[Congressional Record (Bound Edition), Volume 148 (2002), Part 15]
[Senate]
[Pages 21030-21083]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. REED (for himself and Mr. Fitzgerald):
  S. 3127. A bill to amend the Safe Drinking Water Act to provide 
assistance to States to support testing of private wells in areas of 
suspected contamination to limit or prevent human exposure to 
contaminated groundwater; to the Committee on Environment and Public 
Works.
  Mr. REED. Mr. President, today I am proud to be joined by my 
colleague Senator Fitzgerald in introducing the Private Well Testing 
Assistance Act of 2002. This legislation seeks to protect the health of 
our Nation's rural families by providing Federal assistance to State 
health and environmental agencies for sampling of drinking water wells 
near suspected areas of groundwater contamination.
  More than 15.1 million households are served by private drinking 
water wells in the United States. At times, these wells are affected by 
serious groundwater contaminants, including industrial solvents, 
petroleum, nitrates, radon, arsenic, beryllium, chloroform, and 
gasoline additives such as MTBE.
  While private well owners generally are responsible for regular 
testing of drinking water wells, cases of serious or potentially 
widespread groundwater contamination often require State agencies to 
conduct costly tests on numerous wells. Many of these sites are 
included in the Environmental Protection Agency's Comprehensive 
Environmental Response, Compensation, and Liability Information System, 
or CERCLIS, for which Federal funding is available for initial site 
assessments, but not for subsequent regular sampling to ensure that 
contaminants have not migrated to additional household wells.
  With many State budgets across the country in fiscal crisis, State 
governments often do not have the resources to provide regular, 
reliable testing of wells in proximity to suspected areas of 
contamination. By authorizing EPA to provide up to $20 million per year 
to assist State well testing programs, subject to a 20 percent State 
match, the Private Well Testing Assistance Act will create an incentive 
for states to improve well monitoring near both new and existing areas 
of groundwater contamination.
  I urge my colleagues to help ensure the health and safety of American 
families that rely on groundwater for their drinking water needs by 
supporting this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3127

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Private Well Testing 
     Assistance Act''.

     SEC. 2. ASSISTANCE FOR TESTING OF PRIVATE WELLS.

       Part E of the Safe Drinking Water Act (42 U.S.C. 300j et 
     seq.) is amended by adding at the end the following:

     ``SEC. 1459. ASSISTANCE FOR TESTING OF PRIVATE WELLS.

       ``(a) Findings.--Congress finds that--
       ``(1) more than 15,100,000 households in the United States 
     are served by private drinking water wells;

[[Page 21031]]

       ``(2) while private well owners generally are responsible 
     for regular testing of drinking water wells for the presence 
     of contaminants, cases of serious or potentially widespread 
     groundwater contamination often require State health and 
     environmental agencies to conduct costly tests on numerous 
     drinking water well sites;
       ``(3) many of those sites are included in the Comprehensive 
     Environmental Response, Compensation, and Liability 
     Information System of the Environmental Protection Agency, 
     through which Federal funding is available for testing of 
     private wells during initial site assessments but not for 
     subsequent regular sampling to ensure that contaminants have 
     not migrated to other wells;
       ``(4) many State governments do not have the resources to 
     provide regular, reliable testing of drinking water wells 
     that are located in proximity to areas of suspected 
     groundwater contamination;
       ``(5) State fiscal conditions, already in decline before 
     the terrorist attacks of September 11, 2001, are rapidly 
     approaching a state of crisis;
       ``(6) according to the National Conference of State 
     Legislatures--
       ``(A) revenues in 43 States are below estimates; and
       ``(B) 36 States have already planned or implemented cuts in 
     public services;
       ``(7) as a result of those economic conditions, most States 
     do not have drinking water well testing programs in place, 
     and many State well testing programs have been discontinued, 
     placing households served by private drinking water wells at 
     increased risk; and
       ``(8) the provision of Federal assistance, with a State 
     cost-sharing requirement, would establish an incentive for 
     States to provide regular testing of drinking water wells in 
     proximity to new and existing areas of suspected groundwater 
     contamination.
       ``(b) Definitions.--In this section:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Environmental Protection Agency, acting 
     in consultation with appropriate State agencies.
       ``(2) Area of concern.--The term `area of concern' means a 
     geographic area in a State the groundwater of which may, as 
     determined by the State--
       ``(A) be contaminated or threatened by a release of 1 or 
     more substances of concern; and
       ``(B) present a serious threat to human health.
       ``(3) Hazardous substance.--The term `hazardous substance' 
     has the meaning given the term in section 101 of the 
     Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601).
       ``(4) Pollutant or contaminant.--The term `pollutant or 
     contaminant' has the meaning given the term in section 101 of 
     the Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601).
       ``(5) Substance of concern.--The term `substance of 
     concern' means--
       ``(A) a hazardous substance;
       ``(B) a pollutant or contaminant;
       ``(C) petroleum (including crude oil and any fraction of 
     crude oil);
       ``(D) methyl tertiary butyl ether; and
       ``(E) such other naturally-occurring or other substances 
     (including arsenic, beryllium, and chloroform) as the 
     Administrator, in consultation with appropriate State 
     agencies, may identify by regulation.
       ``(c) Establishment of Program.--Not later than 90 days 
     after the date of enactment of this section, the 
     Administrator shall establish a program to provide funds to 
     each State for use in testing private wells in the State.
       ``(d) Determination of Areas of Concern.--Not later than 30 
     days after the date of enactment of this section, the 
     Administrator shall promulgate regulations that describe 
     criteria to be used by a State in determining whether an area 
     in the State is an area of concern, including a definition of 
     the term `threat to human health'.
       ``(e) Application Process.--
       ``(1) In general.--A State that seeks to receive funds 
     under this section shall submit to the Administrator, in such 
     form and containing such information as the Administrator may 
     prescribe, an application for the funds.
       ``(2) Certification.--A State application described in 
     paragraph (1) shall include a certification by the Governor 
     of the State of the potential threat to human health posed by 
     groundwater in each area of concern in the State, as 
     determined in accordance with the regulations promulgated by 
     the Administrator under subsection (d).
       ``(3) Processing.--Not later than 15 days after the 
     Administrator receives an application under this subsection, 
     the Administrator shall approve or disapprove the 
     application.
       ``(f) Provision of Funding.--
       ``(1) In general.--If the Administrator approves an 
     application of a State under subsection (e)(3), the 
     Administrator shall provide to the State an amount of funds 
     to be used to test private wells in the State that--
       ``(A) is determined by the Administrator based on--
       ``(i) the number of private wells to be tested;
       ``(ii) the prevailing local cost of testing a well in each 
     area of concern in the State; and
       ``(iii) the types of substances of concern for which each 
     well is to be tested; and
       ``(B) consists of not more than $500 per well, unless the 
     Administrator determines that 1 or more wells to be tested 
     warrant the provision of a greater amount.
       ``(2) Cost sharing.--
       ``(A) In general.--The Federal share of the cost of any 
     test described in paragraph (1) shall not exceed 80 percent.
       ``(B) Non-federal share.--The non-Federal share of the cost 
     of any test described in paragraph (1) may be provided in 
     cash or in kind.
       ``(g) Number and Frequency of Tests.--
       ``(1) In general.--Subject to paragraph (2), in determining 
     the number and frequency of tests to be conducted under this 
     section with respect to any private well in an area of 
     concern, a State shall take into consideration--
       ``(A) typical and potential seasonal variations in 
     groundwater levels; and
       ``(B) resulting fluctuations in contamination levels.
       ``(2) Limitation.--Except in a case in which at least 2 
     years have elapsed since the last date on which a private 
     well was tested using funds provided under this section, no 
     funds provided under this section may be used to test any 
     private well--
       ``(A) more than 4 times; or
       ``(B) on or after the date that is 1 year after the date on 
     which the well is first tested.
       ``(h) Other Assistance.--Assistance provided to test 
     private wells under this section shall be in addition to any 
     assistance provided for a similar purpose under this Act or 
     any other Federal law.
       ``(i) Report.--Not later than 1 year after the date of 
     enactment of this section, the Administrator, in cooperation 
     with the National Ground Water Association, shall submit to 
     Congress a report that describes the progress made in 
     carrying out this section.
       ``(j) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section $20,000,000 for each of fiscal 
     years 2003 through 2006, to remain available until expended.
       ``(2) Minimum allocation.--The Administrator shall ensure 
     that, for each fiscal year, each State receives not less than 
     0.25 percent of the amount made available under paragraph (1) 
     for the fiscal year.''.
                                 ______
                                 
      By Mr. VOINOVICH (for himself and Mr. DeWine):
  S. 3128. A bill to authorize the Pyramid of Remembrance Foundation to 
establish a memorial in the District of Columbia and its environs to 
honor members of the Armed Forces of the United States who have lost 
their lives during peacekeeping operations, humanitarian efforts, 
training, terrorist attacks, or covert operations; to the Committee on 
Energy and Natural Resources.
  Mr. VOINOVICH. Mr. President, nearly ten years ago, a group of 
students at Riverside High School in Painesville, OH watched with 
horror as a U.S. soldier in Somalia was dragged through the streets of 
Mogadishu. The students, concerned that there was no memorial in our 
Nation's capital to honor members of our armed forces who lost their 
lives during peacekeeping missions such as the one in Somalia, felt 
compelled to take action.
  This group of motivated young people spearheaded a campaign to 
establish a Pyramid of Remembrance in Washington, DC to honor U.S. 
servicemen and women who have lost their lives during peacekeeping 
operations, humanitarian efforts, training, terrorist attacks, or 
convert operations. The students not only proposed the memorial, they 
created a private non- profit foundation to raise the money to 
construct the memorial. The community pulled together, providing legal 
counsel for the students and private donations to help fund the 
project. Thanks to their hard work, the proposed Pyramid of Remembrance 
would be built at no cost to the taxpayer.
  In April 2001, the National Capital Memorial Commission, charged with 
overseeing monument construction in Washington, DC, held hearings about 
the proposed Pyramid of Remembrance. The Commission recommended that 
the memorial be constructed on Defense Department land, possibly at 
Fort McNair. The commissioners also noted that such a memorial would 
indeed fill a void in our Nation's military monuments.
  On May 6, 1999, I spoke on the Senate floor in honor of two brave 
American soldiers, Chief Warrant Officer Kevin L. Reichert and Chief 
Warrant Officer David A. Gibbs, who lost their lives when their Apache 
helicopter crashed

[[Page 21032]]

into the Albanian mountains during a routine training exercise on May 
5, 1999, as U.S. troops joined with our NATO allies in a military 
campaign against Slobodan Milosevic. As I remarked at that time, the 
United States owes David, Kevin and so many other service members a 
debt of gratitude that we will never be able to repay, for they have 
paid the ultimate sacrifice. As the Bible says in John chapter 15:13, 
``Greater love has no man than this, that a man lay down his life for 
his friends.''
  I support the vision of the students at Riverside High School and 
applaud the work they have done to make the Pyramid of Remembrance a 
reality. I believe it is our duty to honor American men and women in 
uniform who have lost their lives while serving their country, whether 
in peacetime or during war.
  I am pleased to introduce in the Senate a companion measure to H.R. 
282, introduced in the House of Representatives by Congressman Steve 
LaTourette, which would authorize the Pyramid of Remembrance Foundation 
to establish a memorial in the District of Columbia or its environs to 
soldiers who have lost their lives during peacekeeping operations, 
humanitarian efforts, training, terrorist attacks, or covert 
operations.
  A monument honoring members of our Armed Forces who have lost their 
lives in peacetime deserves a place of honor in our Nation's capital. I 
commend and thank the students in Painesville, their parents, and the 
teachers and community leaders who have supported them for their hard 
work and dedication to this cause. The proposed Pyramid of Remembrance 
would fill a void among memorials in Washington, DC. I encourage my 
colleagues to support their worthy endeavor and to join me in support 
of this bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3128

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

     SECTION 1. DEFINITIONS.

       In this Act:
       (1) Map.--The term ``map'' means the map referred to in 
     section 2(e) of the Commemorative Works Act (40 U.S.C. 
     1002(e)).
       (2) Memorial.--The term ``memorial'' means the memorial 
     authorized to be established under section 2(a).

     SEC. 2. AUTHORITY TO ESTABLISH MEMORIAL.

       (a) In General.--The Pyramid of Remembrance Foundation may 
     establish a memorial on Federal land in the area depicted on 
     the map as ``Area II'' to honor members of the Armed Forces 
     of the United States who have lost their lives during 
     peacekeeping operations, humanitarian efforts, training, 
     terrorist attacks, or covert operations.
       (b) Compliance With Standards for Commemorative Works.--
       (1) In general.--Except as provided in paragraph (2), the 
     establishment of the memorial shall be in accordance with the 
     Commemorative Works Act (40 U.S.C. 1001 et seq.).
       (2) Exception.--Subsections (b) and (c) of section 3 of the 
     Commemorative Works Act (40 U.S.C. 1003) shall not apply to 
     the establishment of the memorial.

     SEC. 3. FUNDS FOR MEMORIAL.

       (a) Use of Federal Funds Prohibited.--Except as provided by 
     the Commemorative Works Act (40 U.S.C. 1001 et seq.), no 
     Federal funds may be used to pay any expense incurred from 
     the establishment of the memorial.
       (b) Deposit of Excess Funds.--The Pyramid of Remembrance 
     Foundation shall transmit to the Secretary of the Treasury 
     for deposit in the account provided for in section 8(b)(1) of 
     the Commemorative Works Act (40 U.S.C. 1008(b)(1))--
       (1) any funds that remain after payment of all expenses 
     incurred from the establishment of the memorial (including 
     payment of the amount for maintenance and preservation 
     required under section 8(b) of the Commemorative Works Act 
     (40 U.S.C. 1008(b))); or
       (2) any funds that remain on expiration of the authority 
     for the memorial under section 10(b) of that Act (40 U.S.C. 
     1010(b)).
                                 ______
                                 
      By Mr. VOINOVICH (for himself and Mr. Feingold):
  S. 3131. A bill to balance the budget and protect the Social Security 
Trust Fund surpluses; to the Committee on the Budget and the Committee 
on Governmental Affairs, jointly, pursuant to the order of August 4, 
1977, with instructions that if one Committee reports, the other 
Committee have thirty days to report or be discharged.
  Mr. VOINOVICH. Mr. President, I ask unanimous consent that the text 
of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3131

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Truth in 
     Budgeting and Social Security Protection Act of 2002''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                        TITLE I--GENERAL REFORMS

Sec. 101. Extension of the discretionary spending caps.
Sec. 102. Extension of pay-as-you-go requirement.
Sec. 103. Automatic budget enforcement for measures considered on the 
              floor.
Sec. 104. Point of order to require compliance with the caps and pay-
              as-you-go.
Sec. 105. Disclosure of interest costs.
Sec. 106. Executive branch report on fiscal exposures.
Sec. 107. Budget Committee sets 302(b) allocations.
Sec. 108. Long-Term Cost Recognition Point of Order.
Sec. 109. Protection of Social Security surpluses by budget 
              enforcement.

 TITLE II--REFORM OF BUDGETARY TREATMENT OF FEDERAL INSURANCE PROGRAMS

Sec. 201. Federal insurance programs.

            TITLE III--BIENNIAL BUDGETING AND APPROPRIATIONS

Sec. 301. Revision of timetable.
Sec. 302. Amendments to the Congressional Budget and Impoundment 
              Control Act of 1974.
Sec. 303. Amendments to title 31, United States Code.
Sec. 304. Two-year appropriations; title and style of appropriations 
              Acts.
Sec. 305. Multiyear authorizations.
Sec. 306. Government plans on a biennial basis.
Sec. 307. Biennial appropriations bills.
Sec. 308. Report on two-year fiscal period.
Sec. 309. Effective date.

            TITLE IV--COMMISSION ON FEDERAL BUDGET CONCEPTS

Sec. 401. Establishment of Commission on Federal Budget Concepts.
Sec. 402. Powers and duties of Commission.
Sec. 403. Membership.
Sec. 404. Staff and support services.
Sec. 405. Report.
Sec. 406. Termination.
Sec. 407. Funding.

                        TITLE I--GENERAL REFORMS

     SEC. 101. EXTENSION OF THE DISCRETIONARY SPENDING CAPS.

       (a) In General.--Section 251(c) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 is amended by striking 
     paragraphs (7) through (16) and inserting the following:
       ``(7) with respect to fiscal years 2004 through 2009 an 
     amount equal to the appropriated amount of discretionary 
     spending in budget authority and outlays for fiscal year 2003 
     adjusted to reflect inflation;''.
       (b) Expiration.--Section 275(b) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 900 note) is 
     amended by striking subsection (b).
       (c) Additional Enforcement.--Section 205(g) of 
     H.Con.Res.290 (106th Congress) is repealed.

     SEC. 102. EXTENSION OF PAY-AS-YOU-GO REQUIREMENT.

       Section 252(a) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended by striking ``enacted before 
     October 1, 2002,'' both places it appears.

     SEC. 103. AUTOMATIC BUDGET ENFORCEMENT FOR MEASURES 
                   CONSIDERED ON THE FLOOR.

       (a) In General.--Title III of the Congressional Budget Act 
     of 1974 is amended by inserting at the end the following:


                    ``budget evasion point of order

       ``Sec. 316. (a) Discretionary Caps.--It shall not be in 
     order to consider any bill or resolution (or amendment, 
     motion, or conference report on that bill or resolution) that 
     waives or suspends the enforcement of section 251 of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 or 
     otherwise would alter the spending limits set forth in that 
     section.
       ``(b) Pay-as-You-Go.--It shall not be in order to consider 
     any bill or resolution (or amendment, motion, or conference 
     report on that bill or resolution) that waives or suspends 
     the enforcement of section 252 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 or otherwise would 
     alter the balances of the pay-as-you-go scorecard pursuant to 
     that section.
       ``(c) Directed Scoring.--It shall not be in order in the 
     Senate to consider any bill or

[[Page 21033]]

     resolution (or amendment, motion, or conference report on 
     that bill or resolution) that directs the scorekeeping of any 
     bill or resolution.
       ``(d) Waiver and Appeal.--This section may be waived or 
     suspended in the Senate only by an affirmative vote of three-
     fifths of the Members, duly chosen and sworn. An affirmative 
     vote of three-fifths of the Members of the Senate, duly 
     chosen and sworn, shall be required in the Senate to sustain 
     an appeal of the ruling of the Chair on a point of order 
     raised under this section.''.
       (b) Table of Contents.--The table of contents for the 
     Congressional Budget Act of 1974 is amended by inserting 
     after the item for section 315 the following:

Sec. 316. Budget evasion point of order.''.

     SEC. 104. POINT OF ORDER TO REQUIRE COMPLIANCE WITH THE CAPS 
                   AND PAY-AS-YOU-GO.

       Section 312(b) of the Congressional Budget Act of 1974 (2 
     U.S.C. 643(b)) is amended to read as follows:
       ``(b) Discretionary Spending and Pay-as-You-Go Point of 
     Order in the Senate.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, it shall not be in order in the Senate to 
     consider any bill or resolution or any separate provision of 
     a bill or resolution (or amendment, motion, or conference 
     report on that bill or resolution) that would--
       ``(A) exceed any of the discretionary spending limits in 
     section 251(c) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985; or
       ``(B) for direct spending or revenue legislation, would 
     cause or increase an on-budget deficit for any one of the 
     following three applicable time periods--
       (i) the first year covered by the most recently adopted 
     concurrent resolution on the budget;
       (ii) the period of the first 5 fiscal years covered by the 
     most recently adopted concurrent resolution on the budget; or
       (iii) the period of the 5 fiscal years following the first 
     five fiscal years covered in the most recently adopted 
     concurrent resolution on the budget.
       ``(2) Point of order against a specific provision.--If the 
     Presiding Officer sustains a point of order under paragraph 
     (1) with respect to any separate provision of a bill or 
     resolution, that provision shall be stricken from the measure 
     and may not be offered as an amendment from the floor.
       ``(3) Form of the point of order.--A point of order under 
     this section may be raised by a Senator as provided in 
     section 313(e) of the Congressional Budget Act of 1974.
       ``(4) Conference reports.--If a point of order is sustained 
     under this section against a conference report the report 
     shall be disposed of as provided in section 313(d) of the 
     Congressional Budget Act of 1974.
       ``(5) Enforcement by the presiding officer.--In the Senate, 
     if a point of order lies against a bill or resolution (or 
     amendment, motion, or conference report on that bill or 
     resolution) under this section, and no Senator has raised the 
     point of order, and the Senate has not waived the point of 
     order, then before the Senate may vote on the bill or 
     resolution (or amendment, motion, or conference report on 
     that bill or resolution), the Presiding Officer shall on his 
     or her own motion raise a point of order under this section.
       ``(6) Exceptions.--This subsection shall not apply if a 
     declaration of war by the Congress is in effect or if a joint 
     resolution pursuant to section 258 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 has been enacted.''.

     SEC. 105. DISCLOSURE OF INTEREST COSTS.

       Section 308(a)(1) of the Congressional Budget Act of 1974 
     (2 U.S.C. 639(a)(1)) is amended--
       (1) in subparagraph (B), by striking ``and'' after the 
     semicolon;
       (2) in subparagraph (C), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(D) containing a projection by the Congressional Budget 
     Office of the cost of the debt servicing that would be caused 
     by such measure for such fiscal year (or fiscal years) and 
     each of the 4 ensuing fiscal years.''.

     SEC. 106. EXECUTIVE BRANCH REPORT ON FISCAL EXPOSURES.

       (a) In General.--The President shall submit to the 
     Committees on Appropriations, Budget, Finance, and 
     Governmental Affairs of the Senate, and the Committees on 
     Appropriations, Budget, Government Reform, and Ways and Means 
     of the House of Representatives, not later than 2 weeks 
     before the first Monday in February of each year, a report 
     (in this section referred to as the ``report'') on the fiscal 
     exposures of the United States Federal Government and their 
     implications for long-term financial health. The report shall 
     also be included as part of the Consolidated Financial 
     Statement of the United States Government.
       (b) Contents.--
       (1) In general.--The report shall include fiscal exposures 
     for the following categories of fiscal exposures:
       (A) Debt.--Debt, including--
       (i) total gross debt;
       (ii) publicly held debt; and
       (iii) debt held by Government accounts.
       (B) Other financial liabilities.--Other financial 
     liabilities, including--
       (i) civilian and military pensions;
       (ii) post-retirement health benefits;
       (iii) environmental liabilities;
       (iv) accounts payable;
       (v) loan guarantees; and
       (vi) Social Security benefits due and payable.
       (C) Financial commitments.--Financial commitments, 
     including--
       (i) undelivered orders; and
       (ii) long-term operating leases.
       (D) Financial contingencies and other exposure.--Financial 
     contingencies and other exposures, including--
       (i) unadjudicated claims;
       (ii) Federal insurance programs (including both the 
     financial contingency for and risk assumed by such programs);
       (iii) net future benefits under Social Security, Medicare 
     Part A, Medicare Part B, and other social insurance programs;
       (iv) life cycle costs, including deferred and future 
     maintenance and operating costs associated with operating 
     leases and the maintenance of capital assets;
       (v) unfunded portions of incrementally funded capital 
     projects;
       (vi) disaster relief; and
       (vii) others as deemed appropriate.
       (2) Estimates.--Where available, estimates for each 
     exposure should be included. Where reasonable estimates are 
     not available, a range of estimates may be appropriate.
       (3) Other exposures.--Exposures that are analogous to those 
     specified in paragraph (1) shall also be included in the 
     exposure categories identified in such paragraph.
       (c) Format.--The report shall include a 1-page list of all 
     exposures. Additional disclosures shall include descriptions 
     of exposures, the estimation methodologies and significant 
     assumptions used, and an analysis of the implications of the 
     exposures for the long-term financial outlook. Additional 
     analysis deemed informative may be provided on subsequent 
     pages.
       (d) Review With Congress.--Following the submission of the 
     report on fiscal exposures to the Senate and the House of 
     Representatives, the Comptroller General shall review and 
     report to the committee reviewing the report on the report, 
     discussing--
       (1) the extent to which all required disclosures under this 
     section have been made;
       (2) the quality of the cost estimates;
       (3) the scope of the information;
       (4) the long-range financial outlook; and
       (5) any other matters deemed appropriate.
       (e) Definitions.--In this section:
       (1) Liabilities.--The terms ``liabilities'', 
     ``commitments'', and ``contingencies'' shall be defined in 
     accordance with generally accepted accounting principles and 
     standards of the United States Federal Government.
       (2) Risk assumed.--The term ``risk assumed'' means the full 
     portion of the risk premium based on the expected cost of 
     losses inherent in the Government's commitment that is not 
     charged to the insured. For example, the present value of 
     unpaid expected losses net of associated premiums, based on 
     the risk assumed as a result of insurance coverage.
       (3) Net future benefit payments.--The term ``net future 
     benefit payments'' means the net present value of negative 
     cashflow. Negative cashflow is to be calculated as the 
     current amount of funds needed to cover projected shortfalls, 
     excluding trust fund balances, over a 75-year period. This 
     estimate should include births during the period and 
     individuals below age 15 as of January 1 of the valuation 
     year.

     SEC. 107. BUDGET COMMITTEE SETS 302(B) ALLOCATIONS.

       The Congressional Budget Act of 1974 (2 U.S.C. 621 et seq.) 
     is amended--
       (1) in section 301(e)(2)(F) (2 U.S.C. 632(e)(2)(F)), by 
     striking ``section 302(a)'' and inserting ``subsections (a) 
     and (b) of section 302''; and
       (2) in section 302 (2 U.S.C. 633), by striking subsection 
     (b) and inserting the following:
       ``(b) Suballocations for Appropriations Committee.--The 
     joint explanatory statement accompanying a conference report 
     on a concurrent resolution on the budget shall include 
     suballocations of amounts allocated to the Committees on 
     Appropriations of each amount allocated to those committees 
     under subsection (a) among each of the subcommittees of those 
     committees.''.

     SEC. 108. LONG-TERM COST RECOGNITION POINT OF ORDER.

       (a) In General.--Title III of the Congressional Budget Act 
     of 1974 is amended by adding at the end the following:


              ``long-term cost recognition point of order

       ``Sec. 318. (a) Congressional Budget Office Analysis.--
       ``(1) In general.--CBO shall, in conjunction with the 
     analysis required by section 402, prepare and submit to the 
     Committees on the Budget of the House of Representatives and 
     Senate a report on each bill, joint resolution, amendment, 
     motion, or conference report reported by any committee of the 
     House of Representatives or the Senate that contains any cost 
     drivers that CBO concludes are likely to have the effect of 
     increasing the cost path of that measure such that the 
     estimated discounted cash flows of the measure in the 10 
     years following the 10th year after the measure takes effect

[[Page 21034]]

     would be 150 percent or greater of the level of the estimated 
     discounted cash flows of the measure at the end of the 10 
     years following the enactment of the measure.
       ``(2) Projections.--Where possible, CBO should use existing 
     long-term projections of cost drivers prepared by the 
     appropriate Federal agency.
       ``(3) Limit.--Nothing in this section requires CBO to 
     develop cost estimates for a measure beyond the 10th year 
     after the measure takes effect.
       ``(b) Cost Drivers.--Cost drivers CBO shall consider under 
     subsection (a) include--
       ``(1) demographic changes;
       ``(2) new technologies; and
       ``(3) environmental factors.
       ``(c) Point of Order.--It shall not be in order in the 
     House of Representatives or the Senate to consider any bill, 
     joint resolution, amendment, motion, or conference report 
     that CBO determines will increase the level of the estimated 
     discounted cash flows of that measure as reported in 
     subsection (a) by 150 percent or more.''.

     SEC. 109. PROTECTION OF SOCIAL SECURITY SURPLUSES BY BUDGET 
                   ENFORCEMENT.

       (a) Revision of Enforcing Deficit Targets.--Section 253 of 
     the Balanced Budget and Emergency Deficit Control Act of 1985 
     (2 U.S.C. 903) is amended--
       (1) in subsection (a), by striking ``(if any remains) if it 
     exceeds the margin'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Excess Deficit.--The excess deficit is the deficit 
     for the budget year.'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Eliminating Excess Deficit.--Each non-exempt account 
     shall be reduced by a dollar amount calculated by multiplying 
     the baseline level of sequesterable budgetary resources in 
     that account at that time by the uniform percentage necessary 
     to eliminate an excess deficit.''; and
       (4) by striking subsections (g) and (h).
       (b) Medicare Exempt.--
       (1) Amendments.--The Balanced Budget and Emergency Deficit 
     Control Act of 1985 is amended--
       (A) in section 253(e)(3)(A), by striking clause (i) and 
     inserting the following:
       ``(i) the medicare program specified in section 256(d) 
     shall not be reduced; and'';
       (B) in section 255(g)(1)(A), by inserting ``Medicare (for 
     purposes of section 253)'' after the item relating to 
     ``Medical facilities''; and
       (C) in section 256(d)(1), by striking ``sections 252 and 
     253'' and inserting ``section 252''.
       (2) Exemption.--Medicare shall not be subject to sequester 
     under section 253 of the Balanced Budget and Emergency 
     Deficit Control Act of 1985, as amended by this section.
       (c) Economic and Technical Assumptions.--Notwithstanding 
     section 254(j) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 (2 U.S.C. 904(j)), the Office of 
     Management and Budget shall use the economic and technical 
     assumptions underlying the report issued pursuant to section 
     1106 of title 31, United States Code, for purposes of 
     determining the excess deficit under section 253(b) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985, as 
     added by subsection (a).
       (d) Application of Sequestration to Budget Accounts.--
     Section 256(k) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 (2 U.S.C. 906(k)) is amended by--
       (1) striking paragraph (2); and
       (2) redesignating paragraphs (3) through (6) as paragraphs 
     (2) through (5), respectively.
       (e) Strengthening Social Security Points of Order..--
       (1) In general.--Section 312 of the Congressional Budget 
     Act of 1974 (2 U.S.C. 643) is amended by inserting at the end 
     the following:
       ``(g) Strengthening Social Security Point of Order.--It 
     shall not be in order in the House of Representatives or the 
     Senate to consider a concurrent resolution on the budget (or 
     any amendment thereto or conference report thereon) or any 
     bill, joint resolution, amendment, motion, or conference 
     report that would violate or amend section 13301 of the 
     Budget Enforcement Act of 1990.''.
       (2) Super majority requirement.--
       (A) Point of order.--Section 904(c)(1) of the Congressional 
     Budget Act of 1974 is amended by inserting ``312(g),'' after 
     ``310(d)(2),''.
       (B) Waiver.--Section 904(d)(2) of the Congressional Budget 
     Act of 1974 is amended by inserting ``312(g),'' after 
     ``310(d)(2),''.
       (3) Enforcement in each fiscal year.--The Congressional 
     Budget Act of 1974 is amended in--
       (A) section 301(a)(7) (2 U.S.C. 632(a)(7)), by striking 
     ``for the fiscal year'' through the period and inserting 
     ``for each fiscal year covered by the resolution''; and
       (B) section 311(a)(3) (2 U.S.C. 642(a)(3)), by striking 
     beginning with ``for the first fiscal year'' through the 
     period and insert the following: ``for any of the fiscal 
     years covered by the concurrent resolution.''.
       (f) Effective Date.--Section 275(b) of the Balanced Budget 
     and Emergency Deficit Control Act of 1985 (2 U.S.C. 900 note) 
     is amended by striking ``253,''.

 TITLE II--REFORM OF BUDGETARY TREATMENT OF FEDERAL INSURANCE PROGRAMS

     SEC. 201. FEDERAL INSURANCE PROGRAMS.

       (a) In General.--The Congressional Budget Act of 1974 is 
     amended by adding after title V the following new title:

     ``TITLE VI--BUDGETARY TREATMENT OF FEDERAL INSURANCE PROGRAMS

     ``SEC. 601. SHORT TITLE.

       ``This title may be cited as the `Federal Insurance 
     Budgeting Act of 2002'.

     ``SEC. 602. BUDGETARY TREATMENT.

       ``(a) President's Budget.--Beginning with fiscal year 2008, 
     the budget of the Government submitted pursuant to section 
     1105(a) of title 31, United States Code, shall be based on 
     the risk-assumed cost of Federal insurance programs.
       ``(b) Budget Accounting.--For any Federal insurance 
     program--
       ``(1) the program account shall--
       ``(A) pay the risk-assumed cost borne by taxpayers to the 
     financing account; and
       ``(B) pay actual insurance program administrative costs; 
     and
       ``(2) the financing account shall--
       ``(A) receive premiums and other income;
       ``(B) pay all claims for insurance and receive all 
     recoveries; and
       ``(C) transfer to the program account on not less than an 
     annual basis amounts necessary to pay insurance program 
     administrative costs; and
       ``(3) a negative risk-assumed cost shall be transferred 
     from the financing account to the program account, and shall 
     be transferred from the program account to the general fund;
       ``(4) all payments by or receipts of the financing accounts 
     shall be treated in the budget as a means of financing.
       ``(c) Appropriations Required.--(1) Notwithstanding any 
     other provision of law, insurance commitments may be made for 
     fiscal year 2006 and thereafter only to the extent that new 
     budget authority to cover their risk-assumed cost is provided 
     in advance in an appropriation Act.
       ``(2) An outstanding insurance commitment shall not be 
     modified in a manner that increases its risk-assumed cost 
     unless budget authority for the additional cost has been 
     provided in advance.
       ``(3) Paragraph (1) shall not apply to Federal insurance 
     programs that constitute entitlements.
       ``(d) Reestimates.--
       ``(1) In general.--The risk-assumed cost for a fiscal year 
     shall be reestimated in each subsequent year. Such reestimate 
     can equal zero. In the case of a positive reestimate, the 
     amount of the reestimate shall be paid from the program 
     account to the financing account. In the case of a negative 
     reestimate, the amount of the reestimate shall be paid from 
     the financing account to the program account, and shall be 
     transferred from the program account to the general fund. 
     Reestimates shall be displayed as a distinct and separately 
     identified subaccount in the program account.
       ``(2) Appropriations.--There are appropriated such sums as 
     are necessary to fund a positive reestimate under paragraph 
     (1).
       ``(e) Administrative Expenses.--All funding for an agency's 
     administration of a Federal insurance program shall be 
     displayed as a distinct and separately identified subaccount 
     in the program account.

