 
     adversely affected agricultural commodity by the producer, 
     including yield and marketing improvements.
       ``(2) Limitations.--
       ``(A) Adjusted gross income.--
       ``(i) In general.--Notwithstanding any other provision of 
     this chapter, an agricultural commodity producer shall not be 
     eligible for assistance under this chapter in any year in 
     which the average adjusted gross income of the producer 
     exceeds the level set forth in section 1001D of the Food 
     Security Act of 1985.
       ``(ii) Certification.--To comply with the limitation under 
     subparagraph (A), an individual or entity shall provide to 
     the Secretary--

       ``(I) a certification by a certified public accountant or 
     another third party that is acceptable to the Secretary that 
     the average adjusted gross income of the producer does not 
     exceed the level set forth in section 1001D of the Food 
     Security Act of 1985; or
       ``(II) information and documentation regarding the adjusted 
     gross income of the producer

[[Page 15042]]

     through other procedures established by the Secretary.

       ``(B) Counter-cyclical payments.--The total amount of 
     payments made to an agricultural producer under this chapter 
     during any crop year may not exceed the limitation on 
     counter-cyclical payments set forth in section 1001(c) of the 
     Food Security Act of 1985.
       ``(C) Definitions.--In this subsection:
       ``(i) Adjusted gross income.--The term `adjusted gross 
     income' means adjusted gross income of an agricultural 
     commodity producer--

       ``(I) as defined in section 62 of the Internal Revenue Code 
     of 1986 and implemented in accordance with procedures 
     established by the Secretary; and
       ``(II) that is earned directly or indirectly from all 
     agricultural and nonagricultural sources of an individual or 
     entity for a fiscal or corresponding crop year.

       ``(ii) Average adjusted gross income.--

       ``(I) In general.--The term `average adjusted gross income' 
     means the average adjusted gross income of a producer for 
     each of the 3 preceding taxable years.

       ``(II) Effective adjusted gross income.--In the case of a 
     producer that does not have an adjusted gross income for each 
     of the 3 preceding taxable years, the Secretary shall 
     establish rules that provide the producer with an effective 
     adjusted gross income for the applicable year.

       ``(b) Amount of Cash Benefits.--
       ``(1) In general.--Subject to the provisions of section 
     298, an adversely affected agricultural commodity producer 
     described in subsection (a) shall be entitled to adjustment 
     assistance under this chapter in an amount equal to the 
     product of--
       ``(A) one-half of the difference between--
       ``(i) an amount equal to 80 percent of the average of the 
     national average price of the agricultural commodity covered 
     by the application described in subsection (a) for the 5 
     marketing years preceding the most recent marketing year, and
       ``(ii) the national average price of the agricultural 
     commodity for the most recent marketing year, and
       ``(B) the amount of the agricultural commodity produced by 
     the agricultural commodity producer in the most recent 
     marketing year.
       ``(2) Special rule for subsequent qualified years.--The 
     amount of cash benefits for a qualified year shall be 
     determined in the same manner as cash benefits are determined 
     under paragraph (1) except that the average national price of 
     the agricultural commodity shall be determined under 
     paragraph (1)(A)(i) by using the 5-marketing-year period used 
     to determine the amount of cash benefits for the first 
     certification.
       ``(c) Maximum Amount of Cash Assistance.--The maximum 
     amount of cash benefits an agricultural commodity producer 
     may receive in any 12-month period shall not exceed $10,000.
       ``(d) Limitations on Other Assistance.--An agricultural 
     commodity producer entitled to receive a cash benefit under 
     this chapter--
       ``(1) shall not be eligible for any other cash benefit 
     under this title, and
       ``(2) shall be entitled to employment services and training 
     benefits under part II of subchapter B of chapter 2.

     ``SEC. 297. FRAUD AND RECOVERY OF OVERPAYMENTS.

       ``(a) In General.--
       ``(1) Repayment.--If the Secretary, or a court of competent 
     jurisdiction, determines that any person has received any 
     payment under this chapter to which the person was not 
     entitled, such person shall be liable to repay such amount to 
     the Secretary, except that the Secretary may waive such 
     repayment if the Secretary determines, in accordance with 
     guidelines prescribed by the Secretary, that--
       ``(A) the payment was made without fault on the part of 
     such person; and
       ``(B) requiring such repayment would be contrary to equity 
     and good conscience.
       ``(2) Recovery of overpayment.--Unless an overpayment is 
     otherwise recovered, or waived under paragraph (1), the 
     Secretary shall recover the overpayment by deductions from 
     any sums payable to such person under this chapter.
       ``(b) False Statement.--A person shall, in addition to any 
     other penalty provided by law, be ineligible for any further 
     payments under this chapter--
       ``(1) if the Secretary, or a court of competent 
     jurisdiction, determines that the person--
       ``(A) knowingly has made, or caused another to make, a 
     false statement or representation of a material fact; or
       ``(B) knowingly has failed, or caused another to fail, to 
     disclose a material fact; and
       ``(2) as a result of such false statement or 
     representation, or of such nondisclosure, such person has 
     received any payment under this chapter to which the person 
     was not entitled.
       ``(c) Notice and Determination.--Except for overpayments 
     determined by a court of competent jurisdiction, no repayment 
     may be required, and no deduction may be made, under this 
     section until a determination under subsection (a)(1) by the 
     Secretary has been made, notice of the determination and an 
     opportunity for a fair hearing thereon has been given to the 
     person concerned, and the determination has become final.
       ``(d) Payment to Treasury.--Any amount recovered under this 
     section shall be returned to the Treasury of the United 
     States.
       ``(e) Penalties.--Whoever makes a false statement of a 
     material fact knowing it to be false, or knowingly fails to 
     disclose a material fact, for the purpose of obtaining or 
     increasing for himself or for any other person any payment 
     authorized to be furnished under this chapter shall be fined 
     not more than $10,000 or imprisoned for not more than 1 year, 
     or both.

     ``SEC. 298. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--There are authorized to be appropriated 
     and there are appropriated to the Department of Agriculture 
     not to exceed $90,000,000 for each of the fiscal years 2003 
     through 2007 to carry out the purposes of this chapter.
       ``(b) Proportionate Reduction.--If in any year the amount 
     appropriated under this chapter is insufficient to meet the 
     requirements for adjustment assistance payable under this 
     chapter, the amount of assistance payable under this chapter 
     shall be reduced proportionately.''.
       (b) Effective Date.--The amendments made by this title 
     shall take effect on the date that is 180 days after the date 
     of enactment of this Act.

     SEC. 142. CONFORMING AMENDMENTS.

       (a) Judicial review.--
       (1) Section 284(a) of the Trade Act of 1974 (19 U.S.C. 
     2395(a)) is amended--
       (A) by inserting ``an agricultural commodity producer (as 
     defined in section 291(2)) aggrieved by a determination of 
     the Secretary of Agriculture under section 293, '' after 
     ``section 251 of this title,''; and
       (B) in the second sentence of subsection (a) and in 
     subsections (b) and (c), by striking ``or the Secretary of 
     Commerce'' each place it appears and inserting ``, the 
     Secretary of Commerce, or the Secretary of Agriculture''.
       (b) Chapters 6.--The table of contents for title II of the 
     Trade Act of 1974, as amended by subparagraph (A), is amended 
     by inserting after the items relating to chapter 5 the 
     following:

             ``Chapter 6--Adjustment Assistance for Farmers

``Sec. 291. Definitions.
``Sec. 292. Petitions; group eligibility.
``Sec. 293. Determinations by Secretary of Agriculture.
``Sec. 294. Study by Secretary of Agriculture when International Trade 
              Commission begins investigation.
``Sec. 295. Benefit information to agricultural commodity producers.
``Sec. 296. Qualifying requirements for agricultural commodity 
              producers.
``Sec. 297. Fraud and recovery of overpayments.
``Sec. 298. Authorization of appropriations.''.

     SEC. 143. STUDY ON TAA FOR FISHERMEN.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary of Commerce shall conduct a study and 
     report to Congress regarding whether a trade adjustment 
     assistance program is appropriate and feasible for fishermen. 
     For purposes of the preceding sentence, the term 
     ``fishermen'' means any person who is engaged in commercial 
     fishing or is a United States fish processor.

                       Subtitle D--Effective Date

     SEC. 151. EFFECTIVE DATE.

       (a) In General.--Except as otherwise provided in sections 
     123(c) and 141(b), and subsections (b), (c), and (d) of this 
     section, the amendments made by this division shall apply to 
     petitions for certification filed under chapter 2 or 3 of 
     title II of the Trade Act of 1974 on or after the date that 
     is 90 days after the date of enactment of this Act.
       (b) Workers Certified as Eligible Before Effective Date.--
     Notwithstanding subsection (a), a worker shall continue to 
     receive (or be eligible to receive) trade adjustment 
     assistance and other benefits under chapter 2 of title II of 
     the Trade Act of 1974, as in effect on September 30, 2001, 
     for any week for which the worker meets the eligibility 
     requirements of such chapter 2 as in effect on such date, if 
     on or before such date, the worker--
       (1) was certified as eligible for trade adjustment 
     assistance benefits under such chapter as in effect on such 
     date; and
       (2) would otherwise be eligible to receive trade adjustment 
     assistance benefits under such chapter as in effect on such 
     date.
       (c) Workers Who Became Eligible During Qualified Period.--
       (1) In general.--Notwithstanding subsection (a) or any 
     other provision of law, including section 285 of the Trade 
     Act of 1974, any worker who would have been eligible to 
     receive trade adjustment assistance or other benefits under 
     chapter 2 of title II of the Trade Act of 1974 during the 
     qualified period if such chapter 2 had been in effect during 
     such period, shall be eligible to receive trade adjustment 
     assistance and other benefits under chapter 2 of title II of 
     the Trade Act of 1974, as in effect on September 30, 2001, 
     for any week during the qualified period for which the worker 
     meets the eligibility requirements of such chapter 2 as in 
     effect on September 30, 2001.
       (2) Qualified period.--For purposes of this subsection, the 
     term ``qualified period'' means the period beginning on 
     January 11, 2002, and ending on the date that is 90 days 
     after the date of enactment of this Act.
       (d) Adjustment Assistance for Firms.--
       (1) In general.--Notwithstanding subsection (a) or any 
     other provision of law, including section 285 of the Trade 
     Act of 1974, and except as provided in paragraph (2), any 
     firm that would have been eligible to receive adjustment 
     assistance under chapter 3 of title II of the Trade Act if 
     1974 during the qualified period if such chapter 3 had been 
     in effect during such period, shall be eligible to receive 
     adjustment assistance under chapter 3 of title II of the 
     Trade Act of 1974, as in effect on September 30, 2001, for 
     any week during the qualified period for which the firm meets 
     the eligibility requirements of such chapter 3 as in effect 
     on September 30, 2001.

[[Page 15043]]

       (2) Qualified period.--For purposes of this subsection, the 
     term ``qualified period'' means the period beginning on 
     October 1, 2001, and ending on the date that is 90 days after 
     the date of enactment of this Act.

  TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

     SEC. 201. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS 
                   RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A 
                   BENEFIT FROM THE PENSION BENEFIT GUARANTY 
                   CORPORATION.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 35 as 
     section 36 and inserting after section 34 the following new 
     section:

     ``SEC. 35. HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.

       ``(a) In General.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by 
     subtitle A an amount equal to 65 percent of the amount paid 
     by the taxpayer for coverage of the taxpayer and qualifying 
     family members under qualified health insurance for eligible 
     coverage months beginning in the taxable year.
       ``(b) Eligible Coverage Month.--For purposes of this 
     section--
       ``(1) In general.--The term `eligible coverage month' means 
     any month if--
       ``(A) as of the first day of such month, the taxpayer--
       ``(i) is an eligible individual,
       ``(ii) is covered by qualified health insurance, the 
     premium for which is paid by the taxpayer,
       ``(iii) does not have other specified coverage, and
       ``(iv) is not imprisoned under Federal, State, or local 
     authority, and
       ``(B) such month begins more than 90 days after the date of 
     the enactment of the Trade Act of 2002.
       ``(2) Joint returns.--In the case of a joint return, the 
     requirements of paragraph (1)(A) shall be treated as met with 
     respect to any month if at least 1 spouse satisfies such 
     requirements.
       ``(c) Eligible Individual.--For purposes of this section--
       ``(1) In general.--The term `eligible individual' means--
       ``(A) an eligible TAA recipient,
       ``(B) an eligible alternative TAA recipient, and
       ``(C) an eligible PBGC pension recipient.
       ``(2) Eligible taa recipient.--The term `eligible TAA 
     recipient' means, with respect to any month, any individual 
     who is receiving for any day of such month a trade 
     readjustment allowance under chapter 2 of title II of the 
     Trade Act of 1974 or who would be eligible to receive such 
     allowance if section 231 of such Act were applied without 
     regard to subsection (a)(3)(B) of such section. An individual 
     shall continue to be treated as an eligible TAA recipient 
     during the first month that such individual would otherwise 
     cease to be an eligible TAA recipient by reason of the 
     preceding sentence.
       ``(3) Eligible alternative taa recipient.--The term 
     `eligible alternative TAA recipient' means, with respect to 
     any month, any individual who--
       ``(A) is a worker described in section 246(a)(3)(B) of the 
     Trade Act of 1974 who is participating in the program 
     established under section 246(a)(1) of such Act, and
       ``(B) is receiving a benefit for such month under section 
     246(a)(2) of such Act.

     An individual shall continue to be treated as an eligible 
     alternative TAA recipient during the first month that such 
     individual would otherwise cease to be an eligible 
     alternative TAA recipient by reason of the preceding 
     sentence.
       ``(4) Eligible pbgc pension recipient.--The term `eligible 
     PBGC pension recipient' means, with respect to any month, any 
     individual who--
       ``(A) has attained age 55 as of the first day of such 
     month, and
       ``(B) is receiving a benefit for such month any portion of 
     which is paid by the Pension Benefit Guaranty Corporation 
     under title IV of the Employee Retirement Income Security Act 
     of 1974.
       ``(d) Qualifying Family Member.--For purposes of this 
     section--
       ``(1) In general.--The term `qualifying family member' 
     means--
       ``(A) the taxpayer's spouse, and
       ``(B) any dependent of the taxpayer with respect to whom 
     the taxpayer is entitled to a deduction under section 151(c).

     Such term does not include any individual who has other 
     specified coverage.
       ``(2) Special dependency test in case of divorced parents, 
     etc.--If paragraph (2) or (4) of section 152(e) applies to 
     any child with respect to any calendar year, in the case of 
     any taxable year beginning in such calendar year, such child 
     shall be treated as described in paragraph (1)(B) with 
     respect to the custodial parent (within the meaning of 
     section 152(e)(1)) and not with respect to the noncustodial 
     parent.
       ``(e) Qualified Health Insurance.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified health insurance' 
     means any of the following:
       ``(A) Coverage under a COBRA continuation provision (as 
     defined in section 9832(d)(1)).
       ``(B) State-based continuation coverage provided by the 
     State under a State law that requires such coverage.
       ``(C) Coverage offered through a qualified State high risk 
     pool (as defined in section 2744(c)(2) of the Public Health 
     Service Act).
       ``(D) Coverage under a health insurance program offered for 
     State employees.
       ``(E) Coverage under a State-based health insurance program 
     that is comparable to the health insurance program offered 
     for State employees.
       ``(F) Coverage through an arrangement entered into by a 
     State and--
       ``(i) a group health plan (including such a plan which is a 
     multiemployer plan as defined in section 3(37) of the 
     Employee Retirement Income Security Act of 1974),
       ``(ii) an issuer of health insurance coverage,
       ``(iii) an administrator, or
       ``(iv) an employer.
       ``(G) Coverage offered through a State arrangement with a 
     private sector health care coverage purchasing pool.
       ``(H) Coverage under a State-operated health plan that does 
     not receive any Federal financial participation.
       ``(I) Coverage under a group health plan that is available 
     through the employment of the eligible individual's spouse.
       ``(J) In the case of any eligible individual and such 
     individual's qualifying family members, coverage under 
     individual health insurance if the eligible individual was 
     covered under individual health insurance during the entire 
     30-day period that ends on the date that such individual 
     became separated from the employment which qualified such 
     individual for--
       ``(i) in the case of an eligible TAA recipient, the 
     allowance described in subsection (c)(2),
       ``(ii) in the case of an eligible alternative TAA 
     recipient, the benefit described in subsection (c)(3)(B), or
       ``(iii) in the case of any eligible PBGC pension recipient, 
     the benefit described in subsection (c)(4)(B).

     For purposes of this subparagraph, the term `individual 
     health insurance' means any insurance which constitutes 
     medical care offered to individuals other than in connection 
     with a group health plan and does not include Federal- or 
     State-based health insurance coverage.
       ``(2) Requirements for state-based coverage.--
       ``(A) In general.--The term `qualified health insurance' 
     does not include any coverage described in subparagraphs (B) 
     through (H) of paragraph (1) unless the State involved has 
     elected to have such coverage treated as qualified health 
     insurance under this section and such coverage meets the 
     following requirements:
       ``(i) Guaranteed issue.--Each qualifying individual is 
     guaranteed enrollment if the individual pays the premium for 
     enrollment or provides a qualified health insurance costs 
     credit eligibility certificate described in section 7527 and 
     pays the remainder of such premium.
       ``(ii) No imposition of preexisting condition exclusion.--
     No pre-existing condition limitations are imposed with 
     respect to any qualifying individual.
       ``(iii) Nondiscriminatory premium.--The total premium (as 
     determined without regard to any subsidies) with respect to a 
     qualifying individual may not be greater than the total 
     premium (as so determined) for a similarly situated 
     individual who is not a qualifying individual.
       ``(iv) Same benefits.--Benefits under the coverage are the 
     same as (or substantially similar to) the benefits provided 
     to similarly situated individuals who are not qualifying 
     individuals.
       ``(B) Qualifying individual.--For purposes of this 
     paragraph, the term `qualifying individual' means--
       ``(i) an eligible individual for whom, as of the date on 
     which the individual seeks to enroll in the coverage 
     described in subparagraphs (B) through (H) of paragraph (1), 
     the aggregate of the periods of creditable coverage (as 
     defined in section 9801(c)) is 3 months or longer and who, 
     with respect to any month, meets the requirements of clauses 
     (iii) and (iv) of subsection (b)(1)(A); and
       ``(ii) the qualifying family members of such eligible 
     individual.
       ``(3) Exception.--The term `qualified health insurance' 
     shall not include--
       ``(A) a flexible spending or similar arrangement, and
       ``(B) any insurance if substantially all of its coverage is 
     of excepted benefits described in section 9832(c).
       ``(f) Other Specified Coverage.--For purposes of this 
     section, an individual has other specified coverage for any 
     month if, as of the first day of such month--
       ``(1) Subsidized coverage.--
       ``(A) In general.--Such individual is covered under any 
     insurance which constitutes medical care (except insurance 
     substantially all of the coverage of which is of excepted 
     benefits described in section 9832(c)) under any health plan 
     maintained by any employer (or former employer) of the 
     taxpayer or the taxpayer's spouse and at least 50 percent of 
     the cost of such coverage (determined under section 4980B) is 
     paid or incurred by the employer.
       ``(B) Eligible alternative taa recipients.--In the case of 
     an eligible alternative TAA recipient, such individual is 
     either--
       ``(i) eligible for coverage under any qualified health 
     insurance (other than insurance described in subparagraph 
     (A), (B), or (F) of subsection (e)(1)) under which at least 
     50 percent of the cost of coverage (determined under section 
     4980B(f)(4)) is paid or incurred by an employer (or former 
     employer) of the taxpayer or the taxpayer's spouse, or
       ``(ii) covered under any such qualified health insurance 
     under which any portion of the cost of coverage (as so 
     determined) is paid or incurred by an employer (or former 
     employer) of the taxpayer or the taxpayer's spouse.

[[Page 15044]]

       ``(C) Treatment of cafeteria plans.--For purposes of 
     subparagraphs (A) and (B), the cost of coverage shall be 
     treated as paid or incurred by an employer to the extent the 
     coverage is in lieu of a right to receive cash or other 
     qualified benefits under a cafeteria plan (as defined in 
     section 125(d)).
       ``(2) Coverage under medicare, medicaid, or schip.--Such 
     individual--
       ``(A) is entitled to benefits under part A of title XVIII 
     of the Social Security Act or is enrolled under part B of 
     such title, or
       ``(B) is enrolled in the program under title XIX or XXI of 
     such Act (other than under section 1928 of such Act).
       ``(3) Certain other coverage.--Such individual--
       ``(A) is enrolled in a health benefits plan under chapter 
     89 of title 5, United States Code, or
       ``(B) is entitled to receive benefits under chapter 55 of 
     title 10, United States Code.
       ``(g) Special Rules.--
       ``(1) Coordination with advance payments of credit.--With 
     respect to any taxable year, the amount which would (but for 
     this subsection) be allowed as a credit to the taxpayer under 
     subsection (a) shall be reduced (but not below zero) by the 
     aggregate amount paid on behalf of such taxpayer under 
     section 7527 for months beginning in such taxable year.
       ``(2) Coordination with other deductions.--Amounts taken 
     into account under subsection (a) shall not be taken into 
     account in determining any deduction allowed under section 
     162(l) or 213.
       ``(3) MSA distributions.--Amounts distributed from an 
     Archer MSA (as defined in section 220(d)) shall not be taken 
     into account under subsection (a).
       ``(4) Denial of credit to dependents.--No credit shall be 
     allowed under this section to any individual with respect to 
     whom a deduction under section 151 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(5) Both spouses eligible individuals.--The spouse of the 
     taxpayer shall not be treated as a qualifying family member 
     for purposes of subsection (a), if--
       ``(A) the taxpayer is married at the close of the taxable 
     year,
       ``(B) the taxpayer and the taxpayer's spouse are both 
     eligible individuals during the taxable year, and
       ``(C) the taxpayer files a separate return for the taxable 
     year.
       ``(6) Marital status; certain married individuals living 
     apart.--Rules similar to the rules of paragraphs (3) and (4) 
     of section 21(e) shall apply for purposes of this section.
       ``(7) Insurance which covers other individuals.--For 
     purposes of this section, rules similar to the rules of 
     section 213(d)(6) shall apply with respect to any contract 
     for qualified health insurance under which amounts are 
     payable for coverage of an individual other than the taxpayer 
     and qualifying family members.
       ``(8) Treatment of payments.--For purposes of this 
     section--
       ``(A) Payments by secretary.--Payments made by the 
     Secretary on behalf of any individual under section 7527 
     (relating to advance payment of credit for health insurance 
     costs of eligible individuals) shall be treated as having 
     been made by the taxpayer on the first day of the month for 
     which such payment was made.
       ``(B) Payments by taxpayer.--Payments made by the taxpayer 
     for eligible coverage months shall be treated as having been 
     made by the taxpayer on the first day of the month for which 
     such payment was made.
       ``(9) Regulations.--The Secretary may prescribe such 
     regulations and other guidance as may be necessary or 
     appropriate to carry out this section, section 6050T, and 
     section 7527.''.
       (b) Promotion of State High Risk Pools.--Title XXVII of the 
     Public Health Service Act is amended by inserting after 
     section 2744 the following new section:

     ``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.

       ``(a) Seed Grants to States.--The Secretary shall provide 
     from the funds appropriated under subsection (c)(1) a grant 
     of up to $1,000,000 to each State that has not created a 
     qualified high risk pool as of the date of the enactment of 
     this section for the State's costs of creation and initial 
     operation of such a pool.
       ``(b) Matching Funds for Operation of Pools.--
       ``(1) In general.--In the case of a State that has 
     established a qualified high risk pool that--
       ``(A) restricts premiums charged under the pool to no more 
     than 150 percent of the premium for applicable standard risk 
     rates;
       ``(B) offers a choice of two or more coverage options 
     through the pool; and
       ``(C) has in effect a mechanism reasonably designed to 
     ensure continued funding of losses incurred by the State 
     after the end of fiscal year 2004 in connection with 
     operation of the pool;
     the Secretary shall provide, from the funds appropriated 
     under subsection (c)(2) and allotted to the State under 
     paragraph (2), a grant of up to 50 percent of the losses 
     incurred by the State in connection with the operation of the 
     pool.
       ``(2) Allotment.--The amounts appropriated under subsection 
     (c)(2) for a fiscal year shall be made available to the 
     States in accordance with a formula that is based upon the 
     number of uninsured individuals in the States.
       ``(c) Funding.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     authorized and appropriated--
       ``(1) $20,000,000 for fiscal year 2003 to carry out 
     subsection (a); and
       ``(2) $40,000,000 for each of fiscal years 2003 and 2004 to 
     carry out subsection (b).

     Funds appropriated under this subsection for a fiscal year 
     shall remain available for obligation through the end of the 
     following fiscal year. Nothing in this section shall be 
     construed as providing a State with an entitlement to a grant 
     under this section.
       ``(d) Qualified High Risk Pool and State Defined.--For 
     purposes of this section, the term `qualified high risk pool' 
     has the meaning given such term in section 2744(c)(2) and the 
     term `State' means any of the 50 States and the District of 
     Columbia.''.
       (c) Conforming Amendments.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting before the period ``, or 
     from section 35 of such Code''.
       (2) The table of sections for subpart C of part IV of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     striking the last item and inserting the following new items:

``Sec. 35. Health insurance costs of eligible individuals.
``Sec. 36. Overpayments of tax.''.

       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2001.
       (2) State high risk pools.--The amendment made by 
     subsection (b) shall take effect on the date of the enactment 
     of this Act.

     SEC. 202. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE 
                   COSTS OF ELIGIBLE INDIVIDUALS.

       (a) In General.--Chapter 77 of the Internal Revenue Code of 
     1986 (relating to miscellaneous provisions) is amended by 
     adding at the end the following new section:

     ``SEC. 7527. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE 
                   COSTS OF ELIGIBLE INDIVIDUALS.

       ``(a) General Rule.--Not later than August 1, 2003, the 
     Secretary shall establish a program for making payments on 
     behalf of certified individuals to providers of qualified 
     health insurance (as defined in section 35(e)) for such 
     individuals.
       ``(b) Limitation on Advance Payments During any Taxable 
     Year.--The Secretary may make payments under subsection (a) 
     only to the extent that the total amount of such payments 
     made on behalf of any individual during the taxable year does 
     not exceed 65 percent of the amount paid by the taxpayer for 
     coverage of the taxpayer and qualifying family members under 
     qualified health insurance for eligible coverage months 
     beginning in the taxable year.
       ``(c) Certified Individual.--For purposes of this section, 
     the term `certified individual' means any individual for whom 
     a qualified health insurance costs credit eligibility 
     certificate is in effect.
       ``(d) Qualified Health Insurance Costs Credit Eligibility 
     Certificate.--For purposes of this section, the term 
     `qualified health insurance costs credit eligibility 
     certificate' means any written statement that an individual 
     is an eligible individual (as defined in section 35(c)) if 
     such statement provides such information as the Secretary may 
     require for purposes of this section and--
       ``(1) in the case of an eligible TAA recipient (as defined 
     in section 35(c)(2)) or an eligible alternative TAA recipient 
     (as defined in section 35(c)(3)), is certified by the 
     Secretary of Labor (or by any other person or entity 
     designated by the Secretary), or
       ``(2) in the case of an eligible PBGC pension recipient (as 
     defined in section 35(c)(4)), is certified by the Pension 
     Benefit Guaranty Corporation (or by any other person or 
     entity designated by the Secretary).''.
       (b) Disclosure of Return Information for Purposes of 
     Carrying out a Program for Advance Payment of Credit for 
     Health Insurance Costs of Eligible Individuals.--
       (1) In general.--Subsection (l) of section 6103 of such 
     Code (relating to disclosure of returns and return 
     information for purposes other than tax administration) is 
     amended by adding at the end the following new paragraph:
       ``(18) Disclosure of return information for purposes of 
     carrying out a program for advance payment of credit for 
     health insurance costs of eligible individuals.--The 
     Secretary may disclose to providers of health insurance for 
     any certified individual (as defined in section 7527(c)) 
     return information with respect to such certified individual 
     only to the extent necessary to carry out the program 
     established by section 7527 (relating to advance payment of 
     credit for health insurance costs of eligible 
     individuals).''.
       (2) Procedures and recordkeeping related to disclosures.--
     Subsection (p) of such section is amended--
       (A) in paragraph (3)(A) by striking ``or (17)'' and 
     inserting ``(17), or (18)'', and
       (B) in paragraph (4) by inserting ``or (17)'' after ``any 
     other person described in subsection (l)(16)'' each place it 
     appears.
       (3) Unauthorized inspection of returns or return 
     information.--Section 7213A(a)(1)(B) of such Code is amended 
     by striking ``section 6103(n)'' and inserting ``subsection 
     (l)(18) or (n) of section 6103''.
       (c) Information Reporting.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 of the Internal Revenue Code of 1986 (relating to 
     information concerning

[[Page 15045]]

     transactions with other persons) is amended by inserting 
     after section 6050S the following new section:

     ``SEC. 6050T. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE 
                   COSTS OF ELIGIBLE INDIVIDUALS.

       ``(a) Requirement of Reporting.--Every person who is 
     entitled to receive payments for any month of any calendar 
     year under section 7527 (relating to advance payment of 
     credit for health insurance costs of eligible individuals) 
     with respect to any certified individual (as defined in 
     section 7527(c)) shall, at such time as the Secretary may 
     prescribe, make the return described in subsection (b) with 
     respect to each such individual.
       ``(b) Form and Manner of Returns.--A return is described in 
     this subsection if such return--
       ``(1) is in such form as the Secretary may prescribe, and
       ``(2) contains--
       ``(A) the name, address, and TIN of each individual 
     referred to in subsection (a),
       ``(B) the number of months for which amounts were entitled 
     to be received with respect to such individual under section 
     7527 (relating to advance payment of credit for health 
     insurance costs of eligible individuals),
       ``(C) the amount entitled to be received for each such 
     month, and
       ``(D) such other information as the Secretary may 
     prescribe.
       ``(c) Statements To Be Furnished to Individuals With 
     Respect to Whom Information Is Required.--Every person 
     required to make a return under subsection (a) shall furnish 
     to each individual whose name is required to be set forth in 
     such return a written statement showing--
       ``(1) the name and address of the person required to make 
     such return and the phone number of the information contact 
     for such person, and
       ``(2) the information required to be shown on the return 
     with respect to such individual.

     The written statement required under the preceding sentence 
     shall be furnished on or before January 31 of the year 
     following the calendar year for which the return under 
     subsection (a) is required to be made.''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1) of such Code 
     (relating to definitions) is amended by redesignating clauses 
     (xi) through (xvii) as clauses (xii) through (xviii), 
     respectively, and by inserting after clause (x) the following 
     new clause:
       ``(xi) section 6050T (relating to returns relating to 
     credit for health insurance costs of eligible 
     individuals),''.
       (B) Paragraph (2) of section 6724(d) of such Code is 
     amended by striking ``or'' at the end of subparagraph (Z), by 
     striking the period at the end of subparagraph (AA) and 
     inserting ``, or'', and by adding after subparagraph (AA) the 
     following new subparagraph:
       ``(BB) section 6050T (relating to returns relating to 
     credit for health insurance costs of eligible 
     individuals).''.
       (d) Clerical Amendments.--
       (1) Advance payment.--The table of sections for chapter 77 
     of the Internal Revenue Code of 1986 is amended by adding at 
     the end the following new item:

``Sec. 7527. Advance payment of credit for health insurance costs of 
              eligible individuals.''.

       (2) Information reporting.--The table of sections for 
     subpart B of part III of subchapter A of chapter 61 of such 
     Code is amended by inserting after the item relating to 
     section 6050S the following new item:

``Sec. 6050T. Returns relating to credit for health insurance costs of 
              eligible individuals.''.

       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 203. HEALTH INSURANCE ASSISTANCE FOR ELIGIBLE 
                   INDIVIDUALS.

       (a) Eligibility for Grants.--Section 173(a) of the 
     Workforce Investment Act of 1998 (29 U.S.C. 2918(a)) is 
     amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (3), by striking the period and inserting 
     ``; and''; and
       (3) by adding at the end the following:
       ``(4) from funds appropriated under section 174(c)--
       ``(A) to a State or entity (as defined in section 
     173(c)(1)(B)) to carry out subsection (f), including 
     providing assistance to eligible individuals; and
       ``(B) to a State or entity (as so defined) to carry out 
     subsection (g), including providing assistance to eligible 
     individuals.''.
       (b) Use of Funds for Health Insurance Coverage.--Section 
     173 of the Workforce Investment Act of 1998 (29 U.S.C. 2918) 
     is amended by adding at the end the following:
       ``(f) Health Insurance Coverage Assistance for Eligible 
     Individuals.--
       ``(1) In general.--Funds made available to a State or 
     entity under paragraph (4)(A) of subsection (a) may be used 
     by the State or entity for the following:
       ``(A) Health insurance coverage.--To assist an eligible 
     individual and such individual's qualifying family members in 
     enrolling in qualified health insurance.
       ``(B) Administrative and start-up expenses.--To pay the 
     administrative expenses related to the enrollment of eligible 
     individuals and such individuals' qualifying family members 
     in qualified health insurance, including--
       ``(i) eligibility verification activities;
       ``(ii) the notification of eligible individuals of 
     available qualified health insurance options;
       ``(iii) processing qualified health insurance costs credit 
     eligibility certificates provided for under section 7527 of 
     the Internal Revenue Code of 1986;
       ``(iv) providing assistance to eligible individuals in 
     enrolling in qualified health insurance;
       ``(v) the development or installation of necessary data 
     management systems; and
       ``(vi) any other expenses determined appropriate by the 
     Secretary, including start-up costs and on going 
     administrative expenses to carry out clauses (iv) through 
     (ix) of paragraph (2)(A).
       ``(2) Qualified health insurance.--For purposes of this 
     subsection and subsection (g)--
       ``(A) In general.--The term `qualified health insurance' 
     means any of the following:
       ``(i) Coverage under a COBRA continuation provision (as 
     defined in section 733(d)(1) of the Employee Retirement 
     Income Security Act of 1974).
       ``(ii) State-based continuation coverage provided by the 
     State under a State law that requires such coverage.
       ``(iii) Coverage offered through a qualified State high 
     risk pool (as defined in section 2744(c)(2) of the Public 
     Health Service Act).
       ``(iv) Coverage under a health insurance program offered 
     for State employees.
       ``(v) Coverage under a State-based health insurance program 
     that is comparable to the health insurance program offered 
     for State employees.
       ``(vi) Coverage through an arrangement entered into by a 
     State and--

       ``(I) a group health plan (including such a plan which is a 
     multiemployer plan as defined in section 3(37) of the 
     Employee Retirement Income Security Act of 1974),
       ``(II) an issuer of health insurance coverage,
       ``(III) an administrator, or
       ``(IV) an employer.

       ``(vii) Coverage offered through a State arrangement with a 
     private sector health care coverage purchasing pool.
       ``(viii) Coverage under a State-operated health plan that 
     does not receive any Federal financial participation.
       ``(ix) Coverage under a group health plan that is available 
     through the employment of the eligible individual's spouse.
       ``(x) In the case of any eligible individual and such 
     individual's qualifying family members, coverage under 
     individual health insurance if the eligible individual was 
     covered under individual health insurance during the entire 
     30-day period that ends on the date that such individual 
     became separated from the employment which qualified such 
     individual for--

       ``(I) in the case of an eligible TAA recipient, the 
     allowance described in section 35(c)(2) of the Internal 
     Revenue Code of 1986,
       ``(II) in the case of an eligible alternative TAA 
     recipient, the benefit described in section 35(c)(3)(B) of 
     such Code, or
       ``(III) in the case of any eligible PBGC pension recipient, 
     the benefit described in section 35(c)(4)(B) of such Code.

     For purposes of this clause, the term `individual health 
     insurance' means any insurance which constitutes medical care 
     offered to individuals other than in connection with a group 
     health plan and does not include Federal- or State-based 
     health insurance coverage.
       ``(B) Requirements for state-based coverage.--
       ``(i) In general.--The term `qualified health insurance' 
     does not include any coverage described in clauses (ii) 
     through (viii) of subparagraph (A) unless the State involved 
     has elected to have such coverage treated as qualified health 
     insurance under this paragraph and such coverage meets the 
     following requirements:

       ``(I) Guaranteed issue.--Each qualifying individual is 
     guaranteed enrollment if the individual pays the premium for 
     enrollment or provides a qualified health insurance costs 
     credit eligibility certificate described in section 7527 of 
     the Internal Revenue Code of 1986 and pays the remainder of 
     such premium.
       ``(II) No imposition of preexisting condition exclusion.--
     No pre-existing condition limitations are imposed with 
     respect to any qualifying individual.
       ``(III) Nondiscriminatory premium.--The total premium (as 
     determined without regard to any subsidies) with respect to a 
     qualifying individual may not be greater than the total 
     premium (as so determined) for a similarly situated 
     individual who is not a qualifying individual.
       ``(IV) Same benefits.--Benefits under the coverage are the 
     same as (or substantially similar to) the benefits provided 
     to similarly situated individuals who are not qualifying 
     individuals.

       ``(ii) Qualifying individual.--For purposes of this 
     subparagraph, the term `qualifying individual' means--

       ``(I) an eligible individual for whom, as of the date on 
     which the individual seeks to enroll in clauses (ii) through 
     (viii) of subparagraph (A), the aggregate of the periods of 
     creditable coverage (as defined in section 9801(c) of the 
     Internal Revenue Code of 1986) is 3 months or longer and who, 
     with respect to any month, meets the requirements of clauses 
     (iii) and (iv) of section 35(b)(1)(A) of such Code; and
       ``(II) the qualifying family members of such eligible 
     individual.

       ``(C) Exception.--The term `qualified health insurance' 
     shall not include--
       ``(i) a flexible spending or similar arrangement, and

[[Page 15046]]

       ``(ii) any insurance if substantially all of its coverage 
     is of excepted benefits described in section 733(c) of the 
     Employee Retirement Income Security Act of 1974.
       ``(3) Availability of funds.--
       ``(A) Expedited procedures.--With respect to applications 
     submitted by States or entities for grants under this 
     subsection, the Secretary shall--
       ``(i) not later than 15 days after the date on which the 
     Secretary receives a completed application from a State or 
     entity, notify the State or entity of the determination of 
     the Secretary with respect to the approval or disapproval of 
     such application;
       ``(ii) in the case of an application of a State or other 
     entity that is disapproved by the Secretary, provide 
     technical assistance, at the request of the State or entity, 
     in a timely manner to enable the State or entity to submit an 
     approved application; and
       ``(iii) develop procedures to expedite the provision of 
     funds to States and entities with approved applications.
       ``(B) Availability and distribution of funds.--The 
     Secretary shall ensure that funds made available under 
     section 174(c)(1)(A) to carry out subsection (a)(4)(A) are 
     available to States and entities throughout the period 
     described in section 174(c)(2)(A).
       ``(4) Eligible individual defined.--For purposes of this 
     subsection and subsection (g), the term `eligible individual' 
     means--
       ``(A) an eligible TAA recipient (as defined in section 
     35(c)(2) of the Internal Revenue Code of 1986),
       ``(B) an eligible alternative TAA recipient (as defined in 
     section 35(c)(3) of the Internal Revenue Code of 1986), and
       ``(C) an eligible PBGC pension recipient (as defined in 
     section 35(c)(4) of the Internal Revenue Code of 1986),

     who, as of the first day of the month, does not have other 
     specified coverage and is not imprisoned under Federal, 
     State, or local authority.
       ``(5) Qualifying family member defined.--For purposes of 
     this subsection and subsection (g)--
       ``(A) In general.--The term `qualifying family member' 
     means--
       ``(i) the eligible individual's spouse, and
       ``(ii) any dependent of the eligible individual with 
     respect to whom the individual is entitled to a deduction 
     under section 151(c) of the Internal Revenue Code of 1986.

     Such term does not include any individual who has other 
     specified coverage.
       ``(B) Special dependency test in case of divorced parents, 
     etc.--If paragraph (2) or (4) of section 152(e) of such Code 
     applies to any child with respect to any calendar year, in 
     the case of any taxable year beginning in such calendar year, 
     such child shall be treated as described in subparagraph 
     (A)(ii) with respect to the custodial parent (within the 
     meaning of section 152(e)(1) of such Code) and not with 
     respect to the noncustodial parent.
       ``(6) State.--For purposes of this subsection and 
     subsection (g), the term `State' includes an entity as 
     defined in subsection (c)(1)(B).
       ``(7) Other specified coverage.--For purposes of this 
     subsection, an individual has other specified coverage for 
     any month if, as of the first day of such month--
       ``(A) Subsidized coverage.--
       ``(i) In general.--Such individual is covered under any 
     insurance which constitutes medical care (except insurance 
     substantially all of the coverage of which is of excepted 
     benefits described in section 9832(c) of the Internal Revenue 
     Code of 1986) under any health plan maintained by any 
     employer (or former employer) of the taxpayer or the 
     taxpayer's spouse and at least 50 percent of the cost of such 
     coverage (determined under section 4980B of such Code) is 
     paid or incurred by the employer.
       ``(ii) Eligible alternative taa recipients.--In the case of 
     an eligible alternative TAA recipient (as defined in section 
     35(c)(3) of the Internal Revenue Code of 1986), such 
     individual is either--

       ``(I) eligible for coverage under any qualified health 
     insurance (other than insurance described in clause (i), 
     (ii), or (vi) of paragraph (2)(A)) under which at least 50 
     percent of the cost of coverage (determined under section 
     4980B(f)(4) of such Code) is paid or incurred by an employer 
     (or former employer) of the taxpayer or the taxpayer's 
     spouse, or
       ``(II) covered under any such qualified health insurance 
     under which any portion of the cost of coverage (as so 
     determined) is paid or incurred by an employer (or former 
     employer) of the taxpayer or the taxpayer's spouse.

       ``(iii) Treatment of cafeteria plans.--For purposes of 
     clauses (i) and (ii), the cost of coverage shall be treated 
     as paid or incurred by an employer to the extent the coverage 
     is in lieu of a right to receive cash or other qualified 
     benefits under a cafeteria plan (as defined in section 125(d) 
     of the Internal Revenue Code of 1986).
       ``(B) Coverage under medicare, medicaid, or schip.--Such 
     individual--
       ``(i) is entitled to benefits under part A of title XVIII 
     of the Social Security Act or is enrolled under part B of 
     such title, or
       ``(ii) is enrolled in the program under title XIX or XXI of 
     such Act (other than under section 1928 of such Act).
       ``(C) Certain other coverage.--Such individual--
       ``(i) is enrolled in a health benefits plan under chapter 
     89 of title 5, United States Code, or
       ``(ii) is entitled to receive benefits under chapter 55 of 
     title 10, United States Code.
       ``(g) Interim Health Insurance Coverage and Other 
     Assistance.--
       ``(1) In general.--Funds made available to a State or 
     entity under paragraph (4)(B) of subsection (a) may be used 
     by the State or entity to provide assistance and support 
     services to eligible individuals, including health care 
     coverage to the extent provided under subsection (f)(1)(A), 
     transportation, child care, dependent care, and income 
     assistance.
       ``(2) Income support.--With respect to any income 
     assistance provided to an eligible individual with such 
     funds, such assistance shall supplement and not supplant 
     other income support or assistance provided under chapter 2 
     of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.) 
     (as in effect on the day before the effective date of the 
     Trade Act of 2002) or the unemployment compensation laws of 
     the State where the eligible individual resides.
       ``(3) Health insurance coverage.--With respect to any 
     assistance provided to an eligible individual with such funds 
     in enrolling in qualified health insurance, the following 
     rules shall apply:
       ``(A) The State or entity may provide assistance in 
     obtaining such coverage to the eligible individual and to 
     such individual's qualifying family members.
       ``(B) Such assistance shall supplement and may not supplant 
     any other State or local funds used to provide health care 
     coverage and may not be included in determining the amount of 
     non-Federal contributions required under any program.
       ``(4) Availability of funds.--
       ``(A) Expedited procedures.--With respect to applications 
     submitted by States or entities for grants under this 
     subsection, the Secretary shall--
       ``(i) not later than 15 days after the date on which the 
     Secretary receives a completed application from a State or 
     entity, notify the State or entity of the determination of 
     the Secretary with respect to the approval or disapproval of 
     such application;
       ``(ii) in the case of an application of a State or entity 
     that is disapproved by the Secretary, provide technical 
     assistance, at the request of the State or entity, in a 
     timely manner to enable the State or entity to submit an 
     approved application; and
       ``(iii) develop procedures to expedite the provision of 
     funds to States and entities with approved applications.
       ``(B) Availability and distribution of funds.--The 
     Secretary shall ensure that funds made available under 
     section 174(c)(1)(B) to carry out subsection (a)(4)(B) are 
     available to States and entities throughout the period 
     described in section 174(c)(2)(B).
       ``(5) Inclusion of certain individuals as eligible 
     individuals.--For purposes of this subsection, the term 
     `eligible individual' includes an individual who is a member 
     of a group of workers certified after April 1, 2002, under 
     chapter 2 of title II of the Trade Act of 1974 (as in effect 
     on the day before the effective date of the Trade Act of 
     2002) and is participating in the trade readjustment 
     allowance program under such chapter (as so in effect) or who 
     would be determined to be participating in such program under 
     such chapter (as so in effect) if such chapter were applied 
     without regard to section 231(a)(3)(B) of the Trade Act of 
     1974 (as so in effect).''.
       (c) Authorization of Appropriations.--Section 174 of the 
     Workforce Investment Act of 1998 (29 U.S.C. 2919) is amended 
     by adding at the end the following:
       ``(c) Assistance for Eligible Workers.--
       ``(1) Authorization and appropriation for fiscal year 
     2002.--There are authorized to be appropriated and 
     appropriated--
       ``(A) to carry out subsection (a)(4)(A) of section 173, 
     $10,000,000 for fiscal year 2002; and
       ``(B) to carry out subsection (a)(4)(B) of section 173, 
     $50,000,000 for fiscal year 2002.
       ``(2) Authorization of appropriations for subsequent fiscal 
     years.--There are authorized to be appropriated--
       ``(A) to carry out subsection (a)(4)(A) of section 173, 
     $60,000,000 for each of fiscal years 2003 through 2007; and
       ``(B) to carry out subsection (a)(4)(B) of section 173--
       ``(i) $100,000,000 for fiscal year 2003; and
       ``(ii) $50,000,000 for fiscal year 2004.
       ``(3) Availability of funds.--Funds appropriated pursuant 
     to--
       ``(A) paragraphs (1)(A) and (2)(A) for each fiscal year 
     shall, notwithstanding section 189(g), remain available for 
     obligation during the pendency of any outstanding claim under 
     the Trade Act of 1974, as amended by the Trade Act of 2002; 
     and
       ``(B) paragraph (1)(B) and (2)(B), for each fiscal year 
     shall, notwithstanding section 189(g), remain available 
     during the period that begins on the date of enactment of the 
     Trade Act of 2002 and ends on September 30, 2004.''.
       (d) Conforming Amendment.--Section 132(a)(2)(A) of the 
     Workforce Investment Act of 1998 (29 U.S.C. 2862(a)(2)(A)) is 
     amended by inserting ``, other than under subsection (a)(4), 
     (f), and (g)'' after ``grants''.
       (e) Temporary Extension of COBRA Election Period for 
     Certain Individuals.--
       (1) ERISA amendments.--Section 605 of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1165) is 
     amended--
       (A) by inserting ``(a) In General.--'' before ``For 
     purposes of this part''; and
       (B) by adding at the end the following:
       ``(b) Temporary Extension of COBRA Election Period for 
     Certain Individuals.--
       ``(1) In general.--In the case of a nonelecting TAA-
     eligible individual and notwithstanding

[[Page 15047]]

     subsection (a), such individual may elect continuation 
     coverage under this part during the 60-day period that begins 
     on the first day of the month in which the individual becomes 
     a TAA-eligible individual, but only if such election is made 
     not later than 6 months after the date of the TAA-related 
     loss of coverage.
       ``(2) Commencement of coverage; no reach-back.--Any 
     continuation coverage elected by a TAA-eligible individual 
     under paragraph (1) shall commence at the beginning of the 
     60-day election period described in such paragraph and shall 
     not include any period prior to such 60-day election period.
       ``(3) Preexisting conditions.--With respect to an 
     individual who elects continuation coverage pursuant to 
     paragraph (1), the period--
       ``(A) beginning on the date of the TAA-related loss of 
     coverage, and
       ``(B) ending on the first day of the 60-day election period 
     described in paragraph (1),
     shall be disregarded for purposes of determining the 63-day 
     periods referred to in section 701(c)(2), section 2701(c)(2) 
     of the Public Health Service Act, and section 9801(c)(2) of 
     the Internal Revenue Code of 1986.
       ``(4) Definitions.--For purposes of this subsection:
       ``(A) Nonelecting taa-eligible individual.--The term 
     `nonelecting TAA-eligible individual' means a TAA-eligible 
     individual who--
       ``(i) has a TAA-related loss of coverage; and
       ``(ii) did not elect continuation coverage under this part 
     during the TAA-related election period.
       ``(B) TAA-eligible individual.--The term `TAA-eligible 
     individual' means--
       ``(i) an eligible TAA recipient (as defined in paragraph 
     (2) of section 35(c) of the Internal Revenue Code of 1986), 
     and
       ``(ii) an eligible alternative TAA recipient (as defined in 
     paragraph (3) of such section).
       ``(C) TAA-related election period.--The term `TAA-related 
     election period' means, with respect to a TAA-related loss of 
     coverage, the 60-day election period under this part which is 
     a direct consequence of such loss.
       ``(D) TAA-related loss of coverage.--The term `TAA-related 
     loss of coverage' means, with respect to an individual whose 
     separation from employment gives rise to being an TAA-
     eligible individual, the loss of health benefits coverage 
     associated with such separation.''.
       (2) PHSA amendments.--Section 2205 of the Public Health 
     Service Act (42 U.S.C. 300bb-5) is amended--
       (A) by inserting ``(a) In General.--'' before ``For 
     purposes of this title''; and
       (B) by adding at the end the following:
       ``(b) Temporary Extension of COBRA Election Period for 
     Certain Individuals.--
       ``(1) In general.--In the case of a nonelecting TAA-
     eligible individual and notwithstanding subsection (a), such 
     individual may elect continuation coverage under this title 
     during the 60-day period that begins on the first day of the 
     month in which the individual becomes a TAA-eligible 
     individual, but only if such election is made not later than 
     6 months after the date of the TAA-related loss of coverage.
       ``(2) Commencement of coverage; no reach-back.--Any 
     continuation coverage elected by a TAA-eligible individual 
     under paragraph (1) shall commence at the beginning of the 
     60-day election period described in such paragraph and shall 
     not include any period prior to such 60-day election period.
       ``(3) Preexisting conditions.--With respect to an 
     individual who elects continuation coverage pursuant to 
     paragraph (1), the period--
       ``(A) beginning on the date of the TAA-related loss of 
     coverage, and
       ``(B) ending on the first day of the 60-day election period 
     described in paragraph (1),
     shall be disregarded for purposes of determining the 63-day 
     periods referred to in section 2701(c)(2), section 701(c)(2) 
     of the Employee Retirement Income Security Act of 1974, and 
     section 9801(c)(2) of the Internal Revenue Code of 1986.
       ``(4) Definitions.--For purposes of this subsection:
       ``(A) Nonelecting taa-eligible individual.--The term 
     `nonelecting TAA-eligible individual' means a TAA-eligible 
     individual who--
       ``(i) has a TAA-related loss of coverage; and
       ``(ii) did not elect continuation coverage under this part 
     during the TAA-related election period.
       ``(B) TAA-eligible individual.--The term `TAA-eligible 
     individual' means--
       ``(i) an eligible TAA recipient (as defined in paragraph 
     (2) of section 35(c) of the Internal Revenue Code of 1986), 
     and
       ``(ii) an eligible alternative TAA recipient (as defined in 
     paragraph (3) of such section).
       ``(C) TAA-related election period.--The term `TAA-related 
     election period' means, with respect to a TAA-related loss of 
     coverage, the 60-day election period under this part which is 
     a direct consequence of such loss.
       ``(D) TAA-related loss of coverage.--The term `TAA-related 
     loss of coverage' means, with respect to an individual whose 
     separation from employment gives rise to being an TAA-
     eligible individual, the loss of health benefits coverage 
     associated with such separation.''.
       (3) IRC amendments.--Paragraph (5) of section 4980B(f) of 
     the Internal Revenue Code of 1986 (relating to election) is 
     amended by adding at the end the following:
       ``(C) Temporary extension of cobra election period for 
     certain individuals.--
       ``(i) In general.--In the case of a nonelecting TAA-
     eligible individual and notwithstanding subparagraph (A), 
     such individual may elect continuation coverage under this 
     subsection during the 60-day period that begins on the first 
     day of the month in which the individual becomes a TAA-
     eligible individual, but only if such election is made not 
     later than 6 months after the date of the TAA-related loss of 
     coverage.
       ``(ii) Commencement of coverage; no reach-back.--Any 
     continuation coverage elected by a TAA-eligible individual 
     under clause (i) shall commence at the beginning of the 60-
     day election period described in such paragraph and shall not 
     include any period prior to such 60-day election period.
       ``(iii) Preexisting conditions.--With respect to an 
     individual who elects continuation coverage pursuant to 
     clause (i), the period--

       ``(I) beginning on the date of the TAA-related loss of 
     coverage, and
       ``(II) ending on the first day of the 60-day election 
     period described in clause (i),

     shall be disregarded for purposes of determining the 63-day 
     periods referred to in section 9801(c)(2), section 701(c)(2) 
     of the Employee Retirement Income Security Act of 1974, and 
     section 2701(c)(2) of the Public Health Service Act.
       ``(iv) Definitions.--For purposes of this subsection:

       ``(I) Nonelecting taa-eligible individual.--The term 
     `nonelecting TAA-eligible individual' means a TAA-eligible 
     individual who has a TAA-related loss of coverage and did not 
     elect continuation coverage under this subsection during the 
     TAA-related election period.
       ``(II) TAA-eligible individual.--The term `TAA-eligible 
     individual' means an eligible TAA recipient (as defined in 
     paragraph (2) of section 35(c)) and an eligible alternative 
     TAA recipient (as defined in paragraph (3) of such section).
       ``(III) TAA-related election period.--The term `TAA-related 
     election period' means, with respect to a TAA-related loss of 
     coverage, the 60-day election period under this subsection 
     which is a direct consequence of such loss.
       ``(IV) TAA-related loss of coverage.--The term `TAA-related 
     loss of coverage' means, with respect to an individual whose 
     separation from employment gives rise to being an TAA-
     eligible individual, the loss of health benefits coverage 
     associated with such separation.''.

       (f) Rule of Construction.--Nothing in this title (or the 
     amendments made by this title), other than provisions 
     relating to COBRA continuation coverage and reporting 
     requirements, shall be construed as creating any new mandate 
     on any party regarding health insurance coverage.

                   TITLE III--CUSTOMS REAUTHORIZATION

     SEC. 301. SHORT TITLE.

       This Act may be cited as the ``Customs Border Security Act 
     of 2002''.

               Subtitle A--United States Customs Service

  CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL 
                               OPERATIONS

     SEC. 311. AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL 
                   OPERATIONS, COMMERCIAL OPERATIONS, AND AIR AND 
                   MARINE INTERDICTION.

       (a) Noncommercial Operations.--Section 301(b)(1) of the 
     Customs Procedural Reform and Simplification Act of 1978 (19 
     U.S.C. 2075(b)(1)) is amended--
       (1) by striking subparagraph (A), and inserting the 
     following:
       ``(A) $1,365,456,000 for fiscal year 2003.''; and
       (2) by striking subparagraph (B), and inserting the 
     following:
       ``(B) $1,399,592,400 for fiscal year 2004.''.
       (b) Commercial Operations.--
       (1) In general.--Section 301(b)(2)(A) of the Customs 
     Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)(2)(A)) is amended--
       (A) by striking clause (i), and inserting the following:
       ``(i) $1,642,602,000 for fiscal year 2003.''; and
       (B) by striking clause (ii), and inserting the following:
       ``(ii) $1,683,667,050 for fiscal year 2004.''.
       (2) Automated commercial environment computer system.--Of 
     the amount made available for each of fiscal years 2003 and 
     2004 under section 301(b)(2)(A) of the Customs Procedural 
     Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)(2)(A)), as amended by paragraph (1), $308,000,000 
     shall be available until expended for each such fiscal year 
     for the development, establishment, and implementation of the 
     Automated Commercial Environment computer system.
       (3) Reports.--Not later than 90 days after the date of the 
     enactment of this Act, and not later than the end of each 
     subsequent 90-day period, the Commissioner of Customs shall 
     prepare and submit to the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate a report demonstrating that the development and 
     establishment of the Automated Commercial Environment 
     computer system is being carried out in a cost-effective 
     manner and meets the modernization requirements of title VI 
     of the North American Free Trade Agreement Implementation 
     Act.
       (c) Air and Marine Interdiction.--Section 301(b)(3) of the 
     Customs Procedural Reform and Simplification Act of 1978 (19 
     U.S.C. 2075(b)(3)) is amended--
       (1) by striking subparagraph (A), and inserting the 
     following:
       ``(A) $170,829,000 for fiscal year 2003.''; and
       (2) by striking subparagraph (B), and inserting the 
     following:
       ``(B) $175,099,725 for fiscal year 2004.''.
       (d) Submission of Out-Year Budget Projections.--Section 
     301(a) of the Customs Procedural Reform and Simplification 
     Act of 1978 (19

[[Page 15048]]

     U.S.C. 2075(a)) is amended by adding at the end the 
     following:
       ``(3) By not later than the date on which the President 
     submits to Congress the budget of the United States 
     Government for a fiscal year, the Commissioner of Customs 
     shall submit to the Committee on Ways and Means of the House 
     of Representatives and the Committee on Finance of the Senate 
     the projected amount of funds for the succeeding fiscal year 
     that will be necessary for the operations of the Customs 
     Service as provided for in subsection (b).''.

     SEC. 312. ANTITERRORIST AND ILLICIT NARCOTICS DETECTION 
                   EQUIPMENT FOR THE UNITED STATES-MEXICO BORDER, 
                   UNITED STATES-CANADA BORDER, AND FLORIDA AND 
                   THE GULF COAST SEAPORTS.

       (a) Fiscal Year 2003.--Of the amounts made available for 
     fiscal year 2003 under section 301(b)(1)(A) of the Customs 
     Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)(1)(A)), as amended by section 311(a) of this Act, 
     $90,244,000 shall be available until expended for acquisition 
     and other expenses associated with implementation and 
     deployment of antiterrorist and illicit narcotics detection 
     equipment along the United States-Mexico border, the United 
     States-Canada border, and Florida and the Gulf Coast 
     seaports, as follows:
       (1) United states-mexico border.--For the United States-
     Mexico border, the following:
       (A) $6,000,000 for 8 Vehicle and Container Inspection 
     Systems (VACIS).
       (B) $11,200,000 for 5 mobile truck x-rays with transmission 
     and backscatter imaging.
       (C) $13,000,000 for the upgrade of 8 fixed-site truck x-
     rays from the present energy level of 450,000 electron volts 
     to 1,000,000 electron volts (1-MeV).
       (D) $7,200,000 for 8 1-MeV pallet x-rays.
       (E) $1,000,000 for 200 portable contraband detectors 
     (busters) to be distributed among ports where the current 
     allocations are inadequate.
       (F) $600,000 for 50 contraband detection kits to be 
     distributed among all southwest border ports based on traffic 
     volume.
       (G) $500,000 for 25 ultrasonic container inspection units 
     to be distributed among all ports receiving liquid-filled 
     cargo and to ports with a hazardous material inspection 
     facility.
       (H) $2,450,000 for 7 automated targeting systems.
       (I) $360,000 for 30 rapid tire deflator systems to be 
     distributed to those ports where port runners are a threat.
       (J) $480,000 for 20 portable Treasury Enforcement 
     Communications Systems (TECS) terminals to be moved among 
     ports as needed.
       (K) $1,000,000 for 20 remote watch surveillance camera 
     systems at ports where there are suspicious activities at 
     loading docks, vehicle queues, secondary inspection lanes, or 
     areas where visual surveillance or observation is obscured.
       (L) $1,254,000 for 57 weigh-in-motion sensors to be 
     distributed among the ports with the greatest volume of 
     outbound traffic.
       (M) $180,000 for 36 AM traffic information radio stations, 
     with 1 station to be located at each border crossing.
       (N) $1,040,000 for 260 inbound vehicle counters to be 
     installed at every inbound vehicle lane.
       (O) $950,000 for 38 spotter camera systems to counter the 
     surveillance of customs inspection activities by persons 
     outside the boundaries of ports where such surveillance 
     activities are occurring.
       (P) $390,000 for 60 inbound commercial truck transponders 
     to be distributed to all ports of entry.
       (Q) $1,600,000 for 40 narcotics vapor and particle 
     detectors to be distributed to each border crossing.
       (R) $400,000 for license plate reader automatic targeting 
     software to be installed at each port to target inbound 
     vehicles.
       (2) United states-canada border.--For the United States-
     Canada border, the following:
       (A) $3,000,000 for 4 Vehicle and Container Inspection 
     Systems (VACIS).
       (B) $8,800,000 for 4 mobile truck x-rays with transmission 
     and backscatter imaging.
       (C) $3,600,000 for 4 1-MeV pallet x-rays.
       (D) $250,000 for 50 portable contraband detectors (busters) 
     to be distributed among ports where the current allocations 
     are inadequate.
       (E) $300,000 for 25 contraband detection kits to be 
     distributed among ports based on traffic volume.
       (F) $240,000 for 10 portable Treasury Enforcement 
     Communications Systems (TECS) terminals to be moved among 
     ports as needed.
       (G) $400,000 for 10 narcotics vapor and particle detectors 
     to be distributed to each border crossing based on traffic 
     volume.
       (3) Florida and gulf coast seaports.--For Florida and the 
     Gulf Coast seaports, the following:
       (A) $4,500,000 for 6 Vehicle and Container Inspection 
     Systems (VACIS).
       (B) $11,800,000 for 5 mobile truck x-rays with transmission 
     and backscatter imaging.
       (C) $7,200,000 for 8 1-MeV pallet x-rays.
       (D) $250,000 for 50 portable contraband detectors (busters) 
     to be distributed among ports where the current allocations 
     are inadequate.
       (E) $300,000 for 25 contraband detection kits to be 
     distributed among ports based on traffic volume.
       (b) Fiscal Year 2004.--Of the amounts made available for 
     fiscal year 2004 under section 301(b)(1)(B) of the Customs 
     Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)(1)(B)), as amended by section 311(a) of this Act, 
     $9,000,000 shall be available until expended for the 
     maintenance and support of the equipment and training of 
     personnel to maintain and support the equipment described in 
     subsection (a).
       (c) Acquisition of Technologically Superior Equipment; 
     Transfer of Funds.--
       (1) In general.--The Commissioner of Customs may use 
     amounts made available for fiscal year 2003 under section 
     301(b)(1)(A) of the Customs Procedural Reform and 
     Simplification Act of 1978 (19 U.S.C. 2075(b)(1)(A)), as 
     amended by section 311(a) of this Act, for the acquisition of 
     equipment other than the equipment described in subsection 
     (a) if such other equipment--
       (A)(i) is technologically superior to the equipment 
     described in subsection (a); and
       (ii) will achieve at least the same results at a cost that 
     is the same or less than the equipment described in 
     subsection (a); or
       (B) can be obtained at a lower cost than the equipment 
     described in subsection (a).
       (2) Transfer of funds.--Notwithstanding any other provision 
     of this section, the Commissioner of Customs may reallocate 
     an amount not to exceed 10 percent of--
       (A) the amount specified in any of subparagraphs (A) 
     through (R) of subsection (a)(1) for equipment specified in 
     any other of such subparagraphs (A) through (R);
       (B) the amount specified in any of subparagraphs (A) 
     through (G) of subsection (a)(2) for equipment specified in 
     any other of such subparagraphs (A) through (G); and
       (C) the amount specified in any of subparagraphs (A) 
     through (E) of subsection (a)(3) for equipment specified in 
     any other of such subparagraphs (A) through (E).

     SEC. 313. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS.

       As part of the annual performance plan for each of the 
     fiscal years 2003 and 2004 covering each program activity set 
     forth in the budget of the United States Customs Service, as 
     required under section 1115 of title 31, United States Code, 
     the Commissioner of Customs shall establish performance goals 
     and performance indicators, and shall comply with all other 
     requirements contained in paragraphs (1) through (6) of 
     subsection (a) of such section with respect to each of the 
     activities to be carried out pursuant to section 312.

     CHAPTER 2--CHILD CYBER-SMUGGLING CENTER OF THE CUSTOMS SERVICE

     SEC. 321. AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO 
                   PREVENT CHILD PORNOGRAPHY/CHILD SEXUAL 
                   EXPLOITATION.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Customs Service $10,000,000 for 
     fiscal year 2003 to carry out the program to prevent child 
     pornography/child sexual exploitation established by the 
     Child Cyber-Smuggling Center of the Customs Service.
       (b) Use of Amounts for Child Pornography Cyber Tipline.--Of 
     the amount appropriated under subsection (a), the Customs 
     Service shall provide 3.75 percent of such amount to the 
     National Center for Missing and Exploited Children for the 
     operation of the child pornography cyber tipline of the 
     Center and for increased public awareness of the tipline.

                  CHAPTER 3--MISCELLANEOUS PROVISIONS

     SEC. 331. ADDITIONAL CUSTOMS SERVICE OFFICERS FOR UNITED 
                   STATES-CANADA BORDER.

       Of the amount made available for fiscal year 2003 under 
     paragraphs (1) and (2)(A) of section 301(b) of the Customs 
     Procedural Reform and Simplification Act of 1978 (19 U.S.C. 
     2075(b)), as amended by section 311 of this Act, $28,300,000 
     shall be available until expended for the Customs Service to 
     hire approximately 285 additional Customs Service officers to 
     address the needs of the offices and ports along the United 
     States-Canada border.

     SEC. 332. STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF 
                   THE CUSTOMS SERVICE.

       (a) Study.--The Commissioner of Customs shall conduct a 
     study of current personnel practices of the Customs Service, 
     including an overview of performance standards and the effect 
     and impact of the collective bargaining process on drug 
     interdiction efforts of the Customs Service and a comparison 
     of duty rotation policies of the Customs Service and other 
     Federal agencies that employ similarly situated personnel.
       (b) Report.--Not later than 120 days after the date of the 
     enactment of this Act, the Commissioner of Customs shall 
     submit to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate a 
     report containing the results of the study conducted under 
     subsection (a).

     SEC. 333. STUDY AND REPORT RELATING TO ACCOUNTING AND 
                   AUDITING PROCEDURES OF THE CUSTOMS SERVICE.

       (a) Study.--(1) The Commissioner of Customs shall conduct a 
     study of actions by the Customs Service to ensure that 
     appropriate training is being provided to Customs Service 
     personnel who are responsible for financial auditing of 
     importers.
       (2) In conducting the study, the Commissioner--
       (A) shall specifically identify those actions taken to 
     comply with provisions of law that protect the privacy and 
     trade secrets of importers, such as section 552(b) of title 
     5, United States Code, and section 1905 of title 18, United 
     States Code; and
       (B) shall provide for public notice and comment relating to 
     verification of the actions described in subparagraph (A).

[[Page 15049]]

       (b) Report.--Not later than 6 months after the date of the 
     enactment of this Act, the Commissioner of Customs shall 
     submit to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate a 
     report containing the results of the study conducted under 
     subsection (a).

     SEC. 334. ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING 
                   SYSTEM; REPORTS.

       (a) Establishment and Implementation.--
       (1) In general.--Not later than September 30, 2003, the 
     Commissioner of Customs shall, in accordance with the audit 
     of the Customs Service's fiscal years 2000 and 1999 financial 
     statements (as contained in the report of the Office of the 
     Inspector General of the Department of the Treasury issued on 
     February 23, 2001), establish and implement a cost accounting 
     system for expenses incurred in both commercial and 
     noncommercial operations of the Customs Service.
       (2) Additional requirement.--The cost accounting system 
     described in paragraph (1) shall provide for an 
     identification of expenses based on the type of operation, 
     the port at which the operation took place, the amount of 
     time spent on the operation by personnel of the Customs 
     Service, and an identification of expenses based on any other 
     appropriate classification necessary to provide for an 
     accurate and complete accounting of the expenses.
       (b) Reports.--Beginning on the date of the enactment of 
     this Act and ending on the date on which the cost accounting 
     system described in subsection (a) is fully implemented, the 
     Commissioner of Customs shall prepare and submit to Congress 
     on a quarterly basis a report on the progress of implementing 
     the cost accounting system pursuant to subsection (a).

     SEC. 335. STUDY AND REPORT RELATING TO TIMELINESS OF 
                   PROSPECTIVE RULINGS.

       (a) Study.--The Comptroller General shall conduct a study 
     on the extent to which the Office of Regulations and Rulings 
     of the Customs Service has made improvements to decrease the 
     amount of time to issue prospective rulings from the date on 
     which a request for the ruling is received by the Customs 
     Service.
       (b) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate a 
     report containing the results of the study conducted under 
     subsection (a).
       (c) Definition.--In this section, the term ``prospective 
     ruling'' means a ruling that is requested by an importer on 
     goods that are proposed to be imported into the United States 
     and that relates to the proper classification, valuation, or 
     marking of such goods.

     SEC. 336. STUDY AND REPORT RELATING TO CUSTOMS USER FEES.

       (a) Study.--The Comptroller General shall conduct a study 
     on the extent to which the amount of each customs user fee 
     imposed under section 13031(a) of the Consolidated Omnibus 
     Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)) is 
     commensurate with the level of services provided by the 
     Customs Service relating to the fee so imposed.
       (b) Report.--Not later than 120 days after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate a 
     report in classified form containing--
       (1) the results of the study conducted under subsection 
     (a); and
       (2) recommendations for the appropriate amount of the 
     customs user fees if such results indicate that the fees are 
     not commensurate with the level of services provided by the 
     Customs Service.