     ``SEC. 603. TIMETABLE FOR IMPLEMENTATION OF ACCRUAL BUDGETING 
                   FOR FEDERAL INSURANCE PROGRAMS.

       ``(a) Agency Requirements.--Agencies with responsibility 
     for Federal insurance programs shall develop models to 
     estimate their risk-assumed cost by year through the budget 
     horizon and shall submit those models, all relevant data, a 
     justification for critical assumptions, and the annual 
     projected risk-assumed costs to OMB with their budget 
     requests each year starting with the request for fiscal year 
     2005. Agencies will likewise provide OMB with annual 
     estimates of modifications, if any, and reestimates of 
     program costs.
       ``(b) Disclosure.--When the President submits a budget of 
     the Government pursuant to section 1105(a) of title 31, 
     United States Code, for fiscal year 2005, OMB shall publish a 
     notice in the Federal Register advising interested persons of 
     the availability of information describing the models, data 
     (including sources), and critical assumptions (including 
     explicit or implicit discount rate assumptions) that it or 
     other executive branch entities would use to estimate the 
     risk-assumed cost of Federal insurance programs and giving 
     such persons an opportunity to submit comments. At the same 
     time, the chairman of the Committee on the Budget shall 
     publish a notice for CBO in the Federal Register advising 
     interested persons of the availability of information 
     describing the models, data (including sources), and critical 
     assumptions (including explicit or implicit discount rate 
     assumptions) that it would use to estimate the risk-assumed 
     cost of Federal insurance programs and giving such interested 
     persons an opportunity to submit comments.
       ``(c) Revision.--After consideration of comments pursuant 
     to subsection (b), and in consultation with the Committees on 
     the Budget of the House of Representatives and the Senate, 
     OMB and CBO shall revise the models, data, and major 
     assumptions they would

[[Page 21035]]

     use to estimate the risk-assumed cost of Federal insurance 
     programs.
       ``(d) Display.--
       ``(1) In general.--For fiscal years 2005, 2006, and 2007 
     the budget submissions of the President pursuant to section 
     1105(a) of title 31, United States Code, and CBO's reports on 
     the economic and budget outlook pursuant to section 202(e)(1) 
     and the President's budgets, shall for display purposes only, 
     estimate the risk-assumed cost of existing or proposed 
     Federal insurance programs.
       ``(2) OMB.--The display in the budget submissions of the 
     President for fiscal years 2005, 2006, and 2007 shall 
     include--
       ``(A) a presentation for each Federal insurance program in 
     budget-account level detail of estimates of risk-assumed 
     cost;
       ``(B) a summary table of the risk-assumed costs of Federal 
     insurance programs; and
       ``(C) an alternate summary table of budget functions and 
     aggregates using risk-assumed rather than cash-based cost 
     estimates for Federal insurance programs.
       ``(3) CBO.--In the second session of the 108th Congress and 
     the 109th Congress, CBO shall include in its estimates under 
     section 308, for display purposes only, the risk-assumed cost 
     of existing Federal insurance programs, or legislation that 
     CBO, in consultation with the Committees on the Budget of the 
     House of Representatives and the Senate, determines would 
     create a new Federal insurance program.
       ``(e) OMB, CBO, and GAO Evaluations.--(1) Not later than 6 
     months after the budget submission of the President pursuant 
     to section 1105(a) of title 31, United States Code, for 
     fiscal year 2007, OMB, CBO, and GAO shall each submit to the 
     Committees on the Budget of the House of Representatives and 
     the Senate a report that evaluates the advisability and 
     appropriate implementation of this title.
       ``(2) Each report made pursuant to paragraph (1) shall 
     address the following:
       ``(A) The adequacy of risk-assumed estimation models used 
     and alternative modeling methods.
       ``(B) The availability and reliability of data or 
     information necessary to carry out this title.
       ``(C) The appropriateness of the explicit or implicit 
     discount rate used in the various risk-assumed estimation 
     models.
       ``(D) The advisability of specifying a statutory discount 
     rate (such as the Treasury rate) for use in risk-assumed 
     estimation models.
       ``(E) The ability of OMB, CBO, or GAO, as applicable, to 
     secure any data or information directly from any Federal 
     agency necessary to enable it to carry out this title.
       ``(F) The relationship between risk-assumed accrual 
     budgeting for Federal insurance programs and the specific 
     requirements of the Balanced Budget and Emergency Deficit 
     Control Act of 1985.
       ``(G) Whether Federal budgeting is improved by the 
     inclusion of risk-assumed cost estimates for Federal 
     insurance programs.
       ``(H) The advisability of including each of the programs 
     currently estimated on a risk-assumed cost basis in the 
     Federal budget on that basis.

     ``SEC. 604. DEFINITIONS.

       ``For purposes of this title:
       ``(1) The term `Federal insurance program' means a program 
     that makes insurance commitments and includes the list of 
     such programs as to be defined by the budget concepts 
     commission, as required by title IV of the Truth in Budgeting 
     and Social Security Protection Act of 2002.
       ``(2) The term `insurance commitment' means an agreement in 
     advance by a Federal agency to indemnify a non-Federal entity 
     against specified losses. This term does not include loan 
     guarantees as defined in title V or benefit programs such as 
     social security, medicare, and similar existing social 
     insurance programs.
       ``(3)(A) The term `risk-assumed cost' means the net present 
     value of the estimated cash flows to and from the Government 
     resulting from an insurance commitment or modification 
     thereof.
       ``(B) The cash flows associated with an insurance 
     commitment include--
       ``(i) expected claims payments inherent in the Government's 
     commitment;
       ``(ii) net premiums (expected premium collections received 
     from or on behalf of the insured less expected administrative 
     expenses);
       ``(iii) expected recoveries; and
       ``(iv) expected changes in claims, premiums, or recoveries 
     resulting from the exercise by the insured of any option 
     included in the insurance commitment.
       ``(C) The cost of a modification is the difference between 
     the current estimate of the net present value of the 
     remaining cash flows under the terms of the insurance 
     commitment, and the current estimate of the net present value 
     of the remaining cash flows under the terms of the insurance 
     commitment as modified.
       ``(D) The cost of a reestimate is the difference between 
     the net present value of the amount currently required by the 
     financing account to pay estimated claims and other 
     expenditures and the amount currently available in the 
     financing account. The cost of a reestimate shall be 
     accounted for in the current year in the budget of the 
     Government submitted pursuant to section 1105(a) of title 31, 
     United States Code.
       ``(E) For purposes of this definition, expected 
     administrative expenses shall be construed as the amount 
     estimated to be necessary for the proper administration of 
     the insurance program. This amount may differ from amounts 
     actually appropriated or otherwise made available for the 
     administration of the program.
       ``(4) The term `program account' means the budget account 
     for the risk-assumed cost, and for paying all costs of 
     administering the insurance program, and is the account from 
     which the risk-assumed cost is disbursed to the financing 
     account.
       ``(5) The term `financing account' means the nonbudget 
     account that is associated with each program account which 
     receives payments from or makes payments to the program 
     account, receives premiums and other payments from the 
     public, pays insurance claims, and holds balances.
       ``(6) The term `modification' means any Government action 
     that alters the risk-assumed cost of an existing insurance 
     commitment from the current estimate of cash flows. This 
     includes any action resulting from new legislation, or from 
     the exercise of administrative discretion under existing law, 
     that directly or indirectly alters the estimated cost of 
     existing insurance commitments.
       ``(7) The term `model' means any actuarial, financial, 
     econometric, probabilistic, or other methodology used to 
     estimate the expected frequency and magnitude of loss-
     producing events, expected premiums or collections from or on 
     behalf of the insured, expected recoveries, and 
     administrative expenses.
       ``(8) The term `current' has the same meaning as in section 
     250(c)(9) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985.
       ``(9) The term `OMB' means the Director of the Office of 
     Management and Budget.
       ``(10) The term `CBO' means the Director of the 
     Congressional Budget Office.
       ``(11) The term `GAO' means the Comptroller General of the 
     United States.

     ``SEC. 605. AUTHORIZATIONS TO ENTER INTO CONTRACTS; ACTUARIAL 
                   COST ACCOUNT.

       ``(a) Authorization of Appropriations.--There is authorized 
     to be appropriated $600,000 for each of fiscal years 2002 
     through 2007 to the Director of the Office of Management and 
     Budget and each agency responsible for administering a 
     Federal program to carry out this title.
       ``(b) Treasury Transactions With the Financing Accounts.--
     The Secretary of the Treasury shall borrow from, receive 
     from, lend to, or pay the insurance financing accounts such 
     amounts as may be appropriate. The Secretary of the Treasury 
     may prescribe forms and denominations, maturities, and terms 
     and conditions for the transactions described above. The 
     authorities described above shall not be construed to 
     supersede or override the authority of the head of a Federal 
     agency to administer and operate an insurance program. All 
     the transactions provided in this subsection shall be subject 
     to the provisions of subchapter II of chapter 15 of title 31, 
     United States Code. Cash balances of the financing accounts 
     in excess of current requirements shall be maintained in a 
     form of uninvested funds, and the Secretary of the Treasury 
     shall pay interest on these funds.
       ``(c) Appropriation of Amount Necessary to Cover Risk-
     Assumed Cost of Insurance Commitments at Transition Date.--
     (1) A financing account is established on September 30, 2007, 
     for each Federal insurance program.
       ``(2) There is appropriated to each financing account the 
     amount of the risk-assumed cost of Federal insurance 
     commitments outstanding for that program as of the close of 
     September 30, 2007.
       ``(3) These financing accounts shall be used in 
     implementing the budget accounting required by this title.

     ``SEC. 606. EFFECTIVE DATE.

       ``(a) In General.--This title shall take effect immediately 
     and shall expire on September 30, 2009.
       ``(b) Special Rule.--If this title is not reauthorized by 
     September 30, 2009, then the accounting structure and 
     budgetary treatment of Federal insurance programs shall 
     revert to the accounting structure and budgetary treatment in 
     effect immediately before the date of enactment of this 
     title.''.
       (b) Conforming Amendment.--The table of contents set forth 
     in section 1(b) of the Congressional Budget and Impoundment 
     Control Act of 1974 is amended by inserting after the item 
     relating to section 507 the following new items:

     ``TITLE VI--BUDGETARY TREATMENT OF FEDERAL INSURANCE PROGRAMS

``Sec. 601. Short title.
``Sec. 602. Budgetary treatment.
``Sec. 603. Timetable for implementation of accrual budgeting for 
              Federal insurance programs.
``Sec. 604. Definitions.
``Sec. 605. Authorizations to enter into contracts; actuarial cost 
              account.
``Sec. 606. Effective date.''.

[[Page 21036]]



            TITLE III--BIENNIAL BUDGETING AND APPROPRIATIONS

     SEC. 301. REVISION OF TIMETABLE.

       Section 300 of the Congressional Budget Act of 1974 (2 
     U.S.C. 631) is amended to read as follows:


                               ``timetable

       ``Sec. 300. (a) In General.--Except as provided by 
     subsection (b), the timetable with respect to the 
     congressional budget process for any Congress (beginning with 
     the One Hundred Eighth Congress) is as follows:
       

                                                 ``First Session
                 ``On or before:         Action to be completed:
 
                 First Monday in         President submits budget recommendations.
                  February.
                 February 15...........  Congressional Budget Office submits report to Budget Committees.
                 Not later than 6 weeks  Committees submit views and estimates to Budget Committees.
                  after budget
                  submission.
                 April 1...............  Budget Committees report concurrent resolution on the biennial budget.
                 May 15................  Congress completes action on concurrent resolution on the biennial
                                          budget.
                 May 15................  Biennial appropriation bills may be considered in the House.
                 June 10...............  House Appropriations Committee reports last biennial appropriation
                                          bill.
                 June 30...............  House completes action on biennial appropriation bills.
                 August 1..............  Congress completes action on reconciliation legislation.
                 October 1.............  Biennium begins.
 



                                                ``Second Session
               ``On or before:          Action to be completed:
 
               February 15............  President submits budget review.
               Not later than 6 weeks   Congressional Budget Office submits report to Budget Committees.
                after President
                submits budget review.
               The last day of the      Congress completes action on bills and resolutions authorizing new
                session.                 budget authority for the succeeding biennium.
 

       ``(b) Special Rule.--In the case of any first session of 
     Congress that begins in any year immediately following a leap 
     year and during which the term of a President (except a 
     President who succeeds himself) begins, the following dates 
     shall supersede those set forth in subsection (a):

       

                                                 ``First Session
               ``On or before:          Action to be completed:
               First Monday in April..  President submits budget recommendations.
                April 20..............  Committees submit views and estimates to Budget Committees.
               May 15.................  Budget Committees report concurrent resolution on the biennial budget.
               June 1.................  Congress completes action on concurrent resolution on the biennial
                                         budget.
               July 1.................  Biennial appropriation bills may be considered in the House.
               July 20................  House completes action on biennial appropriation bills.
               August 1...............  Congress completes action on reconciliation legislation.
               October 1..............  Biennium begins.''.
 

     SEC. 302. AMENDMENTS TO THE CONGRESSIONAL BUDGET AND 
                   IMPOUNDMENT CONTROL ACT OF 1974.

       (a) Declaration of Purpose.--Section 2(2) of the 
     Congressional Budget and Impoundment Control Act of 1974 (2 
     U.S.C. 621(2)) is amended by striking ``each year'' and 
     inserting ``biennially''.
       (b) Definitions.--
       (1) Budget resolution.--Section 3(4) of such Act (2 U.S.C. 
     622(4)) is amended by striking ``fiscal year'' each place it 
     appears and inserting ``biennium''.
       (2) Biennium.--Section 3 of such Act (2 U.S.C. 622) is 
     further amended by adding at the end the following new 
     paragraph:
       ``(11) The term `biennium' means the period of 2 
     consecutive fiscal years beginning on October 1 of any odd-
     numbered year.''.
       (c) Biennial Concurrent Resolution on the Budget.--
       (1) Contents of resolution.--Section 301(a) of such Act (2 
     U.S.C. 632(a)) is amended--
       (A) in the matter preceding paragraph (1) by--
       (i) striking ``April 15 of each year'' and inserting ``May 
     15 of each odd-numbered year'';
       (ii) striking ``the fiscal year beginning on October 1 of 
     such year'' the first place it appears and inserting ``the 
     biennium beginning on October 1 of such year''; and
       (iii) striking ``the fiscal year beginning on October 1 of 
     such year'' the second place it appears and inserting ``each 
     fiscal year in such period'';
       (B) in paragraph (6), by striking ``for the fiscal year'' 
     and inserting ``for each fiscal year in the biennium''; and
       (C) in paragraph (7), by striking ``for the first fiscal 
     year'' and inserting ``for each fiscal year in the 
     biennium''.
       (2) Additional matters.--Section 301(b)(3) of such Act (2 
     U.S.C. 632(b)) is amended by striking ``for such fiscal 
     year'' and inserting ``for either fiscal year in such 
     biennium''.
       (3) Views of other committees.--Section 301(d) of such Act 
     (2 U.S.C. 632(d)) is amended

[[Page 21037]]

     by inserting ``(or, if applicable, as provided by section 
     300(b))'' after ``United States Code''.
       (4) Hearings.--Section 301(e)(1) of such Act (2 U.S.C. 
     632(e)) is amended by--
       (A) striking ``fiscal year'' and inserting ``biennium''; 
     and
       (B) inserting after the second sentence the following: ``On 
     or before April 1 of each odd-numbered year (or, if 
     applicable, as provided by section 300(b)), the Committee on 
     the Budget of each House shall report to its House the 
     concurrent resolution on the budget referred to in subsection 
     (a) for the biennium beginning on October 1 of that year.''.
       (5) Goals for reducing unemployment.--Section 301(f) of 
     such Act (2 U.S.C. 632(f)) is amended by striking ``fiscal 
     year'' each place it appears and inserting ``biennium''.
       (6) Economic assumptions.--Section 301(g)(1) of such Act (2 
     U.S.C. 632(g)(1)) is amended by striking ``for a fiscal 
     year'' and inserting ``for a biennium''.
       (7) Section heading.--The section heading of section 301 of 
     such Act is amended by striking ``annual'' and inserting 
     ``biennial''.
       (8) Table of contents.--The item relating to section 301 in 
     the table of contents set forth in section 1(b) of such Act 
     is amended by striking ``Annual'' and inserting ``Biennial''.
       (d) Committee Allocations.--Section 302 of such Act (2 
     U.S.C. 633) is amended--
       (1) in subsection (a)(1) by--
       (A) striking ``for the first fiscal year of the 
     resolution,'' and inserting ``for each fiscal year in the 
     biennium,'';
       (B) striking ``for that period of fiscal years'' and 
     inserting ``for all fiscal years covered by the resolution''; 
     and
       (C) striking ``for the fiscal year of that resolution'' and 
     inserting ``for each fiscal year in the biennium'';
       (2) in subsection (f)(1), by striking ``for a fiscal year'' 
     and inserting ``for a biennium'';
       (3) in subsection (f)(1), by striking ``first fiscal year'' 
     and inserting ``each fiscal year of the biennium'';
       (4) in subsection (f)(2)(A), by--
       (A) striking ``first fiscal year'' and inserting ``each 
     fiscal year of the biennium''; and
       (B) striking ``the total of fiscal years'' and inserting 
     ``the total of all fiscal years covered by the resolution''; 
     and
       (5) in subsection (g)(1)(A), by striking ``April'' and 
     inserting ``May''.
       (e) Section 303 Point of Order.--
       (1) In general.--Section 303(a) of such Act (2 U.S.C. 
     634(a)) is amended by striking ``first fiscal year'' and 
     inserting ``each fiscal year of the biennium''.
       (2) Exceptions in the house.--Section 303(b)(1) of such Act 
     (2 U.S.C. 634(b)) is amended--
       (A) in subparagraph (A), by striking ``the budget year'' 
     and inserting ``the biennium''; and
       (B) in subparagraph (B), by striking ``the fiscal year'' 
     and inserting ``the biennium''.
       (3) Application to the senate.--Section 303(c)(1) of such 
     Act (2 U.S.C. 634(c)) is amended by--
       (A) striking ``fiscal year'' and inserting ``biennium''; 
     and
       (B) striking ``that year'' and inserting ``each fiscal year 
     of that biennium''.
       (f) Permissible Revisions of Concurrent Resolutions on the 
     Budget.--Section 304(a) of such Act (2 U.S.C. 635) is 
     amended--
       (1) by striking ``fiscal year'' the first two places it 
     appears and inserting ``biennium'';
       (2) by striking ``for such fiscal year''; and
       (3) by inserting before the period ``for such biennium''.
       (g) Procedures for Consideration of Budget Resolutions.--
     Section 305(a)(3) of such Act (2 U.S.C. 636(b)(3)) is amended 
     by striking ``fiscal year'' and inserting ``biennium''.
       (h) Completion of House Action on Appropriation Bills.--
     Section 307 of such Act (2 U.S.C. 638) is amended--
       (1) by striking ``each year'' and inserting ``each odd-
     numbered year'';
       (2) by striking ``annual'' and inserting ``biennial'';
       (3) by striking ``fiscal year'' and inserting ``biennium''; 
     and
       (4) by striking ``that year'' and inserting ``each odd-
     numbered year''.
       (i) Completion of Action on Regular Appropriation Bills.--
     Section 309 of such Act (2 U.S.C. 640) is amended--
       (1) by inserting ``of any odd-numbered calendar year'' 
     after ``July'';
       (2) by striking ``annual'' and inserting ``biennial''; and
       (3) by striking ``fiscal year'' and inserting ``biennium''.
       (j) Reconciliation Process.--Section 310(a) of such Act (2 
     U.S.C. 641(a)) is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``any fiscal year'' and inserting ``any biennium''; and
       (2) in paragraph (1) by striking ``such fiscal year'' each 
     place it appears and inserting ``any fiscal year covered by 
     such resolution''.
       (k) Section 311 Point of Order.--
       (1) In the house.--Section 311(a)(1) of such Act (2 U.S.C. 
     642(a)) is amended--
       (A) by striking ``for a fiscal year'' and inserting ``for a 
     biennium'';
       (B) by striking ``the first fiscal year'' each place it 
     appears and inserting ``either fiscal year of the biennium''; 
     and
       (C) by striking ``that first fiscal year'' and inserting 
     ``each fiscal year in the biennium''.
       (2) In the senate.--Section 311(a)(2) of such Act is 
     amended--
       (A) in subparagraph (A), by striking ``for the first fiscal 
     year'' and inserting ``for either fiscal year of the 
     biennium''; and
       (B) in subparagraph (B)--
       (i) by striking ``that first fiscal year'' the first place 
     it appears and inserting ``each fiscal year in the 
     biennium''; and
       (ii) by striking ``that first fiscal year and the ensuing 
     fiscal years'' and inserting ``all fiscal years''.
       (3) Social security levels.--Section 311(a)(3) of such Act 
     is amended by--
       (A) striking ``for the first fiscal year'' and inserting 
     ``each fiscal year in the biennium''; and
       (B) striking ``that fiscal year and the ensuing fiscal 
     years'' and inserting ``all fiscal years''.
       (l) MDA Point of Order.--Section 312(c) of the 
     Congressional Budget Act of 1974 (2 U.S.C. 643) is amended--
       (1) by striking ``for a fiscal year'' and inserting ``for a 
     biennium'';
       (2) in paragraph (1), by striking ``first fiscal year'' and 
     inserting ``either fiscal year in the biennium'';
       (3) in paragraph (2), by striking ``that fiscal year'' and 
     inserting ``either fiscal year in the biennium''; and
       (4) in the matter following paragraph (2), by striking 
     ``that fiscal year'' and inserting ``the applicable fiscal 
     year''.

     SEC. 303. AMENDMENTS TO TITLE 31, UNITED STATES CODE.

       (a) Definition.--Section 1101 of title 31, United States 
     Code, is amended by adding at the end thereof the following 
     new paragraph:
       ``(3) `biennium' has the meaning given to such term in 
     paragraph (11) of section 3 of the Congressional Budget and 
     Impoundment Control Act of 1974 (2 U.S.C. 622(11)).''.
       (b) Budget Contents and Submission to the Congress.--
       (1) Schedule.--The matter preceding paragraph (1) in 
     section 1105(a) of title 31, United States Code, is amended 
     to read as follows:
       ``(a) On or before the first Monday in February of each 
     odd-numbered year (or, if applicable, as provided by section 
     300(b) of the Congressional Budget Act of 1974), beginning 
     with the One Hundred Seventh Congress, the President shall 
     transmit to the Congress, the budget for the biennium 
     beginning on October 1 of such calendar year. The budget 
     transmitted under this subsection shall include a budget 
     message and summary and supporting information. The President 
     shall include in each budget the following:''.
       (2) Expenditures.--Section 1105(a)(5) of title 31, United 
     States Code, is amended by striking ``the fiscal year for 
     which the budget is submitted and the 4 fiscal years after 
     that year'' and inserting ``each fiscal year in the biennium 
     for which the budget is submitted and in the succeeding 4 
     years''.
       (3) Receipts.--Section 1105(a)(6) of title 31, United 
     States Code, is amended by striking ``the fiscal year for 
     which the budget is submitted and the 4 fiscal years after 
     that year'' and inserting ``each fiscal year in the biennium 
     for which the budget is submitted and in the succeeding 4 
     years''.
       (4) Balance statements.--Section 1105(a)(9)(C) of title 31, 
     United States Code, is amended by striking ``the fiscal 
     year'' and inserting ``each fiscal year in the biennium''.
       (5) Functions and activities.--Section 1105(a)(12) of title 
     31, United States Code, is amended in subparagraph (A), by 
     striking ``the fiscal year'' and inserting ``each fiscal year 
     in the biennium''.
       (6) Allowances.--Section 1105(a)(13) of title 31, United 
     States Code, is amended by striking ``the fiscal year'' and 
     inserting ``each fiscal year in the biennium''.
       (7) Allowances for uncontrolled expenditures.--Section 
     1105(a)(14) of title 31, United States Code, is amended by 
     striking ``that year'' and inserting ``each fiscal year in 
     the biennium for which the budget is submitted''.
       (8) Tax expenditures.--Section 1105(a)(16) of title 31, 
     United States Code, is amended by striking ``the fiscal 
     year'' and inserting ``each fiscal year in the biennium''.
       (9) Future years.--Section 1105(a)(17) of title 31, United 
     States Code, is amended--
       (A) by striking ``the fiscal year following the fiscal 
     year'' and inserting ``each fiscal year in the biennium 
     following the biennium'';
       (B) by striking ``that following fiscal year'' and 
     inserting ``each such fiscal year''; and
       (C) by striking ``fiscal year before the fiscal year'' and 
     inserting ``biennium before the biennium''.
       (10) Prior year outlays.--Section 1105(a)(18) of title 31, 
     United States Code, is amended--
       (A) by striking ``the prior fiscal year'' and inserting 
     ``each of the 2 most recently completed fiscal years,'';
       (B) by striking ``for that year'' and inserting ``with 
     respect to those fiscal years''; and
       (C) by striking ``in that year'' and inserting ``in those 
     fiscal years''.
       (11) Prior year receipts.--Section 1105(a)(19) of title 31, 
     United States Code, is amended--
       (A) by striking ``the prior fiscal year'' and inserting 
     ``each of the 2 most recently completed fiscal years'';
       (B) by striking ``for that year'' and inserting ``with 
     respect to those fiscal years''; and

[[Page 21038]]

       (C) by striking ``in that year'' each place it appears and 
     inserting ``in those fiscal years''.
       (c) Estimated Expenditures of Legislative and Judicial 
     Branches.--Section 1105(b) of title 31, United States Code, 
     is amended by striking ``each year'' and inserting ``each 
     even-numbered year''.
       (d) Recommendations To Meet Estimated Deficiencies.--
     Section 1105(c) of title 31, United States Code, is amended--
       (1) by striking ``the fiscal year for'' the first place it 
     appears and inserting ``each fiscal year in the biennium 
     for'';
       (2) by striking ``the fiscal year for'' the second place it 
     appears and inserting ``each fiscal year of the biennium, as 
     the case may be,''; and
       (3) by striking ``that year'' and inserting ``for each year 
     of the biennium''.
       (e) Capital Investment Analysis.--Section 1105(e)(1) of 
     title 31, United States Code, is amended by striking 
     ``ensuing fiscal year'' and inserting ``biennium to which 
     such budget relates''.
       (f) Supplemental Budget Estimates and Changes.--
       (1) In general.--Section 1106(a) of title 31, United States 
     Code, is amended--
       (A) in the matter preceding paragraph (1), by--
       (i) striking ``Before July 16 of each year,'' and inserting 
     ``Before February 15 of each even numbered year,''; and
       (ii) striking ``fiscal year'' and inserting ``biennium'';
       (B) in paragraph (1), by striking ``that fiscal year'' and 
     inserting ``each fiscal year in such biennium'';
       (C) in paragraph (2), by striking ``4 fiscal years 
     following the fiscal year'' and inserting ``4 fiscal years 
     following the biennium''; and
       (D) in paragraph (3), by striking ``fiscal year'' and 
     inserting ``biennium''.
       (2) Changes.--Section 1106(b) of title 31, United States 
     Code, is amended by--
       (A) striking ``the fiscal year'' and inserting ``each 
     fiscal year in the biennium'';
       (B) striking ``April 11 and July 16 of each year'' and 
     inserting ``February 15 of each even-numbered year''; and
       (C) striking ``July 16'' and inserting ``February 15 of 
     each even-numbered year.''.
       (g) Current Programs and Activities Estimates.--
       (1) In general.--Section 1109(a) of title 31, United States 
     Code, is amended--
       (A) by striking ``On or before the first Monday after 
     January 3 of each year (on or before February 5 in 1986)'' 
     and inserting ``At the same time the budget required by 
     section 1105 is submitted for a biennium''; and
       (B) by striking ``the following fiscal year'' and inserting 
     ``each fiscal year of such period''.
       (2) Joint economic committee.--Section 1109(b) of title 31, 
     United States Code, is amended by striking ``March 1 of each 
     year'' and inserting ``within 6 weeks of the President's 
     budget submission for each odd-numbered year (or, if 
     applicable, as provided by section 300(b) of the 
     Congressional Budget Act of 1974)''.
       (h) Year-Ahead Requests for Authorizing Legislation.--
     Section 1110 of title 31, United States Code, is amended by--
       (1) striking ``May 16'' and inserting ``March 31''; and
       (2) striking ``year before the year in which the fiscal 
     year begins'' and inserting ``calendar year preceding the 
     calendar year in which the biennium begins''.

     SEC. 304. TWO-YEAR APPROPRIATIONS; TITLE AND STYLE OF 
                   APPROPRIATIONS ACTS.

       Section 105 of title 1, United States Code, is amended to 
     read as follows:

     ``Sec. 105. Title and style of appropriations Acts

       ``(a) The style and title of all Acts making appropriations 
     for the support of the Government shall be as follows: `An 
     Act making appropriations (here insert the object) for each 
     fiscal year in the biennium of fiscal years (here insert the 
     fiscal years of the biennium).'.
       ``(b) All Acts making regular appropriations for the 
     support of the Government shall be enacted for a biennium and 
     shall specify the amount of appropriations provided for each 
     fiscal year in such period.
       ``(c) For purposes of this section, the term `biennium' has 
     the same meaning as in section 3(11) of the Congressional 
     Budget and Impoundment Control Act of 1974 (2 U.S.C. 
     622(11)).''.

     SEC. 305. MULTIYEAR AUTHORIZATIONS.

       (a) In General.--Title III of the Congressional Budget Act 
     of 1974 is amended by adding at the end the following new 
     section:


                   ``authorizations of appropriations

       ``Sec. 319. (a) Point of Order.--It shall not be in order 
     in the House of Representatives or the Senate to consider--
       ``(1) any bill, joint resolution, amendment, motion, or 
     conference report that authorizes appropriations for a period 
     of less than 2 fiscal years, unless the program, project, or 
     activity for which the appropriations are authorized will 
     require no further appropriations and will be completed or 
     terminated after the appropriations have been expended; and
       ``(2) in any odd-numbered year, any authorization or 
     revenue bill or joint resolution until Congress completes 
     action on the biennial budget resolution, all regular 
     biennial appropriations bills, and all reconciliation bills.
       ``(b) Applicability.--In the Senate, subsection (a) shall 
     not apply to--
       ``(1) any measure that is privileged for consideration 
     pursuant to a rule or statute;
       ``(2) any matter considered in Executive Session; or
       ``(3) an appropriations measure or reconciliation bill.''.
       (b) Amendment to Table of Contents.--The table of contents 
     set forth in section 1(b) of the Congressional Budget and 
     Impoundment Control Act of 1974 is amended by adding after 
     the item relating to section 313 the following new item:

``Sec. 319. Authorizations of appropriations.''.

     SEC. 306. GOVERNMENT PLANS ON A BIENNIAL BASIS.

       (a) Strategic Plans.--Section 306 of title 5, United States 
     Code, is amended--
       (1) in subsection (a), by striking ``September 30, 1997'' 
     and inserting ``September 30, 2003'';
       (2) in subsection (b)--
       (A) by striking ``at least every three years'' and 
     inserting ``at least every 4 years''; and
       (B) by striking ``five years forward'' and inserting ``six 
     years forward''; and
       (3) in subsection (c), by inserting a comma after 
     ``section'' the second place it appears and adding 
     ``including a strategic plan submitted by September 30, 2003 
     meeting the requirements of subsection (a)''.
       (b) Budget Contents and Submission to Congress.--Paragraph 
     (28) of section 1105(a) of title 31, United States Code, is 
     amended by striking ``beginning with fiscal year 1999, a'' 
     and inserting ``beginning with fiscal year 2004, a 
     biennial''.
       (c) Performance Plans.--Section 1115 of title 31, United 
     States Code, is amended--
       (1) in subsection (a)--
       (A) in the matter before paragraph (1)--
       (i) by striking ``section 1105(a)(29)'' and inserting 
     ``section 1105(a)(28)''; and
       (ii) by striking ``an annual'' and inserting ``a 
     biennial'';
       (B) in paragraph (1) by inserting after ``program 
     activity'' the following: ``for both years 1 and 2 of the 
     biennial plan'';
       (C) in paragraph (5) by striking ``and'' after the 
     semicolon,
       (D) in paragraph (6) by striking the period and inserting a 
     semicolon; and inserting ``and'' after the inserted 
     semicolon; and
       (E) by adding after paragraph (6) the following:
       ``(7) cover a 2-year period beginning with the first fiscal 
     year of the next biennial budget cycle.'';
       (2) in subsection (d) by striking ``annual'' and inserting 
     ``biennial''; and
       (3) in paragraph (6) of subsection (f) by striking 
     ``annual'' and inserting ``biennial''.
       (d) Managerial Accountability and Flexibility.--Section 
     9703 of title 31, United States Code, relating to managerial 
     accountability, is amended--
       (1) in subsection (a)--
       (A) in the first sentence by striking ``annual''; and
       (B) by striking ``section 1105(a)(29)'' and inserting 
     ``section 1105(a)(28)'';
       (2) in subsection (e)--
       (A) in the first sentence by striking ``one or'' before 
     ``years'';
       (B) in the second sentence by striking ``a subsequent 
     year'' and inserting ``for a subsequent 2-year period''; and
       (C) in the third sentence by striking ``three'' and 
     inserting ``four''.
       (e) Pilot Projects for Performance Budgeting.--Section 1119 
     of title 31, United States Code, is amended--
       (1) in paragraph (1) of subsection (d), by striking 
     ``annual'' and inserting ``biennial''; and
       (2) in subsection (e), by striking ``annual'' and inserting 
     ``biennial''.
       (f) Strategic Plans.--Section 2802 of title 39, United 
     States Code, is amended--
       (1) is subsection (a), by striking ``September 30, 1997'' 
     and inserting ``September 30, 2003'';
       (2) in subsection (b), by striking ``at least every three 
     years'' and inserting ``at least every 4 years'';
       (3) by striking ``five years forward'' and inserting ``six 
     years forward''; and
       (4) in subsection (c), by inserting a comma after 
     ``section'' the second place it appears and inserting 
     ``including a strategic plan submitted by September 30, 2003 
     meeting the requirements of subsection (a)''.
       (g) Performance Plans.--Section 2803(a) of title 39, United 
     States Code, is amended--
       (1) in the matter before paragraph (1), by striking ``an 
     annual'' and inserting ``a biennial'';
       (2) in paragraph (1), by inserting after ``program 
     activity'' the following: ``for both years 1 and 2 of the 
     biennial plan'';
       (3) in paragraph (5), by striking ``and'' after the 
     semicolon;
       (4) in paragraph (6), by striking the period and inserting 
     ``; and''; and
       (5) by adding after paragraph (6) the following:
       ``(7) cover a 2-year period beginning with the first fiscal 
     year of the next biennial budget cycle.''.

[[Page 21039]]

       (h) Committee Views of Plans and Reports.--Section 301(d) 
     of the Congressional Budget Act (2 U.S.C. 632(d)) is amended 
     by adding at the end ``Each committee of the Senate or the 
     House of Representatives shall review the strategic plans, 
     performance plans, and performance reports, required under 
     section 306 of title 5, United States Code, and sections 1115 
     and 1116 of title 31, United States Code, of all agencies 
     under the jurisdiction of the committee. Each committee may 
     provide its views on such plans or reports to the Committee 
     on the Budget of the applicable House.''.
       (i) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     take effect on March 1, 2003.
       (2) Agency actions.--Effective on and after the date of 
     enactment of this Act, each agency shall take such actions as 
     necessary to prepare and submit any plan or report in 
     accordance with the amendments made by this Act.

     SEC. 307. BIENNIAL APPROPRIATIONS BILLS.

       (a) In General.--Title III of the Congressional Budget Act 
     of 1974 (2 U.S.C. 631 et seq.) is amended by adding at the 
     end the following:


            ``consideration of biennial appropriations bills

       ``Sec. 320. It shall not be in order in the House of 
     Representatives or the Senate in any odd-numbered year to 
     consider any regular bill providing new budget authority or a 
     limitation on obligations under the jurisdiction of any of 
     the subcommittees of the Committees on Appropriations for 
     only the first fiscal year of a biennium, unless the program, 
     project, or activity for which the new budget authority or 
     obligation limitation is provided will require no additional 
     authority beyond 1 year and will be completed or terminated 
     after the amount provided has been expended.''.
       (b) Amendment to Table of Contents.--The table of contents 
     set forth in section 1(b) of the Congressional Budget and 
     Impoundment Control Act of 1974 is amended by adding after 
     the item relating to section 313 the following new item:

``Sec. 320. Consideration of biennial appropriations bills.''.

     SEC. 308. REPORT ON TWO-YEAR FISCAL PERIOD.

       Not later than 180 days after the date of enactment of this 
     subpart, the Director of OMB shall--
       (1) determine the impact and feasibility of changing the 
     definition of a fiscal year and the budget process based on 
     that definition to a 2-year fiscal period with a biennial 
     budget process based on the 2-year period; and
       (2) report the findings of the study to the Committees on 
     the Budget of the House of Representatives and the Senate.

     SEC. 309. EFFECTIVE DATE.

       (a) In General.--Except as provided in sections 306 and 308 
     and subsection (b), this title and the amendments made by 
     this title shall take effect on January 1, 2003, and shall 
     apply to budget resolutions and appropriations for the 
     biennium beginning with fiscal year 2004.
       (b) Authorizations for the Biennium.--For purposes of 
     authorizations for the biennium beginning with fiscal year 
     2004, the provisions of this title and the amendments made by 
     this title relating to 2-year authorizations shall take 
     effect January 1, 2003.

            TITLE IV--COMMISSION ON FEDERAL BUDGET CONCEPTS

     SEC. 401. ESTABLISHMENT OF COMMISSION ON FEDERAL BUDGET 
                   CONCEPTS.

       There is established a commission to be known as the 
     Commission on Federal Budget Concepts (referred to in this 
     title as the ``Commission'').

     SEC. 402. POWERS AND DUTIES OF COMMISSION.

       (a) Duties of the Commission.--
       (1) In general.--The duties of the Commission shall 
     include--
       (A) a review of the 1967 report of the President's 
     Commission on Budget Concepts and assessment of the 
     implementation of the recommendations of that report;
       (B) identification and evaluation of the structure, 
     concepts, classifications, and bases of accounting of the 
     Federal budget;
       (C) identification of any applicable general accounting 
     principles and practices in the private sector and evaluation 
     of their value to budget practices in the Federal sector;
       (D) a report that shall include recommendations for 
     modifications to the structure, concepts, classifications, 
     and bases of accounting of the Federal budget that would 
     enhance the usefulness of the budget for public policy and 
     financial planning.
       (2) Specific areas of consideration.--Specific areas for 
     consideration by the Commission shall include the following:
       (A) Should part ownership by the Government be sufficient 
     to make an entity Federal and to include it in the budget?
       (B) When is Federal control of an entity, including control 
     exercised through Federal regulations, sufficient to cause it 
     to be included in the budget?
       (C) Are privately owned assets under long-term leases to 
     the Federal Government effectively purchased by the 
     Government during the lease period?
       (D) Should there be an ``off-budget'' section of the 
     budget? How should the Federal Government differentiate 
     between spending and receipts?
       (E) Should the total costs of refundable tax credits belong 
     on the spending side of the budget?
       (F) When should Federal Reserve earnings be reported as 
     receipts or offsetting receipts (negative spending) in the 
     net interest portion of the budget?
       (G) What is a ``user fee'' and under what circumstances is 
     it properly an offset to spending or a governmental receipt? 
     What uses do trust funds have?
       (H) Do trust fund balances provide misleading information? 
     Do the roughly 200 trust funds add clarity or confusion to 
     the budget process?
       (I) Are there better ways than trust fund accounting to 
     identify long-term liabilities?
       (J) Should accrual budgetary accounting be adopted for 
     Federal retirement, military retirement, or Social Security 
     and other entitlements?
       (K) Are off-budget accounts suitable for capturing accruals 
     in the budget?
       (L) What is the appropriate budgetary treatment of--
       (i) purchases and sales of financial assets, including 
     equities, bonds, and foreign currencies;
       (ii) emergency spending;
       (iii) the cost of holding fixed assets (cost of capital);
       (iv) sales of physical assets; and
       (v) seigniorage on coins and currency?
       (M) When policy changes have strong but indirect feedback 
     effects on revenues and other aggregates, should they be 
     reported in budget estimates?
       (N) How should the policies that are one-sided bets on 
     economic events (probabilistic scoring) be represented in the 
     budget?
       (b) Powers of the Commission.--
       (1) Conduct of business.--The Commission may hold hearings, 
     take testimony, receive evidence, and undertake such other 
     activities necessary to carry out its duties.
       (2) Access to information.--The Commission may secure 
     directly from any department of agency of the United States 
     information necessary to carry out its duties. Upon request 
     of the Chair of the Commission, the head of that department 
     or agency shall furnish that information to the Commission.
       (3) Postal service.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the United States.

     SEC. 403. MEMBERSHIP.

       (a) Membership.--The Commission shall be composed of 12 
     members as follows:
       (1) Three members appointed by the chairman of the 
     Committee on the Budget of the Senate.
       (2) Three members appointed by the chairman of the 
     Committee on the Budget of the House of Representatives.
       (3) Three members appointed by the ranking member of the 
     Committee on the Budget of the Senate.
       (4) Three members appointed by the ranking member of the 
     Committee on the Budget of the House of Representatives.
       (b) Qualifications and Term.--
       (1) Qualifications.--Members appointed to the Commission 
     pursuant to subsection (a) shall--
       (A) have expertise and experience in the fields or 
     disciplines related to the subject areas to be considered by 
     the Commission; and
       (B) not be Members of Congress.
       (2) Term of appointment.--The term of an appointment to the 
     Commission shall be for the life of the Commission.
       (3) Chair and vice chair.--The Chair and Vice Chair may be 
     elected from among the members of the Commission. The Vice 
     Chair shall assume the duties of the Chair in the Chair's 
     absence.
       (c) Meetings; Quorum; and Vacancies.--
       (1) Meetings.--The Commission shall meet at least once a 
     month on a day to be decided by the Commission. The 
     Commission may meet at such other times at the call of the 
     Chair or of a majority of its voting members. The meetings of 
     the Commission shall be open to the public, unless by public 
     vote, the Commission shall determine to close a meeting or 
     any portion of a meeting to the public.
       (2) Quorum.--A majority of the voting membership shall 
     constitute a quorum of the Commission, except that 3 or more 
     voting members may conduct hearings.
       (3) Vacancies.--A vacancy on the Commission shall be filled 
     in the same manner in which the original appointment was 
     filled under subsection (a).
       (d) Compensation and Expenses.--Members of the Commission 
     shall serve without pay for their service on the Commission, 
     but may receive travel expenses, including per diem in lieu 
     of subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code.

     SEC. 404. STAFF AND SUPPORT SERVICES.

       (a) Staff.--With the advance approval of the Commission, 
     the executive director may

[[Page 21040]]

     appoint such personnel as is appropriate. The staff of the 
     Commission shall be appointed without regard to political 
     affiliation and without regard to the provisions of title 5, 
     United States Code, governing appointments in the competitive 
     service, and may be paid without regard to the provisions of 
     chapter 51 and subchapter III of chapter 53 of such title 
     relating to classifications and General Schedule pay rates.
       (b) Executive Director.--The Chairman shall appoint an 
     executive director, who shall be paid the rate of basic pay 
     for level II of the Executive Schedule.
       (c) Experts and Consultants.--With the advance approval of 
     the Commission, the executive director may procure temporary 
     and intermittent services under section 3109(b) of title 5, 
     United States Code.
       (d) Technical and Administrative Assistance.--Upon the 
     request of the Commission--
       (1) the head of any agency, office, or establishment within 
     the executive or legislative branches of the United States 
     shall provide, without reimbursement, such technical 
     assistance as the Commission determines is necessary to carry 
     out its duties; and
       (2) the Administrator of the General Services 
     Administration shall provide, on a reimbursable basis, such 
     administrative support services as the Commission may 
     require.
       (e) Detail of Federal Personnel.--Upon the request of the 
     Commission, the head of an agency, office, or establishment 
     in the executive or legislative branch of the United States 
     is authorized to detail, without reimbursement, any of the 
     personnel of that agency, office, or establishment to the 
     Commission to assist the Commission in carrying out its 
     duties. Any such detail shall not interrupt or otherwise 
     affect the employment status or privileges of that employee.
       (f) CBO.--The Director of the Congressional Budget Office 
     shall provide the Commission with its latest research on the 
     accuracy of its past budget and economic projections as 
     compared to those of the Office of Management and Budget and, 
     if possible, those of private sector forecasters. The 
     Commission shall work with the Directors of the Congressional 
     Budget Office and the Office of Management and Budget in 
     their efforts to explain the factors affecting the accuracy 
     of budget projections.

     SEC. 405. REPORT.

       Not later than _____, the Commission shall transmit a 
     report to the President and to each House of Congress. The 
     report shall contain a detailed statement of the findings and 
     conclusions of the Commission, together with its 
     recommendations for such legislative or administrative 
     actions as it considers appropriate. No finding, conclusion, 
     or recommendation may be made by the Commission unless 
     approved by a majority of those voting, a quorum being 
     present. At the request of any Commission member, the report 
     shall include that member's dissenting findings, conclusions, 
     or recommendations.

     SEC. 406. TERMINATION.

       The Commission shall terminate 30 days after the date of 
     transmission of the report required in section 405.

     SEC. 407. FUNDING.

       There are authorized to be appropriated not more than 
     $1,000,000 to carry out this title. Sums so appropriated 
     shall remain available until expended.
  Mr. FEINGOLD. Mr. President, I am pleased to join today with my 
Colleague from Ohio, Mr. Voinovich, to introduce the Truth in Budgeting 
and Social Security Protection Act of 2002. This bill collects a 
variety of budget process ideas to help protect Social Security, 
promote balanced budgets, and improve government accounting practices. 
I hope that this effort will help spur greater debate and action to 
restore fiscal discipline.
  Our government's finances have taken a dire turn in the last year-
and-a-half. While in January of last year the Congressional Budget 
Office projected that, in the fiscal year just ended, fiscal year 2002, 
the government would run a unified budget surplus of $313 billion, now 
it projects a unified budget deficit of $157 billion.
  And not counting Social Security surpluses, the picture is even 
worse. While in January of last year CBO projected that for fiscal year 
2002, the government would run a surplus of $142 billion, without using 
Social Security surpluses, now it projects a deficit of $314 billion, 
not counting Social Security.
  We must stop running deficits because they cause the government to 
use the surpluses of the Social Security Trust Fund for other 
government purposes, rather than to pay down the debt and help our 
Nation prepare for the coming retirement of the Baby Boom generation.
  And we must stop running deficits because every dollar that we add to 
the Federal debt is another dollar that we are forcing our children to 
pay back in higher taxes or fewer government benefits. When the 
government in this generation chooses to spend on current consumption 
and to accumulate debt for our children's generation to pay, it does 
nothing less than rob our children of their own choices. We make our 
choices to spend on our wants, but we saddle them with debts that they 
must pay from their tax dollars and their hard work. And the government 
should not do that.
  That is why I am joining with my Colleague from Ohio to introduce 
this bill to improve the budget process today. We need to strengthen 
the budget process. We need to do more.
  Our bill would: extend the discretionary spending caps and the pay-
as-you-go rules for 5 years, strengthen the enforcement of those budget 
rules, help protect Social Security surpluses, institute biennial 
budgeting, improve accounting for long-term costs of legislation, 
improve accounting for federal insurance programs, highlight the full 
expenses, including interest costs, of spending or tax cuts, and create 
a new commission to study the budget process.
  Together, these budget process proposals would go a long way toward 
increasing the responsibility of the Federal budget. I hope that 
between now and the beginning of the next Congress, my Colleagues and 
observers of the budget process will review these proposals, perhaps 
build on them, and then join with us in a major effort to strengthen 
the budget process next year.
  We must stop using Social Security surpluses to fund other government 
programs. We must stop piling up debt for our children to pay off. We 
must enact major reforms of the budget process.
  I hope that this effort will contribute to those ends.
                                 ______
                                 
      By Mr. BAUCUS (for himself, Mr. Crapo, and Mr. Craig):
  S. 3132. A bill to improve the economy and the quality of life for 
all citizens by authorizing funds for Federal-aid highways, and for 
other purposes; to the Committee on Environment and Public Works.
                                 ______
                                 
      By Mr. BAUCUS (for himself, Mr. Crapo, and Mr. Craig):
  S. 3133. A bill to amend the Internal Revenue Code of 1986 to make 
funding available to carry out the Maximum Economic Growth for America 
Through Highway Funding Act; to the Committee on Finance.
  Mr. BAUCUS. Mr. President, I rise today to introduce two bills, the 
Maximum Economic Growth for America Through Highway Funding Act'', or 
``MEGA FUND ACT''--Parts one and two.
  The MEGA FUND ACT is intended to do exactly what its name suggest, 
increase Federal investment in our Nation's highway system. That is an 
important objective. Highway investments create jobs, increase the 
productivity of our economy, and improve the quality of life for all 
Americans.
  In 1998 Congress passed one of the most successful and bipartisan 
bills in recent memory, the ``Transportation Equity Act for the 21st 
Century'', better known as ``TEA-21.'' I am honored to have been an 
author of that piece of legislation.
  The MEGA FUND ACT builds on the success of the highway elements of 
TEA-21, keeping nearly all of its structure in place and increasing 
funding levels.
  There are several major aspects of this legislation.
  First, the MEGA FUND ACT significantly increases highway program 
levels. The principal feature of the bill is its increased funding for 
the program, something that will help all States and all citizens. 
Under TEA-21, as amended, the total obligation authority for FY 2003 is 
$28.485 billion.
  Under the 6 years of the MEGA FUND ACT, the comparable program level 
would grow to $34.839 billion in FY 2004 and to $41.839 billion by FY 
2009.
  These funding increases will be enabled by enactment of legislation 
that I have already introduced with Senator Crapo, S. 2678, the Mega 
Trust Act and S. 3097, MEGA INNOVATE ACT.

[[Page 21041]]

  While these program levels represent a substantial increase, the 
needs of our highway system are even greater. So, the program levels in 
the bill represent only a down payment on the investment in highways 
that is needed to improve our economy through commerce and job 
creation, increase personal mobility and make our roads safer.
  Second, the MEGA FUND ACT continues the basic program structure and 
formulas from TEA-21. The current TEA-21 minimum guarantee formula is 
extended.
  Also, the bill would continue to focus funding on the core programs 
administered by the States: Interstate Maintenance, National Highway 
System, Surface Transportation Program, Bridge, Congestion Mitigation 
and Air Quality Improvement, and the Minimum Guarantee. These key 
programs would constitute approximately the same proportion of the 
overall program as under TEA-21.
  Third, a new category is added to aid states in overcoming economic 
and demographic barriers. The bill would create a new program, at $2 
billion annually, to assist States in dealing with certain economic and 
demographic hardships.
  This would be a new type of program, not subject to the minimum 
guarantee. It is not keyed to specific project types but to types of 
problems facing States. States with very high growth rates, high 
population density, low population density, or low per capita incomes, 
for example, face real challenges.
  This different approach lets States facing those problems receive 
funds and pick the projects. Every one of the 50 States would receive 
significant funding under this program every year.
  The MEGA FUND ACT continues firewalls and improves RABA. One of the 
great contributions of TEA-21 is that it provides the highway program 
protection under the budget procedures of Congress.
  These ``firewall'' provisions enable our citizens to be confident 
that highway taxes will be invested in highways, not saved or diverted.
  TEA-21 also established Revenue Aligned Budget Authority, or RABA. 
The principle of RABA is that, if funds available for the highway 
program exceed expectations, then additional money can be put to work 
in the highway program. This bill would continue those important 
provisions with improvements.
  One key improvement is the elimination of so-called ``negative 
RABA.'' Under the bill, there are only automatic upward adjustments in 
obligation levels under RABA. These adjustments would still take place 
when the Highway Account balance is financially stronger than initially 
estimated.
  Another key reform would focus RABA calculations on the actual 
balance in the Highway Account, rather than on annual revenues.
  This important reform will help ensure that monies in the Highway 
Account of the Highway Trust Fund are invested and not allowed to build 
up to a large balance. Today's RABA did not preclude a build up of 
funds in the Highway Account, delaying the delivery of needed highway 
investments to our citizens.
  The MEGA FUND ACT increased the stability of distributions to states 
under the allocation programs. The bill includes proposed revisions to 
several so-called ``allocation'' programs that will increase funding 
for all States.
  Today, large portions of the program funds that are not apportioned 
to States are distributed on a discretionary basis. This bill would 
leave portions of the program subject to discretion, but move the 
allocation programs, collectively, in a general direction that would 
provide States greater certainty that they will be participating in 
allocation program funds.
  Specifically, the bill makes modest changes to the Intelligent 
Transportation System, ITS, program and to the Transportation and 
Community and System Preservation Pilot, TCSP, program, to ensure that 
some of those funds find their way into every State.
  Another modest change will ensure that each State with a border 
receives at least some funding under the borders and corridors 
programs, and that States with significant public lands receive at 
least some public lands discretionary funding.
  Let me say a few things about what is not addressed in this bill. The 
MEGA FUND ACT sets forth an outline for the highway program. It does 
not address the transit program that is within the jurisdiction of the 
Banking Committee, or the highway safety programs within the 
jurisdiction of the Commerce Committee, or the revenue for the highway 
program that is within the jurisdiction of the Finance Committee.
  My proposals for those issues are in previous bills that I have 
introduced--MEGA RED TRANS, MEGA SAFE, MEGA STREAM, MEGA TRUST, MEGA 
INNOVATE and today, MEGA FUND, Part II. Those are important matters 
that also must be addressed as part of the final overall legislation 
that will extend and build upon TEA-21.
  As for MEGA FUND Part II, this bill although short and simple, 
actually represents the most important step in any reauthorization 
bill. MEGA FUND, Part II allows the funding program set forth in MEGA 
FUND Part I to be spend from the Highway Trust Fund.
  Without this important step, Congress can write formulas until 
Christmas, but no money can actually be sent to the states and spent. 
The ability to spend this money requires a change to the Internal 
Revenue Code that makes those Highway Trust Funds available for 
payment. MEGA FUND PART II takes care of that.
  In summary, the MEGA FUND ACT stays close to the successful program 
structure of TEA-21 and maintains its apportionment formulas. It would 
significantly increase funding for the program as a whole, continue 
budgetary firewalls and strengthen RABA, and provide some extra funds 
to all States through the economic and demographic barriers program and 
through some innovations in other programs not subject to the minimum 
guarantee.
  I ask unanimous consent that a section-by-section analysis of both 
bills be printed in the Record.
  There being no objection, the bills and the additional material was 
ordered to be printed in the Record, as follows:

                                S. 3132

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Maximum Economic Growth for 
     America Through Highway Funding Act'' or the ``MEGA Fund 
     Act''.

     SEC. 2. AUTHORIZATION OF APPROPRIATIONS.

       (a) Programs Subject to Minimum Guarantee.--The following 
     sums are authorized to be appropriated out of the Highway 
     Trust Fund (other than the Mass Transit Account):
       (1) Interstate maintenance program.--For the Interstate 
     maintenance program under section 119 of title 23, United 
     States Code, $4,864,000,000 for fiscal year 2004, 
     $5,020,000,000 for fiscal year 2005, $5,176,000,000 for 
     fiscal year 2006, $5,333,000,000 for fiscal year 2007, 
     $5,645,000,000 for fiscal year 2008, and $5,958,000,000 for 
     fiscal year 2009.
       (2) National highway system.--For the National Highway 
     System under section 103(b) of title 23, United States Code, 
     $5,836,000,000 for fiscal year 2004, $6,024,000,000 for 
     fiscal year 2005, $6,212,000,000 for fiscal year 2006, 
     $6,399,000,000 for fiscal year 2007, $6,774,000,000 for 
     fiscal year 2008, and $7,150,000,000 for fiscal year 2009.
       (3) Bridge program.--For the bridge program under section 
     144 of title 23, United States Code, $4,173,000,000 for 
     fiscal year 2004, $4,307,000,000 for fiscal year 2005, 
     $4,442,000,000 for fiscal year 2006, $4,576,000,000 for 
     fiscal year 2007, $4,844,000,000 for fiscal year 2008, and 
     $5,112,000,000 for fiscal year 2009.
       (4) Surface transportation program.--For the surface 
     transportation program under section 133 of title 23, United 
     States Code, $6,809,000,000 for fiscal year 2004, 
     $7,028,000,000 for fiscal year 2005, $7,247,000,000 for 
     fiscal year 2006, $7,466,000,000 for fiscal year 2007, 
     $7,903,000,000 for fiscal year 2008, and $8,341,000,000 for 
     fiscal year 2009.
       (5) Congestion mitigation and air quality improvement 
     program.--For the congestion mitigation and air quality 
     improvement program under section 149 of title 23, United 
     States Code, $1,654,000,000 for fiscal year 2004, 
     $1,707,000,000 for fiscal year 2005, $1,760,000,000 for 
     fiscal year 2006, $1,813,000,000 for fiscal year 2007, 
     $1,919,000,000 for fiscal year 2008, and $2,026,000,000 for 
     fiscal year 2009.
       (6) Appalachian development highway system program.--For 
     the Appalachian development highway system program under 
     section 14501 of title 40, United States Code, $450,000,000 
     for each of fiscal years 2004 through 2009.

[[Page 21042]]

       (7) Recreational trails program.--For the recreational 
     trails program under section 206 of title 23, United States 
     Code, $75,000,000 for each of fiscal years 2004 through 2009.
       (8) High priority projects program.--For the high priority 
     projects program under section 117 of title 23, United States 
     Code, $1,000,000,000 for each of fiscal years 2004 through 
     2009.
       (b) Assistance in Overcoming Economic and Demographic 
     Barriers.--For the program to provide assistance in 
     overcoming economic and demographic barriers under section 
     139 of title 23, United States Code, there is authorized to 
     be appropriated out of the Highway Trust Fund (other than the 
     Mass Transit Account) $2,000,000,000 for each of fiscal years 
     2004 through 2009.
       (c) Additional Programs.--The following sums are authorized 
     to be appropriated out of the Highway Trust Fund (other than 
     the Mass Transit Account):
       (1) Federal lands highways program.--
       (A) Indian reservation roads.--For Indian reservation roads 
     under section 204 of title 23, United States Code, 
     $300,000,000 for each of fiscal years 2004 through 2009.
       (B) Public lands highways.--For public lands highways under 
     section 204 of title 23, United States Code, $350,000,000 for 
     each of fiscal years 2004 through 2009.
       (C) Park roads and parkways.--For park roads and parkways 
     under section 204 of title 23, United States Code, 
     $300,000,000 for each of fiscal years 2004 through 2009.
       (D) Refuge roads.--For refuge roads under section 204 of 
     title 23, United States Code, $35,000,000 for each of fiscal 
     years 2004 through 2009.
       (2) National corridor planning and development program.--
     For the national corridor planning and development program 
     under section 1118 of the Transportation Equity Act for the 
     21st Century (23 U.S.C. 101 note; 112 Stat. 161) $100,000,000 
     for each of fiscal years 2004 through 2009.
       (3) Coordinated border infrastructure program.--For the 
     coordinated border infrastructure program under section 1119 
     of the Transportation Equity Act for the 21st Century (23 
     U.S.C. 101 note; 112 Stat. 163) $100,000,000 for each of 
     fiscal years 2004 through 2009.
       (4) Construction of ferry boats and ferry terminal 
     facilities.--For construction of ferry boats and ferry 
     terminal facilities under section 1064 of the Intermodal 
     Surface Transportation Efficiency Act of 1991 (23 U.S.C. 129 
     note; 105 Stat. 2005) $50,000,000 for each of fiscal years 
     2004 through 2009.
       (5) National scenic byways program.--For the national 
     scenic byways program under section 162 of title 23, United 
     States Code, $30,000,000 for each of fiscal years 2004 
     through 2009.
       (6) Highway use tax evasion projects.--For highway use tax 
     evasion projects under section 143 of title 23, United States 
     Code, $40,000,000 for each of fiscal years 2004 through 2009.
       (7) Commonwealth of puerto rico highway program.--For the 
     Commonwealth of Puerto Rico highway program under section 
     1214(r) of the Transportation Equity Act for the 21st Century 
     (112 Stat. 209) $130,000,000 for each of fiscal years 2004 
     through 2009.
       (d) Transportation and Community and System Preservation 
     Pilot Program.--Section 1221(e)(1) of the Transportation 
     Equity Act for the 21st Century (23 U.S.C. 101 note; 112 
     Stat. 223) is amended--
       (1) by striking ``1999 and'' and inserting ``1999,''; and
       (2) by inserting before the period at the end the 
     following: ``, and $50,000,000 for each of fiscal years 2004 
     through 2009''.
       (e) National Historic Covered Bridge Preservation.--Section 
     1224(d) of the Transportation Equity Act for the 21st Century 
     (112 Stat. 837) is amended by striking ``2003'' and inserting 
     ``2009''.
       (f) Safety Incentive Grants for Use of Seat Belts.--Section 
     157(g)(1) of title 23, United States Code, is amended--
       (1) by striking ``2002, and'' and inserting ``2002,''; and
       (2) by inserting before the period at the end the 
     following: ``, and $115,000,000 for each of fiscal years 2004 
     through 2009''.
       (g) Research Programs.--The following sums are authorized 
     to be appropriated out of the Highway Trust Fund (other than 
     the Mass Transit Account):
       (1) Surface transportation research.--For carrying out 
     sections 502, 506, 507, and 508 of title 23, United States 
     Code, $103,000,000 for each of fiscal years 2004 through 
     2009.
       (2) Technology deployment program.--For carrying out 
     section 503 of title 23, United States Code, $50,000,000 for 
     each of fiscal years 2004 through 2009.
       (3) Training and education.--For carrying out section 504 
     of title 23, United States Code, $20,000,000 for each of 
     fiscal years 2004 through 2009.
       (4) Bureau of transportation statistics.--For the Bureau of 
     Transportation Statistics to carry out section 111 of title 
     49, United States Code, $31,000,000 for each of fiscal years 
     2004 through 2009.
       (5) ITS standards, research, operational tests, and 
     development.--For carrying out sections 5204, 5205, 5206, and 
     5207 of the Transportation Equity Act for the 21st Century 
     (23 U.S.C. 502 note; 112 Stat. 453) $110,000,000 for each of 
     fiscal years 2004 through 2009.
       (6) ITS deployment.--For carrying out sections 5208 and 
     5209 of the Transportation Equity Act for the 21st Century 
     (23 U.S.C. 502 note; 112 Stat. 458) $140,000,000 for each of 
     fiscal years 2004 through 2009.
       (7) University transportation research.--For carrying out 
     section 5505 of title 49, United States Code, $32,000,000 for 
     each of fiscal years 2004 through 2009.
       (h) Future Strategic Highway Research Program.--Section 104 
     of title 23, United States Code, is amended by adding at the 
     end the following:
       ``(m) Future Strategic Highway Research Program.--
       ``(1) Deductions.--For each of fiscal years 2004 through 
     2009, whenever an apportionment is made of the sums made 
     available for expenditure on each of the surface 
     transportation program under section 133, the bridge program 
     under section 144, the congestion mitigation and air quality 
     improvement program under section 149, and the Interstate and 
     National Highway System program, the Secretary shall make 
     proportionate deductions from those programs, in a total 
     amount equal to $75,000,000, to be used to pay the costs of a 
     future strategic highway research program established under 
     paragraph (2).
       ``(2) Program.--The Secretary shall establish and carry out 
     a future strategic highway research program.
       ``(3) Federal share.--The Federal share of the cost of a 
     project carried out under the future strategic highway 
     research program shall be 80 percent (unless the Secretary 
     determines otherwise with respect to a project).
       ``(4) Availability of amounts.--The amounts deducted under 
     paragraph (1) shall be available for obligation in the same 
     manner as if the funds were apportioned under this chapter, 
     except that the funds shall remain available until 
     expended.''.
       (i) Magnetic Levitation Transportation Technology 
     Deployment Program.--Section 322(h)(1)(B)(i) of title 23, 
     United States Code, is amended--
       (1) by striking ``2002, and'' and inserting ``2002,''; and
       (2) by inserting before the period at the end the 
     following: ``, and such sums as are necessary for fiscal year 
     2004 and each fiscal year thereafter''.
       (j) TIFIA.--Section 188 of title 23, United States Code, is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (1)(E), by striking ``fiscal year 2003'' 
     and inserting ``each of fiscal years 2003 through 2009''; and
       (B) in paragraph (2), by striking ``2003'' and inserting 
     ``2009''; and
       (2) in the table contained in subsection (c), by striking 
     the item relating to fiscal year 2003 and inserting the 
     following:

  ``2003................................................$2,600,000,000 
  ``2004................................................$2,600,000,000 
  ``2005................................................$2,600,000,000 
  ``2006................................................$2,600,000,000 
  ``2007................................................$2,600,000,000 
  ``2008................................................$2,600,000,000 
  ``2009.............................................$2,600,000,000.''.