     SEC. 337. FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER 
                   FACILITIES.

       (a) In General.--Section 13031(b)(9) of the Consolidated 
     Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
     58c(b)(9)) is amended as follows:
       (1) In subparagraph (A)--
       (A) in the matter preceding clause (i), by striking ``the 
     processing of merchandise that is informally entered or 
     released'' and inserting ``the processing of letters, 
     documents, records, shipments, merchandise, or any other item 
     that is valued at an amount that is less than $2,000 (or such 
     higher amount as the Secretary of the Treasury may set by 
     regulation pursuant to section 498 of the Tariff Act of 
     1930), except such items entered for transportation and 
     exportation or immediate exportation''; and
       (B) by striking clause (ii), and inserting the following:
       ``(ii) Subject to the provisions of subparagraph (B), in 
     the case of an express consignment carrier facility or 
     centralized hub facility, $.66 per individual airway bill or 
     bill of lading.''.
       (2) By redesignating subparagraph (B) as subparagraph (C) 
     and inserting after subparagraph (A) the following:
       ``(B)(i) Beginning in fiscal year 2004, the Secretary of 
     the Treasury may adjust (not more than once per fiscal year) 
     the amount described in subparagraph (A)(ii) to an amount 
     that is not less than $.35 and not more than $1.00 per 
     individual airway bill or bill of lading. The Secretary shall 
     provide notice in the Federal Register of a proposed 
     adjustment under the preceding sentence and the reasons 
     therefor and shall allow for public comment on the proposed 
     adjustment.
       ``(ii) Notwithstanding section 451 of the Tariff Act of 
     1930, the payment required by subparagraph (A)(ii) shall be 
     the only payment required for reimbursement of the Customs 
     Service in connection with the processing of an individual 
     airway bill or bill of lading in accordance with such 
     subparagraph and for providing services at express 
     consignment carrier facilities or centralized hub facilities, 
     except that the Customs Service may require such facilities 
     to cover expenses of the Customs Service for adequate office 
     space, equipment, furnishings, supplies, and security.
       ``(iii)(I) The payment required by subparagraph (A)(ii) and 
     clause (ii) of this subparagraph shall be paid on a quarterly 
     basis by the carrier using the facility to the Customs 
     Service in accordance with regulations prescribed by the 
     Secretary of the Treasury.
       ``(II) 50 percent of the amount of payments received under 
     subparagraph (A)(ii) and clause (ii) of this subparagraph 
     shall, in accordance with section 524 of the Tariff Act of 
     1930, be deposited in the Customs User Fee Account and shall 
     be used to directly reimburse each appropriation for the 
     amount paid out of that appropriation for the costs incurred 
     in providing services to express consignment carrier 
     facilities or centralized hub facilities. Amounts deposited 
     in accordance with the preceding sentence shall be available 
     until expended for the provision of customs services to 
     express consignment carrier facilities or centralized hub 
     facilities.
       ``(III) Notwithstanding section 524 of the Tariff Act of 
     1930, the remaining 50 percent of the amount of payments 
     received under subparagraph (A)(ii) and clause (ii) of this 
     subparagraph shall be paid to the Secretary of the Treasury, 
     which is in lieu of the payment of fees under subsection 
     (a)(10) of this section.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect on October 1, 2002.

     SEC. 338. NATIONAL CUSTOMS AUTOMATION PROGRAM.

       Section 411(b) of the Tariff Act of 1930 (19 U.S.C. 
     1411(b)) is amended by striking the second sentence and 
     inserting the following: ``The Secretary may, by regulation, 
     require the electronic submission of information described in 
     subsection (a) or any other information required to be 
     submitted to the Customs Service separately pursuant to this 
     subpart.''.

     SEC. 339. AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS 
                   STAFFING.

       There are authorized to be appropriated to the Department 
     of Treasury such sums as may be necessary to provide an 
     increase in the annual rate of basic pay--
       (1) for all journeyman Customs inspectors and Canine 
     Enforcement Officers who have completed at least one year's 
     service and are receiving an annual rate of basic pay for 
     positions at GS-9 of the General Schedule under section 5332 
     of title 5, United States Code, from the annual rate of basic 
     pay payable for positions at GS-9 of the General Schedule 
     under such section 5332, to an annual rate of basic pay 
     payable for positions at GS-11 of the General Schedule under 
     such section 5332; and
       (2) for the support staff associated with the personnel 
     described in subparagraph (A), at the appropriate GS level of 
     the General Schedule under such section 5332.

                  CHAPTER 4--ANTITERRORISM PROVISIONS

     SEC. 341. IMMUNITY FOR UNITED STATES OFFICIALS THAT ACT IN 
                   GOOD FAITH.

       (a) Immunity.--Section 3061 of the Revised Statutes (19 
     U.S.C. 482) is amended--
       (1) by striking ``Any of the officers'' and inserting ``(a) 
     Any of the officers''; and
       (2) by adding at the end the following:
       ``(b) Any officer or employee of the United States 
     conducting a search of a person pursuant to subsection (a) 
     shall not be held liable for any civil damages as a result of 
     such search if the officer or employee performed the search 
     in good faith and used reasonable means while effectuating 
     such search.''.
       (b) Requirement To Post Policy and Procedures for Searches 
     of Passengers.--Not later than 30 days after the date of the 
     enactment of this Act, the Commissioner of Customs shall 
     ensure that at each Customs border facility appropriate 
     notice is posted that provides a summary of the policy and 
     procedures of the Customs Service for searching passengers, 
     including a statement of the policy relating to the 
     prohibition on the conduct of profiling of passengers based 
     on gender, race, color, religion, or ethnic background.

     SEC. 342. EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, 
                   OR STAFFING OF THE CUSTOMS SERVICE.

       Section 318 of the Tariff Act of 1930 (19 U.S.C. 1318) is 
     amended--
       (1) by striking ``Whenever the President'' and inserting 
     ``(a) Whenever the President''; and
       (2) by adding at the end the following:
       ``(b)(1) Notwithstanding any other provision of law, the 
     Secretary of the Treasury, when necessary to respond to a 
     national emergency declared under the National Emergencies 
     Act (50 U.S.C. 1601 et seq.) or to a specific threat to human 
     life or national interests, is authorized to take the 
     following actions on a temporary basis:
       ``(A) Eliminate, consolidate, or relocate any office or 
     port of entry of the Customs Service.
       ``(B) Modify hours of service, alter services rendered at 
     any location, or reduce the number of employees at any 
     location.
       ``(C) Take any other action that may be necessary to 
     respond directly to the national emergency or specific 
     threat.
       ``(2) Notwithstanding any other provision of law, the 
     Commissioner of Customs, when necessary to respond to a 
     specific threat to human life or national interests, is 
     authorized to close temporarily any Customs office or port of 
     entry or take any other lesser action that may be necessary 
     to respond to the specific threat.

[[Page 15050]]

       ``(3) The Secretary of the Treasury or the Commissioner of 
     Customs, as the case may be, shall notify the Committee on 
     Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate not later than 72 hours 
     after taking any action under paragraph (1) or (2).''.

     SEC. 343. MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO 
                   AND OTHER IMPROVED CUSTOMS REPORTING 
                   PROCEDURES.

       (a) Cargo Information.--
       (1) In general.--Subject to paragraphs (2) and (3), not 
     later than 1 year after the date of enactment of this Act, 
     the Secretary shall promulgate regulations providing for the 
     transmission to the Customs Service, through an electronic 
     data interchange system, of information pertaining to cargo 
     destined for importation into the United States or 
     exportation from the United States, prior to such importation 
     or exportation.
       (2) Information required.--The information required by the 
     regulations promulgated pursuant to paragraph (1) under the 
     parameters set forth in paragraph (3) shall be such 
     information as the Secretary determines to be reasonably 
     necessary to ensure aviation, maritime, and surface 
     transportation safety and security pursuant to those laws 
     enforced and administered by the Customs Service.
       (3) Parameters.--In developing regulations pursuant to 
     paragraph (1), the Secretary shall adhere to the following 
     parameters:
       (A) The Secretary shall solicit comments from and consult 
     with a broad range of parties likely to be affected by the 
     regulations, including importers, exporters, carriers, 
     customs brokers, and freight forwarders, among other 
     interested parties.
       (B) In general, the requirement to provide particular 
     information shall be imposed on the party most likely to have 
     direct knowledge of that information. Where requiring 
     information from the party with direct knowledge of that 
     information is not practicable, the regulations shall take 
     into account how, under ordinary commercial practices, 
     information is acquired by the party on which the requirement 
     is imposed, and whether and how such party is able to verify 
     the information. Where information is not reasonably 
     verifiable by the party on which a requirement is imposed, 
     the regulations shall permit that party to transmit 
     information on the basis of what it reasonably believes to be 
     true.
       (C) The Secretary shall take into account the existence of 
     competitive relationships among the parties on which 
     requirements to provide particular information are imposed.
       (D) Where the regulations impose requirements on carriers 
     of cargo, they shall take into account differences among 
     different modes of transportation, including differences in 
     commercial practices, operational characteristics, and 
     technological capacity to collect and transmit information 
     electronically.
       (E) The regulations shall take into account the extent to 
     which the technology necessary for parties to transmit and 
     the Customs Service to receive and analyze data in a timely 
     fashion is available. To the extent that the Secretary 
     determines that the necessary technology will not be widely 
     available to particular modes of transportation or other 
     affected parties until after promulgation of the regulations, 
     the regulations shall provide interim requirements 
     appropriate for the technology that is available at the time 
     of promulgation.
       (F) The information collected pursuant to the regulations 
     shall be used exclusively for ensuring aviation, maritime, 
     and surface transportation safety and security, and shall not 
     be used for determining entry or for any other commercial 
     enforcement purposes.
       (G) The regulations shall protect the privacy of business 
     proprietary and any other confidential information provided 
     to the Customs Service. However, this parameter does not 
     repeal, amend, or otherwise modify other provisions of law 
     relating to the public disclosure of information transmitted 
     to the Customs Service.
       (H) In determining the timing for transmittal of any 
     information, the Secretary shall balance likely impact on 
     flow of commerce with impact on aviation, maritime, and 
     surface transportation safety and security. With respect to 
     requirements that may be imposed on carriers of cargo, the 
     timing for transmittal of information shall take into account 
     differences among different modes of transportation, as 
     described in subparagraph (D).
       (I) Where practicable, the regulations shall avoid imposing 
     requirements that are redundant with one another or that are 
     redundant with requirements in other provisions of law.
       (J) The Secretary shall determine whether it is appropriate 
     to provide transition periods between promulgation of the 
     regulations and the effective date of the regulations and 
     shall prescribe such transition periods in the regulations, 
     as appropriate. The Secretary may determine that different 
     transition periods are appropriate for different classes of 
     affected parties.
       (K) With respect to requirements imposed on carriers, the 
     Secretary, in consultation with the Postmaster General, shall 
     determine whether it is appropriate to impose the same or 
     similar requirements on shipments by the United States Postal 
     Service. If the Secretary determines that such requirements 
     are appropriate, then they shall be set forth in the 
     regulations.
       (L) Not later than 15 days prior to promulgation of the 
     regulations, the Secretary shall transmit to the Committees 
     on Finance and Commerce, Science, and Transportation of the 
     Senate and the Committees on Ways and Means and 
     Transportation and Infrastructure of the House of 
     Representatives a report setting forth--
       (i) the proposed regulations;
       (ii) an explanation of how particular requirements in the 
     proposed regulations meet the needs of aviation, maritime, 
     and surface transportation safety and security;
       (iii) an explanation of how the Secretary expects the 
     proposed regulations to affect the commercial practices of 
     affected parties; and
       (iv) an explanation of how the proposed regulations address 
     particular comments received from interested parties.
       (b) Documentation of Waterborne Cargo.--Part II of title IV 
     of the Tariff Act of 1930 is amended by inserting after 
     section 431 the following new section:

     ``SEC. 431A. DOCUMENTATION OF WATERBORNE CARGO.

       ``(a) Applicability.--This section shall apply to all cargo 
     to be exported that is moved by a vessel carrier from a port 
     in the United States.
       ``(b) Documentation Required.--(1) No shipper of cargo 
     subject to this section (including an ocean transportation 
     intermediary that is a non-vessel-operating common carrier 
     (as defined in section 3(17)(B) of the Shipping Act of 1984 
     (46 U.S.C. App. 1702(17)(B)) may tender or cause to be 
     tendered to a vessel carrier cargo subject to this section 
     for loading on a vessel in a United States port, unless such 
     cargo is properly documented pursuant to this subsection.
       ``(2) For the purposes of this subsection, cargo shall be 
     considered properly documented if the shipper submits to the 
     vessel carrier or its agent a complete set of shipping 
     documents no later than 24 hours after the cargo is delivered 
     to the marine terminal operator, but under no circumstances 
     later than 24 hours prior to departure of the vessel.
       ``(3) A complete set of shipping documents shall include--
       ``(A) for shipments for which a shipper's export 
     declaration is required, a copy of the export declaration or, 
     if the shipper files such declarations electronically in the 
     Automated Export System, the complete bill of lading, and the 
     master or equivalent shipping instructions, including the 
     Internal Transaction Number (ITN); or
       ``(B) for shipments for which a shipper's export 
     declaration is not required, a shipper's export declaration 
     exemption statement and such other documents or information 
     as the Secretary may by regulation prescribe.
       ``(4) The Secretary shall by regulation prescribe the time, 
     manner, and form by which shippers shall transmit documents 
     or information required under this subsection to the Customs 
     Service.
       ``(c) Loading Undocumented Cargo Prohibited.--
       ``(1) No marine terminal operator (as defined in section 
     3(14) of the Shipping Act of 1984 (46 U.S.C. App. 1702(14))) 
     may load, or cause to be loaded, any cargo subject to this 
     section on a vessel unless instructed by the vessel carrier 
     operating the vessel that such cargo has been properly 
     documented in accordance with this section.
       ``(2) When cargo is booked by 1 vessel carrier to be 
     transported on the vessel of another vessel carrier, the 
     booking carrier shall notify the operator of the vessel that 
     the cargo has been properly documented in accordance with 
     this section. The operator of the vessel may rely on such 
     notification in releasing the cargo for loading aboard the 
     vessel.
       ``(d) Reporting of Undocumented Cargo.--A vessel carrier 
     shall notify the Customs Service of any cargo tendered to 
     such carrier that is not properly documented pursuant to this 
     section and that has remained in the marine terminal for more 
     than 48 hours after being delivered to the marine terminal, 
     and the location of the cargo in the marine terminal. For 
     vessel carriers that are members of vessel sharing agreements 
     (or any other arrangement whereby a carrier moves cargo on 
     another carrier's vessel), the vessel carrier accepting the 
     booking shall be responsible for reporting undocumented 
     cargo, without regard to whether it operates the vessel on 
     which the transportation is to be made.
       ``(e) Assessment of Penalties.--Whoever is found to have 
     violated subsection (b) of this section shall be liable to 
     the United States for civil penalties in a monetary amount up 
     to the value of the cargo, or the actual cost of the 
     transportation, whichever is greater.
       ``(f) Seizure of Undocumented Cargo.--
       ``(1) Any cargo that is not properly documented pursuant to 
     this section and has remained in the marine terminal for more 
     than 48 hours after being delivered to the marine terminal 
     operator shall be subject to search, seizure, and forfeiture.
       ``(2) The shipper of any such cargo is liable to the marine 
     terminal operator and to the ocean carrier for demurrage and 
     other applicable charges for any undocumented cargo which has 
     been notified to or searched or seized by the Customs Service 
     for the entire period the cargo remains under the order and 
     direction of the Customs Service. Unless the cargo is seized 
     by the Customs Service and forfeited, the marine terminal 
     operator and the ocean carrier shall have a lien on the cargo 
     for the amount of the demurrage and other charges.
       ``(g) Effect on Other Provisions.--Nothing in this section 
     shall be construed, interpreted, or applied to relieve or 
     excuse any party from compliance with any obligation or 
     requirement arising under any other law, regulation, or order 
     with regard to the documentation or carriage of cargo.''.
       (c) Secretary.--For purposes of this section, the term 
     ``Secretary'' means the Secretary of the Treasury. If, at the 
     time the regulations required by subsection (a)(1) are 
     promulgated, the

[[Page 15051]]

     Customs Service is no longer located in the Department of the 
     Treasury, then the Secretary of the Treasury shall exercise 
     the authority under subsection (a) jointly with the Secretary 
     of the Department in which the Customs Service is located.

     SEC. 343A. SECURE SYSTEMS OF TRANSPORTATION.

       (a) Joint Task Force.--The Secretary of the Treasury shall 
     establish a joint task force to evaluate, prototype, and 
     certify secure systems of transportation. The joint task 
     force shall be comprised of officials from the Department of 
     Transportation and the Customs Service, and any other 
     officials that the Secretary deems appropriate. The task 
     force shall establish a program to evaluate and certify 
     secure systems of international intermodal transport no later 
     than 1 year after the date of enactment of this Act. The task 
     force shall solicit and consider input from a broad range of 
     interested parties.
       (b) Program Requirements.--At a minimum the program 
     referred to in subsection (a) shall require certified systems 
     of international intermodal transport to be significantly 
     more secure than existing transportation programs, and the 
     program shall--
       (1) establish standards and a process for screening and 
     evaluating cargo prior to import into or export from the 
     United States;
       (2) establish standards and a process for a system of 
     securing cargo and monitoring it while in transit;
       (3) establish standards and a process for allowing the 
     United States Government to ensure and validate compliance 
     with the program elements; and
       (4) include any other elements that the task force deems 
     necessary to ensure the security and integrity of the 
     international intermodal transport movements.
       (c) Recognition of Certified Systems.--
       (1) Secretary of the Treasury.--The Secretary of the 
     Treasury shall recognize certified systems of intermodal 
     transport in the requirements of a national security plan for 
     United States seaports, and in the provisions requiring 
     planning to reopen United States ports for commerce.
       (2) Commissioner of Customs.--The Commissioner of Customs 
     shall recognize certified systems of intermodal transport in 
     the evaluation of cargo risk for purposes of United States 
     imports and exports.
       (d) Report.--Within 1 year after the program described in 
     subsection (a) is implemented, the Secretary of the Treasury 
     shall transmit a report to the Committees on Commerce, 
     Science, and Transportation and Finance of the Senate and the 
     Committees on Transportation and Infrastructure and Ways and 
     Means of the House of Representatives that--
       (1) evaluates the program and its requirements;
       (2) states the Secretary's views as to whether any 
     procedure, system, or technology evaluated as part of the 
     program offers a higher level of security than under existing 
     procedures;
       (3) states the Secretary's views as to the integrity of the 
     procedures, technology, or systems evaluated as part of the 
     program; and
       (4) makes a recommendation with respect to whether the 
     program, or any procedure, system, or technology should be 
     incorporated in a nationwide system for certified systems of 
     intermodal transport.

     SEC. 344. BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN 
                   OUTBOUND MAIL.

       (a) In General.--The Tariff Act of 1930 is amended by 
     inserting after section 582 the following:

     ``SEC. 583. EXAMINATION OF OUTBOUND MAIL.

       ``(a) Examination.--
       ``(1) In general.--For purposes of ensuring compliance with 
     the Customs laws of the United States and other laws enforced 
     by the Customs Service, including the provisions of law 
     described in paragraph (2), a Customs officer may, subject to 
     the provisions of this section, stop and search at the 
     border, without a search warrant, mail of domestic origin 
     transmitted for export by the United States Postal Service 
     and foreign mail transiting the United States that is being 
     imported or exported by the United States Postal Service.
       ``(2) Provisions of law described.--The provisions of law 
     described in this paragraph are the following:
       ``(A) Section 5316 of title 31, United States Code 
     (relating to reports on exporting and importing monetary 
     instruments).
       ``(B) Sections 1461, 1463, 1465, and 1466, and chapter 110 
     of title 18, United States Code (relating to obscenity and 
     child pornography).
       ``(C) Section 1003 of the Controlled Substances Import and 
     Export Act (relating to exportation of controlled substances) 
     (21 U.S.C. 953).
       ``(D) The Export Administration Act of 1979 (50 U.S.C. App. 
     2401 et seq.).
       ``(E) Section 38 of the Arms Export Control Act (22 U.S.C. 
     2778).
       ``(F) The International Emergency Economic Powers Act (50 
     U.S.C. 1701 et seq.).
       ``(b) Search of Mail Not Sealed Against Inspection and 
     Other Mail.--Mail not sealed against inspection under the 
     postal laws and regulations of the United States, mail which 
     bears a Customs declaration, and mail with respect to which 
     the sender or addressee has consented in writing to search, 
     may be searched by a Customs officer.
       ``(c) Search of Mail Sealed Against Inspection Weighing in 
     Excess of 16 Ounces.--
       ``(1) In general.--Mail weighing in excess of 16 ounces 
     sealed against inspection under the postal laws and 
     regulations of the United States may be searched by a Customs 
     officer, subject to paragraph (2), if there is reasonable 
     cause to suspect that such mail contains one or more of the 
     following:
       ``(A) Monetary instruments, as defined in section 1956 of 
     title 18, United States Code.
       ``(B) A weapon of mass destruction, as defined in section 
     2332a(b) of title 18, United States Code.
       ``(C) A drug or other substance listed in schedule I, II, 
     III, or IV in section 202 of the Controlled Substances Act 
     (21 U.S.C. 812).
       ``(D) National defense and related information transmitted 
     in violation of any of sections 793 through 798 of title 18, 
     United States Code.
       ``(E) Merchandise mailed in violation of section 1715 or 
     1716 of title 18, United States Code.
       ``(F) Merchandise mailed in violation of any provision of 
     chapter 71 (relating to obscenity) or chapter 110 (relating 
     to sexual exploitation and other abuse of children) of title 
     18, United States Code.
       ``(G) Merchandise mailed in violation of the Export 
     Administration Act of 1979 (50 U.S.C. App. 2401 et seq.).
       ``(H) Merchandise mailed in violation of section 38 of the 
     Arms Export Control Act (22 U.S.C. 2778).
       ``(I) Merchandise mailed in violation of the International 
     Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).
       ``(J) Merchandise mailed in violation of the Trading with 
     the Enemy Act (50 U.S.C. App. 1 et seq.).
       ``(K) Merchandise subject to any other law enforced by the 
     Customs Service.
       ``(2) Limitation.--No person acting under the authority of 
     paragraph (1) shall read, or authorize any other person to 
     read, any correspondence contained in mail sealed against 
     inspection unless prior to so reading--
       ``(A) a search warrant has been issued pursuant to rule 41 
     of the Federal Rules of Criminal Procedure; or
       ``(B) the sender or addressee has given written 
     authorization for such reading.
       ``(d) Search of Mail Sealed Against Inspection Weighing 16 
     Ounces or Less.--Notwithstanding any other provision of this 
     section, subsection (a)(1) shall not apply to mail weighing 
     16 ounces or less sealed against inspection under the postal 
     laws and regulations of the United States.''.
       (b) Certification by Secretary.--Not later than 3 months 
     after the date of enactment of this section, the Secretary of 
     State shall determine whether the application of section 583 
     of the Tariff Act of 1930 to foreign mail transiting the 
     United States that is imported or exported by the United 
     States Postal Service is being handled in a manner consistent 
     with international law and any international obligation of 
     the United States. Section 583 of such Act shall not apply to 
     such foreign mail unless the Secretary certifies to Congress 
     that the application of such section 583 is consistent with 
     international law and any international obligation of the 
     United States.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), this 
     section and the amendments made by this section shall take 
     effect on the date of enactment of this Act.
       (2) Certification with respect to foreign mail.--The 
     provisions of section 583 of the Tariff Act of 1930 relating 
     to foreign mail transiting the United States that is imported 
     or exported by the United States Postal Service shall not 
     take effect until the Secretary of State certifies to 
     Congress, pursuant to subsection (b), that the application of 
     such section 583 is consistent with international law and any 
     international obligation of the United States.

     SEC. 345. AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT 
                   OF CUSTOMS OPERATIONS IN NEW YORK CITY.

       (a) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated for 
     the reestablishment of operations of the Customs Service in 
     New York, New York, such sums as may be necessary for fiscal 
     year 2003.
       (2) Operations described.--The operations referred to in 
     paragraph (1) include, but are not limited to, the following:
       (A) Operations relating to the Port Director of New York 
     City, the New York Customs Management Center (including the 
     Director of Field Operations), and the Special Agent-In-
     Charge for New York.
       (B) Commercial operations, including textile enforcement 
     operations and salaries and expenses of--
       (i) trade specialists who determine the origin and value of 
     merchandise;
       (ii) analysts who monitor the entry data into the United 
     States of textiles and textile products; and
       (iii) Customs officials who work with foreign governments 
     to examine textile makers and verify entry information.
       (b) Availability.--Amounts appropriated pursuant to the 
     authorization of appropriations under subsection (a) are 
     authorized to remain available until expended.

              CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS

     SEC. 351. GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY 
                   CUSTOMS SERVICE.

       (a) GAO Audit.--The Comptroller General of the United 
     States shall conduct an audit of the system established and 
     carried out by the Customs Service to monitor transshipment.

[[Page 15052]]

       (b) Report.--Not later than 9 months after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to the Committee on Ways and Means of the House of 
     Representatives and Committee on Finance of the Senate a 
     report that contains the results of the study conducted under 
     subsection (a), including recommendations for improvements to 
     the transshipment monitoring system if applicable.
       (c) Transshipment Described.--Transshipment within the 
     meaning of this section has occurred when preferential 
     treatment under any provision of law has been claimed for a 
     textile or apparel article on the basis of material false 
     information concerning the country of origin, manufacture, 
     processing, or assembly of the article or any of its 
     components. For purposes of the preceding sentence, false 
     information is material if disclosure of the true information 
     would mean or would have meant that the article is or was 
     ineligible for preferential treatment under the provision of 
     law in question.

     SEC. 352. AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE 
                   TRANSSHIPMENT ENFORCEMENT OPERATIONS.

       (a) Authorization of Appropriations.--
       (1) In general.--There is authorized to be appropriated for 
     transshipment (as described in section 351(c)) enforcement 
     operations, outreach, and education of the Customs Service 
     $9,500,000 for fiscal year 2003.
       (2) Availability.--Amounts appropriated pursuant to the 
     authorization of appropriations under paragraph (1) are 
     authorized to remain available until expended.
       (b) Use of Funds.--Of the amount appropriated pursuant to 
     the authorization of appropriations under subsection (a), the 
     following amounts are authorized to be made available for the 
     following purposes:
       (1) Import specialists.--$1,463,000 for 21 Customs import 
     specialists to be assigned to selected ports for 
     documentation review to support detentions and exclusions and 
     1 additional Customs import specialist assigned to the 
     Customs headquarters textile program to administer the 
     program and provide oversight.
       (2) Inspectors.--$652,080 for 10 Customs inspectors to be 
     assigned to selected ports to examine targeted high-risk 
     shipments.
       (3) Investigators.--(A) $1,165,380 for 10 investigators to 
     be assigned to selected ports to investigate instances of 
     smuggling, quota and trade agreement circumvention, and use 
     of counterfeit visas to enter inadmissible goods.
       (B) $149,603 for 1 investigator to be assigned to the 
     Customs headquarters textile program to coordinate and ensure 
     implementation of textile production verification team 
     results from an investigation perspective.
       (4) International trade specialists.--$226,500 for 3 
     international trade specialists to be assigned to Customs 
     headquarters to be dedicated to illegal textile transshipment 
     policy issues, outreach, education, and other free trade 
     agreement enforcement issues.
       (5) Permanent import specialists for hong kong.--$500,000 
     for 2 permanent import specialist positions and $500,000 for 
     2 investigators to be assigned to Hong Kong to work with Hong 
     Kong and other government authorities in Southeast Asia to 
     assist such authorities in pursuing proactive enforcement of 
     bilateral trade agreements.
       (6) Various permanent trade positions.--$3,500,000 for the 
     following:
       (A) 2 permanent positions to be assigned to the Customs 
     attache office in Central America to address trade 
     enforcement issues for that region.
       (B) 2 permanent positions to be assigned to the Customs 
     attache office in South Africa to address trade enforcement 
     issues pursuant to the African Growth and Opportunity Act 
     (title I of Public Law 106-200).
       (C) 4 permanent positions to be assigned to the Customs 
     attache office in Mexico to address the threat of illegal 
     textile transshipment through Mexico and other related issues 
     under the North American Free Trade Agreement Act.
       (D) 2 permanent positions to be assigned to the Customs 
     attache office in Seoul, South Korea, to address the trade 
     issues in the geographic region.
       (E) 2 permanent positions to be assigned to the proposed 
     Customs attache office in New Delhi, India, to address the 
     threat of illegal textile transshipment and other trade 
     enforcement issues.
       (F) 2 permanent positions to be assigned to the Customs 
     attache office in Rome, Italy, to address trade enforcement 
     issues in the geographic region, including issues under free 
     trade agreements with Jordan and Israel.
       (7) Attorneys.--$179,886 for 2 attorneys for the Office of 
     the Chief Counsel of the Customs Service to pursue cases 
     regarding illegal textile transshipment.
       (8) Auditors.--$510,000 for 6 Customs auditors to perform 
     internal control reviews and document and record reviews of 
     suspect importers.
       (9) Additional travel funds.--$250,000 for deployment of 
     additional textile production verification teams to sub-
     Saharan Africa.
       (10) Training.--(A) $75,000 for training of Customs 
     personnel.
       (B) $200,000 for training for foreign counterparts in risk 
     management analytical techniques and for teaching factory 
     inspection techniques, model law development, and enforcement 
     techniques.
       (11) Outreach.--$60,000 for outreach efforts to United 
     States importers.

     SEC. 353. IMPLEMENTATION OF THE AFRICAN GROWTH AND 
                   OPPORTUNITY ACT.

       Of the amount made available for fiscal year 2003 under 
     section 301(b)(2)(A) of the Customs Procedural Reform and 
     Simplification Act of 1978 (19 U.S.C. 2075(b)(2)(A)), as 
     amended by section 311(b)(1) of this Act, $1,317,000 shall be 
     available until expended for the Customs Service to provide 
     technical assistance to help sub-Saharan African countries 
     develop and implement effective visa and anti-transshipment 
     systems as required by the African Growth and Opportunity Act 
     (title I of Public Law 106-200), as follows:
       (1) Travel funds.--$600,000 for import specialists, special 
     agents, and other qualified Customs personnel to travel to 
     sub-Saharan African countries to provide technical assistance 
     in developing and implementing effective visa and anti-
     transshipment systems.
       (2) Import specialists.--$266,000 for 4 import specialists 
     to be assigned to Customs headquarters to be dedicated to 
     providing technical assistance to sub-Saharan African 
     countries for developing and implementing effective visa and 
     anti-transshipment systems.
       (3) Data reconciliation analysts.--$151,000 for 2 data 
     reconciliation analysts to review apparel shipments.
       (4) Special agents.--$300,000 for 2 special agents to be 
     assigned to Customs headquarters to be available to provide 
     technical assistance to sub-Saharan African countries in the 
     performance of investigations and other enforcement 
     initiatives.

      Subtitle B--Office of the United States Trade Representative

     SEC. 361. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Section 141(g)(1) of the Trade Act of 1974 
     (19 U.S.C. 2171(g)(1)) is amended--
       (1) in subparagraph (A)--
       (A) in the matter preceding clause (i), by striking ``not 
     to exceed'';
       (B) by striking clause (i), and inserting the following:
       ``(i) $32,300,000 for fiscal year 2003.''; and
       (C) by striking clause (ii), and inserting the following:
       ``(ii) $33,108,000 for fiscal year 2004.''; and
       (2) in subparagraph (B)--
       (A) in clause (i), by adding ``and'' at the end;
       (B) by striking clause (ii); and
       (C) by redesignating clause (iii) as clause (ii).
       (b) Submission of Out-Year Budget Projections.--Section 
     141(g) of the Trade Act of 1974 (19 U.S.C. 2171(g)) is 
     amended by adding at the end the following:
       ``(3) By not later than the date on which the President 
     submits to Congress the budget of the United States 
     Government for a fiscal year, the United States Trade 
     Representative shall submit to the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate the projected amount of funds for the 
     succeeding fiscal year that will be necessary for the Office 
     to carry out its functions.''.
       (c) Additional Staff for Office of Assistant U.S. Trade 
     Representative for Congressional Affairs.--
       (1) In general.--There is authorized to be appropriated 
     such sums as may be necessary for fiscal year 2003 for the 
     salaries and expenses of two additional legislative 
     specialist employee positions within the Office of the 
     Assistant United States Trade Representative for 
     Congressional Affairs.
       (2) Availability.--Amounts appropriated pursuant to the 
     authorization of appropriations under paragraph (1) are 
     authorized to remain available until expended.

        Subtitle C--United States International Trade Commission

     SEC. 371. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--Section 330(e)(2)(A) of the Tariff Act of 
     1930 (19 U.S.C. 1330(e)(2)(A)) is amended--
       (1) by striking clause (i), and inserting the following:
       ``(i) $54,000,000 for fiscal year 2003.''; and
       (2) by striking clause (ii), and inserting the following:
       ``(ii) $57,240,000 for fiscal year 2004.''.
       (b) Submission of Out-Year Budget Projections.--Section 
     330(e) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is 
     amended by adding at the end the following:
       ``(4) By not later than the date on which the President 
     submits to Congress the budget of the United States 
     Government for a fiscal year, the Commission shall submit to 
     the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     the projected amount of funds for the succeeding fiscal year 
     that will be necessary for the Commission to carry out its 
     functions.''.

                   Subtitle D--Other trade provisions

     SEC. 381. INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM 
                   DUTY ACQUIRED ABROAD BY UNITED STATES 
                   RESIDENTS.

       (a) In General.--Subheading 9804.00.65 of the Harmonized 
     Tariff Schedule of the United States is amended in the 
     article description column by striking ``$400'' and inserting 
     ``$800''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect 90 days after the date of the enactment of 
     this Act.

     SEC. 382. REGULATORY AUDIT PROCEDURES.

       Section 509(b) of the Tariff Act of 1930 (19 U.S.C. 
     1509(b)) is amended by adding at the end the following:
       ``(6)(A) If during the course of any audit concluded under 
     this subsection, the Customs Service identifies overpayments 
     of duties or fees or over-declarations of quantities or 
     values that are within the time period and scope of the audit 
     that the Customs Service has defined,

[[Page 15053]]

     then in calculating the loss of revenue or monetary penalties 
     under section 592, the Customs Service shall treat the 
     overpayments or over-declarations on finally liquidated 
     entries as an offset to any underpayments or 
     underdeclarations also identified on finally liquidated 
     entries, if such overpayments or over-declarations were not 
     made by the person being audited for the purpose of violating 
     any provision of law.
       ``(B) Nothing in this paragraph shall be construed to 
     authorize a refund not otherwise authorized under section 
     520.''.

     SEC. 383. PAYMENT OF DUTIES AND FEES.

       Section 505(a) of the Tariff Act of 1930 (19 U.S.C. 
     1505(a)) is amended to read as follows:
       ``(a) Deposit of Estimated Duties and Fees.--Unless the 
     entry is subject to a periodic payment or the merchandise is 
     entered for warehouse or transportation, or under bond, the 
     importer of record shall deposit with the Customs Service at 
     the time of entry, or at such later time as the Secretary may 
     prescribe by regulation (but not later than 10 working days 
     after entry or release) the amount of duties and fees 
     estimated to be payable on such merchandise. As soon as a 
     periodic payment module of the Automated Commercial 
     Environment is developed, but no later than October 1, 2004, 
     a participating importer of record, or the importer's filer, 
     may deposit estimated duties and fees for entries of 
     merchandise no later than the 15th day of the month following 
     the month in which the merchandise is entered or released, 
     whichever comes first.''.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY

     SEC. 2101. SHORT TITLE AND FINDINGS.

       (a) Short Title.--This title may be cited as the 
     ``Bipartisan Trade Promotion Authority Act of 2002''.
       (b) Findings.--The Congress makes the following findings:
       (1) The expansion of international trade is vital to the 
     national security of the United States. Trade is critical to 
     the economic growth and strength of the United States and to 
     its leadership in the world. Stable trading relationships 
     promote security and prosperity. Trade agreements today serve 
     the same purposes that security pacts played during the Cold 
     War, binding nations together through a series of mutual 
     rights and obligations. Leadership by the United States in 
     international trade fosters open markets, democracy, and 
     peace throughout the world.
       (2) The national security of the United States depends on 
     its economic security, which in turn is founded upon a 
     vibrant and growing industrial base. Trade expansion has been 
     the engine of economic growth. Trade agreements maximize 
     opportunities for the critical sectors and building blocks of 
     the economy of the United States, such as information 
     technology, telecommunications and other leading 
     technologies, basic industries, capital equipment, medical 
     equipment, services, agriculture, environmental technology, 
     and intellectual property. Trade will create new 
     opportunities for the United States and preserve the 
     unparalleled strength of the United States in economic, 
     political, and military affairs. The United States, secured 
     by expanding trade and economic opportunities, will meet the 
     challenges of the twenty-first century.
       (3) Support for continued trade expansion requires that 
     dispute settlement procedures under international trade 
     agreements not add to or diminish the rights and obligations 
     provided in such agreements. Therefore--
       (A) the recent pattern of decisions by dispute settlement 
     panels of the WTO and the Appellate Body to impose 
     obligations and restrictions on the use of antidumping, 
     countervailing, and safeguard measures by WTO members under 
     the Antidumping Agreement, the Agreement on Subsidies and 
     Countervailing Measures, and the Agreement on Safeguards has 
     raised concerns; and
       (B) the Congress is concerned that dispute settlement 
     panels of the WTO and the Appellate Body appropriately apply 
     the standard of review contained in Article 17.6 of the 
     Antidumping Agreement, to provide deference to a permissible 
     interpretation by a WTO member of provisions of that 
     Agreement, and to the evaluation by a WTO member of the facts 
     where that evaluation is unbiased and objective and the 
     establishment of the facts is proper.

     SEC. 2102. TRADE NEGOTIATING OBJECTIVES.

       (a) Overall Trade Negotiating Objectives.--The overall 
     trade negotiating objectives of the United States for 
     agreements subject to the provisions of section 2103 are--
       (1) to obtain more open, equitable, and reciprocal market 
     access;
       (2) to obtain the reduction or elimination of barriers and 
     distortions that are directly related to trade and that 
     decrease market opportunities for United States exports or 
     otherwise distort United States trade;
       (3) to further strengthen the system of international 
     trading disciplines and procedures, including dispute 
     settlement;
       (4) to foster economic growth, raise living standards, and 
     promote full employment in the United States and to enhance 
     the global economy;
       (5) to ensure that trade and environmental policies are 
     mutually supportive and to seek to protect and preserve the 
     environment and enhance the international means of doing so, 
     while optimizing the use of the world's resources;
       (6) to promote respect for worker rights and the rights of 
     children consistent with core labor standards of the ILO (as 
     defined in section 2113(6)) and an understanding of the 
     relationship between trade and worker rights;
       (7) to seek provisions in trade agreements under which 
     parties to those agreements strive to ensure that they do not 
     weaken or reduce the protections afforded in domestic 
     environmental and labor laws as an encouragement for trade;
       (8) to ensure that trade agreements afford small businesses 
     equal access to international markets, equitable trade 
     benefits, and expanded export market opportunities, and 
     provide for the reduction or elimination of trade barriers 
     that disproportionately impact small businesses; and
       (9) to promote universal ratification and full compliance 
     with ILO Convention No. 182 Concerning the Prohibition and 
     Immediate Action for the Elimination of the Worst Forms of 
     Child Labor.
       (b) Principal Trade Negotiating Objectives.--
       (1) Trade barriers and distortions.--The principal 
     negotiating objectives of the United States regarding trade 
     barriers and other trade distortions are--
       (A) to expand competitive market opportunities for United 
     States exports and to obtain fairer and more open conditions 
     of trade by reducing or eliminating tariff and nontariff 
     barriers and policies and practices of foreign governments 
     directly related to trade that decrease market opportunities 
     for United States exports or otherwise distort United States 
     trade; and
       (B) to obtain reciprocal tariff and nontariff barrier 
     elimination agreements, with particular attention to those 
     tariff categories covered in section 111(b) of the Uruguay 
     Round Agreements Act (19 U.S.C. 3521(b)).
       (2) Trade in services.--The principal negotiating objective 
     of the United States regarding trade in services is to reduce 
     or eliminate barriers to international trade in services, 
     including regulatory and other barriers that deny national 
     treatment and market access or unreasonably restrict the 
     establishment or operations of service suppliers.
       (3) Foreign investment.--Recognizing that United States law 
     on the whole provides a high level of protection for 
     investment, consistent with or greater than the level 
     required by international law, the principal negotiating 
     objectives of the United States regarding foreign investment 
     are to reduce or eliminate artificial or trade-distorting 
     barriers to foreign investment, while ensuring that foreign 
     investors in the United States are not accorded greater 
     substantive rights with respect to investment protections 
     than United States investors in the United States, and to 
     secure for investors important rights comparable to those 
     that would be available under United States legal principles 
     and practice, by--
       (A) reducing or eliminating exceptions to the principle of 
     national treatment;
       (B) freeing the transfer of funds relating to investments;
       (C) reducing or eliminating performance requirements, 
     forced technology transfers, and other unreasonable barriers 
     to the establishment and operation of investments;
       (D) seeking to establish standards for expropriation and 
     compensation for expropriation, consistent with United States 
     legal principles and practice;
       (E) seeking to establish standards for fair and equitable 
     treatment consistent with United States legal principles and 
     practice, including the principle of due process;
       (F) providing meaningful procedures for resolving 
     investment disputes;
       (G) seeking to improve mechanisms used to resolve disputes 
     between an investor and a government through--
       (i) mechanisms to eliminate frivolous claims and to deter 
     the filing of frivolous claims;
       (ii) procedures to ensure the efficient selection of 
     arbitrators and the expeditious disposition of claims;
       (iii) procedures to enhance opportunities for public input 
     into the formulation of government positions; and
       (iv) providing for an appellate body or similar mechanism 
     to provide coherence to the interpretations of investment 
     provisions in trade agreements; and
       (H) ensuring the fullest measure of transparency in the 
     dispute settlement mechanism, to the extent consistent with 
     the need to protect information that is classified or 
     business confidential, by--
       (i) ensuring that all requests for dispute settlement are 
     promptly made public;
       (ii) ensuring that--

       (I) all proceedings, submissions, findings, and decisions 
     are promptly made public; and
       (II) all hearings are open to the public; and

       (iii) establishing a mechanism for acceptance of amicus 
     curiae submissions from businesses, unions, and 
     nongovernmental organizations.
       (4) Intellectual property.--The principal negotiating 
     objectives of the United States regarding trade-related 
     intellectual property are--
       (A) to further promote adequate and effective protection of 
     intellectual property rights, including through--
       (i)(I) ensuring accelerated and full implementation of the 
     Agreement on Trade-Related Aspects of Intellectual Property 
     Rights referred to in section 101(d)(15) of the Uruguay Round 
     Agreements Act (19 U.S.C. 3511(d)(15)), particularly with 
     respect to meeting enforcement obligations under that 
     agreement; and
       (II) ensuring that the provisions of any multilateral or 
     bilateral trade agreement governing intellectual property 
     rights that is entered into

[[Page 15054]]

     by the United States reflect a standard of protection similar 
     to that found in United States law;
       (ii) providing strong protection for new and emerging 
     technologies and new methods of transmitting and distributing 
     products embodying intellectual property;
       (iii) preventing or eliminating discrimination with respect 
     to matters affecting the availability, acquisition, scope, 
     maintenance, use, and enforcement of intellectual property 
     rights;
       (iv) ensuring that standards of protection and enforcement 
     keep pace with technological developments, and in particular 
     ensuring that rightholders have the legal and technological 
     means to control the use of their works through the Internet 
     and other global communication media, and to prevent the 
     unauthorized use of their works; and
       (v) providing strong enforcement of intellectual property 
     rights, including through accessible, expeditious, and 
     effective civil, administrative, and criminal enforcement 
     mechanisms;
       (B) to secure fair, equitable, and nondiscriminatory market 
     access opportunities for United States persons that rely upon 
     intellectual property protection; and
       (C) to respect the Declaration on the TRIPS Agreement and 
     Public Health, adopted by the World Trade Organization at the 
     Fourth Ministerial Conference at Doha, Qatar on November 14, 
     2001.
       (5) Transparency.--The principal negotiating objective of 
     the United States with respect to transparency is to obtain 
     wider and broader application of the principle of 
     transparency through--
       (A) increased and more timely public access to information 
     regarding trade issues and the activities of international 
     trade institutions;
       (B) increased openness at the WTO and other international 
     trade fora by increasing public access to appropriate 
     meetings, proceedings, and submissions, including with regard 
     to dispute settlement and investment; and
       (C) increased and more timely public access to all 
     notifications and supporting documentation submitted by 
     parties to the WTO.
       (6) Anti-corruption.--The principal negotiating objectives 
     of the United States with respect to the use of money or 
     other things of value to influence acts, decisions, or 
     omissions of foreign governments or officials or to secure 
     any improper advantage in a manner affecting trade are--
       (A) to obtain high standards and appropriate domestic 
     enforcement mechanisms applicable to persons from all 
     countries participating in the applicable trade agreement 
     that prohibit such attempts to influence acts, decisions, or 
     omissions of foreign governments; and
       (B) to ensure that such standards do not place United 
     States persons at a competitive disadvantage in international 
     trade.
       (7) Improvement of the wto and multilateral trade 
     agreements.--The principal negotiating objectives of the 
     United States regarding the improvement of the World Trade 
     Organization, the Uruguay Round Agreements, and other 
     multilateral and bilateral trade agreements are--
       (A) to achieve full implementation and extend the coverage 
     of the World Trade Organization and such agreements to 
     products, sectors, and conditions of trade not adequately 
     covered; and
       (B) to expand country participation in and enhancement of 
     the Information Technology Agreement and other trade 
     agreements.
       (8) Regulatory practices.--The principal negotiating 
     objectives of the United States regarding the use of 
     government regulation or other practices by foreign 
     governments to provide a competitive advantage to their 
     domestic producers, service providers, or investors and 
     thereby reduce market access for United States goods, 
     services, and investments are--
       (A) to achieve increased transparency and opportunity for 
     the participation of affected parties in the development of 
     regulations;
       (B) to require that proposed regulations be based on sound 
     science, cost-benefit analysis, risk assessment, or other 
     objective evidence;
       (C) to establish consultative mechanisms among parties to 
     trade agreements to promote increased transparency in 
     developing guidelines, rules, regulations, and laws for 
     government procurement and other regulatory regimes; and
       (D) to achieve the elimination of government measures such 
     as price controls and reference pricing which deny full 
     market access for United States products.
       (9) Electronic commerce.--The principal negotiating 
     objectives of the United States with respect to electronic 
     commerce are--
       (A) to ensure that current obligations, rules, disciplines, 
     and commitments under the World Trade Organization apply to 
     electronic commerce;
       (B) to ensure that--
       (i) electronically delivered goods and services receive no 
     less favorable treatment under trade rules and commitments 
     than like products delivered in physical form; and
       (ii) the classification of such goods and services ensures 
     the most liberal trade treatment possible;
       (C) to ensure that governments refrain from implementing 
     trade-related measures that impede electronic commerce;
       (D) where legitimate policy objectives require domestic 
     regulations that affect electronic commerce, to obtain 
     commitments that any such regulations are the least 
     restrictive on trade, nondiscriminatory, and transparent, and 
     promote an open market environment; and
       (E) to extend the moratorium of the World Trade 
     Organization on duties on electronic transmissions.
       (10) Reciprocal trade in agriculture.--(A) The principal 
     negotiating objective of the United States with respect to 
     agriculture is to obtain competitive opportunities for United 
     States exports of agricultural commodities in foreign markets 
     substantially equivalent to the competitive opportunities 
     afforded foreign exports in United States markets and to 
     achieve fairer and more open conditions of trade in bulk, 
     specialty crop, and value-added commodities by--
       (i) reducing or eliminating, by a date certain, tariffs or 
     other charges that decrease market opportunities for United 
     States exports--
       (I) giving priority to those products that are subject to 
     significantly higher tariffs or subsidy regimes of major 
     producing countries; and
       (II) providing reasonable adjustment periods for United 
     States import-sensitive products, in close consultation with 
     the Congress on such products before initiating tariff 
     reduction negotiations;
       (ii) reducing tariffs to levels that are the same as or 
     lower than those in the United States;
       (iii) reducing or eliminating subsidies that decrease 
     market opportunities for United States exports or unfairly 
     distort agriculture markets to the detriment of the United 
     States;
       (iv) allowing the preservation of programs that support 
     family farms and rural communities but do not distort trade;
       (v) developing disciplines for domestic support programs, 
     so that production that is in excess of domestic food 
     security needs is sold at world prices;
       (vi) eliminating government policies that create price-
     depressing surpluses;
       (vii) eliminating state trading enterprises whenever 
     possible;
       (viii) developing, strengthening, and clarifying rules and 
     effective dispute settlement mechanisms to eliminate 
     practices that unfairly decrease United States market access 
     opportunities or distort agricultural markets to the 
     detriment of the United States, particularly with respect to 
     import-sensitive products, including--
       (I) unfair or trade-distorting activities of state trading 
     enterprises and other administrative mechanisms, with 
     emphasis on requiring price transparency in the operation of 
     state trading enterprises and such other mechanisms in order 
     to end cross subsidization, price discrimination, and price 
     undercutting;
       (II) unjustified trade restrictions or commercial 
     requirements, such as labeling, that affect new technologies, 
     including biotechnology;
       (III) unjustified sanitary or phytosanitary restrictions, 
     including those not based on scientific principles in 
     contravention of the Uruguay Round Agreements;
       (IV) other unjustified technical barriers to trade; and
       (V) restrictive rules in the administration of tariff rate 
     quotas;
       (ix) eliminating practices that adversely affect trade in 
     perishable or cyclical products, while improving import 
     relief mechanisms to recognize the unique characteristics of 
     perishable and cyclical agriculture;
       (x) ensuring that import relief mechanisms for perishable 
     and cyclical agriculture are as accessible and timely to 
     growers in the United States as those mechanisms that are 
     used by other countries;
       (xi) taking into account whether a party to the 
     negotiations has failed to adhere to the provisions of 
     already existing trade agreements with the United States or 
     has circumvented obligations under those agreements;
       (xii) taking into account whether a product is subject to 
     market distortions by reason of a failure of a major 
     producing country to adhere to the provisions of already 
     existing trade agreements with the United States or by the 
     circumvention by that country of its obligations under those 
     agreements;
       (xiii) otherwise ensuring that countries that accede to the 
     World Trade Organization have made meaningful market 
     liberalization commitments in agriculture;
       (xiv) taking into account the impact that agreements 
     covering agriculture to which the United States is a party, 
     including the North American Free Trade Agreement, have on 
     the United States agricultural industry;
       (xv) maintaining bona fide food assistance programs and 
     preserving United States market development and export credit 
     programs; and
       (xvi) striving to complete a general multilateral round in 
     the World Trade Organization by January 1, 2005, and seeking 
     the broadest market access possible in multilateral, 
     regional, and bilateral negotiations, recognizing the effect 
     that simultaneous sets of negotiations may have on United 
     States import-sensitive commodities (including those subject 
     to tariff-rate quotas).
       (B)(i) Before commencing negotiations with respect to 
     agriculture, the United States Trade Representative, in 
     consultation with the Congress, shall seek to develop a 
     position on the treatment of seasonal and perishable 
     agricultural products to be employed in the negotiations in 
     order to develop an international consensus on the treatment 
     of seasonal or perishable agricultural products in 
     investigations relating to dumping and safeguards and in any 
     other relevant area.
       (ii) During any negotiations on agricultural subsidies, the 
     United States Trade Representative shall seek to establish 
     the common base year for calculating the Aggregated 
     Measurement of Support (as defined in the Agreement on 
     Agriculture) as the end of each country's Uruguay

[[Page 15055]]

     Round implementation period, as reported in each country's 
     Uruguay Round market access schedule.
       (iii) The negotiating objective provided in subparagraph 
     (A) applies with respect to agricultural matters to be 
     addressed in any trade agreement entered into under section 
     2103(a) or (b), including any trade agreement entered into 
     under section 2103(a) or (b) that provides for accession to a 
     trade agreement to which the United States is already a 
     party, such as the North American Free Trade Agreement and 
     the United States-Canada Free Trade Agreement.
       (11) Labor and the environment.--The principal negotiating 
     objectives of the United States with respect to labor and the 
     environment are--
       (A) to ensure that a party to a trade agreement with the 
     United States does not fail to effectively enforce its 
     environmental or labor laws, through a sustained or recurring 
     course of action or inaction, in a manner affecting trade 
     between the United States and that party after entry into 
     force of a trade agreement between those countries;
       (B) to recognize that parties to a trade agreement retain 
     the right to exercise discretion with respect to 
     investigatory, prosecutorial, regulatory, and compliance 
     matters and to make decisions regarding the allocation of 
     resources to enforcement with respect to other labor or 
     environmental matters determined to have higher priorities, 
     and to recognize that a country is effectively enforcing its 
     laws if a course of action or inaction reflects a reasonable 
     exercise of such discretion, or results from a bona fide 
     decision regarding the allocation of resources, and no 
     retaliation may be authorized based on the exercise of these 
     rights or the right to establish domestic labor standards and 
     levels of environmental protection;
       (C) to strengthen the capacity of United States trading 
     partners to promote respect for core labor standards (as 
     defined in section 2113(6));
       (D) to strengthen the capacity of United States trading 
     partners to protect the environment through the promotion of 
     sustainable development;
       (E) to reduce or eliminate government practices or policies 
     that unduly threaten sustainable development;
       (F) to seek market access, through the elimination of 
     tariffs and nontariff barriers, for United States 
     environmental technologies, goods, and services; and
       (G) to ensure that labor, environmental, health, or safety 
     policies and practices of the parties to trade agreements 
     with the United States do not arbitrarily or unjustifiably 
     discriminate against United States exports or serve as 
     disguised barriers to trade.
       (12) Dispute settlement and enforcement.--The principal 
     negotiating objectives of the United States with respect to 
     dispute settlement and enforcement of trade agreements are--
       (A) to seek provisions in trade agreements providing for 
     resolution of disputes between governments under those trade 
     agreements in an effective, timely, transparent, equitable, 
     and reasoned manner, requiring determinations based on facts 
     and the principles of the agreements, with the goal of 
     increasing compliance with the agreements;
       (B) to seek to strengthen the capacity of the Trade Policy 
     Review Mechanism of the World Trade Organization to review 
     compliance with commitments;
       (C) to seek adherence by panels convened under the Dispute 
     Settlement Understanding and by the Appellate Body to the 
     standard of review applicable under the Uruguay Round 
     Agreement involved in the dispute, including greater 
     deference, where appropriate, to the fact-finding and 
     technical expertise of national investigating authorities;
       (D) to seek provisions encouraging the early identification 
     and settlement of disputes through consultation;
       (E) to seek provisions to encourage the provision of trade-
     expanding compensation if a party to a dispute under the 
     agreement does not come into compliance with its obligations 
     under the agreement;
       (F) to seek provisions to impose a penalty upon a party to 
     a dispute under the agreement that--
       (i) encourages compliance with the obligations of the 
     agreement;
       (ii) is appropriate to the parties, nature, subject matter, 
     and scope of the violation; and
       (iii) has the aim of not adversely affecting parties or 
     interests not party to the dispute while maintaining the 
     effectiveness of the enforcement mechanism; and
       (G) to seek provisions that treat United States principal 
     negotiating objectives equally with respect to--
       (i) the ability to resort to dispute settlement under the 
     applicable agreement;
       (ii) the availability of equivalent dispute settlement 
     procedures; and
       (iii) the availability of equivalent remedies.
       (13) WTO extended negotiations.--The principal negotiating 
     objectives of the United States regarding trade in civil 
     aircraft are those set forth in section 135(c) of the Uruguay 
     Round Agreements Act (19 U.S.C. 3355(c)) and regarding rules 
     of origin are the conclusion of an agreement described in 
     section 132 of that Act (19 U.S.C. 3552).
       (14) Trade remedy laws.--The principal negotiating 
     objectives of the United States with respect to trade remedy 
     laws are--
       (A) to preserve the ability of the United States to enforce 
     rigorously its trade laws, including the antidumping, 
     countervailing duty, and safeguard laws, and avoid agreements 
     that lessen the effectiveness of domestic and international 
     disciplines on unfair trade, especially dumping and 
     subsidies, or that lessen the effectiveness of domestic and 
     international safeguard provisions, in order to ensure that 
     United States workers, agricultural producers, and firms can 
     compete fully on fair terms and enjoy the benefits of 
     reciprocal trade concessions; and
       (B) to address and remedy market distortions that lead to 
     dumping and subsidization, including overcapacity, 
     cartelization, and market-access barriers.
       (15) Border taxes.--The principal negotiating objective of 
     the United States regarding border taxes is to obtain a 
     revision of the WTO rules with respect to the treatment of 
     border adjustments for internal taxes to redress the 
     disadvantage to countries relying primarily on direct taxes 
     for revenue rather than indirect taxes.
       (16) Textile Negotiations.--The principal negotiating 
     objectives of the United States with respect to trade in 
     textiles and apparel articles are to obtain competitive 
     opportunities for United States exports of textiles and 
     apparel in foreign markets substantially equivalent to the 
     competitive opportunities afforded foreign exports in United 
     States markets and to achieve fairer and more open conditions 
     of trade in textiles and apparel.
       (17) Worst Forms of Child Labor.--The principal negotiating 
     objective of the United States with respect to the trade-
     related aspects of the worst forms of child labor are to seek 
     commitments by parties to trade agreements to vigorously 
     enforce their own laws prohibiting the worst forms of child 
     labor.
       (c) Promotion of Certain Priorities.--In order to address 
     and maintain United States competitiveness in the global 
     economy, the President shall--
       (1) seek greater cooperation between the WTO and the ILO;
       (2) seek to establish consultative mechanisms among parties 
     to trade agreements to strengthen the capacity of United 
     States trading partners to promote respect for core labor 
     standards (as defined in section 2113(6)) and to promote 
     compliance with ILO Convention No. 182 Concerning the 
     Prohibition and Immediate Action for the Elimination of the 
     Worst Forms of Child Labor, and report to the Committee on 
     Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate on the content and 
     operation of such mechanisms;
       (3) seek to establish consultative mechanisms among parties 
     to trade agreements to strengthen the capacity of United 
     States trading partners to develop and implement standards 
     for the protection of the environment and human health based 
     on sound science, and report to the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate on the content and operation of such 
     mechanisms;
       (4) conduct environmental reviews of future trade and 
     investment agreements, consistent with Executive Order 13141 
     of November 16, 1999, and its relevant guidelines, and report 
     to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate on 
     such reviews;
       (5) review the impact of future trade agreements on United 
     States employment, including labor markets, modeled after 
     Executive Order 13141 to the extent appropriate in 
     establishing procedures and criteria, report to the Committee 
     on Ways and Means of the House of Representatives and the 
     Committee on Finance of the Senate on such review, and make 
     that report available to the public;
       (6) take into account other legitimate United States 
     domestic objectives including, but not limited to, the 
     protection of legitimate health or safety, essential 
     security, and consumer interests and the law and regulations 
     related thereto;
       (7) direct the Secretary of Labor to consult with any 
     country seeking a trade agreement with the United States 
     concerning that country's labor laws and provide technical 
     assistance to that country if needed;
       (8) in connection with any trade negotiations entered into 
     under this Act, submit to the Committee on Ways and Means of 
     the House of Representatives and the Committee on Finance of 
     the Senate a meaningful labor rights report of the country, 
     or countries, with respect to which the President is 
     negotiating, on a time frame determined in accordance with 
     section 2107(b)(2)(E);
       (9) with respect to any trade agreement which the President 
     seeks to implement under trade authorities procedures, submit 
     to the Congress a report describing the extent to which the 
     country or countries that are parties to the agreement have 
     in effect laws governing exploitative child labor;
       (10) continue to promote consideration of multilateral 
     environmental agreements and consult with parties to such 
     agreements regarding the consistency of any such agreement 
     that includes trade measures with existing environmental 
     exceptions under Article XX of the GATT 1994;
       (11) report to the Committee on Ways and Means of the House 
     of Representatives and the Committee on Finance of the 
     Senate, not later than 12 months after the imposition of a 
     penalty or remedy by the United States permitted by a trade 
     agreement to which this title applies, on the effectiveness 
     of the penalty or remedy applied under United States law in 
     enforcing United States rights under the trade agreement; and
       (12) seek to establish consultative mechanisms among 
     parties to trade agreements to examine the trade consequences 
     of significant and unanticipated currency movements and to 
     scrutinize

[[Page 15056]]

     whether a foreign government engaged in a pattern of 
     manipulating its currency to promote a competitive advantage 
     in international trade.

     The report under paragraph (11) shall address whether the 
     penalty or remedy was effective in changing the behavior of 
     the targeted party and whether the penalty or remedy had any 
     adverse impact on parties or interests not party to the 
     dispute.
       (d) Consultations.--
       (1) Consultations with congressional advisers.--In the 
     course of negotiations conducted under this title, the United 
     States Trade Representative shall consult closely and on a 
     timely basis with, and keep fully apprised of the 
     negotiations, the Congressional Oversight Group convened 
     under section 2107 and all committees of the House of 
     Representatives and the Senate with jurisdiction over laws 
     that would be affected by a trade agreement resulting from 
     the negotiations.
       (2) Consultation before agreement initialed.--In the course 
     of negotiations conducted under this title, the United States 
     Trade Representative shall--
       (A) consult closely and on a timely basis (including 
     immediately before initialing an agreement) with, and keep 
     fully apprised of the negotiations, the congressional 
     advisers for trade policy and negotiations appointed under 
     section 161 of the Trade Act of 1974 (19 U.S.C. 2211), the 
     Committee on Ways and Means of the House of Representatives, 
     the Committee on Finance of the Senate, and the Congressional 
     Oversight Group convened under section 2107; and
       (B) with regard to any negotiations and agreement relating 
     to agricultural trade, also consult closely and on a timely 
     basis (including immediately before initialing an agreement) 
     with, and keep fully apprised of the negotiations, the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate.
       (e) Adherence to Obligations Under Uruguay Round 
     Agreements.--In determining whether to enter into 
     negotiations with a particular country, the President shall 
     take into account the extent to which that country has 
     implemented, or has accelerated the implementation of, its 
     obligations under the Uruguay Round Agreements.

     SEC. 2103. TRADE AGREEMENTS AUTHORITY.

       (a) Agreements Regarding Tariff Barriers.--
       (1) In general.--Whenever the President determines that one 
     or more existing duties or other import restrictions of any 
     foreign country or the United States are unduly burdening and 
     restricting the foreign trade of the United States and that 
     the purposes, policies, priorities, and objectives of this 
     title will be promoted thereby, the President--
       (A) may enter into trade agreements with foreign countries 
     before--
       (i) June 1, 2005; or
       (ii) June 1, 2007, if trade authorities procedures are 
     extended under subsection (c); and
       (B) may, subject to paragraphs (2) and (3), proclaim--
       (i) such modification or continuance of any existing duty,
       (ii) such continuance of existing duty-free or excise 
     treatment, or
       (iii) such additional duties,
     as the President determines to be required or appropriate to 
     carry out any such trade agreement.

     The President shall notify the Congress of the President's 
     intention to enter into an agreement under this subsection.
       (2) Limitations.--No proclamation may be made under 
     paragraph (1) that--
       (A) reduces any rate of duty (other than a rate of duty 
     that does not exceed 5 percent ad valorem on the date of the 
     enactment of this Act) to a rate of duty which is less than 
     50 percent of the rate of such duty that applies on such date 
     of enactment;
       (B) reduces the rate of duty below that applicable under 
     the Uruguay Round Agreements, on any import sensitive 
     agricultural product; or
       (C) increases any rate of duty above the rate that applied 
     on the date of the enactment of this Act.
       (3) Aggregate reduction; exemption from staging.--
       (A) Aggregate reduction.--Except as provided in 
     subparagraph (B), the aggregate reduction in the rate of duty 
     on any article which is in effect on any day pursuant to a 
     trade agreement entered into under paragraph (1) shall not 
     exceed the aggregate reduction which would have been in 
     effect on such day if--
       (i) a reduction of 3 percent ad valorem or a reduction of 
     one-tenth of the total reduction, whichever is greater, had 
     taken effect on the effective date of the first reduction 
     proclaimed under paragraph (1) to carry out such agreement 
     with respect to such article; and
       (ii) a reduction equal to the amount applicable under 
     clause (i) had taken effect at 1-year intervals after the 
     effective date of such first reduction.
       (B) Exemption from staging.--No staging is required under 
     subparagraph (A) with respect to a duty reduction that is 
     proclaimed under paragraph (1) for an article of a kind that 
     is not produced in the United States. The United States 
     International Trade Commission shall advise the President of 
     the identity of articles that may be exempted from staging 
     under this subparagraph.
       (4) Rounding.--If the President determines that such action 
     will simplify the computation of reductions under paragraph 
     (3), the President may round an annual reduction by an amount 
     equal to the lesser of--
       (A) the difference between the reduction without regard to 
     this paragraph and the next lower whole number; or
       (B) one-half of 1 percent ad valorem.
       (5) Other limitations.--A rate of duty reduction that may 
     not be proclaimed by reason of paragraph (2) may take effect 
     only if a provision authorizing such reduction is included 
     within an implementing bill provided for under section 2105 
     and that bill is enacted into law.
       (6) Other tariff modifications.--Notwithstanding paragraphs 
     (1)(B), (2)(A), (2)(C), and (3) through (5), and subject to 
     the consultation and layover requirements of section 115 of 
     the Uruguay Round Agreements Act, the President may proclaim 
     the modification of any duty or staged rate reduction of any 
     duty set forth in Schedule XX, as defined in section 2(5) of 
     that Act, if the United States agrees to such modification or 
     staged rate reduction in a negotiation for the reciprocal 
     elimination or harmonization of duties under the auspices of 
     the World Trade Organization.
       (7) Authority under uruguay round agreements act not 
     affected.--Nothing in this subsection shall limit the 
     authority provided to the President under section 111(b) of 
     the Uruguay Round Agreements Act (19 U.S.C. 3521(b)).
       (b) Agreements Regarding Tariff and Nontariff Barriers.--
       (1) In general.--(A) Whenever the President determines 
     that--
       (i) one or more existing duties or any other import 
     restriction of any foreign country or the United States or 
     any other barrier to, or other distortion of, international 
     trade unduly burdens or restricts the foreign trade of the 
     United States or adversely affects the United States economy, 
     or
       (ii) the imposition of any such barrier or distortion is 
     likely to result in such a burden, restriction, or effect,

     and that the purposes, policies, priorities, and objectives 
     of this title will be promoted thereby, the President may 
     enter into a trade agreement described in subparagraph (B) 
     during the period described in subparagraph (C).
       (B) The President may enter into a trade agreement under 
     subparagraph (A) with foreign countries providing for--
       (i) the reduction or elimination of a duty, restriction, 
     barrier, or other distortion described in subparagraph (A); 
     or
       (ii) the prohibition of, or limitation on the imposition 
     of, such barrier or other distortion.
       (C) The President may enter into a trade agreement under 
     this paragraph before--
       (i) June 1, 2005; or
       (ii) June 1, 2007, if trade authorities procedures are 
     extended under subsection (c).
       (2) Conditions.--A trade agreement may be entered into 
     under this subsection only if such agreement makes progress 
     in meeting the applicable objectives described in section 
     2102(a) and (b) and the President satisfies the conditions 
     set forth in section 2104.
       (3) Bills qualifying for trade authorities procedures.--(A) 
     The provisions of section 151 of the Trade Act of 1974 (in 
     this title referred to as ``trade authorities procedures'') 
     apply to a bill of either House of Congress which contains 
     provisions described in subparagraph (B) to the same extent 
     as such section 151 applies to implementing bills under that 
     section. A bill to which this paragraph applies shall 
     hereafter in this title be referred to as an ``implementing 
     bill''.
       (B) The provisions referred to in subparagraph (A) are--
       (i) a provision approving a trade agreement entered into 
     under this subsection and approving the statement of 
     administrative action, if any, proposed to implement such 
     trade agreement; and
       (ii) if changes in existing laws or new statutory authority 
     are required to implement such trade agreement or agreements, 
     provisions, necessary or appropriate to implement such trade 
     agreement or agreements, either repealing or amending 
     existing laws or providing new statutory authority.
       (c) Extension Disapproval Process for Congressional Trade 
     Authorities Procedures.--
       (1) In general.--Except as provided in section 2105(b)--
       (A) the trade authorities procedures apply to implementing 
     bills submitted with respect to trade agreements entered into 
     under subsection (b) before July 1, 2005; and
       (B) the trade authorities procedures shall be extended to 
     implementing bills submitted with respect to trade agreements 
     entered into under subsection (b) after June 30, 2005, and 
     before July 1, 2007, if (and only if)--
       (i) the President requests such extension under paragraph 
     (2); and
       (ii) neither House of the Congress adopts an extension 
     disapproval resolution under paragraph (5) before June 1, 
     2005.
       (2) Report to congress by the president.--If the President 
     is of the opinion that the trade authorities procedures 
     should be extended to implementing bills described in 
     paragraph (1)(B), the President shall submit to the Congress, 
     not later than March 1, 2005, a written report that contains 
     a request for such extension, together with--
       (A) a description of all trade agreements that have been 
     negotiated under subsection (b) and the anticipated schedule 
     for submitting such agreements to the Congress for approval;
       (B) a description of the progress that has been made in 
     negotiations to achieve the purposes, policies, priorities, 
     and objectives of this title, and a statement that such 
     progress justifies the continuation of negotiations; and

[[Page 15057]]

       (C) a statement of the reasons why the extension is needed 
     to complete the negotiations.
       (3) Other reports to congress.--
       (A) Report by the advisory committee.--The President shall 
     promptly inform the Advisory Committee for Trade Policy and 
     Negotiations established under section 135 of the Trade Act 
     of 1974 (19 U.S.C. 2155) of the President's decision to 
     submit a report to the Congress under paragraph (2). The 
     Advisory Committee shall submit to the Congress as soon as 
     practicable, but not later than May 1, 2005, a written report 
     that contains--
       (i) its views regarding the progress that has been made in 
     negotiations to achieve the purposes, policies, priorities, 
     and objectives of this title; and
       (ii) a statement of its views, and the reasons therefor, 
     regarding whether the extension requested under paragraph (2) 
     should be approved or disapproved.
       (B) Report by itc.--The President shall promptly inform the 
     International Trade Commission of the President's decision to 
     submit a report to the Congress under paragraph (2). The 
     International Trade Commission shall submit to the Congress 
     as soon as practicable, but not later than May 1, 2005, a 
     written report that contains a review and analysis of the 
     economic impact on the United States of all trade agreements 
     implemented between the date of enactment of this Act and the 
     date on which the President decides to seek an extension 
     requested under paragraph (2).
       (4) Status of reports.--The reports submitted to the 
     Congress under paragraphs (2) and (3), or any portion of such 
     reports, may be classified to the extent the President 
     determines appropriate.
       (5) Extension disapproval resolutions.--(A) For purposes of 
     paragraph (1), the term ``extension disapproval resolution'' 
     means a resolution of either House of the Congress, the sole 
     matter after the resolving clause of which is as follows: 
     ``That the __ disapproves the request of the President for 
     the extension, under section 2103(c)(1)(B)(i) of the 
     Bipartisan Trade Promotion Authority Act of 2002, of the 
     trade authorities procedures under that Act to any 
     implementing bill submitted with respect to any trade 
     agreement entered into under section 2103(b) of that Act 
     after June 30, 2005.'', with the blank space being filled 
     with the name of the resolving House of the Congress.
       (B) Extension disapproval resolutions--
       (i) may be introduced in either House of the Congress by 
     any member of such House; and
       (ii) shall be referred, in the House of Representatives, to 
     the Committee on Ways and Means and, in addition, to the 
     Committee on Rules.
       (C) The provisions of section 152(d) and (e) of the Trade 
     Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the 
     floor consideration of certain resolutions in the House and 
     Senate) apply to extension disapproval resolutions.
       (D) It is not in order for--
       (i) the Senate to consider any extension disapproval 
     resolution not reported by the Committee on Finance;
       (ii) the House of Representatives to consider any extension 
     disapproval resolution not reported by the Committee on Ways 
     and Means and, in addition, by the Committee on Rules; or
       (iii) either House of the Congress to consider an extension 
     disapproval resolution after June 30, 2005.
       (d) Commencement of Negotiations.--In order to contribute 
     to the continued economic expansion of the United States, the 
     President shall commence negotiations covering tariff and 
     nontariff barriers affecting any industry, product, or 
     service sector, and expand existing sectoral agreements to 
     countries that are not parties to those agreements, in cases 
     where the President determines that such negotiations are 
     feasible and timely and would benefit the United States. Such 
     sectors include agriculture, commercial services, 
     intellectual property rights, industrial and capital goods, 
     government procurement, information technology products, 
     environmental technology and services, medical equipment and 
     services, civil aircraft, and infrastructure products. In so 
     doing, the President shall take into account all of the 
     principal negotiating objectives set forth in section 
     2102(b).