     SEC. 3. OBLIGATION CEILING.

       (a) In General.--Section 1102 of the Transportation Equity 
     Act for the 21st Century (23 U.S.C. 104 note; 112 Stat. 115) 
     is amended--
       (1) in subsection (a)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(7) $34,000,000,000 for fiscal year 2004;
       ``(8) $35,000,000,000 for fiscal year 2005;
       ``(9) $36,000,000,000 for fiscal year 2006;
       ``(10) $37,000,000,000 for fiscal year 2007;
       ``(11) $39,000,000,000 for fiscal year 2008; and
       ``(12) $41,000,000,000 for fiscal year 2009.'';
       (2) in subsection (b)(8), by striking ``through 2007'' and 
     inserting ``through 2009'';
       (3) in subsection (c)--
       (A) by striking ``For each of fiscal years 1998 through 
     2003,'' and inserting ``Except as otherwise provided, for 
     fiscal year 1998 and each fiscal year thereafter,'';
       (B) in paragraph (1)--
       (i) by striking ``Code, and amounts'' and inserting ``Code, 
     amounts''; and
       (ii) by inserting before the semicolon at the end the 
     following: ``or, for fiscal year 2004 and each fiscal year 
     thereafter, amounts authorized for the Indian reservation 
     roads program under section 204 of title 23, United States 
     Code''; and
       (C) in paragraph (5), by striking ``this Act'' and 
     inserting ``this Act, the Maximum Economic Growth for America 
     Through Highway Funding Act,'';
       (4) in subsection (d), by striking ``2003'' and inserting 
     ``2009'';
       (5) in subsection (e)--
       (A) by striking ``Obligation'' and inserting the following:
       ``(1) In general.--Obligation'';
       (B) in paragraph (1) (as designated by subparagraph (A)), 
     by striking ``and under title V of this Act'' and inserting 
     ``under title V of this Act, and under the Maximum Economic 
     Growth for America Through Highway Funding Act''; and
       (C) by adding at the end the following:
       ``(2) Limitation for fiscal years 2004 through 2009.--
     Notwithstanding any other provision of law, the total of all 
     obligations

[[Page 21043]]

     from amounts made available from the Highway Trust Fund 
     (other than the Mass Transit Account) by section 2(f) of the 
     Maximum Economic Growth for America Through Highway Funding 
     Act, and section 104(m) of title 23, United States Code, 
     shall not exceed $561,000,000 for each of fiscal years 2004 
     through 2009.'';
       (6) in the first sentence of subsection (f), by striking 
     ``2003'' and inserting ``2009'';
       (7) in subsection (h)--
       (A) by striking ``Limitations on obligations imposed by 
     subsection (a)'' and inserting the following:
       ``(1) Fiscal years 1998 through 2003.--Limitations on 
     obligations imposed by paragraphs (1) through (6) of 
     subsection (a)''; and
       (B) by adding at the end the following:
       ``(2) Fiscal years 2004 through 2009.--
       ``(A) In general.--Limitations on obligations imposed by 
     paragraphs (7) through (12) of subsection (a) for a fiscal 
     year shall be increased by an amount equal to the amount of 
     any increase for the fiscal year determined under section 
     4(b)(5) of the Maximum Economic Growth for America Through 
     Highway Funding Act.
       ``(B) Distribution of increases.--Any increase under 
     subparagraph (A) shall be distributed in accordance with this 
     section.''; and
       (8) in subsection (i)--
       (A) in paragraph (5), by striking ``and'' at the end;
       (B) in paragraph (6), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(7) $450,000,000 for fiscal year 2004;
       ``(8) $470,000,000 for fiscal year 2005;
       ``(9) $490,000,000 for fiscal year 2006;
       ``(10) $510,000,000 for fiscal year 2007;
       ``(11) $530,000,000 for fiscal year 2008; and
       ``(12) $550,000,000 for fiscal year 2009.''.
       (b) Deduction for Administrative Expenses.--Section 
     104(a)(1) of title 23, United States Code, is amended--
       (1) by inserting ``the lesser of'' after ``in an amount not 
     to exceed'';
       (2) in subparagraph (A)--
       (A) by redesignating clauses (i) and (ii) as subclauses (I) 
     and (II), respectively, and indenting appropriately; and
       (B) by striking ``(A) 1\1/6\ percent'' and inserting the 
     following:
       ``(A) the sum of--
       ``(i) 1\1/6\ percent'';
       (3) by striking ``(B) one-third'' and inserting the 
     following:
       ``(ii) one-third'';
       (4) in subparagraph (A)(ii) (as so designated), by striking 
     the period at the end and inserting ``; or''; and
       (5) by adding at the end the following:
       ``(B) the amount specified for the applicable fiscal year 
     in section 1102(i) of the Transportation Equity Act for the 
     21st Century (23 U.S.C. 104 note; 112 Stat. 118) for use as 
     described in subparagraph (A).''.

     SEC. 4. RELIABLE HIGHWAY PROGRAM LEVELS; REVISIONS TO REVENUE 
                   ALIGNED BUDGET AUTHORITY.

       (a) Sense of the Senate Relating to Reform of Revenue 
     Aligned Budget Authority.--
       (1) Findings.--The Senate finds that--
       (A) the experience under the Transportation Equity Act for 
     the 21st Century (112 Stat. 107) with respect to revenue 
     aligned budget authority (referred to in this subsection as 
     ``RABA'') has been that, while RABA has produced increases in 
     highway program obligation levels in some fiscal years, RABA 
     also--
       (i) has allowed the balance in the Highway Trust Fund 
     (other than the Mass Transit Account) to grow since the date 
     of enactment of the Transportation Equity Act for the 21st 
     Century;
       (ii) does not provide a mechanism to allow that balance to 
     be expended for the benefit of the public; and
       (iii) has resulted in unexpectedly large annual 
     differences, or estimated differences, in highway program 
     obligation authority as compared with the levels specified in 
     section 1102 of the Transportation Equity Act for the 21st 
     Century (23 U.S.C. 104 note; 112 Stat. 115); and
       (B) Congress has taken legislative action to reject the 
     implementation of estimates that would have resulted in 
     ``negative'' RABA.
       (2) Sense of the senate.--It is the sense of the Senate 
     that the provisions of budget legislation pertaining to the 
     highway program should be amended--
       (A) to improve predictability and stability in the levels 
     of highway program obligation authority;
       (B) to facilitate the expenditure of funds in the Highway 
     Trust Fund (other than the Mass Transit Account); and
       (C) to eliminate the possibility of reductions in the 
     levels of highway program obligation authority being imposed 
     automatically, so that any reductions are solely the 
     prerogative of Congress.
       (b) Reliable Highway Program Levels.--
       (1) In general.--Notwithstanding any other provision of 
     law, no spending limits other than the spending limits 
     specified in this subsection may be imposed, for any of 
     fiscal years 2004 through 2009, on budget accounts or 
     portions of budget accounts that are subject to the 
     obligation limitations and the exemptions from obligation 
     limitations that are specified in section 1102 of the 
     Transportation Equity Act for the 21st Century (23 U.S.C. 104 
     note; 112 Stat. 115).
       (2) Amount of obligation authority.--For each of fiscal 
     years 2004 through 2009, the limitation on obligation 
     authority for the budget accounts described in paragraph (1) 
     shall be equal to the sum of--
       (A) the limitation for that fiscal year specified in 
     section 1102(a) of the Transportation Equity Act for the 21st 
     Century;
       (B) all amounts exempt from that limit under section 
     1102(b) of that Act; and
       (C) the amount of any increase for the fiscal year under 
     paragraph (5).
       (3) Outlays.--For each of fiscal years 2004 through 2009, 
     the limitation on outlays for the budget accounts described 
     in paragraph (1) shall be the level of outlays necessary to 
     accommodate outlays resulting from obligations for that 
     fiscal year under paragraph (2) and obligations from prior 
     fiscal years.
       (4) Annual report on estimated balance in highway 
     account.--In the submission by the President of the budget of 
     the United States Government under section 1105 of title 31, 
     United States Code, for each of fiscal years 2005 through 
     2009, the President shall include an estimate of the balance 
     that will be in the Highway Account of the Highway Trust Fund 
     (as defined in section 9503(e)(5)(B) of the Internal Revenue 
     Code of 1986) at the end of fiscal year 2009.
       (5) Increase based on fund balance.--
       (A) Estimate for fiscal year 2005.--In the submission by 
     the President of the budget of the United States Government 
     under section 1105 of title 31, United States Code, for 
     fiscal year 2005, if the estimate described in paragraph (4) 
     is that, but for this subparagraph, the balance in the 
     Highway Account of the Highway Trust Fund at the end of 
     fiscal year 2009 will be in excess of $7,000,000,000, the 
     amount specified in section 1102(a)(8) of the Transportation 
     Equity Act for the 21st Century shall be deemed to have been 
     increased by an amount equal to 50 percent of the amount of 
     the estimated excess.
       (B) Estimate for fiscal year 2006.--In the submission by 
     the President of the budget of the United States Government 
     under section 1105 of title 31, United States Code, for 
     fiscal year 2006, if the estimate described in paragraph (4) 
     is that, but for this subparagraph, the balance in the 
     Highway Account of the Highway Trust Fund at the end of 
     fiscal year 2009 will be in excess of $6,500,000,000, the 
     amount specified in section 1102(a)(9) of the Transportation 
     Equity Act for the 21st Century shall be deemed to have been 
     increased by an amount equal to 50 percent of the amount of 
     the estimated excess.
       (C) Estimate for fiscal year 2007.--In the submission by 
     the President of the budget of the United States Government 
     under section 1105 of title 31, United States Code, for 
     fiscal year 2007, if the estimate described in paragraph (4) 
     is that, but for this subparagraph, the balance in the 
     Highway Account of the Highway Trust Fund at the end of 
     fiscal year 2009 will be in excess of $6,000,000,000, the 
     amount specified in section 1102(a)(10) of the Transportation 
     Equity Act for the 21st Century shall be deemed to have been 
     increased by an amount equal to 50 percent of the amount of 
     the estimated excess.
       (D) Estimate for fiscal year 2008.--In the submission by 
     the President of the budget of the United States Government 
     under section 1105 of title 31, United States Code, for 
     fiscal year 2008, if the estimate described in paragraph (4) 
     is that, but for this subparagraph, the balance in the 
     Highway Account of the Highway Trust Fund at the end of 
     fiscal year 2009 will be in excess of $5,500,000,000, the 
     amount specified in section 1102(a)(11) of the Transportation 
     Equity Act for the 21st Century shall be deemed to have been 
     increased by an amount equal to 50 percent of the amount of 
     the estimated excess.
       (E) Estimate for fiscal year 2009.--In the submission by 
     the President of the budget of the United States Government 
     under section 1105 of title 31, United States Code, for 
     fiscal year 2009, if the estimate described in paragraph (4) 
     is that, but for this subparagraph, the balance in the 
     Highway Account of the Highway Trust Fund at the end of 
     fiscal year 2009 will be in excess of $5,000,000,000, the 
     amount specified in section 1102(a)(12) of the Transportation 
     Equity Act for the 21st Century shall be deemed to have been 
     increased by an amount equal to the amount of the estimated 
     excess.
       (6) No effect on byrd rule.--Nothing in this subsection 
     affects section 9503(d) of the Internal Revenue Code of 1986.
       (c) Sense of the Senate Supporting Reliable Program Levels 
     in Additional Budget Accounts.--It is the sense of the Senate 
     that the Act reauthorizing highway, highway safety, and 
     transit programs for fiscal years beginning with fiscal year 
     2004 should include, in addition to the budgetary protections 
     for the highway program provided under subsection (b), 
     appropriate budgetary protections for highway safety and 
     transit programs.
       (d) Conforming Amendments to Revenue Aligned Budget 
     Authority.--Section 110 of title 23, United States Code, is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by inserting ``for fiscal years 2000 through 2003'' 
     after ``Allocation''; and
       (ii) by striking ``fiscal year 2000 and each fiscal year 
     thereafter'' and inserting ``each of fiscal years 2000 
     through 2003'';

[[Page 21044]]

       (B) in paragraph (2)--
       (i) by inserting ``for fiscal years 2001 through 2003'' 
     after ``Reduction''; and
       (ii) by striking ``fiscal year 2000 or any fiscal year 
     thereafter'' and inserting ``any of fiscal years 2000 through 
     2002''; and
       (C) by adding at the end the following:
       ``(3) Allocations for fiscal years 2005 through 2009.--For 
     any of fiscal years 2005 through 2009, if an increase is made 
     to the level of obligation authority under section 4(b)(5) of 
     the Maximum Economic Growth for America Through Highway 
     Funding Act, the Secretary shall allocate for the fiscal year 
     an amount equal to the amount of the increase.''; and
       (2) in subsection (b)--
       (A) in paragraph (1)(A)--
       (i) by striking ``for'' the second place it appears; and
       (ii) by inserting ``(112 Stat. 107), the Maximum Economic 
     Growth for America Through Highway Funding Act'' after ``21st 
     Century'';
       (B) in paragraph (2), by striking ``subsection (a)(1)'' and 
     inserting ``paragraph (1) or (3) of subsection (a), as 
     applicable,''; and
       (C) in paragraph (4), by striking ``subsection (a)(1)'' and 
     inserting ``paragraph (1) or (3) of subsection (a), as 
     applicable,''.

     SEC. 5. ASSISTANCE IN OVERCOMING ECONOMIC AND DEMOGRAPHIC 
                   BARRIERS.

       (a) In General.--Title 23, United States Code, is amended 
     by inserting after section 138 the following:

     ``Sec. 139. Assistance in overcoming economic and demographic 
       barriers

       ``(a) Definitions.--In this section:
       ``(1) High-growth state.--The term `high-growth State' 
     means a State that has a population according to the 2000 
     decennial census that is at least 25 percent greater than the 
     population for the State according to the 1990 decennial 
     census.
       ``(2) High-population-density state.--The term `high-
     population-density State' means a State in which the number 
     of individuals per principal arterial mile is greater than 75 
     percent of the number of individuals per principal arterial 
     mile in the 50 States and the District of Columbia, as 
     determined using population according to the 2000 decennial 
     census.
       ``(3) Highway statistics.--
       ``(A) In general.--The term `Highway Statistics' means the 
     Highway Statistics published by the Federal Highway 
     Administration for the most recent calendar or fiscal year 
     for which data are available, which most recent calendar or 
     fiscal year shall be determined as of the first day of the 
     fiscal year for which any calculation using the Highway 
     Statistics is made.
       ``(B) Terms.--Any reference to a term that is used in the 
     Highway Statistics is a reference to the term as used in the 
     Highway Statistics as of September 30, 2002.
       ``(4) Low-income state.--The term `low-income State' means 
     a State that, according to Table PS-1 of the Highway 
     Statistics, has a per capita income that is less than the 
     national average per capita income.
       ``(5) Low-population-density state.--The term `low-
     population-density State' means a State in which the number 
     of individuals per principal arterial mile is less than 75 
     percent of the number of individuals per principal arterial 
     mile in the 50 States and the District of Columbia, as 
     determined using population according to the 2000 decennial 
     census.
       ``(6) National average per capita income.--The term 
     `national average per capita income' means the average per 
     capita income for the 50 States and the District of Columbia, 
     as specified in the Highway Statistics.
       ``(7) Principal arterial miles.--The term `principal 
     arterial miles', with respect to a State, means the principal 
     arterial miles (including Interstate and other expressway or 
     freeway system miles) in the State, as specified in Table HM-
     20 of the Highway Statistics.
       ``(8) State.--The term `State' means each of the 50 States.
       ``(9) State with extensive road ownership.--The term `State 
     with extensive road ownership' means a State that owns more 
     than 80 percent of the total Federal-aid and non-Federal-aid 
     mileage in the State according to Table HM-14 of the Highway 
     Statistics.
       ``(b) Establishment.--There is established a program to 
     assist States that face certain economic and demographic 
     barriers in meeting transportation needs.
       ``(c) Allocation of Funds.--For each of fiscal years 2004 
     through 2009, funds made available to carry out this section 
     shall be allocated as follows:
       ``(1) Low-income states.--For each fiscal year, each low-
     income State shall receive an allocation under this paragraph 
     that is equal to the product obtained by multiplying--
       ``(A) $600,000,000; and
       ``(B) the ratio that--
       ``(i) the difference between--

       ``(I) the national average per capita income; and
       ``(II) the per capita income of the low-income State; bears 
     to

       ``(ii) the sum of the differences determined under clause 
     (i) for all low-income States.
       ``(2) High-growth states.--For each fiscal year, each high-
     growth State shall receive an allocation under this paragraph 
     that is equal to the product obtained by multiplying--
       ``(A) $75,000,000; and
       ``(B) the ratio that--
       ``(i) the percentage by which the population of the high-
     growth State according to the 2000 decennial census exceeds 
     the population of the high-growth State according to the 1990 
     decennial census; bears to
       ``(ii) the sum of the percentages determined under clause 
     (i) for all high-growth States.
       ``(3) Low-population-density states.--
       ``(A) In general.--Subject to subparagraph (B), for each 
     fiscal year, each low-population-density State shall receive 
     an allocation under this paragraph that is equal to the 
     product obtained by multiplying--
       ``(i) $625,000,000; and
       ``(ii) the ratio that--

       ``(I) the quotient obtained by dividing--

       ``(aa) the number of principal arterial miles in the State; 
     by
       ``(bb) the population of the low-population-density State 
     according to the 2000 decennial census; bears to

       ``(II) the sum of the quotients determined under subclause 
     (I) for all low-population-density States.

       ``(B) Maximum allocation.--
       ``(i) In general.--If the allocation for a low-population-
     density State under subparagraph (A) is greater than 
     $35,000,000, the allocation of the low-population-density 
     State shall be reduced to $35,000,000.
       ``(ii) Use of excess allocations.--

       ``(I) Reallocation.--Subject to subclause (II), the funds 
     in addition to the $35,000,000 that would have been allocated 
     to a low-population-density State but for clause (i) shall be 
     reallocated among the low-population-density States that were 
     allocated less than $35,000,000 under subparagraph (A) in 
     accordance with the proportionate shares of those low-
     population-density States under subparagraph (A).
       ``(II) Additional reallocations.--If a reallocation under 
     subclause (I) would result in the receipt by any low-
     population-density State of an amount greater than 
     $35,000,000 under this paragraph--

       ``(aa) the allocation for the low-population-density State 
     shall be reduced to $35,000,000; and
       ``(bb) the amounts in excess of $35,000,000 shall be 
     subject to 1 or more further reallocations in accordance with 
     that subclause so that no low-population-density State is 
     allocated more than $35,000,000 under this paragraph.
       ``(4) High-population-density states.--
       ``(A) In general.--Subject to subparagraph (B), for each 
     fiscal year, each high-population-density State shall receive 
     an allocation under this paragraph that is equal to the 
     product obtained by multiplying--
       ``(i) $625,000,000; and
       ``(ii) the ratio that--

       ``(I) the quotient obtained by dividing--

       ``(aa) the population of the high-population-density State 
     according to the 2000 decennial census; by
       ``(bb) the number of principal arterial miles in the State; 
     bears to

       ``(II) the sum of the quotients determined under subclause 
     (I) for all high-population-density States.

       ``(B) Maximum allocation.--
       ``(i) In general.--If the allocation for a high-population-
     density State under subparagraph (A) is greater than 
     $35,000,000, the allocation of the high-population-density 
     State shall be reduced to $35,000,000.
       ``(ii) Use of excess allocations.--

       ``(I) Reallocation.--Subject to subclause (II), the funds 
     in addition to the $35,000,000 that would have been allocated 
     to a high-population-density State but for clause (i) shall 
     be reallocated among the high-population-density States that 
     were allocated less than $35,000,000 under subparagraph (A) 
     in accordance with the proportionate shares of those high-
     population-density States under subparagraph (A).
       ``(II) Additional reallocations.--If a reallocation under 
     subclause (I) would result in the receipt by any high-
     population-density State of an amount greater than 
     $35,000,000 under this paragraph--

       ``(aa) the allocation for the high-population-density State 
     shall be reduced to $35,000,000; and
       ``(bb) the amounts in excess of $35,000,000 shall be 
     subject to 1 or more further reallocations in accordance with 
     that subclause so that no high-population-density State is 
     allocated more than $35,000,000 under this paragraph.
       ``(5) States with extensive road ownership.--For each 
     fiscal year, each State with extensive road ownership shall 
     receive an allocation under this paragraph that is equal to 
     the product obtained by multiplying--
       ``(A) $75,000,000; and
       ``(B) the ratio that--
       ``(i) the total Federal-aid and non-Federal-aid mileage 
     owned by each State with extensive road ownership according 
     to Table HM-14 of the Highway Statistics; bears to
       ``(ii) the sum of the mileages determined under clause (i) 
     for all States with extensive road ownership.
       ``(d) Treatment of Allocated Funds.--
       ``(1) In general.--Subject to paragraph (2), funds 
     allocated to a State under this section for a fiscal year 
     shall be treated for program administrative purposes as if 
     the funds--

[[Page 21045]]

       ``(A) were funds apportioned to the State under sections 
     104(b)(1), 104(b)(2), 104(b)(3), 104(b)(4), and 144; and
       ``(B) were apportioned to the State in the same ratio that 
     the State is apportioned funds under the sections specified 
     in subparagraph (A) for the fiscal year.
       ``(2) Program administrative purposes.--Program 
     administrative purposes referred to in paragraph (1)--
       ``(A) include--
       ``(i) the Federal share;
       ``(ii) availability for obligation; and
       ``(iii) except as provided in subparagraph (B), 
     applicability of deductions; and
       ``(B) exclude--
       ``(i) calculation of the minimum guarantee under section 
     105; and
       ``(ii) applicability of the deduction for the future 
     strategic highway research program under section 104(m).''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     inserting after the item relating to section 138 the 
     following:

``139. Assistance in overcoming economic and demographic barriers.''.

     SEC. 6. EMERGENCY RELIEF.

       Section 125 of title 23, United States Code, is amended--
       (1) in subsection (c)(1), by striking ``Not more than 
     $100,000,000 is authorized to be obligated in any 1 fiscal 
     year commencing after September 30, 1980,'' and inserting 
     ``Not more than $100,000,000 is authorized to be obligated in 
     any of fiscal years 1981 through 2003, and not more than 
     $200,000,000 is authorized to be obligated in fiscal year 
     2004 or any fiscal year thereafter,''; and
       (2) by adding at the end the following:
       ``(g) Protection of Highway Trust Fund.--Effective 
     beginning on the earlier of October 1, 2003, or the date of 
     enactment of this subsection, notwithstanding any other 
     provision of law, if an Act is enacted that provides for an 
     amount in excess of $200,000,000 for any fiscal year for the 
     emergency fund authorized by this section (including any Act 
     that states that provision of that amount in excess of 
     $200,000,000 is `notwithstanding any other provision of 
     law'), that Act shall be applied so that all funds for that 
     fiscal year for the program established by this section in 
     excess of $200,000,000--
       ``(1) shall be derived from the general fund of the 
     Treasury, and not from the Highway Trust Fund (other than the 
     Mass Transit Account); but
       ``(2) shall be administered by the Secretary in all other 
     respects as if the funds were appropriated from the Highway 
     Trust Fund (other than the Mass Transit Account).''.

     SEC. 7. INCREASED STABILITY OF DISTRIBUTION UNDER ALLOCATION 
                   PROGRAMS.

       (a) National Corridor Planning and Development Program.--
     Section 1118 of the Transportation Equity Act for the 21st 
     Century (23 U.S.C. 101 note; 112 Stat. 161) is amended--
       (1) by redesignating subsection (g) as subsection (h); and
       (2) by inserting after subsection (f) the following:
       ``(g) Minimum Allocations to Border States.--
     Notwithstanding any other provision of law, in allocating 
     funds under this section for fiscal year 2004 and each fiscal 
     year thereafter, the Secretary shall ensure that not less 
     than 2 percent of the funds made available to carry out the 
     program under this section are allocated to each border State 
     (as defined in section 1119(e)).''.
       (b) Coordinated Border Infrastructure Program.--Section 
     1119 of the Transportation Equity Act for the 21st Century 
     (23 U.S.C. 101 note; 112 Stat. 163) is amended--
       (1) by redesignating subsection (e) as subsection (f); and
       (2) by inserting after subsection (d) the following:
       ``(e) Minimum Allocations to Border States.--
     Notwithstanding any other provision of law, in allocating 
     funds under this section for fiscal year 2004 and each fiscal 
     year thereafter, the Secretary shall ensure that not less 
     than 2 percent of the funds made available to carry out the 
     program under this section are allocated to each border 
     State.''.
       (c) Transportation and Community and System Preservation 
     Pilot Program.--Section 1221 of the Transportation Equity Act 
     for the 21st Century (23 U.S.C. 101 note; 112 Stat. 221) is 
     amended by adding at the end the following:
       ``(f) Minimum Allocations to States.--Notwithstanding any 
     other provision of law, in allocating funds made available 
     under this section for fiscal year 2004 and each fiscal year 
     thereafter, the Secretary shall ensure that the total of the 
     allocations to each State (including allocations to the 
     metropolitan planning organizations and local governments in 
     the State) under this section is not less than the product 
     obtained by multiplying--
       ``(1) 50 percent of the percentage specified for the State 
     in section 105 of title 23, United States Code, for the 
     fiscal year; and
       ``(2) the total amount of funds made available to carry out 
     this section for the fiscal year.''.
       (d) Minimum Allocations to States for ITS Deployment.--
       (1) In general.--Notwithstanding any other provision of 
     law, for fiscal year 2004 and each fiscal year thereafter, in 
     allocating funds made available under section 2(f)(6), the 
     Secretary shall ensure that the total of the allocations to 
     each State using those funds is not less than the product 
     obtained by multiplying--
       (A) 50 percent of the percentage specified for the State in 
     section 105 of title 23, United States Code, for the fiscal 
     year; and
       (B) the total amount of funds made available under section 
     2(f)(6).
       (2) Use of funds for both types of projects.--In 
     administering funds available for allocation under section 
     2(f)(6), the Secretary shall encourage States to carry out 
     both--
       (A) projects eligible under section 5208 of the 
     Transportation Equity Act for the 21st Century (23 U.S.C. 502 
     note; 112 Stat. 458); and
       (B) projects eligible under section 5209 of that Act.

     SEC. 8. HISTORIC PARK ROADS AND PARKWAYS.

       (a) In General.--Section 202(c) of title 23, United States 
     Code, is amended--
       (1) by striking ``(c) On'' and inserting the following:
       ``(c) Park Roads and Parkways.--
       ``(1) In general.--On''; and
       (2) by adding at the end the following:
       ``(2) Historic park roads and parkways.--
       ``(A) Definitions.--In this paragraph:
       ``(i) National park.--The term `national park' means an 
     area of land or water administered by the National Park 
     Service that is designated as a national park.
       ``(ii) Recreation visit.--The term `recreation visit' means 
     the entry into a national park for a recreational purpose of 
     an individual who is not--

       ``(I) an employee of the Federal Government, or other 
     individual, who has business in the national park;
       ``(II) an individual passing through the national park for 
     a purpose other than visiting the national park; or
       ``(III) an individual residing in the national park.

       ``(iii) Recreation visitor day.--The term `recreation 
     visitor day' means a period of 12 hours spent in a national 
     park by an individual making a recreation visit to the 
     national park.
       ``(B) Allocation.--Notwithstanding paragraph (1), for 
     fiscal year 2004 and each fiscal year thereafter, the first 
     $100,000,000 authorized to be appropriated from the Highway 
     Trust Fund (other than the Mass Transit Account) for park 
     roads and parkways for the fiscal year shall be allocated for 
     projects to reconstruct, rehabilitate, restore, resurface, or 
     improve to applicable safety standards any highway that meets 
     the criteria specified in subparagraph (C).
       ``(C) Eligibility criteria.--The criteria referred to in 
     subparagraph (B) are that--
       ``(i) the highway provides access to or is located in a 
     national park;
       ``(ii) the highway was initially constructed before 1940; 
     and
       ``(iii) as determined using data provided by the National 
     Park Service averaged over the 3 most recent years for which 
     the data are available, the national park to which the 
     highway provides access or in which the highway is located is 
     used more than 1,000,000 recreation visitor days per year.
       ``(D) Priority.--In funding projects eligible under 
     subparagraphs (B) and (C), the Secretary shall give priority 
     to any project on a highway that is located in or provides 
     access to a national park that--
       ``(i) is adjacent to a national park of a foreign country; 
     or
       ``(ii) is located in more than 1 State.
       ``(E) Federal-state cooperation in project development.--
     Projects to be carried out under this paragraph shall be 
     developed cooperatively by the Secretary and the State in 
     which a national park is located.
       ``(F) Support by the secretary.--The Secretary shall 
     provide the maximum feasible support to ensure prompt 
     development and implementation of projects under this 
     paragraph.
       ``(G) Reservation of funds for projects outside national 
     parks.--
       ``(i) In general.--For each fiscal year, not less than 40 
     percent of the funds allocated under this paragraph shall be 
     used for projects described in subparagraph (B) on highways 
     that are located outside national parks but provide access to 
     national parks.
       ``(ii) Use of excess funds.--If the Secretary determines 
     that funds set aside under clause (i) are in excess of the 
     needs for reconstruction, rehabilitation, restoration, 
     resurfacing, or improvement of the highways described in that 
     clause, the funds set aside under that clause may be used for 
     transit projects that serve national parks with highways 
     (including access highways) that meet the criteria specified 
     in subparagraph (C).
       ``(H) Availability of amounts.--Funds allocated under this 
     paragraph shall remain available until expended.
       ``(I) Relationship to other law.--Nothing in this paragraph 
     reduces the eligibility or priority of a project under any 
     other provision of this title or other law.''.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     projects that--
       (1) are eligible for funding under section 202(c)(2) of 
     title 23, United States Code; but

[[Page 21046]]

       (2) are not fully funded from funds made available under 
     paragraph (1) or (2) of section 202(c) of that title.

     SEC. 9. COOPERATIVE FEDERAL LANDS TRANSPORTATION PROGRAM.

       (a) In General.--Chapter 2 of title 23, United States Code, 
     is amended by inserting after section 206 the following:

     ``Sec. 207. Cooperative Federal lands transportation program

       ``(a) In General.--
       ``(1) Establishment.--There is established the cooperative 
     Federal lands transportation program (referred to in this 
     section as the `program').
       ``(2) Projects.--
       ``(A) Locations.--Funds available for the program under 
     subsection (d) may be used for projects, or portions of 
     projects, on highways that--
       ``(i) are owned or maintained by States or political 
     subdivisions of States; and
       ``(ii) cross, are adjacent to, or lead to federally owned 
     land or Indian reservations (including Corps of Engineers 
     reservoirs), as determined by the State.
       ``(B) Selection.--The projects shall be selected by a State 
     after consultation with the Secretary and each affected local 
     or tribal government.
       ``(C) Types of projects.--A project selected by a State 
     under this section--
       ``(i) shall be on a highway or bridge owned or maintained 
     by the State or 1 or more political subdivisions of the 
     State; and
       ``(ii) may be--

       ``(I) a highway or bridge construction or maintenance 
     project eligible under this title; or
       ``(II) any eligible project under section 204(h).

       ``(b) Distribution of Funds for Projects.--
       ``(1) In general.--
       ``(A) Determinations by the secretary.--The Secretary--
       ``(i) after consultation with the Administrator of General 
     Services, the Secretary of the Interior, and the heads of 
     other agencies as appropriate (including the Chief of 
     Engineers), shall determine the percentage of the total land 
     in each State that is owned by the Federal Government or that 
     is held by the Federal Government in trust;
       ``(ii) shall determine the sum of the percentages 
     determined under clause (i) for States with respect to which 
     the percentage is 4.5 or greater; and
       ``(iii) shall determine for each State included in the 
     determination under clause (ii) the percentage obtained by 
     dividing--

       ``(I) the percentage for the State determined under clause 
     (i); by
       ``(II) the sum determined under clause (ii).

       ``(B) Adjustment.--The Secretary shall--
       ``(i) reduce any percentage determined under subparagraph 
     (A)(iii) that is greater than 7.5 percent to 7.5 percent; and
       ``(ii) redistribute the percentage points equal to any 
     reduction under clause (i) among other States included in the 
     determination under subparagraph (A)(ii) in proportion to the 
     percentages for those States determined under subparagraph 
     (A)(iii).
       ``(2) Availability to states.--For each fiscal year, the 
     Secretary shall make funds available to carry out eligible 
     projects in a State in an amount equal to the amount obtained 
     by multiplying--
       ``(A) the percentage for the State, if any, determined 
     under paragraph (1); by
       ``(B) the funds made available for the program under 
     subsection (d) for the fiscal year.
       ``(c) Transfers.--Notwithstanding any other provision of 
     law, a State and the Secretary may agree to transfer amounts 
     made available to a State under this section to the 
     allocations of the State under section 202 for use in 
     carrying out projects on any Federal lands highway that is 
     located in the State.
       ``(d) Funding.--
       ``(1) In general.--Notwithstanding section 202 or any other 
     provision of law, for fiscal year 2004 and each fiscal year 
     thereafter, the Secretary shall transfer for use in 
     accordance with this section an amount equal to 50 percent of 
     the funds that would otherwise be allocated for the fiscal 
     year under the first sentence of section 202(b).
       ``(2) Contract authority.--Funds transferred for use in 
     accordance with this section shall be available for 
     obligation in the same manner as if the funds were 
     apportioned under chapter 1.''.
       (b) Conforming Amendment.--The analysis for chapter 2 of 
     title 23, United States Code, is amended by striking the item 
     relating to section 207 and inserting the following:

``207. Cooperative Federal lands transportation program.''.

     SEC. 10. MISCELLANEOUS PROGRAM IMPROVEMENTS.

       (a) Federal Share.--
       (1) In general.--Section 120 of title 23, United States 
     Code, is amended--
       (A) in subsection (b), by striking ``the percentage that 
     the area of all such lands in such State'' each place it 
     appears and inserting ``twice the percentage that the area of 
     all such lands in the State'';
       (B) in subsection (f)--
       (i) by striking ``and with the Department of the Interior'' 
     and inserting ``, the Department of the Interior, and the 
     Department of Agriculture''; and
       (ii) by striking ``and national parks and monuments under 
     the jurisdiction of the Department of the Interior'' and 
     inserting ``, national parks, national monuments, and 
     national forests under the jurisdiction of the Department of 
     the Interior or the Department of Agriculture''; and
       (C) by adding at the end the following:
       ``(m) Multistate Weight Enforcement Improvements.--The 
     Federal share of the cost of any project described in section 
     101(a)(3)(H) shall be 100 percent if the project is to be 
     used, or is carried out jointly, by more than 1 State.''.
       (2) High priority projects program.--Section 117(c) of 
     title 23, United States Code, is amended by striking ``80 
     percent'' and inserting ``the share applicable under section 
     120(b)''.
       (3) Highway bridge replacement and rehabilitation 
     program.--Section 144 of title 23, United States Code, is 
     amended by striking subsection (f).
       (4) National scenic byways program.--Section 162(f) of 
     title 23, United States Code, is amended by striking ``80 
     percent'' and inserting ``the share applicable under section 
     120(b)''.
       (5) State planning and research.--Section 505(c) of title 
     23, United States Code, is amended by striking ``80 percent'' 
     and inserting ``the share applicable under section 120(b),''.
       (6) Intelligent transportation system integration 
     program.--Section 5208 of the Transportation Equity Act for 
     the 21st Century (23 U.S.C. 502 note; 112 Stat. 458) is 
     amended by striking subsection (f) and inserting the 
     following:
       ``(f) Federal Share.--The Federal share of the cost of a 
     project payable from funds made available to carry out this 
     section shall be the share applicable under section 120(b) of 
     title 23, United States Code.''.
       (7) Commercial vehicle intelligent transportation system 
     infrastructure deployment.--Section 5209 of the 
     Transportation Equity Act for the 21st Century (23 U.S.C. 502 
     note; 112 Stat. 461) is amended by striking subsection (e) 
     and inserting the following:
       ``(e) Federal Share.--The Federal share of the cost of a 
     project payable from funds made available to carry out this 
     section shall be the share applicable under section 120(b) of 
     title 23, United States Code.''.
       (b) Increased Flexibility in Addressing Railway-Highway 
     Crossings.--Section 130(e) of title 23, United States Code, 
     is amended by striking the first sentence and inserting the 
     following: ``Funds authorized for or expended under this 
     section may be used for installation of protective devices at 
     railway-highway crossings.''.
       (c) Flexibility in Improving Air Quality.--Section 149(c) 
     of title 23, United States Code, is amended--
       (1) in paragraph (1), by striking ``for any project 
     eligible under the surface transportation program under 
     section 133.'' and inserting the following: ``for any project 
     in the State that--
       ``(A) would be eligible under this section if the project 
     were carried out in a nonattainment or maintenance area; or
       ``(B) is eligible under the surface transportation program 
     under section 133.''; and
       (2) in paragraph (2), by striking ``for any project in the 
     State eligible under section 133.'' and inserting the 
     following: ``for any project in the State that--
       ``(A) would be eligible under this section if the project 
     were carried out in a nonattainment or maintenance area; or
       ``(B) is eligible under the surface transportation program 
     under section 133.''.
       (d) Broadened TIFIA Eligibility.--Section 182(a)(3) of 
     title 23, United States Code, is amended--
       (1) in subparagraph (A)(i), by striking ``$100,000,000'' 
     and inserting ``$25,000,000'';
       (2) by striking ``project costs'' and all that follows 
     through ``to be eligible'' and inserting the following: 
     ``project costs.--To be eligible'';
       (3) by striking subparagraph (B); and
       (4) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B), respectively, and indenting appropriately.
       (e) State Role in Selection of Forest Highway Projects.--
     Section 204(a) of title 23, United States Code, is amended by 
     adding at the end the following:
       ``(7) State role in selection of forest highway projects.--
     Notwithstanding any other provision of this title, no forest 
     highway project may be carried out in a State under this 
     chapter unless the State concurs in the selection of the 
     project.''.
       (f) Historic Bridge Eligibility.--Section 144(o) of title 
     23, United States Code, is amended--
       (1) in paragraph (3), by inserting ``200 percent of'' after 
     ``shall not exceed''; and
       (2) in paragraph (4)--
       (A) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively, and indenting appropriately;
       (B) by striking ``Any State'' and inserting the following:
       ``(A) In general.--Any State'';
       (C) in the second sentence--
       (i) by striking ``Costs incurred'' and inserting the 
     following:
       ``(B) Eligibility as reimbursable project costs.--
       ``(i) In general.--Costs incurred''; and
       (ii) by inserting ``200 percent of'' after ``not to 
     exceed''; and

[[Page 21047]]

       (D) by striking the third sentence and inserting the 
     following:
       ``(ii) Amount.--If a State elects to use funds apportioned 
     under this section to support the relocation of a historic 
     bridge, the eligible reimbursable project costs shall be 
     equal to the greater of the Federal share that would be 
     available for the construction of a new bicycle or pedestrian 
     bridge or 200 percent of the cost of demolition of the 
     historic bridge.
       ``(iii) Effect.--Nothing in clause (ii) creates an 
     obligation on the part of a State to preserve a historic 
     bridge.''.

     SEC. 11. MISCELLANEOUS PROGRAM EXTENSIONS AND TECHNICAL 
                   AMENDMENTS.

       (a) Railway-Highway Crossing Hazard Elimination.--Section 
     104(d)(2)(A) of title 23, United States Code, is amended by 
     striking ``for a fiscal year'' and inserting ``for each of 
     fiscal years 1998 through 2003''.
       (b) Minimum Guarantee.--Section 105 of title 23, United 
     States Code, is amended in subsections (a), (d), and (f) by 
     striking ``2003'' each place it appears and inserting 
     ``2009''.
       (c) High Priority Projects Program.--Section 117 of title 
     23, United States Code, is amended--
       (1) in subsection (a)--
       (A) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--The Secretary'';
       (B) by striking ``Of amounts made available to carry out 
     this section,'' and inserting the following:
       ``(2) Availability of funds for fiscal years 1998 through 
     2003.--Of the funds made available to carry out this section 
     for each of fiscal years 1998 through 2003,''; and
       (C) by adding at the end the following:
       ``(3) Availability of funds for fiscal years 2004 through 
     2009.--
       ``(A) In general.--For each of fiscal years 2004 through 
     2009, the Secretary shall allocate the funds made available 
     to carry out this section to each of the 50 States and the 
     District of Columbia in accordance with the percentage 
     specified for each such State and the District of Columbia 
     under section 105.
       ``(B) Use of funds.--Funds allocated in accordance with 
     subparagraph (A) may be used for any project eligible under 
     this chapter that is designated by the State transportation 
     department as a high priority project.''; and
       (2) in subsection (b), by striking ``For'' and inserting 
     ``With respect to funds made available to carry out this 
     section for each of fiscal years 1998 through 2003, for''.
       (d) Highway Bridge Replacement and Rehabilitation 
     Program.--Section 144(g)(1) of title 23, United States Code, 
     is amended by adding at the end the following:
       ``(D) Fiscal years 2004 through 2009.--Of the amounts 
     authorized to be appropriated to carry out the bridge program 
     under this section for each of fiscal years 2004 through 
     2009, all but $100,000,000 shall be apportioned as provided 
     in subsection (e). That $100,000,000 shall be available at 
     the discretion of the Secretary.''.
       (e) Disadvantaged Business Enterprises.--Section 1101(b)(1) 
     of the Transportation Equity Act for the 21st Century (23 
     U.S.C. 101 note; 112 Stat. 113) is amended by striking ``of 
     this Act'' and inserting ``of this Act and the Maximum 
     Economic Growth for America Through Highway Funding Act''.
       (f) Puerto Rico Highway Program.--Section 1214(r)(1) of the 
     Transportation Equity Act for the 21st Century (112 Stat. 
     209) is amended by inserting ``, and funds authorized by 
     section 2(b)(7) of the Maximum Economic Growth for America 
     Through Highway Funding Act for each of fiscal years 2004 
     through 2009,'' after ``2003''.

     SEC. 12. EFFECTIVE DATE.

       Except as otherwise provided, this Act and the amendments 
     made by this Act take effect on October 1, 2003.
                                  ____


                                S. 3133

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Maximum Economic Growth for 
     America Through Highway Funding Part II Act'' or the ``MEGA 
     Fund Part II Act''.

     SEC. 2. AUTHORIZATION TO MAKE FUNDING AVAILABLE FROM THE 
                   HIGHWAY TRUST FUND.

       Section 9503(c)(1) of the Internal Revenue Code of 1986 
     (relating to expenditures from the Highway Trust Fund) is 
     amended--
       (1) in the first sentence--
       (A) by striking ``2003'' and inserting ``2009'';
       (B) in subparagraph (D), by striking ``or'' at the end;
       (C) in subparagraph (E), by striking the period at the end 
     and inserting ``, or''; and
       (D) by adding at the end the following:
       ``(F) authorized to be paid out of the Highway Trust Fund 
     under the Maximum Economic Growth for America Through Highway 
     Funding Act.''; and
       (2) in the second sentence, by striking ``TEA 21 
     Restoration Act'' and inserting ``Maximum Economic Growth for 
     America Through Highway Funding Act''.
                                  ____


               Mega Fund Act--Section-by-Section Analysis


                         section 1, short title

       This section sets forth the title of the bill.


               section 2. authorization of appropriations

       Subsection (a) would authorize the programs subject to the 
     Minimum Guarantee. The 5 principal apportioned programs of 
     TEA-21--Interstate Maintenance, National Highway System, 
     Surface Transportation Program, Bridge, Congestion Mitigation 
     and Air Quality Improvement (CMAQ)--would be significantly 
     increased. Collectively, they would grow from $20.2 billion 
     for FY 2003 to $28.6 billion by FY 2009. Also, they would 
     maintain their current proportion to one anther. The 
     Appalachian Highway program would be continued at present 
     levels of $450 million annually and the Recreational Trails 
     program increased to $75 million annually. A technical and 
     conforming provision in section 11 of the bill would extend 
     the Minimum Guarantee program--which would grow considerably 
     by operation of its own terms.
       The High Priority Projects program would be continued but 
     reduced from nearly $1.8 billion in FY 2003 to a still-
     generous $1 billion for each of FYs 2004-2009. The bill does 
     not pretend that high priority projects will go away, but 
     tries to set a realistic goal of reducing them, providing 
     States a wider role in administering the program.
       Subsection (b) would authorize $2 billion annually for the 
     new economic and demographic barriers program set forth in 
     section 5 of the bill.
       Subsection (c) would authorize additional programs. The 
     borders program and the corridors program would be separately 
     authorized, at $100 million annually each. Federal lands 
     highways programs are reauthorized and increased to the 
     following annual levels: Indian Reservation Roads, $300 
     million; Public Land Highways, $350 million; Park Roads, $300 
     million; and Refuge Roads, $35 million. The programs for 
     ferry boats and terminals, scenic byways, and highways in 
     Puerto Rico would be reauthorized at increased annual levels 
     of $50 million, $30 million, and $130 million, respectively.
       The program to combat highway use tax evasion would be 
     significantly increased, from $5 million today to $40 million 
     annually from FYs 2004-2009. This is an important investment. 
     Improved compliance with highway tax obligations will 
     increase revenues available for the program.
       Subsection (d) would double, to $50 million annual, the 
     TCSP program. Subsection (e) would continue the National 
     Historic Bridge Preservation program at $10 million annually. 
     Subsection (f) would continue the program for incentive 
     grants for seat belt use at $115 million annually. Subsection 
     (g) would continue current research programs at current 
     levels. Subsection (h) would authorize $75 million annually 
     for 6 years for a new Future Strategic Highway Research 
     Program (``FSHRP''). Subsection (i) would continue the 
     current authorization for magnetic levitation deployment of 
     such sums as may be necessary. Subsection (j) would continue 
     authorization for the TIFIA program at current levels of $130 
     million annually.


                     Section 3, Obligation Ceiling

       This section amends the obligation ceiling provision of 
     TEA-21 to set the obligation limit for FYs 2004-2009 and to 
     make a handful of changes. The non-technical provisions of 
     the section include the following.
       Paragraph (a)(1) sets the annual obligation ceilings, 
     starting at $34 billion for FY 2004 and rising gradually to 
     $39 billion for FY 2008 and $41 billion for FY 2009. 
     Paragraph (a)(2) continues current exemptions from the 
     obligation ceiling. Paragraph (a)(3) includes an amendment 
     that would newly provide the Indian Reservation Roads program 
     with obligation authority equal to authorizations. Paragraph 
     (a)(5) would continue the practice of setting a separate 
     obligation limit for research. Paragraph (a)(7) would provide 
     for obligation authority to be increased when called for by 
     the terms of the RABA provision. Paragraph (a)(8) would set a 
     distinct obligation limit on administrative expenses.


   Section 4, Reliable Highway Program Levels; Revisions to Revenue 
                        Aligned Budget Authority

       Subsection (a) of section 4 sets forth the Sense of the 
     Senate as to why RABA should be continued but improved. 
     Subsection (a) recites that under current law the balance in 
     the Highway Account has grown, denying the public the benefit 
     of the user taxes paid. It also recites that the RABA 
     calculation mechanism has led to annual program levels that 
     differ widely from prior estimates. In addition, the current 
     law produced an estimate of large ``negative RABA'' for 
     fiscal year 2003, a result that Congress found to be totally 
     unacceptable. Congress proceeded to eliminate FY 2003 
     negative RABA through enactment of legislation (section 1402 
     of Public Law No. 107-206).
       Subsection (b) would carry forward firewalls and continue 
     and improve RABA. Paragraphs (b)(1)-(3) would continue 
     firewalls. They would make clear that no spending limits may 
     be imposed to limit highway program obligations below the 
     level of the obligation limit for that year, plus amounts 
     exempt from the obligation limit for that year, plus any 
     applicable upward adjustment due to RABA. The provisions 
     would also protect any outlays made pursuant to the protected 
     obligation (and exempt) levels.

[[Page 21048]]

       Paragraphs (b)(4) and (5) would continue and improve RABA. 
     Under the provisions there would be no negative RABA. As a 
     result, States and the public would be able to count on 
     receiving at least the specified program levels.
       The determination of whether additional funding would be 
     automatically provided, above the levels set in the 
     obligation provision, would be based on the balance in the 
     Highway Account, not based on current year revenue. Under 
     current law, with program levels keyed to Highway Account 
     income, the current balance is locked up. One can only access 
     Account income, not the balance, even though the user taxes 
     residing in the Account were paid with the expectation that 
     they would be invested in the highway program.
       As to the specifics of potential upward adjustment in 
     obligation authority under this provision, a key point of 
     reference for the calculations is that Congress should 
     attempt to achieve a prudent, though not overly cautious 
     balance in the Highway Account of approximately $5 billion at 
     the end of FY 2009. As the bill properly deletes negative 
     RABA, it takes a cautious approach to allowing positive RABA 
     in the initial years of the bill, not paying out all funds.
       Thus, as provided in paragraph (5) if, when the FY 2005 
     budget is submitted, it is estimated that, but for upward 
     adjustment of obligation levels, the balance in the Account 
     as of the close of fiscal year 2009 would exceed $7 billion, 
     then there would be an upward adjustment in FY 2005 
     obligation levels of 50% of the estimated excess over that $7 
     billion balance.
       However, as the RABA payments are geared towards the fund 
     balance, the 50% of any calculated ``excess'' for a year that 
     is ``forgone'' in that year is not ``lost'' to the highway 
     program, only delayed in release, if the estimates hold firm 
     over the years. By FY 2009, the provision would pay out as 
     RABA, the full excess over a $5 billion balance in the 
     Highway Account.
       This approach constrains upward adjustments in RABA 
     obligations during the early years of the bill out of respect 
     for the possibility that revenues could be disappointing 
     during the later years of the bill. But this approach still 
     allows the currently large balance in the Highway Account to 
     be put to work.
       Subsection (b) concerns budgetary protection only for the 
     highway program, as it was developed in conjunction with 
     provisions concerning that program. Subsection (b) does not 
     establish specific budget protections for highway safety and 
     transit programs. Accordingly, subsection (c) of this section 
     includes a Sense of the Senate resolution that appropriate 
     protections for such programs, developed in conjunction with 
     proposals for such programs, should be included in final 
     legislation reauthorizing highway and transit programs.


 section 5, assistance in overcoming economic and demographic barriers

       Section 5 would create a new type of program that would 
     provide $2 billion per year to assist States in overcoming 
     certain economic and demographic characteristics that can 
     make it more difficult to meet transportation challenges.
       Five challenges are recognized under this section: low 
     population density ($625 million), high population density 
     ($625 million), low income ($600 million), high population 
     growth ($75 million), and high levels of State road ownership 
     ($75 million). In each category, the amount of funds 
     distributed to a State is increased when the degree of the 
     challenge is more extreme.
       Once received by a State, these funds are to be treated as 
     if received in the same proportion as the State's 
     apportionments under the Interstate Maintenance, National 
     Highway System, Surface Transportation Program, Bridge, 
     Congestion Mitigation and Air Quality programs and would be 
     subject to the administrative rules governing those programs.


                      section 6, emergency relief

       The Emergency Relief program, 23 U.S.C. 125, has been under 
     funded for years. This section would double the Emergency 
     Relief authorization from the Highway Account of the Highway 
     Trust Fund from $100 million to $200 million annually. It 
     also includes language limiting the Highway Account's annual 
     contribution to the program to a maximum of that level. This 
     in no way limits the ability of the Congress to respond 
     rapidly to emergencies, but it does address the degree to 
     which the Highway Account should be financing the response.


    Section 7, Increased Stability of Distribution Under Allocation 
                                Programs

       Under this section States would be provided assurance of 
     receiving at least some funding under some of these programs, 
     while leaving some funding for treatment on a discretionary 
     basis. Thus, under subsections (c) and (d), 50 per cent of 
     the funds for the TCSP and ITS deployment programs would be 
     distributed to the States based on their Minimum Guarantee 
     percentage shares, leaving the balance for discretionary 
     distribution. As these programs grow, it is appropriate to 
     move in the direction of mainstreaming their distribution, so 
     that all States participate.
       In addition, under subsections (a) and (b), concerning the 
     separately funded border infrastructure and corridor 
     programs, each border state, within the meaning of the border 
     program, would receive at least 2 per cent of the program's 
     funds. This leaves most of the funds for discretionary 
     distribution but ensures some participation by the border 
     states in these programs.


              Section 8, Historic Park Roads and Parkways

       This section would ensure that, in the administration of 
     the park roads and parkways program, older and intensively 
     used national parks receive some priority in funding. There 
     are major parks, national treasures, where the roads in the 
     parks or providing access to them were initially constructed 
     before 1940 and are in need of serious attention. This 
     provision focuses on such parks that handle many visitors, 
     specifically those with over 1 million visitor days per year. 
     The bill does not ignore other park and parkway needs, as the 
     proposed increase represents an increase apart from this 
     section's requirement that some funds be dedicated to these 
     high-use, old infrastructure parks.


      Section 9, Cooperative Federal Lands Transportation Program

       This section would ensure that at least some of the 
     discretionary public lands funding goes to States with 
     significant public lands holdings, in proportion to the 
     extent to which the land in such States is owned by the 
     Federal Government (or held by the Federal Government in 
     trust). The provision should make the delivery of our public 
     lands highway projects more effective and efficient. While 
     leaving significant funds for discretionary distribution, by 
     making the distribution of some funds more regular, the 
     provision would allow States to work with Federal agencies on 
     projects on a longer term and more regular basis.


             Section 10, Miscellaneous Program Improvements

       This section contains a number of modest program 
     improvements. Under subsection (c) a State that has the 
     flexibility to use CMAQ funds for highway projects in 
     attainment areas could use those funds for projects in 
     attainment areas that would help prevent pollution. 
     Subsection (e) would codify current practice, under which 
     forest highway projects are not undertaken in a State without 
     the concurrence of the State. Subsection (d) would allow 
     small States the potential to participate in the TIFIA credit 
     program, by lowering the project threshold under that program 
     to $25 million from $100 million. Subsection (b) would 
     increase State flexibility in choosing rail-highway crossing 
     projects. Subsection (a) would correct anomalies in highway 
     statutes that result in inadequate recognition of the 
     economic difficulties facing States with large Federal land 
     holdings.
       States with significant Federal lands have greater 
     difficulty raising the non-Federal match for Federal projects 
     due to the restrictions on the use of Federal lands for 
     economic activity and the inability of the States to tax such 
     lands. Thus, the basic rule in title 23 of the U.S. Code has 
     long been that the non-Federal match is reduced in such 
     States. Yet careful review of title 23 reveals many 
     provisions, including even the bridge program, which do not 
     follow this general rule. This section would update the 
     Federal lands match provision, to reflect the greater 
     difficulty in raising match faced by such States and to 
     ensure that the principle of the reduced match for Federal 
     lands States is applied to all major elements of the highway 
     program.
       The subsection on Historic Bridges would allow states to 
     use bridge program funds up to an amount not to exceed 200 
     percent of the cost of demolishing a historic bridge. 
     Additionally, this subsection repeals the prohibition on the 
     use of Federal-aid highway funds in the future, for projects 
     associated with such bridges after the bridge has been 
     donated.
       This flexibility does not create an obligation on the state 
     to fund preservation or relocation of a historic bridge.


  section 11, miscellaneous program extensions and technical revisions

       This largely technical section would: not extend a takedown 
     of surface transportation program funds that has been used to 
     support a narrow class of projects; continue the Minimum 
     Guarantee program, the discretionary bridge program, Puerto 
     Rico highway program, and the DBE program. Given overall 
     funding increases, the provision does not extent the 
     Interstate Maintenance Discretionary program, further 
     increasing funds available to all the States under that 
     program. It establishes a placeholder for distribution of 
     funds for high priority projects.


                       section 12, effective date

       Under this section the provisions of the bill would take 
     effect on October 1, 2003.

          Mega Fund Act, Part II--Section-by-Section Analysis


                         section 1, short title

       This section sets forth the title of the bill.


                               section 2

       This section amends section 9503(c) of the United States 
     Internal Revenue Code to allow expenditures pursuant to the 
     Mega

[[Page 21049]]

     Fund Act to be available from the Highway Trust Fund.
                                 ______
                                 
      By Mr. BAUCUS (for himself, Mr. Crapo, and Mr. Craig):
  S. 3134. A bill to amend titles 23 and 49, United States Code, to 
encourage economic growth in the United States by increasing 
transportation investments in rural areas, and for other purposes; to 
the Committee on Environment and Public Works.
  Mr. BAUCUS. Mr. President I rise today to introduce a bill to help 
rural America. Now I am always trying to help Montana, but this bill 
will help every State. Today I introduce the MEGA RURAL ACT, Maximum 
Economic Growth for America Through Rural Transportation Investment.
  Quite simply, there are rural transportation needs not being met 
nationwide. This bill addresses those needs.
  This is the eighth bill in a series of bills that Senator Crapo and I 
are introducing to highlight our proposals on reauthorization of TEA 
21--the Transportation Equity Act for the 21st Century.
  So far we've introduced a series of MEGA ACTs, Maximum Economic 
Growth for America Through different types of investments and policy 
changes. In the past 6 months I have introduced MEGA TRUST, MEGA RED 
TRANS, MEGA FUND, Parts I and II, MEGA SAFE, MEGA STREAM and MEGA 
INNOVATE. Today it's the MEGA RURAL ACT.
  The first provision in the MEGA RURAL Act will help states overcome 
certain rural hardships. In the same manner as the MEGA FUND ACT 
addresses this, the MEGA RURAL ACT would create a new program, at $2 
billion annually, to assist States in dealing with certain economic and 
demographic barriers.
  This would be a new type of program, not subject to the minimum 
guarantee, that is not keyed to specific project types but to types of 
problems facing States. States with low population density, or low per 
capita incomes, for example, face real challenges. While the provision 
also addresses some problems faced by non-rural States, this new 
section will give real help to rural States.
  The different approach of this program lets States facing those 
problems receive funds and pick the projects. Every one of the 50 
States would receive significant funding under this program every year.
  The second issue that the MEGA RURAL ACT addresses is that of rural 
roads. I've been hearing from County Commissioners from Montana as well 
as other States, about how much they need direct funding for local 
roads.
  These localities are hard pressed for funds and many of these roads 
are unsafe. This bill, just as the MEGA SAFE ACT does, would establish 
a pilot program, at $200 million annually from FY 2004-2009, to address 
safety on rural local roads. Funds could be used only on local roads 
and rural minor collectors, roads that are not Federal-aid highways.
  The program does not affect distribution of funds among States, as 
funds will be distributed to each of the 50 States in accord with their 
relative formula share under 23 U.S.C. 105. Funds could be used only 
for projects or activities that have a safety benefit. By January 1, 
2009 the Secretary of Transportation is to report on progress under the 
provision and whether any modifications are recommended.
  Finally, just as the MEGA RED TRANS ACT does, the MEGA RURAL ACT 
would ensure that, as Federal transit programs are reauthorized, 
increased funding is provided to meet the needs of the elderly and 
disabled and of rural and small urban areas.
  There is no question that our nation's large metropolitan areas have 
substantial transit needs that will receive attention as transit 
reauthorization legislation is developed. But the transit needs of 
rural and smaller areas, and of our elderly and disabled citizens, also 
require additional attention and funding.
  The bill would provide that additional funding in a way that does not 
impact other portions of the transit program. For example, while the 
bill would at least double every State's funding for the elderly and 
disabled transit program by FY 2004, nothing in the bill would reduce 
funding for any portion of the transit program or for any State.
  To the contrary, the bill would help strengthen the transit program 
as a whole by providing that the Mass Transit Account of the Highway 
Trust Fund is credited with the interest on its balance. This is a key 
provision in the MEGA TRUST Act the MEGA RED TRANS Act, and now the 
MEGA RURAL ACT.
  Specifically, the bill would set modest minimum annual 
apportionments, by State, for the elderly and disabled transit program, 
the rural transit program, and for States that have urbanized areas 
with a population of less than 200,000.
  It would ensure that each State that has a small urbanized area 
receives a minimum of $11 million for these three programs.
  It is not a large amount of money but, for my State of Montana it is 
double what we get for those programs currently. For some other States 
it is more than four times what they receive.
  The bill would also establish a $30 million program for essential bus 
service, to help connect citizens in rural communities to the rest of 
the world by facilitating transportation between rural areas and 
airports and passenger rail stations.
  I am very aware of the role that public transit plays in the lives of 
rural citizens and the elderly and disabled. When most people hear the 
word ``transit'' they think of a light rail system. But in rural areas 
transit translates to buses and vanpools.
  Its about time that these issues are being addressed for rural 
America. Thank You.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3134

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Maximum Economic Growth for 
     America Through Rural Transportation Investment Act'' or the 
     ``MEGA Rural Act''.

     SEC. 2. ASSISTANCE IN OVERCOMING ECONOMIC AND DEMOGRAPHIC 
                   BARRIERS.

       (a) In General.--Title 23, United States Code, is amended 
     by inserting after section 138 the following:

     ``Sec. 139. Assistance in overcoming economic and demographic 
       barriers

       ``(a) Definitions.--In this section:
       ``(1) High-growth state.--The term `high-growth State' 
     means a State that has a population according to the 2000 
     Census that is at least 25 percent greater than the 
     population for the State according to the 1990 Census.
       ``(2) High-population-density state.--The term `high-
     population-density State' means a State in which the number 
     of individuals per principal arterial mile is greater than 75 
     percent of the number of individuals per principal arterial 
     mile in the 50 States and the District of Columbia, as 
     determined using population according to the 2000 Census.
       ``(3) Highway statistics.--
       ``(A) In general.--The term `Highway Statistics' means the 
     Highway Statistics published by the Federal Highway 
     Administration for the most recent calendar or fiscal year 
     for which data are available, which most recent calendar or 
     fiscal year shall be determined as of the first day of the 
     fiscal year for which any calculation using the Highway 
     Statistics is made.
       ``(B) Terms.--Any reference to a term that is used in the 
     Highway Statistics is a reference to the term as used in the 
     Highway Statistics as of September 30, 2002.
       ``(4) Low-income state.--The term `low-income State' means 
     a State that, according to Table PS-1 of the Highway 
     Statistics, has a per capita income that is less than the 
     national average per capita income.
       ``(5) Low-population-density state.--The term `low-
     population-density State' means a State in which the number 
     of individuals per principal arterial mile is less than 75 
     percent of the number of individuals per principal arterial 
     mile in the 50 States and the District of Columbia, as 
     determined using population according to the 2000 Census.
       ``(6) National average per capita income.--The term 
     `national average per capita income' means the average per 
     capita income for the 50 States and the District of Columbia, 
     as specified in the Highway Statistics.
       ``(7) Principal arterial miles.--The term `principal 
     arterial miles', with respect to a

[[Page 21050]]

     State, means the principal arterial miles (including 
     Interstate and other expressway or freeway system miles) in 
     the State, as specified in Table HM-20 of the Highway 
     Statistics.
       ``(8) State.--The term `State' means each of the 50 States.
       ``(9) State with extensive road ownership.--The term `State 
     with extensive road ownership' means a State that owns more 
     than 80 percent of the total Federal-aid and non-Federal-aid 
     mileage in the State according to Table HM-14 of the Highway 
     Statistics.
       ``(b) Establishment.--There is established a program to 
     assist States that face certain economic and demographic 
     barriers in meeting transportation needs.
       ``(c) Allocation of Funds.--For each of fiscal years 2004 
     through 2009, funds made available to carry out this section 
     shall be allocated as follows:
       ``(1) Low-income states.--For each fiscal year, each low-
     income State shall receive an allocation under this paragraph 
     that is equal to the product obtained by multiplying--
       ``(A) $600,000,000; and
       ``(B) the ratio that--
       ``(i) the difference between--

       ``(I) the national average per capita income; and
       ``(II) the per capita income of the low-income State; bears 
     to

       ``(ii) the sum of the differences determined under clause 
     (i) for all low-income States.
       ``(2) High-growth states.--For each fiscal year, each high-
     growth State shall receive an allocation under this paragraph 
     that is equal to the product obtained by multiplying--
       ``(A) $75,000,000; and
       ``(B) the ratio that--
       ``(i) the percentage by which the population of the high-
     growth State according to the 2000 Census exceeds the 
     population of the high-growth State according to the 1990 
     Census; bears to
       ``(ii) the sum of the percentages determined under clause 
     (i) for all high-growth States.
       ``(3) Low-population-density states.--
       ``(A) In general.--Subject to subparagraph (B), for each 
     fiscal year, each low-population-density State shall receive 
     an allocation under this paragraph that is equal to the 
     product obtained by multiplying--
       ``(i) $625,000,000; and
       ``(ii) the ratio that--

       ``(I) the quotient obtained by dividing--

       ``(aa) the number of principal arterial miles in the State; 
     by
       ``(bb) the population of the low-population-density State 
     according to the 2000 Census; bears to

       ``(II) the sum of the quotients determined under subclause 
     (I) for all low-population-density States.

       ``(B) Maximum allocation.--
       ``(i) In general.--If the allocation for a low-population-
     density State under subparagraph (A) is greater than 
     $35,000,000, the allocation of the low-population-density 
     State shall be reduced to $35,000,000.
       ``(ii) Use of excess allocations.--

       ``(I) Reallocation.--Subject to subclause (II), the funds 
     in addition to the $35,000,000 that would have been allocated 
     to a low-population-density State but for clause (i) shall be 
     reallocated among the low-population-density States that were 
     allocated less than $35,000,000 under subparagraph (A) in 
     accordance with the proportionate shares of those low-
     population-density States under subparagraph (A).
       ``(II) Additional reallocations.--If a reallocation under 
     subclause (I) would result in the receipt by any low-
     population-density State of an amount greater than 
     $35,000,000 under this paragraph--

       ``(aa) the allocation for the low-population-density State 
     shall be reduced to $35,000,000; and
       ``(bb) the amounts in excess of $35,000,000 shall be 
     subject to 1 or more further reallocations in accordance with 
     that subclause so that no low-population-density State is 
     allocated more than $35,000,000 under this paragraph.
       ``(4) High-population-density states.--
       ``(A) In general.--Subject to subparagraph (B), for each 
     fiscal year, each high-population-density State shall receive 
     an allocation under this paragraph that is equal to the 
     product obtained by multiplying--
       ``(i) $625,000,000; and
       ``(ii) the ratio that--

       ``(I) the quotient obtained by dividing--

       ``(aa) the population of the high-population-density State 
     according to the 2000 Census; by
       ``(bb) the number of principal arterial miles in the State; 
     bears to

       ``(II) the sum of the quotients determined under subclause 
     (I) for all high-population-density States.