     SEC. 2104. CONSULTATIONS AND ASSESSMENT.

       (a) Notice and Consultation Before Negotiation.--The 
     President, with respect to any agreement that is subject to 
     the provisions of section 2103(b), shall--
       (1) provide, at least 90 calendar days before initiating 
     negotiations, written notice to the Congress of the 
     President's intention to enter into the negotiations and set 
     forth therein the date the President intends to initiate such 
     negotiations, the specific United States objectives for the 
     negotiations, and whether the President intends to seek an 
     agreement, or changes to an existing agreement;
       (2) before and after submission of the notice, consult 
     regarding the negotiations with the Committee on Finance of 
     the Senate and the Committee on Ways and Means of the House 
     of Representatives, such other committees of the House and 
     Senate as the President deems appropriate, and the 
     Congressional Oversight group convened under section 2107; 
     and
       (3) upon the request of a majority of the members of the 
     Congressional Oversight Group under section 2107(c), meet 
     with the Congressional Oversight Group before initiating the 
     negotiations or at any other time concerning the 
     negotiations.
       (b) Negotiations Regarding Agriculture.--
       (1) In general.--Before initiating or continuing 
     negotiations the subject matter of which is directly related 
     to the subject matter under section 2102(b)(10)(A)(i) with 
     any country, the President shall assess whether United States 
     tariffs on agricultural products that were bound under the 
     Uruguay Round Agreements are lower than the tariffs bound by 
     that country. In addition, the President shall consider 
     whether the tariff levels bound and applied throughout the 
     world with respect to imports from the United States are 
     higher than United States tariffs and whether the negotiation 
     provides an opportunity to address any such disparity. The 
     President shall consult with the Committee on Ways and Means 
     and the Committee on Agriculture of the House of 
     Representatives and the Committee on Finance and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate concerning the results of the assessment, whether it 
     is appropriate for the United States to agree to further 
     tariff reductions based on the conclusions reached in the 
     assessment, and how all applicable negotiating objectives 
     will be met.
       (2) Special consultations on import sensitive products.--
     (A) Before initiating negotiations with regard to 
     agriculture, and, with respect to the Free Trade Area for the 
     Americas and negotiations with regard to agriculture under 
     the auspices of the World Trade Organization, as soon as 
     practicable after the enactment of this Act, the United 
     States Trade Representative shall--
       (i) identify those agricultural products subject to tariff-
     rate quotas on the date of enactment of this Act, and 
     agricultural products subject to tariff reductions by the 
     United States as a result of the Uruguay Round Agreements, 
     for which the rate of duty was reduced on January 1, 1995, to 
     a rate which was not less than 97.5 percent of the rate of 
     duty that applied to such article on December 31, 1994;
       (ii) consult with the Committee on Ways and Means and the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Finance and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate concerning--
       (I) whether any further tariff reductions on the products 
     identified under clause (i) should be appropriate, taking 
     into account the impact of any such tariff reduction on the 
     United States industry producing the product concerned;
       (II) whether the products so identified face unjustified 
     sanitary or phytosanitary restrictions, including those not 
     based on scientific principles in contravention of the 
     Uruguay Round Agreements; and
       (III) whether the countries participating in the 
     negotiations maintain export subsidies or other programs, 
     policies, or practices that distort world trade in such 
     products and the impact of such programs, policies, and 
     practices on United States producers of the products;
       (iii) request that the International Trade Commission 
     prepare an assessment of the probable economic effects of any 
     such tariff reduction on the United States industry producing 
     the product concerned and on the United States economy as a 
     whole; and
       (iv) upon complying with clauses (i), (ii), and (iii), 
     notify the Committee on Ways and Means and the Committee on 
     Agriculture of the House of Representatives and the Committee 
     on Finance and the Committee on Agriculture, Nutrition, and 
     Forestry of the Senate of those products identified under 
     clause (i) for which the Trade Representative intends to seek 
     tariff liberalization in the negotiations and the reasons for 
     seeking such tariff liberalization.
       (B) If, after negotiations described in subparagraph (A) 
     are commenced--
       (i) the United States Trade Representative identifies any 
     additional agricultural product described in subparagraph 
     (A)(i) for tariff reductions which were not the subject of a 
     notification under subparagraph (A)(iv), or
       (ii) any additional agricultural product described in 
     subparagraph (A)(i) is the subject of a request for tariff 
     reductions by a party to the negotiations,

     the Trade Representative shall, as soon as practicable, 
     notify the committees referred to in subparagraph (A)(iv) of 
     those products and the reasons for seeking such tariff 
     reductions.
       (3) Negotiations regarding the fishing industry.--Before 
     initiating, or continuing, negotiations which directly relate 
     to fish or shellfish trade with any country, the President 
     shall consult with the Committee on Ways and Means and the 
     Committee on Resources of the House of Representatives, and 
     the Committee on Finance and the Committee on Commerce, 
     Science, and Transportation of the Senate, and shall keep the 
     Committees apprised of negotiations on an ongoing and timely 
     basis.
       (c) Negotiations Regarding Textiles.--Before initiating or 
     continuing negotiations the subject matter of which is 
     directly related to textiles and apparel products with any 
     country, the President shall assess whether United States 
     tariffs on textile and apparel products that were bound under 
     the Uruguay Round Agreements are lower than the tariffs bound 
     by that country and whether the negotiation provides an 
     opportunity to address any such disparity. The President 
     shall consult with the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate concerning the results of the assessment, whether it 
     is appropriate for the United States to agree to further 
     tariff reductions based on the conclusions reached in the 
     assessment, and how all applicable negotiating objectives 
     will be met.
       (d) Consultation With Congress Before Agreements Entered 
     Into.--
       (1) Consultation.--Before entering into any trade agreement 
     under section 2103(b), the President shall consult with--

[[Page 15058]]

       (A) the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate;
       (B) each other committee of the House and the Senate, and 
     each joint committee of the Congress, which has jurisdiction 
     over legislation involving subject matters which would be 
     affected by the trade agreement; and
       (C) the Congressional Oversight Group convened under 
     section 2107.
       (2) Scope.--The consultation described in paragraph (1) 
     shall include consultation with respect to--
       (A) the nature of the agreement;
       (B) how and to what extent the agreement will achieve the 
     applicable purposes, policies, priorities, and objectives of 
     this title; and
       (C) the implementation of the agreement under section 2105, 
     including the general effect of the agreement on existing 
     laws.
       (3) Report regarding united states trade remedy laws.--
       (A) Changes in certain trade laws.--The President, at least 
     180 calendar days before the day on which the President 
     enters into a trade agreement under section 2103(b), shall 
     report to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate--
       (i) the range of proposals advanced in the negotiations 
     with respect to that agreement, that may be in the final 
     agreement, and that could require amendments to title VII of 
     the Tariff Act of 1930 or to chapter 1 of title II of the 
     Trade Act of 1974; and
       (ii) how these proposals relate to the objectives described 
     in section 2102(b)(14).
       (B) Certain agreements.--With respect to a trade agreement 
     entered into with Chile or Singapore, the report referred to 
     in subparagraph (A) shall be submitted by the President at 
     least 90 calendar days before the day on which the President 
     enters into that agreement.
       (C) Resolutions.--(i) At any time after the transmission of 
     the report under subparagraph (A), if a resolution is 
     introduced with respect to that report in either House of 
     Congress, the procedures set forth in clauses (iii) through 
     (vi) shall apply to that resolution if--
       (I) no other resolution with respect to that report has 
     previously been reported in that House of Congress by the 
     Committee on Ways and Means or the Committee on Finance, as 
     the case may be, pursuant to those procedures; and
       (II) no procedural disapproval resolution under section 
     2105(b) introduced with respect to a trade agreement entered 
     into pursuant to the negotiations to which the report under 
     subparagraph (A) relates has previously been reported in that 
     House of Congress by the Committee on Ways and Means or the 
     Committee on Finance, as the case may be.
       (ii) For purposes of this subparagraph, the term 
     ``resolution'' means only a resolution of either House of 
     Congress, the matter after the resolving clause of which is 
     as follows: ``That the __ finds that the proposed changes to 
     United States trade remedy laws contained in the report of 
     the President transmitted to the Congress on __ under section 
     2104(d)(3) of the Bipartisan Trade Promotion Authority Act of 
     2002 with respect to __, are inconsistent with the 
     negotiating objectives described in section 2102(b)(14) of 
     that Act.'', with the first blank space being filled with the 
     name of the resolving House of Congress, the second blank 
     space being filled with the appropriate date of the report, 
     and the third blank space being filled with the name of the 
     country or countries involved.
       (iii) Resolutions in the House of Representatives--
       (I) may be introduced by any Member of the House;
       (II) shall be referred to the Committee on Ways and Means 
     and, in addition, to the Committee on Rules; and
       (III) may not be amended by either Committee.
       (iv) Resolutions in the Senate--
       (I) may be introduced by any Member of the Senate;
       (II) shall be referred to the Committee on Finance; and
       (III) may not be amended.
       (iv) It is not in order for the House of Representatives to 
     consider any resolution that is not reported by the Committee 
     on Ways and Means and, in addition, by the Committee on 
     Rules.
       (v) It is not in order for the Senate to consider any 
     resolution that is not reported by the Committee on Finance.
       (vi) The provisions of section 152(d) and (e) of the Trade 
     Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to floor 
     consideration of certain resolutions in the House and Senate) 
     shall apply to resolutions.
       (e) Advisory Committee Reports.--The report required under 
     section 135(e)(1) of the Trade Act of 1974 regarding any 
     trade agreement entered into under section 2103(a) or (b) of 
     this Act shall be provided to the President, the Congress, 
     and the United States Trade Representative not later than 30 
     days after the date on which the President notifies the 
     Congress under section 2103(a)(1) or 2105(a)(1)(A) of the 
     President's intention to enter into the agreement.
       (f) ITC Assessment.--
       (1) In general.--The President, at least 90 calendar days 
     before the day on which the President enters into a trade 
     agreement under section 2103(b), shall provide the 
     International Trade Commission (referred to in this 
     subsection as ``the Commission'') with the details of the 
     agreement as it exists at that time and request the 
     Commission to prepare and submit an assessment of the 
     agreement as described in paragraph (2). Between the time the 
     President makes the request under this paragraph and the time 
     the Commission submits the assessment, the President shall 
     keep the Commission current with respect to the details of 
     the agreement.
       (2) ITC assessment.--Not later than 90 calendar days after 
     the President enters into the agreement, the Commission shall 
     submit to the President and the Congress a report assessing 
     the likely impact of the agreement on the United States 
     economy as a whole and on specific industry sectors, 
     including the impact the agreement will have on the gross 
     domestic product, exports and imports, aggregate employment 
     and employment opportunities, the production, employment, and 
     competitive position of industries likely to be significantly 
     affected by the agreement, and the interests of United States 
     consumers.
       (3) Review of empirical literature.--In preparing the 
     assessment, the Commission shall review available economic 
     assessments regarding the agreement, including literature 
     regarding any substantially equivalent proposed agreement, 
     and shall provide in its assessment a description of the 
     analyses used and conclusions drawn in such literature, and a 
     discussion of areas of consensus and divergence between the 
     various analyses and conclusions, including those of the 
     Commission regarding the agreement.

     SEC. 2105. IMPLEMENTATION OF TRADE AGREEMENTS.

       (a) In General.--
       (1) Notification and submission.--Any agreement entered 
     into under section 2103(b) shall enter into force with 
     respect to the United States if (and only if)--
       (A) the President, at least 90 calendar days before the day 
     on which the President enters into the trade agreement, 
     notifies the House of Representatives and the Senate of the 
     President's intention to enter into the agreement, and 
     promptly thereafter publishes notice of such intention in the 
     Federal Register;
       (B) within 60 days after entering into the agreement, the 
     President submits to the Congress a description of those 
     changes to existing laws that the President considers would 
     be required in order to bring the United States into 
     compliance with the agreement;
       (C) after entering into the agreement, the President 
     submits to the Congress, on a day on which both Houses of 
     Congress are in session, a copy of the final legal text of 
     the agreement, together with--
       (i) a draft of an implementing bill described in section 
     2103(b)(3);
       (ii) a statement of any administrative action proposed to 
     implement the trade agreement; and
       (iii) the supporting information described in paragraph 
     (2); and
       (D) the implementing bill is enacted into law.
       (2) Supporting information.--The supporting information 
     required under paragraph (1)(C)(iii) consists of--
       (A) an explanation as to how the implementing bill and 
     proposed administrative action will change or affect existing 
     law; and
       (B) a statement--
       (i) asserting that the agreement makes progress in 
     achieving the applicable purposes, policies, priorities, and 
     objectives of this title; and
       (ii) setting forth the reasons of the President regarding--

       (I) how and to what extent the agreement makes progress in 
     achieving the applicable purposes, policies, and objectives 
     referred to in clause (i);
       (II) whether and how the agreement changes provisions of an 
     agreement previously negotiated;
       (III) how the agreement serves the interests of United 
     States commerce;
       (IV) how the implementing bill meets the standards set 
     forth in section 2103(b)(3); and
       (V) how and to what extent the agreement makes progress in 
     achieving the applicable purposes, policies, and objectives 
     referred to in section 2102(c) regarding the promotion of 
     certain priorities.

       (3) Reciprocal benefits.--In order to ensure that a foreign 
     country that is not a party to a trade agreement entered into 
     under section 2103(b) does not receive benefits under the 
     agreement unless the country is also subject to the 
     obligations under the agreement, the implementing bill 
     submitted with respect to the agreement shall provide that 
     the benefits and obligations under the agreement apply only 
     to the parties to the agreement, if such application is 
     consistent with the terms of the agreement. The implementing 
     bill may also provide that the benefits and obligations under 
     the agreement do not apply uniformly to all parties to the 
     agreement, if such application is consistent with the terms 
     of the agreement.
       (4) Disclosure of commitments.--Any agreement or other 
     understanding with a foreign government or governments 
     (whether oral or in writing) that--
       (A) relates to a trade agreement with respect to which the 
     Congress enacts an implementing bill under trade authorities 
     procedures, and
       (B) is not disclosed to the Congress before an implementing 
     bill with respect to that agreement is introduced in either 
     House of Congress,
     shall not be considered to be part of the agreement approved 
     by the Congress and shall have no force and effect under 
     United States law or in any dispute settlement body.
       (b) Limitations on Trade Authorities Procedures.--
       (1) For lack of notice or consultations.--
       (A) In general.--The trade authorities procedures shall not 
     apply to any implementing bill

[[Page 15059]]

     submitted with respect to a trade agreement or trade 
     agreements entered into under section 2103(b) if during the 
     60-day period beginning on the date that one House of 
     Congress agrees to a procedural disapproval resolution for 
     lack of notice or consultations with respect to such trade 
     agreement or agreements, the other House separately agrees to 
     a procedural disapproval resolution with respect to such 
     trade agreement or agreements.
       (B) Procedural disapproval resolution.--(i) For purposes of 
     this paragraph, the term ``procedural disapproval 
     resolution'' means a resolution of either House of Congress, 
     the sole matter after the resolving clause of which is as 
     follows: ``That the President has failed or refused to notify 
     or consult in accordance with the Bipartisan Trade Promotion 
     Authority Act of 2002 on negotiations with respect to ______ 
     and, therefore, the trade authorities procedures under that 
     Act shall not apply to any implementing bill submitted with 
     respect to such trade agreement or agreements.'', with the 
     blank space being filled with a description of the trade 
     agreement or agreements with respect to which the President 
     is considered to have failed or refused to notify or consult.
       (ii) For purposes of clause (i), the President has ``failed 
     or refused to notify or consult in accordance with the 
     Bipartisan Trade Promotion Authority Act of 2002'' on 
     negotiations with respect to a trade agreement or trade 
     agreements if--
       (I) the President has failed or refused to consult (as the 
     case may be) in accordance with section 2104 or 2105 with 
     respect to the negotiations, agreement, or agreements;
       (II) guidelines under section 2107(b) have not been 
     developed or met with respect to the negotiations, agreement, 
     or agreements;
       (III) the President has not met with the Congressional 
     Oversight Group pursuant to a request made under section 
     2107(c) with respect to the negotiations, agreement, or 
     agreements; or
       (IV) the agreement or agreements fail to make progress in 
     achieving the purposes, policies, priorities, and objectives 
     of this title.
       (2) Procedures for considering resolutions.--(A) Procedural 
     disapproval resolutions--
       (i) in the House of Representatives--
       (I) may be introduced by any Member of the House;
       (II) shall be referred to the Committee on Ways and Means 
     and, in addition, to the Committee on Rules; and
       (III) may not be amended by either Committee; and
       (ii) in the Senate--
       (I) may be introduced by any Member of the Senate;
       (II) shall be referred to the Committee on Finance; and
       (III) may not be amended.
       (B) The provisions of section 152(d) and (e) of the Trade 
     Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the 
     floor consideration of certain resolutions in the House and 
     Senate) apply to a procedural disapproval resolution 
     introduced with respect to a trade agreement if no other 
     procedural disapproval resolution with respect to that trade 
     agreement has previously been reported in that House of 
     Congress by the Committee on Ways and Means or the Committee 
     on Finance, as the case may be, and if no resolution 
     described in section 2104(d)(3)(C)(ii) with respect to that 
     trade agreement has been reported in that House of Congress 
     by the Committee on Ways and Means or the Committee on 
     Finance, as the case may be, pursuant to the procedures set 
     forth in clauses (iii) through (vi) of such section 
     2104(d)(3)(C).
       (C) It is not in order for the House of Representatives to 
     consider any procedural disapproval resolution not reported 
     by the Committee on Ways and Means and, in addition, by the 
     Committee on Rules.
       (D) It is not in order for the Senate to consider any 
     procedural disapproval resolution not reported by the 
     Committee on Finance.
       (3) For failure to meet other requirements.--Not later than 
     December 31, 2002, the Secretary of Commerce, in consultation 
     with the Secretary of State, the Secretary of the Treasury, 
     the Attorney General, and the United States Trade 
     Representative, shall transmit to the Congress a report 
     setting forth the strategy of the executive branch to address 
     concerns of the Congress regarding whether dispute settlement 
     panels and the Appellate Body of the WTO have added to 
     obligations, or diminished rights, of the United States, as 
     described in section 2101(b)(3). Trade authorities procedures 
     shall not apply to any implementing bill with respect to an 
     agreement negotiated under the auspices of the WTO unless the 
     Secretary of Commerce has issued such report in a timely 
     manner.
       (c) Rules of House of Representatives and Senate.--
     Subsection (b) of this section, section 2103(c), aand section 
     2104(d)(3)(C) are enacted by the Congress--
       (1) as an exercise of the rulemaking power of the House of 
     Representatives and the Senate, respectively, and as such are 
     deemed a part of the rules of each House, respectively, and 
     such procedures supersede other rules only to the extent that 
     they are inconsistent with such other rules; and
       (2) with the full recognition of the constitutional right 
     of either House to change the rules (so far as relating to 
     the procedures of that House) at any time, in the same 
     manner, and to the same extent as any other rule of that 
     House.

     SEC. 2106. TREATMENT OF CERTAIN TRADE AGREEMENTS FOR WHICH 
                   NEGOTIATIONS HAVE ALREADY BEGUN.

       (a) Certain Agreements.--Notwithstanding the prenegotiation 
     notification and consultation requirement described in 
     section 2104(a), if an agreement to which section 2103(b) 
     applies--
       (1) is entered into under the auspices of the World Trade 
     Organization,
       (2) is entered into with Chile,
       (3) is entered into with Singapore, or
       (4) establishes a Free Trade Area for the Americas,
     and results from negotiations that were commenced before the 
     date of the enactment of this Act, subsection (b) shall 
     apply.
       (b) Treatment of Agreements.--In the case of any agreement 
     to which subsection (a) applies--
       (1) the applicability of the trade authorities procedures 
     to implementing bills shall be determined without regard to 
     the requirements of section 2104(a) (relating only to 90 days 
     notice prior to initiating negotiations), and any procedural 
     disapproval resolution under section 2105(b)(1)(B) shall not 
     be in order on the basis of a failure or refusal to comply 
     with the provisions of section 2104(a); and
       (2) the President shall, as soon as feasible after the 
     enactment of this Act--
       (A) notify the Congress of the negotiations described in 
     subsection (a), the specific United States objectives in the 
     negotiations, and whether the President is seeking a new 
     agreement or changes to an existing agreement; and
       (B) before and after submission of the notice, consult 
     regarding the negotiations with the committees referred to in 
     section 2104(a)(2) and the Congressional Oversight Group 
     convened under section 2107.

     SEC. 2107. CONGRESSIONAL OVERSIGHT GROUP.

       (a) Members and Functions.--
       (1) In general.--By not later than 60 days after the date 
     of the enactment of this Act, and not later than 30 days 
     after the convening of each Congress, the chairman of the 
     Committee on Ways and Means of the House of Representatives 
     and the chairman of the Committee on Finance of the Senate 
     shall convene the Congressional Oversight Group.
       (2) Membership from the house.--In each Congress, the 
     Congressional Oversight Group shall be comprised of the 
     following Members of the House of Representatives:
       (A) The chairman and ranking member of the Committee on 
     Ways and Means, and 3 additional members of such Committee 
     (not more than 2 of whom are members of the same political 
     party).
       (B) The chairman and ranking member, or their designees, of 
     the committees of the House of Representatives which would 
     have, under the Rules of the House of Representatives, 
     jurisdiction over provisions of law affected by a trade 
     agreement negotiations for which are conducted at any time 
     during that Congress and to which this title would apply.
       (3) Membership from the senate.--In each Congress, the 
     Congressional Oversight Group shall also be comprised of the 
     following members of the Senate:
       (A) The chairman and ranking member of the Committee on 
     Finance and 3 additional members of such Committee (not more 
     than 2 of whom are members of the same political party).
       (B) The chairman and ranking member, or their designees, of 
     the committees of the Senate which would have, under the 
     Rules of the Senate, jurisdiction over provisions of law 
     affected by a trade agreement negotiations for which are 
     conducted at any time during that Congress and to which this 
     title would apply.
       (4) Accreditation.--Each member of the Congressional 
     Oversight Group described in paragraph (2)(A) and (3)(A) 
     shall be accredited by the United States Trade Representative 
     on behalf of the President as an official adviser to the 
     United States delegation in negotiations for any trade 
     agreement to which this title applies. Each member of the 
     Congressional Oversight Group described in paragraph (2)(B) 
     and (3)(B) shall be accredited by the United States Trade 
     Representative on behalf of the President as an official 
     adviser to the United States delegation in the negotiations 
     by reason of which the member is in the Congressional 
     Oversight Group. The Congressional Oversight Group shall 
     consult with and provide advice to the Trade Representative 
     regarding the formulation of specific objectives, negotiating 
     strategies and positions, the development of the applicable 
     trade agreement, and compliance and enforcement of the 
     negotiated commitments under the trade agreement.
       (5) Chair.--The Congressional Oversight Group shall be 
     chaired by the Chairman of the Committee on Ways and Means of 
     the House of Representatives and the Chairman of the 
     Committee on Finance of the Senate.
       (b) Guidelines.--
       (1) Purpose and revision.--The United States Trade 
     Representative, in consultation with the chairmen and ranking 
     minority members of the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate--
       (A) shall, within 120 days after the date of the enactment 
     of this Act, develop written guidelines to facilitate the 
     useful and timely exchange of information between the Trade 
     Representative and the Congressional Oversight Group convened 
     under this section; and
       (B) may make such revisions to the guidelines as may be 
     necessary from time to time.
       (2) Content.--The guidelines developed under paragraph (1) 
     shall provide for, among other things--
       (A) regular, detailed briefings of the Congressional 
     Oversight Group regarding negotiating

[[Page 15060]]

     objectives, including the promotion of certain priorities 
     referred to in section 2102(c), and positions and the status 
     of the applicable negotiations, beginning as soon as 
     practicable after the Congressional Oversight Group is 
     convened, with more frequent briefings as trade negotiations 
     enter the final stage;
       (B) access by members of the Congressional Oversight Group, 
     and staff with proper security clearances, to pertinent 
     documents relating to the negotiations, including classified 
     materials;
       (C) the closest practicable coordination between the Trade 
     Representative and the Congressional Oversight Group at all 
     critical periods during the negotiations, including at 
     negotiation sites;
       (D) after the applicable trade agreement is concluded, 
     consultation regarding ongoing compliance and enforcement of 
     negotiated commitments under the trade agreement; and
       (E) the time frame for submitting the report required under 
     section 2102(c)(8).
       (c) Request for Meeting.--Upon the request of a majority of 
     the Congressional Oversight Group, the President shall meet 
     with the Congressional Oversight Group before initiating 
     negotiations with respect to a trade agreement, or at any 
     other time concerning the negotiations.

     SEC. 2108. ADDITIONAL IMPLEMENTATION AND ENFORCEMENT 
                   REQUIREMENTS.

       (a) In General.--At the time the President submits to the 
     Congress the final text of an agreement pursuant to section 
     2105(a)(1)(C), the President shall also submit a plan for 
     implementing and enforcing the agreement. The implementation 
     and enforcement plan shall include the following:
       (1) Border personnel requirements.--A description of 
     additional personnel required at border entry points, 
     including a list of additional customs and agricultural 
     inspectors.
       (2) Agency staffing requirements.--A description of 
     additional personnel required by Federal agencies responsible 
     for monitoring and implementing the trade agreement, 
     including personnel required by the Office of the United 
     States Trade Representative, the Department of Commerce, the 
     Department of Agriculture (including additional personnel 
     required to implement sanitary and phytosanitary measures in 
     order to obtain market access for United States exports), the 
     Department of the Treasury, and such other agencies as may be 
     necessary.
       (3) Customs infrastructure requirements.--A description of 
     the additional equipment and facilities needed by the United 
     States Customs Service.
       (4) Impact on state and local governments.--A description 
     of the impact the trade agreement will have on State and 
     local governments as a result of increases in trade.
       (5) Cost analysis.--An analysis of the costs associated 
     with each of the items listed in paragraphs (1) through (4).
       (b) Budget Submission.--The President shall include a 
     request for the resources necessary to support the plan 
     described in subsection (a) in the first budget that the 
     President submits to the Congress after the submission of the 
     plan.

     SEC. 2109. COMMITTEE STAFF.

       The grant of trade promotion authority under this title is 
     likely to increase the activities of the primary committees 
     of jurisdiction in the area of international trade. In 
     addition, the creation of the Congressional Oversight Group 
     under section 2107 will increase the participation of a 
     broader number of Members of Congress in the formulation of 
     United States trade policy and oversight of the international 
     trade agenda for the United States. The primary committees of 
     jurisdiction should have adequate staff to accommodate these 
     increases in activities.

     SEC. 2110. CONFORMING AMENDMENTS.

       (a) In General.--Title I of the Trade Act of 1974 (19 
     U.S.C. 2111 et seq.) is amended as follows:
       (1) Implementing bill.--
       (A) Section 151(b)(1) (19 U.S.C. 2191(b)(1)) is amended by 
     striking ``section 1103(a)(1) of the Omnibus Trade and 
     Competitiveness Act of 1988, or section 282 of the Uruguay 
     Round Agreements Act'' and inserting ``section 282 of the 
     Uruguay Round Agreements Act, or section 2105(a)(1) of the 
     Bipartisan Trade Promotion Authority Act of 2002''.
       (B) Section 151(c)(1) (19 U.S.C. 2191(c)(1)) is amended by 
     striking ``or section 282 of the Uruguay Round Agreements 
     Act'' and inserting ``, section 282 of the Uruguay Round 
     Agreements Act, or section 2105(a)(1) of the Bipartisan Trade 
     Promotion Authority Act of 2002''.
       (2) Advice from international trade commission.--Section 
     131 (19 U.S.C. 2151) is amended--
       (A) in subsection (a)--
       (i) in paragraph (1), by striking ``section 123 of this Act 
     or section 1102 (a) or (c) of the Omnibus Trade and 
     Competitiveness Act of 1988,'' and inserting ``section 123 of 
     this Act or section 2103(a) or (b) of the Bipartisan Trade 
     Promotion Authority Act of 2002,''; and
       (ii) in paragraph (2), by striking ``section 1102 (b) or 
     (c) of the Omnibus Trade and Competitiveness Act of 1988'' 
     and inserting ``section 2103(b) of the Bipartisan Trade 
     Promotion Authority Act of 2002'';
       (B) in subsection (b), by striking ``section 
     1102(a)(3)(A)'' and inserting ``section 2103(a)(3)(A) of the 
     Bipartisan Trade Promotion Authority Act of 2002''; and
       (C) in subsection (c), by striking ``section 1102 of the 
     Omnibus Trade and Competitiveness Act of 1988,'' and 
     inserting ``section 2103 of the Bipartisan Trade Promotion 
     Authority Act of 2002,''.
       (3) Hearings and advice.--Sections 132, 133(a), and 134(a) 
     (19 U.S.C. 2152, 2153(a), and 2154(a)) are each amended by 
     striking ``section 1102 of the Omnibus Trade and 
     Competitiveness Act of 1988,'' each place it appears and 
     inserting ``section 2103 of the Bipartisan Trade Promotion 
     Authority Act of 2002,''.
       (4) Prerequisites for offers.--Section 134(b) (19 U.S.C. 
     2154(b)) is amended by striking ``section 1102 of the Omnibus 
     Trade and Competitiveness Act of 1988'' and inserting 
     ``section 2103 of the Bipartisan Trade Promotion Authority 
     Act of 2002''.
       (5) Advice from private and public sectors.--Section 135 
     (19 U.S.C. 2155) is amended--
       (A) in subsection (a)(1)(A), by striking ``section 1102 of 
     the Omnibus Trade and Competitiveness Act of 1988'' and 
     inserting ``section 2103 of the Bipartisan Trade Promotion 
     Authority Act of 2002'';
       (B) in subsection (e)(1)--
       (i) by striking ``section 1102 of the Omnibus Trade and 
     Competitiveness Act of 1988'' each place it appears and 
     inserting ``section 2103 of the Bipartisan Trade Promotion 
     Authority Act of 2002''; and
       (ii) by striking ``section 1103(a)(1)(A) of such Act of 
     1988'' and inserting ``section 2105(a)(1)(A) of the 
     Bipartisan Trade Promotion Authority Act of 2002''; and
       (C) in subsection (e)(2), by striking ``section 1101 of the 
     Omnibus Trade and Competitiveness Act of 1988'' and inserting 
     ``section 2102 of the Bipartisan Trade Promotion Authority 
     Act of 2002''.
       (6) Transmission of agreements to congress.--Section 162(a) 
     (19 U.S.C. 2212(a)) is amended by striking ``or under section 
     1102 of the Omnibus Trade and Competitiveness Act of 1988'' 
     and inserting ``or under section 2103 of the Bipartisan Trade 
     Promotion Authority Act of 2002''.
       (b) Application of Certain Provisions.--For purposes of 
     applying sections 125, 126, and 127 of the Trade Act of 1974 
     (19 U.S.C. 2135, 2136(a), and 2137)--
       (1) any trade agreement entered into under section 2103 
     shall be treated as an agreement entered into under section 
     101 or 102, as appropriate, of the Trade Act of 1974 (19 
     U.S.C. 2111 or 2112); and
       (2) any proclamation or Executive order issued pursuant to 
     a trade agreement entered into under section 2103 shall be 
     treated as a proclamation or Executive order issued pursuant 
     to a trade agreement entered into under section 102 of the 
     Trade Act of 1974.

     SEC. 2111. REPORT ON IMPACT OF TRADE PROMOTION AUTHORITY.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the International Trade Commission 
     shall report to the Committee on Finance of the Senate and 
     the Committee on Ways and Means of the House of 
     Representatives regarding the economic impact on the United 
     States of the trade agreements described in subsection (b).
       (b) Agreements.--The trade agreements described in this 
     subsection are the following:
       (1) The United States-Israel Free Trade Agreement.
       (2) The United States-Canada Free Trade Agreement.
       (3) The North American Free Trade Agreement.
       (4) The Uruguay Round Agreements.
       (5) The Tokyo Round of Multilateral Trade Negotiations.

     SEC. 2112. INTERESTS OF SMALL BUSINESS.

       The Assistant United States Trade Representative for 
     Industry and Telecommunications shall be responsible for 
     ensuring that the interests of small business are considered 
     in all trade negotiations in accordance with the objective 
     described in section 2102(a)(8). It is the sense of the 
     Congress that the small business functions should be 
     reflected in the title of the Assistant United States Trade 
     Representative assigned the responsibility for small 
     business.

     SEC. 2113. DEFINITIONS.

       In this title:
       (1) Agreement on agriculture.--The term ``Agreement on 
     Agriculture'' means the agreement referred to in section 
     101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C. 
     3511(d)(2)).
       (2) Agreement on safeguards.--The term ``Agreement on 
     Safeguards means the agreement referred to in section 
     101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C. 
     3511(d)(12)).
       (3) Agreement on subsidies and countervailing measures.--
     The term ``Agreement on Subsidies and Countervailing 
     Measures'' means the agreement referred to in section 
     101(d)(13) of the Uruguay Round Agreements Act (19 U.S.C. 
     3511(d)(13)).
       (4) Antidumping agreement.--The term ``Antidumping 
     Agreement`` means the Agreement on Implementation of Article 
     VI of the General Agreement on Tariffs and Trade 1994 
     referred to in section 101(d)(7) of the Uruguay Round 
     Agreements Act (19 U.S.C. 3511(d)(7)).
       (5) Appellate body.--The term ``Appellate Body'' means the 
     Appellate Body established under Article 17.1 of the Dispute 
     Settlement Understanding.
       (6) Core labor standards.--The term ``core labor 
     standards'' means--
       (A) the right of association;
       (B) the right to organize and bargain collectively;
       (C) a prohibition on the use of any form of forced or 
     compulsory labor;
       (D) a minimum age for the employment of children; and
       (E) acceptable conditions of work with respect to minimum 
     wages, hours of work, and occupational safety and health.

[[Page 15061]]

       (7) Dispute settlement understanding.--The term ``Dispute 
     Settlement Understanding'' means the Understanding on Rules 
     and Procedures Governing the Settlement of Disputes referred 
     to in section 101(d)(16) of the Uruguay Round Agreements Act.
       (8) GATT 1994.--The term ``GATT 1994'' has the meaning 
     given that term in section 2 of the Uruguay Round Agreements 
     Act (19 U.S.C. 3501).
       (9) ILO.--The term ``ILO'' means the International Labor 
     Organization.
       (10) Import sensitive agricultural product.--The term 
     ``import sensitive agricultural product'' means an 
     agricultural product--
       (A) with respect to which, as a result of the Uruguay Round 
     Agreements the rate of duty was the subject of tariff 
     reductions by the United States and, pursuant to such 
     Agreements, was reduced on January 1, 1995, to a rate that 
     was not less than 97.5 percent of the rate of duty that 
     applied to such article on December 31, 1994; or
       (B) which was subject to a tariff-rate quota on the date of 
     the enactment of this Act.
       (11) United states person.--The term ``United States 
     person'' means--
       (A) a United States citizen;
       (B) a partnership, corporation, or other legal entity 
     organized under the laws of the United States; and
       (C) a partnership, corporation, or other legal entity that 
     is organized under the laws of a foreign country and is 
     controlled by entities described in subparagraph (B) or 
     United States citizens, or both.
       (12) Uruguay round agreements.--The term ``Uruguay Round 
     Agreements'' has the meaning given that term in section 2(7) 
     of the Uruguay Round Agreements Act (19 U.S.C. 3501(7)).
       (13) World trade organization; wto.--The terms ``World 
     Trade Organization'' and ``WTO'' mean the organization 
     established pursuant to the WTO Agreement.
       (14) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing the World Trade Organization entered 
     into on April 15, 1994.
       (15) WTO member.--The term ``WTO member'' has the meaning 
     given that term in section 2(10) of the Uruguay Round 
     Agreements Act (19 U.S.C. 3501(10)).

                DIVISION C--ANDEAN TRADE PREFERENCE ACT

                  TITLE XXXI--ANDEAN TRADE PREFERENCE

     SEC. 3101. SHORT TITLE.

       This title may be cited as the ``Andean Trade Promotion and 
     Drug Eradication Act''.

     SEC. 3102. FINDINGS.

       Congress makes the following findings:
       (1) Since the Andean Trade Preference Act was enacted in 
     1991, it has had a positive impact on United States trade 
     with Bolivia, Colombia, Ecuador, and Peru. Two-way trade has 
     doubled, with the United States serving as the leading source 
     of imports and leading export market for each of the Andean 
     beneficiary countries. This has resulted in increased jobs 
     and expanded export opportunities in both the United States 
     and the Andean region.
       (2) The Andean Trade Preference Act has been a key element 
     in the United States counternarcotics strategy in the Andean 
     region, promoting export diversification and broad-based 
     economic development that provides sustainable economic 
     alternatives to drug-crop production, strengthening the 
     legitimate economies of Andean countries and creating viable 
     alternatives to illicit trade in coca.
       (3) Notwithstanding the success of the Andean Trade 
     Preference Act, the Andean region remains threatened by 
     political and economic instability and fragility, vulnerable 
     to the consequences of the drug war and fierce global 
     competition for its legitimate trade.
       (4) The continuing instability in the Andean region poses a 
     threat to the security interests of the United States and the 
     world. This problem has been partially addressed through 
     foreign aid, such as Plan Colombia, enacted by Congress in 
     2000. However, foreign aid alone is not sufficient. 
     Enhancement of legitimate trade with the United States 
     provides an alternative means for reviving and stabilizing 
     the economies in the Andean region.
       (5) The Andean Trade Preference Act constitutes a tangible 
     commitment by the United States to the promotion of 
     prosperity, stability, and democracy in the beneficiary 
     countries.
       (6) Renewal and enhancement of the Andean Trade Preference 
     Act will bolster the confidence of domestic private 
     enterprise and foreign investors in the economic prospects of 
     the region, ensuring that legitimate private enterprise can 
     be the engine of economic development and political stability 
     in the region.
       (7) Each of the Andean beneficiary countries is committed 
     to conclude negotiation of a Free Trade Area of the Americas 
     by the year 2005, as a means of enhancing the economic 
     security of the region.
       (8) Temporarily enhancing trade benefits for Andean 
     beneficiary countries will promote the growth of free 
     enterprise and economic opportunity in these countries and 
     serve the security interests of the United States, the 
     region, and the world.

     SEC. 3103. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT.

       (a) Eligibility of Certain Articles.--Section 204 of the 
     Andean Trade Preference Act (19 U.S.C. 3203) is amended--
       (1) by striking subsection (c) and redesignating 
     subsections (d) through (g) as subsections (c) through (f), 
     respectively; and
       (2) by amending subsection (b) to read as follows:
       ``(b) Exceptions and Special Rules.--
       ``(1) Certain articles that are not import-sensitive.--The 
     President may proclaim duty-free treatment under this title 
     for any article described in subparagraph (A), (B), (C), or 
     (D) that is the growth, product, or manufacture of an ATPDEA 
     beneficiary country, that is imported directly into the 
     customs territory of the United States from an ATPDEA 
     beneficiary country, and that meets the requirements of this 
     section, if the President determines that such article is not 
     import-sensitive in the context of imports from ATPDEA 
     beneficiary countries:
       ``(A) Footwear not designated at the time of the effective 
     date of this title as eligible for purposes of the 
     generalized system of preferences under title V of the Trade 
     Act of 1974.
       ``(B) Petroleum, or any product derived from petroleum, 
     provided for in headings 2709 and 2710 of the HTS.
       ``(C) Watches and watch parts (including cases, bracelets 
     and straps), of whatever type including, but not limited to, 
     mechanical, quartz digital or quartz analog, if such watches 
     or watch parts contain any material which is the product of 
     any country with respect to which HTS column 2 rates of duty 
     apply.
       ``(D) Handbags, luggage, flat goods, work gloves, and 
     leather wearing apparel that were not designated on August 5, 
     1983, as eligible articles for purposes of the generalized 
     system of preferences under title V of the Trade Act of 1974.
       ``(2) Exclusions.--Subject to paragraph (3), duty-free 
     treatment under this title may not be extended to--
       ``(A) textiles and apparel articles which were not eligible 
     articles for purposes of this title on January 1, 1994, as 
     this title was in effect on that date;
       ``(B) rum and tafia classified in subheading 2208.40 of the 
     HTS;
       ``(C) sugars, syrups, and sugar-containing products subject 
     to over-quota duty rates under applicable tariff-rate quotas; 
     or
       ``(D) tuna prepared or preserved in any manner in airtight 
     containers, except as provided in paragraph (4).
       ``(3) Apparel articles and certain textile articles.--
       ``(A) In general.--Apparel articles that are imported 
     directly into the customs territory of the United States from 
     an ATPDEA beneficiary country shall enter the United States 
     free of duty and free of any quantitative restrictions, 
     limitations, or consultation levels, but only if such 
     articles are described in subparagraph (B).
       ``(B) Covered articles.--The apparel articles referred to 
     in subparagraph (A) are the following:
       ``(i) Apparel articles assembled from products of the 
     united states or atpdea beneficiary countries or products not 
     available in commercial quantities.--Apparel articles sewn or 
     otherwise assembled in 1 or more ATPDEA beneficiary 
     countries, or the United States, or both, exclusively from 
     any one or any combination of the following:

       ``(I) Fabrics or fabric components wholly formed, or 
     components knit-to-shape, in the United States, from yarns 
     wholly formed in the United States or 1 or more ATPDEA 
     beneficiary countries (including fabrics not formed from 
     yarns, if such fabrics are classifiable under heading 5602 or 
     5603 of the HTS and are formed in the United States). Apparel 
     articles shall qualify under this subclause only if all 
     dyeing, printing, and finishing of the fabrics from which the 
     articles are assembled, if the fabrics are knit fabrics, is 
     carried out in the United States. Apparel articles shall 
     qualify under this subclause only if all dyeing, printing, 
     and finishing of the fabrics from which the articles are 
     assembled, if the fabrics are woven fabrics, is carried out 
     in the United States.
       ``(II) Fabrics or fabric components formed or components 
     knit-to-shape, in 1 or more ATPDEA beneficiary countries, 
     from yarns wholly formed in 1 or more ATPDEA beneficiary 
     countries, if such fabrics (including fabrics not formed from 
     yarns, if such fabrics are classifiable under heading 5602 or 
     5603 of the HTS and are formed in 1 or more ATPDEA 
     beneficiary countries) or components are in chief value of 
     llama, alpaca, or vicuna.
       ``(III) Fabrics or yarns, to the extent that apparel 
     articles of such fabrics or yarns would be eligible for 
     preferential treatment, without regard to the source of the 
     fabrics or yarns, under Annex 401 of the NAFTA.

       ``(ii) Additional fabrics.--At the request of any 
     interested party, the President is authorized to proclaim 
     additional fabrics and yarns as eligible for preferential 
     treatment under clause (i)(III) if--

       ``(I) the President determines that such fabrics or yarns 
     cannot be supplied by the domestic industry in commercial 
     quantities in a timely manner;
       ``(II) the President has obtained advice regarding the 
     proposed action from the appropriate advisory committee 
     established under section 135 of the Trade Act of 1974 (19 
     U.S.C. 2155) and the United States International Trade 
     Commission;
       ``(III) within 60 days after the request, the President has 
     submitted a report to the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate that sets forth the action proposed to be proclaimed 
     and the reasons for such action, and the advice obtained 
     under subclause (II);
       ``(IV) a period of 60 calendar days, beginning with the 
     first day on which the President has

[[Page 15062]]

     met the requirements of subclause (III), has expired; and
       ``(V) the President has consulted with such committees 
     regarding the proposed action during the period referred to 
     in subclause (III).

       ``(iii) Apparel articles assembled in 1 or more atpdea 
     beneficiary countries from regional fabrics or regional 
     components.--(I) Subject to the limitation set forth in 
     subclause (II), apparel articles sewn or otherwise assembled 
     in 1 or more ATPDEA beneficiary countries from fabrics or 
     from fabric components formed or from components knit-to-
     shape, in 1 or more ATPDEA beneficiary countries, from yarns 
     wholly formed in the United States or 1 or more ATPDEA 
     beneficiary countries (including fabrics not formed from 
     yarns, if such fabrics are classifiable under heading 5602 or 
     5603 of the HTS and are formed in 1 or more ATPDEA 
     beneficiary countries), whether or not the apparel articles 
     are also made from any of the fabrics, fabric components 
     formed, or components knit-to-shape described in clause (i) 
     (unless the apparel articles are made exclusively from any of 
     the fabrics, fabric components formed, or components knit-to-
     shape described in clause (i)).
       ``(II) The preferential treatment referred to in subclause 
     (I) shall be extended in the 1-year period beginning October 
     1, 2002, and in each of the 4 succeeding 1-year periods, to 
     imports of apparel articles in an amount not to exceed the 
     applicable percentage of the aggregate square meter 
     equivalents of all apparel articles imported into the United 
     States in the preceding 12-month period for which data are 
     available.
       ``(III) For purposes of subclause (II), the term 
     `applicable percentage' means 2 percent for the 1-year period 
     beginning October 1, 2002, increased in each of the 4 
     succeeding 1-year periods by equal increments, so that for 
     the period beginning October 1, 2006, the applicable 
     percentage does not exceed 5 percent.
       ``(iv) Handloomed, handmade, and folklore articles.--A 
     handloomed, handmade, or folklore article of an ATPDEA 
     beneficiary country identified under subparagraph (C) that is 
     certified as such by the competent authority of such 
     beneficiary country.
       ``(v) Certain other apparel articles.--

       ``(I) General rule.--Any apparel article classifiable under 
     subheading 6212.10 of the HTS, except for articles entered 
     under clause (i), (ii), (iii), or (iv), if the article is 
     both cut and sewn or otherwise assembled in the United 
     States, or one or more ATPDEA beneficiary countries, or both.
       ``(II) Limitation.--During the 1-year period beginning on 
     October 1, 2003, and during each of the 3 succeeding 1-year 
     periods, apparel articles described in subclause (I) of a 
     producer or an entity controlling production shall be 
     eligible for preferential treatment under this paragraph only 
     if the aggregate cost of fabrics (exclusive of all findings 
     and trimmings) formed in the United States that are used in 
     the production of all such articles of that producer or 
     entity that are entered and eligible under this clause during 
     the preceding 1-year period is at least 75 percent of the 
     aggregate declared customs value of the fabric (exclusive of 
     all findings and trimmings) contained in all such articles of 
     that producer or entity that are entered and eligible under 
     this clause during the preceding 1-year period.
       ``(III) Development of procedure to ensure compliance.--The 
     United States Customs Service shall develop and implement 
     methods and procedures to ensure ongoing compliance with the 
     requirement set forth in subclause (II). If the Customs 
     Service finds that a producer or an entity controlling 
     production has not satisfied such requirement in a 1-year 
     period, then apparel articles described in subclause (I) of 
     that producer or entity shall be ineligible for preferential 
     treatment under this paragraph during any succeeding 1-year 
     period until the aggregate cost of fabrics (exclusive of all 
     findings and trimmings) formed in the United States that are 
     used in the production of such articles of that producer or 
     entity entered during the preceding 1-year period is at least 
     85 percent of the aggregate declared customs value of the 
     fabric (exclusive of all findings and trimmings) contained in 
     all such articles of that producer or entity that are entered 
     and eligible under this clause during the preceding 1-year 
     period.

       ``(vi) Special rules.--

       ``(I) Exception for findings and trimmings.--An article 
     otherwise eligible for preferential treatment under this 
     paragraph shall not be ineligible for such treatment because 
     the article contains findings or trimmings of foreign origin, 
     if such findings and trimmings do not exceed 25 percent of 
     the cost of the components of the assembled product. Examples 
     of findings and trimmings are sewing thread, hooks and eyes, 
     snaps, buttons, `bow buds', decorative lace, trim, elastic 
     strips, zippers, including zipper tapes and labels, and other 
     similar products.
       ``(II) Certain interlining.--(aa) An article otherwise 
     eligible for preferential treatment under this paragraph 
     shall not be ineligible for such treatment because the 
     article contains certain interlinings of foreign origin, if 
     the value of such interlinings (and any findings and 
     trimmings) does not exceed 25 percent of the cost of the 
     components of the assembled article.
       ``(bb) Interlinings eligible for the treatment described in 
     division (aa) include only a chest type plate, `hymo' piece, 
     or `sleeve header', of woven or weft-inserted warp knit 
     construction and of coarse animal hair or man-made filaments.
       ``(cc) The treatment described in this subclause shall 
     terminate if the President makes a determination that United 
     States manufacturers are producing such interlinings in the 
     United States in commercial quantities.
       ``(III) De minimis rule.--An article that would otherwise 
     be ineligible for preferential treatment under this 
     subparagraph because the article contains yarns not wholly 
     formed in the United States or in one or more ATPDEA 
     beneficiary countries shall not be ineligible for such 
     treatment if the total weight of all such yarns is not more 
     than 7 percent of the total weight of the good.
       ``(IV) Special origin rule.--An article otherwise eligible 
     for preferential treatment under clause (i) or (iii) shall 
     not be ineligible for such treatment because the article 
     contains nylon filament yarn (other than elastomeric yarn) 
     that is classifiable under subheading 5402.10.30, 5402.10.60, 
     5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10, 
     5402.41.90, 5402.51.00, or 5402.61.00 of the HTS from a 
     country that is a party to an agreement with the United 
     States establishing a free trade area, which entered into 
     force before January 1, 1995.

       ``(vii) Textile luggage.--Textile luggage--

       ``(I) assembled in an ATPDEA beneficiary country from 
     fabric wholly formed and cut in the United States, from yarns 
     wholly formed in the United States, that is entered under 
     subheading 9802.00.80 of the HTS; or
       ``(II) assembled from fabric cut in an ATPDEA beneficiary 
     country from fabric wholly formed in the United States from 
     yarns wholly formed in the United States.

       ``(C) Handloomed, handmade, and folklore articles.--For 
     purposes of subparagraph (B)(iv), the President shall consult 
     with representatives of the ATPDEA beneficiary countries 
     concerned for the purpose of identifying particular textile 
     and apparel goods that are mutually agreed upon as being 
     handloomed, handmade, or folklore goods of a kind described 
     in section 2.3(a), (b), or (c) of the Annex or Appendix 
     3.1.B.11 of the Annex.
       ``(D) Penalties for transshipment.--
       ``(i) Penalties for exporters.--If the President 
     determines, based on sufficient evidence, that an exporter 
     has engaged in transshipment with respect to apparel articles 
     from an ATPDEA beneficiary country, then the President shall 
     deny all benefits under this title to such exporter, and any 
     successor of such exporter, for a period of 2 years.
       ``(ii) Penalties for countries.--Whenever the President 
     finds, based on sufficient evidence, that transshipment has 
     occurred, the President shall request that the ATPDEA 
     beneficiary country or countries through whose territory the 
     transshipment has occurred take all necessary and appropriate 
     actions to prevent such transshipment. If the President 
     determines that a country is not taking such actions, the 
     President shall reduce the quantities of apparel articles 
     that may be imported into the United States from such country 
     by the quantity of the transshipped articles multiplied by 3, 
     to the extent consistent with the obligations of the United 
     States under the WTO.
       ``(iii) Transshipment described.--Transshipment within the 
     meaning of this subparagraph has occurred when preferential 
     treatment under subparagraph (A) has been claimed for an 
     apparel article on the basis of material false information 
     concerning the country of origin, manufacture, processing, or 
     assembly of the article or any of its components. For 
     purposes of this clause, false information is material if 
     disclosure of the true information would mean or would have 
     meant that the article is or was ineligible for preferential 
     treatment under subparagraph (A).
       ``(E) Bilateral emergency actions.--
       ``(i) In general.--The President may take bilateral 
     emergency tariff actions of a kind described in section 4 of 
     the Annex with respect to any apparel article imported from 
     an ATPDEA beneficiary country if the application of tariff 
     treatment under subparagraph (A) to such article results in 
     conditions that would be cause for the taking of such actions 
     under such section 4 with respect to a like article described 
     in the same 8-digit subheading of the HTS that is imported 
     from Mexico.
       ``(ii) Rules relating to bilateral emergency action.--For 
     purposes of applying bilateral emergency action under this 
     subparagraph--

       ``(I) the requirements of paragraph (5) of section 4 of the 
     Annex (relating to providing compensation) shall not apply;
       ``(II) the term `transition period' in section 4 of the 
     Annex shall mean the period ending December 31, 2006; and
       ``(III) the requirements to consult specified in section 4 
     of the Annex shall be treated as satisfied if the President 
     requests consultations with the ATPDEA beneficiary country in 
     question and the country does not agree to consult within the 
     time period specified under section 4 of the Annex.

       ``(4) Tuna.--
       ``(A) General rule.--Tuna that is harvested by United 
     States vessels or ATPDEA beneficiary country vessels, that is 
     prepared or preserved in any manner, in an ATPDEA beneficiary 
     country, in foil or other flexible airtight containers 
     weighing with their contents not more than 6.8 kilograms 
     each, and that is imported directly into the customs 
     territory of the United States from an ATPDEA beneficiary 
     country, shall enter the United States free of duty and free 
     of any quantitative restrictions.
       ``(B) Definitions.--In this paragraph--
       ``(i) United states vessel.--A `United States vessel' is a 
     vessel having a certificate of documentation with a fishery 
     endorsement under chapter 121 of title 46, United States 
     Code.
       ``(ii) ATPDEA vessel.--An `ATPDEA vessel' is a vessel--

[[Page 15063]]

       ``(I) which is registered or recorded in an ATPDEA 
     beneficiary country;
       ``(II) which sails under the flag of an ATPDEA beneficiary 
     country;
       ``(III) which is at least 75 percent owned by nationals of 
     an ATPDEA beneficiary country or by a company having its 
     principal place of business in an ATPDEA beneficiary country, 
     of which the manager or managers, chairman of the board of 
     directors or of the supervisory board, and the majority of 
     the members of such boards are nationals of an ATPDEA 
     beneficiary country and of which, in the case of a company, 
     at least 50 percent of the capital is owned by an ATPDEA 
     beneficiary country or by public bodies or nationals of an 
     ATPDEA beneficiary country;
       ``(IV) of which the master and officers are nationals of an 
     ATPDEA beneficiary country; and
       ``(V) of which at least 75 percent of the crew are 
     nationals of an ATPDEA beneficiary country.

       ``(5) Customs procedures.--
       ``(A) In general.--
       ``(i) Regulations.--Any importer that claims preferential 
     treatment under paragraph (1), (3), or (4) shall comply with 
     customs procedures similar in all material respects to the 
     requirements of Article 502(1) of the NAFTA as implemented 
     pursuant to United States law, in accordance with regulations 
     promulgated by the Secretary of the Treasury.
       ``(ii) Determination.--

       ``(I) In general.--In order to qualify for the preferential 
     treatment under paragraph (1), (3), or (4) and for a 
     Certificate of Origin to be valid with respect to any article 
     for which such treatment is claimed, there shall be in effect 
     a determination by the President that each country described 
     in subclause (II)--

       ``(aa) has implemented and follows, or
       ``(bb) is making substantial progress toward implementing 
     and following,

     procedures and requirements similar in all material respects 
     to the relevant procedures and requirements under chapter 5 
     of the NAFTA.
       ``(II) Country described.--A country is described in this 
     subclause if it is an ATPDEA beneficiary country--

       ``(aa) from which the article is exported; or
       ``(bb) in which materials used in the production of the 
     article originate or in which the article or such materials 
     undergo production that contributes to a claim that the 
     article is eligible for preferential treatment under 
     paragraph (1), (3), or (4).
       ``(B) Certificate of origin.--The Certificate of Origin 
     that otherwise would be required pursuant to the provisions 
     of subparagraph (A) shall not be required in the case of an 
     article imported under paragraph (1), (3), or (4) if such 
     Certificate of Origin would not be required under Article 503 
     of the NAFTA (as implemented pursuant to United States law), 
     if the article were imported from Mexico.
       ``(C) Report on cooperation of atpdea countries concerning 
     circumvention.--The United States Commissioner of Customs 
     shall conduct a study analyzing the extent to which each 
     ATPDEA beneficiary country--
       ``(i) has cooperated fully with the United States, 
     consistent with its domestic laws and procedures, in 
     instances of circumvention or alleged circumvention of 
     existing quotas on imports of textile and apparel goods, to 
     establish necessary relevant facts in the places of import, 
     export, and, where applicable, transshipment, including 
     investigation of circumvention practices, exchanges of 
     documents, correspondence, reports, and other relevant 
     information, to the extent such information is available;
       ``(ii) has taken appropriate measures, consistent with its 
     domestic laws and procedures, against exporters and importers 
     involved in instances of false declaration concerning 
     quantities, description, classification, or origin of textile 
     and apparel goods; and
       ``(iii) has penalized the individuals and entities involved 
     in any such circumvention, consistent with its domestic laws 
     and procedures, and has worked closely to seek the 
     cooperation of any third country to prevent such 
     circumvention from taking place in that third country.

     The Commissioner of Customs shall submit to the Congress, not 
     later than October 1, 2003, a report on the study conducted 
     under this subparagraph.
       ``(6) Definitions.--In this subsection--
       ``(A) Annex.--The term `the Annex' means Annex 300-B of the 
     NAFTA.
       ``(B) ATPDEA beneficiary country.--The term `ATPDEA 
     beneficiary country' means any `beneficiary country', as 
     defined in section 203(a)(1) of this title, which the 
     President designates as an ATPDEA beneficiary country, taking 
     into account the criteria contained in subsections (c) and 
     (d) of section 203 and other appropriate criteria, including 
     the following:
       ``(i) Whether the beneficiary country has demonstrated a 
     commitment to--

       ``(I) undertake its obligations under the WTO, including 
     those agreements listed in section 101(d) of the Uruguay 
     Round Agreements Act, on or ahead of schedule; and
       ``(II) participate in negotiations toward the completion of 
     the FTAA or another free trade agreement.

       ``(ii) The extent to which the country provides protection 
     of intellectual property rights consistent with or greater 
     than the protection afforded under the Agreement on Trade-
     Related Aspects of Intellectual Property Rights described in 
     section 101(d)(15) of the Uruguay Round Agreements Act.
       ``(iii) The extent to which the country provides 
     internationally recognized worker rights, including--

       ``(I) the right of association;
       ``(II) the right to organize and bargain collectively;
       ``(III) a prohibition on the use of any form of forced or 
     compulsory labor;
       ``(IV) a minimum age for the employment of children; and
       ``(V) acceptable conditions of work with respect to minimum 
     wages, hours of work, and occupational safety and health.

       ``(iv) Whether the country has implemented its commitments 
     to eliminate the worst forms of child labor, as defined in 
     section 507(6) of the Trade Act of 1974.
       ``(v) The extent to which the country has met the 
     counternarcotics certification criteria set forth in section 
     490 of the Foreign Assistance Act of 1961 (22 U.S.C. 2291j) 
     for eligibility for United States assistance.
       ``(vi) The extent to which the country has taken steps to 
     become a party to and implements the Inter-American 
     Convention Against Corruption.
       ``(vii) The extent to which the country--

       ``(I) applies transparent, nondiscriminatory, and 
     competitive procedures in government procurement equivalent 
     to those contained in the Agreement on Government Procurement 
     described in section 101(d)(17) of the Uruguay Round 
     Agreements Act; and

       ``(II) contributes to efforts in international fora to 
     develop and implement international rules in transparency in 
     government procurement.

       ``(viii) The extent to which the country has taken steps to 
     support the efforts of the United States to combat terrorism.
       ``(C) NAFTA.--The term `NAFTA' means the North American 
     Free Trade Agreement entered into between the United States, 
     Mexico, and Canada on December 17, 1992.
       ``(D) WTO.--The term `WTO' has the meaning given that term 
     in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 
     3501).
       ``(E) ATPDEA.--The term `ATPDEA' means the Andean Trade 
     Promotion and Drug Eradication Act.
       ``(F) FTAA.--The term `FTAA' means the Free Trade Area for 
     the Americas.''.
       (b) Determination Regarding Retention of Designation.--
     Section 203(e)(1) of the Andean Trade Preference Act (19 
     U.S.C. 3202(e)(1)) is amended--
       (1) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (2) by inserting ``(A)'' after ``(1)''; and
       (3) by adding at the end the following:
       ``(B) The President may, after the requirements of 
     paragraph (2) have been met--
       ``(i) withdraw or suspend the designation of any country as 
     an ATPDEA beneficiary country, or
       ``(ii) withdraw, suspend, or limit the application of 
     preferential treatment under section 204(b)(1), (3), or (4) 
     to any article of any country,

     if, after such designation, the President determines that, as 
     a result of changed circumstances, the performance of such 
     country is not satisfactory under the criteria set forth in 
     section 204(b)(6)(B).''.
       (c) Conforming Amendments.--(1) Section 202 of the Andean 
     Trade Preference Act (19 U.S.C. 3201) is amended by inserting 
     ``(or other preferential treatment)'' after ``treatment''.
       (2) Section 204(a) of the Andean Trade Preference Act (19 
     U.S.C. 3203(a)) is amended--
       (A) in paragraph (1)--
       (i) by inserting ``(or otherwise provided for)'' after 
     ``eligibility''; and
       (ii) by inserting ``(or preferential treatment)'' after 
     ``duty-free treatment''; and
       (B) in paragraph (2), by striking ``subsection (a)'' and 
     inserting ``paragraph (1)''.
       (d) Petitions for Review.--
       (1) In general.--Not later than 180 days after the date of 
     the enactment of this Act, the President shall promulgate 
     regulations regarding the review of eligibility of articles 
     and countries under the Andean Trade Preference Act, 
     consistent with section 203(e) of such Act, as amended by 
     this title.
       (2) Content of regulations.--The regulations shall be 
     similar to the regulations regarding eligibility under the 
     generalized system of preferences under title V of the Trade 
     Act of 1974 with respect to the timetable for reviews and 
     content, and shall include procedures for requesting 
     withdrawal, suspension, or limitations of preferential duty 
     treatment under the Andean Trade Preference Act, conducting 
     reviews of such requests, and implementing the results of the 
     reviews.
       (e) Reporting Requirements.--Section 203(f) of the Andean 
     Trade Preference Act (19 U.S.C. 3202(f)) is amended to read 
     as follows:
       ``(f) Reporting Requirements.--
       ``(1) In general.--Not later than April 30, 2003, and every 
     2 years thereafter during the period this title is in effect, 
     the United States Trade Representative shall submit to the 
     Congress a report regarding the operation of this title, 
     including--
       ``(A) with respect to subsections (c) and (d), the results 
     of a general review of beneficiary countries based on the 
     considerations described in such subsections; and
       ``(B) the performance of each beneficiary country or ATPEA 
     beneficiary country, as the case may be, under the criteria 
     set forth in section 204(b)(6)(B).
       ``(2) Public comment.--Before submitting the report 
     described in paragraph (1), the United States Trade 
     Representative shall publish a notice in the Federal Register 
     requesting public

[[Page 15064]]

     comments on whether beneficiary countries are meeting the 
     criteria listed in section 204(b)(6)(B).''.

     SEC. 3104. TERMINATION.

       (a) In General.--Section 208 of the Andean Trade Preference 
     Act (19 U.S.C. 3206) is amended to read as follows:

     ``SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.

       ``No duty-free treatment or other preferential treatment 
     extended to beneficiary countries under this title shall 
     remain in effect after December 31, 2006.''.
       (b) Retroactive Application for Certain Liquidations and 
     Reliquidations.--
       (1) In general.--Notwithstanding section 514 of the Tariff 
     Act of 1930 or any other provision of law, and subject to 
     paragraph (3), the entry--
       (A) of any article to which duty-free treatment (or 
     preferential treatment) under the Andean Trade Preference Act 
     (19 U.S.C. 3201 et seq.) would have applied if the entry had 
     been made on December 4, 2001, and
       (B) that was made after December 4, 2001, and before the 
     date of the enactment of this Act,
     shall be liquidated or reliquidated as if such duty-free 
     treatment (or preferential treatment) applied, and the 
     Secretary of the Treasury shall refund any duty paid with 
     respect to such entry.
       (2) Entry.--As used in this subsection, the term ``entry'' 
     includes a withdrawal from warehouse for consumption.
       (3) Requests.--Liquidation or reliquidation may be made 
     under paragraph (1) with respect to an entry only if a 
     request therefor is filed with the Customs Service, within 
     180 days after the date of the enactment of this Act, that 
     contains sufficient information to enable the Customs 
     Service--
       (A) to locate the entry; or
       (B) to reconstruct the entry if it cannot be located.

     SEC. 3105. REPORT ON FREE TRADE AGREEMENT WITH ISRAEL.

       (a) Report to Congress.--The United States Trade 
     Representative shall review the implementation of the United 
     States-Israel Free Trade Agreement and shall submit to the 
     Speaker of the House of Representatives, the President of the 
     Senate, the Committee on Ways and Means of the House of 
     Representatives, and the Committee on Finance of the Senate a 
     report on the results of such review.
       (b) Contents of Report.--The report under subsection (a) 
     shall include the following:
       (1) A review of the terms of the United States-Israel Free 
     Trade Agreement, particularly the terms with respect to 
     market access commitments.
       (2) A review of subsequent agreements which may have been 
     reached between the parties to the Agreement and of 
     unilateral concessions of additional benefits received by 
     each party from the other.
       (3) A review of any current negotiations between the 
     parties to the Agreement with respect to implementation of 
     the Agreement and other pertinent matters.
       (4) An assessment of the degree of fulfillment of 
     obligations under the Agreement by the United States and 
     Israel.
       (5) An assessment of improvements in structuring future 
     trade agreements that should be considered based on the 
     experience of the United States under the Agreement.
       (c) Timing of Report.--The United States Trade 
     Representative shall submit the report under subsection (a) 
     not later than 6 months after the date of the enactment of 
     this Act.
       (d) Definition.--In this section, the terms ``United 
     States-Israel Free Trade Agreement'' and ``Agreement'' means 
     the Agreement on the Establishment of a Free Trade Area 
     between the Government of the United States of America and 
     the Government of Israel entered into on April 22, 1985.

     SEC. 3106. MODIFICATION OF DUTY TREATMENT FOR TUNA.

       Subheading 1604.14.20 of the Harmonized Tariff Schedule of 
     the United States is amended--
       (1) in the article description, by striking ``20 percent of 
     the United States pack of canned tuna'' and inserting ``4.8 
     percent of apparent United States consumption of tuna in 
     airtight containers''; and
       (2) by redesignating such subheading as subheading 
     1604.14.22.

     SEC. 3107. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC 
                   RECOVERY ACT.

       (a) In General.--Section 213(b)(2)(A) of the Carribean 
     Basin Economic Recovery Act (19 U.S.C. 2703(b)(2)(A)) is 
     amended as follows:
       (1) Clause (i) is amended--
       (A) by striking the matter preceding subclause (I) and 
     inserting the following:
       ``(i) Apparel articles assembled in one or more cbtpa 
     beneficiary countries.--Apparel articles sewn or otherwise 
     assembled in one or more CBTPA beneficiary countries from 
     fabrics wholly formed and cut, or from components knit-to-
     shape, in the United States from yarns wholly formed in the 
     United States, (including fabrics not formed from yarns, if 
     such fabrics are classifiable under heading 5602 or 5603 of 
     the HTS and are wholly formed and cut in the United States) 
     that are--''; and
       (B) by adding at the end the following:
     ``Apparel articles entered on or after September 1, 2002, 
     shall qualify under the preceding sentence only if all 
     dyeing, printing, and finishing of the fabrics from which the 
     articles are assembled, if the fabrics are knit fabrics, is 
     carried out in the United States. Apparel articles entered on 
     or after September 1, 2002, shall qualify under the first 
     sentence of this clause only if all dyeing, printing, and 
     finishing of the fabrics from which the articles are 
     assembled, if the fabrics are woven fabrics, is carried out 
     in the United States.''.
       (2) Clause (ii) is amended to read as follows:
       ``(ii) Other apparel articles assembled in one or more 
     cbtpa beneficiary countries.--Apparel articles sewn or 
     otherwise assembled in one or more CBTPA beneficiary 
     countries with thread formed in the United States from 
     fabrics wholly formed in the United States and cut in one or 
     more CBTPA beneficiary countries from yarns wholly formed in 
     the United States, or from components knit-to-shape in the 
     United States from yarns wholly formed in the United States, 
     or both (including fabrics not formed from yarns, if such 
     fabrics are classifiable under heading 5602 or 5603 of the 
     HTS and are wholly formed in the United States). Apparel 
     articles entered on or after September 1, 2002, shall qualify 
     under the preceding sentence only if all dyeing, printing, 
     and finishing of the fabrics from which the articles are 
     assembled, if the fabrics are knit fabrics, is carried out in 
     the United States. Apparel articles entered on or after 
     September 1, 2002, shall qualify under the first sentence of 
     this clause only if all dyeing, printing, and finishing of 
     the fabrics from which the articles are assembled, if the 
     fabrics are woven fabrics, is carried out in the United 
     States.''.
       (3) Clause (iii)(II) is amended to read as follows:
       ``(II) The amount referred to in subclause (I) is as 
     follows:

       ``(aa) 500,000,000 square meter equivalents during the 1-
     year period beginning on October 1, 2002.

       ``(bb) 850,000,000 square meter equivalents during the 1-
     year period beginning on October 1, 2003.
       ``(cc) 970,000,000 square meter equivalents in each 
     succeeding 1-year period through September 30, 2008.''.

       (4) Clause (iii)(IV) is amended to read as follows:
       ``(IV) The amount referred to in subclause (III) is as 
     follows:

       ``(aa) 4,872,000 dozen during the 1-year period beginning 
     on October 1, 2001.
       ``(bb) 9,000,000 dozen during the 1-year period beginning 
     on October 1, 2002.
       ``(cc) 10,000,000 dozen during the 1-year period beginning 
     on October 1, 2003.
       ``(dd) 12,000,000 dozen in each succeeding 1-year period 
     through September 30, 2008.''.

       (5) Clause (iv) is amended to read as follows:
       ``(iv) Certain other apparel articles.--

       ``(I) General rule.--Subject to subclause (II), any apparel 
     article classifiable under subheading 6212.10 of the HTS, 
     except for articles entered under clause (i), (ii), (iii), 
     (v), or (vi), if the article is both cut and sewn or 
     otherwise assembled in the United States, or one or more 
     CBTPA beneficiary countries, or both.
       ``(II) Limitation.--During the 1-year period beginning on 
     October 1, 2001, and during each of the 6 succeeding 1-year 
     periods, apparel articles described in subclause (I) of a 
     producer or an entity controlling production shall be 
     eligible for preferential treatment under subparagraph (B) 
     only if the aggregate cost of fabrics (exclusive of all 
     findings and trimmings) formed in the United States that are 
     used in the production of all such articles of that producer 
     or entity that are entered and eligible under this clause 
     during the preceding 1-year period is at least 75 percent of 
     the aggregate declared customs value of the fabric (exclusive 
     of all findings and trimmings) contained in all such articles 
     of that producer or entity that are entered and eligible 
     under this clause during the preceding 1-year period.
       ``(III) Development of procedure to ensure compliance.--The 
     United States Customs Service shall develop and implement 
     methods and procedures to ensure ongoing compliance with the 
     requirement set forth in subclause (II). If the Customs 
     Service finds that a producer or an entity controlling 
     production has not satisfied such requirement in a 1-year 
     period, then apparel articles described in subclause (I) of 
     that producer or entity shall be ineligible for preferential 
     treatment under subparagraph (B) during any succeeding 1-year 
     period until the aggregate cost of fabrics (exclusive of all 
     findings and trimmings) formed in the United States that are 
     used in the production of such articles of that producer or 
     entity entered during the preceding 1-year period is at least 
     85 percent of the aggregate declared customs value of the 
     fabric (exclusive of all findings and trimmings) contained in 
     all such articles of that producer or entity that are entered 
     and eligible under this clause during the preceding 1-year 
     period.''.

       (6) Clause (vii) is amended by adding at the end the 
     following new subclause:

       ``(V) Thread.--An article otherwise eligible for 
     preferential treatment under this paragraph shall not be 
     ineligible for such treatment because the thread used to 
     assemble the article is dyed, printed, or finished in one or 
     more CBTPA beneficiary countries.''.

       (7) Section 213(b)(2)(A) of such Act is further amended by 
     adding at the end the following new clause:
       ``(ix) Apparel articles assembled in one or more cbtpa 
     beneficiary countries from united states and cbtpa 
     beneficiary country components.--Apparel articles sewn or 
     otherwise assembled in one or more CBTPA beneficiary 
     countries with thread formed in the United States from 
     components cut in the United States and in one or more CBTPA 
     beneficiary countries from fabric wholly formed in the United 
     States from yarns wholly formed in the United States, or from 
     components knit-to-shape in the United States and one or more 
     CBTPA beneficiary countries from yarns wholly

[[Page 15065]]

     formed in the United States, or both (including fabrics not 
     formed from yarns, if such fabrics are classifiable under 
     heading 5602 or 5603 of the HTS). Apparel articles shall 
     qualify under this clause only if they meet the requirements 
     of clause (i) or (ii) (as the case may be) with respect to 
     dyeing, printing, and finishing of knit and woven fabrics 
     from which the articles are assembled.''.
       (b) Effective Date of Certain Provisions.--The amendment 
     made by subsection (a)(3) shall take effect on October 1, 
     2002.

     SEC. 3108. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND 
                   OPPORTUNITY ACT.

       (a) In General.--Section 112(b) of the African Growth and 
     Opportunity Act (19 U.S.C. 3721(b)) is amended as follows:
       (1) Paragraph (1) is amended by amending the matter 
     preceding subparagraph (A) to read as follows:
       ``(1) Apparel articles assembled in one or more beneficiary 
     sub-saharan african countries.--Apparel articles sewn or 
     otherwise assembled in one or more beneficiary sub-Saharan 
     African countries from fabrics wholly formed and cut, or from 
     components knit-to-shape, in the United States from yarns 
     wholly formed in the United States, (including fabrics not 
     formed from yarns, if such fabrics are classifiable under 
     heading 5602 or 5603 of the Harmonized Tariff Schedule of the 
     United States and are wholly formed and cut in the United 
     States) that 
     are--''.
       (2) Paragraph (2) is amended to read as follows:
       ``(2) Other apparel articles assembled in one or more 
     beneficiary sub-saharan african countries.--Apparel articles 
     sewn or otherwise assembled in one or more beneficiary sub-
     Saharan African countries with thread formed in the United 
     States from fabrics wholly formed in the United States and 
     cut in one or more beneficiary sub-Saharan African countries 
     from yarns wholly formed in the United States, or from 
     components knit-to-shape in the United States from yarns 
     wholly formed in the United States, or both (including 
     fabrics not formed from yarns, if such fabrics are 
     classifiable under heading 5602 or 5603 of the Harmonized 
     Tariff Schedule of the United States and are wholly formed in 
     the United States).''.
       (3) Paragraph (3) is amended--
       (A) by amending the matter preceding subparagraph (A) to 
     read as follows:
       ``(3) Apparel articles from regional fabric or yarns.--
     Apparel articles wholly assembled in one or more beneficiary 
     sub-Saharan African countries from fabric wholly formed in 
     one or more beneficiary sub-Saharan African countries from 
     yarns originating either in the United States or one or more 
     beneficiary sub-Saharan African countries (including fabrics 
     not formed from yarns, if such fabrics are classified under 
     heading 5602 or 5603 of the Harmonized Tariff Schedule of the 
     United States and are wholly formed in one or more 
     beneficiary sub-Saharan African countries), or from 
     components knit-to-shape in one or more beneficiary sub-
     Saharan African countries from yarns originating either in 
     the United States or one or more beneficiary sub-Saharan 
     African countries, or apparel articles wholly formed on 
     seamless knitting machines in a beneficiary sub-Saharan 
     African country from yarns originating either in the United 
     States or one or more beneficiary sub-Saharan African 
     countries, subject to the following:''; and
       (B) by amending subparagraph (B) to read as follows:
       ``(B) Special rule for lesser developed countries.--
       ``(i) In general.--Subject to subparagraph (A), 
     preferential treatment under this paragraph shall be extended 
     through September 30, 2004, for apparel articles wholly 
     assembled, or knit-to-shape and wholly assembled, or both, in 
     one or more lesser developed beneficiary sub-Saharan African 
     countries regardless of the country of origin of the fabric 
     or the yarn used to make such articles.
       ``(ii) Lesser developed beneficiary sub-saharan african 
     country.--For purposes of clause (i), the term `lesser 
     developed beneficiary sub-Saharan African country' means--

       ``(I) a beneficiary sub-Saharan African country that had a 
     per capita gross national product of less than $1,500 in 
     1998, as measured by the International Bank for 
     Reconstruction and Development;
       ``(II) Botswana; and
       ``(III) Namibia.''.

       (4) Paragraph (4)(B) is amended by striking ``18.5'' and 
     inserting ``21.5''.
       (5) Section 112(b) of such Act is further amended by adding 
     at the end the following new paragraph:
       ``(7) Apparel articles assembled in one or more beneficiary 
     sub-saharan african countries from united states and 
     beneficiary sub-saharan african country components.--Apparel 
     articles sewn or otherwise assembled in one or more 
     beneficiary sub-Saharan African countries with thread formed 
     in the United States from components cut in the United States 
     and one or more beneficiary sub-Saharan African countries 
     from fabric wholly formed in the United States from yarns 
     wholly formed in the United States, or from components knit-
     to-shape in the United States and one or more beneficiary 
     sub-Saharan African countries from yarns wholly formed in the 
     United States, or both (including fabrics not formed from 
     yarns, if such fabrics are classifiable under heading 5602 or 
     5603 of the Harmonized Tariff Schedule of the United 
     States).''.
       (b) Increase in Limitation on Certain Benefits.--The 
     applicable percentage under clause (ii) of section 
     112(b)(3)(A) of the African Growth and Opportunity Act (19 
     U.S.C. 3721(b)(3)(A)) shall be increased--
       (1) by 2.17 percent for the 1-year period beginning on 
     October 1, 2002, and
       (2) by equal increments in each succeeding 1-year period 
     provided for in such clause, so that for the 1-year period 
     beginning October 1, 2007, the applicable percentage is 
     increased by 3.5 percent,
     except that such increase shall not apply with respect to 
     articles eligible under subparagraph (B) of section 112(b)(3) 
     of that Act.

     DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT

       TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

     SEC. 4101. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.

       (a) Extension of Duty-Free Treatment Under System.--Section 
     505 of the Trade Act of 1974 (19 U.S.C. 2465(a)) is amended 
     by striking ``September 30, 2001'' and inserting ``December 
     31, 2006''.
       (b) Retroactive Application for Certain Liquidations and 
     Reliquidations.--
       (1) In general.--Notwithstanding section 514 of the Tariff 
     Act of 1930 or any other provision of law, and subject to 
     paragraph (2), the entry--
       (A) of any article to which duty-free treatment under title 
     V of the Trade Act of 1974 would have applied if the entry 
     had been made on September 30, 2001,
       (B) that was made after September 30, 2001, and before the 
     date of the enactment of this Act, and
       (C) to which duty-free treatment under title V of that Act 
     did not apply,
     shall be liquidated or reliquidated as free of duty, and the 
     Secretary of the Treasury shall refund any duty paid with 
     respect to such entry.
       (2) Requests.--Liquidation or reliquidation may be made 
     under paragraph (1) with respect to an entry only if a 
     request therefor is filed with the Customs Service, within 
     180 days after the date of the enactment of this Act, that 
     contains sufficient information to enable the Customs 
     Service--
       (A) to locate the entry; or
       (B) to reconstruct the entry if it cannot be located.
       (3) Definition.--As used in this subsection, the term 
     ``entry'' includes a withdrawal from warehouse for 
     consumption.

     SEC. 4102. AMENDMENTS TO GENERALIZED SYSTEM OF PREFERENCES.

       (a) Eligibility for Generalized System of Preferences.--
     Section 502(b)(2)(F) of the Trade Act of 1974 (19 U.S.C. 
     2462(b)(2)(F)) is amended by striking the period at the end 
     and inserting ``or such country has not taken steps to 
     support the efforts of the United States to combat 
     terrorism.''.
       (b) Definition of Internationally Recognized Worker 
     Rights.--Section 507(4) of the Trade Act of 1974 (19 U.S.C. 
     2467(4)) is amended by amending subparagraph (D) to read as 
     follows:
       ``(D) a minimum age for the employment of children, and a 
     prohibition on the worst forms of child labor, as defined in 
     paragraph (6); and''.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                 TITLE L--MISCELLANEOUS TRADE BENEFITS

                      Subtitle A--Wool Provisions

     SEC. 5101. WOOL PROVISIONS.

       (a) Short Title.--This section may be cited as the ``Wool 
     Manufacturer Payment Clarification and Technical Corrections 
     Act''.
       (b) Clarification of Temporary Duty Suspension.--Heading 
     9902.51.13 of the Harmonized Tariff Schedule of the United 
     States is amended by inserting ``average'' before 
     ``diameters''.
       (c) Payments to Manufacturers of Certain Wool Products.--
       (1) Payments.--Section 505 of the Trade and Development Act 
     of 2000 (Public Law 106-200; 114 Stat. 303) is amended as 
     follows:
       (A) Subsection (a) is amended--
       (i) by striking ``In each of the calendar years'' and 
     inserting ``For each of the calendar years''; and
       (ii) by striking ``for a refund of duties'' and all that 
     follows through the end of the subsection and inserting ``for 
     a payment equal to an amount determined pursuant to 
     subsection (d)(1).''.
       (B) Subsection (b) is amended to read as follows:
       ``(b) Wool Yarn.--
       ``(1) Importing manufacturers.--For each of the calendar 
     years 2000, 2001, and 2002, a manufacturer of worsted wool 
     fabrics who imports wool yarn of the kind described in 
     heading 5107.10 or 9902.51.13 of the Harmonized Tariff 
     Schedule of the United States shall be eligible for a payment 
     equal to an amount determined pursuant to subsection (d)(2).
       ``(2) Nonimporting manufacturers.--For each of the calendar 
     years 2001 and 2002, any other manufacturer of worsted wool 
     fabrics of imported wool yarn of the kind described in 
     heading 5107.10 or 9902.51.13 of the Harmonized Tariff 
     Schedule of the United States shall be eligible for a payment 
     equal to an amount determined pursuant to subsection 
     (d)(2).''.
       (C) Subsection (c) is amended to read as follows:
       ``(c) Wool Fiber and Wool Top.--
       ``(1) Importing manufacturers.--For each of the calendar 
     years 2000, 2001, and 2002, a manufacturer of wool yarn or 
     wool fabric who imports wool fiber or wool top of the kind 
     described in heading 5101.11, 5101.19, 5101.21,

[[Page 15066]]

     5101.29, 5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 
     5105.29, or 9902.51.14 of the Harmonized Tariff Schedule of 
     the United States shall be eligible for a payment equal to an 
     amount determined pursuant to subsection (d)(3).
       ``(2) Nonimporting manufacturers.--For each of the calendar 
     years 2001 and 2002, any other manufacturer of wool yarn or 
     wool fabric of imported wool fiber or wool top of the kind 
     described in heading 5101.11, 5101.19, 5101.21, 5101.29, 
     5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 5105.29, or 
     9902.51.14 of the Harmonized Tariff Schedule of the United 
     States shall be eligible for a payment equal to an amount 
     determined pursuant to subsection (d)(3).''.
       (D) Section 505 is further amended by striking subsection 
     (d) and inserting the following new subsections:
       ``(d) Amount of Annual Payments to Manufacturers.--
       ``(1) Manufacturers of men's suits, etc. of imported 
     worsted wool fabrics.--
       ``(A) Eligible to receive more than $5,000.--Each annual 
     payment to manufacturers described in subsection (a) who, 
     according to the records of the Customs Service as of 
     September 11, 2001, are eligible to receive more than $5,000 
     for each of the calendar years 2000, 2001, and 2002, shall be 
     in an amount equal to one-third of the amount determined by 
     multiplying $30,124,000 by a fraction--
       ``(i) the numerator of which is the amount attributable to 
     the duties paid on eligible wool products imported in 
     calendar year 1999 by the manufacturer making the claim, and
       ``(ii) the denominator of which is the total amount 
     attributable to the duties paid on eligible wool products 
     imported in calendar year 1999 by all the manufacturers 
     described in subsection (a) who, according to the records of 
     the Customs Service as of September 11, 2001, are eligible to 
     receive more than $5,000 for each such calendar year under 
     this section as it was in effect on that date.
       ``(B) Eligible wool products.--For purposes of subparagraph 
     (A), the term `eligible wool products' refers to imported 
     worsted wool fabrics described in subsection (a).
       ``(C) Others.--All manufacturers described in subsection 
     (a), other than the manufacturers to which subparagraph (A) 
     applies, shall each receive an annual payment in an amount 
     equal to one-third of the amount determined by dividing 
     $1,665,000 by the number of all such other manufacturers.
       ``(2) Manufacturers of worsted wool fabrics of imported 
     wool yarn.--
       ``(A) Importing manufacturers.--Each annual payment to an 
     importing manufacturer described in subsection (b)(1) shall 
     be in an amount equal to one-third of the amount determined 
     by multiplying $2,202,000 by a fraction--
       ``(i) the numerator of which is the amount attributable to 
     the duties paid on eligible wool products imported in 
     calendar year 1999 by the importing manufacturer making the 
     claim, and
       ``(ii) the denominator of which is the total amount 
     attributable to the duties paid on eligible wool products 
     imported in calendar year 1999 by all the importing 
     manufacturers described in subsection (b)(1).
       ``(B) Eligible wool products.--For purposes of subparagraph 
     (A), the term `eligible wool products' refers to imported 
     wool yarn described in subsection (b)(1).
       ``(C) Nonimporting manufacturers.--Each annual payment to a 
     nonimporting manufacturer described in subsection (b)(2) 
     shall be in an amount equal to one-half of the amount 
     determined by multiplying $141,000 by a fraction--
       ``(i) the numerator of which is the amount attributable to 
     the purchases of imported eligible wool products in calendar 
     year 1999 by the nonimporting manufacturer making the claim, 
     and
       ``(ii) the denominator of which is the total amount 
     attributable to the purchases of imported eligible wool 
     products in calendar year 1999 by all the nonimporting 
     manufacturers described in subsection (b)(2).
       ``(3) Manufacturers of wool yarn or wool fabric of imported 
     wool fiber or wool top.--
       ``(A) Importing manufacturers.--Each annual payment to an 
     importing manufacturer described in subsection (c)(1) shall 
     be in an amount equal to one-third of the amount determined 
     by multiplying $1,522,000 by a fraction--
       ``(i) the numerator of which is the amount attributable to 
     the duties paid on eligible wool products imported in 
     calendar year 1999 by the importing manufacturer making the 
     claim, and
       ``(ii) the denominator of which is the total amount 
     attributable to the duties paid on eligible wool products 
     imported in calendar year 1999 by all the importing 
     manufacturers described in subsection (c)(1).
       ``(B) Eligible wool products.--For purposes of subparagraph 
     (A), the term `eligible wool products' refers to imported 
     wool fiber or wool top described in subsection (c)(1).
       ``(C) Nonimporting manufacturers.--Each annual payment to a 
     nonimporting manufacturer described in subsection (c)(2) 
     shall be in an amount equal to one-half of the amount 
     determined by multiplying $597,000 by a fraction--
       ``(i) the numerator of which is the amount attributable to 
     the purchases of imported eligible wool products in calendar 
     year 1999 by the nonimporting manufacturer making the claim, 
     and
       ``(ii) the denominator of which is the amount attributable 
     to the purchases of imported eligible wool products in 
     calendar year 1999 by all the nonimporting manufacturers 
     described in subsection (c)(2).
       ``(4) Letters of intent.--Except for the nonimporting 
     manufacturers described in subsections (b)(2) and (c)(2) who 
     may make claims under this section by virtue of the enactment 
     of the Wool Manufacturer Payment Clarification and Technical 
     Corrections Act, only manufacturers who, according to the 
     records of the Customs Service, filed with the Customs 
     Service before September 11, 2001, letters of intent to 
     establish eligibility to be claimants are eligible to make a 
     claim for a payment under this section.
       ``(5) Amount attributable to purchases by nonimporting 
     manufacturers.--
       ``(A) Amount attributable.--For purposes of paragraphs 
     (2)(C) and (3)(C), the amount attributable to the purchases 
     of imported eligible wool products in calendar year 1999 by a 
     nonimporting manufacturer shall be the amount the 
     nonimporting manufacturer paid for eligible wool products in 
     calendar year 1999, as evidenced by invoices. The 
     nonimporting manufacturer shall make such calculation and 
     submit the resulting amount to the Customs Service, within 45 
     days after the date of enactment of the Wool Manufacturer 
     Payment Clarification and Technical Corrections Act, in a 
     signed affidavit that attests that the information contained 
     therein is true and accurate to the best of the affiant's 
     belief and knowledge. The nonimporting manufacturer shall 
     retain the records upon which the calculation is based for a 
     period of five years beginning on the date the affidavit is 
     submitted to the Customs Service.
       ``(B) Eligible wool product.--For purposes of subparagraph 
     (A)--
       ``(i) the eligible wool product for nonimporting 
     manufacturers of worsted wool fabrics is wool yarn of the 
     kind described in heading 5107.10 or 9902.51.13 of the 
     Harmonized Tariff Schedule of the United States purchased in 
     calendar year 1999; and
       ``(ii) the eligible wool products for nonimporting 
     manufacturers of wool yarn or wool fabric are wool fiber or 
     wool top of the kind described in heading 5101.11, 5101.19, 
     5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 5104.00, 
     5105.21, 5105.29, or 9902.51.14 of such Schedule purchased in 
     calendar year 1999.
       ``(6) Amount attributable to duties paid.--For purposes of 
     paragraphs (1), (2)(A), and (3)(A), the amount attributable 
     to the duties paid by a manufacturer shall be the amount 
     shown on the records of the Customs Service as of September 
     11, 2001, under this section as then in effect.
       ``(7) Schedule of payments; reallocations.--
       ``(A) Schedule.--Of the payments described in paragraphs 
     (1), (2)(A), and (3)(A), the Customs Service shall make the 
     first and second installments on or before the date that is 
     45 days after the date of enactment of the Wool Manufacturer 
     Payment Clarification and Technical Corrections Act, and the 
     third installment on or before April 15, 2003. Of the 
     payments described in paragraphs (2)(C) and (3)(C), the 
     Customs Service shall make the first installment on or before 
     the date that is 120 days after the date of enactment of the 
     Wool Manufacturer Payment Clarification and Technical 
     Corrections Act, and the second installment on or before 
     April 15, 2003.
       ``(B) Reallocations.--In the event that a manufacturer that 
     would have received payment under subparagraph (A) or (C) of 
     paragraph (1), (2), or (3) ceases to be qualified for such 
     payment as such a manufacturer, the amounts otherwise payable 
     to the remaining manufacturers under such subparagraph shall 
     be increased on a pro rata basis by the amount of the payment 
     such manufacturer would have received.
       ``(8) Reference.--For purposes of paragraphs (1)(A) and 
     (6), the `records of the Customs Service as of September 11, 
     2001' are the records of the Wool Duty Unit of the Customs 
     Service on September 11, 2001, as adjusted by the Customs 
     Service to the extent necessary to carry out this section. 
     The amounts so adjusted are not subject to administrative or 
     judicial review.
       ``(e) Affidavits by Manufacturers.--
       ``(1) Affidavit required.--A manufacturer may not receive a 
     payment under this section for calendar year 2000, 2001, or 
     2002, as the case may be, unless that manufacturer has 
     submitted to the Customs Service for that calendar year a 
     signed affidavit that attests that, during that calendar 
     year, the affiant was a manufacturer in the United States 
     described in subsection (a), (b), or (c).
       ``(2) Timing.--An affidavit under paragraph (1) shall be 
     valid--
       ``(A) in the case of a manufacturer described in paragraph 
     (1), (2)(A), or (3)(A) of subsection (d) filing a claim for a 
     payment for calendar year 2000 or 2001, or both, only if the 
     affidavit is postmarked no later than 15 days after the date 
     of enactment of the Wool Manufacturer Payment Clarification 
     and Technical Corrections Act; and
       ``(B) in the case of a claim for a payment for calendar 
     year 2002, only if the affidavit is postmarked no later than 
     March 1, 2003.
       ``(f) Offsets.--Notwithstanding any other provision of this 
     section, any amount otherwise payable under subsection (d) to 
     a manufacturer in calendar year 2001 and, where applicable, 
     in calendar years 2002 and 2003, shall be reduced by the 
     amount of any payment received by that manufacturer under 
     this section before the enactment of the Wool Manufacturer 
     Payment Clarification and Technical Corrections Act.
       ``(g) Definition.--For purposes of this section, the 
     manufacturer is the party that owns--
       ``(1) imported worsted wool fabric, of the kind described 
     in heading 9902.51.11 or 9902.51.12 of the Harmonized Tariff 
     Schedule of the United States, at the time the fabric is cut 
     and sewn in

[[Page 15067]]

     the United States into men's or boys' suits, suit-type 
     jackets, or trousers;
       ``(2) imported wool yarn, of the kind described in heading 
     5107.01 or 9902.51.13 of such Schedule, at the time the yarn 
     is processed in the United States into worsted wool fabric; 
     or
       ``(3) imported wool fiber or wool top, of the kind 
     described in heading 5101.11, 5101.19, 5101.21, 5101.29, 
     5101.30, 5103.10, 5103.20, 5104.00, 5105.21, 5105.29, or 
     9902.51.14 of such Schedule, at the time the wool fiber or 
     wool top is processed in the United States into wool yarn.''.
       (2) Funding.--There is authorized to be appropriated and is 
     hereby appropriated, out of amounts in the General Fund of 
     the Treasury not otherwise appropriated, $36,251,000 to carry 
     out the amendments made by paragraph (1).

     SEC. 5102. DUTY SUSPENSION ON WOOL.

       (a) Extension of Temporary Duty Reductions.--
       (1) Heading 9902.51.11.-- Heading 9902.51.11 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     striking ``2003'' and inserting ``2005''.
       (2) Heading 9902.51.12.-- Heading 9902.51.12 of the 
     Harmonized Tariff Schedule of the United States is amended--
       (A) by striking ``2003'' and inserting ``2005''; and
       (B) by striking ``6%'' and inserting ``Free''.
       (3) Heading 9902.51.13.--Heading 9902.51.13 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     striking ``2003'' and inserting ``2005''.
       (4) Heading 9902.51.14.--Heading 9902.51.14 of the 
     Harmonized Tariff Schedule of the United States is amended by 
     striking ``2003'' and inserting ``2005''.
       (b) Limitation on Quantity of Imports.--
       (1) Note 15.--U.S. Note 15 to subchapter II of chapter 99 
     of the Harmonized Tariff Schedule of the United States is 
     amended--
       (A) by striking ``from January 1 to December 31 of each 
     year, inclusive''; and
       (B) by striking ``, or such other'' and inserting the 
     following: ``in calendar year 2001, 3,500,000 square meter 
     equivalents in calendar year 2002, and 4,500,000 square meter 
     equivalents in calendar year 2003 and each calendar year 
     thereafter, or such greater''.
       (2) Note 16.--U.S. Note 16 to subchapter II of chapter 99 
     of the Harmonized Tariff Schedule of the United States is 
     amended--
       (A) by striking ``from January 1 to December 31 of each 
     year, inclusive''; and
       (B) by striking ``, or such other'' and inserting the 
     following: ``in calendar year 2001, 2,500,000 square meter 
     equivalents in calendar year 2002, and 3,500,000 square meter 
     equivalents in calendar year 2003 and each calendar year 
     thereafter, or such greater''.
       (c) Extension of Duty Refunds and Wool Research Trust 
     Fund.--
       (1) In general.--The United States Customs Service shall 
     pay each manufacturer that receives a payment under section 
     505 of the Trade and Development Act of 2000 (Public Law 106-
     200) for calendar year 2002, and that provides an affidavit 
     that it remains a manufacturer in the United States as of 
     January 1 of the year of the payment, 2 additional payments, 
     each payment equal to the payment received for calendar year 
     2002 as follows:
       (A) The first payment to be made after January 1, 2004, but 
     on or before April 15, 2004.
       (B) The second payment to be made after January 1, 2005, 
     but on or before April 15, 2005.
       (2) Conforming amendment.--Section 506(f) of the Trade and 
     Development Act of 2000 (Public Law 106-200) is amended by 
     striking ``2004'' and inserting ``2006''.
       (3) Authorization.--There is authorized to be appropriated 
     and is hereby appropriated out of amounts in the general fund 
     of the Treasury not otherwise appropriated such sums as are 
     necessary to carry out the provisions of this subsection.
       (d) Effective Date.--The amendment made by subsection 
     (a)(2)(B) applies to goods entered, or withdrawn from 
     warehouse for consumption, on or after January 1, 2002.

                      Subtitle B--Other Provisions

     SEC. 5201. FUND FOR WTO DISPUTE SETTLEMENTS.

       (a) Establishment of Fund.--There is established in the 
     Treasury a fund for the payment of settlements under this 
     section.
       (b) Authority of USTR to Pay Settlements.--Amounts in the 
     fund established under subsection (a) shall be available, as 
     provided in appropriations Acts, only for the payment by the 
     United States Trade Representative of the amount of the total 
     or partial settlement of any dispute pursuant to proceedings 
     under the auspices of the World Trade Organization, if--
       (1) in the case of a total or partial settlement in an 
     amount of not more than $10,000,000, the Trade Representative 
     certifies to the Secretary of the Treasury that the 
     settlement is in the best interests of the United States; and
       (2) in the case of a total or partial settlement in an 
     amount of more than $10,000,000, the Trade Representative 
     certifies to the Congress that the settlement is in the best 
     interests of the United States.
       (c) Appropriations.--There are authorized to be 
     appropriated to the fund established under subsection (a)--
       (1) $50,000,000; and
       (2) amounts equivalent to amounts recovered by the United 
     States pursuant to the settlement of disputes pursuant to 
     proceedings under the auspices of the World Trade 
     Organization.

     Amounts appropriated to the fund are authorized to remain 
     available until expended.
       (d) Management of Fund.--Sections 9601 and 9602(b) of the 
     Internal Revenue Code of 1986 shall apply to the fund 
     established under subsection (a) to the same extent as such 
     provisions apply to trust funds established under subchapter 
     A of chapter 98 of such Code.

     SEC. 5202. CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS 
                   USED IN NUCLEAR FACILITIES.

       (a) In General.--Subheading 9902.84.02 of the Harmonized 
     Tariff Schedule of the United States is amended--
       (1) by striking ``4.9%'' and inserting ``Free''; and
       (2) by striking ``12/31/2003'' and inserting ``12/31/
     2006''.
       (b) Effective Date.--
       (1) In general.--The amendments made by subsection (a) 
     shall apply to goods entered, or withdrawn from warehouse for 
     consumption, on or after January 1, 2002.
       (2) Retroactive application.--Notwithstanding section 514 
     of the Tariff Act of 1930 or any other provision of law, and 
     subject to paragraph (4), the entry of any article--
       (A) that was made on or after January 1, 2002, and
       (B) to which duty-free treatment would have applied if the 
     amendment made by this section had been in effect on the date 
     of such entry,
     shall be liquidated or reliquidated as if such duty-free 
     treatment applied, and the Secretary of the Treasury shall 
     refund any duty paid with respect to such entry.
       (3) Entry.--As used in this subsection, the term ``entry'' 
     includes a withdrawal from warehouse for consumption.
       (4) Requests.--Liquidation or reliquidation may be made 
     under paragraph (2) with respect to an entry only if a 
     request therefor is filed with the Customs Service, within 
     180 days after the date of the enactment of this Act, that 
     contains sufficient information to enable the Customs 
     Service--
       (A) to locate the entry; or
       (B) to reconstruct the entry if it cannot be located.

     SEC. 5203. SUGAR TARIFF-RATE QUOTA CIRCUMVENTION.

       (a) In General.--Chapter 17 of the Harmonized Tariff 
     Schedule of the United States is amended in the superior text 
     to subheading 1702.90.05 by striking ``Containing'' and all 
     that follows through ``solids:'' and inserting the following:
     ``Containing soluble non-sugar solids (excluding any foreign 
     substances, including but not limited to molasses, that may 
     have been added to or developed in the product) equal to 6 
     percent or less by weight of the total soluble solids:''.
       (b) Monitoring for Circumvention.--The Secretary of 
     Agriculture and the Commissioner of Customs shall 
     continuously monitor imports of sugar and sugar-containing 
     products provided for in chapters 17, 18, 19, and 21 of the 
     Harmonized Tariff Schedule of the United States, other than 
     molasses imported for use in animal feed or the production of 
     rum and articles prepared for marketing to the ultimate 
     consumer in the form and package in which imported, for 
     indications that an article is being used to circumvent a 
     tariff-rate quota provided for in those chapters. The 
     Secretary and Commissioner shall specifically examine imports 
     of articles provided for in subheading 1703.10.30 of the 
     Harmonized Tariff Schedule of the United States.
       (c) Reports and Recommendations.--The Secretary and the 
     Commissioner shall report their findings to Congress and the 
     President not later than 180 days after the date of enactment 
     of this Act and every 6 months thereafter. The reports shall 
     include data and a description of developments and trends in 
     the composition of trade of articles provided for in the 
     chapters of the Harmonized Tariff Schedule of the United 
     States identified in subsection (b) and any indications of 
     circumvention that may exist. The reports shall also include 
     recommendations for ending such circumvention, including 
     recommendations for legislation.

       And the Senate agree to the same.

     From the Committee on Ways and Means, for consideration of 
     the House amendment and the Senate amendment, and 
     modifications committed to conference:
     William Thomas,
     Phillip M. Crane,
     From the Committee on Education and the Workforce, for 
     consideration of the Senate amendment, and modifications 
     committed to conference:
     John Boehner,
     Sam Johnson,
     From the Committee on Energy and Commerce, for consideration 
     of sec. 603 of the Senate amendment, and modifications 
     committed to conference:
     Billy Tauzin,
     Michael Bilirakis,
     From the Committee on Government Reform, for consideration of 
     sec. 344 of the House amendment, and sec. 1143 of the Senate 
     amendment, and modifications committed to conference:
     Dan Burton,
     Bob Barr,
     From the Committee on the Judiciary, for consideration of 
     secs. 111, 601, and 701 of the Senate amendment, and 
     modifications committed to conference:
     F. James Sensenbrenner,
     Howard Coble,
     From the Committee on the Rules, for consideration of secs. 
     2103, 2105, and 2106 of the House amendment and secs. 2103, 
     2105, and 2106 of the Senate amendment, and modifications 
     committed to conference:

[[Page 15068]]

     David Dreier,
     John Linder,
                                Managers on the Part of the House.

     Max Baucus,
     John Breaux,
     Chuck Grassley,
     Orrin Hatch,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to the bill (H.R. 3009), to extend 
     the Andean Trade Preference Act, to grant additional trade 
     benefits under that Act, and for other purposes, submit the 
     following joint statement to the House and the Senate in 
     explanation of the effect of the action agreed upon by the 
     managers and recommended in the accompanying conference 
     report:
       The Senate amendment struck all of the House bill after the 
     enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment that is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clerical 
     changes.

                DIVISION A--TRADE ADJUSTMENT ASSISTANCE


                         sec. 101--short title

     Present law
       No provision.
     House amendment
       Section 101 of H.R. 3009 provides that Division A of the 
     Act may be cited as the ``Trade Adjustment Assistance Reform 
     Act of 2002.''
     Senate amendment
       Section 101 of H.R. 3009 provides that Division A of the 
     Act may be cited as the ``Trade Adjustment Assistance Reform 
     Act of 2002.''
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

          Subtitle A--Trade Adjustment Assistance for Workers


  sec. 111--reauthorization of the trade adjustment assistance program

     Present law
       Current section 245 authorizes to be appropriated to the 
     Department of Labor such sums as may be necessary to carry 
     out the purposes of the TAA and NAFTA-TAA for workers 
     programs for the period October 1, 1998 through September 30, 
     2001. Current section 285 provides for termination of all 
     Trade Adjustment Assistance programs on September 30, 2001, 
     but provides that workers, and firms eligible to receive 
     benefits on or before that date shall continue to be eligible 
     to receive such benefits as though the programs were in 
     effect.
     House amendment
     Senate amendment
       Section III of the Senate bill creates a new section 248 of 
     the Trade Act of 1974 which authorizes to be appropriated to 
     the Department of Labor such sums as may be necessary to 
     carry out the purposes of the Trade Adjustment Assistance for 
     workers program for the period October 1, 2001, through 
     September 30, 2007. Section 701 of the Senate bill amends 
     current section 285 to provide for termination of all Trade 
     Adjustment Assistance programs on September 30, 2007, but 
     provides that workers, and firms, communities, farmers, and 
     fishermen eligible to receive benefits on or before that date 
     shall continue to be eligible to receive such benefits as 
     though the programs were in effect.
     Conference agreement
       Conferees agree to extend the authorization of the Trade 
     Adjustment Assistance programs through September 30, 2007, 
     and to consolidate the NAFTA-TAA program with the regular TAA 
     program.


     sec. 112--filing of petitions and provision of rapid response 
    assistance; expedited review of petitions by secretary of labor

     Present law
       Current sections 221 and 250 set forth requirements 
     concerning who may file a petition for certification of 
     eligibility to apply for TAA and NAFTA-TAA assistance, 
     respectively. Under both programs, petitions may be filed by 
     a group of workers or by their certified or recognized union 
     or other duly authorized representative. TAA petitions are 
     filed with the Secretary of Labor. NAFTA-TAA petitions are 
     filed with the Governor of the relevant State and forwarded 
     by him to the Secretary of Labor. Under section 223, the 
     Secretary of Labor must rule on eligibility within 60 days 
     after a TAA petition is filed. Under section 250, the 
     Governor must make a preliminary eligibility determination 
     within 10 days after a NAFTA-TAA petition is filed, and the 
     Secretary of Labor must make a final eligibility 
     determination within the next 30 days. Section 221 also sets 
     forth notice and hearing obligations of the Secretary of 
     Labor upon receipt of a TAA petition. Section 250 provides 
     that, in the event of preliminary certification of 
     eligibility to apply for NAFTA-TAA benefits, the Governor 
     immediately provide the affected workers with certain rapid 
     response services.
     House amendment
       The House Amendment provided for a shortened period for the 
     Secretary of Labor to consider petitions from 60 days to 40 
     days and for other rapid response assistance to workers.
     Senate amendment
       Section 111 of the Senate bill creates a new section 231 of 
     the Trade Act of 1974, which consolidates the TAA and NAFTA-
     TAA programs by establishing a single program with a single 
     set of group eligibility criteria and a single set of 
     procedures and standards for filing and reviewing petitions, 
     certifying eligibility, and terminating certifications of 
     eligibility.
       Section 231 expands the list of entities that may file a 
     petition for group certification of eligibility to include 
     employers, one-stop operators or one-stop partners, State 
     employment agencies, and any entity to which notice of a 
     plant closing or mass layoff must be given under section 3 of 
     the Worker Adjustment and Retaining Notification Act. Section 
     231 also provides that the President, or the Committee on 
     Finance of the Senate or the Committee on Ways and Means of 
     the House of Representatives (by resolution), may direct the 
     Secretary of Labor to initiate a certification process under 
     this chapter to determine the eligibility for Trade 
     Adjustment Assistance of a group of workers.
       Section 231 creates a single process for filing and 
     reviewing petitions for Trade Adjustment Assistance for 
     workers, under which all petitions are filed with both the 
     Secretary of Labor and the Governor of the State. Upon filing 
     of the petition, the Governor is required to fulfill the 
     requirements of any agreement entered into with the 
     Department of Labor under section 222, to provide certain 
     rapid response services, and to notify workers on whose 
     behalf a petition has been filed of their potential 
     eligibility for certain existing federal health care, child 
     care, transportation, and other assistance programs. Upon 
     filing the petition, the Secretary of Labor must make his 
     certification determination within 40 days and provide the 
     notice required.
     Conference agreement
       The Senate recedes to the House with a change providing for 
     simultaneous filing of petitions with the Secretary of Labor 
     and State Governor.


                sec. 113--group eligibility requirements

     Present law
       Current law sections 222 and 250 of Title II of the Trade 
     Act of 1974 set forth group eligibility criteria. Under TAA, 
     the Secretary must certify a group of workers as eligible to 
     apply for Trade Adjustment Assistance if he determines (1) 
     that a significant number or proportion of the workers in 
     such workers' firm have become or are threatened to become 
     totally or partially separated; (2) sales or production of 
     such firm have decreased absolutely; and (3) imports of 
     articles like or directly competitive with articles produced 
     by such workers' firm contributed importantly to the total or 
     partial separation or threat thereof, and to the decline in 
     sales or production. Under NAFTA-TAA, group eligibility may 
     be based on the same criteria set forth in section 222, but 
     section 250 also provides for NAFTA-TAA eligibility where 
     there has been a shift in production by the workers' firm to 
     Mexico or Canada of articles like or directly competitive 
     with articles which are produced by the firm. Section 222 
     also includes special eligibility provisions with respect to 
     oil and natural gas producers.
     House amendment
       The House Amendment at Section 113 expanded the Trade 
     Adjustment Assistance programs to secondary workers that are 
     suppliers to firms that were certified and which satisfied 
     certain conditions.
     Senate amendment
       Section 111 of the Senate Amendment creates a new section 
     231 under which the eligibility criteria are revised. First, 
     workers are eligible for TAA if the value or volume of 
     imports of articles like or directly competitive with 
     articles produced by that firm have increased and the 
     increase in the value or volume of imports contributed 
     importantly to the workers' separation or threat of 
     separation. Second, eligibility is extended to workers who 
     are separated due to shifts in production to any country, 
     rather than only when the shift in production is to Mexico or 
     Canada. Third, eligibility is extended to adversely affected 
     secondary workers. Eligible secondary workers include workers 
     in supplier firms and, with respect to trade with NAFTA 
     countries, downstream firms. Fourth, a new special 
     eligibility provision is added with respect to taconite 
     pellets.
     Conference agreement
       The Conferees agree to extend coverage of Trade Adjustment 
     Assistance to new categories of workers: 1) secondary workers 
     that supply directly to another firm component parts for 
     articles that were the basis for

[[Page 15069]]

     a certification of eligibility, 2) downstream workers that 
     were affected by trade with Mexico or Canada, and 3) certain 
     workers that have been laid off because their firm has 
     shifted its production to another country that has a free 
     trade agreement with the United States, that has a 
     unilaterally preferential trading arrangement with the United 
     States, or when there has been or is likely to be an increase 
     in imports of the relevant articles.


  sec. 114--qualifying requirements for trade readjustment allowances

     Present law
       Current section 231 establishes qualifying requirements 
     that must be met in order for an individual worker within a 
     certified group to receive Trade Adjustment Assistance. In 
     order to receive trade readjustment allowances, a certified 
     worker must have been separated on or after the eligibility 
     date established in the certification but within 2 years of 
     the date of the certification determination; been employed 
     for at least 26 of the 52 weeks preceding the separation at 
     wages of $30 or more a week; be eligible for and have 
     exhausted unemployment insurance benefits; not be 
     disqualified for extended compensation payable under the 
     Federal-State Extended Unemployment Compensation Act of 1970 
     by reason of the work acceptance and job search requirements 
     in section 202(a)(3) of that Act; and be enrolled in a 
     training program approved by the Secretary of Labor or have 
     received a training waiver.
     House amendment
       The House Amendment at Section 114 provided for 
     requirements and deadlines for workers to enroll in training.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 235 
     which maintains the individual eligibility requirements in 
     current law, with the exception of revisions to provisions 
     governing bases for granting training waivers.
     Conference agreement
       The Senate recedes to the House, with a change to adopt a 
     training enrollment deadline of 16 weeks after separation.


               sec. 115--waivers of training requirements

     Present law
       Section 231 sets forth permissible bases for granting a 
     training waiver. Pursuant to section 250(d), training waivers 
     are not available in the NAFTA-TAA program.
     House amendment
       The House Amendment provides that all workers who are 
     eligible to apply for Trade Adjustment Assistance may be 
     considered for training waivers and codifies several bases on 
     which the Secretary may grant a waiver.
     Senate Amendment
       Section 111 of the Senate Amendment adds a new section 235 
     which provides that all workers who are eligible to apply for 
     Trade Adjustment Assistance may be considered for training 
     waivers and codifies several bases on which the Secretary may 
     grant a waiver.
     Conference agreement
       The House receded to the Senate with a change to delete the 
     Senate provision giving the Secretary discretion to grant 
     waivers for ``other'' reasons.


  sec. 116--amendments to limitations on trade readjustment allowances

     Present law
       Current section 233 provides that each certified worker may 
     receive trade readjustment allowances for a maximum of 52 
     weeks. Current law also provides that, in most circumstances, 
     a worker is treated as participating in training during any 
     week which is part of a break in training that does not 
     exceed 14 days.
     House amendment
       Section 116 of the House Amendment would add 26 weeks of 
     trade adjustment allowances for those workers who were in 
     training and required the extension of benefits for the 
     purpose of completing training.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 23 7 
     which increases the maximum time period during which a worker 
     may receive trade adjustment allowances to 78 weeks, extends 
     the permissible duration of a break in training to 30 days, 
     and provides for an additional 26 weeks of income support for 
     workers requiring remedial education. Section 237 also 
     clarifies that the requirement that a worker exhaust 
     unemployment insurance benefits prior to receiving trade 
     adjustment allowances does not apply to any extension of 
     unemployment insurance by a State using its own funds that 
     extends beyond either the 26 week period mandated by Federal 
     law or any additional period provided for under the Federal-
     State Extended Unemployment Compensation Act of 1970 (26 
     U.S.C. 3304 note).
     Conference agreement
       The Senate recedes to the House.


         sec. 117--annual total amount of payments for training

     Present law
       Current section 236 establishes the terms and conditions 
     under which training is available to eligible workers; 
     permits the Secretary of Labor to approve certain specified 
     types of training programs and to pay the costs of approved 
     training and certain supplemental costs, including 
     subsistence and transportation costs, for eligible workers; 
     and caps total annual funding for training under the TAA for 
     workers program at $80 million. Section 250 separately caps 
     training expenditures under the NAFTA-TAA program at $30 
     million annually.
     House amendment
       The House provided $30 million additional funds for the 
     Trade Adjustment Assistance program. Combined with NAFTA 
     Trade Adjustment Assistance, the total training funds 
     available were $140 million.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 240 
     which sets the total funds available for training 
     expenditures under the unified TAA for workers program to 
     $300 million annually.
     Conference agreement
       Conferees agreed to a combined training cap of $220 million 
     for Trade Adjustment Assistance training.


             SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING

     Present law
       No applicable section.
     House amendment
       The House Amendment included provisions related to employer 
     based training including on-the-job training and customized 
     training with partial reimbursements provided to the 
     employer.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 240 
     which revises the list of training programs which the 
     Secretary may approve to include customized training. It also 
     adds a new section 237, which clarifies that the prohibition 
     on payment of trade adjustment allowances to a worker 
     receiving on-the-job training does not apply to a worker 
     enrolled in a non-paid customized training program.
     Conference agreement
       The Senate recedes to the House.


SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF 
                                  1998

     Present law
       No provision.
     House amendment
       The House Amendment provided multiple provisions related to 
     coordinating efforts under the Trade Adjustment Assistance 
     programs to provide information and benefits to workers under 
     the Workforce Investment Act.
     Senate amendment
       No provision.
     Conference agreement
       Conferees agreed to drop House language with the exception 
     of a provision related to coordinating the delivery of Trade 
     Adjustment Assistance benefits and information at one-stop 
     delivery systems under the Workforce Investment Act.


                      SEC. 120--EXPENDITURE PERIOD

     Present law
       No provision.
     House amendment
       The House amendment provided that certain funds obligated 
     for any fiscal year to carry out activities may be expended 
     by each State in the succeeding two fiscal years.
     Senate amendment
       No provision.
     Conference agreement
       The Senate recedes to the House.


                    SEC. 121--JOB SEARCH ALLOWANCES

     Present law
       Under current section 237, when the Secretary of Labor 
     determines that local employment is not available, an 
     adversely affected worker certified eligible for TAA benefits 
     may receive reimbursement of 90 percent of the cost of 
     necessary job search expenses up to $800.
     House amendment
       No provision.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 241 
     which raises the maximum reimbursement for job search 
     expenses to $1,250 per worker.
     Conference agreement
       The House recedes to the Senate.


                    SEC. 122--RELOCATION ALLOWANCES

     Present law
       Under current section 238, when the Secretary of Labor 
     determines that local employment is not available, an 
     adversely affected worker certified eligible for TAA benefits 
     may receive a relocation allowance consisting of (1) 90 
     percent of the reasonable and necessary expenses incurred in 
     transporting a worker and his family, if any, and household 
     effects, and (2) a lump sum equivalent to three times the 
     worker's average weekly wage, up to a maximum payment of 
     $800.
     House amendment
       No provision.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 242 
     which raises the maximum

[[Page 15070]]

     lump sum portion of the relocation allowance to $1,250.
     Conference agreement
       The House recedes to the Senate.


  SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM

     Present law
       Current law authorizes a Trade Adjustment Assistance 
     Program for workers affected by NAFTA trade.
     House amendment
       No provision.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 231 
     which combines the TAA and NAFTA-TAA programs, establishing a 
     single program with a single set of group eligibility 
     criteria and a single set of procedures and standards for 
     filing and reviewing petitions, certifying eligibility, and 
     terminating certification of eligibility.
     Conference agreement
       The House recedes to the Senate to the extent of repealing 
     the NAFTA Trade Adjustment Assistance program and creating a 
     single, unified TAA program for workers.


   SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT 
                      ASSISTANCE FOR OLDER WORKERS

     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 243 
     which directs the Secretary of Labor, within one year of 
     enactment, to establish a two-year wage insurance pilot 
     program under which a State uses the funds provided to the 
     State for Trade Adjustment allowances to pay to an adversely 
     affected worker certified under section 231, for a period not 
     to exceed two years, a wage subsidy of up to 50 percent of 
     the difference between the wages received by the adversely 
     affected worker from reemployment and the wages received by 
     the adversely affected worker at the time of separation. An 
     adversely affected worker may be eligible to receive a wage 
     subsidy if the worker obtains reemployment not more than 26 
     weeks after the date of separation from the adversely 
     affected employment, is at least 50 years of age, earns not 
     more than $50,000 a year in wages from reemployment, is 
     employed at least 30 hours a week in the reemployment, and 
     does not return to the employment from which the worker was 
     separated. The wage subsidy available to workers in the wage 
     insurance program is 50 percent of the difference between the 
     amount of the wages received by the worker from reemployment 
     and the amount of the wages received by the worker at the 
     time of separation, if the wages the worker receives from 
     reemployment are less than $40,000 a year. The wage subsidy 
     is 25 percent if the wages received by the worker from 
     reemployment are greater than $40,000 a year but not more 
     than $50,000 a year. Total payments made to an adversely 
     affected worker under the wage insurance program may not 
     exceed $5,000 in each year of the 2-year period. A worker 
     participating in the wage insurance program is not eligible 
     to receive any other Trade Adjustment Assistance benefits, 
     unless the Secretary of Labor determines that the worker has 
     shown circumstances that warrant eligibility for training 
     benefits under section 240.
     Conference agreement
       The Conferees agree to create a new alternative Trade 
     Adjustment Assistance program for older workers.


          SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS

     Present law
       No provision.
     House amendment
       The House passed amendment included a declaration of policy 
     and Sense of the Congress related to the responsibility of 
     the Secretary of Labor to provide information to workers 
     related to benefits available to them under the TAA and other 
     federal programs.
     Senate amendment
       Although certain supportive services are available to 
     dislocated workers under WIA, current law makes no express 
     linkage between these services and Trade Adjustment 
     Assistance and TAA certified workers may not be able to 
     access them. Section 111 of the Senate Amendment adds a new 
     section 243 which provides that States may apply for and the 
     Secretary of Labor may make available to adversely affected 
     workers certified under the Trade Adjustment Assistance 
     program supportive services available under WIA, including 
     transportation, child care, and dependent care, that are 
     necessary to enable a worker to participate in or complete 
     training. Section 243 requires the Comptroller General to 
     conduct a study of all assistance provided by the Federal 
     Government for workers facing job loss and economic distress; 
     to submit a report to the Committee on Finance of the Senate 
     and the Committee on Ways and Means of the House of 
     Representatives on the study within one year of enactment of 
     this Act; and to distribute the report to all WIA one-stop 
     partners. Section 243 further provides that each State may 
     conduct a study of its assistance programs for workers facing 
     job loss and economic distress. Each State is eligible for a 
     grant from the Secretary of Labor, not to exceed $50,000, to 
     enable it to conduct the study. In the event that a grant is 
     awarded, the State must, within one year of receiving the 
     grant, provide its report to the Committee on Finance and the 
     Committee on Ways and Means and distribute its report to one-
     stop partners in the State.
     Conference agreement
       The Senate recedes to the House.

           Subtitle B--Trade Adjustment Assistance for Firms


    SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM

     Present law
       The Trade Adjustment Assistance for Firms program provides 
     technical assistance to qualifying firms. Current Title II, 
     Chapter 3, section 251 of the Trade Act of 1974 provides that 
     a firm is eligible to receive Trade Adjustment Assistance 
     under this program if (1) a significant number or proportion 
     of its workers have become or are threatened to become 
     totally or partially separated; (2) sales or production, or 
     both, have decreased absolutely; and (3) increases of imports 
     of articles like or directly competitive with articles which 
     are produced by such firms contributed importantly to the 
     total or partial separations or threat thereof.
       The authorization for the Trade Adjustment Assistance for 
     Firms program expired on September 30, 2001. The TAA for 
     Firms program is currently subject to annual appropriations 
     and is funded as part of the budget of the Economic 
     Development Administration in the Department of Commerce.
     House amendment
       The House passed amendment included a 2 year 
     reauthorization for Trade Adjustment Assistance for Firms.
     Senate amendment
       Section 201 of the Senate Amendment reauthorizes the Trade 
     Adjustment Assistance for Firms program for fiscal years 2002 
     through 2007; expands the definition of qualifying firms to 
     cover shifts in production; and authorizes appropriations to 
     the Department of Commerce in the amount of $16 million 
     annually for fiscal years 2002 through 2007 to carry out the 
     purposes of the Trade Adjustment Assistance for Firms 
     program.
     Conference agreement
       The House recedes to the Senate on the issue of providing a 
     $16 million authorization for Trade Adjustment Assistance for 
     Firms and reauthorizing the program through September 30, 
     2007.

    Subtitle C--Trade Adjustment Assistance for Farmers and Ranchers


           SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 401 of the Senate Amendment adds new sections 292-
     298 of the Trade Act of 1974 which create a Trade Adjustment 
     Assistance program for farmers and ranchers in the Department 
     of Agriculture. Under this section, a group of agricultural 
     commodity producers may petition the Secretary of Agriculture 
     for Trade Adjustment Assistance. The Secretary must certify 
     the group as eligible for Trade Adjustment Assistance for 
     farmers if it is determined that the national average price 
     in the most recent marketing year for the commodity produced 
     by the group is less than 80 percent of the national average 
     price in the preceding 5 marketing years and that increases 
     in imports of that commodity contributed importantly to the 
     decline in price.
     Conference agreement
       The House recedes to the Senate with changes. The Conferees 
     agree to include limitations on eligibility based upon 
     adjusted gross income and counter-cyclical payment 
     limitations set forth in the Food Security Act of 1985.


                    SEC. 142--CONFORMING AMENDMENTS

     Present law
       No applicable section.
     House amendment
       No provision.
     Senate amendment
       The Senate Amendment makes conforming amendments to the 
     Trade Act of 1974 concerning the TAA for Farmers program.
     Conference agreement
       Conferees agree to make conforming amendments to the Trade 
     Act of 1974.


          SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN

     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 502 of the Senate Amendment adds new sections 299-
     299(G) which create a Trade

[[Page 15071]]

     Adjustment Assistance program for fishermen in the Department 
     of Commerce. Under this program, a group of fishermen may 
     petition the Secretary of Commerce for Trade Adjustment 
     Assistance. The Secretary must certify the group as eligible 
     for Trade Adjustment Assistance for fishermen if it is 
     determined that the national average price in the most recent 
     marketing year for the fish produced by the group is less 
     than 80 percent of the national average price in the 
     proceeding five marketing years and that increases in imports 
     of that fish contributed importantly to the decline in price.
     Conference agreement
       Conferees agree to drop Senate Amendment and authorize a 
     study by the Department of Labor to investigate applying TAA 
     to fisherman.

                       Subtitle D--Effective Date


                        SEC. 151--EFFECTIVE DATE

     Present law
       No applicable provision.
     House amendment
       No provision.
     Senate amendment
       Section 801 of the Senate Amendment provides that except as 
     otherwise specified, the amendments to the TAA program shall 
     be effective 90 days after enactment of the Trace Act of 
     2002. The Senate Amendment includes transitional provisions 
     governing the period between expiration of the prior 
     authorizations of TAA for workers and firms and the effective 
     date of the amendments.
     Conference agreement
       The House recedes to the Senate.

  TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS


 SEC. 201(a) AND 202. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS 
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE PENSION 
  BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH 
                INSURANCE COSTS OF ELIGIBLE INDIVIDUALS

     Present Law
       Under present law, the tax treatment of health insurance 
     expenses depends on the individual's circumstances. In 
     general, employer contributions to an accident or health plan 
     are excludable from an employee's gross income (sec. 106).
       Self-employed individuals are entitled to deduct a portion 
     of the amount paid for health insurance expenses for the 
     individual and his or her spouse and dependents. The 
     percentage of deductible expenses is 70 percent in 2002 and 
     100 percent in 2003 and thereafter.
       Individuals other than self-employed individuals who 
     purchase their own health insurance and itemize deductions 
     may deduct their expenses to the extent that their total 
     medical expenses exceed 7.5 percent of adjusted gross income.
       Present law does not provide a tax credit for the purchase 
     of health insurance.
       The health care continuation rules (commonly referred to as 
     ``COBRA'' rules, after the Consolidated Omnibus Budget 
     Reconciliation Act of 1985 in which they were enacted) 
     require that employer-sponsored group health plans of 
     employers with 20 or more employees must offer certain 
     covered employees and their dependents (``qualified 
     beneficiaries'') the option of purchasing continued health 
     coverage in the event of loss of coverage resulting from 
     certain qualifying events. These qualifying events include: 
     termination or reduction in hours of employment, death, 
     divorce or legal separation, enrollment in Medicare, the 
     bankruptcy of the employer, or the end of a child's 
     dependency under a parent's health plan. In general, the 
     maximum period of COBRA coverage is 18 months. An employer is 
     permitted to charge qualified beneficiaries 102 percent of 
     the applicable premium for COBRA coverage.
       Under present law, individuals without access to COBRA are 
     able to purchase individual policies on a guaranteed issue 
     basis without exclusion of coverage for pre-existing 
     conditions if they had 18 months of creditable coverage under 
     an employer sponsored group health plan, governmental plan, 
     or a church plan. Those with access to COBRA are required to 
     exhaust their 18 months of COBRA prior to obtaining a policy 
     on a guaranteed issue basis without exclusion of coverage for 
     pre-existing conditions.
     House amendment
       The House bill provides a refundable tax credit for up to 
     60 percent of the expenses of an eligible individual for 
     qualified health insurance coverage of the eligible 
     individual and his or her spouse or dependents. Eligible 
     individuals are certain TAA eligible workers and PBGC pension 
     beneficiaries. In the case of TAA eligible workers, no more 
     than 12 months of coverage would be eligible for the credit. 
     The amount of the credit would be phased out for taxpayers 
     with modified adjusted gross income between $20,000 and 
     $40,000 for single taxpayers ($40,000 and $80,000 for married 
     taxpayers filing a joint return). The credit would be 
     available on an advance basis pursuant to a program to be 
     established by the Secretary of the Treasury. Insurance that 
     qualifies for the credit includes certain COBRA coverage and 
     certain individual market options.
     Senate amendment
       The Senate amendment provides a refundable credit for 70 
     percent of qualified health insurance expenses. The credit is 
     available with respect to certain TAA eligible workers. The 
     credit is payable on an advance basis pursuant to a program 
     to be established by the Secretary of the Treasury. Insurance 
     that qualifies for the credit includes certain COBRA 
     coverage, certain State-based options, and individual health 
     insurance if certain requirements are satisfied.
     Conference agreement
       Refundable health insurance credit: in general
       In the case of taxpayers who are eligible individuals, the 
     conference agreement provides a refundable tax credit for 65 
     percent of the taxpayer's expenses for qualified health 
     insurance of the taxpayer and qualifying family members for 
     each eligible coverage month beginning in the taxable year. 
     The credit is available only with respect to amounts paid by 
     the taxpayer.
       Qualifying family members are the taxpayer's spouse and any 
     dependent of the taxpayer with respect to whom the taxpayer 
     is entitled to claim a dependency exemption.\1\ Any 
     individual who has other specified coverage is not a 
     qualifying family member.
---------------------------------------------------------------------------
     \1\Present law allows the custodial parent to release the 
     right to claim the dependency exemption for a child to the 
     noncustodial parent. In addition, if certain requirements are 
     met, the parents may decide by ageement that the noncustodial 
     parent is entitled to the dependency exemption with respect 
     to a child. In such cases, the provision would treat the 
     child as the dependent of the custodial parent for purposes 
     of the credit.
---------------------------------------------------------------------------
       Persons eligible for the credit
       Eligibility for the credit is determined on a monthly 
     basis. In general, an eligible coverage month is any month 
     if, as of the first day of the month, the taxpayer (1) is an 
     eligible individual, (2) is covered by qualified health 
     insurance, (3) does not have other specified coverage, and 
     (4) is not imprisoned under Federal, State, or local 
     authority. In the case of a joint return, the eligibility 
     requirements are met if at least one spouse satisfies the 
     requirements. An eligible month must begin more than 90 days 
     after the date of enactment.
       An eligible individual is (1) an eligible TAA recipient, 
     (2) an eligible alternative TAA recipient, and (3) an 
     eligible PBGC pension recipient.
       An individual is an eligible TAA recipient during any month 
     if the individual (1) is receiving for any day of such month 
     a trade adjustment allowance\2\ or who would be eligible to 
     receive such an allowance but for the requirement that the 
     individual exhaust unemployment benefits before being 
     eligible to receive an allowance and (2) with respect to such 
     allowance, is covered under a certification issued under 
     subchapter A or D of chapter 2 of title II of the Trade Act 
     of 1974. An individual is treated as an eligible TAA 
     recipient during the first month that such individual would 
     otherwise cease to be an eligible TAA recipient.
---------------------------------------------------------------------------
     \2\Part I of subchapter B, or subchapter D, of chapter 2 of 
     title II of the Trade Act of 1974.
---------------------------------------------------------------------------
       An individual is an eligible alternative TAA recipient 
     during any month if the individual (1) is a worker described 
     in section 246(a)(3)(B) of the Trade Act of 1974 who is 
     participating in the program established under section 
     246(a)(1) of such Act, and (2) is receiving a benefit for 
     such month under section 246(a)(2) of such Act. An individual 
     is treated as an eligible alternative TAA recipient during 
     the first month that such individual would otherwise cease to 
     be an eligible TAA recipient.
       An individual is a PBGC pension recipient for any month if 
     he or she (1) is age 55 or over as of the first day of the 
     month, and (2) is receiving a benefit any portion of which is 
     paid by the Pension Benefit Guaranty Corporation (PBGC).
       An otherwise eligible taxpayer is not eligible for the 
     credit for a month if, as of the first day of the month the 
     individual has other specified coverage. Specified coverage 
     would be (1) coverage under any insurance which constitutes 
     medical care (expect for insurance substantially all of the 
     coverage of which is for excepted benefits)\3\ if at least 50 
     percent of the cost of the coverage is paid by

[[Page 15072]]

     an employer\4\ (or former employer) of the individual or his 
     or her spouse or (2) coverage under certain governmental 
     health programs.\5\ A rule aggregating plans of the same 
     employer applies in determining whether the employer pays at 
     least 50 percent of the cost of coverage. A person is not an 
     eligible individual if he or she may be claimed as a 
     dependent on another person's tax return. A special rule 
     applies with respect to alternative TAA recipients.
---------------------------------------------------------------------------
     \3\Excepted benefits are: (1) coverage only for accident or 
     disability income or any combination thereof, (2) coverage 
     issued as a supplement to liability insurance; (3) liability 
     insurance, including general liability insurance and 
     automobile liability insurance; (4) worker's compensation or 
     similar insurance; (5) automobile medical payment insurance; 
     (6) credit-only insurance; (7) coverage for on-site medical 
     clinics; (8) other insurance coverage similar to the 
     coverages in (1)-(7) specified in regulations under which 
     benefits for medical care are secondary or incidental to 
     other insurance benefits; (9) limited scope dental or vision 
     benefits; (10) benefits for long-term care, nursing home 
     care, home health care, community-based care, or any 
     combination thereof. and (11) other benefits similar to those 
     in (9) and (10) as specified in regulations. (12) coverage 
     only for a specified disease or illness; (13) hospital 
     indemnity or other fixed indemnity insurance; and (14) 
     Medicare supplemental insurance.
     \4\An amount would be considered paid by the employer if it 
     is excludable from income. Thus, for example, amounts paid 
     for health coverage on a salary reduction basis under an 
     employer plan are considered paid by the employer.
     \5\Specifically, an individual would not be eligible for the 
     credit if, as of the first day of the month, the individual 
     is (1) entitled to benefits under Medicare Part A, enrolled 
     in Medicare Part B, or enrolled in Medicaid or SCHIP, (2) 
     enrolled in a health benefits plan under the Federal 
     Employees Health Benefit Plan, or (3) entitled to receive 
     benefits under chapter 55 of title 10 of the United States 
     Code (relating to military personnel). An individual is not 
     considered to be enrolled in Medicaid solely by reason of 
     receiving immunizations.
---------------------------------------------------------------------------
       Qualified health insurance
       Qualified health insurance eligible for the credit is: (1) 
     COBRA continuation coverage; (2) State based continuation 
     coverage provided by the State under a State law that 
     requires such coverage; (3) coverage offered through a 
     qualified State high risk pool; (4) coverage under a health 
     insurance program offered to State employees or a comparable 
     program; (5) coverage through an arrangement entered into by 
     the State and a group health plan, an issuer of health 
     insurance coverage, an administrator, or an employer; (6) 
     coverage offered through a State arrangement with a private 
     sector health care coverage purchasing pool; (7) coverage 
     under a State-operated health plan that does not receive any 
     Federal financial participation; (8) coverage under a group 
     health plan that is available through the employment of the 
     eligible individual's spouse; and (9) coverage under 
     individual health insurance if the eligible individual was 
     covered under individual health insurance during the entire 
     30-day period that ends on the date the individual became 
     separated from the employment which qualified the individual 
     for the TAA allowance, the benefit for an eligible 
     alternative TAA recipient, or a pension benefit from the 
     PBGC, whichever applies.\6\
---------------------------------------------------------------------------
     \6\For this purpose, ``individual health insurance'' means 
     any insurance which constitutes medical care offered to 
     individuals other than in connection with a group health 
     plan. Such term does not include Federal- or State-based 
     health insurance coverage.
---------------------------------------------------------------------------
       Qualified health insurance does not include any State-based 
     coverage (i.e., coverage described in (2)-(8) in the 
     preceding paragraph), unless the State has elected to have 
     such coverage treated as qualified health insurance and such 
     coverage meets certain requirements. Such State coverage must 
     provide that each qualifying individual is guaranteed 
     enrollment if the individual pays the premium for enrollment 
     or provides a qualified health insurance costs eligibility 
     certificate and pays the remainder of the premium. In 
     addition, the State-based coverage cannot impose any pre-
     existing condition limitation with respect to qualifying 
     individuals. State-based coverage cannot require a qualifying 
     individual to pay a premium or contribution that is greater 
     than the premium or contribution for a similarly situated 
     individual who is not a qualified individual. Finally, 
     benefits under the State-based coverage must the same as (or 
     substantially similar to) benefits provided to similarly 
     situated individuals who are not a qualified individuals. A 
     qualifying *individual is an eligible 'individual who seeks 
     to enroll in the State-based coverage and who has aggregate 
     periods of creditable coverage\7\ of three months or longer, 
     does not have other specified coverage, and who is not 
     imprisoned. A qualifying individual also includes qualified 
     family members of such an eligible individual.
---------------------------------------------------------------------------
     \7\Creditable coverage is determined under the Health Care 
     Portability and Accountability Act (Code sec. 9801 (c)).
---------------------------------------------------------------------------
       Qualified health insurance does not include coverage under 
     a flexible spending or similar arrangement or any insurance 
     if substantially all of the coverage is of excepted benefits.
       Other rules
       Amounts taken into account in determining the credit could 
     not be taken into account in determining the amount allowable 
     under the itemized deduction for medical expenses or the 
     deduction for health insurance expenses of self-employed 
     individuals. Amounts distributed from a medical savings 
     account would not be eligible for the credit. The amount of 
     the credit is reduced by any credit received on an advance 
     basis. Married taxpayers filing separate returns are eligible 
     for the credit; however, if both spouses are eligible 
     individuals and the spouses file a separate return, then the 
     spouse of the taxpayer is not a qualifying family member.
       The Secretary of the Treasury is authorized to prescribe 
     such regulations and other guidance as may be necessary or 
     appropriate to carry out the provision.
       Advance payment of refundable health insurance credit; 
           reporting requirements
       The conference agreement provides for payment of the credit 
     on an advance basis (i.e., prior to the filing of the 
     taxpayer's return) pursuant to a program to be established by 
     the Secretary of the Treasury no later than August 1, 2003. 
     Such program is to provide for making payments on behalf of 
     certified individuals to providers of qualified health 
     insurance. In order to receive the credit on an advance 
     basis, a qualified health insurance costs credit eligibility 
     certificate would have to be in effect for the taxpayer. A 
     qualified health insurance costs credit eligibility 
     certificate is a written statement that an individual is an 
     eligible individual for purposes of the credit, provides such 
     information as the Secretary of the Treasury may require, and 
     is provided by the Secretary of Labor or the PBGC (as 
     appropriate) or such other person or entity designated by the 
     Secretary.
       The conference report permits the disclosure of return 
     information of certified individuals to providers of health 
     insurance information to the extent necessary to carry out 
     the advance payment mechanism.
       The conference report provides that any person who receives 
     payments during a calendar year for qualified health 
     insurance and claims a reimbursement for an advance credit 
     amount is to file an information return with respect to each 
     individual from whom such payments were received or for whom 
     such a reimbursement is claimed. The return is to be in such 
     form as the Secretary may prescribe and is to contain the 
     name, address, and taxpayer identification number of the 
     individual and any other individual on the same health 
     insurance policy, the aggregate of the advance credit amounts 
     provided, the number of months for which advance credit 
     amounts are provided, and such other information as the 
     Secretary may prescribe. The conference report requires that 
     similar information be provided to the individual no later 
     than January 31 of the year following the year for which the 
     information return is made.