       ``(B) Maximum allocation.--
       ``(i) In general.--If the allocation for a high-population-
     density State under subparagraph (A) is greater than 
     $35,000,000, the allocation of the high-population-density 
     State shall be reduced to $35,000,000.
       ``(ii) Use of excess allocations.--

       ``(I) Reallocation.--Subject to subclause (II), the funds 
     in addition to the $35,000,000 that would have been allocated 
     to a high-population-density State but for clause (i) shall 
     be reallocated among the high-population-density States that 
     were allocated less than $35,000,000 under subparagraph (A) 
     in accordance with the proportionate shares of those high-
     population-density States under subparagraph (A).
       ``(II) Additional reallocations.--If a reallocation under 
     subclause (I) would result in the receipt by any high-
     population-density State of an amount greater than 
     $35,000,000 under this paragraph--

       ``(aa) the allocation for the high-population-density State 
     shall be reduced to $35,000,000; and
       ``(bb) the amounts in excess of $35,000,000 shall be 
     subject to 1 or more further reallocations in accordance with 
     that subclause so that no high-population-density State is 
     allocated more than $35,000,000 under this paragraph.
       ``(5) States with extensive road ownership.--For each 
     fiscal year, each State with extensive road ownership shall 
     receive an allocation under this paragraph that is equal to 
     the product obtained by multiplying--
       ``(A) $75,000,000; and
       ``(B) the ratio that--
       ``(i) the total Federal-aid and non-Federal-aid mileage 
     owned by each State with extensive road ownership according 
     to Table HM-14 of the Highway Statistics; bears to
       ``(ii) the sum of the mileages determined under clause (i) 
     for all States with extensive road ownership.
       ``(d) Treatment of Allocated Funds.--
       ``(1) In general.--Subject to paragraph (2), funds 
     allocated to a State under this section for a fiscal year 
     shall be treated for program administrative purposes as if 
     the funds--
       ``(A) were funds apportioned to the State under sections 
     104(b)(1), 104(b)(2), 104(b)(3), 104(b)(4), and 144; and
       ``(B) were apportioned to the State in the same ratio that 
     the State is apportioned funds under the sections specified 
     in paragraph (1) for the fiscal year.
       ``(2) Program administrative purposes.--Program 
     administrative purposes referred to in paragraph (1)--
       ``(A) include--
       ``(i) the Federal share;
       ``(ii) availability for obligation; and
       ``(iii) except as provided in subparagraph (B), 
     applicability of deductions; and
       ``(B) exclude--
       ``(i) calculation of the minimum guarantee under section 
     105; and
       ``(ii) applicability of the deduction for the future 
     strategic highway research program under section 104(m).''.
       (b) Assistance in Overcoming Economic and Demographic 
     Barriers.--For the program to provide assistance in 
     overcoming economic and demographic barriers under section 
     139 of title 23, United States Code, there is authorized to 
     be appropriated out of the Highway Trust Fund (other than the 
     Mass Transit Account) $2,000,000,000 for each of fiscal years 
     2004 through 2009.
       (c) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     inserting after the item relating to section 138 the 
     following:

``139. Assistance in overcoming economic and demographic barriers.''.

     SEC. 3. RURAL LOCAL ROADS SAFETY PILOT PROGRAM.

       (a) Definitions.--In this section:
       (1) In general.--
       (A) Eligible activity.--
       (i) In general.--The term ``eligible activity'' means a 
     project or activity that--

       (I) is carried out only on public roads that are 
     functionally classified as rural local roads or rural minor 
     collectors (and is not carried out on a Federal-aid highway); 
     and
       (II) provides a safety benefit.

       (ii) Inclusions.--The term ``eligible activity'' includes--

       (I) a project or program such as those described in section 
     133(d)(1) of title 23, United States Code;
       (II) road surfacing or resurfacing;
       (III) improvement or maintenance of local bridges;
       (IV) road reconstruction or improvement;
       (V) installation or improvement of signage, signals, or 
     lighting;
       (VI) a maintenance activity that provides a safety benefit 
     (including repair work, striping, surface marking, or a 
     similar safety precaution); or
       (VII) acquisition of materials for use in projects 
     described in any of subclauses (I) through (VI).

       (B) Program.--The term ``program'' means the rural local 
     roads safety pilot program established under subsection (b).
       (C) State.--The term ``State'' does not include the 
     District of Columbia or Puerto Rico.
       (2) Other terms.--Except as otherwise provided, terms used 
     in this section have the meanings given those terms in title 
     23, United States Code.
       (b) Establishment.--The Secretary shall establish a rural 
     local roads safety pilot program to carry out eligible 
     activities.
       (c) Allocation of Funds With Respect to States.--For each 
     fiscal year, funds made available to carry out this section 
     shall be allocated by the Secretary to the State 
     transportation department in each of the States in the ratio 
     that--

[[Page 21051]]

       (1) the relative share of the State under section 105 of 
     title 23, United States Code, for a fiscal year; bears to
       (2) the total shares of all 50 States under that section 
     for the fiscal year.
       (d) Allocation of Funds Within States.--Each State that 
     receives funds under subsection (c) shall allocate those 
     funds within the State as follows:
       (1) Counties.--Except as provided in paragraph (2) and 
     subject to paragraph (3), a State shall allocate to each 
     county in the State an amount in the ratio that--
       (A) the public road miles within the county that are 
     functionally classified as rural local roads or rural minor 
     collectors; bears to
       (B) the total of all public road miles within all counties 
     in the State that are functionally classified as rural local 
     roads or rural minor collectors.
       (2) Alternative formula for allocation.--Paragraph (1) 
     shall not apply to a State if the State transportation 
     department certifies to the Secretary that the State has in 
     effect an alternative formula or system for allocation of 
     funds received under subsection (c) (including an alternative 
     formula or system that permits allocations to political 
     subdivisions or groups of political subdivisions, in addition 
     to individual counties, in the State) that--
       (A) was developed under the authority of State law; and
       (B) provides that funds allocated to the State 
     transportation department under this section will be 
     allocated within the State in accordance with a program that 
     includes selection by local governments of eligible 
     activities funded under this section.
       (3) Administrative expenses.--Before allocating amounts 
     under paragraph (1) or (2), as applicable, a State 
     transportation department may retain not more than 10 percent 
     of an amount allocated to the State transportation department 
     under subsection (c) for administrative costs incurred in 
     carrying out this section.
       (e) Project Selection.--
       (1) By county.--If an allocation of funds within a State is 
     made under subsection (d)(1), counties within the State to 
     which the funds are allocated shall select eligible 
     activities to be carried out using the funds.
       (2) By state alternative.--If an allocation of funds within 
     a State is made under subsection (d)(2), eligible activities 
     to be carried out using the funds shall be selected in 
     accordance with the State alternative.
       (f) Federal Share.--The Federal share of the cost of an 
     eligible activity carried out under this section shall be 100 
     percent.
       (g) Report.--Not later than January 1, 2009, after 
     providing States, local governments, and other interested 
     parties an opportunity for comment, the Secretary shall 
     submit to the Committee on Environment and Public Works of 
     the Senate and the Committee on Transportation and 
     Infrastructure of the House of Representatives a report 
     that--
       (1) describes progress made in carrying out the program; 
     and
       (2) includes recommendations as to whether the program 
     should be continued or modified.
       (h) Contract Authority.--Funds made available to carry out 
     this section shall be available for obligation in the same 
     manner as if the funds were apportioned under chapter 1 of 
     title 23, United States Code, except that the Federal share 
     of the cost of an eligible activity under this section shall 
     be determined in accordance with this section.
       (i) Authorization of Appropriations.--There is authorized 
     to be appropriated out of the Highway Trust Fund (other than 
     the Mass Transit Account) to carry out this section 
     $200,000,000 for each of fiscal years 2004 through 2009.

     SEC. 4. MINIMUM LEVEL OF FUNDING FOR ELDERLY AND DISABLED 
                   PROGRAM.

       Section 5310 of title 49, United States Code, is amended--
       (1) in subsection (b), in the first sentence, by striking 
     the period at the end and inserting the following: ``, 
     provided that, for fiscal years 2004, 2005, and 2006, each 
     State shall receive annually, of the amounts apportioned 
     under this section, a minimum of double the amount 
     apportioned to the State in fiscal year 2003 or $1,000,000, 
     whichever is greater, and that for fiscal years 2007, 2008, 
     and 2009, each State shall receive annually, of the amounts 
     apportioned under this section, a minimum equal to the 
     minimum required to be apportioned to the State for fiscal 
     year 2006 plus $500,000.''; and
       (2) by adding at the end the following:
       ``(k) Amounts for Operating Assistance.--Amounts made 
     available under this section may be used for operating 
     assistance.
       ``(l) Available Funds.--Notwithstanding any other provision 
     of law, of the aggregate amounts made available by and 
     appropriated under this chapter, the amount made available to 
     provide transportation services to elderly individuals and 
     individuals with disabilities under this section in each of 
     fiscal years 2004 through 2009, shall be not less than the 
     amount necessary to match the minimum apportionment levels 
     required by subsection (b).''.

     SEC. 5. MINIMUM LEVEL OF FUNDING FOR RURAL PROGRAM.

       Section 5311 of title 49, United States Code, is amended--
       (1) in subsection (c), in the first sentence, by striking 
     the period at the end and inserting the following: ``, 
     provided that none of the 50 States shall receive, from the 
     amounts annually apportioned under this section, an 
     apportionment of less than $5,000,000 for each of fiscal 
     years 2004, 2005, and 2006, and $5,500,000 for each of fiscal 
     years 2007, 2008, and 2009.''; and
       (2) by adding at the end the following:
       ``(k) Amounts.--Notwithstanding any other provision of law, 
     of the aggregate amounts made available by and appropriated 
     under this chapter, the amount made available for the program 
     established by this section in each of fiscal years 2004 
     through 2009 shall be not less than the sum of--
       ``(1) the amount made available for all States for such 
     purpose for fiscal year 2003; and
       ``(2)(A) for each of fiscal years 2004, 2005, and 2006, the 
     amount equal to the difference between $5,000,000 and the 
     apportionment for fiscal year 2003, for each of those 
     individual States that were apportioned less than $5,000,000 
     under this section for fiscal year 2003; or
       ``(B) for each of fiscal years 2007, 2008, and 2009, the 
     amount equal to the difference between $5,500,000 and the 
     apportionment for fiscal year 2003, for each of those 
     individual States that were apportioned less than $5,500,000 
     under this section for fiscal year 2003.''.

     SEC. 6. ESSENTIAL BUS SERVICE.

       (a) In General.--Chapter 53 of title 49, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 5339. Essential bus service

       ``(a) In General.--The Secretary shall establish a program 
     under which States shall provide essential bus service 
     between rural areas and primary airports, as defined in 
     section 47102, and between rural areas and stations for 
     intercity passenger rail service, and appropriate 
     intermediate or nearby points.
       ``(b) Eligible Activities.--Eligible activities under the 
     program established by this section shall include--
       ``(1) planning and marketing for intercity bus 
     transportation;
       ``(2) capital grants for intercity bus shelters, park and 
     ride facilities, and joint use facilities;
       ``(3) operating grants, including direct assistance, 
     purchase of service agreements, user-side subsidies, 
     demonstration projects, and other means; and
       ``(4) enhancement of connections between bus service and 
     commercial air passenger service and intercity passenger rail 
     service.
       ``(c) Availability of Funds.--Amounts made available 
     pursuant to this section shall remain available until 
     expended.
       ``(d) Relationship to Section 5311.--Amounts for the 
     program established by this section shall be apportioned to 
     the States in the same proportion as amounts apportioned to 
     the States under section 5311. Section 5311(j) applies to 
     this section.
       ``(e) Funds.--Notwithstanding any other provision of law, 
     of the aggregate amounts made available by and appropriated 
     under this chapter--
       ``(1) for fiscal years 2004, 2005, and 2006, $30,000,000 of 
     the total for each fiscal year shall be for the 
     implementation of this section; and
       ``(2) for fiscal years 2007, 2008, and 2009, $35,000,000 of 
     the total for each fiscal year shall be for the 
     implementation of this section.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 53 of title 49, United States Code, is 
     amended by adding at the end the following:

``5339. Essential bus service.''.

     SEC. 7. MINIMUM LEVEL OF FUNDING FOR URBANIZED AREAS WITH A 
                   POPULATION OF LESS THAN 200,000.

       (a) Minimum Apportionment.--Section 5336(a)(1) of title 49, 
     United States Code, is amended by striking ``mile; and'' and 
     inserting the following: ``mile,

     provided that the apportionments under this paragraph shall 
     be modified to the extent required so that urbanized areas 
     that are eligible under this paragraph and are located in a 
     State in which all urbanized areas in the State eligible 
     under this paragraph collectively receive apportionments 
     totaling less than $5,000,000 in any of fiscal years 2004, 
     2005, or 2006, or less than $5,500,000 in any of fiscal years 
     2007, 2008, or 2009, shall each have their apportionments 
     increased, proportionately, to the extent that, collectively, 
     all of the urbanized areas in the State that are eligible 
     under this paragraph receive, of the amounts apportioned 
     annually under this paragraph, $5,000,000 for each of fiscal 
     years 2004, 2005, and 2006, and $5,500,000 for each of fiscal 
     years 2007, 2008, and 2009; and''.
       (b) Funds.--Section 5307 of title 49, United States Code, 
     is amended by adding at the end the following:
       ``(o) Funds.--Notwithstanding any other provision of law, 
     of the aggregate amounts made available by and appropriated 
     under this chapter, in each of fiscal years 2004 through 
     2009, the amount made available for the program established 
     by this section shall be not less than the sum of--
       ``(1) the amount made available for such purpose for fiscal 
     year 2003; and
       ``(2) the amount equal to the sum of the increase in 
     apportionments for that fiscal year

[[Page 21052]]

     over fiscal year 2003, to urbanized areas with a population 
     of less than 200,000, in affected States, attributable to the 
     operation of section 5336(a)(1).''.

     SEC. 8. LEVEL PLAYING FIELD FOR GOVERNMENT SHARE.

       (a) In General.--Chapter 53 of title 49, United States Code 
     (as amended by section 6) is amended by adding at the end the 
     following:

     ``Sec. 5340. Government share

       ``With respect to amounts apportioned or otherwise 
     distributed for fiscal year 2004 and each subsequent fiscal 
     year, the Government share of eligible transit project costs 
     or eligible operating costs, shall be the greater of--
       ``(1) the share applicable under other provisions of this 
     chapter; or
       ``(2) the share that would apply, in the State in which the 
     transit project or operation is located, to a highway project 
     under section 133 of title 23.''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 53 of title 49, United States Code, is 
     amended by adding at the end the following:

``5340. Government share.''.

     SEC. 9. INTEREST CREDITED TO MASS TRANSIT ACCOUNT.

       Section 9503(f)(2) of the Internal Revenue Code of 1986 
     (relating to the Highway Trust Fund) is amended by striking 
     the period at the end and inserting the following: ``, 
     provided that after September 30, 2003, interest accruing on 
     the balance in the Mass Transit Account shall be credited to 
     such account.''.
                                 ______
                                 
      By Mr. CARPER (for himself, Mr. Chafee, Mr. Breaux, and Mr. 
        Baucus):
  S. 3135. A bill to amend the Clean Air Act to establish a national 
uniform multiple air pollutant regulatory program for the electric 
generating sector; to the Committee on Environment and Public Works.
  Mr. CARPER. Mr. President, this past June, at an EPW Committee 
markup, I joined the majority of committee members in reporting out 
legislation to reduce harmful emissions from our Nation's power plants. 
At that time, I offered, and then withdrew an alternate, comprehensive, 
4-emission approach. Since then, along with representatives from 
electric generators who would be impacted by such legislation, and some 
leaders in the environmental community, I have worked to strengthen my 
amendment even further. The result is the Clean Air Planning Act. I 
rise today to introduce this bill, and am pleased to be joined by 
Senators Chafee, Beaux, and Baucus.
  The bill takes a market-based approach that would aggressively reduce 
emissions of sulfur dioxide, SO2, nitrogen oxides, 
NOX, carbon dioxide, CO2, and mercury from 
electrical power generators. This approach also would provide planning 
and regulatory certainty to electric generators, who are required to 
achieve these reductions. It is mindful of the fact that coal fuels 
approximately 50 percent of our Nation's electricity and contributes a 
disproportionate share of emissions, and will remain the leading source 
of reliable, affordable electricity for decades to come.
  The public health and environmental impacts of SO2, 
NOX, and mercury have been well documented. While there is 
bipartisan agreement that emissions of these three pollutants from 
power plants need further control, there is some disagreement over how 
much and how fast. The Clean Air Planning Act would establish 
significant caps on total emissions of these pollutants, but the caps 
would be phased in to provide the industry the time needed to meet the 
caps. In addition, the bill includes a flexible trading system to allow 
the caps to be attained most efficiently.
  There is also a growing consensus that greenhouse gases such as 
CO2 emissions from power plants are contributing to climate 
change. The time has come to set up mechanisms that will address these 
emissions without impeding economic growth. The Clean Air Planning Act 
establishes the modest goal of capping CO2 emissions from 
electrical generators at 2001 levels by 2012. Generators can meet that 
goal with a flexible system that allows both trading between 
generators.
  The bill also includes flexible options to reduce the costs of 
controlling carbon dioxide emissions through international projects and 
through forest and agricultural projects that can sequester carbon from 
the atmosphere while also providing additional environmental benefits. 
Part of the task ahead is to get better analysis that helps determine 
the right parameters for these flexibility provisions, so that the bill 
provides a smooth least-cost transition for the industry yet also 
delivers a meaningful incentive for improved efficiency and reduced 
emissions from power plants.
  In the context of comprehensive legislation that will achieve 
significant reductions in emissions from power plants, some existing 
regulatory requirements should be updated. This bill carefully updates 
some New Source Review requirements to eliminate redundancy while 
retaining strict environmental protections.
  I have heard from several experts in recent weeks who have studied 
provisions of this bill as it was being developed, and I plan to engage 
them in further discussions in the weeks and months ahead. I appreciate 
their willingness to help keep this important topic moving forward. 
This is a complex issue, one that should be of great importance to 
electric generators, environmental leaders, State and local regulators, 
and to each of us here in the Senate. There are numerous complicated 
issues in this legislation such as the proper extent of crediting off 
system carbon reductions, equitable allocation of allowances, 
appropriate regulatory streamlining, and prevention of local impacts, 
and we invite assistance from all who want to help us address these 
issues.
  Today, America's power plants will emit over 6 million tons of 
harmful emissions. They will also power the world's most productive 
economy. Reducing emissions while retaining affordable electricity is 
the goal of the Clean Air Planning Act, and I urge my colleagues to 
join me in this effort. I look forward to developing consensus within 
the Senate next year and passing strong, comprehensive legislation.
  Thank you, Mr. President. I ask unanimous consent that the text of 
this bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3135

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Clean Air 
     Planning Act of 2002''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Integrated air quality planning for the electric generating 
              sector.
Sec. 4. New source review program.
Sec. 5. Revisions to sulfur dioxide allowance program.
Sec. 6. Relationship to other law.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) fossil fuel-fired electric generating facilities, 
     consisting of facilities fueled by coal, fuel oil, and 
     natural gas, produce nearly \2/3\ of the electricity 
     generated in the United States;
       (2) fossil fuel-fired electric generating facilities 
     produce approximately \2/3\ of the total sulfur dioxide 
     emissions, \1/3\ of the total nitrogen oxides emissions, \1/
     3\ of the total carbon dioxide emissions, and \1/3\ of the 
     total mercury emissions, in the United States;
       (3)(A) many electric generating facilities have been exempt 
     from the emission limitations applicable to new units based 
     on the expectation that over time the units would be retired 
     or updated with new pollution control equipment; but
       (B) many of the exempted units continue to operate and emit 
     pollutants at relatively high rates;
       (4) pollution from existing electric generating facilities 
     can be reduced through adoption of modern technologies and 
     practices;
       (5) the electric generating industry is being restructured 
     with the objective of providing lower electricity rates and 
     higher quality service to consumers;
       (6) the full benefits of competition will not be realized 
     if the environmental impacts of generation of electricity are 
     not uniformly internalized; and
       (7) the ability of owners of electric generating facilities 
     to effectively plan for the future is impeded by the 
     uncertainties surrounding future environmental regulatory 
     requirements that are imposed inefficiently on a piecemeal 
     basis.
       (b) Purposes.--The purposes of this Act are--
       (1) to protect and preserve the environment and safeguard 
     public health by ensuring that substantial emission 
     reductions are achieved at fossil fuel-fired electric 
     generating facilities;

[[Page 21053]]

       (2) to significantly reduce the quantities of mercury, 
     carbon dioxide, sulfur dioxide, and nitrogen oxides that 
     enter the environment as a result of the combustion of fossil 
     fuels;
       (3) to encourage the development and use of renewable 
     energy;
       (4) to internalize the cost of protecting the values of 
     public health, air, land, and water quality in the context of 
     a competitive market in electricity;
       (5) to ensure fair competition among participants in the 
     competitive market in electricity that will result from fully 
     restructuring the electric generating industry;
       (6) to provide a period of environmental regulatory 
     stability for owners and operators of electric generating 
     facilities so as to promote improved management of existing 
     assets and new capital investments; and
       (7) to achieve emission reductions from electric generating 
     facilities in a cost-effective manner.

     SEC. 3. INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC 
                   GENERATING SECTOR.

  The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at 
the end the following:

     ``TITLE VII--INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC 
                           GENERATING SECTOR

``Sec. 701. Definitions.
``Sec. 702. National pollutant tonnage limitations.
``Sec. 703. Nitrogen oxide and mercury allowance trading programs.
``Sec. 704. Carbon dioxide allowance trading program.

     ``SEC. 701. DEFINITIONS.

       ``In this title:
       ``(1) Affected unit.--
       ``(A) Mercury.--The term `affected unit', with respect to 
     mercury, means a coal-fired electric generating facility 
     (including a cogenerating facility) that--
       ``(i) has a nameplate capacity greater than 25 megawatts; 
     and
       ``(ii) generates electricity for sale.
       ``(B) Nitrogen oxides and carbon dioxide.--The term 
     `affected unit', with respect to nitrogen oxides and carbon 
     dioxide, means a fossil fuel-fired electric generating 
     facility (including a cogenerating facility) that--
       ``(i) has a nameplate capacity greater than 25 megawatts; 
     and
       ``(ii) generates electricity for sale.
       ``(C) Sulfur dioxide.--The term `affected unit', with 
     respect to sulfur dioxide, has the meaning given the term in 
     section 402.
       ``(2) Carbon dioxide allowance.--The term `carbon dioxide 
     allowance' means an authorization allocated by the 
     Administrator under this title to emit 1 ton of carbon 
     dioxide during or after a specified calendar year.
       ``(3) Covered unit.--The term `covered unit' means--
       ``(A) an affected unit;
       ``(B) a nuclear generating unit with respect to incremental 
     nuclear generation; and
       ``(C) a renewable energy unit.
       ``(4) Greenhouse gas.--The term `greenhouse gas' means--
       ``(A) carbon dioxide;
       ``(B) methane;
       ``(C) nitrous oxide;
       ``(D) hydrofluorocarbons;
       ``(E) perfluorocarbons; and
       ``(F) sulfur hexafluoride.
       ``(5) Incremental nuclear generation.--The term 
     `incremental nuclear generation' means the difference 
     between--
       ``(A) the quantity of electricity generated by a nuclear 
     generating unit in a calendar year; and
       ``(B) the quantity of electricity generated by the nuclear 
     generating unit in calendar year 1990;

     as determined by the Administrator and measured in megawatt 
     hours.
       ``(6) Mercury allowance.--The term `mercury allowance' 
     means an authorization allocated by the Administrator under 
     this title to emit 1 pound of mercury during or after a 
     specified calendar year.
       ``(7) New renewable energy unit.--The term `new renewable 
     energy unit' means a renewable energy unit that has operated 
     for a period of not more than 3 years.
       ``(8) New unit.--The term `new unit' means an affected unit 
     that has operated for not more than 3 years and is not 
     eligible to receive--
       ``(A) sulfur dioxide allowances under section 417(b);
       ``(B) nitrogen oxide allowances or mercury allowances under 
     section 703(c)(2); or
       ``(C) carbon dioxide allowances under section 704(c)(2).
       ``(9) Nitrogen oxide allowance.--The term `nitrogen oxide 
     allowance' means an authorization allocated by the 
     Administrator under this title to emit 1 ton of nitrogen 
     oxides during or after a specified calendar year.
       ``(10) Nuclear generating unit.--The term `nuclear 
     generating unit' means an electric generating facility that--
       ``(A) uses nuclear energy to supply electricity to the 
     electric power grid; and
       ``(B) commenced operation in calendar year 1990 or earlier.
       ``(11) Renewable energy.--The term `renewable energy' means 
     electricity generated from--
       ``(A) wind;
       ``(B) organic waste (excluding incinerated municipal solid 
     waste);
       ``(C) biomass (including anaerobic digestion from farm 
     systems and landfill gas recovery);
       ``(D) fuel cells; or
       ``(E) a hydroelectric, geothermal, solar thermal, 
     photovoltaic, or other nonfossil fuel, nonnuclear source.
       ``(12) Renewable energy unit.--The term `renewable energy 
     unit' means an electric generating facility that uses 
     exclusively renewable energy to supply electricity to the 
     electric power grid.
       ``(13) Sequestration.--The term `sequestration' means the 
     action of sequestering carbon by--
       ``(A) enhancing a natural carbon sink (such as through 
     afforestation); or
       ``(B)(i) capturing the carbon dioxide emitted from a fossil 
     fuel-based energy system; and
       ``(ii)(I) storing the carbon in a geologic formation or in 
     a deep area of an ocean; or
       ``(II) converting the carbon to a benign solid material 
     through a biological or chemical process.
       ``(14) Sulfur dioxide allowance.--The term `sulfur dioxide 
     allowance' has the meaning given the term `allowance' in 
     section 402.

     ``SEC. 702. NATIONAL POLLUTANT TONNAGE LIMITATIONS.

       ``(a) Sulfur Dioxide.--The annual tonnage limitation for 
     emissions of sulfur dioxide from affected units in the United 
     States shall be equal to--
       ``(1) for each of calendar years 2008 through 2011, 
     4,500,000 tons;
       ``(2) for each of calendar years 2012 through 2014, 
     3,500,000 tons; and
       ``(3) for calendar year 2015 and each calendar year 
     thereafter, 2,250,000 tons.
       ``(b) Nitrogen Oxides.--The annual tonnage limitation for 
     emissions of nitrogen oxides from affected units in the 
     United States shall be equal to--
       ``(1) for each of calendar years 2008 through 2011, 
     1,870,000 tons; and
       ``(2) for calendar year 2012 and each calendar year 
     thereafter, 1,700,000 tons.
       ``(c) Mercury.--
       ``(1) In general.--The annual tonnage limitation for 
     emissions of mercury from affected units in the United States 
     shall be equal to--
       ``(A) for each of calendar years 2008 through 2011, 24 
     tons; and
       ``(B) for calendar year 2012 and each calendar year 
     thereafter, a percentage determined under paragraph (2) of 
     the total quantity of mercury present in delivered coal in 
     calendar year 1999 (as determined by the Administrator).
       ``(2) Determination of percentage.--The percentage referred 
     to in paragraph (1)(B) shall be--
       ``(A) not less than 7 nor more than 21 percent; and
       ``(B) determined by the Administrator not later than 
     January 1, 2004, based on the best scientific data available 
     concerning--
       ``(i) the reduction in emissions of mercury necessary to 
     protect public health and the environment; and
       ``(ii) the cost and performance of mercury control 
     technology.
       ``(3) Maximum emissions of mercury from each affected 
     unit.--
       ``(A) Calendar years 2008 through 2011.--For each of 
     calendar years 2008 through 2011, the emissions of mercury 
     from each affected unit shall not exceed either, at the 
     option of the operator of the affected unit--
       ``(i) 50 percent of the total quantity of mercury present 
     in the coal delivered to the affected unit in the calendar 
     year; or
       ``(ii) an annual output-based emission rate for mercury 
     that shall be determined by the Administrator based on an 
     input-based rate of 4 pounds per trillion British thermal 
     units.
       ``(B) Calendar year 2012 and thereafter.--For calendar year 
     2012 and each calendar year thereafter, the emissions of 
     mercury from each affected unit shall not exceed--
       ``(i) 30 percent of the total quantity of mercury present 
     in the coal delivered to the affected unit in the calendar 
     year; or
       ``(ii) an annual output-based emission rate for mercury 
     that shall be determined by the Administrator.
       ``(d) Carbon Dioxide.--Subject to section 704(d), the 
     annual tonnage limitation for emissions of carbon dioxide 
     from covered units in the United States shall be equal to--
       ``(1) for each of calendar years 2008 through 2011, the 
     quantity of emissions projected to be emitted from affected 
     units in calendar year 2005, as determined by the Energy 
     Information Administration of the Department of Energy based 
     on the projections of the Administration the publication of 
     which most closely precedes the date of enactment of this 
     title; and
       ``(2) for calendar year 2012 and each calendar year 
     thereafter, the quantity of emissions emitted from affected 
     units in calendar year 2001, as determined by the Energy 
     Information Administration of the Department of Energy.
       ``(e) Review of Annual Tonnage Limitations.--

[[Page 21054]]

       ``(1) Period of effectiveness.--The annual tonnage 
     limitations established under subsections (a) through (d) 
     shall remain in effect until the date that is 20 years after 
     the date of enactment of this title.
       ``(2) Determination by administrator.--Not later than 15 
     years after the date of enactment of this title, the 
     Administrator, after considering impacts on human health, the 
     environment, the economy, and costs, shall determine whether 
     1 or more of the annual tonnage limitations should be 
     revised.
       ``(3) Determination not to revise.--If the Administrator 
     determines under paragraph (2) that none of the annual 
     tonnage limitations should be revised, the Administrator 
     shall publish in the Federal Register a notice of the 
     determination and the reasons for the determination.
       ``(4) Determination to revise.--
       ``(A) In general.--If the Administrator determines under 
     paragraph (2) that 1 or more of the annual tonnage 
     limitations should be revised, the Administrator shall 
     publish in the Federal Register--
       ``(i) not later than 15 years and 180 days after the date 
     of enactment of this title, proposed regulations implementing 
     the revisions; and
       ``(ii) not later than 16 years and 180 days after the date 
     of enactment of this title, final regulations implementing 
     the revisions.
       ``(B) Effective date of revisions.--Any revisions to the 
     annual tonnage limitations under subparagraph (A) shall take 
     effect on the date that is 20 years after the date of 
     enactment of this title.
       ``(f) Reduction of Emissions From Specified Affected 
     Units.--Subject to the requirements of this Act concerning 
     national ambient air quality standards established under part 
     A of title I, notwithstanding the annual tonnage limitations 
     established under this section, the Federal Government or a 
     State government may require that emissions from a specified 
     affected unit be reduced to address a local air quality 
     problem.

     ``SEC. 703. NITROGEN OXIDE AND MERCURY ALLOWANCE TRADING 
                   PROGRAMS.

       ``(a) Regulations.--
       ``(1) Promulgation.--
       ``(A) In general.--Not later than January 1, 2004, the 
     Administrator shall promulgate regulations to establish for 
     affected units in the United States--
       ``(i) a nitrogen oxide allowance trading program; and
       ``(ii) a mercury allowance trading program.
       ``(B) Requirements.--Regulations promulgated under 
     subparagraph (A) shall establish requirements for the 
     allowance trading programs under this section, including 
     requirements concerning--
       ``(i)(I) the generation, allocation, issuance, recording, 
     tracking, transfer, and use of nitrogen oxide allowances and 
     mercury allowances; and
       ``(II) the public availability of all information 
     concerning the activities described in subclause (I) that is 
     not confidential;
       ``(ii) compliance with subsection (e)(1);
       ``(iii) the monitoring and reporting of emissions under 
     paragraphs (2) and (3) of subsection (e); and
       ``(iv) excess emission penalties under subsection (e)(4).
       ``(2) Mixed fuel, co-generation facilities and combined 
     heat and power facilities.--The Administrator shall 
     promulgate such regulations as are necessary to ensure the 
     equitable issuance of allowances to--
       ``(A) facilities that use more than 1 energy source to 
     produce electricity; and
       ``(B) facilities that produce electricity in addition to 
     another service or product.
       ``(3) Report to congress on use of captured or recovered 
     mercury.--
       ``(A) In general.--Not later than 18 months after the date 
     of enactment of this title, the Administrator shall submit to 
     Congress a report on the public health and environmental 
     impacts from mercury that is or may be--
       ``(i) captured or recovered by air pollution control 
     technology; and
       ``(ii) incorporated into products such as soil amendments 
     and cement.
       ``(B) Required elements.--The report shall--
       ``(i) review--

       ``(I) technologies, in use as of the date of the report, 
     for incorporating mercury into products; and
       ``(II) potential technologies that might further minimize 
     the release of mercury; and

       ``(ii)(I) address the adequacy of legal authorities and 
     regulatory programs in effect as of the date of the report to 
     protect public health and the environment from mercury in 
     products described in subparagraph (A)(ii); and
       ``(II) to the extent necessary, make recommendations to 
     improve those authorities and programs.
       ``(b) New Unit Reserves.--
       ``(1) Establishment.--The Administrator shall establish by 
     regulation a reserve of nitrogen oxide allowances and a 
     reserve of mercury allowances to be set aside for use by new 
     units.
       ``(2) Determination of quantity.--The Administrator, in 
     consultation with the Secretary of Energy, shall determine, 
     based on projections of electricity output for new units--
       ``(A) not later than June 30, 2004, the quantity of 
     nitrogen oxide allowances and mercury allowances required to 
     be held in reserve for new units for each of calendar years 
     2008 through 2012; and
       ``(B) not later than June 30 of each fifth calendar year 
     thereafter, the quantity of nitrogen oxide allowances and 
     mercury allowances required to be held in reserve for new 
     units for the following 5-calendar year period.
       ``(c) Nitrogen Oxide and Mercury Allowance Allocations.--
       ``(1) Timing of allocations.--The Administrator shall 
     allocate nitrogen oxide allowances and mercury allowances to 
     affected units--
       ``(A) not later than December 31, 2004, for calendar year 
     2008; and
       ``(B) not later than December 31 of calendar year 2005 and 
     each calendar year thereafter, for the fourth calendar year 
     that begins after that December 31.
       ``(2) Allocations to affected units that are not new 
     units.--
       ``(A) Quantity of nitrogen oxide allowances allocated.--The 
     Administrator shall allocate to each affected unit that is 
     not a new unit a quantity of nitrogen oxide allowances that 
     is equal to the product obtained by multiplying--
       ``(i) 1.5 pounds of nitrogen oxides per megawatt hour; and
       ``(ii) the quotient obtained by dividing--

       ``(I) the average annual net quantity of electricity 
     generated by the affected unit during the most recent 3-
     calendar year period for which data are available, measured 
     in megawatt hours; by
       ``(II) 2,000 pounds of nitrogen oxides per ton.

       ``(B) Quantity of mercury allowances allocated.--The 
     Administrator shall allocate to each affected unit that is 
     not a new unit a quantity of mercury allowances that is equal 
     to the product obtained by multiplying--
       ``(i) 0.0000227 pounds of mercury per megawatt hour; and
       ``(ii) the average annual net quantity of electricity 
     generated by the affected unit during the most recent 3-
     calendar year period for which data are available, measured 
     in megawatt hours.
       ``(C) Adjustment of allocations.--
       ``(i) In general.--If, for any calendar year, the total 
     quantity of allowances allocated under subparagraph (A) or 
     (B) is not equal to the applicable quantity determined under 
     clause (ii), the Administrator shall adjust the quantity of 
     allowances allocated to affected units that are not new units 
     on a pro-rata basis so that the quantity is equal to the 
     applicable quantity determined under clause (ii).
       ``(ii) Applicable quantity.--The applicable quantity 
     referred to in clause (i) is the difference between--

       ``(I) the applicable annual tonnage limitation for 
     emissions from affected units specified in subsection (b) or 
     (c) of section 702 for the calendar year; and
       ``(II) the quantity of nitrogen oxide allowances or mercury 
     allowances, respectively, placed in the applicable new unit 
     reserve established under subsection (b) for the calendar 
     year.

       ``(3) Allocation to new units.--
       ``(A) Methodology.--The Administrator shall promulgate 
     regulations to establish a methodology for allocating 
     nitrogen oxide allowances and mercury allowances to new 
     units.
       ``(B) Quantity of nitrogen oxide allowances and mercury 
     allowances allocated.--The Administrator shall determine the 
     quantity of nitrogen oxide allowances and mercury allowances 
     to be allocated to each new unit based on the projected 
     emissions from the new unit.
       ``(4) Allowance not a property right.--A nitrogen oxide 
     allowance or mercury allowance--
       ``(A) is not a property right; and
       ``(B) may be terminated or limited by the Administrator.
       ``(5) No judicial review.--An allocation of nitrogen 
     allowances or mercury allowances by the Administrator under 
     this subsection shall not be subject to judicial review.
       ``(d) Nitrogen Oxide Allowance and Mercury Allowance 
     Transfer System.--
       ``(1) Use of allowances.--The regulations promulgated under 
     subsection (a)(1)(A) shall--
       ``(A) prohibit the use (but not the transfer in accordance 
     with paragraph (3)) of any nitrogen oxide allowance or 
     mercury allowance before the calendar year for which the 
     allowance is allocated;
       ``(B) provide that unused nitrogen oxide allowances and 
     mercury allowances may be carried forward and added to 
     nitrogen oxide allowances and mercury allowances, 
     respectively, allocated for subsequent years; and
       ``(C) provide that unused nitrogen oxide allowances and 
     mercury allowances may be transferred by--
       ``(i) the person to which the allowances are allocated; or
       ``(ii) any person to which the allowances are transferred.
       ``(2) Use by persons to which allowances are transferred.--
     Any person to which nitrogen oxide allowances or mercury 
     allowances are transferred under paragraph (1)(C)--

[[Page 21055]]

       ``(A) may use the nitrogen oxide allowances or mercury 
     allowances in the calendar year for which the nitrogen oxide 
     allowances or mercury allowances were allocated, or in a 
     subsequent calendar year, to demonstrate compliance with 
     subsection (e)(1); or
       ``(B) may transfer the nitrogen oxide allowances or mercury 
     allowances to any other person for the purpose of 
     demonstration of that compliance.
       ``(3) Certification of transfer.--A transfer of a nitrogen 
     oxide allowance or mercury allowance shall not take effect 
     until a written certification of the transfer, authorized by 
     a responsible official of the person making the transfer, is 
     received and recorded by the Administrator.
       ``(4) Permit requirements.--An allocation or transfer of 
     nitrogen oxide allowances or mercury allowances to an 
     affected unit shall, after recording by the Administrator, be 
     considered to be part of the federally enforceable permit of 
     the affected unit under this Act, without a requirement for 
     any further review or revision of the permit.
       ``(e) Compliance and Enforcement.--
       ``(1) In general.--For calendar year 2008 and each calendar 
     year thereafter, the operator of each affected unit shall 
     surrender to the Administrator--
       ``(A) a quantity of nitrogen oxide allowances that is equal 
     to the total tons of nitrogen oxides emitted by the affected 
     unit during the calendar year; and
       ``(B) a quantity of mercury allowances that is equal to the 
     total pounds of mercury emitted by the affected unit during 
     the calendar year.
       ``(2) Monitoring system.--The Administrator shall 
     promulgate regulations requiring the accurate monitoring of 
     the quantities of nitrogen oxides and mercury that are 
     emitted at each affected unit.
       ``(3) Reporting.--
       ``(A) In general.--Not less often than quarterly, the owner 
     or operator of an affected unit shall submit to the 
     Administrator a report on the monitoring of emissions of 
     nitrogen oxides and mercury carried out by the owner or 
     operator in accordance with the regulations promulgated under 
     paragraph (2).
       ``(B) Authorization.--Each report submitted under 
     subparagraph (A) shall be authorized by a responsible 
     official of the affected unit, who shall certify the accuracy 
     of the report.
       ``(C) Public reporting.--The Administrator shall make 
     available to the public, through 1 or more published reports 
     and 1 or more forms of electronic media, data concerning the 
     emissions of nitrogen oxides and mercury from each affected 
     unit.
       ``(4) Excess emissions.--
       ``(A) In general.--The owner or operator of an affected 
     unit that emits nitrogen oxides or mercury in excess of the 
     nitrogen oxide allowances or mercury allowances that the 
     owner or operator holds for use for the affected unit for the 
     calendar year shall--
       ``(i) pay an excess emissions penalty determined under 
     subparagraph (B); and
       ``(ii) offset the excess emissions by an equal quantity in 
     the following calendar year or such other period as the 
     Administrator shall prescribe.
       ``(B) Determination of excess emissions penalty.--
       ``(i) Nitrogen oxides.--The excess emissions penalty for 
     nitrogen oxides shall be equal to the product obtained by 
     multiplying--

       ``(I) the number of tons of nitrogen oxides emitted in 
     excess of the total quantity of nitrogen oxide allowances 
     held; and
       ``(II) $5,000, adjusted (in accordance with regulations 
     promulgated by the Administrator) for changes in the Consumer 
     Price Index for All-Urban Consumers published by the 
     Department of Labor.

       ``(ii) Mercury.--The excess emissions penalty for mercury 
     shall be equal to the product obtained by multiplying--

       ``(I) the number of pounds of mercury emitted in excess of 
     the total quantity of mercury allowances held; and
       ``(II) $10,000, adjusted (in accordance with regulations 
     promulgated by the Administrator) for changes in the Consumer 
     Price Index for All-Urban Consumers published by the 
     Department of Labor.

     ``SEC. 704. CARBON DIOXIDE ALLOWANCE TRADING PROGRAM.

       ``(a) Regulations.--
       ``(1) In general.--Not later than January 1, 2004, the 
     Administrator shall promulgate regulations to establish a 
     carbon dioxide allowance trading program for covered units in 
     the United States.
       ``(2) Required elements.--Regulations promulgated under 
     paragraph (1) shall establish requirements for the carbon 
     dioxide allowance trading program under this section, 
     including requirements concerning--
       ``(A)(i) the generation, allocation, issuance, recording, 
     tracking, transfer, and use of carbon dioxide allowances; and
       ``(ii) the public availability of all information 
     concerning the activities described in clause (i) that is not 
     confidential;
       ``(B) compliance with subsection (f)(1);
       ``(C) the monitoring and reporting of emissions under 
     paragraphs (2) and (3) of subsection (f);
       ``(D) excess emission penalties under subsection (f)(4); 
     and
       ``(E) standards, guidelines, and procedures concerning the 
     generation, certification, and use of additional carbon 
     dioxide allowances made available under subsection (d).
       ``(b) New Unit Reserve.--
       ``(1) Establishment.--The Administrator shall establish by 
     regulation a reserve of carbon dioxide allowances to be set 
     aside for use by new units and new renewable energy units.
       ``(2) Determination of quantity.--The Administrator, in 
     consultation with the Secretary of Energy, shall determine, 
     based on projections of electricity output for new units and 
     new renewable energy units--
       ``(A) not later than June 30, 2004, the quantity of carbon 
     dioxide allowances required to be held in reserve for new 
     units and new renewable energy units for each of calendar 
     years 2008 through 2012; and
       ``(B) not later than June 30 of each fifth calendar year 
     thereafter, the quantity of carbon dioxide allowances 
     required to be held in reserve for new units and renewable 
     energy units for the following 5-calendar year period.
       ``(c) Carbon Dioxide Allowance Allocation.--
       ``(1) Timing of allocations.--The Administrator shall 
     allocate carbon dioxide allowances to covered units--
       ``(A) not later than December 31, 2004, for calendar year 
     2008; and
       ``(B) not later than December 31 of calendar year 2005 and 
     each calendar year thereafter, for the fourth calendar year 
     that begins after that December 31.
       ``(2) Allocations to covered units that are not new 
     units.--
       ``(A) In general.--The Administrator shall allocate to each 
     affected unit that is not a new unit, to each nuclear 
     generating unit with respect to incremental nuclear 
     generation, and to each renewable energy unit that is not a 
     new renewable energy unit, a quantity of carbon dioxide 
     allowances that is equal to the product obtained by 
     multiplying--
       ``(i) the quantity of carbon dioxide allowances available 
     for allocation under subparagraph (B); and
       ``(ii) the quotient obtained by dividing--

       ``(I) the average net quantity of electricity generated by 
     the unit in a calendar year during the most recent 3-calendar 
     year period for which data are available, measured in 
     megawatt hours; and
       ``(II) the total of the average net quantities described in 
     subclause (I) with respect to all such units.

       ``(B) Quantity to be allocated.--For each calendar year, 
     the quantity of carbon dioxide allowances allocated under 
     subparagraph (A) shall be equal to the difference between--
       ``(i) the annual tonnage limitation for emissions of carbon 
     dioxide from affected units specified in section 702(d) for 
     the calendar year; and
       ``(ii) the quantity of carbon dioxide allowances placed in 
     the new unit reserve established under subsection (b) for the 
     calendar year.
       ``(3) Allocation to new units and new renewable energy 
     units.--
       ``(A) Methodology.--The Administrator shall promulgate 
     regulations to establish a methodology for allocating carbon 
     dioxide allowances to new units and new renewable energy 
     units.
       ``(B) Quantity of carbon dioxide allowances allocated.--The 
     Administrator shall determine the quantity of carbon dioxide 
     allowances to be allocated to each new unit and each new 
     renewable energy unit based on the unit's projected share of 
     the total electric power generation attributable to covered 
     units.
       ``(d) Issuance and Use of Additional Carbon Dioxide 
     Allowances.--
       ``(1) In general.--
       ``(A) Allowances for projects certified by independent 
     review board.--In addition to carbon dioxide allowances 
     allocated under subsection (c), the Administrator shall make 
     carbon dioxide allowances available to projects that are 
     certified, in accordance with paragraph (3), by the 
     independent review board established under paragraph (2) as 
     eligible to receive the carbon dioxide allowances.
       ``(B) Allowances obtained under other programs.--The 
     regulations promulgated under subsection (a)(1) shall--
       ``(i) allow covered units to comply with subsection (f)(1) 
     by purchasing and using carbon dioxide allowances that are 
     traded under any other United States or internationally 
     recognized carbon dioxide reduction program that is specified 
     under clause (ii);
       ``(ii) specify, for the purpose of clause (i), programs 
     that meet the goals of this section; and
       ``(iii) apply such conditions to the use of carbon dioxide 
     allowances traded under programs specified under clause (ii) 
     as are necessary to achieve the goals of this section.
       ``(2) Independent review board.--
       ``(A) In general.--
       ``(i) Establishment.--The Administrator shall establish an 
     independent review board to assist the Administrator in 
     certifying projects as eligible for carbon dioxide allowances 
     made available under paragraph (1)(A).
       ``(ii) Review and approval.--Each certification by the 
     independent review board of a project shall be subject to the 
     review and approval of the Administrator.

[[Page 21056]]

       ``(iii) Requirements.--Subject to this subsection, 
     requirements relating to the creation, composition, duties, 
     responsibilities, and other aspects of the independent review 
     board shall be included in the regulations promulgated by the 
     Administrator under subsection (a).
       ``(B) Membership.--The independent review board shall be 
     composed of 12 members, of whom--
       ``(i) 10 members shall be appointed by the Administrator, 
     of whom--

       ``(I) 1 member shall represent the Environmental Protection 
     Agency (who shall serve as chairperson of the independent 
     review board);
       ``(II) 3 members shall represent State governments;
       ``(III) 3 members shall represent the electric generating 
     sector; and
       ``(IV) 3 members shall represent environmental 
     organizations;

       ``(ii) 1 member shall be appointed by the Secretary of 
     Energy to represent the Department of Energy; and
       ``(iii) 1 member shall be appointed by the Secretary of 
     Agriculture to represent the Department of Agriculture.
       ``(C) Staff and other resources.--The Administrator shall 
     provide such staff and other resources to the independent 
     review board as the Administrator determines to be necessary.
       ``(D) Development of guidelines.--
       ``(i) In general.--The independent review board shall 
     develop guidelines for certifying projects in accordance with 
     paragraph (3), including--

       ``(I) criteria that address the validity of claims that 
     projects result in the generation of carbon dioxide 
     allowances;
       ``(II) guidelines for certifying incremental carbon 
     sequestration in accordance with clause (ii); and
       ``(III) guidelines for certifying geological sequestration 
     of carbon dioxide in accordance with clause (iii).

       ``(ii) Guidelines for certifying incremental carbon 
     sequestration.--The guidelines for certifying incremental 
     carbon sequestration in forests, agricultural soil, 
     rangeland, or grassland shall include development, reporting, 
     monitoring, and verification guidelines, to be used in 
     quantifying net carbon sequestration from land use projects, 
     that are based on--

       ``(I) measurement of increases in carbon storage in excess 
     of the carbon storage that would have occurred in the absence 
     of such a project;
       ``(II) comprehensive carbon accounting that--

       ``(aa) reflects net increases in carbon reservoirs; and
       ``(bb) takes into account any carbon emissions resulting 
     from disturbance of carbon reservoirs in existence as of the 
     date of commencement of the project;

       ``(III) adjustments to account for--

       ``(aa) emissions of carbon that may result at other 
     locations as a result of the impact of the project on timber 
     supplies; or
       ``(bb) potential displacement of carbon emissions to other 
     land owned by the entity that carries out the project; and

       ``(IV) adjustments to reflect the expected carbon storage 
     over various time periods, taking into account the likely 
     duration of the storage of the carbon stored in a carbon 
     reservoir.

       ``(iii) Guidelines for certifying geological sequestration 
     of carbon dioxide.--The guidelines for certifying geological 
     sequestration of carbon dioxide produced by a covered unit 
     shall--

       ``(I) provide that a project shall be certified only to the 
     extent that the geological sequestration of carbon dioxide 
     produced by a covered unit is in addition to any carbon 
     dioxide used by the covered unit in 2008 for enhanced oil 
     recovery; and
       ``(II) include requirements for development, reporting, 
     monitoring, and verification for quantifying net carbon 
     sequestration--

       ``(aa) to ensure the permanence of the sequestration; and
       ``(bb) to ensure that the sequestration will not cause or 
     contribute to significant adverse effects on the environment.
       ``(iv) Deadlines for development.--The guidelines under 
     clause (i) shall be developed--

       ``(I) with respect to projects described in paragraph 
     (3)(A), not later than January 1, 2004; and
       ``(II) with respect to projects described in paragraph 
     (3)(B), not later than January 1, 2005.

       ``(v) Updating of guidelines.--The independent review board 
     shall periodically update the guidelines as the independent 
     review board determines to be appropriate.
       ``(E) Certification of projects.--
       ``(i) In general.--Subject to clause (ii), subparagraph 
     (A)(ii), and paragraph (3), the independent review board 
     shall certify projects as eligible for additional carbon 
     dioxide allowances.
       ``(ii) Limitation.--The independent review board shall not 
     certify a project under this subsection if the carbon dioxide 
     emission reductions achieved by the project will be used to 
     satisfy any requirement imposed on any foreign country or any 
     industrial sector to reduce the quantity of greenhouse gases 
     emitted by the foreign country or industrial sector.
       ``(3) Projects eligible for additional carbon dioxide 
     allowances.--
       ``(A) Projects carried out in calendar years 1990 through 
     2007.--
       ``(i) In general.--The independent review board may certify 
     as eligible for carbon dioxide allowances a project that--

       ``(I) is carried out on or after January 1, 1990, and 
     before January 1, 2008; and
       ``(II) consists of--

       ``(aa) a carbon sequestration project carried out in the 
     United States or a foreign country;
       ``(bb) a project reported under section 1605(b) of the 
     Energy Policy Act of 1992 (42 U.S.C. 13385(b)); or
       ``(cc) any other project to reduce emissions of greenhouse 
     gases that is carried out in the United States or a foreign 
     country.
       ``(ii) Maximum quantity of additional carbon dioxide 
     allowances.--The Administrator may make available to projects 
     certified under clause (i) a quantity of allowances that is 
     not greater than 10 percent of the tonnage limitation for 
     calendar year 2008 for emissions of carbon dioxide from 
     affected units specified in section 702(d)(1).
       ``(iii) Use of allowances.--Allowances made available under 
     clause (ii) may be used to comply with subsection (f)(1) in 
     calendar year 2008 or any calendar year thereafter.
       ``(B) Projects carried out in calendar year 2008 and 
     thereafter.--The independent review board may certify as 
     eligible for carbon dioxide allowances a project that--
       ``(i) is carried out on or after January 1, 2008; and
       ``(ii) consists of--

       ``(I) a carbon sequestration project carried out in the 
     United States or a foreign country; or
       ``(II) a project to reduce the greenhouse gas emissions (on 
     a carbon dioxide equivalency basis determined by the 
     independent review board) of a source of greenhouse gases 
     that is not an affected unit.

       ``(e) Carbon Dioxide Allowance Transfer System.--
       ``(1) Use of allowances.--The regulations promulgated under 
     subsection (a)(1) shall--
       ``(A) prohibit the use (but not the transfer in accordance 
     with paragraph (3)) of any carbon dioxide allowance before 
     the calendar year for which the carbon dioxide allowance is 
     allocated;
       ``(B) provide that unused carbon dioxide allowances may be 
     carried forward and added to carbon dioxide allowances 
     allocated for subsequent years;
       ``(C) provide that unused carbon dioxide allowances may be 
     transferred by--
       ``(i) the person to which the carbon dioxide allowances are 
     allocated; or
       ``(ii) any person to which the carbon dioxide allowances 
     are transferred; and
       ``(D) provide that carbon dioxide allowances allocated and 
     transferred under this section may be transferred into any 
     other market-based carbon dioxide emission trading program 
     that is--
       ``(i) approved by the President; and
       ``(ii) implemented in accordance with regulations developed 
     by the Administrator or the head of any other Federal agency.
       ``(2) Use by persons to which carbon dioxide allowances are 
     transferred.--Any person to which carbon dioxide allowances 
     are transferred under paragraph (1)(C)--
       ``(A) may use the carbon dioxide allowances in the calendar 
     year for which the carbon dioxide allowances were allocated, 
     or in a subsequent calendar year, to demonstrate compliance 
     with subsection (f)(1); or
       ``(B) may transfer the carbon dioxide allowances to any 
     other person for the purpose of demonstration of that 
     compliance.
       ``(3) Certification of transfer.--A transfer of a carbon 
     dioxide allowance shall not take effect until a written 
     certification of the transfer, authorized by a responsible 
     official of the person making the transfer, is received and 
     recorded by the Administrator.
       ``(4) Permit requirements.--An allocation or transfer of 
     carbon dioxide allowances to a covered unit, or for a project 
     carried out on behalf of a covered unit, under subsection (c) 
     or (d) shall, after recording by the Administrator, be 
     considered to be part of the federally enforceable permit of 
     the covered unit under this Act, without a requirement for 
     any further review or revision of the permit.
       ``(f) Compliance and Enforcement.--
       ``(1) In general.--For calendar year 2008 and each calendar 
     year thereafter--
       ``(A) the operator of each affected unit and each renewable 
     energy unit shall surrender to the Administrator a quantity 
     of carbon dioxide allowances that is equal to the total tons 
     of carbon dioxide emitted by the affected unit or renewable 
     energy unit during the calendar year; and
       ``(B) the operator of each nuclear generating unit that has 
     incremental nuclear generation shall surrender to the 
     Administrator a quantity of carbon dioxide allowances that is 
     equal to the total tons of carbon dioxide emitted by the 
     nuclear generating unit during the calendar year from 
     incremental nuclear generation.
       ``(2) Monitoring system.--The Administrator shall 
     promulgate regulations requiring the accurate monitoring of 
     the quantity of carbon dioxide that is emitted at each 
     covered unit.
       ``(3) Reporting.--

[[Page 21057]]

       ``(A) In general.--Not less often than quarterly, the owner 
     or operator of a covered unit, or a person that carries out a 
     project certified under subsection (d) on behalf of a covered 
     unit, shall submit to the Administrator a report on the 
     monitoring of carbon dioxide emissions carried out at the 
     covered unit in accordance with the regulations promulgated 
     under paragraph (2).
       ``(B) Authorization.--Each report submitted under 
     subparagraph (A) shall be authorized by a responsible 
     official of the covered unit, who shall certify the accuracy 
     of the report.
       ``(C) Public reporting.--The Administrator shall make 
     available to the public, through 1 or more published reports 
     and 1 or more forms of electronic media, data concerning the 
     emissions of carbon dioxide from each covered unit.
       ``(4) Excess emissions.--
       ``(A) In general.--The owner or operator of a covered unit 
     that emits carbon dioxide in excess of the carbon dioxide 
     allowances that the owner or operator holds for use for the 
     covered unit for the calendar year shall--
       ``(i) pay an excess emissions penalty determined under 
     subparagraph (B); and
       ``(ii) offset the excess emissions by an equal quantity in 
     the following calendar year or such other period as the 
     Administrator shall prescribe.
       ``(B) Determination of excess emissions penalty.--The 
     excess emissions penalty shall be equal to the product 
     obtained by multiplying--
       ``(i) the number of tons of carbon dioxide emitted in 
     excess of the total quantity of carbon dioxide allowances 
     held; and
       ``(ii) $100, adjusted (in accordance with regulations 
     promulgated by the Administrator) for changes in the Consumer 
     Price Index for All-Urban Consumers published by the 
     Department of Labor.
       ``(g) Allowance Not a Property Right.--A carbon dioxide 
     allowance--
       ``(1) is not a property right; and
       ``(2) may be terminated or limited by the Administrator.
       ``(h) No Judicial Review.--An allocation of carbon dioxide 
     allowances by the Administrator under subsection (c) or (d) 
     shall not be subject to judicial review.''.

     SEC. 4. NEW SOURCE REVIEW PROGRAM.

       Section 165 of the Clean Air Act (42 U.S.C. 7475) is 
     amended by adding at the end the following:
       ``(f) Revisions to New Source Review Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) Covered unit.--The term `covered unit' has the 
     meaning given the term in section 701.
       ``(B) New source review program.--The term `new source 
     review program' means the program to carry out section 111 
     and this part.
       ``(2) Regulations.--In accordance with this subsection, the 
     Administrator shall promulgate revisions to the new source 
     review program.
       ``(3) Applicability criteria.--The regulations shall revise 
     the applicability criteria under the new source review 
     program for covered units so that, beginning January 1, 2008, 
     a physical change or a change in the method of operation at a 
     covered unit shall be subject to the regulations under the 
     new source review program and subject to approval by the 
     Administrator only if--
       ``(A)(i) the change involves the replacement of 1 or more 
     components of the covered unit; and
       ``(ii) the amount of the fixed capital costs of the 
     replacement exceeds 50 percent of the amount of the fixed 
     capital costs of construction of a comparable new covered 
     unit; or
       ``(B) the change results in any increase in the rate of 
     emissions from the covered unit of air pollutants regulated 
     under the new source review program (measured in pounds per 
     megawatt hour).
       ``(4) Lowest achievable emission rate.--The regulations 
     shall revise the definition of `lowest achievable emission 
     rate' under section 171, with respect to technology required 
     to be installed by the electric generating sector, to allow 
     costs to be considered in the determination of the lowest 
     achievable emission rate, so that, beginning January 1, 2008, 
     a covered unit (as defined in section 701) shall not be 
     required to install technology required to meet a lowest 
     achievable emission rate if the cost of the technology 
     exceeds a maximum amount (in dollars per ton) that--
       ``(A) is determined by the Administrator; but
       ``(B) does not exceed twice the amount of the cost 
     guideline for best available control technology established 
     under subsection (a)(4).
       ``(5) Emission offsets.--A new source within the electric 
     generating sector that locates in a nonattainment area after 
     December 31, 2007, shall not be required to obtain offsets 
     for emissions of air pollutants.
       ``(6) No effect on other requirements.--Nothing in this 
     subsection affects the obligation of any State or local 
     government to comply with the requirements established under 
     this section concerning--
       ``(A) national ambient air quality standards;
       ``(B) maximum allowable air pollutant increases or maximum 
     allowable air pollutant concentrations; or
       ``(C) protection of visibility and other air quality-
     related values in areas designated as class I areas under 
     part C of title I.''.

     SEC. 5. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PROGRAM.

       (a) In General.--Title IV of the Clean Air Act (relating to 
     acid deposition control) (42 U.S.C. 7651 et seq.) is amended 
     by adding at the end the following:

     ``SEC. 417. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PROGRAM.

       ``(a) Definitions.--In this section, the terms `affected 
     unit' and `new unit' have the meanings given the terms in 
     section 701.
       ``(b) Regulations.--Not later than January 1, 2004, the 
     Administrator shall promulgate such revisions to the 
     regulations to implement this title as the Administrator 
     determines to be necessary to implement section 702(a).
       ``(c) New Unit Reserve.--
       ``(1) Establishment.--Subject to the annual tonnage 
     limitation for emissions of sulfur dioxide from affected 
     units specified in section 702(a), the Administrator shall 
     establish by regulation a reserve of allowances to be set 
     aside for use by new units.
       ``(2) Determination of quantity.--The Administrator, in 
     consultation with the Secretary of Energy, shall determine, 
     based on projections of electricity output for new units--
       ``(A) not later than June 30, 2004, the quantity of 
     allowances required to be held in reserve for new units for 
     each of calendar years 2008 through 2012; and
       ``(B) not later than June 30 of each fifth calendar year 
     thereafter, the quantity of allowances required to be held in 
     reserve for new units for the following 5-calendar year 
     period.
       ``(3) Allocation.--
       ``(A) Regulations.--The Administrator shall promulgate 
     regulations to establish a methodology for allocating 
     allowances to new units.
       ``(B) No judicial review.--An allocation of allowances by 
     the Administrator under this subsection shall not be subject 
     to judicial review.
       ``(d) Existing Units.--
       ``(1) Allocation.--
       ``(A) Regulations.--Subject to the annual tonnage 
     limitation for emissions of sulfur dioxide from affected 
     units specified in section 702(a), and subject to the reserve 
     of allowances for new units under subsection (c), the 
     Administrator shall promulgate regulations to govern the 
     allocation of allowances to affected units that are not new 
     units.
       ``(B) Required elements.--The regulations shall provide 
     for--
       ``(i) the allocation of allowances on a fair and equitable 
     basis between affected units that received allowances under 
     section 405 and affected units that are not new units and 
     that did not receive allowances under that section, using for 
     both categories of units the same or similar allocation 
     methodology as was used under section 405; and
       ``(ii) the pro-rata distribution of allowances to all units 
     described in clause (i), subject to the annual tonnage 
     limitation for emissions of sulfur dioxide from affected 
     units specified in section 702(a).
       ``(2) Timing of allocations.--The Administrator shall 
     allocate allowances to affected units--
       ``(A) not later than December 31, 2004, for calendar year 
     2008; and
       ``(B) not later than December 31 of calendar year 2005 and 
     each calendar year thereafter, for the fourth calendar year 
     that begins after that December 31.
       ``(3) No judicial review.--An allocation of allowances by 
     the Administrator under this subsection shall not be subject 
     to judicial review.
       ``(e) Western Regional Air Partnership.--
       ``(1) Definitions.--In this subsection:
       ``(A) Covered state.--The term `covered State' means each 
     of the States of Arizona, California, Colorado, Idaho, 
     Nevada, New Mexico, Oregon, Utah, and Wyoming.
       ``(B) Covered year.--The term `covered year' means--
       ``(i)(I)(aa) the third calendar year after the first 
     calendar year in which the Administrator determines by 
     regulation that the total of the annual emissions of sulfur 
     dioxide from all affected units in the covered States is 
     projected to exceed 271,000 tons in calendar year 2018 or any 
     calendar year thereafter; but
       ``(bb) not earlier than calendar year 2016; or
       ``(II) if the Administrator does not make the determination 
     described in subclause (I)(aa)--

       ``(aa) the third calendar year after the first calendar 
     year with respect to which the total of the annual emissions 
     of sulfur dioxide from all affected units in the covered 
     States first exceeds 271,000 tons; but
       ``(bb) not earlier than calendar year 2021; and

       ``(ii) each calendar year after the calendar year 
     determined under clause (i).
       ``(2) Maximum emissions of sulfur dioxide from each 
     affected unit.--In each covered year, the emissions of sulfur 
     dioxide from each affected unit in a covered State shall not 
     exceed the number of allowances that are allocated under 
     paragraph (3) and held by the affected unit for the covered 
     year.

[[Page 21058]]

       ``(3) Allocation of allowances.--
       ``(A) In general.--Not later than January 1, 2013, the 
     Administrator shall promulgate regulations to establish--
       ``(i) a methodology for allocating allowances to affected 
     units in covered States under this subsection; and
       ``(ii) the timing of the allocations.
       ``(B) No judicial review.--An allocation of allowances by 
     the Administrator under this paragraph shall not be subject 
     to judicial review.''.
       (b) Definition of Allowance.--Section 402 of the Clean Air 
     Act (relating to acid deposition control) (42 U.S.C. 7651a) 
     is amended by striking paragraph (3) and inserting the 
     following:
       ``(3) Allowance.--The term `allowance' means an 
     authorization, allocated by the Administrator to an affected 
     unit under this title, to emit, during or after a specified 
     calendar year, a quantity of sulfur dioxide determined by the 
     Administrator and specified in the regulations promulgated 
     under section 417(b).''.
       (c) Technical Amendments.--
       (1) Title IV of the Clean Air Act (relating to noise 
     pollution) (42 U.S.C. 7641 et seq.)--
       (A) is amended by redesignating sections 401 through 403 as 
     sections 801 through 803, respectively; and
       (B) is redesignated as title VIII and moved to appear at 
     the end of that Act.
       (2) The table of contents for title IV of the Clean Air Act 
     (relating to acid deposition control) (42 U.S.C. prec. 7651) 
     is amended by adding at the end the following:

``Sec. 417. Revisions to sulfur dioxide allowance program.''.