                             Effective Date

       The provision is generally effective with respect to 
     taxable years beginning after December 31, 2001. The 
     provision relating to the advance payment mechanism to be 
     developed by the Secretary would be effective on the date of 
     enactment.

                   TITLE III--CUSTOMS REAUTHORIZATION

               Subtitle A--United States Customs Service

  CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL 
                               OPERATIONS


                         SEC. 301--SHORT TITLE

     Present law
       No applicable section
     House amendment
       H.R. 3009 as amended and passed by the House provides that 
     the Act may be cited as, the ``Customs Border Security Act of 
     2002.''
     Senate amendment
       The Senate amendment is identical.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment


SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS, 
         COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION

     Present law
       The statutory basis for authorization of appropriations for 
     Customs is section 301 (b)(1) of the Customs Procedural and 
     Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as 
     amended by section 8102 of the Omnibus Budget Reconciliation 
     Act of 1986 [P.L. 99-509], first outlined separate amounts 
     for non-commercial and commercial operations for the salaries 
     and expenses portion of the Customs authorization. Under 19 
     U.S.C. 2075, Congress has adopted a two-year authorization 
     process to provide Customs with guidance as it plans its 
     budget, as well as guidance from the Committee for the 
     appropriation process.
       The most recent authorization of appropriations for Customs 
     (under section 101 of the Customs and Trade Act of 1990 [P.L. 
     101 382]) provided $118,238,000 for salaries and expenses and 
     $143,047,000 for air and marine interdiction program for FY 
     1991, and $1,247,884,000 for salaries and expenses and 
     $150,199,000 for air and marine interdiction program in FY 
     1992.
     House amendment
       This provision authorizes $1,365,456,000 for FY 2003 and 
     $1,399,592,400 for FY 2004 for noncommercial operations of 
     the Customs Service. It also authorizes $1,642,602,000 for FY 
     2003 and $1,683,667,050 for FY 2004 for commercial operations 
     of the Customs Service. Of the amounts authorized for 
     commercial operations, $308,000,000 is authorized for the 
     automated commercial environment computer system for each 
     fiscal year. The provisions require that the Customs Service 
     provide the Committee on Ways and Means and the Committee on 
     Finance of the Senate with a report demonstrating that the 
     computer system is being built in a cost-effective manner. In 
     addition, the provisions authorizes $170,829,000 for FY 2003 
     and $175,099,725 for FY 2004 for air and marine interdiction 
     operations of the Customs Service. The provision requires 
     submission of

[[Page 15073]]

     out-of-year budget projections to the Ways and Means and 
     Finance Committees.
     Senate amendment
       This provision authorizes $886,513,000 for FY 2003 and 
     $909,471,000 for FY 2004 for noncommercial operations of the 
     Customs Service. It also authorizes $1,603,482,000 for FY 
     2003 and $1,645,009,000 for FY 2004 for commercial operations 
     of the Customs Service. Of the amounts authorized for 
     commercial operations, $308,000,000 is authorized for the 
     automated commercial environment computer system for each 
     fiscal year. The provisions require that the Customs Service 
     provide the Committee on Ways and Means and the Committee on 
     Finance of the Senate with a report demonstrating that the 
     computer system is being built in a cost-effective manner. In 
     addition, the provisions authorizes $181,860,000 for FY 2003 
     and $186,570,000 for FY 2004 for air and marine interdiction 
     operations of the Customs Service. The provision requires 
     submission of out-of-year budget projections to the Ways and 
     Means and Finance Committees.
     Conference agreement
       The Senate recedes to House.


 SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR 
   THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND 
                  FLORIDA AND THE GULF COAST SEAPORTS

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     that $90,244,000 of the FY 2003 appropriations be available 
     until expended for acquisition and other expenses associated 
     with implementation and deployment of terrorist and narcotics 
     detection equipment along the United States-Mexico border, 
     the United States-Canada border, and Florida and the Gulf 
     seaports. The equipment would include vehicle and inspection 
     systems. The provision would require that $9,000,000 of the 
     FY 2004 appropriations be used for maintenance of equipment 
     described above. This section would also provide the 
     Commissioner of Customs with flexibility in using these funds 
     and would allow for the acquisition of new updated technology 
     not anticipated when this bill was drafted. Nothing in the 
     language of the bill is intended to prevent the Commissioner 
     of Customs from dedicating resources to specific ports not 
     identified in the bill.
       The equipment would include vehicle and container 
     inspection systems, mobile truck x-rays, upgrades to fixed-
     site truck x-rays, pallet x-rays, busters, contraband 
     detection kits, ultrasonic container inspection units, 
     automated targeting systems, rapid tire deflator systems, 
     portable Treasury Enforcement Communications Systems 
     terminals, remote surveillance camera systems, weigh-in-
     motion sensors, vehicle counters, spotter camera systems, 
     inbound commercial truck transponders, narcotics vapor and 
     particle detectors, and license plate reader automatic 
     targeting software.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


        SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     Customs to measure specifically the effectiveness of the 
     resources dedicated in sections 312 as part of its annual 
     performance plan.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference Agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

    Subtitle B--Child Cyber-Smuggling Center of the Customs Service


SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD 
                 PORNOGRAPHY/CHILD SEXUAL EXPLOITATION

     Present law
       Customs enforcement responsibilities include enforcement of 
     U.S. laws to prevent border trafficking relating to child 
     pornography, intellectual property rights violations, money 
     laundering, and illegal arms. Funding for these activities 
     has been included in the Customs general account.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     authorize $10 million for Customs to carry out its program to 
     combat on-line child sex predators. Of that amount, $375,000 
     would be dedicated to the National Center for Missing 
     Children for the operation of its child pornography cyber 
     tipline.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

                  CHAPTER 2--MISCELLANEOUS PROVISIONS


  SEC. 331--ADDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House earmarks $25 
     million and 285 new staff hires for Customs to use at the 
     U.S.-Canada border.
     Senate amendment
       The Senate amendment is the same as the House Amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


   SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE 
                            CUSTOMS SERVICE

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House requires 
     Customs to conduct a study of current personnel practices 
     including: performance standards; the effect and impact of 
     the collective bargaining process on Customs drug 
     interdiction efforts; and a comparison of duty rotations 
     policies of Customs and other federal agencies employing 
     similarly situated personnel.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


    SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING 
                   PROCEDURES OF THE CUSTOMS SERVICE

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     Customs to conduct a study to ensure that appropriate 
     training is being provided to personnel who are responsible 
     for financial auditing of importers. Customs would 
     specifically report on how its audit personnel protect the 
     privacy and trade secrets of importers.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


 SEC. 334--establishment and implementation of cost accounting system; 
                                reports

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would mandate 
     the imposition of a cost accounting system in order for 
     Customs to effectively explain its expenditures. Such a 
     system would provide compliance with the core financial 
     system requirements of the Joint Financial Management 
     Improvement Program (JFMIP), which is a joint and cooperative 
     undertaking of the U.S. Department of the Treasury, the 
     General Accounting Office, the Office of Management and 
     Budget, and the Office of Personnel Management working in 
     cooperation with each other and other agencies to improve 
     financial management practices in government. That Program 
     has statutory authorization in the Budget and Accounting 
     Procedures Act of 1950 (31 U.S.C. 65).
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


   SEC. 335--study and report relating to timeliness of prospective 
                                rulings

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     the Comptroller General to prepare an report to determine 
     whether Customs has improved its timeliness in providing 
     prospective rulings.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


        SEC. 336--study and report relating to customs user fees

     Present law
       No applicable section.

[[Page 15074]]

     House amendment
       H.R. 3009 as amended and passed by the House would require 
     the Comptroller General to prepare a confidential report to 
     determine whether current user fees are appropriately set at 
     a level commensurate with the service provided for the fee. 
     The Comptroller General is authorized to recommend the 
     appropriate level for customs user fees.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


  SEC. 337--fees for customs inspections at express courier facilities

     Present law
       Current law provides for direct reimbursement by courier 
     facilities of expenses incurred by Customs conducting 
     inspections at those facilities.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     establish a per item fee of sixty-six cents to cover Customs 
     expenses. This amount could be lowered to more than thirty-
     five cents or raised to no more than $1.00 by the Secretary 
     of the Treasury after a rulemaking process to reevaluate the 
     expenses incurred by Customs in providing inspectional 
     services.
     Senate amendment
       No provision.
     Conference agreement
       The Senate recedes to the House.


             SEC. 338--national customs automation program

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would empower 
     the Secretary to require the electronic submission of any 
     information required to be submitted to the Customs Service.
     Senate amendment
       No provision.
     Conference agreement
       The Senate recedes to the House.


     SEC. 339--authorization of appropriations for customs staffing

     Present law
       No applicable section.
     House amendment
       No provision.
     Senate amendment
       The Senate Amendment authorizes the appropriation to the 
     Department of Treasury such sums as may be necessary to 
     increase the annual pay of journeyman Customs inspectors and 
     Canine Enforcement Officers who have completed at least one 
     year of service and are being paid at a GS-9 level, from GS-9 
     to GS-11. The Senate provision also authorizes an increase in 
     pay of support staff.
     Conference agreement
       The House recedes to the Senate.

                  CHAPTER 4--ANTITERRORISM PROVISIONS


     SEC. 341--Immunity for customs officers that act in good faith

     Present law
       Currently, Customs officers are entitled to qualified 
     immunity in civil suits brought by persons, who were searched 
     upon arrival in the United States. Qualified immunity 
     protects officers from liability if they can establish that 
     their actions did not violate any clearly established 
     constitutional or statutory rights.
     House amendment
       H.R. 3009 as amended and passed by the House would protect 
     Customs officers by providing them immunity from lawsuits 
     stemming from personal searches of people entering the 
     country so long as the officers conduct the searches in good 
     faith.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes to the House, but conferees qualify the 
     provision by adding that the means used to effectuate such 
     searches must be reasonable. To be covered by this immunity 
     provision, inspectors must follow Customs Service inspection 
     rules including the rule against profiling against race, 
     religions, or ethnic background.


SEC. 342--emergency adjustments to offices, ports of entry, or staffing 
                         of the customs service

     Present law
       Present law places numerous restrictions on and, in some 
     instances, precludes the Secretary of the Treasury or Customs 
     from making any adjustments to ports and staff. 19 U.S.C. 
     1318 requires a Presidential proclamation of an emergency and 
     authorization to the Secretary of the Treasury only to extend 
     the time for performance of legally required acts during an 
     emergency. No other emergency powers statute for Customs 
     exists.
     House amendment
       H.R. 3009 as amended and passed by the House would permit 
     the Secretary of the Treasury, if the President declares a 
     national emergency or if necessary to address specific 
     threats to human life or national interests, to eliminate, 
     consolidate, or relocate Customs ports and offices and to 
     alter staffing levels, services rendered and hours of 
     operations at those locations. In addition, the amendment 
     would permit the Commissioner of Customs, when necessary to 
     address threats to human life or national interests, to close 
     temporarily any Customs office or port or take any other 
     lesser action necessary to respond to the specific threat. 
     The Secretary or the Commissioner would be required to notify 
     Congress of any action taken under this proposal within 72 
     hours.
     Senate amendment
       The Senate amendment is the same as the House Amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


 SEC. 343 & 343A--mandatory advanced electronic information for cargo 
           and passengers; secure systems of transportation.

     Present law
       Currently, commercial carriers bringing passengers or cargo 
     into or out of the country have no obligation to provide 
     Customs with such information in advance.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     every air, land, or water-based commercial carrier to file an 
     electronic manifest describing all passengers with Customs 
     before entering or leaving the country. There is a similar 
     requirement for cargo entering the country. Specific 
     information required in the advanced manifest system would be 
     developed by Treasury in regulations.
     Senate amendment
       The Senate Amendment is similar to the House Amendment. 
     However, with respect to cargo, the Senate Amendment applies 
     to out-bound as well as in-bound shipments.
     Conference agreement
       The conferees agree to direct the Secretary of the Treasury 
     to promulgate regulations pertaining to the electronic 
     transmission to the Customs Service of information relevant 
     to aviation, maritime, and surface transportation safety and 
     security prior to a cargo carrier's arrival in or departure 
     from the United States. The agreement sets forth parameters 
     for the Secretary to follow in developing these regulations. 
     For example, the parameters require that the regulations be 
     flexible with respect to the commercial and operational 
     aspects of different modes of transportation. They also 
     require that, in general, the Customs Service seek 
     information from parties most likely to have direct knowledge 
     of the information at issue. The conferees also agree to 
     amendment of the Tariff Act of 1930 to establish requirements 
     concerning proper documentation of ocean-bound cargo prior to 
     a vessel's departure. Finally, the conferees agree to direct 
     the Secretary of the Treasury to establish a task force to 
     evaluate, prototype and certify secure systems of 
     transportation.


 SEC. 344--border search authority for certain contraband in outbound 
                                 mail.

     Present law
       Although Customs currently searches all inbound mail, and 
     although it searches outbound mail sent via private carriers, 
     outbound mail carried by the Postal Service is not subject to 
     search.
     House amendment
       H.R. 3009 as amended and passed by the House would enable 
     Customs officers to search outbound U.S. mail for unreported 
     monetary instruments, weapons of mass destruction, firearms, 
     and other contraband used by terrorists. However, reading of 
     mail would not be authorized absent Customs officers 
     obtaining a search warrant or consent.
     Senate amendment
       The Senate Amendment is the same as the House Amendment 
     with respect to mail weighing in excess of 16 ounces. 
     However, under the Senate Amendment, the Customs Service 
     would be required to obtain a warrant in order to search mail 
     weighing 16 ounces or less. The Senate Amendment also 
     requires the Secretary of State to determine whether it is 
     consistent with international law and U.S. treaty obligations 
     for the Customs Service to search mail transiting the United 
     States between two foreign countries. The Customs Service 
     would be authorized to search such mail only after the 
     Secretary of State determined that such measures are 
     consistent with international law and U.S. treaty 
     obligations.
     Conference agreement
       The House recedes to the Senate.


   sec. 345--Authorization of appropriations for reestablishment of 
                  Customs operations in New York City

     Present law
       No applicable section.

[[Page 15075]]

     House amendment
       H.R. 3009 as amended and passed by the House authorizes 
     funds to reestablish those operations.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

              CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS


  sec. 351--gao audit of textile transshipment monitoring by customs 
                                service

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would direct 
     the Comptroller General to conduct an audit of the systems at 
     the Customs Service to monitor and enforce textile 
     transshipment. The Comptroller General would report on 
     recommendations for improvements.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


  sec. 352--authorization of appropriations for textile transshipment 
                         enforcement operations

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     authorize $9,500,000 for FY 2002 to the Customs Service for 
     the purpose of enhancing its textile transshipment 
     enforcement operations. This amount would be in addition to 
     Customs Service's base authorization and the authorization to 
     reestablish the destroyed textile monitoring and enforcement 
     operations at the World Trade Center.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The Senate recedes to the House, but the text is clarified 
     to provide that personnel will also conduct education and 
     outreach in addition to enforcement.


   sec. 353--implementation of the african growth and opportunity act

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would earmark 
     approximately $1.3 million within Customs' budget for 
     selected activities related to providing technical assistance 
     to help sub-Saharan African countries develop and implement 
     effective visa and anti-transshipment systems as required by 
     the African Growth and Opportunity Act (title I of Public Law 
     106-200).
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

      Subtitle B--Office of the United States Trade Representative


               sec. 361--authorization of appropriations

     Present law
       The statutory authority for budget authorization for the 
     Office of the United States Trade Representative is section 
     141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)). 
     The most recent authorization of appropriations for USTR was 
     under section 101 of the Customs and Trade Act of 1990 [P.L. 
     101-382]. Under 19 U.S.C. 2171, Congress has adopted a two-
     year authorization process to provide USTR with guidance as 
     it plans its budget as well as guidance from the Committee 
     for the appropriation process.
     House amendment
       H.R. 3009 as amended and passed by the House authorizes 
     $32,300,000 for FY 2003 and $31,108,000 for FY 2004. The 
     provision requires submission of out-of-year budget 
     projections to the Ways and Means and Finance Committees. In 
     light of the substantial increase in trade negotiation work 
     to be conducted by USTR and the associated need for 
     consultations with Congress, this provision would authorize 
     the addition of two individuals to assist the office of 
     Congressional Affairs.
     Senate amendment
       The Senate amendment authorizes $30,000,000 for FY 2003 and 
     $31,000,000 for FY 2004.
     Conference agreement
       The Senate recedes to the House.

        Subtitle C--United States International Trade Commission


               sec. 371--authorization of appropriations

     Present law
       The statutory authority for budget authorization for the 
     International Trade Commission is section 330(e)(2)(A) of the 
     Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent 
     authorization of appropriations for the ITC was under section 
     101 of the Customs and Trade Act of 1990 [P.L. 101-382]. 
     Under 19 U.S.C. 1330, Congress has adopted a two-year 
     authorization process to provide the ITC with guidance as it 
     plans its budget as well as guidance from the Committees for 
     the appropriation process.
     House amendment
       H.R. 3009 as amended and passed by the House authorizes 
     $54,000,000 for FY 2003 and $57,240,000 for FY 2004. The 
     provision requires submission of out-of-year budget 
     projections to the Ways and Means and Finance Committees.
     Senate amendment
       The Senate amendment authorizes $51,400,000 for FY 2003 and 
     $53,400,000 for FY 2004.
     Conference agreement
       The Senate recedes to the House.

                   Subtitle D--Other Trade Provisions


  sec. 381. increase in aggregate value of articles exempt from duty 
               acquired abroad by united states residents

     Present law
       The Harmonized Tariff Schedule at subheading 9804.00.65 
     currently provides a $400 duty exemption for travelers 
     returning from abroad.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     increased the current $400 duty exemption to $800.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


                 sec. 382--regulatory audit procedures

     Present law
       Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509) 
     provides the authority for Customs to audit persons making 
     entry of merchandise into the U.S. In the course of such 
     audit, Customs auditors may identify discrepancies, including 
     underpayments of duties. However, if there also are 
     overpayments, there is no requirement that such overpayments 
     be offset against the underpayments if the underlying entry 
     has been liquidated.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     that when conducting an audit, Customs must recognize and 
     offset overpayments and overdeclarations of duties, 
     quantities and values against underpayments and 
     underdeclarations. As an example, if during an audit Customs 
     finds that an importer has underpaid duties associated with 
     one entry of merchandise by $100 but has also overpaid duties 
     from another entry of merchandise by $25, then any assessment 
     by Customs must be the difference of $75.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


                  sec. 383--payment of duties and fees

     Present law
       Current law at 19 U.S.C. 1505 provides for the collection 
     of duties by the Secretary through regulatory process.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     duties to be paid within 10 working days without extension. 
     The bill also provides for the Customs Service to create a 
     monthly billing system upon the building of the Automated 
     Commercial Environment.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes to the House.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY


                  sec. 2101--short title and findings

     Present law
       No provision.
     House amendment
       The short title of the bill is the ``Bipartisan Trade 
     Promotion Authority Act of 2001.'' Section 2101 of the House 
     amendment to H.R. 3009 states that Congress finds the 
     expansion of international trade is vital to U.S. national 
     security and economic growth, as well as U.S. leadership. 
     Section 2101 also states that the recent pattern of decisions 
     by dispute settlement panels and the Appellate Body of the 
     World Trade Organization to impose obligations and 
     restrictions on the use of antidumping and countervailing 
     measures by WTO members has raised concerns, and Congress is 
     concerned that such bodies appropriately apply the standard 
     of review contained in Article 17.6 of the Antidumping

[[Page 15076]]

     Agreement, to provide deference to a permissible 
     interpretation by a WTO member and to the evaluation by a 
     member of the facts where that evaluation is unbiased and 
     objective and the establishment of the facts is proper.
     Senate amendment
       The short title of the bill is the ``Bipartisan Trade 
     Promotion Authority Act of 2002.'' Section 2101 of the Senate 
     amendment to H.R. 3009 states that Congress finds the 
     expansion of international trade is vital to U.S. national 
     security and economic growth, as well as U.S. leadership. 
     Section 2101 also states that support for continued trade 
     expansion requires that dispute settlement procedures under 
     international trade agreements not add to or diminish the 
     rights and obligations provided in such agreements. It goes 
     on to note a troubling pattern of cases before WTO dispute 
     settlement panels and the WTO Appellate Body that do 
     precisely that.
     Conference agreement
       The Senate recedes to the House with modifications. With 
     respect to the findings, the Conferees believe that, as 
     stated in section 2101(b) of the Conference agreement, 
     support for continued trade expansion requires that dispute 
     settlement procedures under international trade agreements 
     not add to or diminish the rights and obligations provided in 
     such agreements. Therefore, the recent pattern of decisions 
     by dispute settlement panels and the WTO Appellate Body to 
     impose obligations and restrictions on the use of 
     antidumping, countervailing and safeguard measures by WTO 
     members has raised concerns, and Congress is concerned that 
     such bodies appropriately apply the standard of review 
     contained in Article 17.6 of the Antidumping Agreement, to 
     provide deference to a permissible interpretation by a WTO 
     member and to the evaluation by a member of the facts where 
     that evaluation is unbiased and objective and the 
     establishment of the facts is proper.


                sec. 2102--trade negotiating objectives

     Present/expired law
       Section 1101(a) of the Omnibus Trade and Competitiveness 
     Act of 1988 (the 1988 Act) set forth overall negotiating 
     objectives for concluding trade agreements. These objectives 
     were to obtain more open, equitable, and reciprocal market 
     access, the reduction or elimination of barriers and other 
     trade-distorting policies and practices, and a more effective 
     system of international trading disciplines and procedures. 
     Section 1102(b) set forth the following principal trade 
     negotiating objectives: dispute settlement, transparency, 
     developing countries, current account surpluses, trade and 
     monetary coordination, agriculture, unfair trade practices, 
     trade in services, intellectual property, foreign direct 
     investment, safeguards, specific barriers, worker rights, 
     access to high technology, and border taxes.
     House amendment
       Section 2102 of the House amendment to H.R. 3009 would 
     establish the following overall negotiating objectives: 
     obtaining more open, equitable, and reciprocal market access; 
     obtaining the reduction or elimination of barriers and other 
     trade-distorting policies and practices; further 
     strengthening the system of international trading disciplines 
     and procedures, including dispute settlement; fostering 
     economic growth and full employment in the U.S. and the 
     global economy; ensuring that trade and environmental 
     policies are mutually supportive and seeking to protect and 
     preserve the environment and enhance the international means 
     of doing so, while optimizing the use of the world's 
     resources; promoting respect for worker rights and the rights 
     of children consistent with International Labor Organization 
     core labor standards, as defined in the bill; and seeking 
     provisions in trade agreements under which parties strive to 
     ensure that they do not weaken or reduce the protections 
     afforded in domestic environmental and labor laws as an 
     encouragement to trade.
       In addition, section 2102 would establish the principal 
     trade negotiating objectives for concluding trade agreements, 
     as follows:
       Trade barriers and distortions: expanding competitive 
     market opportunities for U.S. exports and obtaining fairer 
     and more open conditions of trade by reducing or eliminating 
     tariff and nontariff barriers and policies and practices of 
     foreign governments directly related to trade that decrease 
     market opportunities for U.S. exports and distort U.S. trade; 
     and obtaining reciprocal tariff and nontariff barrier 
     elimination agreements, with particular attention to products 
     covered in section 111(b) of the Uruguay Round Agreements 
     Act.
       Services: to reduce or eliminate barriers to international 
     trade in services, including regulatory and other barriers, 
     that deny national treatment or unreasonably restrict the 
     establishment or operations of services suppliers.
       Foreign investment: to reduce or eliminate artificial or 
     trade-distorting barriers to trade-related foreign investment 
     and, recognizing that U.S. law on the whole provides a high 
     level of protection for investment, consistent with or 
     greater than the level required by international law, to 
     secure for investors important rights comparable to those 
     that would be available under U.S. legal principles and 
     practice, by:
       reducing or eliminating exceptions to the principle of 
     national treatment;
       freeing the transfer of funds relating to investments;
       reducing or eliminating performance requirements, forced 
     technology transfers, and other unreasonable barriers to the 
     establishment and operation of investments;
       seeking to establish standards for expropriation and 
     compensation for expropriation, consistent with United States 
     legal principles and practice;
       providing meaningful procedures for resolving investment 
     disputes including between an investor and a government;
       seeking to improve mechanisms used to resolve disputes 
     between an investor and a government through mechanisms to 
     eliminate frivolous claims and procedures to ensure the 
     efficient selection of arbitrators and the expeditious 
     disposition of claims;
       providing an appellate or similar review mechanism to 
     correct manifestly erroneous interpretations of law; and
       ensuring the fullest measure of transparency in investment 
     disputes by ensuring that all requests for dispute settlement 
     and all proceedings, submissions, findings, and decisions are 
     promptly made public;
       all hearings are open to the public; and
       establishing a mechanism for acceptance of amicus curiae 
     submissions.
       Intellectual property: including: promoting adequate and 
     effective protection of intellectual property rights through 
     ensuring accelerated and full implementation of the Agreement 
     on Trade-Related Aspects of Intellectual Property Rights, 
     including strong enforcement;
       providing stronger protection for new and emerging 
     technologies and new methods of transmitting and distributing 
     products embodying intellectual property; and
       ensuring that standards of protection and enforcement keep 
     pace with technological developments, and in particular 
     ensuring that Tight holders have the legal and technological 
     means to control the use of their works through the internet 
     and other global communication media.
       Transparency: to increase public access to information 
     regarding trade issues as well as the activities of 
     international trade institutions; to increase openness in 
     international trade fora, including the WTO, by increasing 
     public access to appropriate meetings, proceedings, and 
     submissions, including with regard to dispute settlement and 
     investment; and to increase timely public access to 
     notifications made by WTO member states and the supporting 
     documents.
       Anti-corruption: to obtain high standards and appropriate 
     enforcement mechanisms applicable to persons from all 
     countries participating in a trade agreement that prohibit 
     attempts to influence acts, decisions, or omissions of 
     foreign government; and to ensure that such standards do not 
     place U.S. persons at a competitive disadvantage in 
     international trade.
       Improvement of the WTO and multilateral trade agreements: 
     to achieve full implementation and extend the coverage of the 
     WTO and such agreements to products, sectors, and conditions 
     of trade not adequately covered; and to expand country 
     participation in and enhancement of the Information 
     Technology Agreement (ITA) and other trade agreements.
       Regulatory practices: to achieve increased transparency and 
     opportunity for the participation of affected parties in the 
     development of regulations; to require that proposed 
     regulations be based on sound science, cost-benefit analysis, 
     risk assessment, or other objective evidence; to establish 
     consultative mechanisms among parties to trade agreements to 
     promote increased transparency in developing guidelines, 
     rules, regulations, and laws for government procurement and 
     other regulatory regimes; and to achieve the elimination of 
     government measures such as price controls and reference 
     pricing which deny full market access for United States 
     products.
       Electronic commerce: to ensure that current obligations, 
     rules, disciplines, and commitments under the WTO apply to 
     electronic commerce; to ensure that electronically delivered 
     goods and services receive no less favorable treatment under 
     trade rules and commitments than like products delivered in 
     physical form; and the classification of such goods and 
     services ensures the most liberal trade treatment possible; 
     to ensure that governments refrain from implementing trade-
     related measures that impede electronic commerce; where 
     legitimate policy objectives require domestic regulations 
     that affect electronic commerce, to obtain commitments that 
     any such regulations are the least restrictive on trade, 
     nondiscriminatory, and transparent, and promote an open 
     market environment; and to extend the moratorium of the WTO 
     on duties on electronic transmissions.
       Agriculture: to ensure that the U.S. trade negotiators duly 
     recognize the importance of agricultural issues; to obtain 
     competitive market opportunities for U.S. exports in foreign 
     markets substantially equivalent to the competitive 
     opportunities afforded foreign exports in U.S. markets and to 
     achieve fairer and more open conditions of trade; to reduce 
     or eliminate trade distorting subsidies; to

[[Page 15077]]

     impose disciplines on the operations of state-trading 
     enterprises or similar administrative mechanisms; to 
     eliminate unjustified restrictions on products derived from 
     biotechnology; to eliminate sanitary or phytosanitary 
     restrictions that contravene the Uruguay Round Agreement as 
     they are not based on scientific principles and to improve 
     import relief mechanisms to accommodate the unique aspects of 
     perishable and cyclical agriculture.
       Labor and the environment: to ensure that a party does not 
     fail to effectively enforce its environmental or labor laws, 
     through a sustained or recurring course of action or 
     inaction, in a manner affecting trade between the United 
     States and that party; to recognize that a party to a trade 
     agreement is effectively enforcing its laws if a course of 
     inaction or inaction reflects a reasonable exercise of 
     discretion or results from a bona fide decision regarding 
     allocation of resources and no retaliation may be authorized 
     based on the exercise of these rights or the right to 
     establish domestic labor standards and levels of 
     environmental protection; to strengthen the capacity of U.S. 
     trading partners to promote respect for core labor standards 
     and to protect the environment through the promotion of 
     sustainable development; to reduce or eliminate government 
     practices or policies that unduly threaten sustainable 
     development; to seek market access for U.S. environmental 
     technologies, goods, and services; and to ensure that labor, 
     environmental, health, or safety policies and practices of 
     parties to trade agreements do not arbitrarily or 
     unjustifiably discriminate against U.S. exports or serve as 
     disguised barriers to trade.
       Dispute settlement and enforcement: to seek provisions in 
     trade agreements providing for resolution of disputes between 
     governments in an effective, timely, transparent, equitable, 
     and reasoned manner requiring determinations based on facts 
     and the principles of the agreement, with the goal of 
     increasing compliance; seek to strengthen the capacity of the 
     WTO Trade Policy Review Mechanism to review compliance; seek 
     provisions encouraging the early identification and 
     settlement of disputes through consultations; seek provisions 
     encouraging trade-expanding compensation; seek provisions to 
     impose a penalty that encourages compliance, is appropriate 
     to the parties, nature, subject matter, and scope of the 
     violation, and has the aim of not adversely affecting parties 
     or interests not party to the dispute while maintaining the 
     effectiveness of the enforcement mechanism; and seek 
     provisions that treat U.S. principal negotiating objectives 
     equally with respect to ability to resort to dispute 
     settlement and availability of equivalent procedures and 
     remedies.
       Extended WTO negotiations: concerning extended WTO 
     negotiations on financial services, civil aircraft, and rules 
     of origin.
     Senate amendment
       The Senate Amendment is substantially similar to the House 
     Amendment, with the exception of several key provisions:
       Small Business: The Senate Amendment contains an overall 
     negotiating objective ``to ensure that trade agreements 
     afford small businesses equal access to international 
     markets, equitable trade benefits, expanded export market 
     opportunities, and provide for the reduction or elimination 
     of trade barriers that disproportionately impact small 
     businesses.''
       Trade in Motor Vehicles and Parts: The Senate Amendment 
     contains a principal negotiating objective on expanding 
     competitive opportunities for exports of U.S. motor vehicles 
     and parts.
       Foreign Investment: The Senate Amendment states as an 
     objective of the United States in the context of investor-
     state dispute settlement ``ensuring that foreign investors in 
     the United States are not accorded greater rights than United 
     States investors in the United States.'' The Senate 
     Amendment's objective with respect to investor-state dispute 
     settlement also differs from the House Amendment in the 
     following respects:
       It sets as an objective ``seeking to establish standards 
     for fair and equitable treatment consistent with United 
     States legal principles and practice, including the principle 
     of due process.''
       It sets deterrence of the filing of frivolous claims as an 
     objective, in addition to the prompt elimination of frivolous 
     claims.
       The Senate Amendment seeks to establish ``procedures to 
     enhance opportunities for public input into the formulation 
     of government positions.''
       The Senate Amendment seeks to establish a single appellate 
     body to review decisions by arbitration panels in investor-
     state dispute settlement cases. Also, unlike the House 
     Amendment, the Senate Amendment does not prescribe a standard 
     of review for an eventual appellate body.
       Intellectual Property: The Senate Amendment contains an 
     objective to respect the Declaration on the TRIPS Agreement 
     and Public Health, adopted by the World Trade Organization at 
     the Fourth Ministerial Conference at Doha, Qatar on November 
     14, 2001.
       Trade in Agriculture: The Senate Amendment's negotiating 
     objective on export subsidies differs from the House 
     Amendment, stating that an objective of the United States is 
     ``seeking to eliminate all export subsidies on agricultural 
     commodities while maintaining bona fide food aid and 
     preserving U.S. agriculture development and export credit 
     programs that allow the U.S. to compete with other foreign 
     export promotion efforts.'' The Senate Amendment also 
     provides that it is a negotiating objective of the United 
     States to ``strive to complete a general multilateral round 
     in the WTO by January 1, 2005, and seek the broadest market 
     access possible in multilateral, regional, and bilateral 
     negotiations, recognizing the effect that simultaneous sets 
     of negotiations may have on US import-sensitive commodities 
     (including those subject to tariff-rate quotas).''
       Human Rights and Democracy : The Senate Amendment contains 
     a negotiating objective ``to obtain provisions in trade 
     agreements that require parties to those agreements to strive 
     to protect internationally recognized civil, political, and 
     human rights.''
       Dispute Settlement: The Senate Amendment contains a 
     negotiating objective absent in the House Amendment ``to seek 
     improved adherence by panels convened under the WTO 
     Understanding on Rules and Procedures Governing the 
     Settlement of Disputes and by the WTO Appellate Body to the 
     standard of review applicable under the WTO Agreement 
     involved in the dispute, including greater deference, where 
     appropriate, to the fact finding and technical expertise of 
     national investigating authorities.''
       Border Taxes: The Senate Amendment contains an objective 
     absent from the House Amendment on border taxes. The 
     objective seeks ``to obtain a revision of the WTO rules with 
     respect to the treatment of border adjustments for internal 
     taxes to redress the disadvantage to countries relying 
     primarily on direct taxes for revenue rather than indirect 
     taxes.'' The objective is addressed to a decision by the WTO 
     Dispute Settlement Body holding the foreign sales corporation 
     provisions of the Internal Revenue Code to be inconsistent 
     with WTO rules.
       Textiles: The Senate Amendment contains an extensive 
     objective on opening foreign markets to U.S. textile exports. 
     There is no similar provision in the House Amendment.
       Worst Forms of Child Labor: The Senate Amendment contains a 
     negotiating objective to prevent distortions in the conduct 
     of international trade caused by the use of the worst forms 
     of child labor and to redress unfair and illegitimate 
     competition based upon the use of the worst forms of child 
     labor.
     Conference agreement
       The Senate recedes to the House with several modifications. 
     With respect to the overall negotiating objectives, the 
     Conferees agree to the overall negotiating objective 
     regarding small business in section 2101-(a)(8) of the Senate 
     amendment. Second, the Conferees agree to an overall 
     negotiating objective to promote universal compliance with 
     ILO Declaration 182 concerning the worst forms of child 
     labor.
       With respect to the principal negotiating objectives, the 
     Conferees agree to expand the negotiating objective on 
     intellectual property to respect the Declaration on the TRIPS 
     Agreement and Public Health, adopted by the WTO at Doha 
     (section 2102(b)(4)(c) of the Senate amendment).
       With respect to the principal negotiating objectives 
     regarding foreign investment, the Conferees believe that it 
     is a priority for negotiators to seek agreements protecting 
     the rights of U.S. investors abroad and ensuring the 
     existence of a neutral investor-state dispute settlement 
     mechanism. At the same time, these protections must be 
     balanced so that they do not come at the expense of making 
     Federal, State and local laws and regulations more vulnerable 
     to successful challenges by foreign investors than by 
     similarly situated U.S. investors.
       No Greater Rights: The House recedes to the Senate with a 
     technical modification to clarify that foreign investors in 
     the United States are not accorded greater substantive rights 
     with respect to investment protections than United States 
     investors in the United States. That is, the reciprocal 
     obligations regarding investment protections that the United 
     States undertakes in pursuing its goals should not result in 
     foreign investors being entitled to compensation for 
     government actions where a similarly situated U.S. investor 
     would not be entitled to any form of relief, while ensuring 
     that U.S. investors abroad can challenge host government 
     measures which violate the terms of the investment agreement. 
     Thus, this language expresses Congress' direction that the 
     substantive investment protections (e.g., expropriation, fair 
     and equitable treatment, and full protection and security) 
     should be consistent with United States legal principles and 
     practice and not provide greater rights to foreign investors 
     in the United States.
       This language applies to substantive protections only and 
     is not applicable to procedural issues, such as access to 
     investor-state dispute settlement. The Conferees recognize 
     that the procedures for resolving disputes between a foreign 
     investor and a government may differ from the procedures for 
     resolving disputes between a domestic investor and a 
     government and may be available at different times during the 
     dispute. Thus, the

[[Page 15078]]

     ``no greater rights'' direction does not, for instance, apply 
     to such issues as the dismissal of frivolous claims, the 
     exhaustion of remedies, access to appellate procedures, or 
     other similar issues.
       The Conferees also agree that negotiators should seek to 
     provide for an appellate body or similar mechanism to provide 
     coherence to the interpretations of investment provisions in 
     trade agreements.
       With respect to the principal negotiating objective on 
     agriculture, the Conferees agree to section 
     2102(b)(10)(A)(iii) and (xv) of the House amendment, in lieu 
     of section 2102(b)(10)(A)(iii) of the Senate amendment. The 
     Conferees also accept section 2102(b)(10)(A)(xvi) of the 
     Senate amendment on the timing and sequence of WTO 
     agriculture negotiations relative to other negotiations.
       The Conferees agree to section 2102(b)(13)(C) of the Senate 
     amendment, relating to dispute settlement in dumping, 
     subsidy, and safeguard cases, as modified, to seek adherence 
     by WTO panels to the applicable standard of review.
       The Conferees recognize the importance of preserving the 
     ability of the United States to enforce rigorously its trade 
     remedy laws, including the antidumping, countervailing duty 
     and safeguard laws. Because this issue is significant to many 
     Members of Congress in both the House and Senate, the 
     Conferees have made this priority a principal negotiating 
     objective. Negotiators must also avoid agreements that lessen 
     the effectiveness of domestic and international disciplines 
     on unfair trade, as well as domestic and international 
     safeguard provisions. In addition, section 2102(b)(14)(B) 
     directs the President to address and remedy market 
     distortions that lead to dumping and subsidization, including 
     overcapacity, cartelization, and market-access barriers.
       The Conferees agree to section 2012(b)(14) of the Senate 
     amendment stating that the United States should seek a 
     revision of WTO rules on the treatment of border adjustments 
     for internal taxes to redress the disadvantage to countries 
     relying primarily on direct taxes for revenue rather than 
     indirect taxes. The Conferees agree that such a revision of 
     WTO rules is one among other options for the United States, 
     including domestic legislation, to redress such a 
     disadvantage.
       The Conferees agree to include as a principal negotiating 
     objective to obtain competitive market opportunities for U.S. 
     exports of textiles substantially equivalent to those for 
     foreign textiles in the United States.
       The Conferees agree to a principal negotiating objective 
     concerning the worst forms of child labor, to seek 
     commitments by trade agreement parties to vigorously enforce 
     their own laws prohibiting the worst forms of child labor.


             sec. 2102(c)--promotion of certain priorities

     Present/expired law
       No provision.
     House amendment
       Section 2102(c) of the House amendment to H.R. 3009 sets 
     forth certain priorities for the President to address. These 
     provisions include seeking greater cooperation between WTO 
     and the ILO; seeking to establish consultative mechanisms 
     among parties to trade agreements to strengthen the capacity 
     of U.S. trading partners to promote respect for core labor 
     standards, seeking to seek to establish consultative 
     mechanisms among parties to trade agreements to strengthen 
     the capacity of U.S. trading partners to develop and 
     implement standards for environment and human health based on 
     sound science; conducting environmental reviews of future 
     trade and investment agreements, consistent with Executive 
     Order 13141 and its relevant guidelines; reviewing the impact 
     of future trade agreements on U.S. employment, modeled after 
     Executive Order 13141; taking into account, in negotiating 
     trade agreements, protection of legitimate health or safety, 
     essential security, and consumer interests; requiring the 
     Secretary of Labor to consult with foreign parties to trade 
     negotiations as to their labor laws and providing technical 
     assistance where needed; reporting to Congress on the extent 
     to which parties to an agreement have in effect laws 
     governing exploitative child labor; preserving the ability of 
     the United States to enforce rigorously its trade laws, 
     including antidumping and countervailing duty laws, and 
     avoiding agreements which lessen their effectiveness; 
     ensuring that U.S. exports are not subject to the abusive use 
     of trade laws, including antidumping and countervailing duty 
     laws, by other countries; continuing to promote consideration 
     of Multilateral Environmental Agreements (MEAs) and 
     consulting with parties to such agreements regarding the 
     consistency of any MEA that includes trade measures with 
     existing environmental exceptions under Article XX of the 
     GATT.
       In addition, USTR, twelve months after the imposition of a 
     penalty or remedy by the United States permitted by an 
     agreement to which this Act applies, is to report to the 
     Committee on the effectiveness of remedies applied under U.S. 
     law to enforce U.S. rights under trade agreements. USTR shall 
     address whether the remedy was effective in changing the 
     behavior of the targeted party and whether the remedy had any 
     adverse impact on parties or interests not party to the 
     dispute.
       Finally, section 2102(c) would direct the President to seek 
     to establish consultative mechanisms among parties to trade 
     agreements to examine the trade consequences of significant 
     and unanticipated currency movements and to scrutinize 
     whether a foreign government engaged in a pattern of 
     manipulating its currency to promote a competitive advantage 
     in international trade.
     Senate amendment
       With several notable exceptions, the priorities set forth 
     in section 2102(c) of the Senate Amendment are identical to 
     the priorities set forth in the House Amendment. The 
     exceptions are:
       With respect to the study that the President must perform 
     on the impact of future trade agreements on employment, the 
     Senate Amendment requires the President to examine particular 
     criteria, as follows: the impact on job security, the level 
     of compensation of new jobs and existing jobs, the 
     displacement of employment, and the regional distribution of 
     employment, utilizing experience from previous trade 
     agreements and alternative models of employment analysis. The 
     Senate Amendment also requires that the report be made 
     available to the public.
       The Senate Amendment requires that, in connection with new 
     trade agreement negotiations, the President shall ``submit to 
     the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate a 
     meaningful labor rights report of the country, or countries, 
     with respect to which the President is negotiating.''
       The Senate Amendment adds to the House Amendment priority 
     on preserving the ability of the United States to enforce 
     vigorously its trade laws, by including U.S. ``safeguards'' 
     law in the list of laws at issue. This is the U.S. law 
     authorizing the President to provide relief to parties 
     seriously injured or threatened with serious injury due to 
     surges of imports. The priority in the Senate Amendment also 
     directs the President to remedy certain market distorting 
     measures that underlie unfair trade practices.
     Cconference agreement
       The Senate recedes to the House amendment with several 
     modifications. With respect to the worst forms of child 
     labor, the Conferees agree to expand section 2102(c)(2) of 
     the House amendment to include the worst forms of child labor 
     within requirement to seek to establish consultative 
     mechanisms to strengthen the capacity of U.S. trading 
     partners to promote respect for core labor standards.
       The Conferees agree to modify section 2105(c)(5) of the 
     House amendment to require the President to report on impact 
     of future trade agreements on US employment, including on 
     labor markets, modeled after E.O. 13141 to the extent 
     appropriate in establishing procedures and criteria, and to 
     make the report public.
       With respect to the labor rights report in section 
     2102(c)(8) of both bills, the Conferees agree to the Senate 
     provision. Furthermore, the Conferees agree to section 
     2107(b)(2)(E) of the Senate amendment to require that 
     guidelines for the Congressional Oversight Group include the 
     time frame for submitting this report.


  sec. 2102(d)--consultations, adherence to obligations under uruguay 
                            round agreements

     Present/expired law
       No provision.
     House amendment
       Section 2102(d) of the House amendment to H.R. 3009 
     requires that USTR consult closely and on a timely basis with 
     the Congressional Oversight Group appointed under section 
     2107. In addition, USTR would be required to consult closely 
     (including immediately before the initialing of an agreement) 
     with the congressional advisers on trade policy and 
     negotiations appointed under section 161 of the Trade Act of 
     1974, as well as the House Committee on Ways and Means, the 
     Senate Committee on Finance, and the Congressional Oversight 
     Group. With regard to negotiations concerning agriculture 
     trade, USTR would also be required to consult with the House 
     and Senate Committees on Agriculture.
       In determining whether to enter into negotiations with a 
     particular country, section 2102(e) would require the 
     President to take into account whether that country has 
     implemented its obligations under the Uruguay Round 
     Agreements.
     Senate amendment
       Section 2102(d) of the Senate amendment is identical to the 
     House provision in the House amendment to H.R. 3009.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


                 SEC. 2103--TRADE AGREEMENTS AUTHORITY

     Present/expired law
       Tariff proclamation authority. Section 1102(a) of the 1988 
     Act provided authority to the President to proclaim 
     modifications in duties without the need for Congressional 
     approval, subject to certain limitations. Specifically, for 
     rates that exceed 5 percent ad

[[Page 15079]]

     valorem, the President could not reduce any rate of duty to a 
     rate less than 50 percent of the rate of duty applying on the 
     date of enactment. Rates at or below 5 percent could be 
     reduced to zero. Any duty reduction that exceeded 50 percent 
     of an existing duty higher than 5 percent or any tariff 
     increase had to be approved by Congress.
       Staging authority required that duty reductions on any 
     article could not exceed 3 percent per year, or one-tenth of 
     the total reduction, whichever is greater, except that 
     staging was not required if the International Trade 
     Commission determined there was no U.S. production of that 
     article.
       Negotiation of bilateral agreements. Section 1102(c) of the 
     1988 Act set forth three requirements for the negotiation of 
     a bilateral agreement:
       The foreign country must request the negotiation of the 
     bilateral agreement;
       The agreement must make progress in meeting applicable U.S. 
     trade negotiating objectives; and
       The President must provide written notice of the 
     negotiations to the Committee on Ways and Means and the 
     Committee on Finance of the Senate and consult with these 
     committees.
       The negotiations could proceed unless either Committee 
     disapproved the negotiations within 60 days prior to the 90 
     calendar days advance notice required of entry into an 
     agreement (described below).
       Negotiation of multilateral non-tariff agreements. With 
     respect to multilateral agreements, section 1102(b) of the 
     1988 Act provided that whenever the President determines that 
     any barrier to, or other distortion of, international trade 
     unduly burdens or restricts the foreign trade of the United 
     States or adversely affects the U.S. economy, or the 
     imposition of any such barrier or distortion is likely to 
     result in such a burden, restriction, or effect, he may enter 
     into a trade agreement with the foreign countries involved. 
     The agreement must provide for the reduction or elimination 
     of such barrier or other distortion or prohibit or limit the 
     imposition of such a barrier or distortion.
       Provisions qualifying for fast track procedures. Section 
     1103(b)(1)(A) of the 1988 Act provided that fast track apply 
     to implementing bills submitted with respect to any trade 
     agreements entered into under the statute. Section 151(b)(1) 
     of the Trade Act of 1974 further defined ``implementing 
     bill'' as a bill containing provisions ``necessary or 
     appropriate'' to implement the trade agreement, as well as 
     provisions approving the agreement and the statement of 
     administrative action.
       Time period. The authority applied with respect to 
     agreements entered into before June 1, 1991, and until June 
     1, 1993 unless Congress passed an extension disapproval 
     resolution. The authority was then extended to April 15, 
     1994, to cover the Uruguay Round of multilateral negotiations 
     under the General Agreement on Tariffs and Trade.
     House amendment
       Section 2103 of the House amendment provides:
       Proclamation authority. Section 2103(a) would provide the 
     President the authority to proclaim, without Congressional 
     approval, certain duty modifications in a manner very similar 
     to the expired provision. Specifically, for rates that exceed 
     5 percent ad valorem, the President would not be authorized 
     to reduce any rate of duty to a rate less than 50 percent of 
     the rate of duty applying on the date of enactment. Rates at 
     or below 5 percent ad valorem could be reduced to zero. Any 
     duty reduction that exceeded 50 percent of an existing duty 
     higher than 5 percent or any tariff increase would have to be 
     approved by Congress.
       In addition, section 2103(a) would not allow the use of 
     tariff proclamation authority on import sensitive 
     agriculture.
       Staging authority would require that duty reductions on any 
     article could not exceed 3 percent per year, or one-tenth of 
     the total reduction, whichever is greater, except that 
     staging would not be required if the International Trade 
     Commission determined there is no U.S. production of that 
     article.
       These limitations would not apply to reciprocal agreements 
     to eliminate or harmonize duties negotiated under the 
     auspices of the World Trade Organization, such as so-called 
     ``zero-for-zero'' negotiations.
       Agreements on tariff and non-tariff barriers. Section 
     2103(b)(1) would authorize the President to enter into a 
     trade agreement with a foreign country whenever he determined 
     that any duty or other import restriction or any other 
     barrier to or distortion of international trade unduly 
     burdens or restricts the foreign trade of the United States 
     or adversely affects the U.S. economy, or the imposition of 
     any such barrier or distortion is likely to result in such a 
     burden, restriction, or effect. The agreement must provide 
     for the reduction or elimination of such barrier or other 
     distortion or prohibit or limit the imposition of such a 
     barrier or distortion. No distinction would be made between 
     bilateral and multilateral agreements.
       Conditions. Section 2103(b)(2) would provide that the 
     special implementing bills procedures may be used only if the 
     agreement makes progress in meeting the applicable objectives 
     set forth in section 2102(a) and (b) and the President 
     satisfies the consultation requirements set forth in section 
     2104.
       Bills qualifying for trade authorities procedures. Section 
     2103(b)(3)(A) would provide that bills implementing trade 
     agreements may qualify for trade promotion authority TPA 
     procedures only if those bills consist solely of the 
     following provisions:
       Provisions approving the trade agreement and statement of 
     administrative action; and
       Provisions necessary or appropriate to implement the trade 
     agreement.
       Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C) would 
     extend trade promotion authority to agreements entered into 
     before June 1, 2005. An extension until June 1, 2007, would 
     be permitted unless Congress passed a disapproval resolution, 
     as described under section 2103(c).
     Senate amendment
       In most respects, section 2103 of the Senate Amendment is 
     identical to section 2103 of the House Amendment. However, 
     there are several key differences, as follows:
       The Senate Amendment limits the President's proclamation 
     authority with respect to ``import sensitive agricultural 
     products,'' a term defined in section 2113(5) of the Senate 
     Amendment. This limitation differs from the limitation in the 
     House Amendment, inasmuch as it includes certain products 
     subject to tariff rate quotas.
       The Senate Amendment contains a provision making a trade 
     agreement implementing bill ineligible for ``fast track'' 
     procedures if the bill modifies, amends, or requires 
     modification or amendment to certain trade remedy laws. A 
     bill that does modify, amend or require modification or 
     amendment to those laws is subject to a point of order in the 
     Senate, which may be waived by a majority vote.
       The Senate Amendment requires the U.S. International Trade 
     Commission to submit a report to Congress on negotiations 
     during the initial period for which the President is granted 
     trade promotion authority. This report would be made in 
     connection with a request by the President to have such 
     authority extended.
     Conference agreement
       The Senate recedes to the House amendment with several 
     modifications. The Conferees agree to the new definition of 
     import sensitive agriculture in section 2103(a)(2)(B), 
     2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to 
     encompass products subject to tariff rate quotas, as well as 
     products subject to the lowest tariff reduction in the 
     Uruguay Round.
       The Conferees agree to section 2103(c)(3)(B) of the Senate 
     amendment, which requires the ITC to submit a report to 
     Congress by May 1, 2005 (if the President seeks extension of 
     TPA until June 2, 2007) analyzing the economic impact on the 
     United States of all trade agreements implemented between 
     enactment and the extension request.


                SEC. 2104--CONSULTATIONS AND ASSESSMENT

     Present/expired law
       Section 102 of the Trade Act of 1974 and sections 1102(d) 
     and 1103 of the 1988 Act set forth the fast track 
     requirements. These provisions required the President, before 
     entering into any trade agreement, to consult with Congress 
     as to the nature of the agreement, how and to what extent the 
     agreement will achieve applicable purposes, policies, and 
     objectives, and all matters relating to agreement 
     implementation. In addition, before entering into an 
     agreement, the President was required to give Congress at 
     least 90 calendar days advance notice of his intent. The 
     purpose of this period was to provide the Congressional 
     Committees of jurisdiction an opportunity to review the 
     proposed agreement before it was signed.
       Section 135(e) of the Trade Act of 1974 required that the 
     Advisory Committee for Trade Policy and Negotiations meet at 
     the conclusion of negotiations for each trade agreement and 
     provide a report as to whether and to what extent the 
     agreement promotes the economic interests of the United 
     States and achieves the applicable overall and principal 
     negotiating objectives of section 1101 of the 1988 Act. The 
     report was due not later than the date on which the President 
     notified Congress of his intent to enter into an agreement. 
     With regard to the Uruguay Round, the report was due 30 days 
     after the date of notification.
     House amendment
       Section 2104 of the House amendment to H.R. 3009 would 
     establish a number of requirements that the President consult 
     with Congress. Specifically, section 2104(a)(1) would require 
     the President to provide written notice and consult with the 
     relevant committees at least 90 calendar days prior to 
     entering into negotiations. Section 2104(a)(c) also provides 
     that the President shall meet with the Congressional 
     Oversight Group established under section 2107 upon a request 
     of a majority of its members. Trade promotion authority would 
     not apply to an implementing bill if both Houses separately 
     agree to a procedural disapproval resolution within any 60-
     day period stating that the Administration has failed to 
     notify or consult with Congress.
       Section 2104(b)(1) would establish a special consultation 
     requirement for agriculture. Specifically, before initiating 
     negotiations concerning tariff reductions in agriculture, the 
     President is to assess whether U.S. tariffs on agriculture 
     products that were bound

[[Page 15080]]

     under the Uruguay Round Agreements are lower than the tariffs 
     bound by that country. In his assessment, the President would 
     also be required to consider whether the tariff levels bound 
     and applied throughout the world with respect to imports from 
     the United States are higher than U.S. tariffs and whether 
     the negotiation provides an opportunity to address any such 
     disparity. The President would be required to consult with 
     the Committees on Ways and Means and Agriculture of the House 
     and the Committees on Finance and Agriculture, Nutrition and 
     Forestry of the Senate concerning the results of this 
     assessment and whether it is appropriate for the United 
     States to agree to further tariff reductions under such 
     circumstances and how all applicable negotiating objectives 
     would be met.
       Section 2104(b)(2) provides special consultations on import 
     sensitive agriculture products. Specifically, before 
     initiating negotiations on agriculture and as soon as 
     practicable with respect to the Free Trade Area of the 
     Americas and WTO negotiations, USTR is to identify import 
     sensitive agriculture products and consult with the 
     Committees on Ways & Means and Agriculture of the House and 
     the Committees on Finance and Agriculture, Nutrition, and 
     Forestry in the Senate concerning whether any further tariff 
     reduction should be appropriate, and whether the identified 
     products face unjustified sanitary or phytosanitary barriers. 
     USTR is also to request that the International Trade 
     Commission prepare an assessment of the probable economic 
     effects of any such tariff reduction on the U.S. industry 
     producing the product and on the U.S. economy as a whole. 
     USTR is to then notify the Committees of those products for 
     which it intends to seek tariff liberalization as well as the 
     reasons. If USTR commences negotiations and then identifies 
     additional import sensitive agriculture products, or a party 
     to the negotiations requests tariff reductions on such a 
     product, then USTR shall notify the Committees as soon as 
     practicable of those products and the reasons for seeking 
     tariff reductions.
       Section 2104(c) would establish a special consultation 
     requirement for textiles. Specifically, before initiating 
     negotiations concerning tariff reductions in textiles and 
     apparel, the President is to assess whether U.S. tariffs on 
     textile and apparel products that were bound under the 
     Uruguay Round Agreements are lower than the tariffs bound by 
     that country. In his assessment, the President would also be 
     required to consider whether the tariff levels bound and 
     applied throughout the world with respect to imports from the 
     United States are higher than U.S. tariffs and whether the 
     negotiation provides an opportunity to address any such 
     disparity. The President would be required to consult with 
     the Committee on Ways and Means of the House and the 
     Committee on Finance of the Senate concerning the results of 
     this assessment and whether it is appropriate for the United 
     States to agree to further tariff reductions under such 
     circumstances and how all applicable negotiating objectives 
     would be met.
       In addition, section 2104(d) would require the President, 
     before entering into any trade agreement, to consult with the 
     relevant Committees concerning the nature of the agreement, 
     how and to what extent the agreement will achieve the 
     applicable purposes, policies, and objectives set forth in 
     the House amendment to H.R. 3009 and all matters relating to 
     implementation under section 2105, including the general 
     effect of the agreement on U.S. laws.
       Section 2104(e) would require that the report of the 
     Advisory Committee for Trade Policy and Negotiations under 
     section 135(e)(1) of the Trade Act of 1974 be provided not 
     later than 30 days after the date on which the President 
     notifies Congress of his intent to enter into the agreement 
     under section 2105(a)(1)(A).
       Finally, section 2104(f) would require the President, at 
     least 90 days before entering into a trade agreement, to ask 
     the International Trade Commission to assess the agreement, 
     including the likely impact of the agreement on the U.S. 
     economy as a whole, specific industry sectors, and U.S. 
     consumers. That report would be due 90 days from the date 
     after the President enters into the agreement.
     Senate amendment
       The Senate Amendment is substantially similar to the House 
     bill, with the following exceptions:
       Consultations on export subsidies and distorting policies. 
     Section 2104(b)(2)(A)(ii)(III) requires consultations on 
     whether nations producing identified products maintain export 
     subsidies or distorting policies that distort trade and 
     impact of policies on U.S. producers.
       Consultations relating to fishing trade. Section 2104(b)(3) 
     requires that for negotiations relating to fishing trade, the 
     Administration will keep fully apprised and on timely basis 
     consult with the House Resources Committee and the Senate 
     Commerce Committee.
       Special reporting requirements on U.S. trade remedy laws. 
     Section 2104(d) provides that the President, at least 90 
     calendar days before the President enters into a trade 
     agreement, shall notify the House Ways and Means Committee 
     and the Senate Finance Committee in writing any amendments to 
     U.S. antidumping and countervailing duty laws (title VII of 
     the Tariff Act of 1930) or U.S. safeguard provisions (chapter 
     1 of title II of the Trade Act of 1974) that the President 
     proposes to include in the implementing legislation. On the 
     date that the President transmits the notification, the 
     President must also transmit to the Committees a report 
     explaining his reasons for believing that amendments to these 
     trade remedy laws are necessary to implement the trade 
     agreement and his reasons for believing that such amendments 
     are consistent with the negotiating objective on this issue. 
     Not later than 60 calendar days after the date on which the 
     President transmits notification to the relevant committees, 
     the Chairman and ranking members of the House Ways and Means 
     Committee and the Senate Finance Committees shall issue 
     reports stating whether the proposed amendments described in 
     the President's notification are consistent with the 
     negotiating objectives on trade laws.
     Conference agreement
       The Senate recedes to the House with several modifications. 
     The Conferees agree to section 2104(b)(2)(A)(11)(III) of the 
     Senate amendment, which requires consultations on whether 
     other nations producing identified products maintain export 
     subsidies or distorting policies that distort trade and 
     impact of policies on U.S. producers. In addition, the 
     Conferees agree to section 2104(b)(3) of the Senate 
     amendment, which requires that for negotiations relating to 
     fishing trade, the Administration will keep fully apprised 
     and on timely basis consult with the House Resources 
     Committee and the Senate Commerce Committee.
       Finally, the Conferees agree to include the notification 
     and report on changes to trade remedy laws in sections 
     2104(d)(3)(A) and (B) in the Senate amendment with 
     modifications. Given the priority that Conferees attach to 
     keeping U.S. trade remedy laws strong and ensuring that they 
     remain fully enforceable, the Conference agreement puts in 
     place a process requiring special scrutiny of any impact that 
     trade agreements may have on these laws. The process requires 
     the President, at least 180 calendar days before the day on 
     which he enters into a trade agreement, to report to the 
     Committees on Ways and Means and the Committee on Finance the 
     range of proposals advanced in trade negotiations and may be 
     in the final agreement that could require amendments to title 
     VII of the Tariff Act of 1930 or to chapter 1 of title II of 
     the Trade Act of 1974; and how these proposals relate to the 
     objectives described in section 2102(b)(14).
       The Conference agreement also provides a mechanism for any 
     Member in the House or Senate to introduce at any time after 
     the President's report is issued a nonbinding resolution 
     which states ``that the ____ finds that the proposed changes 
     to U.S. trade remedy laws contained in the report of the 
     President transmitted to the Congress on ____ under section 
     2104(d)(3) of the Bipartisan Trade Promotion Authority Act of 
     2002 with respect to ____, are inconsistent with the 
     negotiating objectives described in section 2102(b)(14) of 
     that Act.'', with the first blank space being filled in with 
     either the ``House of Representatives'' or the ``Senate'', as 
     the case may be, the second blank space filled in with the 
     appropriate date of the report, and the third blank space 
     being filled in with the name of the country or countries 
     involved.
       The resolution is referred to the Ways and Means and Rules 
     Committees in the House and the Finance Committee in the 
     Senate, and is privileged on the floor if it is reported by 
     the Committees. The Conference agreement allows only one 
     resolution (either a nonbinding resolution or a disapproval 
     resolution) per agreement to be eligible for the trade 
     promotion authority procedures contained in sections 152 (d) 
     and (e) of the Trade Act of 1974. The one resolution quota is 
     satisfied for the House only after the Ways and Means 
     Committee reports a resolution, and for the Senate only after 
     the Finance Committee reports a resolution.
       The Conference agreement states that, with respect to 
     agreements entered into with Chile and Singapore, the report 
     referenced in section 2104(d)(3)(A) shall be submitted by the 
     President at least 90 calendar days before the day on which 
     the President enters into a trade agreement with either 
     country.


             SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS

     Present/expired law
       Before entering into the draft agreement, the President was 
     required to give Congress 90 days advance notice (120 days 
     for the Uruguay Round) to provide an opportunity for revision 
     before signature. After entering into the agreement, the 
     President was required to submit formally the draft 
     agreement, implementing legislation, and a statement of 
     administrative action. Once the bill was formally introduced, 
     there was no opportunity to amend any portion of the bill--
     whether on the floor or in committee. Consequently, before 
     the formal introduction took place, the committees of 
     jurisdiction would hold hearings, ``unofficial'' or 
     ``informal'' mark-up sessions and a ``mock conference'' with 
     the Senate committees of jurisdiction in order to develop a 
     draft implementing bill together with the Administration and 
     to make

[[Page 15081]]

     their concerns known to the Administration before it 
     introduced the legislation formally.
       After formal introduction of the implementing bill, the 
     House committees of jurisdiction had 45 legislative days to 
     report the bill, and the House was required to vote on the 
     bill within 15 legislative days after the measure was 
     reported or discharged from the committees. Fifteen 
     additional days were provided for Senate committee 
     consideration (assuming the implementing bill was a revenue 
     bill), and the Senate floor action was required within 15 
     additional days. Accordingly, the maximum period for 
     Congressional consideration of an implementing bill from the 
     date of introduction was 90 legislative days. Amendments to 
     the legislation were not permitted once the bill was 
     introduced; the committee and floor actions consisted of ``up 
     or down'' votes on the bill as introduced.
       Finally, section 1103(d) of the 1988 Act specified that the 
     fast track rules were enacted as an exercise of the 
     rulemaking power of the House and the Senate, with the 
     recognition of the right of either House to change the rules 
     at any time.
     House amendment
       Under Section 2105 of the House amendment to H.R. 3009, the 
     President would be required, at least 90 days before entering 
     into an agreement, to notify Congress of his intent to enter 
     into the agreement. Section 2105(a) also would establish a 
     new requirement that the President, within 60 days of signing 
     an agreement, submit to Congress a preliminary list of 
     existing laws that he considers would be required to bring 
     the United States into compliance with agreement.
       Section 2105(b) would provide that trade promotion 
     authority would not apply if both Houses separately agree to 
     a procedural disapproval resolution within any 60-day period 
     stating that the Administration failed to notify or consult 
     with Congress, which is defined as failing or refusing to 
     consult in accordance with section 2104 or 2105, failing to 
     develop or meet guidelines under section 2107(b), failure to 
     meet with the Congressional Oversight Group, or the agreement 
     fails to make progress in achieving the purposes. policies, 
     priorities, and objectives of the Act. In a change from the 
     expired law, such a resolution may be introduced by any 
     Member of the House or Senate. Only one such privileged 
     resolution would be permitted to be considered per trade 
     agreement per Congress.
       Most of the remaining provisions are identical to the 
     expired law. Specifically, section 2105(a) would require the 
     President, after entering into agreement, to submit formally 
     the draft agreement, the implementing legislation, and a 
     statement of administrative action to Congress, and there 
     would be no time limit to do so, but with the new requirement 
     that the submission be made on a date on which both Houses 
     are in session. The procedures of section 151 of the Trade 
     Act of 1974 would then apply. Specifically, on the same day 
     as the President formally submits the legislation, the bill 
     would be introduced (by request) by the Majority Leaders of 
     the House and the Senate. After formal introduction of the 
     legislation, the House Committees of jurisdiction would have 
     45 legislative days to report the bill. The House would be 
     required to vote on the bill within 15 legislative days after 
     the measure was reported or discharged from the Committees. 
     Fifteen additional days would be provided for Senate 
     Committee consideration (assuming the implementing bill was a 
     revenue bill), and Senate floor action would be required 
     within 15 additional days. Accordingly, the maximum period 
     for Congressional consideration of the implementing bill from 
     the date of introduction would be 90 legislative days.
       As with the expired provisions, once the bill has been 
     formally introduced, no amendments would be permitted either 
     in Committee or floor action, and a straight ``up or down'' 
     vote would be required. Of course, before formal 
     introduction, the bill could be developed by the Committees 
     of jurisdiction together with the Administration during the 
     informal Committee mark-up process.
       Finally, as with the expired provision, section 2105(c) 
     specifies that sections 2105(b) and 3(c) are enacted as an 
     exercise of the rulemaking power of the House and the Senate, 
     with the recognition of the right of either House to change 
     the rules at any time.
     Senate amendment
       The Senate Amendment is substantially similar to the House 
     Bill, with the following exception:
       Reporting requirements. Section 2105(a)(1)(A)(ii) requires 
     the President to transmit to the House Ways and Means 
     Committee and the Senate Finance Committee the notification 
     and report described in section 2104(d)(3)(A) regarding 
     changes to U.S. trade remedy laws.
       Disclosure Requirements. Section 2105(a)(4) of the Senate 
     bill specifies that any trade agreement or understanding with 
     a foreign government (oral or written) not disclosed to 
     Congress will not be considered part of trade agreement 
     approved by Congress and shall have no effect under U.S. law 
     or in any dispute settlement body.
       Senate Procedures. Section 2105(b)(1)(C)(i)(II) provides 
     that any Member of the Senate may introduce a procedural 
     disapproval resolution, and that that resolution will be 
     referred to the Senate Finance Committee. Section 
     2105(b)(1)(C)(iv) provides that the Senate may not consider a 
     disapproval resolution that has not been reported by the 
     Senate Finance Committee.
     Conference agreement
       The Senate recedes to the House amendment with several 
     modifications. The Conferees agree to section 2105(a)(4) of 
     the Senate amendment, which specifies that any trade 
     agreement or understanding with a foreign government (oral or 
     written) not disclosed to Congress will not be considered 
     part of trade agreement approved by Congress and shall have 
     no effect under U.S. 
     law or in any dispute settlement body, the Conferees also 
     agree to sections 2105(b)(1)(C)(i)(II) and (b)(1)(C)(iv) of 
     the Senate amendment, which applies the same procedures for 
     consideration of bills in the Senate as for the House.
       Finally, the Conferees agree to section 2105(b)(2) of the 
     Senate amendment with modifications, which requires the 
     Secretary of Commerce, in consultation with the Secretaries 
     of State and Treasury, the Attorney General, and the United 
     States Trade Representative, to transmit to Congress a report 
     setting forth the strategy of the executive branch to address 
     concerns of Congress regarding whether dispute settlement 
     panels and the Appellate Body of the WTO have added to 
     obligations or diminished rights of the United States, as 
     described in section 2101(b)(3). Trade authorities procedures 
     shall not apply to any implementing bill with respect to an 
     agreement negotiated under the auspices of the WTO unless the 
     Secretary of Commerce has issued such report prior to 
     December 31, 2002.


            SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS

     Present/expired law
       No provision.
     House amendment
       Section 2106 of the House amendment to H.R. 3009 exempts 
     agreements resulting from ongoing negotiations with Chile or 
     Singapore, an agreement establishing a Free Trade Area of the 
     Americas, and agreements concluded under the auspices of the 
     WTO from prenegotiation consultation requirements of section 
     2104(a) only. However, upon enactment of H.R. 3009, the 
     Administration is required to consult as to those elements 
     set forth in section 2104(a) as soon as feasible.
     Senate amendment
       Section 2106 of the Senate amendment is substantially 
     similar to the House bill.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


                SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP

     Present/expired law
       No provision.
     House amendment
       Section 2107 of the House amendment to H.R. 3009 would 
     require the Chairman of the Committee on Ways and Means and 
     the Chairman of the Committee on Finance to chair and 
     convene, sixty days after the effective date of this Act, the 
     Congressional Oversight Group. The Group would be comprised 
     of the following Members of the House: the Chairman and 
     Ranking Member of the Committee on Ways and Means and three 
     additional members of the Committee (not more than two of 
     whom are from the same party), and the Chairman and Ranking 
     Member of the Committees which would have, under the Rules of 
     the House, jurisdiction over provisions of law affected by a 
     trade negotiation. The Group would be comprised of the 
     following Members of the Senate: the Chairman and Ranking 
     Member of the Committee on Finance and three additional 
     members of the Committee (not more than two of whom are from 
     the same party), and the Chairman and Ranking Member of the 
     Committees which would have, under the Rules of the Senate, 
     jurisdiction over provisions of law affected by a trade 
     negotiation.
       Members are to be accredited as official advisors to the 
     U.S. delegation in the negotiations. USTR is to develop 
     guidelines to facilitate the useful and timely exchange of 
     information between USTR and the Group, including regular 
     briefings, access to pertinent documents, and the closest 
     possible coordination at all critical periods during the 
     negotiations, including at negotiation sites.
       Finally, section 2107(c) provides that upon the request of 
     a majority of the Congressional Oversight Group, the 
     President shall meet with the Group before initiating 
     negotiations or at any other time concerning the 
     negotiations.
     Senate amendment
       Section 2107 of the Senate amendment is identical to the 
     House amendment to H.R. 3009.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


   SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS

     Present/expired law
       No provision.
     House amendment
       Section 2108 of the House amendment to H.R. 3009 would 
     require the President to submit to the Congress a plan for 
     implementing

[[Page 15082]]

     and enforcing any trade agreement resulting from this Act. 
     The report is to be submitted simultaneously with the text of 
     the agreement and is to include a review of the Executive 
     Branch personnel needed to enforce the agreement as well as 
     an assessment of any U.S. Customs Service infrastructure 
     improvements required. The range of personnel to be addressed 
     in the report is very comprehensive, including U.S. Customs 
     and Department of Agriculture border inspectors, and 
     monitoring and implementing personnel at USTR, the 
     Departments of Agriculture, Commerce, and the Treasury, and 
     any other agencies as may be required.
     Senate amendment
       Section 2108 of the Senate amendment is identical to the 
     House amendment to H.R. 3009.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


                       SEC. 2109--COMMITTEE STAFF

     Present/expired law
       No provision.
     House amendment
       Section 2109 of the House amendment to H.R. 3009 states 
     that the grant of trade promotion authority is likely to 
     increase the activities of the primary committees of 
     jurisdiction and the creation of the Congressional Oversight 
     Group under section 2107 will increase the participation of a 
     broader Members of Congress in the formulation of U.S. trade 
     policy and oversight of the U.S. trade agenda. The provision 
     specifies that the primary committees of jurisdiction should 
     have adequate staff to accommodate these increases in 
     activities.
     Senate amendment
       Section 2109 of the Senate amendment is identical to the 
     House amendment to H.R. 3009.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


      SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY

     Present/expired law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 2111 requires the International Trade Commission, 
     within one year following enactment of this Act, to issue a 
     report regarding the economic impact of the following trade 
     agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the 
     U.S.-Canada Free Trade Agreement; (3) the North American Free 
     Trade Agreement (NAFTA); (4) The Uruguay Round Agreements, 
     which established the World Trade Organization; and (5) The 
     Tokyo Round of Multilateral Trade Negotiations.
     Conference agreement
       The House recedes to the Senate amendment.


                       SEC. 2112--SMALL BUSINESS

     Present/expired law
       No provision.
     House amendment
       No provision.
     Senate amendment
       WTO small business advocate. Section 2112(a) provides that 
     the U.S. Trade Representative shall pursue identification of 
     a small business advocate at the World Trade Organization 
     Secretariat to examine the impact of WTO agreements on the 
     interests of small businesses, address the concerns of small 
     businesses, and recommend ways to address those interests in 
     trade negotiations involving the WTO.
       Assistant USTR responsible for small businesses. Section 
     2112(b) provides that the Assistant United States Trade 
     Representative for Industry and Telecommunications shall be 
     responsible for ensuring that the interests of small 
     businesses are considered in trade negotiations.
     Conference agreement
       The Senate recedes to the House amendment with a 
     modification. The Conferees agree to section 2112(b) of the 
     Senate amendment, which provides that the Assistant USTR for 
     Industry and Telecommunications will be responsible for 
     ensuring that the interests of small business are considered 
     in trade negotiations.

                DIVISION C--ANDEAN TRADE PREFERENCE ACT

                  TITLE XXXI--ANDEAN TRADE PREFERENCE


                         SEC. 3101--SHORT TITLE

     Present law
       No provision.
     House amendment
       Section 3101 of H.R. 3009, as amended, provides that the 
     Act may be cited as the ``Andean Trade Promotion and Drug 
     Eradication Act.''
     Senate amendment
       Section 3101 provides that the Act may be cited as the 
     ``Andean Trade Preference Expansion Act.''
     Conference agreement
       The Senate recedes.


                          SEC. 3102--FINDINGS

     Present law
       No provision.
     House amendment
       Section 1302 contains findings of Congress that:
       (1) Since the Andean Trade Preference Act was enacted in 
     1991, it has had a positive impact on United States trade 
     with Bolivia, Colombia, Ecuador, and Peru. Two-way trade has 
     doubled, with the United States serving as the leading source 
     of imports and leading export market for each of the Andean 
     beneficiary countries. This has resulted in increased jobs 
     and expanded export opportunities in both the United States 
     and the Andean region.
       (2) The Andean Trade Preference Act has been a key element 
     in the United States counter narcotics strategy in the Andean 
     region, promoting export diversification and broad-based 
     economic development that provide sustainable economic 
     alternatives to drug-crop production, strengthening the 
     legitimate economies of Andean countries and creating viable 
     alternatives to illicit trade in coca.
       (3) Notwithstanding the success of the Andean Trade 
     Preference Act, the Andean region remains threatened by 
     political and economic instability and fragility, vulnerable 
     to the consequences of the drug war and fierce global 
     competition for its legitimate trade.
       (4) The continuing instability in the Andean region poses a 
     threat to the security interests of the United States and the 
     world. This problem has been partially addressed through 
     foreign aid, such as Plan Colombia, enacted by Congress in 
     2000. However, foreign aid alone is not sufficient. 
     Enhancement of legitimate trade with the United States 
     provides an alternative means for reviving and stabilizing 
     the economies in the Andean region.
       (5) The Andean Trade Preference Act constitutes a tangible 
     commitment by the United States to the promotion of 
     prosperity, stability, and democracy in the beneficiary 
     countries.
       (6) Renewal and enhancement of the Andean Trade Preference 
     Act will bolster the confidence of domestic private 
     enterprise and foreign investors in the economic prospects of 
     the region, ensuring that legitimate private enterprise can 
     be the engine of economic development and political stability 
     in the region.
       (7) Each of the Andean beneficiary countries is committed 
     to conclude negotiation of a Free Trade Area of the Americas 
     by the year 2005 as a means of enhancing the economic 
     security of the region.
       (8) Temporarily enhancing trade benefits for Andean 
     beneficiaries countries will promote the growth of free 
     enterprise and economic opportunity in these countries and 
     serve the security interests of the United States, the 
     region, and the world.
     Senate amendment
       Section 3101 is identical.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


        SEC. 3103--ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT

     Articles (Except Apparel) Eligible for Preferential Treatment

     Present law
       The Andean Trade Preference Act (ATPA), enacted on December 
     4, 1991 as title II of Public Law 102-182, authorizes 
     preferential trade benefits for the Andean nations of 
     Bolivia, Colombia, Ecuador, and Peru, similar to those 
     benefits granted to beneficiaries under the Caribbean Basin 
     Initiative program. The ATPA authorizes the President to 
     proclaim duty-free treatment for all eligible articles from 
     Bolivia, Colombia, Ecuador, Peru. This authority applies only 
     to normal column 1 rates of duty in the Harmonized Tariff 
     Schedule of the United States (HTS); any additional duties 
     imposed under U.S. unfair trade practice laws, such as the 
     antidumping or countervailing duty laws, are not affected by 
     this authority.
       The ATPA contains a list of products that are ineligible 
     for duty-free treatment. More specifically, ATPA duty-free 
     treatment does not apply to textile and apparel articles that 
     are subject to textile agreements; petroleum and petroleum 
     products; footwear not eligible for duty-free treatment under 
     the Generalized System of Preferences; certain watches and 
     watch parts; certain leather products; and sugar, syrups and 
     molasses subject to over-quota rates of duty.
     House amendment
       Section 3103 (a) amends the Andean Trade Preference Act to 
     authorize the President to proclaim duty-free treatment for 
     any of the following articles which were previously excluded 
     from duty-free treatment under the ATPA, if the President 
     determines that the article is not import-sensitive in the 
     context of imports from beneficiary countries:
       (1) Footwear not designated at the time of the effective 
     date of this Act as eligible for the purposes of the 
     Generalized System of

[[Page 15083]]

     Preferences under title V of the Trade Act of 1974;
       (2) Petroleum, or any product derived from petroleum, 
     provided for in headings 2709 and 2710 of the HTS;
       (3) Watches and watch parts (including cases, bracelets and 
     straps), of whatever type including, but not limited to, 
     mechanical, quartz digital or quartz analog, if such watches 
     or watch parts contain any material which is the product of 
     any country with respect to which HTS column 2 rates of duty 
     apply;
       (4) Handbags, luggage, flat goods, work gloves, and leather 
     wearing apparel that--(i) are the product of any beneficiary 
     country; and (ii) were not designated on August 5, 1983, as 
     eligible articles for purposes of the Generalized System of 
     Preferences under title V of the Trade Act of 1974.
       Under H.R. 3009, textiles subject to textile agreements; 
     sugar, syrups and molasses subject to over-quota tariffs; and 
     rum and tafia classified in subheading 2208.40.00 of the HTS 
     would continue to be ineligible for duty-free treatment, as 
     would apparel products other than those specifically 
     described below. Imports of tuna, prepared or preserved in 
     any manner, in airtight containers would receive immediate 
     duty-free treatment.
     Senate amendment
       Section 3102 of the bill replaces the list of excluded 
     products under section 204(b) of the current ATPA with a new 
     provision that extends duty preferences to most of those 
     products. The new preferences take the form of exceptions to 
     the general rule that the excluded products are not eligible 
     for duty-free treatment.
       The enhanced preferences are made available to ``ATPEA 
     beneficiary countries.'' Paragraph (5) of section 204(b) of 
     the ATPA as amended by the present bill defines ATPEA 
     beneficiary countries as those countries previously 
     designated by the President as ``beneficiary countries'' 
     (i.e., Bolivia, Colombia, Ecuador, and Peru) which 
     subsequently are designated by the President as ``ATPEA 
     beneficiary countries,'' based on the President's 
     consideration of additional eligibility criteria.
       In the event that the President did not designate a current 
     ``beneficiary country'' as an ``ATPEA beneficiary country,'' 
     that country would remain eligible for ATPA benefits under 
     the law as expired on December 4, 2001, but would not be 
     eligible for the enhanced benefits provided under the present 
     bill.
       Footwear not eligible for duty-free treatment under GSP 
     receives the same tariff treatment as like products from 
     Mexico, except that duties on articles in particular tariff 
     subheadings are to be reduced by 1/15 per year.
       The Senate Amendment provides special treatment for rum and 
     tafia, allowing them to receive the same tariff treatment as 
     like products from Mexico. The bill also allows certain 
     handbags, luggage, flat goods, work gloves, and leather 
     wearing apparel to receive the same tariff treatment as like 
     products from Mexico.
       Under the bill, the President is authorized to proclaim 
     duty-free treatment for tuna that is harvested by United 
     States or ATPEA vessels, subject to a quantitative yearly cap 
     of 20 percent of the domestic United States tuna pack in the 
     preceding year.
     Conference agreement
       Senate recedes on the authority of President to proclaim 
     duty-free treatment for particular articles which were 
     previously excluded from duty-free treatment under the ATPA, 
     if the President determines that the article is not import-
     sensitive in the context of imports from beneficiary 
     countries.
       Textiles subject to textile agreements; sugar, syrups and 
     molasses subject to over-quota tariffs; and rum and tafia 
     classified in subheading 2208.40.00 of the HTS would continue 
     to be ineligible for duty-free treatment, as would apparel 
     products other than those specifically described below.
       House recedes on the treatment of tuna with an amendment 
     to: 1) retain U.S. or Andean flagged vessel rule of origin 
     requirement in Senate amendment; 2) authorize the President 
     to grant duty-free treatment for Andean exports of tuna 
     packed in flexible (e.g., foil), airtight containers weighing 
     with their contents not more than 6.8 kg each; and 3) update 
     calculation of current MFN tariff-rate quota to be an amount 
     based on 4.8 percent of apparent domestic consumption of tuna 
     in airtight containers rather than domestic production.

                       Eligible Apparel Articles

     Present law
       Under the ATPA, apparel articles are on the list of 
     products excluded from eligibility for duty-free treatment.
     House amendment
       Under Section 3103, the President may proclaim duty-free 
     and quota-free treatment for apparel articles sewn or 
     otherwise assembled in one or more beneficiary countries 
     exclusively from any one or any combination of the following:
       (1) Fabrics or fabric components formed, or components 
     knit-to-shape, in the United States (including fabrics not 
     formed from yarns, if such fabrics are classifiable under 
     heading 5602 or 5603 of the HTS and are formed in the United 
     States).
       (2) Fabrics or fabric components formed, or components 
     knit-to-shape, in one or more beneficiary countries, from 
     yarns formed in one or more beneficiary countries, if such 
     fabrics (including fabrics not formed from yarns, if such 
     fabrics are classifiable under heading 5602 or 5603 of the 
     HTS and are formed in one or more beneficiary countries) are 
     in chief weight of llama, or alpaca.
       (3) Fabrics or yarn not produced in the United States or in 
     the region, to the extent that apparel articles of such 
     fabrics or yarn would be eligible for preferential treatment, 
     without regard to the source of the fabrics or yarn, under 
     Annex 401 of the NAFTA (short supply provisions). Any 
     interested party may request the President to consider such 
     treatment for additional fabrics and yarns on the basis that 
     they cannot be supplied by the domestic industry in 
     commercial quantities in a timely manner, and the President 
     must make a determination within 60 calendar days of 
     receiving the request from the interested party.
       (4) Apparel articles sewn or otherwise assembled in one or 
     more beneficiary countries from fabrics or fabric components 
     formed or components knit-to-shape, in one or more 
     beneficiary countries, from yarns formed in the United States 
     or in one or more beneficiary countries (including fabrics 
     not formed from yarns, if such fabrics are classifiable under 
     heading 5602 or 5603 of the HTS and are formed in one or more 
     beneficiary countries), whether or not the apparel articles 
     are also made from any of the fabrics, fabric components 
     formed, or components knit-to-shape in the United States 
     described in paragraph 1. Imports of apparel made from 
     regional fabric and regional yarn would be capped at 3% of 
     U.S. imports growing to 6% of U.S. imports in 2006, measured 
     in square meter equivalents.
     Senate amendment
       Paragraph (2) of section 204(b) of the ATPA as amended by 
     section 3102 of the present bill extends duty-free treatment 
     to certain textile and apparel articles from ATPEA 
     beneficiary countries. The provision divides articles 
     eligible for this treatment into several different categories 
     and limits duty-free treatment to a period defined as the 
     transition period.'' The transition period is defined in 
     paragraph (5) of section 204(b) of the ATPA as amended to be 
     the period from enactment of the present bill through the 
     earlier of February 28, 2006 or establishment of a FTAA.
       In general, the different categories of textile and apparel 
     articles eligible for duty free treatment are defined 
     according to the origin of the yarn and fabric from which the 
     articles are made. Under the first category, apparel sewn or 
     otherwise assembled in one or more ATPEA beneficiary 
     countries is eligible for duty-free treatment if it is made 
     exclusively from one or a combination of several sub-
     categories of components, as follows:
       (1) United States fabric, fabric components, or knit-to-
     shape components, made from yarns wholly formed in the United 
     States;
       (2) A combination of both United States and ATPEA 
     beneficiary country components knit-to-shape from yarns 
     wholly formed in the United States;
       (3) ATPEA beneficiary country fabric, fabric components, or 
     knit-to-shape components, made from yarns wholly formed in 
     one or more ATPEA beneficiary countries, if the constituent 
     fibers are primarily llama or alpaca hair; and
       (4) Fabrics or yarns, regardless of origin, if such fabrics 
     or yarns have been deemed, under the North American Free 
     Trade Agreement, not to be widely available in commercial 
     quantities in the United States. A separate provision of 
     section 204(b) of the ATPA as amended by the present bill 
     sets forth a process for interested parties to petition the 
     President for inclusion of additional yarns and fabrics in 
     the ``short supply'' list. This process includes obtaining 
     advice from the United States International Trade Commission 
     and industry advisory groups, and consultation with the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives.
       A second category of apparel articles eligible for duty-
     free treatment is apparel articles knit-to-shape (except 
     socks) in one or more ATPEA beneficiary countries from yarns 
     wholly formed in the United States. To qualify under this 
     category, the entire article must be knit-to-shape--as 
     opposed to being assembled from components that are 
     themselves knit-to-shape.
       A third category of apparel articles eligible for duty-free 
     treatment is apparel articles wholly assembled in one or more 
     ATPEA beneficiary countries from fabric or fabric components 
     knit, or components knit-to-shape in one or more ATPEA 
     beneficiary countries from yarns wholly formed in the United 
     States. The quantity of apparel eligible for this benefit is 
     subject to an annual cap. The cap is set at 70 million square 
     meter equivalents for the one-year period beginning March 1, 
     2002. The cap will increase by 16 percent, compounded 
     annually, in each succeeding one-year period, through 
     February 28, 2006.
       Thus, the cap applied to this category in each year 
     following enactment will be as follows:
       70 million square meter equivalents (SME) in the year 
     beginning March 1, 2002;

[[Page 15084]]

       81.2 million SME in the year beginning March 1, 2003;
       94.19 million SME in the year beginning March 1, 2004; and
       109.26 million SME in the year beginning March 1, 2005.
       A separate provision makes clear that goods otherwise 
     qualifying under the latter category will not be disqualified 
     if they happen to contain United States fabric made from 
     United States yarn.
       A fourth category of apparel eligible for duty-free 
     treatment under the Senate bill is brassieres that are cut or 
     sewn, or otherwise assembled, in one or more ATPEA 
     beneficiary countries, or in such countries and the United 
     States. This separate category requires that, in the 
     aggregate, brassieres manufactured by a given producer 
     claiming duty-free treatment for such products contain 
     certain quantities of United States fabric.
       A fifth category of textile and apparel eligible for duty-
     free treatment is handloomed, handmade, and folklore 
     articles.
       A final category of textile and apparel goods eligible for 
     duty-free treatment is textile luggage assembled in an ATPEA 
     beneficiary country from fabric and yarns formed in the 
     United States.
       In addition to the foregoing categories, the bill sets 
     forth special rules for determining whether particular 
     textile and apparel articles qualify for duty-free treatment.
     Conference agreement
       In general the conferees agreed to follow the House 
     amendment on apparel provisions with the exception that the 
     House receded to the Senate on the treatment of textile 
     luggage. With respect to category 2 in the House bill 
     relating to fabrics or fabric components formed, or 
     components knit-to-shape, in one or more beneficiary 
     countries, from yarns formed in one or more beneficiary 
     countries, if such fabrics are in chief weight of llama, or 
     alpaca, conferees agreed to include vicuna and calculate 
     product eligibility based on chief value instead of chief 
     weight. Also, conferees agreed to cap imports of apparel made 
     from regional fabric and regional yarn (category 4 in the 
     House bill) at 2% of U.S. imports growing to 5% of U.S. 
     imports in 2006, measured in square meter equivalents.
       It is the intention of the conferees that in cases where 
     fabrics or yarns determined by the President to be in short 
     supply impart the essential character to an article, the 
     remaining textile components may be constructed of fabrics or 
     yarns regardless of origin, as in Annex 401 of the NAFTA. In 
     cases where the fabrics or yarns determined by the President 
     to be in short supply do not impart the essential character 
     of the article, the article shall not be ineligible for 
     preferential treatment under this Act because the article 
     contains the short supply fabric or yarn.

              Special Origin Rule for Nylon Filament Yarn

     House amendment
       No provision.
     Senate amendment
       Articles otherwise eligible for duty-free treatment and 
     quota free treatment under the bill are not ineligible 
     because they contain certain nylon filament yarn (other than 
     elastomeric yarn) from a country that had an FTA with the 
     U.S. in force prior to January 1, 1995.
     Conference agreement
       House recedes.

               Dyeing, Finishing and Printing Requirement

     House amendment
       New requirement that apparel made of U.S. knit or woven 
     fabric assembled in CBTPA country qualifies for benefits only 
     if the U.S. knit or woven fabric is dyed and finished in the 
     United States. Apparel made of U.S. knit or woven fabric 
     assembled in an Andean beneficiary country qualifies for 
     benefits only if the U.S. knit or woven fabric is dyed and 
     finished in the United States.
     Senate Provision
       No provision.
     Conference agreement
       Senate recedes.

                      Penalties for Transshipment

     Present Law
       The Tariff Act of 1930, as amended, provides for civil 
     monetary penalties for unlawful transshipment. These include 
     penalties under 19 U.S.C. 1592 for up to a maximum of the 
     domestic value of the imported merchandise or eight times the 
     loss of revenue, as well as denial of entry, redelivery or 
     liquidated damages for failure to redeliver the merchandise 
     determined to be inaccurately represented. In addition, an 
     importer may be liable for criminal penalties, including 
     imprisonment for up to five years, under section 1001 of 
     title 18 of the United States Code for making false 
     statements on import documentation.
       Under the North American Free Trade Agreement (NAFTA), 
     Parties to the Agreement must observe Customs procedures and 
     documentation requirements, which are established in Chapter 
     5 of NAFTA. Requirements regarding Certificates of Origin for 
     imports receiving preferential tariffs are detailed in 
     Article 502.1 of NAFTA.
     House amendment
       Section 3103 requires that importers comply with 
     requirements similar in all material respects to the 
     requirements regarding Certificates of Origin contained in 
     Article 502.1 of the North American Free Trade Agreement 
     (NAFTA) for a similar importation from Mexico.
       In addition, if an exporter is determined under the laws of 
     the United States to have engaged in illegal transshipment of 
     apparel products from an Andean country, then the President 
     shall deny all benefits under the bill to such exporter, and 
     to any successors of such exporter, for a period of two 
     years.
       In cases where the President has requested a beneficiary 
     country to take action to prevent transshipment and the 
     country has failed to do so, the President shall reduce the 
     quantities of textile and apparel articles that may be 
     imported into the United States from that country by three 
     times the quantity of articles transshipped, to the extent 
     that such action is consistent with World Trade Organization 
     (WTO) rules.
     Senate amendment
       In amending section 204(b) of the ATPA, section 3102 of the 
     present bill provides special penalties for transshipment of 
     textile and apparel articles from an ATPEA beneficiary 
     country. Transshipment is defined as claiming duty-free 
     treatment for textile and apparel imports on the basis of 
     materially false information. An exporter found to have 
     engaged in such transshipment (or a successor of such 
     exporter) shall be denied all benefits under the ATPA for a 
     period of two years.
       The bill further provides penalties for an ATPEA 
     beneficiary country that fails to cooperate with the United 
     States in efforts to prevent transshipment. Where textile and 
     apparel articles from such country are subject to quotas on 
     importation into the United States consistent with WTO rules, 
     the President must reduce the quantity of such articles that 
     may be imported into the United States by three times the 
     quantity of transshipped articles, to the extent consistent 
     with WTO rules.
     Conference agreement
       Conference agreement follows House and Senate bill.

                         Import Relief Actions

     Present law
       The import relief procedures and authorities under sections 
     201-204 of the Trade Act of 1974 apply to imports from ATPA 
     beneficiary countries, as they do to imports from other 
     countries. If ATPA imports cause serious injury, or threat of 
     such injury, to the domestic industry producing a like or 
     directly competitive article, section 204(d) of the ATPA 
     authorizes the President to suspend ATPA duty-free treatment 
     and proclaim a rate of duty or other relief measures.
       Under NAFTA, the United States may invoke a special 
     safeguard provision at any time during the tariff phase-out 
     period if a NAFTA-origin textile or apparel good is being 
     imported in such increased quantities and under such 
     conditions as to cause ``serious damage, or actual threat 
     thereof,'' to a domestic industry producing a like or 
     directly competitive good. The President is authorized to 
     either suspend further duty reductions or increase the rate 
     of duty to the NTR rate for up to three years.
     House amendment
       Under Section 3103 normal safeguard authorities under ATPA 
     would apply to imports of all products except textiles and 
     apparel. A NAFTA equivalent safeguard authorities would apply 
     to imports of apparel products from ATPA countries, except 
     that, United States, if it applied a safeguard action, would 
     not be obligated to provide equivalent trade liberalizing 
     compensation to the exporting country.
     Senate amendment
       The bill establishes similar textile and apparel safeguard 
     provisions based on the NAFTA textile and apparel safeguard 
     provision.
     Conference agreement
       Conference Agreement follows House and Senate bill.

                          Designation Criteria

     Present law
       In determining whether to designate any country as an ATPA 
     beneficiary country, the President must take into account 
     seven mandatory and 12 discretionary criteria, which are 
     listed in section 203 of the ATPA.
       Under Section 203 of the ATPA, the President shall not 
     designate any country a ATPA beneficiary country if:
       (1) the country is a Communist country;
       (2) the country has nationalized, expropriated, imposed 
     taxes or other exactions or otherwise seized ownership or 
     control of U.S. property (including intellectual property), 
     unless he determines that prompt, adequate, and effective 
     compensation has been or is being made, or good faith 
     negotiations to provide such compensation are in progress, or 
     the country is otherwise taking steps to discharge its 
     international obligations, or a dispute over compensation has 
     been submitted to arbitration;
       (3) the country fails to act in good faith in recognizing 
     as binding or in enforcing arbitral awards in favor of U.S. 
     citizens;
       (4) the country affords ``reverse'' preferences to 
     developed countries and whether such treatment has or is 
     likely to have a significant adverse effect on U.S. commerce;

[[Page 15085]]

       (5) a government-owned entity in the country engages in the 
     broadcast of copyrighted material belonging to U.S. copyright 
     owners without their express consent or the country fails to 
     work toward the provision of adequate and effective 
     intellectual property rights;
       (6) the country is not a signatory to an agreement 
     regarding the extradition of U.S. citizens,
       (7) if the country has not or is not taking steps to afford 
     internationally recognized worker rights to workers in the 
     country;
       In determining whether to designate a country as eligible 
     for ATPA benefits, the President shall take into account 
     (discretionary criteria):
       (1) an expression by the country of its desire to be 
     designated;
       (2) the economic conditions in the country, its living 
     standards, and any other appropriate economic factors;
       (3) the extent to which the country has assured the United 
     States it will provide equitable and reasonable access to its 
     markets and basic commodity resources;
       (4) the degree to which the country follows accepted rules 
     of international trade under the World Trade Organization;
       (5) the degree to which the country uses export subsidies 
     or imposes export performance or local content requirements 
     which distort international trade;
       (6) the degree to which the trade policies of the country 
     are contributing to the revitalization of the region;
       (7) the degree to which the country is undertaking self-
     help measures to protect its own economic development;
       (8) whether or not the country has taken or is taking steps 
     to afford to workers in that country (including any 
     designated zone in that country) internationally recognized 
     workers rights;
       (9) the extent to which the country provides under its law 
     adequate and effective means for foreign nationals to secure, 
     exercise, and enforce exclusive intellectual property rights;
       (10) the extent to which the country prohibits its 
     nationals from engaging in the broadcast of copyrighted 
     material belonging to U.S. copyright owners without their 
     express consent;
       (11) whether such country has met the narcotics cooperation 
     certification criteria of the Foreign Assistance Act of 1961 
     for eligibility for U.S. assistance; and
       (12) the extent to which the country is prepared to 
     cooperate with the United States in the administration of the 
     Act.
       Under the ATPA the President is prohibited from designating 
     a country a beneficiary country if any of criteria (1)-(7) 
     apply to that country, subject to waiver if the President 
     determines that country designation will be in the U.S. 
     national economic or security interest. The waiver does not 
     apply to criteria (4) and (6). Under the ATPA criteria on (7) 
     is included as both mandatory and discretionary.
       The President may withdraw or suspend beneficiary country 
     status or duty-free treatment on any article if he determines 
     the country should be barred from designation as a result of 
     changed circumstances. The President must submit a triennial 
     report to the Congress on the operation of the program. The 
     report shall include any evidence that the crop eradication 
     and crop substitution efforts of the beneficiary country are 
     directly related to the effects of the legislation
     House amendment
       The House amendment provides that the President, in 
     designating a country as eligible for the enhanced ATPDEA 
     benefits, shall take into account the existing eligibility 
     criteria established under ATPA described above, as well as 
     other appropriate criteria, including: whether a country has 
     demonstrated a commitment to undertake its WTO obligations 
     and participate in negotiations toward the completion of the 
     FTAA or comparable trade agreement; the extent to which the 
     country provides intellectual property protection consistent 
     with or greater than that afforded under the Agreement on 
     Trade-Related Aspects of Intellectual Property Rights; the 
     extent to which the country provides internationally 
     recognized worker fights; whether the country has implemented 
     its commitments to eliminate the worst forms of child labor; 
     the extent to which a country has taken steps to become a 
     party to and implement the Inter-American Convention Against 
     Corruption; and the extent to which the country applies 
     transparent, nondiscriminatory and competitive procedures in 
     government procurement equivalent to those included in the 
     WTO Agreement on Government Procurement and otherwise 
     contributes to efforts in international fora to develop and 
     implement international rules in transparency in government 
     procurement.
     Senate amendment
       Section 3102(5) contains identical provisions.
     Conference agreement
       Conference Agreement follows the House and Senate 
     amendments. In evaluating a potential beneficiary's 
     compliance with its WTO obligations, the conferees expect the 
     President to take into account the extent to which the 
     country follows the rules on customs valuation set forth in 
     the WTO Customs Valuation Agreement. With respect to 
     intellectual property protection, it is the Conferees intent 
     that the President will also take into account the extent to 
     which potential beneficiary countries are providing or taking 
     steps to provide protection of intellectual property rights 
     comparable to the protections provided to the United States 
     in bilateral intellectual property agreements.
       Since April 1995, Colombia has applied a variable import 
     duty system, known as the ``price band'' system, on fourteen 
     basic agriculture products such as wheat, corn, and soybean 
     oil. An additional 147 commodities, considered substitutes or 
     related products, are subject to the price band system which 
     establishes ceiling, floor, and reference prices on imports. 
     The Conferees's view is that the price band system is non-
     transparent and easily manipulated as a protectionist device. 
     In early 2000, the United States reached agreement with 
     Colombia in the WTO that Colombia would delink wet pet food, 
     the only finished product in this system, from the price band 
     system. In implementing the eligibility criteria relating to 
     market access and implementation of WTO commitments, it is 
     the Conferees intent that USTR insist that Colombia implement 
     its WTO commitment to remove pet food from the price band 
     tariff system and to apply the 20% common external tariff to 
     imported pet food.
       With respect to whether beneficiary countries are following 
     established WTO rules, the Conferees believe it is important 
     for Andean goveniments to provide transparent and non-
     discriminatory regulatory procedures. Unfortunately, the 
     Conferees know of instances where regulatory policies in 
     Andean countries are opaque, unpredictable, and arbritarily 
     applied. As such, it is the Conferees's view that Andean 
     countries that seek trade benefits should adopt, implement, 
     and apply transparent and non-discriminatory regulatory 
     procedures. The development of such procedures would help 
     create regulatory stability in the Andean region and thus 
     provide mere certainty to U.S. companies that would like to 
     invest in these countries.

            Determination Regarding Retention of Designation

     Present law
       Under Section 203(e) of the ATPA, the President may 
     withdraw or suspend a country's beneficiary country 
     designation, or withdraw, suspend, or limit the application 
     of duty-free treatment to particular articles of a 
     beneficiary country, due to changed circumstances.
     House amendment
       Section 3102(b) amends section 203(e) of the ATPA to 
     provide that President may withdraw or suspend ATPA 
     designation, or withdraw, suspend or limit benefits if a 
     country's performance under eligibility criteria are no 
     longer satisfactory.
     Senate amendment
       Identical.
     Conference agreement
       Conference agreement follows the House amendment and Senate 
     amendment.

                         Reporting Requirements

     Present law
       Provides for: 1) an annual report by the International 
     Trade Commission on the economic impact of the bill and; 2) 
     an annual report by the Secretary of Labor on the impact of 
     the bill with respect to U.S. labor. Also under present law, 
     USTR is required to report triannually on operation of the 
     program.
     House amendment
       Retains current law on reports.
     Senate amendment
       Senate bill requires same ITC and Labor reports as well as 
     an annual report by the Customs Service on compliance and 
     anti-circumvention on the part of beneficiary countries in 
     the area of textile and apparel trade. It also requires USTR 
     to report biannually on operation of the program.
     Conference agreement
       House recedes.
       Petitions for Review
     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 3102(e) of the bill directs the President to 
     promulgate regulations regarding the review of eligibility of 
     articles and countries under the ATPA. Such regulations are 
     to be similar to regulations governing the Generalized System 
     of Preferences petition process.
     Conference agreement
       House recedes.


            section 3104--termination of duty-free treatment

     Present law
       Duty-free treatment under the ATPA expires on December 4, 
     2001.
     House amendment
       Duty-free treatment terminates under the Act on December 
     31, 2006.

[[Page 15086]]

     Senate amendment
       Section 3103 of the bill amends section 208(b) of the ATPA 
     to provide for a termination date of February 28, 2006. Basic 
     ATPA benefits apply retroactively to December 4, 2001.
     Conference agreement
       House recedes on retroactivity for basic ATPA benefits; 
     Senate recedes on termination.


     section 3106--trade benefits under the caribbean basin trade 
   partnership act (cbtpa) and the africa growth and opportunity act 
                                 (agoa)

       Knit-to-shape Apparel
     Present law
       Draft regulations issued by Customs to implement P.L. 106-
     200 stipulate that knit to-shape garments, because 
     technically they do not go through the fabric stage, are not 
     eligible for trade benefits under the act.
     House amendment
       Sec. 3106 and 3107 of the House bill amends AGOA and CBTPA 
     to clarify that preferential treatment is provided to knit-
     to-shape apparel articles assembled in beneficiary countries.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.
     Present law
       Draft regulations issued by Customs to implement P.L. 106-
     200 deny preferential access to garments that are cut both in 
     the United States and beneficiary countries, on the rationale 
     that the legislation does not specifically list this 
     variation in processing (the so called ``hybrid cutting 
     problem'').
     House amendment
       Sec. 3107 of H.R. 3009 adds new rules in CBTPA and AGOA to 
     provide preferential treatment for apparel articles that are 
     cut both in the United States and beneficiary countries.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes
       CBI Knit Cap
     Present law
       P.L. 106-200 extended duty-free benefits to knit apparel 
     made in CBI countries from regional fabric made with U.S. 
     yarn and to knit-to-shape apparel (except socks), up to a cap 
     of 250,000,000 square meter equivalents (SMEs), with a growth 
     rate of 16% per year for first 3 years.
     House amendment
       Sec. 3106 of H.R. 2009 would raise this cap to the 
     following amounts: 250,000,000 SMEs for the 1-year period 
     beginning October 1, 2001; 500,000,000 SMEs for the 1-year 
     period beginning on October 1, 2002; 850,000,000 SMEs for the 
     1-year period beginning on October 1, 2003; 970,000,000 SMEs 
     in each succeeding 1-year period through September 30, 2009.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.
       CBI T-shirt cap
     Present law
       P.L. 106-200 extends benefits for an additional category of 
     CBI regional knit apparel products (T-shirts) up to a cap of 
     4.2 million dozen, growing 16% per year for the first 3 
     years.
     House amendment
       Section 3106 of H.R. 3006 would raise this cap to the 
     following amounts: 4,200,000 dozen during the 1-year period 
     beginning October 1, 2001; 9,000,000 dozen for the 1-year 
     period beginning on October 1, 2002; 10,000,000 dozen for the 
     1-year period beginning on October 1, 2003; 12,000,000 dozen 
     in each succeeding 1-year period through September 30, 2009.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.
     Present law
       Section 112(b)(3) of the AGOA provides preferential 
     treatment for apparel made in beneficiary sub-Saharan African 
     countries from ``regional'' fabric (i.e., fabric formed in 
     one or more beneficiary countries) from yarn originating 
     either in the United States or one or more such countries. 
     Section 112(b)(3)(B) establishes a special rule for lesser 
     developed beneficiary sub-Saharan African countries, which 
     provides preferential treatment, through September 30, 2004, 
     for apparel wholly assembled in one or more such countries 
     regardless of the origin of the fabric used to make the 
     articles. Section 112(b)(3)(A) establishes a quantitative 
     limit or ``cap'' on the amount of apparel that may be 
     imported under section 112(b)(3) or section 112(b)(3)(B). 
     This ``cap'' is 1.5 percent of the aggregate square meter 
     equivalents of all apparel articles imported into the United 
     States for the year that began October 1, 2000, and increases 
     in equal increments to 3.5 percent for the year beginning 
     October 1, 2007.
     House amendment
       Section 3107 would clarify that apparel wholly assembled in 
     one or more beneficiary sub-Saharan African countries from 
     components knit-to-shape in one or more such countries from 
     U.S. or regional yarn is eligible for preferential treatment 
     under section 112(b)(3) of AGOA. Similarly, Section 5 would 
     clarify that apparel knit-to-shape and wholly assembled in 
     one or more lesser developed beneficiary sub-Saharan African 
     countries is eligible for preferential treatment, regardless 
     of the origin of the yarn used to make such articles. The 
     House amendment also would increase the ``cap'' by changing 
     the applicable percentages from 1.5 percent to 3 percent in 
     the year that began October 1, 2000, and from 3.5 percent to 
     7 percent in the year beginning October 1, 2007.
     Senate amendment
       No provision.
     Conference agreement
       Conference agreement follows House Amendment accept the 
     increase in the cap is limited to apparel products made with 
     regional or U.S. fabric and yarn. No increases in amounts of 
     apparel made of third-country fabric over current law.
     Present law
       AGOA was supposed to provide duty-free, quota-free 
     treatment to sweaters knit in African beneficiary countries 
     from fine merino wool yarn, regardless of where the yarn was 
     formed. AGOA was supposed to provide duty-free, quota-free 
     treatment to sweaters knit in African beneficiary countries 
     from fine merino wool yarn, regardless of where the yarn was 
     formed. However, due to a drafting problem, the wrong 
     diameter was included, making it impossible to use the 
     provision.
     House amendment
       Section 3107 corrects the yarn diameter in the AGOA 
     legislation so that sweaters knit to shape from merino wool 
     of a specific diameter are eligible.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.


                      Africa: Namibia and Botswana

     Present law
       The GDBs of Botswana and Namibia exceed the LLDC limit of 
     $1500 and therefore these countries are not eligible to use 
     third country fabric for the transition period under the AGOA 
     regional fabric country cap.
     House amendment
       Section 5 allows Namibia and Botswana to use third country 
     fabric for the transition period under the AGOA regional 
     fabric country cap.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.

       Title XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES


       SEC. 4101-- EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES

     Expired law
       Section 505 of the Trade Act of 1974, as amended, provides 
     that no duty-free treatment under Title V (the Generalized 
     System of Preferences) shall remain in effect after September 
     30, 2001.
     House bill
       The House amendment to H.R. 3009 would amend section 505 of 
     the Trade Act of 1974 to authorize an extension through 
     December 31, 2002. It would also provide retroactive relief 
     in that, notwithstanding section 514 of the Tariff Act of 
     1930 or any other provision of law, the entry of any article 
     to which duty-free treatment under Title V of the Trade Act 
     of 1974 would have applied if the entry had been made on 
     September 30. 2001, and was made after September 30, 2001, 
     and before the enactment of this Act, shall be liquidated or 
     reliquidated as free of duty and the Secretary of Treasury 
     shall refund any duty paid, upon proper request filed with 
     the appropriate Customs officer, within 180 days after the 
     date of enactment.
     Senate amendment
       The Senate amendment authorizes an extension of GSP through 
     December 31, 2006. The extension is retroactive to September 
     30, 2001, permitting importers to liquidate or reliquidate 
     entries made since that date and to seek a return of duties 
     paid on goods that would have entered the United States free 
     of duty, but for expiration of GSP.
       The Senate amendment also amends the definition of 
     ``internationally recognized worker rights'' set forth in the 
     GSP statute (section 507(4) of the Trade Act of 1974). 
     Specifically, it adds to that definition ``a prohibition on 
     discrimination with respect to employment and occupation'' 
     and a ``prohibition of the worst forms of child labor.'' 
     These two prohibitions come from the International Labor 
     Organization's 1998 Declaration on Fundamental Principles and 
     Rights at Work, which defines certain worker rights as 
     ``fundamental.''
       The GSP statute identifies certain criteria that the 
     President must take into account in determining whether to 
     designate a country as eligible for GSP benefits. Conversely, 
     a

[[Page 15087]]

     country's lapse in compliance with one or more of these 
     criteria may be grounds for withdrawal, suspension, or 
     limitation of benefits. Whether a country is taking steps to 
     afford its workers internationally recognized worker rights 
     is one of those criteria. The Senate Amendment seeks to make 
     the concept of ``internationally recognized worker rights'' 
     as defined for GSP consistent with the concept as defined by 
     the ILO.
       Finally, the Senate Amendment establishes a new eligibility 
     criterion for GSP: ``A country is ineligible for GSP if it 
     has not taken steps to support the efforts of the United 
     States to combat terrorism.''
     Conference agreement
       The Conference agreement authorizes an extension of GSP 
     through December 31, 2006. Conferees approved the Senate 
     provision to include a prohibition on the worst forms of 
     child labor in the definition of internationally recognized 
     worker rights in Section 507(a) of the Trade Act of 1974. 
     Conferees declined to include the Senate provision on 
     discrimination with respect to employment in the definition 
     of ``international recognized worker rights under Sec. 507 
     (a) of the Trade Act of 1974. Agreement follows the House and 
     the Senate bill with respect to providing retroactive relief.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                 TITLE L--MISCELLANEOUS TRADE BENEFITS

                      Subtitle A--Wool Provisions


   sec. 5101--wool manufacturer payment clarification and technical 
                            corrections act

     Present law
       Title V of the Trade and Development Act of 2000 (Pub. L. 
     No. 106-200) included certain tariff relief for the domestic 
     tailored clothing and textile industries. The relief was 
     largely aimed at reducing the harmful affects of a ``tariff 
     inversion''--i.e., a tariff structure that levies higher 
     duties on the raw material (such as wool fabric) than on the 
     finished goods (such as mens' suits). A component of the 
     relief to the U.S. tailored clothing and textile industry was 
     a refund of duties paid in calendar year 1999, spread out 
     over calendar years 2000, 2001 and 2002. Pub. L. No. 106-
     2000, Sec. 505.
     House amendment
       No provision.
     Senate amendment
       The Senate bill amends section 505 of the Trade and 
     Development Act of 2000 to simplify the process for refunding 
     to eligible parties duties paid in 1999. Specifically, it 
     creates three special refund pools for each of the affected 
     wool articles (fabric, yarn, and fiber and top). Refunds for 
     importing manufacturers will be distributed in three 
     installments--the first and second on or before the date that 
     is 45 days after the date of enactment of the Wool 
     Manufacturer Payment and Clarification and Technical 
     Corrections Act, and the third on or before April 15, 2003. 
     Refunds for nonimporting manufacturers will be distributed in 
     two installments--the first on or before the date that is 120 
     days after the date of enactment of the Wool Manufacturer 
     Payment Clarification and Technical Corrections Act, and the 
     second on or before April 15, 2003.
       The provision also streamlines the paperwork process, in 
     light of the destruction of previously filed claims and 
     supporting information in the September 11, 2001 attacks on 
     the World Trade Center in New York, New York. Finally, the 
     provision identifies all persons eligible for the refunds.
     Conference agreement
       The House recedes to the Senate.


                   sec. 5102--duty suspension on wool

     Present law
       Sections 501(a) and (b) of the Trade and Development Act of 
     2000 provide temporary duty reductions for certain worsted 
     wool fabrics through 2003.
       Section 501(d) limits the aggregate quantity of worsted 
     wool fabrics entered under heading 9902.51.11 from January 1 
     to December 31 of each year, inclusive, to 2,500,000 square 
     meter equivalents, or such other quantity proclaimed by the 
     President pursuant to section 504(b)(3) of the Trade and 
     Development Act. Further, the section limits the aggregate 
     quantity of worsted wool fabrics entered under heading 
     9902.51.12 from January 1 to December 31 of each year, 
     inclusive, to 1,500,000 square meter equivalents, or such 
     other quantity proclaimed by the President pursuant to 
     section 504(b)(3) of the Trade and Development Act.
     House amendment
       No provision.
     Senate bill
       The Senate bill extends the temporary duty reductions on 
     fabrics of worsted wool from 2003 to 2005. The provision 
     increases the limitation on the quantity of imports of 
     worsted wool fabrics entered under heading 9902.51.11 to 
     3,500,000 square meter equivalents in calendar year 2002, and 
     4,500,000 square meter equivalents in calendar year 2003. 
     Imports of worsted wool fabrics entered under heading 
     9902.51.12 are increased to 2,500,000 square meter 
     equivalents in calendar year 2002, and 3,500,000 square meter 
     equivalents in calendar year 2003.
       The bill extends the payments made to manufacturers under 
     section 505 of the Trade and Development Act of 2000 and 
     requires an affidavit that the manufacturer will remain a 
     manufacturer in the United States as of January 1 of the year 
     of payment. The two additional payments will occur as 
     follows: the first to be made after January 1, 2004, but on 
     or before April 15, 2004, and the second after January 1, 
     2005, but on or before April 15, 2005.
       Finally, the bill extends the ``Wool Research Trust Fund'' 
     for two years through 2006.
      Conference agreement
       The House recedes to the Senate.

                      Subtitle B--Other Provisions


               sec. 5201--fund for wto dispute settlement

     Present law
       No applicable section.
     House amendment
       The provision authorizes a settlement fund within the 
     United States Trade Representative's Office in the amount of 
     $50 million for the use in settling disputes that occur 
     related to the World Trade Organization. The Trade 
     Representative must certify to the Secretary of the Treasury 
     that the settlement is in the best interest of the United 
     States in cases of not more than $10 million. For cases above 
     $10 million, the Trade Representative must make the same 
     certification to the United States Congress.
     Senate bill
       No provision.
     Conference agreement
       The Senate recedes to the House.


  sec. 5202--certain steam or other vapor generating boilers used in 
                           nuclear facilities

     Present law
       Under present law, certain steam or other vapor generating 
     boilers used in nuclear facilities imported into the United 
     States prior to December 31, 2003 are charged a duty rate of 
     4.9 percent ad valorem. This rate took effect pursuant to 
     section 1268 of Public Law Number 106-476 (``Tariff 
     Suspension and Trade Act of 2000''). Previously, the rate had 
     been 5.2 percent ad valorem.
     House amendment
       No provision.
     Senate amendment
       Section 203 of the Senate amendment chances the duty rate 
     on certain steam or other vapor generating boilers used in 
     nuclear facilities to zero for such goods entered, or 
     withdrawn from warehouse for consumption, on or after January 
     1, 2002, and on or before December 31, 2006. The provision 
     was intended to lower the cost of inputs into the operation 
     of nuclear facilities and thereby lower the cost of energy to 
     consumers.
     Committee agreement
       The House recedes to the Senate.


            sec. 5203--sugar tariff rate quota circumvention

     Present law
       No applicable section.
     House amendment
       No provision.
     Senate amendment
       The Senate bill establishes a sugar anti-circumvention 
     program which requires the Secretary of Agriculture to 
     identify imports of articles that are circumventing tariff 
     rate quotas on sugars, syrups, or sugar-containing products 
     imposed under chapters 17, 18, 19, and 21 of the Harmonized 
     Tariff Schedule. The Secretary shall then report to the 
     President articles found to be circumventing such tariff-rate 
     quotas. Upon receiving the Secretary's report, the President 
     shall, by proclamation, include any identified article in the 
     appropriate tariff-rate quota provision of the Harmonized 
     Tariff Schedule.
     Conference agreement
       Conferees agreed to a provision directing the Secretary of 
     Agriculture and the Commissioner of Customs shall monitor for 
     sugar circumvention and shall report and make recommendations 
     to Congress and the President.
       This provision amends the Harmonized Tariff Schedule of the 
     United States (``HTSUS'') to make clear in the statute an 
     important element of the ruling of the Court of Appeals for 
     the Federal Circuit in Heartland By-Products, Inc. v. United 
     States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses 
     is one of the foreign substances that must be excluded when 
     calculating the percentage of soluble non-sugar solids under 
     subheading 1702.90.40.
       The provision requires the Secretary of Agriculture and the 
     Commissioner of Customs to establish a monitoring program to 
     identify existing or likely circumvention of the tariff-rate 
     quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The 
     Secretary and the Commissioner shall report the results of 
     their monitoring to Congress and the President every six 
     months, together with data and a description of developments 
     and trends in the composition of trade provided for in such 
     chapters. This report will be made public. The report will 
     discuss any indications that

[[Page 15088]]

     imports of articles not subject to the tariff-rate quotas are 
     being used for commercial extraction of sugar in the United 
     States. Imports of so-called ``high-test molasses'' currently 
     classified under subheading 1703.10.30 will be examined 
     particularly closely for such indications.
       Finally, the Secretary and the Commissioner will include in 
     the report their recommendations for ending circumvention, 
     including their recommendations for legislation. The Managers 
     emphasize that rapid action to stop circumvention is the best 
     way to prevent a problem from developing and that quick 
     administrative or legislative action is preferable to 
     protracted procedures and litigation, as occurred in the 
     Heartland case.

                DIVISION A--TRADE ADJUSTMENT ASSISTANCE


                         sec. 101--short title

     Present law
       No provision.
     House amendment
       Section 101 of H.R. 3009 provides that Division A of the 
     Act may be cited as the ``Trade Adjustment Assistance Reform 
     Act of 2002.''
     Senate amendment
       Section 101 of H.R. 3009 provides that Division A of the 
     Act may be cited as the ``Trade Adjustment Assistance Reform 
     Act of 2002.''
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

              TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM

          Subtitle A--Trade Adjustment Assistance for Workers


  SEC. 111--REAUTHORIZATION OF THE TRADE ADJUSTMENT ASSISTANCE PROGRAM

     Present law
       Current section 245 authorizes to be appropriated to the 
     Department of Labor such sums as may be necessary to carry 
     out the purposes of the TAA and NAFTA-TAA for workers 
     programs for the period October 1, 1998 through September 30, 
     2001. Current section 285 provides for termination of all 
     Trade Adjustment Assistance programs on September 30, 2001, 
     but provides that workers, and firms eligible to receive 
     benefits on or before that date shall continue to be eligible 
     to receive such benefits as though the programs were in 
     effect.
     House amendment
       The House Amendment reauthorized the Trade Adjustment 
     Assistance programs through September 30, 2004.
     Senate amendment
       Section 111 of the Senate bill creates a new section 248 of 
     the Trade Act of 1974 which authorizes to be appropriated to 
     the Department of Labor such sums as may be necessary to 
     carry out the purposes of the Trade Adjustment Assistance for 
     workers program for the period October 1, 2001, through 
     September 30, 2007. Section 701 of the Senate bill amends 
     current section 285 to provide for termination of all Trade 
     Adjustment Assistance programs on September 30, 2007, but 
     provides that workers, and firms, communities, farmers, and 
     fishermen eligible to receive benefits on or before that date 
     shall continue to be eligible to receive such benefits as 
     though the programs were in effect.
     Conference agreement
       Conferees agree to extend the authorization of the Trade 
     Adjustment Assistance programs through September 30, 2007, 
     and to consolidate the NAFTA-TAA program with the regular TAA 
     program.


     sec. 112--filing of petitions and provision of rapid response 
    assistance; expedited review of petitions by secretary of labor

     Present law
       Current sections 221 and 250 set forth requirements 
     concerning who may file a petition for certification of 
     eligibility to apply for TAA and NAFTA-TAA assistance, 
     respectively. Under both programs, petitions may be filed by 
     a group of workers or by their certified or recognized union 
     or other duly authorized representative. TAA petitions are 
     filed with the Secretary of Labor. NAFTA-TAA petitions are 
     filed with the Governor of the relevant State and forwarded 
     by him to the Secretary of Labor. Under section 223, the 
     Secretary of Labor must rule on eligibility within 60 days 
     after a TAA petition is filed. Under section 250, the 
     Governor must make a preliminary eligibility determination 
     within 10 days after a NAFTA-TAA petition is filed, and the 
     Secretary of Labor must make a final eligibility 
     determination within the next 30 days. Section 221 also sets 
     forth notice and hearing obligations of the Secretary of 
     Labor upon receipt of a TAA petition. Section 250 provides 
     that, in the event of preliminary certification of 
     eligibility to apply for NAFTA-TAA benefits, the Governor 
     immediately provide the affected workers with certain rapid 
     response services.
     House amendment
       The House Amendment provided for a shortened period for the 
     Secretary of Labor to consider petitions from 60 days to 40 
     days and for other rapid response assistance to workers.
     Senate amendment
       Section 111 of the Senate bill creates a new section 231 of 
     the Trade Act of 1974, which consolidates the TAA and NAFTA-
     TAA programs by establishing a single program with a single 
     set of group eligibility criteria and a single set of 
     procedures and standards for filing and reviewing petitions, 
     certifying eligibility, and terminating certifications of 
     eligibility.
       Section 231 expands the list of entities that may file a 
     petition for group certification of eligibility to include 
     employers, one-stop operators or one-stop partners, State 
     employment agencies, and any entity to which notice of a 
     plant closing or mass layoff must be given under section 3 of 
     the Worker Adjustment and Retraining Notification Act. 
     Section 231 also provides that the President, or the 
     Committee on Finance of the Senate or the Committee on Ways 
     and Means of the House of Representatives (by resolution), 
     may direct the Secretary of Labor to initiate a certification 
     process under this chapter to determine the eligibility for 
     Trade Adjustment Assistance of a group of workers.
       Section 231 creates a single process for filing and 
     reviewing petitions for Trade Adjustment Assistance for 
     workers, under which all petitions are filed with both the 
     Secretary of Labor and the Governor of the State. Upon filing 
     of the petition, the Governor is required to fulfill the 
     requirements of any agreement entered into with the 
     Department of Labor under section 222, to provide certain 
     rapid response services, and to notify workers on whose 
     behalf a petition has been filed of their potential 
     eligibility for certain existing federal health care, child 
     care, transportation, and other assistance programs. Upon 
     filing the petition, the Secretary of Labor must make his 
     certification determination within 40 days and provide the 
     notice required.
     Conference agreement
       The Senate recedes to the House with a change providing for 
     simultaneous filing of petitions with the Secretary of Labor 
     and State Governor.


                sec. 113--group eligibility requirements

     Present law
       Current law sections 222 and 250 of Title 11 of the Trade 
     Act of 1974 set forth group eligibility criteria. Under TAA, 
     the Secretary must certify a group of workers as eligible to 
     apply for Trade Adjustment Assistance if he determines (1) 
     that a significant number or proportion of the workers in 
     such workers' firm have become or are threatened to become 
     totally or partially separated; (2) sales or production of 
     such firm have decreased absolutely; and (3) imports of 
     articles like or directly competitive with articles produced 
     by such workers' firm contributed importantly to the total or 
     partial separation or threat thereof, and to the decline in 
     sales or production. Under NAFTA-TAA, group eligibility may 
     be based on the same criteria set forth in section 222, but 
     section 250 also provides for NAFTA-TAA eligibility where 
     there has been a shift in production by the workers' firm to 
     Mexico or Canada of articles like or directly competitive 
     with articles which are produced by the firm. Section 222 
     also includes special eligibility provisions with respect to 
     oil and natural gas producers.
     House amendment
       The House Amendment at Section 113 expanded the Trade 
     Adjustment Assistance programs to secondary workers that are 
     suppliers to firms that were certified and which satisfied 
     certain conditions.
     Senate amendment
       Section 111 of the Senate Amendment creates a new section 
     231 under which the eligibility criteria are revised. First, 
     workers are eligible for TAA if the value or volume of 
     imports of articles like or directly competitive with 
     articles produced by that firm have increased and the 
     increase in the value or volume of imports contributed 
     importantly to the workers' separation or threat of 
     separation. Second, eligibility is extended to workers who 
     are separated due to shifts in production to any country, 
     rather than only when the shift in production is to Mexico or 
     Canada. Third, eligibility is extended to adversely affected 
     secondary workers. Eligible secondary workers include workers 
     in supplier firms and, with respect to trade with NAFTA 
     countries, downstream firms. Fourth, a new special 
     eligibility provision is added with respect to taconite 
     pellets.
     Conference agreement
       The Conferees agree to extend coverage of Trade Adjustment 
     Assistance to new categories of workers: 1) secondary workers 
     that supply directly to another firm component parts for 
     articles that were the basis for a certification of 
     eligibility, 2) downstream workers that were affected by 
     trade with Mexico or Canada, and 3) certain workers that have 
     been laid off because their firm has shifted its production 
     to another country that has a free trade agreement with the 
     United States, that has a unilaterally preferential trading 
     arrangement with the United States, or when there has been or 
     is likely to be an increase in imports of the relevant 
     articles.


  sec. 114--qualifying requirements for trade readjustment allowances

     Present law
       Current section 231 establishes qualifying requirements 
     that must be met in order for

[[Page 15089]]

     an individual worker within a certified group to receive 
     Trade Adjustment Assistance. In order to receive trade 
     readjustment allowances, a certified worker must have been 
     separated on or after the eligibility date established in the 
     certification but within 2 years of the date of the 
     certification determination; been employed for at least 26 of 
     the 52 weeks preceding the separation at wages of $30 or more 
     a week; be eligible for and have exhausted unemployment 
     insurance benefits; not be disqualified for extended 
     compensation payable under the Federal-State Extended 
     Unemployment Compensation Act of 1970 by reason of the work 
     acceptance and job search requirements in section 202(a)(3) 
     of that Act; and be enrolled in a training program approved 
     by the Secretary of Labor or have received a training waiver.
     House amendment
       The House Amendment at Section 114 provided for 
     requirements and deadlines for workers to enroll in training.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 235 
     which maintains the individual eligibility requirements in 
     current law, with the exception of revisions to provisions 
     governing bases for granting training waivers.
     Conference agreement
       The Senate recedes to the House, with a change to adopt a 
     training enrollment deadline of 16 weeks after separation.


               SEC. 115--WAIVERS OF TRAINING REQUIREMENTS

     Present law
       Section 231 sets forth permissible bases for granting a 
     training waiver. Pursuant to section 250(d), training waivers 
     are not available in the NAFTA-TAA program.
     House amendment
       The House Amendment provides that all workers who are 
     eligible to apply for Trade Adjustment Assistance may be 
     considered for training waivers and codifies several bases on 
     which the Secretary may grant a waiver.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 235 
     which provides that all workers who are eligible to apply for 
     Trade Adjustment Assistance may be considered for training 
     waivers and codifies several bases on which the Secretary may 
     grant a waiver.
     Conference agreement
       The House receded to the Senate with a change to delete the 
     Senate provision giving the Secretary discretion to grant 
     waivers for ``other'' reasons.


  SEC. 116--AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES

     Present law
       Current section 233 provides that each certified worker may 
     receive trade readjustment allowances for a maximum of 52 
     weeks. Current law also provides that, in most circumstances, 
     a worker is treated as participating in training during any 
     week which is part of a break in training that does not 
     exceed 14 days.
     House amendment
       Section 116 of the House Amendment would add 26 weeks of 
     trade adjustment allowances for those workers who were in 
     training and required the extension of benefits for the 
     purpose of completing training.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 237 
     which increases the maximum time period during which a worker 
     may receive trade adjustment allowances to 78 weeks, extends 
     the permissible duration of a break in training to 30 days, 
     and provides for an additional 26 weeks of income support for 
     workers requiring remedial education. Section 237 also 
     clarifies that the requirement that a worker exhaust 
     unemployment insurance benefits prior to receiving trade 
     adjustment allowances does not apply to any extension of 
     unemployment insurance by a State using its own funds that 
     extends beyond either the 26 week period mandated by Federal 
     law or any additional period provided for under the Federal-
     State Extended Unemployment Compensation Act of 1970 (26 
     U.S.C. 3304 note).
     Conference agreement
       The Senate recedes to the House.


         sec. 117--annual total amount of payments for training

     Present law
       Current section 236 establishes the terms and conditions 
     under which training is available to eligible workers; 
     permits the Secretary of Labor to approve certain specified 
     types of training programs and to pay the costs of approved 
     training and certain supplemental costs, including 
     subsistence and transportation costs, for eligible workers; 
     and caps total annual funding for training under the TAA for 
     workers program at $80 million. Section 250 separately caps 
     training expenditures under the NAFTA-TAA program at $30 
     million annually.
     House amendment
       The House provided $30 million additional funds for the 
     Trade Adjustment Assistance program. Combined with NAFTA 
     Trade Adjustment Assistance, the total training funds 
     available were $140 million.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 240 
     which sets the total funds available for training 
     expenditures under the unified TAA for workers program to 
     $300 million annually.
     Conference agreement
       Conferees agreed to a combined training cap of $220 million 
     for Trade Adjustment Assistance training.


             SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING

     Present law
       No applicable section.
     House amendment
       The House Amendment included provisions related to employer 
     based training including on-the-job training and customized 
     training with partial reimbursements provided to the 
     employer.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 240 
     which revises the list of training programs which the 
     Secretary may approve to include customized training. It also 
     adds a new section 237, which clarifies that the prohibition 
     on payment of trade adjustment allowances to a worker 
     receiving on-the-job training does not apply to a worker 
     receiving on-the-job training does not apply to worker 
     enrolled in a non-paid customized training program.
     Conference agreement
       The Senate recedes to the House.


SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF 
                                  1998

     Present law
       No provision.
     House amendment
       The House Amendment provided multiple provisions related to 
     coordinating efforts under the Trade Adjustment Assistance 
     programs to provide information and benefits to workers under 
     the Workforce Investment Act.
     Senate amendment
       No provision.
     Conference agreement
       Conferees agreed to drop House language with the exception 
     of a provision related to coordinating the delivery of Trade 
     Adjustment Assistance benefits and information at one-stop 
     delivery systems under the Workforce Investment Act.


                      SEC. 120--EXPENDITURE PERIOD

     Present law
       No provision.
     House amendment
       The House amendment provided that certain funds obligated 
     for any fiscal year to carry out activities may be expended 
     by each State in the succeeding two fiscal years.
     Senate amendment
       No provision.
     Conference agreement
       The Senate recedes to the House.


                    SEC. 121--JOB SEARCH ALLOWANCES

     Present law
       Under current section 237, when the Secretary of Labor 
     determines that local employment is not available, an 
     adversely affected worker certified eligible for TAA benefits 
     may receive reimbursement of 90 percent of the cost of 
     necessary job search expenses up to $800.
     House amendment
       No provision.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 241 
     which raises the maximum reimbursement for job search 
     expenses to $1250 per worker.
     Conference agreement
       The House recedes to the Senate.


                    SEC. 122--RELOCATION ALLOWANCES

     Present law
       Under current section 238, when the Secretary of Labor 
     determines that local employment is not available, an 
     adversely affected worker certified eligible for TAA benefits 
     may receive a relocation allowance consisting of (1) 90 
     percent of the reasonable and necessary expenses incurred in 
     transporting a worker and his family, if any, and household 
     effects, and (2) a lump sum equivalent to three times the 
     worker's average weekly wage, up to a maximum payment of 
     $800.
     House amendment
       No provision.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 242 
     which raises the maximum lump sum portion of the relocation 
     allowance to $1,250.
     Conference agreement
       The House recedes to the Senate.


  SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM

     Present law
       Current law authorizes a Trade Adjustment Assistance 
     Program for workers affected by NAFTA trade.
     House amendment
       No provision.

[[Page 15090]]

     Senate amendment
       Section 111 of the Senate Amendment adds a new section 231 
     which combines the TAA and NAFTA-TAA programs, establishing a 
     single program with a single set of group eligibility 
     criteria and a single set of procedures and standards for 
     filing and reviewing petitions, certifying eligibility, and 
     terminating certification of eligibility.
     Conference agreement
       The House recedes to the Senate to the extent of repealing 
     the NAFTA Trade Adjustment Assistance program and creating a 
     single, unified TAA program for workers.


   SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT 
                      ASSISTANCE FOR OLDER WORKERS

     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 111 of the Senate Amendment adds a new section 243 
     which directs the Secretary of Labor, within one year of 
     enactment, to establish a two-year wage insurance pilot 
     program under which a State uses the funds provided to the 
     State for Trade Adjustment allowances to pay to an adversely 
     affected worker certified under section 231, for a period not 
     to exceed two years, a wage subsidy of up to 50 percent of 
     the difference between the wages received by the adversely 
     affected worker from reemployment and the wages received by 
     the adversely affected worker at the time of separation. An 
     adversely affected worker may be eligible to receive a wage 
     subsidy if the worker obtains reemployment not more than 26 
     weeks after the date of separation from the adversely 
     affected employment, is at least 50 years of age, earns not 
     more than $50,000 a year in wages from reemployment, is 
     employed at least 30 hours a week in the reemployment, and 
     does not return to the employment from which the worker was 
     separated. The wage subsidy available to workers in the wage 
     insurance program is 50 percent of the difference between the 
     amount of the wages received by the worker from reemployment 
     and the amount of the wages received by the worker at the 
     time of separation, if the wages the worker receives from 
     reemployment are less than $40,000 a year. The wage subsidy 
     is 25 percent if the wages received by the worker from 
     reemployment are greater than $40,000 a year but not more 
     than $50,000 a year. Total payments made to an adversely 
     affected worker under the wage insurance program may not 
     exceed $5,000 in each year of the 2-year period. A worker 
     participating in the wage insurance program is not eligible 
     to receive any other Trade Adjustment Assistance benefits, 
     unless the Secretary of Labor determines that the worker has 
     shown circumstances that warrant eligibility for training 
     benefits under section 240.
     Conference agreement
       The Conferees agree to create a new alternative Trade 
     Adjustment Assistance program for older workers.


          SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS

     Present law
       No provision.
     House amendment
       The House passed amendment included a declaration of policy 
     and Sense of the Congress related to the responsibility of 
     the Secretary of Labor to provide information to workers 
     related to benefits available to them under the TAA and other 
     federal programs.
     Senate amendment
       Although certain supportive services are available to 
     dislocated workers under WIA, current law makes no express 
     linkage between these services and Trade Adjustment 
     Assistance and TAA certified workers may not be able to 
     access them. Section 111 of the Senate Amendment adds a new 
     section 243 which provides that States may apply for and the 
     Secretary of Labor may make available to adversely affected 
     workers certified under the Trade Adjustment Assistance 
     program supportive services available under WIA, including 
     transportation, child care, and dependent care, that are 
     necessary to enable a worker to participate in or complete 
     training. Section 243 requires the Comptroller General to 
     conduct a study of all assistance provided by the Federal 
     Government for workers facing job loss and economic distress; 
     to submit a report to the Committee on Finance of the Senate 
     and the Committee on Ways and Means of the House of 
     Representatives on the study within one year of enactment of 
     this Act; and to distribute the report to all WIA one-stop 
     partners. Section 243 further provides that each State may 
     conduct a study of its assistance programs for workers facing 
     job loss and economic distress. Each State is eligible for a 
     grant from the Secretary of Labor, not to exceed $50,000, to 
     enable it to conduct the study. In the event that a grant is 
     awarded, the State must, within one year of receiving the 
     grant, provide its report to the Committee on Finance and the 
     Committee on Ways and Means and distribute its report to one-
     stop partners in the State.
     Conference agreement
       The Senate recedes to the House.

           SUBTITLE B--Trade Adjustment Assistance for Firms


    SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM

     Present law
       The Trade Adjustment Assistance for Firms program provides 
     technical assistance to qualifying firms. Current Title 11, 
     Chapter 3, section 251 of the Trade Act of 1974 provides that 
     a firm is eligible to receive Trade Adjustment Assistance 
     under this program if (1) a significant number or proportion 
     of its workers have become or are threatened to become 
     totally or partially separated; (2) sales or production, or 
     both, have decreased absolutely; and (3) increases of imports 
     of articles like or directly competitive with articles which 
     are produced by such firms contributed importantly to the 
     total or partial separations or threat thereof.
       The authorization for the Trade Adjustment Assistance for 
     Finns program expired on September 30, 2001. The TAA for 
     Firms program is currently subject to annual appropnations 
     and is funded as part of the budget of the Economic 
     Development Administration in the Department of Commerce.
     House amendment
       The House passed amendment included a 2 year 
     reauthorization for Trade Adjustment Assistance for Firms.
     Senate amendment
       Section 201 of the Senate Amendment reauthorizes the Trade 
     Adjustment Assistance for Firms program for fiscal years 2002 
     through 2007; expands the definition of qualifying firms to 
     cover shifts in production; and authorizes appropriations to 
     the Department of Commerce in the amount of $16 million 
     annually for fiscal years 2002 through 2007 to carry out the 
     purposes of the Trade Adjustment Assistance for Firms 
     program.
     Conference agreement
       The House recedes to the Senate on the issue of providing a 
     $16 million authorization for Trade Adjustment Assistance for 
     Firms and reauthorizing the program through September 30, 
     2007.

    SUBTITLE C--Trade Adjustment Assistance for Farmers and Ranchers


           SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 401 of the Senate Amendment adds new sections 292-
     298 of the Trade Act of 1974 which create a Trade Adjustment 
     Assistance program for farmers and ranchers in the Department 
     of Agriculture. Under this section, a group of agricultural 
     commodity producers may petition the Secretary of Agriculture 
     for Trade Adjustment Assistance. The Secretary must certify 
     the group as eligible for Trade Adjustment Assistance for 
     farmers if it is determined that the national average price 
     in the most recent marketing year for the commodity produced 
     by the group is less than 80 percent of the national average 
     price in the preceding 5 marketing years and that increases 
     in imports of that commodity contributed importantly to the 
     decline in price.
     Conference agreement
       The House recedes to the Senate with changes. The Conferees 
     agree to include limitations on eligibility based upon 
     adjusted gross income and counter-cyclical payment 
     limitations set forth in the Food Security Act of 1985.


                    SEC. 142--CONFORMING AMENDMENTS

     Present law
       No applicable section.
     House amendment
       No provision.
     Senate amendment
       The Senate Amendment makes conforming amendments to the 
     Trade Act of 1974 concerning the TAA for Farmers program.
     Conference agreement
       Conferees agree to make conforming amendments to the Trade 
     Act of 1974.


          SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN

     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 502 of the Senate Amendment adds new sections 299-
     299(G) which create a Trade Adjustment Assistance program for 
     fishermen in the Department of Commerce. Under this program, 
     a group of fishermen may petition the Secretary of Commerce 
     for Trade Adjustment Assistance. The Secretary must certify 
     the group as eligible for Trade Adjustment Assistance for 
     fisherman if it is determined that the national average price 
     in the most recent marketing year for the fish produced by 
     the group is less than 80 percent of the national average 
     price in the proceeding five marketing years and that 
     increases in imports of that fish contributed importantly to 
     the decline in price.

[[Page 15091]]

     Conference agreement
       Conferees agree to drop Senate Amendment and authorize a 
     study by the Department of Labor to investigate applying TAA 
     to fisherman.

                       Subtitle D--Effective Date


                        SEC. 151--EFFECTIVE DATE

     Present law
       No applicable provision.
     House amendment
       No provision.
     Senate amendment
       Section 801 of the Senate Amendment provides that except as 
     otherwise specified, the amendments to the TAA program shall 
     be effective 90 days after enactment of the Trace Act of 
     2002. The Senate Amendment includes transitional provisions 
     governing the period between expiration of the prior 
     authorizations of TAA for workers and firms and the effective 
     date of the amendments.
     Conference agreement
       The House recedes to the Senate.

  TITLE II: CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS


SEC. 201 (a) AND 202.--CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS 
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENETFIT FROM THE PENSION 
  BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH 
                INSRUANCE COSTS OF ELIGIBLE INDIVIUDALS

     Present Law
       Under present law, the tax treatment of health insurance 
     expenses depends on the individual's circumstances. In 
     general, employer contributions to an accident or health plan 
     are excludable from an employee's gross income (sec. 106).
       Self-employed individuals are entitled to deduct a portion 
     of the amount paid for health insurance expenses for the 
     individual and his or her spouse and dependents. The 
     percentage of deductible expenses is 70 percent in 2002 and 
     100 percent in 2003 and thereafter.
       Individuals other than self-employed individuals who 
     purchase their own health insurance and itemize deductions 
     may deduct their expenses to the extent that their total 
     medical expenses exceed 7.5 percent of adjusted gross income.
       Present law does not provide a tax credit for the purchase 
     of health insurance.
       The health care continuation rules (commonly referred to as 
     ``COBRA'' rules, after the Consolidated Omnibus Budget 
     Reconciliation Act of 1985 in which they were enacted) 
     require that employer-sponsored group health plans of 
     employers with 20 or more employees must offer certain 
     covered employees and their dependents (``qualified 
     beneficiaries'') the option of purchasing continued health 
     coverage in the event of loss of covera-e resulting ftom 
     certain qualifying events. These qualifying events include: 
     termination or reduction in hours of employment, death, 
     divorce or legal separation, enrollment in Medicare, the 
     bankruptcy of the employer, or the end of a child's 
     dependency under a parent's health plan. In general, the 
     maximum period of COBRA coverage is 18 months. An employer is 
     permitted to charge qualified beneficiaries 102 percent of 
     the applicable premium for COBRA coverage.
       Under present law, individuals without access to COBRA are 
     able to purchase individual policies on a guaranteed issue 
     basis without exclusion of coverage for pre-existing 
     conditions if they had 18 months of creditable coverage under 
     an employer sponsored group health plan, governmental plan, 
     or a church plan. Those with access to COBRA are required to 
     exhaust their 18 months of COBRA prior to obtaining a policy 
     on a guaranteed issue basis without exclusion of coverage for 
     pre-existing conditions.
     House amendment
       The House bill provides a refundable tax credit for up to 
     60 percent of the expenses of an eligible individual for 
     qualified health insurance coverage of the eligible 
     individual and his or her spouse or dependents. Eligible 
     individuals are certain TAA eligible workers and PBGC pension 
     beneficiaries. In the case of TAA eligible workers, no more 
     than 12 months of coverage would be eligible for the credit. 
     The amount of the credit would be phased out for taxpayers 
     with modified adjusted gross income between $20,000 and 
     $40,000 for single taxpayers ($40,000 and $80,000 for married 
     taxpayers filing a joint return). The credit would be 
     available on an advance basis pursuant to a program to be 
     established by the Secretary of the Treasury. Insurance that 
     qualifies for the credit includes certain COBRA coverage and 
     certain individual market options.
     Senate amendment
       The Senate amendment provides a refundable credit for 70 
     percent of qualified health insurance expenses. The credit is 
     available with respect to certain TAA eligible workers. The 
     credit is payable on an advance basis pursuant to a program 
     to be established by the Secretary of the Treasury. Insurance 
     that qualifies for the credit includes certain COBRA 
     coverage, certain State-based options, and individual health 
     insurance if certain requirements are satisfied.
     Conference Agreement
       Refundable health insurance credit: in general
       In the case of taxpayers who are eligible individuals, the 
     conference agreement provides a refundable tax credit for 65 
     percent of the taxpayer's expenses for qualified health 
     insurance of the taxpayer and qualifying family members for 
     each eligible coverage month beginning in the taxable year. 
     The credit is available only with respect to amounts paid by 
     the taxpayer.
       Qualifying family members are the taxpayer's spouse and any 
     dependent of the taxpayer with respect to whom the taxpayer 
     is entitled to claim a dependency exemption.\1\ Any 
     individual who has other specified coverage is not a 
     qualifying family member.
---------------------------------------------------------------------------
     \1\Present law allows the custodial parent to release the 
     night to claim the dependency exemption for a child to the 
     noncustodial parent. In addition, if certain requirements are 
     met, the parents may, decide by agreement that the 
     noncustodial parent is entitled to the dependency exemption 
     with respect to a child. In such cases, the provision would 
     treat the child as the dependent of the custodial parent for 
     purposes of the credit.
---------------------------------------------------------------------------
       Persons eligible for the credit
       Eligibility for the credit is determined on a monthly 
     basis. In general, an eligible coverage month is any month 
     if, as of the first day of the month, the taxpayer (1) is an 
     eligible individual, (2) is covered by qualified health 
     insurance, (3) does not have other specified coverage, and 
     (4) is not imprisoned under Federal, State, or local 
     authority. In the case of a joint return, the eligibility 
     requirements are met if at least one spouse satisfies the 
     requirements. An eligible month must begin more than 90 days 
     after the date of enactment.
       An eligible individual is (1) an eligible TAA recipient, 
     (2) an eligible alternative TAA recipient, and (3) an 
     eligible PBGC pension recipient.
       An individual is an eligible TAA recipient during any month 
     if the individual (1) is receiving for any day of such month 
     a trade adjustment allowance\2\ or who would be eligible to 
     receive such an allowance but for the requirement that the 
     individual exhaust unemployment benefits before being 
     eligible to receive an allowance and (2) with respect to such 
     allowance, is covered under a certification issued under 
     subchapter A or D of chapter 2 of title 11 of the Trade Act 
     of 1974. An individual is treated as an eligible TAA 
     recipient during the first month that such individual would 
     otherwise cease to be an eligible TAA recipient.
---------------------------------------------------------------------------
     \2\Part I of subchapter B, or subchapter D. of chapter 2 of 
     title 11 of the Trade Act of 1974.
---------------------------------------------------------------------------
       An individual is an eligible alternative TAA recipient 
     during any month if the individual (1) is a worker described 
     in section 246(a)(3)(B) of the Trade Act of 1974 who is 
     participating in the program established under section 
     246(a)(1) of such Act, and (2) is receiving a benefit for 
     such month under section 246(a)(2) of such Act. An individual 
     is treated as an eligible alternative TAA recipient during 
     the first month that such individual would otherwise cease to 
     be an eligible TAA recipient.
       An individual is a PBGC pension recipient for any month if 
     he or she (1) is age 55 or over as of the first day of the 
     month, and (2) is receiving a benefit any portion of which is 
     paid by the Pension Benefit Guaranty Corporation (``PBGC).
       An otherwise eligible taxpayer is not eligible for the 
     credit for a month if, as of the first day of the month the 
     individual has other specified coverage. Specified coverage 
     would be (1) coverage under any insurance which constitutes 
     medical care (expect for insurance substantially all of the 
     coverage of which is for excepted benefits)\3\ if at least 50 
     percent of the cost of the coverage is paid by an employee\4\ 
     (or former employer) of the individual or his or her spouse 
     or (2) coverage under certain governmental health 
     programs.\5\ A rule aggregating plans of the same employer 
     applies in determining whether the employer pays at least 50 
     percent of the cost

[[Page 15092]]

     of coverage. A person is not an eligible individual if he or 
     she may be claimed as a dependent on another person's tax 
     return. A special rule applies with respect to alternative 
     TAA recipients.
---------------------------------------------------------------------------
     \3\Excepted benefits are: (1) coverage only for accident or 
     disability income or any combination thereof, (2) coverage 
     issued as a supplement to liability insurance; (3) liability 
     insurance. including general liability insurance and 
     automobile liability insurance; (4) worker's compensation or 
     similar insurance; (5) automobile medical payment insurance; 
     (6) credit-only insurance; (7) coverage for on-site medical 
     clinics; (8) other insurance coverage similar to the 
     coverages in (1)-(7) specified in regulations under which 
     benefits for medical care are secondary or incidental to 
     other insurance benefits; (9) limited scope dental or vision 
     benefits; (10) benefits for long-term care, nursing home 
     care, home health care, community-based care, or any 
     combination thereof, and (11) other benefits similar to those 
     in (9) and (10) as specified in regulations; (12) coverage 
     only for a specified disease or illness; (13) hospital 
     indemnity or other fixed indemnity insurance; and (14) 
     Medicare supplemental insurance.
     \4\An amount would be considered paid by the employer if it 
     is excludable from income. Thus. for example, amounts paid 
     for health coverage on a salary reduction basis under an 
     employer plan are considered paid by the employer.
     \5\Specifically, an individual would not be eligible for the 
     credit if, as of the first day of the month, the individual 
     is (1) entitled to benefits under Medicare Part A, enrolled 
     in Medicare Part B, or enrolled in Medicaid or SCHIP, (2) 
     enrolled in a health benefits plan under the Federal 
     Employees Health Benefit Plan, or (3) entitled to receive 
     benefits under chapter 55 of title 10 of the United States 
     Code (relating to military personnel). An individual is not 
     considered to be enrolled in Medicaid solely by reason of 
     receiving immunizations.
---------------------------------------------------------------------------
       Qualified health insurance
       Qualified health insurance eligible for the credit is: (1) 
     COBRA continuation coverage (2) State based continuation 
     coverage provided by the State under a State law that 
     requires such coverage; (3) coverage offered through a 
     qualified State high risk pool; (4) coverage under a health 
     insurance program offered to State employees or a comparable 
     program; (5) coverage through an arrangement entered into by 
     the State and a group health plan, an issuer of health 
     insurance coverage, an administrator, or an employer; (6) 
     coverage offered through a State arrangement with a private 
     sector health care coverage purchasing pool; (7) coverage 
     under a State-operated health plan that does not receive any 
     Federal financial participation; (8) coverage under a group 
     health plan that is available through the employment of the 
     eligible individual's spouse; and (9) coverage under 
     individual health insurance if the eligible individual was 
     covered under individual health insurance during the entire 
     30-day period that ends on the date the individual became 
     separated from the employment which qualified the individual 
     for the TAA allowance, the benefit for an eligible 
     alternative TAA recipient, or a pension benefit from the 
     PBGC, whichever applies.\6\
---------------------------------------------------------------------------
     \6\For this purpose, ``individual health insurance'' means 
     any insurance which constitutes medical care offered to 
     individuals other than in connection with a group health 
     plan. Such term does not include Federal- or State-based 
     health insurance coverage.
---------------------------------------------------------------------------
       Qualified health insurance does not include any State-based 
     coverage (i.e., coverage described in (2)-(8) in the 
     preceding paragraph), unless the State has elected to have 
     such coverage treated as qualified health insurance and such 
     coverage meets certain requirements. Such State coverage must 
     provide that each qualifying individual is guaranteed 
     enrollment if the individual pays the premium for enrollment 
     or provides a qualified health insurance costs eligibility 
     certificate and pays the remainder of the premium. In 
     addition, the State-based coverage cannot impose any pre-
     existing condition limitation with respect to qualifying 
     individuals. State-based coverage cannot require a qualifying 
     individual to pay a premium or contribution that is greater 
     than the premium or contribution for a similarly situated 
     individual who is not a qualified individual. Finally, 
     benefits under the State-based coverage must the same as (or 
     substantially similar to) benefits provided to similarly 
     situated individuals who are not qualifying individuals. A 
     qualifying individual is an eligible individual who seeks to 
     enroll in the State-based coverage and who has aggregate 
     periods of creditable coverage\7\ of three months or longer, 
     does not have other specified coverage, and who is not 
     imprisoned. A ``qualifying, individual'' also includes 
     qualified family members of such an eligible individual.
---------------------------------------------------------------------------
     \7\Creditable coverage is determined under the Health Care 
     Portability and Accountability Act (Code sec. 9801 (c)).
---------------------------------------------------------------------------
       Qualified health insurance does not include coverage under 
     a flexible spending or similar arrangement or any insurance 
     if substantially all of the coverage is of excepted benefits.
       Other rules
       Amounts taken into account in determining the credit could 
     not be taken into account in determining the amount allowable 
     under the itemized deduction for medical expenses or the 
     deduction for health insurance expenses of self-employed 
     individuals. Amounts distributed from a medical savings 
     account would not be eligible for the credit. The amount of 
     the credit is reduced by any credit received on an advance 
     basis. Married taxpayers filing separate returns are eligible 
     for the credit; however, if both spouses are eligible 
     individuals and the spouses file a separate return, then the 
     spouse of the taxpayer is not a qualifying family member.
       The Secretary of the Treasury is authorized to prescribe 
     such regulations and other guidance as may be necessary or 
     appropriate to carry out the provision.
       Advance payment of refundable health insurance credit; 
           reporting requirements
       The conference agreement provides for payment of the credit 
     on an advance basis (i.e., prior to the filing of the 
     taxpayer's return) pursuant to a program to be established by 
     the Secretary of the Treasury no later than August 1, 2003. 
     Such program is to provide for making payments on behalf of 
     certified individuals to providers of qualified health 
     insurance. In order to receive the credit on an advance 
     basis, a qualified health insurance costs credit eligibility 
     certificate would have to be in effect for the taxpayer. A 
     qualified health insurance costs credit eligibility 
     certificate is a written statement that an individual is an 
     eligible individual for purposes of the credit, provides such 
     information as the Secretary of the Treasury may require, and 
     is provided by the Secretary of Labor or the PBGC (as 
     appropriate) or such other person or entity designated by the 
     Secretary.
       The conference report permits the disclosure of return 
     information of certified individuals to providers of health 
     insurance information to the extent necessary to carry out 
     the advance payment mechanism.
       The conference report provides that any person who receives 
     payments during a calendar year for qualified health 
     insurance and claims a reimbursement for an advance credit 
     amount is to file an information return with respect to each 
     individual from whom such payments were received or for whom 
     such a reimbursement is claimed. The return is to be in such 
     form as the Secretary may prescribe and is to contain the 
     name, address, and taxpayer identification number of the 
     individual and any other individual on the same health 
     insurance policy, the aggregate of the advance credit amounts 
     provided, the number of months for which advance credit 
     amounts are provided, and such other information as the 
     Secretary may prescribe. The conference report requires that 
     similar information be provided to the individual no later 
     than January 31 of the year following the year for which the 
     information return is made.

                             Effective Date

       The provision is generally effective with respect to 
     taxable years beginning after December 31, 2001. The 
     provision relating to the advance payment mechanism to be 
     developed by the Secretary would be effective on the date of 
     enactment.

                  TITLE III.--CUSTOMS REAUTHORIZATION

               Subtitle A--United States Customs Service

  CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL 
                               OPERATIONS


                         SEC. 301--SHORT TITLE

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House provides that 
     the Act may be cited as the ``Customs Border Security Act of 
     2002.''
     Senate amendment
       The Senate amendment is identical.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment


SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS, 
         COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION

     Present law
       The statutory basis for authorization of appropriations for 
     Customs is section 301 (b)(1) of the Customs Procedural and 
     Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as 
     amended by section 8102 of the Omnibus Budget Reconciliation 
     Act of 1986 [P.L. 99-509], first outlined separate amounts 
     for non-commercial and commercial operations for the salaries 
     and expenses portion of the Customs authorization. Under 19 
     U.S.C. 2075, Congress has adopted a two-year authorization 
     process to provide Customs with guidance as it plans its 
     budget, as well as guidance from the Committee for the 
     appropriation process.
       The most recent authorization of appropriations for Customs 
     (under section 101 of the Customs and Trade Act of 1990 [P.L. 
     101 382]) provided $118,238,000 for salaries and expenses and 
     $143,047,000 for air and marine interdiction program for FY 
     1991, and $1,247,884,000 for salaries and expenses and 
     $150,199,000 for air and marine interdiction program in FY 
     1992.
     House amendment
       This provision authorizes $1,365,456,000 for FY 2003 and 
     $1,399,592,400 for FY 2004 for noncommercial operations of 
     the Customs Service. It also authorizes $1,642,602,000 for FY 
     2003 and $1,683,667,050 for FY 2004 for commercial operations 
     of the Customs Service. Of the amounts authorized for 
     commercial operations, $308,000,000 is authorized for the 
     automated commercial environment computer system for each 
     fiscal year. The provisions require that the Customs Service 
     provide the Committee on Ways and Means and the Committee on 
     Finance of the Senate with a report demonstrating that the 
     computer system is being built in a cost-effective manner. In 
     addition, the provisions authorizes $170,829,000 for FY 2003 
     and $175,099,725 for FY 2004 for air and marine interdiction 
     operations of the Customs Service. The provision requires 
     submission of out-of-year budget projections to the Ways and 
     Means and Finance Committees.
     Senate amendment
       This provision authorizes $886,513,000 for FY 2003 and 
     $909,471,000 for FY 2004 for noncommercial operations of the 
     Customs Service. It also authorizes $1,603,482,000 for FY 
     2003 and $1,645,009,000 for FY 2004 for commercial operations 
     of the Customs Service. Of the amounts authorized for 
     commercial operations, $308,000,000 is authorized for the 
     automated commercial environment computer system for each 
     fiscal year. The provisions require that the Customs Service 
     provide the Committee on Ways and Means and the Committee on 
     Finance of the Senate with a report demonstrating that the 
     computer system is being built in a cost-effective manner. In 
     addition, the provisions authorizes $181,860,000 for FY 2003 
     and $186,570,000 for FY 2004 for air and marine

[[Page 15093]]

     interdiction operations of the Customs Service. The provision 
     requires submission of out-of-year budget projections to the 
     Ways and Means and Finance Committees.
     Conference agreement
       The Senate recedes to House.


 SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR 
   THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND 
                  FLORIDA AND THE GULF COAST SEAPORTS

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     that $90,244,000 of the FY 2003 appropriations be available 
     until expended for acquisition and other expenses associated 
     with implementation and deployment of terrorist and narcotics 
     detection equipment along the United States-Mexico border, 
     the United States-Canada border, and Florida and the Gulf 
     seaports. The equipment would include vehicle and inspection 
     systems. The provision would require that $9,000,000 of the 
     FY 2004 appropriations be used for maintenance of equipment 
     described above. This section would also provide the 
     Commissioner of Customs with flexibility in using these funds 
     and would allow for the acquisition of new updated technology 
     not anticipated when this bill was drafted. Nothing in the 
     language of the bill is intended to prevent the Commissioner 
     of Customs from dedicating resources to specific ports not 
     identified in the bill.
       The equipment would include vehicle and container 
     inspection systems, mobile truck x-rays, upgrades to fixed-
     site truck x-rays, pallet x-rays, busters, contraband 
     detection kits, ultrasonic container inspection units, 
     automated targeting systems, rapid tire deflator systems, 
     portable Treasury Enforcement Communications Systems 
     terminals, remote surveillance camera systems, weigh-in-
     motion sensors, vehicle counters, spotter camera systems, 
     inbound commercial truck transponders, narcotics vapor and 
     particle detectors, and license plate reader automatic 
     targeting software.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


        SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     Customs to measure specifically the effectiveness of the 
     resources dedicated in sections 312 as part of its annual 
     performance plan.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

    Subtitle B--Child Cyber-Smuggling Center of the Customs Service


SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD 
                 PORNOGRAPHY/CHILD SEXUAL EXPLOITATION

     Present law
       Customs enforcement responsibilities include enforcement of 
     U.S. laws to prevent border trafficking relating to child 
     pornography, intellectual property rights violations, money 
     laundering, and illegal arms. Funding for these activities 
     has been included in the Customs general account.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     authorize $10 million for Customs to carry out its program to 
     combat on-line child sex predators. Of that amount, $375,000 
     would be dedicated to the National Center for Missing 
     Children for the operation of its child pornography cyber 
     tipline.
     Senate amendment
       The Senate amendment is the same as the House anendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

                  CHAPTER 2--MISCELLANEOUS PROVISIONS


  SEC. 331--ADDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER

     Present law
       No applicable section.
     House Amendment
       H.R. 3009 as amended and passed by the House earmarks $25 
     million and 285 new staff hires for Customs to use at the 
     U.S.-Canada border.
     Senate amendment
       The Senate amendment is the same as the House Amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


   SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE 
                            CUSTOMS SERVICE

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House requires 
     Customs to conduct a study of current personnel practices 
     including: performance standards; the effect and impact of 
     the collective bargaining process on Customs drug 
     interdiction efforts; and a comparison of duty rotations 
     policies of Customs and other federal agencies employing 
     similarly situated personnel.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


    SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING 
                   PROCEDURES OF THE CUSTOMS SERVICE

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     Customs to conduct a study to ensure that appropriate 
     training is being provided to personnel who are responsible 
     for financial auditing of importers. Customs would 
     specifically report on how its audit personnel protect the 
     privacy and trade secrets of importers.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


 SEC. 334--ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM; 
                                REPORTS

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would mandate 
     the imposition of a cost accounting system in order for 
     Customs to effectively explain its expenditures. Such a 
     system would provide compliance with the core financial 
     system requirements of the Joint Financial Management 
     Improvement Program (JFMIP), which is a joint and cooperative 
     undertaking of the U.S. Department of the Treasury, the 
     General Accounting Office, the Office of Management and 
     Budget, and the Office of Personnel Management working in 
     cooperation with each other and other agencies to improve 
     financial management practices in government. That Program 
     has statutory authorization in the Budget and Accounting 
     Procedures Act of 1950 (31 U.S.C. 65).
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


   SEC. 335--STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTIVE 
                                RULINGS

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     the Comptroller General to prepare a report to determine 
     whether Customs has improved its timeliness in providing 
     prospective rulings.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


        SEC. 336--STUDY AND REPORT RELATING TO CUSTOMS USER FEES

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     the Comptroller General to prepare a confidential report to 
     determine whether current user fees are appropriately set at 
     a level commensurate with the service provided for the fee. 
     The Comptroller General is authorized to recommend the 
     appropriate level for customs user fees.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

[[Page 15094]]

  SEC. 337--FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES

     Present law
       Current law provides for direct reimbursement by courier 
     facilities of expenses incurred by Customs conducting 
     inspections at those facilities.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     establish a per item fee of sixty-six cents to cover Customs 
     expenses. This amount could be lowered to more than thirty-
     five cents or raised to no more than $1.00 by the Secretary 
     of the Treasury after a rulemaking process to reevaluate the 
     expenses incurred by Customs in providing inspectional 
     services.
     Senate amendment
       No provision.
     Conference agreement
       The Senate recedes to the House.


             SEC. 338--NATIONAL CUSTOMS AUTOMATION PROGRAM

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would empower 
     the Secretary to require the electronic submission of any 
     information required to be submitted to the Customs Service.
     Senate amendment
       No provision.
     Conference agreement
       The Senate recedes to the House.


     SEC. 339--AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING

     Present law
       No applicable section.
     House amendment
       No provision.
     Senate amendment
       The Senate Amendment authorizes the appropriation to the 
     Department of Treasury such sums as may be necessary to 
     increase the annual pay of journeyman Customs inspectors and 
     Canine Enforcement Officers who have completed at least one 
     year of service and are being paid at a GS-9 level, from GS-9 
     to GS-11. The Senate provision also authorizes an increase in 
     pay of support staff.
     Conference agreement
       The House recedes to the Senate.

                  CHAPTER 4--ANTITERRORISM PROVISIONS


     SEC. 341--IMMUNITY FOR CUSTOMS OFFICERS THAT ACT IN GOOD FAITH

     Present law
       Currently, Customs officers are entitled to qualified 
     immunity in civil suits brought by persons, who were searched 
     upon arrival in the United States. Qualified immunity 
     protects officers from liability if they can establish that 
     their actions did not violate any clearly established 
     constitutional or statutory rights.
     House amendment
       H.R. 3009 as amended and passed by the House would protect 
     Customs officers by providing them immunity from lawsuits 
     stemming from personal searches of people entering the 
     country so long as the officers conduct the searches in good 
     faith.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes to the House, but conferees qualify the 
     provision by adding that the means used to effectuate such 
     searches must be reasonable. To be covered by this immunity 
     provision, inspectors must follow Customs Service inspection 
     rules including the rule against profiling against race, 
     religions, or ethnic background.


SEC. 342--EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING 
                         OF THE CUSTOMS SERVICE

     Present law
       Present law places numerous restrictions on and, in some 
     instances, precludes the Secretary of the Treasury or Customs 
     from making any adjustments to ports and staff. 19 U.S.C. 
     1318 requires a Presidential proclamation of an emergency and 
     authorization to the Secretary of the Treasury only to extend 
     the time for performance of legally required acts during an 
     emergency. No other emergency powers statute for Customs 
     exists.
     House amendment
       H.R. 3009 as amended and passed by the House would permit 
     the Secretary of the Treasury, if the President declares a 
     national emergency or if necessary to address specific 
     threats to human life or national interests, to eliminate, 
     consolidate, or relocate Customs ports and offices and to 
     alter staffing levels, services rendered and hours of 
     operations at those locations. In addition, the amendment 
     would permit the Commissioner of Customs, when necessary to 
     address threats to human life or national interests, to close 
     temporarily any Customs office or port or take any other 
     lesser action necessary to respond to the specific threat. 
     The Secretary or the Commissioner would be required to notify 
     Congress of any action taken under this proposal within 72 
     hours.
     Senate amendment
       The Senate amendment is the same as the House Amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


 SECS. 343 & 343A--MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO 
            AND PASSENGERS; SECURE SYSTEMS OF TRANSPORTATION

     Present law
       Currently, commercial carriers bringing passengers or cargo 
     into or out of the country have no obligation to provide 
     Customs with such information in advance.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     every air, land, or water-based commercial carrier to file an 
     electronic manifest describing all passengers with Customs 
     before entering or leaving the country. There is a similar 
     requirement for cargo entering the country. Specific 
     information required in the advanced manifest system would be 
     developed by Treasury in regulations.
     Senate amendment
       The Senate Amendment is similar to the House Amendment. 
     However, with respect to cargo, the Senate Amendment applies 
     to out-bound as well as in-bound shipments.
     Conference agreement
       The conferees agree to direct the Secretary of the Treasury 
     to promulgate regulations pertaining to the electronic 
     transmission to the Customs Service of information relevant 
     to aviation, maritime, and surface transportation safety and 
     security prior to a cargo carrier's arrival in or departure 
     from the United States. The agreement sets forth parameters 
     for the Secretary to follow in developing these regulations. 
     For example, the parameters require that the regulations be 
     flexible with respect to the commercial and operational 
     aspects of different modes of transportation. They also 
     require that, in general, the Customs Service seek 
     information from parties most likely to have direct knowledge 
     of the information at issue. The conferees also agree to 
     amendment of the Tariff Act of 1930 to establish requirements 
     concerning proper documentation of ocean-bound cargo prior to 
     a vessel's departure. Finally, the conferees agree to direct 
     the Secretary of the Treasury to establish a task force to 
     evaluate, prototype and certify secure systems of 
     transportation.


 SEC. 344--BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND 
                                  MAIL

     Present law
       Although Customs currently searches all inbound mail, and 
     although it searches outbound mail sent via private carriers, 
     outbound mail carried by the Postal Service is not subject to 
     search.
     House amendment
       H.R. 3009 as amended and passed by the House would enable 
     Customs officers to search outbound U.S. mail for unreported 
     monetary instruments, weapons of mass destruction, firearms, 
     and other contraband used by terrorists. However, reading of 
     mail would not be authorized absent Customs officers 
     obtaining a search warrant or consent.
     Senate amendment
       The Senate Amendment is the same as the House Amendment 
     with respect to mail weighing in excess of 16 ounces. 
     However, under the Senate Amendment, the Customs Service 
     would be required to obtain a warrant in order to search mail 
     weighing 16 ounces or less. The Senate Amendment also 
     requires the Secretary of State to determine whether it is 
     consistent with international law and U.S. treaty obligations 
     for the Customs Service to search mail transiting the United 
     States between two foreign countries. The Customs Service 
     would be authorized to search such mail only after the 
     Secretary of State determined that such measures are 
     consistent with international law and U.S. treaty 
     obligations.
     Conference agreement
       The House recedes to the Senate.


   SEC. 345--Authorization of appropriations for reestablishment of 
                  Customs operations in New York City

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House authorizes 
     funds to reestablish those operations.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

              CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS


  SEC. 351--GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS 
                                SERVICE

     Present law
       No applicable section.

[[Page 15095]]

     House amendment
       H.R. 3009 as amended and passed by the House would direct 
     the Comptroller General to conduct an audit of the systems at 
     the Customs Service to monitor and enforce textile 
     transshipment. The Comptroller General would report on 
     recommendations for improvements.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


  SEC. 352--AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT 
                         ENFORCEMENT OPERATIONS

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     authorize $9,500,000 for FY 2002 to the Customs Service for 
     the purpose of enhancing its textile transshipment 
     enforcement operations. This amount would be in addition to 
     Customs Service's base authorization and the authorization to 
     reestablish the destroyed textile monitoring and enforcement 
     operations at the World Trade Center.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The Senate recedes to the House, but the text is clarified 
     to provide that personnel will also conduct education and 
     outreach in addition to enforcement.


   SEC. 353--IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT

     Present law
       No applicable section.
     House amendment
       H.R. 3009 as amended and passed by the House would earmark 
     approximately $1.3 million within Customs' budget for 
     selected activities related to providing technical assistance 
     to help sub-Saharan African countries develop and implement 
     effective visa and anti-transshipment systems as required by 
     the African Growth and Opportunity Act (title I of Public Law 
     106-200).
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.

      Subtitle B--Office of the United States Trade Representative


               SEC. 361--AUTHORIZATION OF APPROPRIATIONS

     Present law
       The statutory authority for budget authorization for the 
     Office of the United States Trade Representative is section 
     141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171 (a)(1)). 
     The most recent authorization of appropriations for USTR was 
     under section 101 of the Customs and Trade Act of 1990 [P.L. 
     101-382]. Under 19 U.S.C. 2171, Congress has adopted a two-
     year authorization process to provide USTR with guidance as 
     it plans its budget as well as guidance from the Committee 
     for the appropriation process.
     House amendment
       H.R. 3009 as amended and passed by the House authorizes 
     $32,300,000 for FY 2003 and $31,108,000 for FY 2004. The 
     provision requires submission of out-of-year budget 
     projections to the Ways and Means and Finance Committees. In 
     light of the substantial increase in trade negotiation work 
     to be conducted by USTR and the associated need for 
     consultations with Congress, this provision would authorize 
     the addition of two individuals to assist the office of 
     Congressional Affairs.
     Senate amendment
       The Senate amendment authorizes $30,000,000 for FY 2003 and 
     $31,000,000 for FY 2004.
     Conference agreement
       The Senate recedes to the House.

        Subtitle C--United States International Trade Commission


               SEC. 371.--Authorization of appropriations

     Present law
       The statutory authority for budget authorization for the 
     International Trade Commission is section 330(e)(2)(A) of the 
     Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent 
     authorization of appropriations for the ITC was under section 
     101 of the Customs and Trade Act of 1990 [P.L. 101-382]. 
     Under 19 U.S.C. 1330, Congress has adopted a two-year 
     authorization process to provide the ITC with guidance as it 
     plans its budget as well as guidance from the Committees for 
     the appropriation process.
     House amendment
       H.R. 3009 as amended and passed by the House authorizes 
     $54,000,000 for FY 2003 and $57,240,000 for FY 2004. The 
     provision requires submission of out-of-year budget 
     projections to the Ways and Means and Finance Committees.
     Senate amendment
       The Senate amendment authorizes $51,400,000 for FY 2003 and 
     $53,400,000 for FY 2004.
     Conference agreement
       The Senate recedes to the House.

                   Subtitle D--Other Trade Provisions


  SEC. 381.--Increase in aggregate value of articles exempt from duty 
               acquired abroad by United States residents

     Present law
       The Harmonized Tariff Schedule at subheading 9804.00.65 
     currently provides a $400 duty exemption for travelers 
     returning from abroad.
     House amendment
       H.R. 3009 as amended and passed by the House would 
     increased the current $400 duty exemption to $800.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


                 SEC. 382.--Regulatory audit procedures

     Present law
       Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509) 
     provides the authority for Customs to audit persons making 
     entry of merchandise into the U.S. In the course of such 
     audit, Customs auditors may identify discrepancies, including 
     underpayments of duties. However, if there also are 
     overpayments, there is no requirement that such overpayments 
     be offset against the underpayments if the underlying entry 
     has been liquidated.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     that when conducting an audit, Customs must recognize and 
     offset overpayments and overdeclarations of duties, 
     quantities and values against underpayments and 
     underdeclarations. As an example, if during an audit Customs 
     finds that an importer has underpaid duties associated with 
     one entry of merchandise by $100 but has also overpaid duties 
     from another entry of merchandise by $25, then any assessment 
     by Customs must be the difference of $75.
     Senate amendment
       The Senate amendment is the same as the House amendment.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


                 SEC. 383.--Payment of Duties and Fees

     Present law
       Current law at 19 U.S.C. 1505 provides for the collection 
     of duties by the Secretary through regulatory process.
     House amendment
       H.R. 3009 as amended and passed by the House would require 
     duties to be paid within 10 working days without extension. 
     The bill also provides for the Customs Service to create a 
     monthly billing system upon the building of the Automated 
     Commercial Environment.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes to the House.

            DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY

                  TITLE XXI--TRADE PROMOTION AUTHORITY


                  SEC. 2101.--SHORT TITLE AND FINDINGS

     Present law
       No provision.
     House amendment
       The short title of the bill is the ``Bipartisan Trade 
     Promotion Authority Act of 2001.'' Section 2101 of the House 
     amendment to H.R. 3009 states that Congress finds the 
     expansion of international trade is vital to U.S. national 
     security and economic growth, as well as U.S. leadership. 
     Section 2101 also states that the recent pattern of decisions 
     by dispute settlement panels and the Appellate Body of the 
     World Trade Organization to impose obligations and 
     restrictions on the use of antidumping and countervailing 
     measures by WTO members has raised concerns, and Congress is 
     concerned that such bodies appropriately apply the standard 
     of review contained in Article 17.6 of the Antidumping 
     Agreement, to provide deference to a permissible 
     interpretation by a WTO member and to the evaluation by a 
     member of the facts where that evaluation is unbiased and 
     objective and the establishment of the facts is proper.
     Senate amendment
       The short title of the bill is the ``Bipartisan Trade 
     Promotion Authority Act of 2002.'' Section 2101 of the Senate 
     amendment to H.R. 3009 states that Congress finds the 
     expansion of international trade is vital to U.S. national 
     security and economic growth, as well as U.S. leadership. 
     Section 2101 also states that support for continued trade 
     expansion requires that dispute settlement procedures under 
     international trade agreements not add to or diminish the 
     rights and obligations provided in such agreements. It goes 
     on to note a troubling pattern of cases before WTO dispute 
     settlement panels and

[[Page 15096]]

     the WTO Appellate Body that do precisely that.
     Conference agreement
       The Senate recedes to the House with modifications. With 
     respect to the findings, the Conferees believe that, as 
     stated in section 2101(b) of the Conference agreement, 
     support for continued trade expansion requires that dispute 
     settlement procedures under international trade agreements 
     not add to or diminish the rights and obligations provided in 
     such agreements. Therefore, the recent pattern of decisions 
     by dispute settlement panels and the WTO Appellate Body to 
     impose obligations and restrictions on the use of 
     antidumping, countervailing and safeguard measures by WTO 
     members has raised concerns, and Congress is concerned that 
     such bodies appropriately apply the standard of review 
     contained in Article 17.6 of the Antidumping Agreement, to 
     provide deference to a permissible interpretation by a WTO 
     member and to the evaluation by a member of the facts where 
     that evaluation is unbiased and objective and the 
     establishment of the facts is proper.


                SEC. 2102--TRADE NEGOTIATING OBJECTIVES

     Present/expired law
       Section 1101(a) of the Omnibus Trade and Competitiveness 
     Act of 1988 (the 1988 Act) set forth overall negotiating 
     objectives for concluding trade agreements. These objectives 
     were to obtain more open, equitable, and reciprocal market 
     access, the reduction or elimination of barriers and other 
     trade-distorting policies and practices, and a more effective 
     system of international trading disciplines and procedures. 
     Section 1102(b) set forth the following principal trade 
     negotiating objectives: dispute settlement, transparency, 
     developing countries, current account surpluses, trade and 
     monetary coordination, agriculture, unfair trade practices, 
     trade in services, intellectual property, foreign direct 
     investment, safeguards, specific barriers, worker rights, 
     access to high technology, and border taxes.
     House amendment
       Section 2102 of the House amendment to H.R. 3009 would 
     establish the following overall negotiating objectives: 
     obtaining more open, equitable, and reciprocal market access; 
     obtaining the reduction or elimination of barriers and other 
     trade-distorting policies and practices; further 
     strengthening the system of international trading disciplines 
     and procedures, including dispute settlement; fostering 
     economic growth and full employment in the U.S. and the 
     global economy; ensuring that trade and environmental 
     policies are mutually supportive and seeking to protect and 
     preserve the environment and enhance the international means 
     of doing so, while optimizing the use of the world's 
     resources; promoting respect for worker rights and the rights 
     of children consistent with International Labor Organization 
     core labor standards, as defined in the bill; and seeking 
     provisions in trade agreements under which parties strive to 
     ensure that they do not weaken or reduce the protections 
     afforded in domestic environmental and labor laws as an 
     encouragement to trade.
       In addition, section 2102 would establish the principal 
     trade negotiating objectives for concluding trade agreements, 
     as follows:
       Trade barriers and distortions: expanding competitive 
     market opportunities for U.S. exports and obtaining fairer 
     and more open conditions of trade by reducing or eliminating 
     tariff and nontariff barriers and policies and practices of 
     foreign governments directly related to trade that decrease 
     market opportunities for U.S. exports and distort U.S. trade; 
     and obtaining reciprocal tariff and nontariff barrier 
     elimination agreements, with particular attention to products 
     covered in section 111(b) of the Uruguay Round Agreements 
     Act.
       Services: to reduce or eliminate barriers to international 
     trade in services, including regulatory and other barriers, 
     that deny national treatment or unreasonably restrict the 
     establishment or operations of services suppliers.
       Foreign investment: to reduce or eliminate artificial or 
     trade-distorting barriers to trade-related foreign investment 
     and, recognizing that U.S. law on the whole provides a high 
     level of protection for investment, consistent with or 
     greater than the level required by international law, to 
     secure for investors important rights comparable to those 
     that would be available under U.S. legal principles and 
     practice, by:
       reducing or eliminating exceptions to the principle of 
     national treatment; freeing the transfer of funds relating to 
     investments; reducing or eliminating performance 
     requirements, forced technology transfers, and other 
     unreasonable barriers to the establishment and operation of 
     investments;
       seeking to establish standards for expropriation and 
     compensation for expropriation, consistent with United States 
     legal principles and practice;
       providing meaningful procedures for resolving investment 
     disputes including between an investor and a government;
       seeking to improve mechanisms used to resolve disputes 
     between an investor and a government through mechanisms to 
     eliminate frivolous claims and procedures to ensure the 
     efficient selection of arbitrators and the expeditious 
     disposition of claims;
       providing an appellate or similar review mechanism to 
     correct manifestly erroneous interpretations of law; and
       ensuring the fullest measure of transparency in investment 
     disputes by ensuring that all requests for dispute settlement 
     and all proceedings, submissions, findings, and decisions are 
     promptly made public; all hearings are open to the public; 
     and establishing a mechanism for acceptance of amicus curiae 
     submissions.
       Intellectual property: including: promoting adequate and 
     effective protection of intellectual property rights through 
     ensuring accelerated and full implementation of the Agreement 
     on Trade-Related Aspects of Intellectual Property Rights, 
     including strong enforcement; providing strong protection for 
     new and emerging technologies and new methods of transmitting 
     and distributing products embodying intellectual property; 
     and ensuring that standards of protection and enforcement 
     keep pace with technological developments, and in particular 
     ensuring that right holders have the legal and technological 
     means to control the use of their works through the internet 
     and other global communication media.
       Transparency: to increase public access to information 
     regarding trade issues as well as the activities of 
     international trade institutions; to increase openness in 
     international trade fora, including the WTO, by increasing 
     public access to appropriate meetings, proceedings, and 
     submissions, including with regard to dispute settlement and 
     investment; and to increase timely public access to 
     notifications made by WTO member states and the supporting 
     documents.
       Anti-corruption: to obtain high standards and appropriate 
     enforcement mechanisms applicable to persons from all 
     countries participating in a trade agreement that prohibit 
     attempts to influence acts, decisions, or omissions of 
     foreign government; and to ensure that such standards do not 
     place U.S. persons at a competitive disadvantage in 
     international trade.
       Improvement of the WTO and multilateral trade agreements: 
     to achieve full implementation and extend the coverage of the 
     WTO and such agreements to products, sectors, and conditions 
     of trade not adequately covered; and to expand country 
     participation in and enhancement of the Information 
     Technology Agreement (ITA) and other trade agreements.
       Regulatory practices: to achieve increased transparency and 
     opportunity for the participation of affected parties in the 
     development of regulations; to require that proposed 
     regulations be based on sound science, cost-benefit analysis, 
     risk assessment, or other objective evidence; to establish 
     consultative mechanisms among parties to trade agreements to 
     promote increased transparency in developing guidelines, 
     rules, regulations, and laws for government procurement and 
     other regulatory regimes; and to achieve the elimination of 
     government measures such as price controls and reference 
     pricing which deny full market access for United States 
     products.
       Electronic commerce: to ensure that current obligations, 
     rules, disciplines, and commitments under the WTO apply to 
     electronic commerce; to ensure that electronically delivered 
     goods and services receive no less favorable treatment under 
     trade rules and commitments than like products delivered in 
     physical form; and the classification of such goods and 
     services ensures the most liberal trade treatment possible; 
     to ensure that governments refrain from implementing trade-
     related measures that impede electronic commerce; where 
     legitimate policy objectives require domestic regulations 
     that affect electronic commerce, to obtain commitments that 
     any such regulations are the least restrictive on trade, 
     nondiscriminatory, and transparent, and promote an open 
     market environment, and to extend the moratorium of the WTO 
     on duties on electronic transmissions.
       Agriculture: to ensure that the U.S. trade negotiators duly 
     recognize the importance of agricultural issues; to obtain 
     competitive market opportunities for U.S. exports in foreign 
     markets substantially equivalent to the competitive 
     opportunities afforded foreign exports in U.S. markets and to 
     achieve fairer and more open conditions of trade; to reduce 
     or eliminate trade distorting subsidies; to impose 
     disciplines on the operations of state-trading enterprises or 
     similar administrative mechanisms; to eliminate unjustified 
     restrictions on products derived from biotechnology; to 
     eliminate sanitary or phytosanitary restrictions that 
     contravene the Uruguay Round Agreement as they are not based 
     on scientific principles and to improve import relief 
     mechanisms to accommodate the unique aspects of perishable 
     and cyclical agriculture.
       Labor and the environment: to ensure that a party does not 
     fail to effectively enforce its environmental or labor laws, 
     through a sustained or recurring course of action or 
     Inaction, in a manner affecting trade between the United 
     States and that party; to recognize that a party to a trade 
     agreement is effectively enforcing its laws if a course of 
     inaction or inaction reflects a reasonable exercise of 
     discretion or results from a bona fide decision regarding 
     allocation of resources and no retaliation may be authorized 
     based

[[Page 15097]]

     on the exercise of these rights or the right to establish 
     domestic labor standards and levels of environmental 
     protection; to strengthen the capacity of U.S. trading 
     partners to promote respect for core labor standards and to 
     protect the environment through the promotion of sustainable 
     development; to reduce or eliminate government practices or 
     policies that unduly threaten sustainable development; to 
     seek market access for U.S. environmental technologies, 
     goods, and services; and to ensure that labor, environmental, 
     health, or safety policies and practices of parties to trade 
     agreements do not arbitrarily or unjustifiably discriminate 
     against U.S. exports or serve as disguised barriers to trade.
       Dispute settlement and enforcement: to seek provisions in 
     trade agreements providing for resolution of disputes between 
     governments in an effective, timely, transparent, equitable, 
     and reasoned manner requiring determinations based on facts 
     and the principles of the agreement, with the goal of 
     increasing compliance; seek to strengthen the capacity of the 
     WTO Trade Policy Review Mechanism to review compliance; seek 
     provisions encouraging the early identification and 
     settlement of disputes through consultations; seek provisions 
     encouraging trade-expanding compensation; seek provisions to 
     impose a penalty that encourages compliance, is appropriate 
     to the parties, nature, subject matter, and scope of the 
     violation, and has the aim of not adversely affecting parties 
     or interests not party to the dispute while maintaining the 
     effectiveness of the enforcement mechanism; and seek 
     provisions that treat U.S. principal negotiating objectives 
     equally with respect to ability to resort to dispute 
     settlement and availability of equivalent procedures and 
     remedies.
       Extended WTO negotiations: concerning extended WTO 
     negotiations on financial services, civil aircraft, and rules 
     of origin.
     Senate amendment
       The Senate Amendment is substantially similar to the House 
     Amendment, with the exception of several key provisions:
       Small Business: The Senate Amendment contains an overall 
     negotiating objective ``to ensure that trade agreements 
     afford small businesses equal access to international 
     markets, equitable trade benefits, expanded export market 
     opportunities, and provide for the reduction or elimination 
     of trade barriers that disproportionately impact small 
     businesses.''
       Trade in Motor Vehicles and Parts: The Senate Amendment 
     contains a principal negotiating objective on expanding 
     competitive opportunities for exports of U.S. motor vehicles 
     and parts.
       Foreign Investment: The Senate Amendment states as an 
     objective of the United States in the context of investor-
     state dispute settlement ``ensuring that foreign investors in 
     the United States are not accorded greater rights than United 
     States investors in the United States.'' The Senate 
     Amendment's objective with respect to investor-state dispute 
     settlement also differs from the House Amendment in the 
     following respects:
       It sets as an objective'' seeking to establish standards 
     for fair and equitable treatment consistent with United 
     States legal principles and practice, including the principle 
     of due process.''
       It sets deterrence of the filing of frivolous claims as an 
     objective, ``in addition to the prompt elimination of 
     frivolous claims.''
       The Senate Amendment seeks to establish ``procedures to 
     enhance opportunities for public input into the formulation 
     of government positions.''
       The Senate Amendment seeks to establish a single appellate 
     body to review decisions by arbitration panels in investor-
     state dispute settlement cases. Also, unlike the House 
     Amendment, the Senate Amendment does not prescribe a standard 
     of review for an eventual appellate body.
       Intellectual Property: The Senate Amendment contains an 
     objective to respect the Declaration on the TRIPS Agreement 
     and Public Health, adopted by the World Trade Organization at 
     the Fourth Ministerial Conference at Doha, Qatar on November 
     14, 2001.''
       Trade in Agriculture: The Senate Amendment's negotiating 
     objective on export subsidies differs from the House 
     Amendment, stating that an objective of the United States is 
     ``seeking to eliminate all export subsidies on agricultural 
     commodities while maintaining bona fide food aid and 
     preserving U.S. agriculture development and export credit 
     programs that allow the U.S. to compete with other foreign 
     export promotion efforts.'' The Senate Amendment also 
     provides that it is a negotiating objective of the United 
     States to ``strive to complete a general multilateral round 
     in the WTO by January 1, 2005, and seek the broadest market 
     access possible in multilateral, regional, and bilateral 
     negotiations, recognizing the effect that simultaneous sets 
     of negotiations may have on U.S. import-sensitive commodities 
     (including those subject to tariff-rate quotas).''
       Human Rights and Democracy: The Senate Amendment contains a 
     negotiating objective ``to obtain provisions in trade 
     agreements that require parties to those agreements to strive 
     to protect internationally recognized civil, political, and 
     human rights.''
       Dispute Settlement: The Senate Amendment contains a 
     negotiating objective absent in the House Amendment ``to seek 
     improved adherence by panels convened under the WTO 
     Understanding on Rules and Procedures Governing the 
     Settlement of Disputes and by the WTO Appellate Body to the 
     standard of review applicable under the WTO Agreement 
     involved in the dispute, including greater deference, where 
     appropriate, to the fact finding and technical expertise of 
     national investigating authorities.''
       Border Taxes: The Senate Amendment contains an objective 
     absent from the House Amendment on border taxes. The 
     objective seeks ``to obtain a revision of the WTO rules with 
     respect to the treatment of border adjustments for internal 
     taxes to redress the disadvantage to countries relying 
     primarily on direct taxes for revenue rather than indirect 
     taxes.'' The objective is addressed to a decision by the WTO 
     Dispute Settlement Body holding the foreign sales corporation 
     provisions of the Internal Revenue Code to be inconsistent 
     with WTO rules.
       Textiles: The Senate Amendment contains an extensive 
     objective on opening foreign markets to U.S. textile exports. 
     There is no similar provision in the House Amendment.
       Worst Forms of Child Labor: The Senate Amendment contains a 
     negotiating objective to prevent distortions in the conduct 
     of international trade caused by the use of the worst forms 
     of child labor and to redress unfair and illegitimate 
     competition based upon the use of the worst forms of child 
     labor.
     Conference agreement
       The Senate recedes to the House with several modifications. 
     With respect to the overall negotiating objectives, the 
     Conferees agree to the overall negotiating objective 
     regarding small business in section 2102(a)(8) of the Senate 
     amendment. Second, the Conferees agree to an overall 
     negotiating objective to promote universal compliance with 
     ILO Declaration 182 concerning the worst forms of child 
     labor.
       With respect to the principal negotiating objectives, the 
     Conferees agree to expand the negotiating objective on 
     intellectual property to respect the Declaration on the TRIPS 
     Agreement and Public Health, adopted by the WTO at Doha 
     (section 2102(b)(4)(c) of the Senate amendment).
       With respect to the principal negotiating objectives 
     regarding foreign investment, the Conferees believe that it 
     is a priority for negotiators to seek agreements protecting 
     the rights of U.S. investors abroad and ensuring the 
     existence of a neutral investor-state dispute settlement 
     mechanism. At the same time, these protections must be 
     balanced so that they do not come at the expense of making 
     Federal, State and local laws and regulations more vulnerable 
     to successful challenges by foreign investors than by 
     similarly situated U.S. investors.
       No Greater Rights: The House recedes to the Senate with a 
     technical modification to clarify that foreign investors in 
     the United States are not accorded greater substantive rights 
     with respect to investment protections than United States 
     investors in the United States. That is, the reciprocal 
     obligations regarding investment protections that the United 
     States undertakes in pursuing its goals should not result in 
     foreign investors being entitled to compensation for 
     government actions where a similarly situated U.S. investor 
     would not be entitled to any form of relief, while ensuring 
     that U.S. investors abroad can challenge host government 
     measures which violate the terms of the investment agreement. 
     Thus, this language expresses Congress' direction that the 
     substantive investment protections (e.g., expropriation, fair 
     and equitable treatment, and full protection and security) 
     should be consistent with United States legal principles and 
     practice and not provide greater rights to foreign investors 
     in the United States.
       This language applies to substantive protections only and 
     is not applicable to procedural issues, such as access to 
     investor-state dispute settlement. The Conferees recognize 
     that the procedures for resolving disputes between a foreign 
     investor and a government may differ from the procedures for 
     resolving disputes between a domestic investor and a 
     government and may be available at different times during the 
     dispute. Thus, the ``no greater rights'' direction does not, 
     for instance, apply to such issues as the dismissal of 
     frivolous claims, the exhaustion of remedies, access to 
     appellate procedures, or other similar issues.
       The Conferees also agree that negotiators should seek to 
     provide for an appellate body, or similar mechanism to 
     provide coherence to the interpretations of investment 
     provisions in trade agreements.
       With respect to the principal negotiating objective on 
     agriculture, the Conferees agree to section 
     2102(b)(10)(A)(iii) and (xv) of the House amendment, in lieu 
     of section 2102(b)(10)(A)(iii) of the Senate amendment. The 
     Conferees also accept section 2102(b)(10)(A)(xvi) of the 
     Senate amendment on the timing and sequence of WTO 
     agriculture negotiations relative to other negotiations.
       The Conferees agree to section 2102(b)(13)(C) of the Senate 
     amendment, relating to dispute settlement in dumping, 
     subsidy, and safeguard cases, as modified, to

[[Page 15098]]

     seek adherence by WTO panels to the applicable standard of 
     review.
       The Conferees recognize the importance of preserving the 
     ability of the United States to enforce rigorously its trade 
     remedy laws, including the antidumping, countervailing duty 
     and safeguard laws. Because this issue is significant to many 
     Members of Congress in both the House and Senate, the 
     Conferees have made this priority a principal negotiating 
     objective. Negotiators must also avoid agreements that lessen 
     the effectiveness of domestic and international disciplines 
     on unfair trade, as well as domestic and international 
     safeguard provisions. In addition, section 2102(b)(14)(B) 
     directs the President to address and remedy market 
     distortions that lead to dumping and subsidization, including 
     overcapacity, cartelization, and market-access barriers.
       The Conferees agree to section 2012(b)(14) of the Senate 
     amendment stating that the United States should seek a 
     revision of WTO rules on the treatment of border adjustments 
     for internal taxes to redress the disadvantage to countries 
     relying primarily on direct taxes for revenue rather than 
     indirect taxes. The Conferees agree that such a revision of 
     WTO rules is one among other options for the United States, 
     including domestic legislation, to redress such a 
     disadvantage.
       The Conferees agree to include as a principal negotiating 
     objective to obtain competitive market opportunities for U.S. 
     exports of textiles substantially equivalent to those for 
     foreign textiles in the United States.
       The Conferees agree to a principal negotiating objective 
     concerning the worst forms of child labor, to seek 
     commitments by trade agreement parties to vigorously enforce 
     their own laws prohibiting the worst forms of child labor.


             SEC. 2102(c)--PROMOTION OF CERTAIN PRIORITIES

     Present/expired law
       No provision.
     House amendment
       Section 2102(c) of the House amendment to H.R. 3009 sets 
     forth certain priorities for the President to address. These 
     provisions include seeking greater cooperation between WTO 
     and the ILO; seeking to establish consultative mechanisms 
     among parties to trade agreements to strengthen the capacity 
     of U.S. trading partners to promote respect for core labor 
     standards; seeking to seek to establish consultative 
     mechanisms among parties to trade agreements to strengthen 
     the capacity of U.S. trading partners to develop and 
     implement standards for environment and human health based on 
     sound science; conducting environmental reviews of future 
     trade and investment agreements, consistent with Executive 
     Order 13141 and its relevant guidelines; reviewing the impact 
     of future trade agreements on U.S. employment, modeled after 
     Executive Order 13141; taking into account, in negotiating 
     trade agreements, protection of legitimate health or safety, 
     essential security, and consumer interests; requiring the 
     Secretary of Labor to consult with foreign parties to trade 
     negotiations as to their labor laws and providing technical 
     assistance where needed; reporting to Congress on the extent 
     to which parties to an agreement have in effect laws 
     governing exploitative child labor; preserving the ability of 
     the United States to enforce rigorously its trade laws, 
     including antidumping and countervailing duty laws, and 
     avoiding agreements which lessen their effectiveness; 
     ensuring that U.S. exports are not subject to the abusive use 
     of trade laws, including antidumping and countervailing duty 
     laws, by other counties; continuing to promote consideration 
     of Multilateral Environmental Agreements (MEAS) and 
     consulting with parties to such agreements regarding the 
     consistency of any MEA that includes trade measures with 
     existing environmental exceptions under Article XX of the 
     GATT.
       In addition, USTR, twelve months after the imposition of a 
     penalty or remedy by the United States permitted by an 
     agreement to which this Act applies, is to report to the 
     Committee on the effectiveness of remedies applied under U.S. 
     law to enforce U.S. rights under trade agreements. USTR shall 
     address whether the remedy was effective in changing the 
     behavior of the targeted party and whether the remedy had any 
     adverse impact on parties or interests not party to the 
     dispute.
       Finally, section 2102(c) would direct the President to seek 
     to establish consultative mechanisms among parties to trade 
     agreements to examine the trade consequences of significant 
     and unanticipated currency movements and to scutinize whether 
     a foreign government engaged in a pattern of manipulating its 
     currency to promote a competitive advantage in international 
     trade.
     Senate amendment
       With several notable exceptions, the priorities set forth 
     in section 2102(c) of the Senate Amendment are identical to 
     the priorities set forth in the House Amendment. The 
     exceptions are:
       With respect to the study that the President must perform 
     on the impact of future trade agreements on employment, the 
     Senate Amendment requires the President to examine particular 
     criteria, as follows: the impact on job security, the level 
     of compensation of new jobs and existing jobs, the 
     displacement of employment, and the regional distribution of 
     employment, utilizing experience from previous trade 
     agreements and alternative models of employment analysis. The 
     Senate Amendment also requires that the report be made 
     available to the public.
       The Senate Amendment requires that, in connection with new 
     trade agreement negotiations, the President shall ``submit to 
     the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate a 
     meaningful labor rights report of the country, or countries, 
     with respect to which the President is negotiating.''
       The Senate Amendment adds to the House Amendment priority 
     on preserving the ability of the United States to enforce 
     vigorously its trade laws, by including U.S. ``safeguards'' 
     law in the list of laws at issue. This is the U.S. law 
     authorizing the President to provide relief to parties 
     seriously injured or threatened with serious injury due to 
     surges of imports. The priority in the Senate Amendment also 
     directs the President to remedy certain market distorting 
     measures that underlie unfair trade practices.
     Conference agreement
       The Senate recedes to the House amendment with several 
     modifications. With respect to the worst forms of child 
     labor, the Conferees agree to expand section 2102(c)(2) of 
     the House amendment to include the worst forms of child labor 
     within requirement to seek to establish consultative 
     mechanisms to strengthen the capacity of U.S. trading 
     partners to promote respect for core labor standards.
       The Conferees agree to modify section 2105(c)(5) of the 
     House amendment to require the President to report on impact 
     of future trade agreements on US employment, including on 
     labor markets, modeled after E.O. 13141 to the extent 
     appropriate in establishing procedures and criteria, and to 
     make the report public.
       With respect to the labor rights report in section 
     2102(c)(8) of both bills, the Conferees agree to the Senate 
     provision. Furthermore, the Conferees agree to section 
     2107(b)(2)(E) of the Senate amendment to require that 
     guidelines for the Congressional Oversight Group include the 
     time frame for submitting this report.


  SEC. 2102(d)--CONSULTATIONS, ADHERENCE TO OBLIGATIONS UNDER URUGUAY 
                            ROUND AGREEMENTS

     Present/expired law
       No provision.
     House amendment
       Section 2102(d) of the House amendment to H.R. 3009 
     requires that USTR consult closely, and on a timely basis 
     with the Congressional Oversight Group appointed under 
     section 2107. In addition, USTR would be required to consult 
     closely (including immediately before the initialing of an 
     agreement) with the congressional advisers on trade policy 
     and negotiations appointed under section 161 of the Trade Act 
     of 1974, as well as the House Committee on Ways and Means, 
     the Senate Committee on Finance, and the Congressional 
     Oversight Group. With regard to negotiations concerning 
     agriculture trade, USTR would also be required to consult 
     with the House and Senate Committees on Agriculture.
       In determining whether to enter into negotiations with a 
     particular country, section 2102(e) would require the 
     President to take into account whether that country has 
     implemented its obligations under the Uruguay Round 
     Agreements.
     Senate amendment
       Section 2102(d) of the Senate amendment is identical to the 
     House provision in the House amendment to H.R. 3009.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


                 SEC. 2103--TRADE AGREEMENTS AUTHORITY

     Present/expired law
       Tariff proclamation authority. Section 1102(a) of the 1988 
     Act provided authority to the President to proclaim 
     modifications in duties without the need for Congressional 
     approval, subject to certain limitations. Specifically, for 
     rates that exceed 5 percent ad valorem, the President could 
     not reduce any rate of duty to a rate less than 50 percent of 
     the rate of duty applying on the date of enactment. Rates at 
     or below 5 percent could be reduced to zero. Any duty 
     reduction that exceeded 50 percent of an existing duty higher 
     than 5 percent or any tariff increase had to be approved by 
     Congress.
       Staging, authority required that duty reductions on any 
     article could not exceed 3 percent per year, or one-tenth of 
     the total reduction, whichever is greater, except that 
     staging was not required if the International Trade 
     Commission determined there was no U.S. production of that 
     article.
       Negotiation of bilateral agreements. Section 1102(c) of the 
     1988 Act set forth three requirements for the negotiation of 
     a bilateral agreement:
       The foreign country must request the negotiation of the 
     bilateral agreement;
       The agreement must make progress in meeting applicable U.S. 
     trade negotiating objectives; and

[[Page 15099]]

       The President must provide written notice of the 
     negotiations to the Committee on Ways and Means and the 
     Committee on Finance of the Senate and consult with these 
     committees.
       The negotiations could proceed unless either Committee 
     disapproved the negotiations within 60 days prior to the 90 
     calendar days advance notice required of entry into an 
     agreement (described below).
       Negotiation of multilateral non-tariff agreements. With 
     respect to multilateral agreements, section 1102(b) of the 
     1988 Act provided that whenever the President determines that 
     any barrier to, or other distortion of, international trade 
     unduly burdens or restricts the foreign trade of the United 
     States or adversely affects the U.S. economy, or the 
     imposition of any such barrier or distortion is likely to 
     result in such a burden, restriction, or effect, he may enter 
     into a trade agreement with the foreign countries involved. 
     The agreement must provide for the reduction or elimination 
     of such barrier or other distortion or prohibit or limit the 
     imposition of such a barrier or distortion.
       Provisions qualifying for fast track procedures. Section 
     1103(b)(1)(A) of the 1988 Act provided that fast track apply 
     to implementing bills submitted with respect to any trade 
     agreements entered into under the statute. Section 151(b)(1) 
     of the Trade Act of 1974 further defined ``implementing 
     bill'' as a bill containing provisions ``necessary or 
     appropriate'' to implement the trade agreement, as well as 
     provisions approving the agreement and the statement of 
     administrative action.
       Time period. The authority applied with respect to 
     agreements entered into before June 1, 1991, and until June 
     1, 1993 unless Congress passed an extension disapproval 
     resolution. The authority was then extended to April 15, 
     1994, to cover the Uruguay Round of multilateral negotiations 
     under the General Agreement on Tariffs and Trade.
     House amendment
       Section 2103 of the House amendment provides:
       Proclamation authority. Section 2103(a) would provide the 
     President the authority to proclaim, without Congressional 
     approval, certain duty modifications in a manner very similar 
     to the expired provision. Specifically, for rates that exceed 
     5 percent ad valorem, the President would not be authorized 
     to reduce any rate of duty to a rate less than 50 percent of 
     the rate of duty applying on the date of enactment. Rates at 
     or below 5 percent ad valorem could be reduced to zero. Any 
     duty reduction that exceeded 50 percent of an existing duty 
     higher than 5 percent or any tariff increase would have to be 
     approved by Congress.
       In addition, section 2103(a) would not allow the use of 
     tariff proclamation authority on import sensitive 
     agriculture.
       Staging authority would require that duty reductions on any 
     article could not exceed 3 percent per year, or one-tenth of 
     the total reduction, whichever is greater, except that 
     staging would not be required if the International Trade 
     Commission determined there is no U.S. production of that 
     article.
       These limitations would not apply to reciprocal agreements 
     to eliminate or harmonize duties negotiated under the 
     auspices of the World Trade Organization, such as so-called 
     ``zero-for-zero'' negotiations.
       Agreements on tariff and non-tariff barriers. Section 
     2103(b)(1) would authorize the President to enter into a 
     trade agreement with a foreign country whenever he determined 
     that any duty or other import restriction or any other 
     barrier to or distortion of international trade unduly 
     burdens or restricts the foreign trade of the United States 
     or adversely affects the U.S. economy, or the imposition of 
     any such barrier or distortion is likely to result in such a 
     burden, restriction, or effect. The agreement must provide 
     for the reduction or elimination of such barrier or other 
     distortion or prohibit or limit the imposition of such a 
     barrier or distortion. No distinction would be made between 
     bilateral and multilateral agreements.
       Conditions. Section 2103(b)(2) would provide that the 
     special implementing bills procedures may be used only if the 
     agreement makes progress in meeting the applicable objectives 
     set forth in section 2102(a) and (b) and the President 
     satisfies the consultation requirements set forth in section 
     2104.
       Bills qualifying for trade authorities procedures. Section 
     2103(b)(3)(A) would provide that bills implementing trade 
     agreements may qualify for trade promotion authority TPA 
     procedures only if those bills consist solely of the 
     following provisions:
       Provisions approving the trade agreement and statement of 
     administrative action; and
       Provisions necessary or appropriate to implement the trade 
     agreement.
       Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C) would 
     extend trade promotion authority to agreements entered into 
     before June 1, 2005. An extension until June 1, 2007, would 
     be permitted unless Congress passed a disapproval resolution, 
     as described under section 2103(c).
     Senate amendment
       In most respects, section 2103 of the Senate Amendment is 
     identical to section 2103 of the House Amendment. However, 
     there are several key differences, as follows:
       The Senate Amendment limits the President's proclamation 
     authority with respect to ``import sensitive agricultural 
     products,'' a term defined in section 2113(5) of the Senate 
     Amendment. This limitation differs from the limitation in the 
     House Amendment, inasmuch as it includes certain products 
     subject to tariff rate quotas.
       The Senate Amendment contains a provision making a trade 
     agreement implementing bill ineligible for ``fast track'' 
     procedures if the bill modifies, amends, or requires 
     modification or amendment to certain trade remedy laws. A 
     bill that does modify, amend or require modification or 
     amendment to those laws is subject to a point of order in the 
     Senate, which may be waived by a majority vote.
       The Senate Amendment requires the U.S. International Trade 
     Commission to submit a report to Congress on negotiations 
     during the initial period for which the President is granted 
     trade promotion authority. This report would be made in 
     connection with a request by the President to have such 
     authority extended.
     Conference agreement
       The Senate recedes to the House amendment with several 
     modifications. The Conferees agree to the new definition of 
     import sensitive agriculture in section 2103(a)(2)(B), 
     2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to 
     encompass products subject to tariff rate quotas, as well as 
     products subject to the lowest tariff reduction in the 
     Uruguay Round.
       The Conferees agree to section 2103(c)(3)(B) of the Senate 
     amendment, which requires the ITC to submit a report to 
     Congress by May 1, 2005 (if the President seeks extension of 
     TPA until June 2, 2007) analyzing the economic impact on the 
     United States of all trade agreements implemented between 
     enactment and the extension request.


                SEC. 2104--CONSULTATIONS AND ASSESSMENT

     Present/expired law
       Section 102 of the Trade Act of 1974 and sections 1102(d) 
     and 1103 of the 1988 Act set forth the fast track 
     requirements. These provisions required the President, before 
     entering into any trade agreement, to consult with Congress 
     as to the nature of the agreement, how and to what extent the 
     agreement will achieve applicable purposes, policies, and 
     objectives, and all matters relating to agreement 
     implementation. In addition, before entering into an 
     agreement, the President was required to give Congress at 
     least 90 calendar days advance notice of his intent. The 
     purpose of this period was to provide the Congressional 
     Committees of jurisdiction an opportunity to review the 
     proposed agreement before it was signed.
       Section 135(e) of the Trade Act of 1974 required that the 
     Advisory Committee for Trade Policy and Negotiations meet at 
     the conclusion of negotiations for each trade agreement and 
     provide a report as to whether and to what extent the 
     agreement promotes the economic interests of the United 
     States and achieves the applicable overall and principal 
     negotiating objectives of section 1101 of the 1988 Act. The 
     report was due not later than the date on which the President 
     notified Congress of his intent to enter into an agreement. 
     With regard to the Uruguay Round, the report was due 30 days 
     after the date of notification.
     House amendment
       Section 2104 of the House amendment to H.R. 3009 would 
     establish a number of requirements that the President consult 
     with Congress. Specifically, section 2104(a)(1) would require 
     the President to provide written notice and consult with the 
     relevant committees at least 90 calendar days prior to 
     entering into negotiations. Section 2104(a)(c) also provides 
     that President shall meet with the Congressional Oversight 
     Group established under section 2107 upon a request of a 
     majority of its members. Trade promotion authority would not 
     apply to an implementing bill if both Houses separately agree 
     to a procedural disapproval resolution within any 60-day 
     period stating that the Administration has failed to notify 
     or consult with Congress.
       Section 2104(b)(1) would establish a special consultation 
     requirement for agriculture. Specifically, before initiating 
     negotiations concerning tariff reductions in agriculture, the 
     President is to assess whether U.S. tariffs on agriculture 
     products that were bound under the Uruguay Round Agreements 
     are lower than the tariffs bound by that country. In his 
     assessment, the President would also be required to consider 
     whether the tariff levels bound and applied throughout the 
     world with respect to imports from the United States are 
     higher than U.S. tariffs and whether the negotiation provides 
     an opportunity to address any such disparity. The President 
     would be required to consult with the Committees on Ways and 
     Means and Agriculture of the House and the Committees on 
     Finance and Agriculture, Nutrition and Forestry of the Senate 
     concerning the results of this assessment and whether it is 
     appropriate for the United States to agree to further tariff 
     reductions under such circumstances and how all applicable 
     negotiating objectives would be met.
       Section 2104(b)(2) provides special consultations on import 
     sensitive agriculture products. Specifically, before 
     initiating negotiations on agriculture and as soon as

[[Page 15100]]

     practicable with respect to the Free Trade Area of the 
     Americas and WTO negotiations, USTR is to identify import 
     sensitive agriculture products and consult with the 
     Committees on Ways and Means and Agriculture of the House and 
     the Committees on Finance and Agriculture, Nutrition, and 
     Forestry in the Senate concerning whether any further tariff 
     reduction should be appropriate, and whether the identified 
     products face unjustified sanitary or phytosanitary barriers. 
     USTR is also to request that the International Trade 
     Commission prepare an assessment of the probable economic 
     effects of any such tariff reduction on the U.S. industry 
     producing the product and on the U.S. economy as a whole. 
     USTR is to then notify the Committees of those products for 
     which it intends to seek tariff liberalization as well as the 
     reasons. If USTR commences negotiations and then identifies 
     additional import sensitive agriculture products, or a party 
     to the negotiations requests tariff reductions on such a 
     product, then USTR shall notify the Committees as soon as 
     practicable of those products and the reasons for seeking 
     tariff reductions.
       Section 2104(c) would establish a special consultation 
     requirement for textiles. Specifically, before initiating 
     negotiations concerning tariff reductions in textiles and 
     apparel, the President is to assess whether U.S. tariffs on 
     textile and apparel products that were bound under the 
     Uruguay Round Agreements are lower than the tariffs bound by 
     that country. In his assessment, the President would also be 
     required to consider whether the tariff levels bound and 
     applied throughout the world with respect to imports from the 
     United States are higher than U.S. tariffs and whether the 
     negotiation provides an opportunity to address any such 
     disparity. The President would be required to consult with 
     the Committee on Ways and Means of the House and the 
     Committee on Finance of the Senate concerning the results of 
     this assessment and whether it is appropriate for the United 
     States to agree to further tariff reductions under such 
     circumstances and how all applicable negotiating objectives 
     would be met.
       In addition, section 2104(d) would require the President, 
     before entering into any trade agreement, to consult with the 
     relevant Committees concerning the nature of the agreement, 
     how and to what extent the agreement will achieve the 
     applicable purposes, policies, and objectives set forth in 
     the House amendment to H.R. 3009 and all matters relating, to 
     implementation under section 2105, including the general 
     effect of the agreement on U.S. laws.
       Section 2104(e) would require that the report of the 
     Advisory Committee for Trade Policy and Negotiations under 
     section 135(e)(1) of the Trade Act of 1974 be provided not 
     later than 30 days after the date on which the President 
     notifies Congress of his intent to enter into the agreement 
     under section 2105(a)(1)(A).
       Finally, section 2104(f) would require the President, at 
     least 90 days before entering into a trade agreement, to ask 
     the International Trade Commission to assess the agreement, 
     including the likely impact of the agreement on the U.S. 
     economy as a whole, specific industry sectors, and U.S. 
     consumers. That report would be due 90 days from the date 
     after the President enters into the agreement.
     Senate amendment
       The Senate Amendment is substantially similar to the House 
     bill, with the following exceptions:
       Consultations on export subsidies and distorting policies. 
     Section 2104(b)(2)(A)(ii)(III) requires consultations on 
     whether nations producing identified products maintain export 
     subsidies or distorting policies that distort trade and 
     impact of policies on U.S. producers.
       Consultations relating to fishing trade. Section 2104(b)(3) 
     requires that for negotiations relating to fishing trade, the 
     Administration will keep fully apprised and on timely basis 
     consult with the House Resources Committee and the Senate 
     Commerce Committee.
       Special reporting requirements on U.S. trade remedy laws. 
     Section 2104(d) provides that the President, at least 90 
     calendar days before the President enters into a trade 
     agreement, shall notify the House Ways and Means Committee 
     and the Senate Finance Committee in writing any amendments to 
     U.S. antidumping and countervailing duty laws (title VII of 
     the Tariff Act of 1930) or U.S. safeguard provisions (chapter 
     1 of title II of the Trade Act of 1974) that the President 
     proposes to include in the implementing legislation. On the 
     date that the President transmits the notification, the 
     President must also transmit to the Committees a report 
     explaining his reasons for believing that amendments to these 
     trade remedy laws are necessary to implement the trade 
     agreement and his reasons for believing that such amendments 
     are consistent with the negotiating objective on this issue. 
     Not later than 60 calendar days after the date on which the 
     President transmits notification to the relevant committees, 
     the Chairman and ranking members of the House Ways and Means 
     Committee and the Senate Finance Committees shall issue 
     reports stating whether the proposed amendments described in 
     the President's notification are consistent with the 
     negotiating objectives on trade laws.
     Conference agreement
       The Senate recedes to the House with several modifications. 
     The Conferees agree to section 2104(b)(2)(A)(ii)(III) of the 
     Senate amendment, which requires consultations on whether 
     other nations producing identified products maintain export 
     subsidies or distorting policies that distort trade and 
     impact of policies on U.S. producers. In addition, the 
     Conferees agree to section 2104(b)(3) of the Senate 
     amendment, which requires that for negotiations relating to 
     fishing trade, the Administration will keep fully apprised 
     and on timely basis consult with the House Resources 
     Committee and the Senate Commerce Committee.
       Finally, the Conferees agree to include the notification 
     and report on changes to trade remedy laws in sections 
     2104(d)(3)(A) and (B) in the Senate amendment with 
     modifications. Given the priority that Conferees attach to 
     keeping U.S. trade remedy laws strong and ensuring that they 
     remain fully enforceable, the Conference agreement puts in 
     place a process requiring special scrutiny of any impact that 
     trade agreements may have on these laws. The process requires 
     the President, at least 180 calendar days before the day on 
     which he enters into a trade agreement, to report to the 
     Committees on Ways and Means and the Committee on Finance the 
     range of proposals advanced in trade negotiations and may be 
     in the final agreement that could require amendments to title 
     VII of the Tariff Act of 1930 or to chapter 1 of title II of 
     the Trade Act of 1974; and how these proposals relate to the 
     objectives described in section 2102(b)(14).
       The Conference agreement also provides a mechanism for any 
     Member in the House or Senate to introduce at any time after 
     the President's report is issued a nonbinding resolution 
     which states ``that the ___ finds that the proposed changes 
     to U.S. trade remedy laws contained in the report of the 
     President transmitted to the Congress on ___ under section 
     2104(d)(3) of the Bipartisan Trade Promotion Authority Act of 
     2002 with respect to ___, are inconsistent with the 
     negotiating objectives described in section 2102(b)(14) of 
     that Act.'', with the first blank space being filled in with 
     either the ``House of Representatives'' or the ``Senate'', as 
     the case may be, the second blank space filled in with the 
     appropriate date of the report, and the third blank space 
     being filled in with the name of the country or countries 
     involved.
       The resolution is referred to the Ways and Means and Rules 
     Committees in the House and the Finance Committee in the 
     Senate, and is privileged on the floor if it is reported by 
     the Committees. The Conference agreement allows only one 
     resolution (either a nonbinding resolution or a disapproval 
     resolution) per agreement to be eligible for the trade 
     promotion authority procedures contained in sections 152 (d) 
     and (e) of the Trade Act of 1974. The one resolution quota is 
     satisfied for the House only after the Ways and Means 
     Committee reports a resolution, and for the Senate only after 
     the Finance Committee reports a resolution.
       The Conference agreement states that, with respect to 
     agreements entered into with Chile and Singapore, the report 
     referenced in section 2104(d)(3)(A) shall be submitted by the 
     President at least 90 calendar days before the day on which 
     the President enters into a trade agreement with either 
     country.


             SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS

     Present/expired law
       Before entering into the draft agreement, the President was 
     required to give Congress 90 days advance notice (120 days 
     for the Uruguay Round) to provide an opportunity for revision 
     before signature. After entering into the agreement, the 
     President was required to submit formally the draft 
     agreement, implementing legislation, and a statement of 
     administrative action. Once the bill was formally introduced, 
     there was no opportunity to amend any portion of the bill--
     whether on the floor or in committee. Consequently, before 
     the formal introduction took place, the committees of 
     jurisdiction would hold hearings, ``unofficial'' or 
     ``informal'' mark-up sessions and a ``mock conference'' with 
     the Senate committees of jurisdiction in order to develop a 
     draft implementing bill together with the Administration and 
     to make their concerns known to the Administration before it 
     introduced the legislation formally.
       After formal introduction of the implementing bill, the 
     House committees of jurisdiction had 45 legislative days to 
     report the bill, and the House was required to vote on the 
     bill within 15 legislative days after the measure was 
     reported or discharged from the committees. Fifteen 
     additional days were provided for Senate committee 
     consideration (assuming the implementing bill was a revenue 
     bill), and the Senate floor action was required within 15 
     additional days. Accordingly, the maximum period for 
     Congressional consideration of an implementing bill from the 
     date of introduction was 90 legislative days. Amendments to 
     the legislation were not permitted once the bill was 
     introduced; the committee and floor actions consisted of ``up 
     or down'' votes on the bill as introduced.
       Finally, section 1103(d) of the 1988 Act specified that the 
     fast track rules were enacted as an exercise of the 
     rulemaking power

[[Page 15101]]

     of the House and the Senate, with the recognition of the 
     right of either House to change the rules at any time.
     House amendment
       Under Section 2105 of the House amendment to H.R. 3009, the 
     President would be required, at least 90 days before entering 
     into an agreement, to notify Congress of his intent to enter 
     into the agreement. Section 2105(a) also would establish a 
     new requirement that the President, within 60 days of signing 
     an agreement, submit to Congress a preliminary list of 
     existing laws that he considers would be required to bring 
     the United States into compliance with agreement.
       Section 2105(b) would provide that trade promotion 
     authority would not apply if both Houses separately agree to 
     a procedural disapproval resolution within any 60-day period 
     stating that the Administration failed to notify or consult 
     with Congress, which is defined as failing or refusing to 
     consult in accordance with section 2104 or 2105, failing to 
     develop or meet guidelines under section 2107(b), failure to 
     meet with the Congressional Oversight Group, or the agreement 
     fails to make progress in achieving the purposes. policies, 
     priorities, and objectives of the Act. In a change from the 
     expired law, such a resolution may be introduced by any 
     Member of the House or Senate. Only one such privileged 
     resolution would be permitted to be considered per trade 
     agreement per Congress.
       Most of the remaining provisions are identical to the 
     expired law. Specifically, section 2105(a) would require the 
     President, after entering into agreement, to submit formally 
     the draft agreement, the implementing legislation, and a 
     statement of administrative action to Congress, and there 
     would be no time limit to do so, but with the new requirement 
     that the submission be made on a date on which both Houses 
     are in session, the procedures of section 151 of the Trade 
     Act of 1974 would then apply. Specifically, on the same day 
     as the President formally submits the legislation, the bill 
     would be introduced (by request) by the Majority Leaders of 
     the House and the Senate. After formal introduction of the 
     legislation, the House Committees of jurisdiction would have 
     45 legislative days to report the bill. The House would be 
     required to vote on the bill within 15 legislative days after 
     the measure was reported or discharged from the Committees. 
     Fifteen additional days would be provided for Senate 
     Committee consideration (assuming the implementing bill was a 
     revenue bill), and Senate floor action would be required 
     within 15 additional days. Accordingly, the maximum period 
     for Congressional consideration of the implementing bill from 
     the date of introduction would be 90 legislative days.
       As with the expired provisions, once the bill has been 
     formally introduced, no amendments would be permitted either 
     in Committee or floor action, and a straight ``up or down'' 
     vote would be required. Of course, before formal 
     introduction, the bill could be developed by the Committees 
     of jurisdiction together with the Administration during the 
     informal Committee mark-up process.
       Finally, as with the expired provision, section 2105(c) 
     specifies that sections 2105(b) and 3(c) are enacted as an 
     exercise of the rulemaking power of the House and the Senate, 
     with the recognition of the right of either House to change 
     the rules at any time.
     Senate amendment
       The Senate Amendment is substantially similar to the House 
     Bill, with the following exception:
       Reporting requirements. Section 2105(a)(1)(A)(ii) requires 
     the President to transmit to the House Ways and Means 
     Committee and the Senate Finance Committee the notification 
     and report described in section 2104(d)(3)(A) regarding 
     changes to U.S. trade remedy laws.
       Disclosure Requirements. Section 2105(a)(4) of the Senate 
     bill specifies that any trade agreement or understanding with 
     a foreign government (oral or written) not disclosed to 
     Congress will not be considered part of trade agreement 
     approved by Congress and shall have no effect under U.S. law 
     or in any dispute settlement body.
       Senate Procedures. Section 2105(b)(1)(C)(i)(11) provides 
     that any Member of the Senate may introduce a procedural 
     disapproval resolution, and that that resolution will be 
     referred to the Senate Finance Committee. Section 
     2105(b)(1)(C)(iv) provides that the Senate may not consider a 
     disapproval resolution that has not been reported by the 
     Senate Finance Committee.
     Conference agreement
       The Senate recedes to the House amendment with several 
     modifications. The Conferees agree to section 2105(a)(4) of 
     the Senate amendment, which specifies that any trade 
     agreement or understanding with a foreign government (oral or 
     written) not disclosed to Congress will not be considered 
     part of trade agreement approved by Congress and shall have 
     no effect under U.S. law or in any dispute settlement body. 
     The Conferees also agree to sections 2105(b)(1)(C)(i)(11) and 
     (b)(1)(C)(Iv) of the Senate amendment, which applies the same 
     procedures for consideration of bills in the Senate as for 
     the House.
       Finally, the Conferees agree to section 2105(b)(2) of the 
     Senate amendment with modifications, which requires the 
     Secretary of Commerce, in consultation with the Secretaries 
     of State and Treasury, the Attorney General, and the United 
     States Trade Representative, to transmit to Congress a report 
     setting forth the strategy of the executive branch to address 
     concerns of Congress regarding whether dispute settlement 
     panels and the Appellate Body of the WTO have added to 
     obligations or diminished rights of the United States, as 
     described in section 2101(b)(3). Trade authorities procedures 
     shall not apply to any implementing bill with respect to an 
     agreement negotiated under the auspices of the WTO unless the 
     Secretary of Commerce has issued such report prior to 
     December 31, 2002.


            SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS

     Present/expired law
       No provision.
     House amendment
       Section 2106 of the House amendment to H.R. 3009 exempts 
     agreements resulting from ongoing negotiations with Chile or 
     Singapore, an agreement establishing a Free Trade Area of the 
     Americas, and agreements concluded under the auspices of the 
     WTO from prenegotiation consultation requirements of section 
     2104(a) only. However, upon enactment of H.R. 3009, the 
     Administration is required to consult as to those elements 
     set forth in section 2104(a) as soon as feasible.
     Senate Amendment
       Section 2106 of the Senate amendment is substantially 
     similar to the House bill.
     Conference Agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


                SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP

     Present/expired law
       No provision.
     House amendment
       Section 2107 of the House amendment to H.R. 3009 would 
     require the Chairman of the Committee on Ways and Means and 
     the Chairman of the Committee on Finance to chair and 
     convene, sixty days after the effective date of this Act, the 
     Congressional Oversight Group. The Group would be comprised 
     of the following Members of the House: the Chairman and 
     Ranking Member of the Committee on Ways and Means and three 
     additional members of the Committee (not more than two of 
     whom are from the same party), and the Chairman and Ranking 
     Member of the Committees which would have, under the Rules of 
     the House, jurisdiction over provisions of law affected by a 
     trade negotiation. The Group would be comprised of the 
     following Members of the Senate: the Chairman and Ranking 
     Member of the Committee on Finance and three additional 
     members of the Committee (not more than two of whom are from 
     the same party), and the Chairman and Ranking Member of the 
     Committees which would have, under the Rules of the Senate, 
     jurisdiction over provisions of law affected by a trade 
     negotiation.
       Members are to be accredited as official advisors to the 
     U.S. delegation in the negotiations. USTR is to develop 
     guidelines to facilitate the useful and timely exchange of 
     information between USTR and the Group, including regular 
     briefings, access to pertinent documents, and the closest 
     possible coordination at all critical periods during the 
     negotiations, including at negotiation sites.
       Finally, section 2107(c) provides that upon the request of 
     a majority of the Congressional Oversight Group, the 
     President shall meet with the Group before initiating 
     negotiations or any other time concerning the negotiations.
     Senate amendment
       Section 2107 of the Senate amendment is identical to the 
     House amendment to H.R. 3009.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


   SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS

     Present/expired law
       No provision.
     House amendment
       Section 2108 of the House amendment to H.R. 3009 would 
     require the President to submit to the Congress a plan for 
     implementing and enforcing any trade agreement resulting from 
     this Act. The report is to be submitted simultaneously with 
     the text of the agreement and is to include a review of the 
     Executive Branch personnel needed to enforce the agreement as 
     well as an assessment of any U.S. Customs Service 
     infrastructure improvements required. The range of personnel 
     to be addressed in the report is very comprehensive, 
     including U.S. Customs and Department of Agriculture border 
     inspectors, and monitoring and implementing personnel at 
     USTF, the Departments of Agriculture, Commerce, and the 
     Treasury, and any other agencies as may be required.
     Senate amendment
       Section 2108 of the Senate amendment is identical to the 
     House amendment to H.R. 3009.

[[Page 15102]]

     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


                       SEC. 2109--COMMITTEE STAFF

     Present/expired law
       No provision.
     House amendment
       Section 2109 of the House amendment to H.R. 3009 states 
     that the grant of trade promotion authority is likely to 
     increase the activities of the primary committees of 
     jurisdiction and the creation of the Congressional Oversight 
     Group under section 2107 will increase the participation of a 
     broader Members of Congress in the formulation of U.S. trade 
     policy and oversight of the U.S. trade agenda. The provision 
     specifies that the primary committees of jurisdiction should 
     have adequate staff to accommodate these increases in 
     activities.
     Senate amendment
       Section 2109 of the Senate amendment is identical to the 
     House amendment to H.R. 3009.
     Conference agreement
       The Conference agreement follows the House amendment and 
     the Senate amendment.


      SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY

     Present/expired law
       No provision.
     House Amendment
       No provision.
     Senate Amendment
       Section 2111 requires the International Trade Commission, 
     within one year following enactment of this Act, to issue a 
     report regarding the economic impact of the following trade 
     agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the 
     U.S.-Canada Free Trade Agreement; (3) the North American Free 
     Trade Agreement (NAFTA); (4) The Uruguay Round Agreements, 
     which established the World Trade Organization; and (5) The 
     Tokyo Round of Multilateral Trade Negotiations.
     Conference agreement
       The House recedes to the Senate amendment.


                       SEC. 2112--SMALL BUSINESS

     Present/expired law
       No provision.
     House amendment
       No provision.
     Senate amendment
       WTO small business advocate. Section 2112(a) provides that 
     the U.S. Trade Representative shall pursue identification of 
     a small business advocate at the World Trade Organization 
     Secretariat to examine the impact of WTO agreements on the 
     interests of small businesses, address the concerns of small 
     businesses, and recommend ways to address those interests in 
     trade negotiations involving the WTO.
       Assistant USTR responsible for small businesses. Section 
     2112(b) provides that the Assistant United States Trade 
     Representative for Industry and Telecommunications shall be 
     responsible for ensuring that the interests of small 
     businesses are considered in trade negotiations.
     Conference agreement
       The Senate recedes to the House amendment with a 
     modification. The Conferees agree to section 2112(b) of the 
     Senate amendment, which provides that the Assistant USTR for 
     Industry and Telecommunications will be responsible for 
     ensuring that the interests of small business are considered 
     in trade negotiations.

                DIVISION C--ANDEAN TRADE PREFERENCE ACT

                  TITLE XXXI--ANDEAN TRADE PREFERENCE


                         SEC. 3101--SHORT TITLE

     Present law
       No provision.
     House amendment
       Section 3101 of H.R. 3009, as amended, provides that the 
     Act may be cited as the ``Andean Trade Promotion and Drug 
     Eradication Act.''
     Senate amendment
       Section 3101 provides that the Act may be cited as the 
     ``Andean Trade Preference Expansion Act.''
     Conference agreement
       The Senate recedes.


                          SEC. 3102--FINDINGS

     Present law
       No provision.
     House amendment
       Section 1302 contains findings of Congress that:
       (1) Since the Andean Trade Preference Act was enacted in 
     1991, it has had a positive impact on United States trade 
     with Bolivia, Colombia, Ecuador, and Peru. Two-way trade has 
     doubled, with the United States serving as the leading source 
     of imports and leading export market for each of the Andean 
     beneficiary countries. This has resulted in increased jobs 
     and expanded export opportunities in both the United States 
     and the Andean region.
       (2) The Andean Trade Preference Act has been a key element 
     in the United States counter narcotics strategy in the Andean 
     region, promoting export diversification and broad-based 
     economic development that provide sustainable economic 
     alternatives to drug-crop production, strengthening the 
     legitimate economies of Andean countries and creating viable 
     alternatives to illicit trade in coca.
       (3) Notwithstanding the success of the Andean Trade 
     Preference Act, the Andean region remains threatened by 
     political and economic instability and fragility, vulnerable 
     to the consequences of the drug war and fierce global 
     competition for its legitimate trade.
       (4) The continuing instability in the Andean region poses a 
     threat to the security interests of the United States and the 
     world. This problem has been partially addressed through 
     foreign aid, such as Plan Colombia, enacted by Congress in 
     2000. However, foreign aid alone is not sufficient. 
     Enhancement of legitimate trade with the United States 
     provides an alternative means for reviving and stabilizing 
     the economies in the Andean region.
       (5) The Andean Trade Preference Act constitutes a tangible 
     commitment by the United States to the promotion of 
     prosperity, stability, and democracy in the beneficiary 
     countries.
       (6) Renewal and enhancement of the Andean Trade Preference 
     Act will bolster the confidence of domestic private 
     enterprise and foreign investors in the economic prospects of 
     the region, ensuring that legitimate private enterprise can 
     be the engine of economic development and political stability 
     in the region.
       (7) Each of the Andean beneficiary countries is committed 
     to conclude negotiation of a Free Trade Area of the Americas 
     by the year 2005 as a means of enhancing the economic 
     security of the region.
       (8) Temporarily enhancing trade benefits for Andean 
     beneficiaries countries will promote the growth of free 
     enterprise and economic opportunity in these countries and 
     serve the security interests of the United States, the 
     region, and the world.
     Senate amendment
       Section 3101 is identical.
     Conference agreement
       The conference agreement follows the House amendment and 
     the Senate amendment.


        SEC. 3103--ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT

     Articles (Except Apparel) Eligible for Preferential Treatment

     Present law
       The Andean Trade Preference Act (ATPA), enacted on December 
     4, 1991 as title II of Public Law 102-182, authorizes 
     preferential trade benefits for the Andean nations of 
     Bolivia, Colombia, Ecuador, and Peru, similar to those 
     benefits granted to beneficiaries under the Caribbean Basin 
     Initiative program. The ATPA authorizes the President to 
     proclaim duty-free treatment for all eligible articles from 
     Bolivia, Colombia, Ecuador, Peru. This authority applies only 
     to normal column I rates of duty in the Harmonized Tariff 
     Schedule of the United States (HTS); any additional duties 
     imposed under U.S. unfair trade practice laws, such as the 
     antidumping or countervailing duty laws, are not affected by 
     this authority.
       The ATPA contains a list of products that are ineligible 
     for duty-free treatment. More specifically, ATPA duty-free 
     treatment does not apply to textile and apparel articles that 
     are subject to textile agreements; petroleum and petroleum 
     products; footwear not eligible for duty-free treatment under 
     the Generalized System of Preferences; certain watches and 
     watch parts; certain leather products; and sugar, syrups and 
     molasses subject to over-quota rates of duty.
     House amendment
       Section 3103 (a) amends the Andean Trade Preference Act to 
     authorize the President to proclaim duty-free treatment for 
     any of the following articles which were previously excluded 
     from duty-free treatment under the ATPA, if the President 
     determines that the article is not import-sensitive in the 
     context of imports from beneficiary countries:
       (1) Footwear not designated at the time of the effective 
     date of this Act as eligible for the purposes of the 
     Generalized System of Preferences under title V of the Trade 
     Act of 1974;
       (2) Petroleum, or any product derived from petroleum, 
     provided for in headings 2709 and 2710 of the HTS;
       (3) Watches and watch parts (including cases, bracelets and 
     straps), of whatever type including, but not limited to, 
     mechanical, quartz digital or quartz analog, if such watches 
     or watch parts contain any material which is the product of 
     any country with respect to which HTS column 2 rates of duty 
     apply;
       (4) Handbags, luggage, flat goods, work gloves, and leather 
     wearing apparel that--(i) are the product of any beneficiary 
     country; and (ii) were not designated on August 5, 1983, as 
     eligible articles for purposes of the

[[Page 15103]]

     Generalized System of Preferences under title V of the Trade 
     Act of 1974.
       Under H.R. 3009, textiles subject to textile agreements; 
     sugar, syrups and molasses subject to over-quota tariffs; and 
     rum and tafia classified in subheading 2208.40.00 of the HTS 
     would continue to be ineligible for duty-free treatment, as 
     would apparel products other than those specifically 
     described below. Imports of tuna, prepared or preserved in 
     any manner, in airtight containers would receive immediate 
     duty-free treatment.
     Senate amendment
       Section 3102 of the bill replaces the list of excluded 
     products under section 204(b) of the current ATPA with a new 
     provision that extends duty preferences to most of those 
     products. The new preferences take the form of exceptions to 
     the general rule that the excluded products are not eligible 
     for duty-free treatment.
       The enhanced preferences are made available to ``ATPEA 
     beneficiary countries.'' Paragraph (5) of section 204(b) of 
     the ATPA as amended by the present bill defines ATPEA 
     beneficiary countries as those countries previously 
     designated by the President as ``beneficiary countries'' 
     (i.e., Bolivia, Colombia, Ecuador, and Peru) which 
     subsequently are designated by the President as ``ATPEA 
     beneficiary countries,'' based on the President's 
     consideration of additional eligibility criteria.
       In the event that the President did not designate a current 
     ``beneficiary country'' as an ``ATPEA beneficiary country,'' 
     that country would remain eligible for ATPA benefits under 
     the law as expired on December 4, 2001, but would not be 
     eligible for the enhanced benefits provided under the present 
     bill.
       Footwear not eligible for duty-free treatment under GSP 
     receives the same tariff treatment as like products from 
     Mexico, except that duties on articles in particular tariff 
     subheadings are to be reduced by 1/15 per year.
       The Senate Amendment provides special treatment for rum and 
     tafia, allowing them to receive the same tariff treatment as 
     like products from Mexico. The bill also allows certain 
     handbags, luggage, flat goods, work gloves, and leather 
     wearing apparel to receive the same tariff treatment as like 
     products from Mexico.
       Under the bill, the President is authorized to proclaim 
     duty-free treatment for tuna that is harvested by United 
     States or ATPEA vessels, subject to a quantitative yearly cap 
     of 20 percent of the domestic United States tuna pack in the 
     preceding year.
     Conference agreement
       Senate recedes on the authority of President to proclaim 
     duty-free treatment for particular articles which were 
     previously excluded from duty-free treatment under the ATPA, 
     if the President determines that the article is not import-
     sensitive in the context of imports from beneficiary 
     countries.
       Textiles subject to textile agreements; sugar, syrups and 
     molasses subject to over-quota tariffs; and rum and tafia 
     classified in subheading 2208.40.00 of the HTS would continue 
     to be ineligible for duty-free treatment, as would apparel 
     products other than those specifically described below.
       House recedes on the treatment of tuna with an amendment 
     to: 1) retain U.S. or Andean flagged vessel rule of origin 
     requirement in Senate amendment; 2) authorize the President 
     to grant duty-free treatment for Andean exports of tuna 
     packed in flexible (e.g., foil), airtight containers weighing 
     with their contents not more than 6.8 kg each; and 3) update 
     calculation of current MFN tariff-rate quota to be an amount 
     based on 4.8 percent of apparent domestic consumption of tuna 
     in airtight containers rather than domestic production.

                       Eligible Apparel Articles

     Present law
       Under the ATPA, apparel articles are on the list of 
     products excluded from eligibility for duty-free treatment.
     House amendment
       Under Section 3103, the President may proclaim duty-free 
     and quota-free treatment for apparel articles sewn or 
     otherwise assembled in one or more beneficiary countries 
     exclusively from any one or any combination of the following:
       (1) Fabrics or fabric components formed, or components 
     knit-to-shape, in the United States (including fabrics not 
     formed from yarns, if such fabrics are classifiable under 
     heading 5602 or 5603 of the HTS and are formed in the United 
     States).
       (2) Fabrics or fabric components formed, or components 
     knit-to-shape, in one or more beneficiary countries, from 
     yarns formed in one or more beneficiary countries, if such 
     fabrics (including fabrics not formed from yarns, if such 
     fabrics are classifiable under heading 5602 or 5603 of the 
     HTS and are formed in one or more beneficiary countries) are 
     in chief weight of llama, or alpaca.
       (3) Fabrics or yarn not produced in the United States or in 
     the region, to the extent that apparel articles of such 
     fabrics or yarn would be eligible for preferential treatment, 
     without regard to the source of the fabrics or yarn, under 
     Annex 401 of the NAFTA (short supply provisions). Any 
     interested party may request the President to consider such 
     treatment for additional fabrics and yarns on the basis that 
     they cannot be supplied by the domestic industry in 
     commercial quantities in a timely manner, and the President 
     must make a determination within 60 calendar days of 
     receiving the request from the interested party.
       (4) Apparel articles sewn or otherwise assembled in one or 
     more beneficiary countries from fabrics or fabric components 
     formed or components knit-to-shape, in one or more 
     beneficiary countries, from yarns formed in the United States 
     or in one or more beneficiary countries (including fabrics 
     not formed from yarns, if such fabrics are classifiable under 
     heading 5602 or 5603 of the HTS and are formed in one or more 
     beneficiary countries), whether or not the apparel articles 
     are also made from any of the fabrics, fabric components 
     formed, or components knit-to-shape in the United States 
     described in paragraph 1. Imports of apparel made from 
     regional fabric and regional yarn would be capped at 3% of 
     U.S. imports growing to 6% of U.S. imports in 2006, measured 
     in square meter equivalents.
     Senate amendment
       Paragraph (2) of section 204(b) of the ATPA as amended by 
     section 3102 of the present bill extends duty-free treatment 
     to certain textile and apparel articles from ATPEA 
     beneficiary countries. The provision divides articles 
     eligible for this treatment into several different categories 
     and limits duty-free treatment to a period defined as the 
     ``transition period.'' The transition period is defined in 
     paragraph (5) of section 204(b) of the ATPA as amended to be 
     the period from enactment of the present bill through the 
     earlier of February 28, 2006 or establishment of a FTAA.
       In general, the different categories of textile and apparel 
     articles eligible for duty-free treatment are defined 
     according to the origin of the yarn and fabric from which the 
     articles are made. Under the first category, apparel sewn or 
     otherwise assembled in one or more ATPEA beneficiary 
     countries is eligible for duty-free treatment if it is made 
     exclusively from one or a combination of several sub-
     categories of components, as follows:
       (1) United States fabric, fabric components, or knit-to-
     shape components, made from yarns wholly formed in the United 
     States;
       (2) A combination of both United States and ATPEA 
     beneficiary country components knit-to-shape from yarns 
     wholly formed in the United States;
       (3) ATPEA beneficiary country fabric, fabric components, or 
     knit-to-shape components, made from yarns wholly formed in 
     one or more ATPEA beneficiary countries, if the constituent 
     fibers are primarily llama or alpaca hair; and
       (4) Fabrics or yarns, regardless of origin, if such fabrics 
     or yarns have been deemed, under the North American Free 
     Trade Agreement, not to be widely available in commercial 
     quantities in the United States. A separate provision of 
     section 204(b) of the ATPA as amended by the present bill 
     sets forth a process for interested parties to petition the 
     President for inclusion of additional yarns and fabrics in 
     the ``short supply'' list. This process includes obtaining 
     advice from the United States International Trade Commission 
     and industry advisory groups, and consultation with the 
     Committee on Finance of the Senate and the Committee on Ways 
     and Means of the House of Representatives.
       A second category of apparel articles eligible for duty-
     free treatment is apparel articles knit-to-shape (except 
     socks) in one or more ATPEA beneficiary countries from yarns 
     wholly formed in the United States. To qualify under this 
     category, the entire article must be knit-to-shape--as 
     opposed to being assembled from components that are 
     themselves knit-to-shape.
       A third category of apparel articles eligible for duty-free 
     treatment is apparel articles wholly assembled in one or more 
     ATPEA beneficiary countries from fabric or fabric components 
     knit, or components knit-to-shape in one or more ATPEA 
     beneficiary countries from yarns wholly formed in the United 
     States. The quantity of apparel eligible for this benefit is 
     subject to an annual cap. The cap is set at 70 million square 
     meter equivalents for the one-year period beginning March 1, 
     2002. The cap will increase by 16 percent, compounded 
     annually, in each succeeding one-year period, through 
     February 28, 2006.
       Thus, the cap applied to this category in each year 
     following enactment will be as follows:
       70 million square meter equivalents (SME) in the year 
     beginning March 1, 2002;
       81.2 million SME in the year beginning March 1, 2003;
       94.19 million SME in the year beginning March 1, 2004; and
       109.26 million SME in the year beginning March 1, 2005.
       A separate provision makes clear that goods otherwise 
     qualifying under the latter category will not be disqualified 
     if they happen to contain United States fabric made from 
     United States yarn.
       A fourth category of apparel eligible for duty-free 
     treatment under the Senate bill is brassieres that are cut or 
     sewn, or otherwise assembled, in one or more ATPEA 
     beneficiary countries, or in such countries and

[[Page 15104]]

     the United States. This separate category requires that, in 
     the aggregate, brassieres manufactured by a given producer 
     claiming duty-free treatment for such products contain 
     certain quantities of United States fabric.
       A fifth category of textile and apparel eligible for duty-
     free treatment is handloomed, handmade, and folklore 
     articles.
       A final category of textile and apparel goods eligible for 
     duty-free treatment is textile luggage assembled in an ATPEA 
     beneficiary country from fabric and yarns formed in the 
     United States.
       In addition to the foregoing categories, the bill sets 
     forth special rules for determining whether particular 
     textile and apparel articles qualify for duty-free treatment.
     Conference agreement
       In general the conferees agreed to follow the House 
     amendment on apparel provisions with the exception that the 
     House receded to the Senate on the treatment of textile 
     luggage. With respect to category 2 in the House bill 
     relating to fabrics or fabric components formed, or 
     components knit-to-shape, in one or more beneficiary 
     countries, from yarns formed in one or more beneficiary 
     countries, if such fabrics are in chief weight of llama, or 
     alpaca, conferees agreed to include vicuna and calculate 
     product eligibility based on chief value instead of chief 
     weight. Also, conferees agreed to cap imports of apparel made 
     from regional fabric and regional yarn (category 4 in the 
     House bill) at 2% of U.S. imports growing to 5% of U.S. 
     imports in 2006, measured in square meter equivalents.
       It is the intention of the conferees that in cases where 
     fabrics or yarns determined by the President to be in short 
     supply impart the essential character to an article, the 
     remaining textile components may be constructed of fabrics or 
     yarns regardless of origin, as in Annex 401 of the NAFTA. In 
     cases where the fabrics or yarns determined by the President 
     to be in short supply do not impart the essential character 
     of the article, the article shall not be ineligible for 
     preferential treatment under this Act because the article 
     contains the short supply fabric or yarn.

              Special Origin Rule for Nylon Filament Yarn

     House amendment
       No provision.
     Senate amendment
       Articles otherwise eligible for duty-free treatment and 
     quota free treatment under the bill are not ineligible 
     because they contain certain nylon filament yarn (other than 
     elastomeric yarn) from a country that had an FTA with the 
     U.S. in force prior to January 1, 1995.
     Conference agreement
       House recedes.

               Dyeing, Finishing and Printing Requirement

     House amendment
       New requirement that apparel made of U.S. knit or woven 
     fabric assembled in CBTPA country qualifies for benefits only 
     if the U.S. knit or woven fabric is dyed and finished in the 
     United States. Apparel made of U.S. knit or woven fabric 
     assembled in an Andean beneficiary country qualifies for 
     benefits only if the U.S. knit or woven fabric is dyed and 
     finished in the United States.
     Senate provision
       No provision.
     Conference agreement
       Senate recedes.

                      Penalties for Transshipment

     Present law
       The Tariff Act of 1930, as amended, provides for civil 
     monetary penalties for unlawful transshipment. These include 
     penalties under 19 U.S.C. 1592 for up to a maximum of the 
     domestic value of the imported merchandise or eight times the 
     loss of revenue, as well as denial of entry, redelivery or 
     liquidated damages for failure to redeliver the merchandise 
     determined to be inaccurately represented. In addition, an 
     importer may be liable for criminal penalties, including 
     imprisonment for up to five years, under section 1001 of 
     title 18 of the United States Code for making false 
     statements on import documentation.
       Under the North American Free Trade Agreement (NAFTA), 
     Parties to the Agreement must observe Customs procedures and 
     documentation requirements, which are established in Chapter 
     5 of NAFTA. Requirements regarding Certificates of Origin for 
     imports receiving preferential tariffs are detailed in 
     Article 502.1 of NAFTA.
     House amendment
       Section 3103 requires that importers comply with 
     requirements similar in all material respects to the 
     requirements regarding Certificates of Origin contained in 
     Article 502.1 of the North American Free Trade Agreement 
     (NAFTA) for a similar importation from Mexico.
       In addition, if an exporter is determined under the laws of 
     the United States to have engaged in illegal transshipment of 
     apparel products from an Andean country, then the President 
     shall deny all benefits under the bill to such exporter, and 
     to any successors of such exporter, for a period of two 
     years.
       In cases where the President has requested a beneficiary 
     country to take action to prevent transshipment and the 
     country has failed to do so, the President shall reduce the 
     quantities of textile and apparel articles that may be 
     imported into the United States from that country by three 
     times the quantity of articles transshipped, to the extent 
     that such action is consistent with World Trade Organization 
     (WTO) rules.
     Senate amendment
       In amending, section 204(b) of the ATPA, section 3102 of 
     the present bill provides special penalties for transshipment 
     of textile and apparel articles from an ATPEA beneficiary 
     country. Transshipment is defined as claiming duty-free 
     treatment for textile and apparel imports on the basis of 
     materially false information. An exporter found to have 
     engaged in such transshipment (or a successor of such 
     exporter) shall be denied all benefits under the ATPA for a 
     period of two years.
       The bill further provides penalties for an ATPEA 
     beneficiary country that fails to cooperate with the United 
     States in efforts to prevent transshipment. Where textile and 
     apparel articles from such country are subject to quotas on 
     importation into the United States consistent with WTO rules, 
     the President must reduce the quantity of such articles that 
     may be imported into the United States by three times the 
     quantity of transshipped articles, to the extent consistent 
     with WTO rules.
     Conference agreement
       Conference agreement follows House and Senate bill.

                         Import Relief Actions

     Present law
       The import relief procedures and authorities under sections 
     201-204 of the Trade Act of 1974 apply to imports from ATPA 
     beneficiary countries, as they do to imports from other 
     countries. If ATPA imports cause serious injury, or threat of 
     such injury, to the domestic industry producing a like or 
     directly competitive article, section 204(d) of the ATPA 
     authorizes the President to suspend ATPA duty-free treatment 
     and proclaim a rate of duty or other relief measures.
       Under NAFTA, the United States may invoke a special 
     safeguard provision at any time during the tariff phase-out 
     period if a NAFTA-origin textile or apparel good is being 
     imported in such increased quantities and under such 
     conditions as to cause ``serious damage, or actual threat 
     thereof,'' to a domestic industry producing a like or 
     directly competitive good. The President is authorized to 
     either suspend further duty reductions or increase the rate 
     of duty to the NTR rate for up to three years.
     House amendment
       Under Section 3103 normal safeguard authorities under ATPA 
     would apply to imports of all products except textiles and 
     apparel. A NAFTA equivalent safeguard authorities would apply 
     to imports of apparel products from ATPA countries, except 
     that, United States, if it applied a safeguard action, would 
     not be obligated to provide equivalent trade liberalizing 
     compensation to the exporting country.
     Senate amendment
       The bill establishes similar textile and apparel safeguard 
     provisions based on the NAFTA textile and apparel safeguard 
     provision.
     Conference agreement
       Conference Agreement follows House and Senate bill.

                          Designation Criteria

     Present law
       In determining whether to designate any country as an ATPA 
     beneficiary country, the President must take into account 
     seven mandatory and 12 discretionary criteria, which are 
     listed in section 203 of the ATPA.
       Under Section 203 of the ATPA, the President shall not 
     designate any country a ATPA beneficiary country if:
       (1) The country is a Communist country;
       (2) The country has nationalized, expropriated, imposed 
     taxes or other exactions or otherwise seized ownership or 
     control of U.S. property (including intellectual property), 
     unless he determines that prompt, adequate, and effective 
     compensation has been or is being made, or good faith 
     negotiations to provide such compensation are in progress, or 
     the country is otherwise taking steps to discharge its 
     international obligations, or a dispute over compensation has 
     been submitted to arbitration;
       (3) The country fails to act in good faith in recognizing 
     as binding or in enforcing arbitral awards in favor of U.S. 
     citizens;
       (4) The country affords ``reverse'' preferences to 
     developed countries and whether such treatment has or is 
     likely to have a significant adverse effect on U.S. commerce;
       (5) A government-owned entity in the country engages in the 
     broadcast of copyrighted material belonging to U.S. copyright 
     owners without their express consent or the country fails to 
     work toward the provision of adequate and effective 
     intellectual property rights;
       (6) The country is not a signatory to an agreement 
     regarding the extradition of U.S. citizens;
       (7) If the country has not or is not taking steps to afford 
     internationally recognized worker rights to workers in the 
     country;
       In determining whether to designate a country as eligible 
     for ATPA benefits, the President shall take into account 
     (discretionary criteria):

[[Page 15105]]

       (1) An expression by the country of its desire to be 
     designated;
       (2) The economic conditions in the country, its living 
     standards, and any other appropriate economic factors;
       (3) The extent to which the country has assured the United 
     States it will provide equitable and reasonable access to its 
     markets and basic commodity resources;
       (4) The degree to which the country follows accepted rules 
     of international trade under the World Trade Organization;
       (5) The degree to which the country uses export subsidies 
     or imposes export performance or local content requirements 
     which distort international trade;
       (6) The degree to which the trade policies of the country 
     are contributing to the revitalization of the region;
       (7) The degree to which the country is undertaking self-
     help measures to protect its own economic development;
       (8) Whether or not the country has taken or is taking steps 
     to afford to workers in that country (including any 
     designated zone in that country) internationally recognized 
     workers rights;
       (9) The extent to which the country provides under its law 
     adequate and effective means for foreign nationals to secure, 
     exercise, and enforce exclusive intellectual property rights;
       (10) The extent to which the country prohibits its 
     nationals from engaging in the broadcast of copyrighted 
     material belonging to U.S. copyright owners without their 
     express consent;
       (11) Whether such country has met the narcotics cooperation 
     certification criteria of the Foreign Assistance Act of 1961 
     for eligibility for U.S. assistance; and
       (12) The extent to which the country is prepared to 
     cooperate with the United States in the administration of the 
     Act.
       Under the ATPA the President is prohibited from designating 
     a country a beneficiary country if any of criteria (1)-(7) 
     apply to that country, subject to waiver if the President 
     determines that country designation will be in the U.S. 
     national economic or security interest. The waiver does not 
     apply to criteria (4) and (6). Under the ATPA criteria on (7) 
     is included as both mandatory and discretionary.
       The President may withdraw or suspend beneficiary country 
     status or duty-free treatment on any article if he determines 
     the country should be barred from designation as a result of 
     changed circumstances. The President must submit a triennial 
     report to the Congress on the operation of the program. The 
     report shall include any evidence that the crop eradication 
     and crop substitution efforts of the beneficiary country are 
     directly related to the effects of the legislation.
     House amendment
       The House amendment provides that the President, in 
     designating a country as eligible for the enhanced ATPDEA 
     benefits, shall take into account the existing eligibility 
     criteria established under ATPA described above, as well as 
     other appropriate criteria, including: whether a country has 
     demonstrated a commitment to undertake its WTO obligations 
     and participate in negotiations toward the completion of the 
     FTAA or comparable trade agreement; the extent to which the 
     country provides intellectual property protection consistent 
     with or greater than that afforded under the Agreement on 
     Trade-Related Aspects of Intellectual Property Rights; the 
     extent to which the country provides internationally 
     recognized worker rights; whether the country has implemented 
     its commitments to eliminate the worst forms of child labor; 
     the extent to which a country has taken steps to become a 
     party to and implement the Inter-American Convention Against 
     Corruption; and the extent to which the country applies 
     transparent, nondiscriminatory and competitive procedures in 
     government procurement equivalent to those included in the 
     WTO Agreement on Government Procurement and otherwise 
     contributes to efforts in international fora to develop and 
     implement international rules in transparency in government 
     procurement.
     Senate amendment
       Section 3102(5) contains identical provisions.
     Conference agreement
       Conference Agreement follows the House and Senate 
     amendments. In evaluating a potential beneficiary's 
     compliance with its WTO obligations, the conferees expect the 
     President to take into account the extent to which the 
     country follows the rules on customs valuation set forth in 
     the WTO Customs Valuation Agreement. With respect to 
     intellectual property protection, it is the Conferees intent 
     that the President will also take into account the extent to 
     which potential beneficiary countries are providing or taking 
     steps to pro,ride protection of intellectual property rights 
     comparable to the protections provided to the United States 
     in bilateral intellectual property agreements.
       Since April 1995, Colombia has applied a variable import 
     duty system, known as the ``price band'' system, on fourteen 
     basic agriculture products such as wheat, corn, and soybean 
     oil. An additional 147 commodities, considered substitutes or 
     related products, are subject to the price band system which 
     establishes ceiling, floor, and reference prices on imports. 
     The Conferees's view is that the price band system is non-
     transparent and easily manipulated as a protectionist device. 
     In early 2000, the United States reached agreement with 
     Colombia in the WTO that Colombia would delink wet pet food, 
     the only finished product in this system, from the price band 
     system. In implementing the eligibility criteria relating to 
     market access and implementation of WTO commitments, it is 
     the Conferees intent that USTR insist that Colombia implement 
     its WTO commitment to remove pet food from the price band 
     tariff system and to apply the 20% common external tariff to 
     imported pet food.
       With respect to whether beneficiary countries are following 
     established WTO rules, the Conferees believe it is important 
     for Andean governments to provide transparent and non-
     discriminatory regulatory procedures. Unfortunately, the 
     Conferees know of instances where regulatory policies in 
     Andean countries are opaque, unpredictable, and arbritarily 
     applied. As such, it is the Conferees's view that Andean 
     countries that seek trade benefits should adopt, implement, 
     and apply transparent and non-discriminatory regulatory 
     procedures. The development of such procedures would help 
     create regulatory stability in the Andean region and thus 
     provide mere certainty to U.S. companies that would like to 
     invest in these countries.

            Determination regarding retention of designation

     Present law
       Under Section 203(e) of the ATPA, the President may 
     withdraw or suspend a country's beneficiary country 
     designation, or withdraw, suspend, or limit the application 
     of duty-free treatment to particular articles of a 
     beneficiary country, due to changed circumstances.
     House amendment
       Section 3102(b) amends section 203(e) of the ATPA to 
     provide that President may withdraw or suspend ATPA 
     designation, or withdraw, suspend or limit benefits is a 
     country's performance under eligibility criteria are no 
     longer satisfactory.
     Senate amendment
       Identical.
     Conference agreement
       Conference agreement follows the House amendment and Senate 
     amendment.
       Reporting Requirements
     Present law
       Provides for: (1) an annual report by the International 
     Trade Commission on the economic impact of the bill and; (2) 
     an annual report by the Secretary of Labor on the impact of 
     the bill with respect to U.S. labor. Also under present law, 
     USTR is required to report triannually on operation of the 
     program.
     House amendment
       Retains current law on reports.
     Senate amendment
       Senate bill requires same ITC and Labor reports as well as 
     an annual report by the Customs Service on compliance and 
     anti-circumvention on the part of beneficiary countries in 
     the area of textile and apparel trade. It also requires USTR 
     to report biannually on operation of the program.
     Conference agreement
       House recedes.
       Petitions for Review
     Present law
       No provision.
     House amendment
       No provision.
     Senate amendment
       Section 3102(e) of the bill directs the President to 
     promulgate regulations regarding the review of eligibility of 
     articles and countries under the ATPA. Such regulations are 
     to be similar to regulations governing the Generalized System 
     of Preferences petition process.
     Conference agreement
       House recedes.


             SEC. 3104--TERMINATION OF DUTY-FREE TREATMENT

     Present law
       Duty-free treatment under the ATPA expires on December 4, 
     2001.
     House amendment
       Duty-free treatment terminates under the Act on December 
     31, 2006.
     Senate amendment
       Section 3103 of the bill amends section 208(b) of the ATPA 
     to provide for a termination date of February 28, 2006. Basic 
     ATPA benefits apply retroactively to December 4, 2001.
     Conference agreement
       House recedes on retroactivity for basic ATPA benefits; 
     Senate recedes on termination.


 SEC. 3106--TRADE BENEFITS UNDER THE CARIBBEAN BASIN TRADE PARTNERSHIP 
      ACT (CBTPA) AND THE AFRICA GROWTH AND OPPORTUNITY ACT (AGOA)

                         Knit-to-shape Apparel

     Present law
       Draft regulations issued by Customs to implement P.L. 106-
     200 stipulate that knit to-

[[Page 15106]]

     shape garments, because technically they do not go through 
     the fabric stage, are not eligible for trade benefits under 
     the act.
     House amendment
       Sec. 3106 and 3107 of the House bill amends AGOA and CBTPA 
     to clarify that preferential treatment is provided to knit-
     to-shape apparel articles assembled in beneficiary countries.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.
     Present law
       Draft regulations issued by Customs to implement P.L. 106-
     200 deny preferential access to garments that are cut both in 
     the United States and beneficiary countries, on the rationale 
     that the legislation does not specifically list this 
     variation in processing (the so-called ``hybrid cutting 
     problem'').
     House amendment
       Sec. 3107 of H.R. 3009 adds new rules in CBTPA and AGOA to 
     provide preferential treatment for apparel articles that are 
     cut both in the United States and beneficiary countries.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.

                              CBI Knit Cap

     Present law
       P.L. 106-200 extended duty-free benefits to knit apparel 
     made in CBI] countries from regional fabric made with U.S. 
     yarn and to knit-to-shape apparel (except socks), up to a cap 
     of 250,000,000 square meter equivalents (SMEs), with a growth 
     rate of 16% per year for first 3 years.
     House amendment
       Sec. 3106 of H.R. 2009 would raise this cap to the 
     following amounts: 250,000,000 SMEs for the 1-year period 
     beginning October 1, 2001; 500,000,000 SMEs for the 1-year 
     period beginning on October 1, 2002; 850,000,000 SMEs for the 
     1-year period beginning, on October 1, 2003; 970,000,000 SMEs 
     in each succeeding 1-year period through September 30, 2009.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.

                            CBI T-shirt cap

     Present law
       P.L. 106-200 extends benefits for an additional category of 
     CBI regional knit apparel products (T-shirts) up to a cap of 
     4.2 million dozen, growing 16% per year for the first 3 
     years.
     House amendment
       Section 3106 of H.R 3006 would raise this cap to the 
     following amounts: 4,200,000 dozen during the 1-year period 
     beginning October 1, 2001; 9,000,000 dozen for the 1-year 
     period beginning on October 1, 2002; 10,000,00 dozen for the 
     1-year period beginning on October 1, 2003; 12,000,000 dozen 
     in each succeeding 1-year period through September 30, 2009.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.
     Present law
       Section 112(b)(3) of the AGOA provides preferential 
     treatment for apparel made in beneficiary sub-Saharan African 
     countries from ``regional'' fabric (i.e., fabric formed in 
     one or more beneficiary countries) from yarn originating 
     either in the United States or one or more such countries. 
     Section 112(b)(3)(B) establishes a special rule for lesser 
     developed beneficiary sub-Saharan African countries, which 
     provides preferential treatment, through September 30, 2004, 
     for apparel wholly assembled in one or more such countries 
     regardless of the origin of the fabric used to make the 
     articles. Section 112(b)(3)(A) establishes a quantitative 
     limit or ``cap'' on the amount of apparel that may be 
     imported under section 112(b)(3) or section 112(b)(3)(B). 
     This ``cap'' is 1.5 percent of the aggregate square meter 
     equivalents of all apparel articles imported into the United 
     States for the year that began October 1, 2000, and increases 
     in equal increments to 3.5 percent for the year beginning 
     October 1, 2007.
     House amendment
       Section 3107 would clarify that apparel wholly assembled in 
     one or more beneficiary, sub-Saharan African countries from 
     components knit-to-shape in one or more such countries from 
     U.S. or regional yarn is eligible for preferential treatment 
     under section 112(b)(3) of AGOA. Similarly, Section 5 would 
     clarify that apparel knit-to-shape and wholly assembled in 
     one or more lesser developed beneficiary sub-Saharan African 
     countries is eligible for preferential treatment, regardless 
     of the origin of the yarn used to make such articles. The 
     House amendment also would increase the ``cap'' by changing 
     the applicable percentages from 1.5 percent to 3 percent in 
     the year that began October 1, 2000, and from 3.5 percent to 
     7 percent in the year beginning October 1, 2007.
     Senate amendment
       No provision.
     Conference agreement
       Conference agreement follows House Amendment accept the 
     increase in the cap is limited to apparel products made with 
     regional or U.S. fabric and yarn. No increases in amounts of 
     apparel made of third-country fabric over current law.
     Present Law
       AGOA was supposed to provide duty-free, quota-free 
     treatment to sweaters knit in African beneficiary countries 
     from fine merino wool yarn, regardless of where the yarn was 
     formed. AGOA was supposed to provide duty-free, quota-free 
     treatment to sweaters knit in African beneficiary countries 
     from fine merino wool yarn, regardless of where the yarn was 
     formed. However, due to a drafting problem, the wrong 
     diameter was included, making it impossible to use the 
     provision.
     House amendment
       Section 3107 corrects the yarn diameter in the AGOA 
     legislation so that sweaters knit to shape from merino wool 
     of a specific diameter are eligible.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.

                      Africa: Namibia and Botswana

     Present law
       The GDBs of Botswana and Namibia exceed the LLDC limit of 
     $1500 and therefore these countries are not eligible to use 
     third country fabric for the transition period under the AGOA 
     regional fabric country cap.
     House amendment
       Section 5 allows Namibia and Botswana to use third country 
     fabric for the transition period under the AGOA regional 
     fabric country cap.
     Senate amendment
       No provision.
     Conference agreement
       Senate recedes.

       TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES


       sec. 4101--extension of generalized system of preferences

     Expired law
       Section 505 of the Trade Act of 1974, as amended, provides 
     that no duty-free treatment under Title V (the Generalized 
     System of Preferences) shall remain in effect after September 
     30, 2001.
     House bill
       The House amendment to H.R. 3009 would amend section 505 of 
     the Trade Act of 1974 to authorize an extension through 
     December 31, 2002. It would also provide retroactive relief 
     in that, notwithstanding section 514 of the Tariff Act of 
     1930 or any other provision of law, the entry of any article 
     to which duty-free treatment under Title V of the Trade Act 
     of 1974 would have applied if the entry had been made on 
     September 30, 2001, and was made after September 30, 2001, 
     and before the enactment of this Act, shall be liquidated or 
     reliquidated as free of duty and the Secretary of Treasury 
     shall refund any duty paid, upon proper request filed with 
     the appropriate Customs officer, within 180 days after the 
     date of enactment.
     Senate amendment
       The Senate amendment authorizes an extension of GSP through 
     December 31, 2006. The extension is retroactive to September 
     30, 2001, permitting importers to liquidate or reliquidate 
     entries made since that date and to seek a return of duties 
     paid on goods that would have entered the United States free 
     of duty, but for expiration of GSP.
       The Senate Amendment also amends the definition of 
     ``internationally recognized worker rights'' set forth in the 
     GSP statute (section 507(4) of the Trade Act of 1974). 
     Specifically, it adds to that definition ``a prohibition on 
     discrimination with respect to employment and occupation'' 
     and a ``prohibition of the worst forms of child labor.'' 
     These two prohibitions come from the International Labor 
     Organization's 1998 Declaration on Fundamental Principles and 
     Rights at Work, which defines certain worker rights as 
     ``fundamental.''
       The GSP statute identifies certain criteria that the 
     President must take into account in determining whether to 
     designate a country as eligible for GSP benefits. Conversely, 
     a country's lapse in compliance with one or more of these 
     criteria may be grounds for withdrawal, suspension, or 
     limitation of benefits. Whether a country is taking steps to 
     afford its workers internationally recognized worker rights 
     is one of those criteria. The Senate Amendment seeks to make 
     the concept of ``internationally recognized worker rights'' 
     as defined for GSP consistent with the concept as defined by 
     the ILO.
       Finally, the Senate Amendment establishes a new eligibility 
     criterion for GSP: ``A country is ineligible for GSP if it 
     has not taken steps to support the efforts of the United 
     States to combat terrorism.''
     Conference agreement
       The Conference agreement authorizes an extension of GSP 
     through December 3 1, 2006. Conferees approved the Senate 
     provision to include a prohibition on the worst forms of 
     child labor in the definition of internationally recognized 
     worker rights in Section

[[Page 15107]]

     507(a) of the Trade Act of 1974. Conferees declined to 
     include the Senate provision on discrimination with respect 
     to employment in the definition of ``international recognized 
     worker rights under Sec. 507 (a) of the Trade Act of 1974. 
     Agreement follows the House and the Senate bill with respect 
     to providing retroactive relief.

                  DIVISION E--MISCELLANEOUS PROVISIONS

                 TITLE L--MISCELLANEOUS TRADE BENEFITS

                      Subtitle A--Wool Provisions


   sec. 5101--wool manufacturer payment clarification and technical 
                            corrections act

     Present law
       Title V of the Trade and Development Act of 2000 (Pub. L. 
     No. 106-200) included certain tariff relief for the domestic 
     tailored clothing and textile industries. The relief was 
     largely aimed at reducing the harmful affects of a ``tariff 
     inversion''--i.e., a tariff structure that levies higher 
     duties on the raw material (such as wool fabric) than on the 
     finished goods (such as mens' suits). A component of the 
     relief to the U.S. tailored clothing and textile industry was 
     a refund of duties paid in calendar year 1999, spread out 
     over calendar years 2000, 2001 and 2002. Pub. L. No. 106-
     2000, Sec. 505.
     House amendment
       No provision.
     Senate amendment
       The Senate bill amends section 505 of the Trade and 
     Development Act of 2000 to simplify the process for refunding 
     to eligible parties duties paid in 1999. Specifically, it 
     creates three special refund pools for each of the affected 
     wool articles (fabric, yarn, and fiber and top). Refunds for 
     importing manufacturers will be distributed in three 
     installments--the first and second on or before the date that 
     is 45 days after the date of enactment of the Wool 
     Manufacturer Payment and Clarification and Technical 
     Corrections Act, and the third on or before April 15, 2003. 
     Refunds for nonimporting manufacturers will be distributed in 
     two installments--the first on or before the date that is 120 
     days after the date of enactment of the Wool Manufacturer 
     Payment Clarification and Technical Corrections Act, and the 
     second on or before April 15, 2003.
       The provision also streamlines the paperwork process, in 
     light of the destruction of previously filed claims and 
     supporting information in the September 11, 2001 attacks on 
     the World Trade Center in New York, New York. Finally, the 
     provision identifies all persons eligible for the refunds.
     Conference agreement
       The House recedes to the Senate.


                   sec. 5102--duty suspension on wool

     Present law
       Sections 501(a) and (b) of the Trade and Development Act of 
     2000 provide temporary duty reductions for certain worsted 
     wool fabrics through 2003.
       Section 501(d) limits the aggregate quantity of worsted 
     wool fabrics entered under heading 9902.51.11 from January 1 
     to December 31 of each year, inclusive, to 2,500,000 square 
     meter equivalents, or such other quantity proclaimed by the 
     President pursuant to section 504(b)(3) of the Trade and 
     Development Act. Further, the section limits the aggregate 
     quantity of worsted wool fabrics entered under heading 
     9902.51.12 from January 1 to December 31 of each year, 
     inclusive, to 1,500,000 square meter equivalents, or such 
     other quantity proclaimed by the President pursuant to 
     section 504(b)(3) of the Trade and Development Act.
     House amendment
       No provision.
     Senate bill
       The Senate bill extends the temporary duty reductions on 
     fabrics of worsted wool from 2003 to 2005. The provision 
     increases the limitation on the quantity of imports of 
     worsted wool fabrics entered under heading 9902.51.11 to 
     3,500,000 square meter equivalents in calendar year 2002, and 
     4,500,000 square meter equivalents in calendar year 2003. 
     Imports of worsted wool fabrics entered under heading 
     9902.51.12 are increased to 2,500,000 square meter 
     equivalents in calendar year 2002, and 3,500,000 square meter 
     equivalents in calendar year 2003.
       The bill extends the payments made to manufacturers under 
     section 505 of the Trade and Development Act of 2000 and 
     requires an affidavit that the manufacturer will remain a 
     manufacturer in the United States as of January 1 of the year 
     of payment. The two additional payments will occur as 
     follows: the first to be made after January 1, 2004, but on 
     or before April 15, 2004, and the second after January 1, 
     2005, but on or before April 15, 2005.
       Finally, the bill extends the ``Wool Research Trust Fund'' 
     for two years through 2006.
     Conference agreement
       The House recedes to the Senate.

                      Subtitle B--Other Provisions


               SEC. 5201--FUND FOR WTO DISPUTE SETTLEMENT

     Present law
       No applicable section.
     House amendment
       The provision authorizes a settlement fund within the 
     United States Trade Representative's Office in the amount of 
     $50 million for the use in settling disputes that occur 
     related to the World Trade Organization. The Trade 
     Representative must certify to the Secretary of the Treasury 
     that the settlement is in the best interest of the United 
     States in cases of not more than $10 million. For cases above 
     $10 million, the Trade Representative must make the same 
     certification to the United States Congress.
     Senate bill
       No provision.
     Conference agreement
       The Senate recedes to the House.


  SEC. 5202--CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN 
                           NUCLEAR FACILITIES

     Present law
       Under present law, certain steam or other vapor generating 
     boilers used in nuclear facilities imported into the United 
     States prior to December 31, 2003 are charged a duty rate of 
     4.9 percent ad valorem. This rate took effect pursuant to 
     section 1268 of Public Law Number 106-476 (``Tariff 
     Suspension and Trade Act of 2000''). Previously, the rate had 
     been 5.2 percent ad valorem.
     House amendment
       No provision.
     Senate amendment
       Section 203 of the Senate amendment changes the duty rate 
     on certain steam or other vapor generating boilers used in 
     nuclear facilities to zero for such goods entered, or 
     withdrawn from warehouse for consumption, on or after January 
     1, 2002, and on or before December 31, 2006. The provision 
     was intended to lower the cost of inputs into the operation 
     of nuclear facilities and thereby lower the cost of energy to 
     consumers.
     Committee agreement
       The House recedes to the Senate.


            SEC. 5203--SUGAR TARIFF RATE QUOTA CIRCUMVENTION

     Present law
       No applicable section.
     House amendment
       No provision.
     Senate amendment
       The Senate bill establishes a sugar anti-circumvention 
     program which requires the Secretary of Agriculture to 
     identify imports of articles that are circumventing tariff-
     rate quotas on sugars, syrups, or sugar-containing products 
     imposed under chapters 17, 18, 19, and 21 of the Harmonized 
     Tariff Schedule. The Secretary shall then report to the 
     President articles found to be circumventing such tariff-rate 
     quotas. Upon receiving the Secretary's report, the President 
     shall, by proclamation, include any identified article in the 
     appropriate tariff-rate quota provision of the Harmonized 
     Tariff Schedule.
     Conference agreement
       Conferees agreed to a provision directing the Secretary of 
     Agriculture and the Commissioner of Customs shall monitor for 
     sugar circumvention and shall report and make recommendations 
     to Congress and the President.
       This provision amends the Harmonized Tariff Schedule of the 
     United States (``HTSUS'') to make clear in the statute an 
     important element of the ruling of the Court of Appeals for 
     the Federal Circuit in Heartland By-Products, Inc. v. United 
     States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses 
     is one of the foreign substances that must be excluded when 
     calculating the percentage of soluble non-sugar solids under 
     subheading 1702.90.40.
       The provision requires the Secretary of Agriculture and the 
     Commissioner of Customs to establish a monitoring program to 
     identify existing or likely circumvention of the tariff-rate 
     quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The 
     Secretary and the Commissioner shall report the results of 
     their monitoring to Congress and the President every six 
     months, together with data and a description of developments 
     and trends in the composition of trade provided for in such 
     chapters. This report will be made public. The report will 
     discuss any indications that imports of articles not subject 
     to the tariff-rate quotas are being used for commercial 
     extraction of sugar in the United States. Imports of so-
     called ``high-test molasses'' currently classified under 
     subheading 1703.10.30 will be examined particularly closely 
     for such indications.
       Finally, the Secretary and the Commissioner will include in 
     the report their recommendations for ending circumvention, 
     including their recommendations for legislation. The Managers 
     emphasize that rapid action to stop circumvention is the best 
     way to prevent a problem from developing and that quick 
     administrative or legislative action is preferable to 
     protracted procedures and litigation, as occurred in the 
     Heartland case.

     From the Committee on Ways and Means, for consideration of 
     the House amendment and the Senate amendment, and 
     modifications committed to conference:
     William Thomas,
     Phillip M. Crane,
     From the Committee on Education and the Workforce, for 
     consideration of sec. 603 of

[[Page 15108]]

     the Senate amendment, and modifications committed to 
     conference:
     John Boehner,
     Sam Johnson,
     From the Committee on Energy and Commerce, for consideration 
     of sec. 603 of the Senate amendment, and modifications 
     committed to conference:
     Billy Tauzin,
     Michael Bilirakis,
     From the Committee on Government Reform, for consideration of 
     sec. 344 of the House amendment, and sec. 1143 of the Senate 
     amendment, and modifications committed to conference:
     Dan Burton,
     Bob Barr,
     From the Committee on the Judiciary, for consideration of 
     secs. 111, 601, and 701 of the Senate amendment, and 
     modifications committed to conference:
     F. James Sensenbrenner,
     Howard Coble,
     From the Committee on Rules, for consideration of secs. 2103, 
     2105, and 2106 of the House amendment and secs. 2103, 2105, 
     and 2106 of the Senate amendment, and modifications committed 
     to conference:
     David Dreier,
     John Linder,
                                 Manager on the Part of the House.

     Max Baucus,
     John Breaux,
     Chuck Grassley,
     Orrin Hatch,
     Managers on the Part of the Senate.

                          ____________________