     SEC. 6. RELATIONSHIP TO OTHER LAW.

       (a) Exemption From Hazardous Air Pollutant Requirements 
     Relating to Mercury.--Section 112 of the Clean Air Act (42 
     U.S.C. 7412) is amended--
       (1) in subsection (f), by adding at the end the following:
       ``(7) Mercury emitted from certain affected units.--Not 
     later than 8 years after the date of enactment of this 
     paragraph, the Administrator shall carry out the duties of 
     the Administrator under this subsection with respect to 
     mercury emitted from affected units (as defined in section 
     701).''; and
       (2) in subsection (n)(1)(A)--
       (A) by striking ``(A) The Administrator'' and inserting the 
     following:
       ``(A) Study, report, and regulations.--
       ``(i) Study and report to congress.--The Administrator'';
       (B) by striking ``The Administrator'' in the fourth 
     sentence and inserting the following:
       ``(ii) Regulations.--

       ``(I) In general.--The Administrator''; and

       (C) in clause (ii) (as designated by subparagraph (B)), by 
     adding at the end the following:

       ``(II) Exemption for certain affected units relating to 
     mercury.--An affected unit (as defined in section 701) that 
     would otherwise be subject to mercury emission standards 
     under subclause (I) shall not be subject to mercury emission 
     standards under subclause (I) or subsection (c).''.

       (b) Temporary Exemption From Visibility Protection 
     Requirements.--Section 169A(c) of the Clean Air Act (42 
     U.S.C. 7491(c)) is amended--
       (1) in paragraph (3), by striking ``this subsection'' and 
     inserting ``paragraph (1)''; and
       (2) by adding at the end the following:
       ``(4) Temporary exemption for certain affected units.--An 
     affected unit (as defined in section 701) shall not be 
     subject to subsection (b)(2)(A) during the period--
       ``(A) beginning on the date of enactment of this paragraph; 
     and
       ``(B) ending on the date that is 20 years after the date of 
     enactment of this paragraph.''.
       (c) No Effect on Other Federal and State Requirements.--
     Except as otherwise specifically provided in this Act, 
     nothing in this Act or an amendment made by this Act--
       (1) affects any permitting, monitoring, or enforcement 
     obligation of the Administrator of the Environmental 
     Protection Agency under the Clean Air Act (42 U.S.C. 7401 et 
     seq.) or any remedy provided under that Act;
       (2) affects any requirement applicable to, or liability of, 
     an electric generating facility under that Act;
       (3) requires a change in, affects, or limits any State law 
     that regulates electric utility rates or charges, including 
     prudency review under State law; or
       (4) precludes a State or political subdivision of a State 
     from adopting and enforcing any requirement for the control 
     or abatement of air pollution, except that a State or 
     political subdivision may not adopt or enforce any emission 
     standard or limitation that is less stringent than the 
     requirements imposed under that Act.
  Mr. CHAFEE. Mr. President, I am pleased to join with Senator Carper 
today to introduce the Clean Air Planning Act of 2002. Congress needs 
to advance four pollutant legislation that offers the best chance for 
broad bipartisan support, and I believe this bill meets that test. The 
testimony received through hearings in the Environment and Public Works 
Committee over the past several years has clearly outlined the need for 
controlling the major emissions from power plants, sulfur dioxide, 
nitrogen oxide, mercury and carbon dioxide, while at the same time 
recognizing the added costs of these new controls. We know through 
experience that we will only be successful at passing legislation if we 
find middle ground.
  The relationship of fossil fuels to global warming is clear and 
scientifically validated. The release of the ``U.S. Climate Action 
Report 2002'' by the Administration in May tells us we need to take 
real actions toward solving the problem. The longer we wait, the harder 
this problem will be to solve. The Rio Convention is a perfect example 
of why waiting is not reasonable. In 1992, we agreed to voluntarily 
reduce harmful emissions to 1990 levels. It didn't happen. Now, in 2002 
we are told that reductions to 1990 levels will stall the economy. If 
we wait much longer before taking any action, imagine how much harder 
it will be to achieve real reductions without harming the economy.
  I am a co-sponsor of Senator Jeffords' bill, S. 556, and I voted for 
it in the Environment and Public Works Committee. However, I believe 
that Carper-Chafee will ultimately enjoy broader support. Our bill 
would achieve significant reductions in a more cost effective way than 
other proposals. For sulfur dioxide, nitrogen oxide, and mercury, we 
will establish emission caps that are superior to reductions that can 
be achieved under the existing Clean Air Act. In addition, for the 
first time, we will ensure that we achieve real reductions of carbon 
dioxide emissions.
  Many predicted that the passage of S. 556 from the Committee would 
create a stalemate on this important issue. I believe that the Carper-
Chafee bill offers a real opportunity to break the stalemate and begin 
an honest debate that will eventually lead to enactment of strong 
legislation. I look forward to working with all of my colleagues as we 
move forward to pass a bill that enjoys the broadest support and 
adequately addresses the serious health, environmental, and economic 
issues facing the nation.
                                 ______
                                 
      By Mr. LEAHY:
  S. 3137. A bill to provide remedies for retaliation against 
whistleblowers making congressional disclosures; to the Committee on 
Governmental Affairs.
  Mr. LEAHY. Mr. President, I rise to introduce the Congressional 
Oversight Protection Act of 2002. The 107th Congress has truly been the 
Congress of the whistleblower. From Sherron Watkins who helped expose 
many of the misdeeds at Enron, to FBI Special Agent Coleen Rowley and 
others who brought needed public attention to some of the shortcomings 
of the FBI prior to 9-11, we have been eyewitness to the value of 
getting the inside story.
  The 107th Congress has also been one of rejuvenated bipartisan 
oversight. On the Judiciary Committee we convened the first series of 
comprehensive bipartisan FBI oversight hearings in decades after I 
assumed the Chairmanship. The Joint Intelligence Committee is now 
conducting bipartisan hearings to ascertain what shortcomings on the 
part of our intelligence community need to be corrected so as not to 
allow the 9-11 terrorist attacks to recur. The Senate Banking Committee 
conducted extensive oversight of the SEC and its relationship with the 
accounting industry, to ascertain whether a new regulatory scheme was 
required. Both the Senate and House Judiciary Committees are attempting 
to ascertain how the new powers we provided in the USA PATRIOT Act are 
being used. These are only a few examples.
  We have all been the beneficiaries of such increased oversight and 
the courage of the whistleblowers who provided information as part of 
that effort, because their revelations have led to important reforms. 
The Enron scandal and the subsequent hearings led to the most extensive 
corporate reform legislation in decades, including the criminal 
provisions and the first ever corporate whistleblower protections from 
S. 2010, the Corporate Fraud and Criminal Accountability Act, that I 
authored. The testimony of the rank and

[[Page 21059]]

file FBI agents that we heard on the Judiciary Committee helped us to 
craft the bipartisan FBI Reform Act, S. 1974. This legislation, which 
included enhanced whistleblower protections, was reported unanimously 
to the full Senate in April but is being blocked by an anonymous 
Republican hold. The same day as Coleen Rowley's nationally televised 
testimony before the Judiciary Committee, President Bush not only 
reversed his previous opposition to establishing a new cabinet level 
Department of Homeland Security, but gave a national address calling 
for the largest government reorganization in 50 years. In the last year 
we have learned once again that the public as a whole benefits from a 
lone voice in the government.
  Unfortunately, the people who very rarely benefit from these 
revelations are the whistleblowers themselves. We have heard testimony 
in oversight hearings on the Judiciary Committee that there is quite 
often retaliation against those who raise public awareness about 
problems within large organizations even to Congress. Sometimes the 
retaliation is overt, sometimes it is more subtle and invidious, but it 
is almost always there. The law needs to protect the people who risk so 
much to protect us and create a culture that encourages employees to 
report waste, fraud, and mismanagement.
  For those who provide information to Congress, that protection is a 
hollow promise. On one hand, the law is very clear that it is illegal 
to interfere with or deny, ``the right of employees, individually or 
collectively, to petition Congress or a Member of Congress, or to 
furnish information to either House of Congress, or to a committee or 
Member thereof . . .'' See 18 U.S.C. Sec. 7211. Amazingly, however, 
this simple provision is a right without a remedy. Employees who are 
retaliated against for providing information to Congress cannot pursue 
any avenue of redress to protect their statutory rights. The only 
exception to this applies to employees of publicly traded companies, 
who are now covered by the whistleblower provision included in the 
Sarbanes-Oxley Act that we passed this year. Thus, under current law, 
government whistleblowers reporting to Congress have less protection 
than private industry whistleblowers.
  This bill would merely correct this anomaly by providing government 
employees that come to Congress with the right to bring an action in 
court when they suffer the type of retaliation already prohibited under 
the law. Thus, it does not create new statutory rights, but merely 
provides a statutory remedy for existing law. That way, we can promise 
future whistleblowers who come before Congress that their right to 
access the legislative branch is not an illusion. We can also assure 
the public at large that our future efforts at Congressional oversight 
and improving the functions of government will be effective. This 
legislation is strongly supported by leading whistleblower groups, 
including the National Whistleblower Center and the Government 
Accountability Project, and I ask unanimous consent that their letters 
of support be printed in the Record.
  For all these reasons, I urge swift passage of this legislation. I 
ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3137

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Congressional Oversight 
     Protection Act of 2002''.

     SEC. 2. PROVIDING REMEDIES FOR RETALIATION AGAINST 
                   WHISTLEBLOWERS MAKING CONGRESSIONAL 
                   DISCLOSURES.

       Section 7211 of title 5, United States Code, is amended--
       (1) by inserting ``(a)'' before ``The right''; and
       (2) by adding at the end the following:
       ``(b) Any employee aggrieved by the discrimination of an 
     employer in violation of subsection (a) may bring an action 
     at law or equity for de novo review in the appropriate 
     district court of the United States, which shall have 
     jurisdiction over an action under this subsection, without 
     regard to the amount in controversy.
       ``(c) Any employee prevailing in an action under this 
     section shall be entitled to all relief necessary to make the 
     employee whole, including--
       ``(1) reinstatement with the same seniority status that the 
     employee would have had but for the discrimination;
       ``(2) the amount of back pay lost as a result of the 
     discrimination, with interest;
       ``(3) compensation for any special damages sustained as a 
     result of the discrimination, including litigation costs, 
     expert witness fees, and reasonable attorney fees; and
       ``(4) punitive damages, in appropriate cases.
       ``(d) Upon the request of the complainant, any action under 
     this section shall be tried by the court with a jury.
       ``(e) The same legal burdens of proof in proceedings under 
     this section shall apply as apply under sections 
     1214(b)(4)(B) and 1221(c) in the case of any alleged 
     prohibited personal practice described in section 2302(b)(8).
       ``(f) For purposes of this section, the term `employee' 
     means an individual (as defined by section 2105) and any 
     individual or organization performing services under a 
     contract with the Government (including as an employee of an 
     organization).''.
                                  ____



                                National Whistleblower Center,

                                 Washington, DC, October 16, 2002.
     Hon. Patrick J. Leahy,
     Chairman, Committee on the Judiciary,
     U.S. Senate, Washington, DC.
       Dear Chairman Leahy: I am writing to strongly support your 
     legislation, the Congressional Oversight Protection Act of 
     2002. The National Whistleblower Center (Center) is the pre-
     eminent national organization that promotes effective 
     measures to protect whistleblowers who come forward in the 
     public interest at great risk to their careers. In that 
     regard, your introduction of this bill once again 
     demonstrates your leadership in understanding the importance 
     of whistleblowing and its role in our democratic process, and 
     the Center is pleased to support your bill and work hard to 
     achieve its swift passage.
       In the wake of the events of 9/11, the stakes have been 
     raised for Congress to perform the most effective oversight 
     of the federal government. To do so, Congress must have 
     unfettered access to information. And that means that 
     citizens in both the public and private sectors must be free 
     to come forward to Congress with proper disclosures without 
     the fear of retaliation. Under current law, citizens have the 
     right to make disclosures to Congress, but there is no remedy 
     for them to protect their rights in the event of retaliation. 
     Your bill would provide such a remedy and, in doing so, would 
     put government whistleblowers on a par with whistleblowers in 
     publicly-held companies who have such protections under the 
     newly-passed Sarbanes-Oxley Act.
       This year, the concept and importance of whistleblowing has 
     been etched indelibly on the minds of the public, thanks to 
     congressional investigations into Enron and other companies, 
     thanks to the joint investigation into intelligence lapses in 
     the government, and thanks to extensive media coverage of 
     these matters. The public's appreciation for the necessity of 
     whistleblowers and whistleblower protections creates an 
     atmosphere conducive to passing the Congressional Oversight 
     Protection Act at the earliest possible time. Your leadership 
     in trying to fill an important void in whistleblower law 
     should be commended and hailed by all those who support 
     ``good government.''
       Once again, thank you for your continued leadership on this 
     and other whistleblower issues throughout the 107th Congress. 
     Please feel free to call on the Center to work together to 
     pass this bill.
           Respectfully,
                                                 Kris J. Kolesnik,
     Executive Director.
                                  ____



                            Government Accountability Project,

                                 Washington, DC, October 17, 2002.
     Hon. Patrick Leahy,
     Chairman, Senate Judiciary Committee, Dirksen Senate Office 
         Building, Washington, DC.
       Dear Chairman Leahy: This letter is to express unqualified 
     appreciation for introduction of the Congressional Oversight 
     Protection Act, providing access to jury trials in court for 
     federal whistleblowers and others who bear witness through 
     disclosures to Congress. This legislation reflects leadership 
     to close an inherent flaw that has prejudiced even the best 
     administrative law remedial systems. Administrative boards do 
     not have the judicial independence or resources for high-
     stakes, politically sensitive whistleblower disputes with 
     national consequences. Ironically, those type of disputes are 
     the primary, most significant reason for enacting 
     whistleblower protection laws.
       The legislation puts teeth into the congressional right to 
     know law, the Lloyd LaFollette Act of 1912. (5 USC 7211) That 
     law's purpose is simple, and fundamental--to protect the free 
     flow of information to Congress. It prohibits discrimination 
     for communicating with Congress. It was passed in response to 
     presidential gag orders that had imposed prior approval 
     before federal employees could communicate with Congress. 
     Flood statements before passage emphasized the free flow of 
     information as the lifeblood for Congress to carry out its 
     mission. The

[[Page 21060]]

     need is even greater when freedom of speech means the freedom 
     to warn Congress of national security breakdowns, before the 
     public suffers the consequences again.
       Unfortunately, Congress failed to specifically provide 
     access to court to enforce Lloyd LaFollette rights. As a 
     result, it has been a right without a remedy. That means it 
     is of little more than rhetorical significance, and no 
     benefit to reprisal victims. Since 1912, 54 whistleblowers 
     have tried to assert their rights under this law. Fifty three 
     cases were dismissed for lack of jurisdiction. Consistently 
     the explanation is that the statute did not provide the court 
     with jurisdiction as authority to act. The bill's purpose is 
     to strengthen Congress' right to know--a prerequisite for 
     informed oversight. The bill's strategy is to provide 
     reinforced protection, beyond normal civil service remedies, 
     for those who choose to communicate through and work with 
     Congress.
       There should be no question of the need for reinforced 
     protection of congressional whistleblowers. The system of 
     administrative civil service hearings was never designed for 
     major public policy disputes involving high stakes national 
     consequences and active congressional oversight. The 
     Administrative Judges who hear the cases have no judicial 
     independence and know they will be treated like 
     whistleblowers if they rule for those challenging politically 
     powerful government officials. As a result, those hearing 
     officers treat significant whistleblower cases like poison 
     ivy. Consistently, the administrative process has been a 
     black hole for politically significant disputes, with 
     decisions regularly not being finalized for years, and one 
     case still pending after 11 years. In a significant 
     environmental dispute involving millions of dollars in timber 
     theft, four Forest Service employees are still waiting for 
     their day in court after six years.
       After lessons learned from the FBI's Coleen Rowley, it is 
     beyond credible debate that whistleblowers can make a major 
     contribution toward preventing another 9/11. Analogous 
     frustrations of Border Patrol, Customs Service, Department of 
     Energy, Federal Bureau of Investigation, Federal Aviation 
     Administration and the Nuclear Regulatory Commission 
     whistleblowers illustrate an unmistakable pattern of ignoring 
     or silencing patriots on the front lines of homeland 
     security. As our nation's modern Paul Reveres, whistleblowers 
     are invaluable as an early warning signal to prevent 
     avoidable disasters.
       It should also be clear, however, that this legislation is 
     a necessity to strengthen homeland security. It will not 
     solve the complex problems of the civil service system. But 
     it will give whistleblowers a credible remedy for the first 
     time in eight years, if they work with Congress. Increasingly 
     whistleblowers have been lionized for their bravery, but that 
     is no substitute for genuine, enforceable rights. Indeed, the 
     praise can ring cynically hollow to those whose careers are 
     in ashes for doing their duty. It is unrealistic to expect 
     whistleblowers to defend the public, if they cannot defend 
     themselves. Profiles in Courage are the exception, not the 
     rule. If successful, your initiative to add rights matching 
     the rhetoric supporting whistleblowers will be a good 
     government breakthrough.
           Sincerely,
                                                       Tom Devine,
                                                   Legal Director.
                                 ______
                                 
      By Mr. DOMENICI:
  S. 3138. A bill to authorize the Secretary of the Interior, in 
cooperation with the University of New Mexico, to construct and occupy 
a portion of the Hibben Center for Archaeological Research at the 
University of New Mexico, and for other purposes; to the Committee on 
Energy and Natural Resources.
  Mr. DOMENICI. Mr. President, I rise to introduce a bill that would 
authorize the Secretary of the Interior to help construct and occupy 
part of the Hibben Center for Archaeological Research at the University 
of New Mexico. This bill will help the University of New Mexico finish 
a state of the art museum facility to store, and display the National 
Park Service's Chaco Collection.
  Let me give you a bit of background. In 1907, Theodore Roosevelt 
founded the Chaco Canyon Culture National Historical Park in 
Northwestern New Mexico. The Monument was created to preserve the 
extensive prehistoric pueblo ruins in Chaco Canyon.
  The height of the Chaco culture began in the mid 800's and lasted 
over 300 years. People built dozens of complex multi-storied masonry 
buildings containing hundreds of rooms. These complexes were connected 
to communities by a network of prehistoric roads. I helped to establish 
the Chaco Culture National Historic Park to preserve these areas.
  Since 1907, the University of New Mexico and the National Park 
Service have been partners in this area. From 1907 to 1949, the 
University owned the land within the Park boundaries. During this 
period, Dr. Frank Hibben excavated in Chaco Canyon and remained 
interested in the area throughout his long career. The University built 
a large collection of artifacts that it retains today.
  In 1949, the University deeded the land to the Federal Government, 
and since that time, the University and the Park Service have continued 
a partnership through a series of memoranda of understanding. Since 
1985, the NPS Chaco collections have been housed at University of New 
Mexico's Maxwell Museum of Anthropology. As both the University of New 
Mexico and the National Park Service collections have begun to grow, a 
new home for them is needed.
  To this end, Dr Hibben began planning a new research and curation 
facility at the University of New Mexico. He asked the Park Service to 
partner with him on this project, and today, construction of the Hibben 
center, a modern, professional facility to house the University of New 
Mexico's collections as well as the Park Service collections is a 
reality.
  Dr. Hibben recently passed away, and left the University of New 
Mexico the funds to assist with this project. The partnership between 
the Park Service and the University will mean that the Hibben center 
will hold a world-class collection and will facilitate and encourage 
the study of these important Southwestern collections.
  This bill will provide authorization to pay for the Federal share of 
the improvement costs to the Hibben Center. This bill is long overdue, 
and will honor both the legacy of Dr. Hibben and the Chaco Culture.
  I urge my colleagues to support this important piece of legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3138

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Hibben Center for 
     Archaeological Research Act of 2002''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) when the Chaco Culture National Historical Park was 
     established in 1907 as the Chaco Canyon National Monument, 
     the University of New Mexico owned a significant portion of 
     the land located within the boundaries of the Park;
       (2) during the period from the 1920's to 1947, the 
     University of New Mexico conducted archaeological research in 
     the Chaco Culture National Historical Park;
       (3) in 1949, the University of New Mexico--
       (A) conveyed to the United States all right, title, and 
     interest of the University in and to the land in the Park; 
     and
       (B) entered into a memorandum of agreement with the 
     National Park Service establishing a research partnership 
     with the Park;
       (4) since 1971, the Chaco Culture National Historical Park, 
     through memoranda of understanding and cooperative agreements 
     with the University of New Mexico, has maintained a research 
     museum collection and archive at the University;
       (5) both the Park and the University have large, 
     significant archaeological research collections stored at the 
     University in multiple, inadequate, inaccessible, and cramped 
     repositories; and
       (6) insufficient storage at the University makes research 
     on and management, preservation, and conservation of the 
     archaeological research collections difficult.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Hibben center.--The term ``Hibben Center'' means the 
     Hibben Center for Archaeological Research to be constructed 
     at the University under section 4(a).
       (2) Park.--The term ``Park'' means the Chaco Culture 
     National Historical Park in the State of New Mexico.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (4) Tenant improvement.--The term ``tenant improvement'' 
     includes--
       (A) finishing the interior portion of the Hibben Center 
     leased by the National Park Service under section 4(c)(1); 
     and
       (B) installing in that portion of the Hibben Center--
       (i) permanent fixtures; and
       (ii) portable storage units and other removable objects.
       (5) University.--The term ``University'' means the 
     University of New Mexico.

[[Page 21061]]



     SEC. 4. HIBBEN CENTER FOR ARCHAEOLOGICAL RESEARCH.

       (a) Establishment.--The Secretary may, in cooperation with 
     the University, construct and occupy a portion of the Hibben 
     Center for Archaeological Research at the University.
       (b) Grants.--
       (1) In general.--The Secretary may provide to the 
     University a grant to pay the Federal share of the 
     construction and related costs for the Hibben Center under 
     paragraph (2).
       (2) Federal share.--The Federal share of the construction 
     and related costs for the Hibben Center shall be 37 percent.
       (3) Limitation.--Amounts provided under paragraph (1) shall 
     not be used to pay any costs to design, construct, and 
     furnish the tenant improvements under subsection (c)(2).
       (c) Lease.--
       (1) In general.--Before funds made available under section 
     5 may be expended for construction costs under subsection 
     (b)(1) or for the costs for tenant improvements under 
     paragraph (2), the University shall offer to enter into a 
     long-term lease with the United States that--
       (A) provides to the National Park Service space in the 
     Hibben Center for storage, research, and offices; and
       (B) is acceptable to the Secretary.
       (2) Tenant improvements.--The Secretary may design, 
     construct, and furnish tenant improvements for, and pay any 
     moving costs relating to, the portion of the Hibben Center 
     leased to the National Park Service under paragraph (1).
       (d) Cooperative Agreements.--To encourage collaborative 
     management of the Chacoan archaeological objects associated 
     with northwestern New Mexico, the Secretary may enter into 
     cooperative agreements with the University, other units of 
     the National Park System, other Federal agencies, and Indian 
     tribes for--
       (1) the curation of and conduct of research on artifacts in 
     the museum collection described in section 2(4); and
       (2) the development, use, management, and operation of the 
     portion of the Hibben Center leased to the National Park 
     Service under subsection (c)(1).

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated--
       (1) to pay the Federal share of the construction costs 
     under section 4(b), $1,574,000; and
       (2) to pay the costs of carrying out section 4(c)(2), 
     $2,198,000.
       (b) Availability.--Amounts made available under subsection 
     (a) shall remain available until expended.
       (c) Reversion.--If the lease described in section 4(c)(1) 
     is not executed by the date that is 2 years after the date of 
     enactment of this Act, any amounts made available under 
     subsection (a) shall revert to the Treasury of the United 
     States.
                                 ______
                                 
      By Mr. SESSIONS (for himself, Mr. Grassley, and Mr. Leahy):
  S. 3139. A bill to provide a right to be heard for participants and 
beneficiaries of an employee pension benefit plan of a debtor in order 
to protect pensions of those employees and retirees; to the Committee 
on the Judiciary.
  Mr. SESSIONS. Mr. President, I rise today to introduce The Employee 
Pension Bankruptcy Protection Act of 2002. Today, when a company 
declares bankruptcy, it is often the employees and retirees who suffer. 
They suffer because they often loose their hard earned pensions and 
retirement benefits during the bankruptcy process. This is simply not 
right. When Americans loose the pensions and benefits that they have 
worked a lifetime to earn, it is the responsibility of the members of 
this body to take notice and to act to protect them.
  The bill I introduce today does one very simple thing it gives 
employees and retirees the right to request that they be represented 
before the bankruptcy court, the same kind of representation that 
protects the rights of others that are owed money by the corporation. 
Under this bill, a representative of the employees and retirees can 
appear and be heard if it is likely that the employee benefit pension 
plan of the bankrupt corporation will be terminated or substantially 
underfunded and if it is possible that the beneficiaries of the plan 
will be adversely affected.
  By allowing employees and retirees to be represented before the 
bankruptcy court, we will ensure that the bankruptcy court hears from 
the people who entrusted their retirement savings to their employer. 
Employees and retirees will be able to argue to the court that any 
division of assets or bankruptcy plan must be fair to the pensioners. 
The needs of the corporation's employees and retirees should be heard 
BEFORE the assets of a bankrupt corporation are split up among 
creditors and lost forever. They deserve to have their day in court.
  It has only recently been brought to my attention that under current 
law, employees and retirees are not represented before the bankruptcy 
court as creditors. Legally, the pension fund is the ``creditor'' of 
the corporation, not the employees and retirees. Thus, the pension 
interests of employees and retirees are represented in the bankruptcy 
process by a trustee of the pension, if one exists, or by the PBGC, if 
it takes over the pension fund.
  Because PBGC, under its governing statutes, can not guarantee the 
full benefits of the pension plan, but can only guarantee the statutory 
amount, significant portions of hard earned pensions can remain unpaid 
when a company goes bankrupt. While the PBGC is often able to pay most 
of the pension benefits when a company goes bankrupt, in certain cases 
the statutory limit can be much lower than the pension payment the 
employee or retiree was promised by the corporation. Employees and 
retirees deserve more than this. They deserve the additional 
representation before the bankruptcy court that this bill provides if 
their hard earned pensions and retiree benefits are to be adequately 
protected.
  I would like to thank Mr. John Nichols of Gadsden, AL, and his son, 
Phil for bringing this to my attention. The ordeal faced by Mr. 
Nichols, is a prime example of why employees and retirees need more 
representation before the bankruptcy court. Mr. Nichols spent his 
entire career at a steel plant in Gadsden. He began working for 
Republic Steel in 1956 and stayed with the company through two 
ownership changes and a buyout by LTV Steel.
  When LTV bought out Mr. Nichols employers, LTV Steel took over the 
monthly pension payments guaranteed to the former employees and 
retirees of Republic Steel, including Mr. Nichols. Soon after the 
takeover, however, LTV filed for bankruptcy, claiming that it could no 
longer make pension payments to Republic Steel's former employees. 
PBGC, the Pension Benefit Guarantee Corporation stepped in to help LTV 
make a small part of the pension payments, but LTV eventually stopped 
making payments at all.
  Because all the payments LTV had been making were not guaranteed by 
the PBGC, the long awaited pension payments earned by Mr. Nichols and 
by Republic Steel's other loyal employees were severely reduced. Mr. 
Nichols' pension payments went from $2,225.00 to $675.00--only 30 
percent of what he had been promised. A third of this payment now 
covers Mr. Nichols' health insurance premium that he can no longer 
purchase through LTV, leaving him with only 20 percent of his promised 
pension each month. PBGC could only pay the retirees the amount their 
statute allowed, and no one had the responsibility of going to the 
bankruptcy court and telling them what was happening to the retirees of 
Republic Steel. PBGC itself recognized that the claims of the 
pensioners against LTV, ``are among the many claims that will probably 
never be paid, except perhaps in cents on the dollar'' and stated that 
PBGC's claim against LTV for the pension plan underfunding was perhaps 
``[t]he largest of these claims [that will go unpaid].''
  During LTV's bankruptcy case, various creditors were represented 
before the bankruptcy court, but not the employees and retirees. Thus, 
when the assets of LTV were divided among its creditors, employees and 
the retirees were not at the table. If the employees and retirees had 
had an opportunity to make their case before the bankruptcy judge, the 
result could have been different.
  The Employee Pension Bankruptcy Protection Act of 2002 seeks to make 
sure that what happened to the retirees of Republic Steel will never 
happen again, employees and retirees will never be deprived of their 
pensions without having their day in court. While a company may still 
be able to discharge its obligation to pay pensioners in bankruptcy, 
this bill at least takes the first modest step to protect pensioners by 
providing them the opportunity to be part of the bankruptcy

[[Page 21062]]

bargaining process. Before the bankruptcy court sells assets or adopts 
a plan of reorganization, the employees and retirees will be heard. 
After all, it is their money. This is only fair.
  I strongly urge my colleagues in the Senate to support this bill and 
to work with me to further ensure that employees and retirees of 
corporations are fairly treated and protected under the United States 
Bankruptcy Code.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3139

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

     SECTION 1. SHORT TITLE.

       This act may be cited as the ``Employee Pension Bankruptcy 
     Protection Act of 2002''.

     SEC. 2. PURPOSE AND INTENT.

       The purpose and intent of this Act is to provide employees 
     and retirees with a greater likelihood of having outstanding 
     pension liabilities paid by a corporation that files for 
     bankruptcy by allowing the employees and retirees of that 
     corporation the right to be heard before the bankruptcy 
     court.

     SEC. 3. RIGHT TO BE HEARD.

       Section 1109 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(c) In a case in which the debtor is the sponsor of an 
     employee pension benefit plan pursuant to section 3(2) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1002(2)), and such plan is likely to be terminated pursuant 
     to title IV of that Act or substantially underfunded by the 
     debtor resulting in a hardship to the participants or 
     beneficiaries, a representative of the participants (as 
     defined in section 3(7) of that Act) and beneficiaries (as 
     defined in section 3(8) of that Act) who are entitled to 
     benefits under such plan and who may be adversely affected by 
     events in the case, may appear and be heard with respect to a 
     sale of all or substantially all of the assets of the debtor 
     or with respect to a plan of reorganization, provided that 
     such participants and beneficiaries may employ counsel and 
     other professionals who shall be compensated from the estate 
     of the debtor.''.
                                 ______
                                 
      By Mr. DODD (for himself and Ms. Collins):
  S. 3140. A bill to assist law enforcement in their efforts to recover 
missing children and to clarify the standards for State sex offender 
registration programs; to the Committee on the Judiciary.
  Mr. DODD. Mr. President, I am pleased to join with my colleague from 
Maine, Senator Collins to introduce the Prevention and Recovery of 
Missing Children Act of 2002, to improve the recovery of missing 
children and the tracking of convicted sexual offenders and child 
predators.
  Sexual offenders pose an enormous challenge for policy makers. They 
create unparalleled fear among citizens, and most of their victims are 
children and youth. Two-thirds of imprisoned sex offenders report that 
their victims were under age 18, and nearly half report that their 
victims are ages 12 and younger.
  Last year, several newspapers across the country, including the 
Hartford Courant, highlighted the inadequacy of reporting information 
in missing child cases and the lack of tracking of convicted sex 
offenders and known child predators. One tragic example reported a 
convicted sex offender who moved from Massachusetts to Montana, where 
police were never contacted about his history. He brutally murdered 
several Montana children before he was apprehended, and was later 
linked to 54 cases of child abduction and molestation in several 
States. In many cases, convicted sex offenders and child predators slip 
through law enforcement loopholes and continue to prey on children.
  Over the last decade, Congress enacted several laws designed to 
improve the tracking of convicted sex offenders and improve the 
recovery of missing children, including The Jacob Wetterling Crimes 
Against Children and Sexually Violent Offender Registration Act of 
1994; Megan's Law of 1996; and The Pam Lyncher Sex Offender Tracking 
and Identification Act of 1996. Collectively, these acts established 
minimum standards for State sex offender registration programs and 
created systems to track convicted sex offenders.
  While these current Federal laws address the main features of an 
effective registry system, the discretion over registry details and 
procedures is left up to the States. This has led to a lack of 
consistency and wide disparities between States. For example, State 
requirements for sex offender notification of registration changes 
range from 1 day to 40 days, and State requirements for a sex offender 
to register an address after moving to a new State range from 48 hours 
to 70 days.
  In addition, many States place the burden to notify changes in 
registry information solely on the sex offender. We need to tighten 
registry systems so that law enforcement in all States is better 
equipped to track sexual offenders. This bill strengthens the registry 
foundation for all States built upon the practices already in place in 
some States. It builds on successful practices to better protect our 
communities nationwide.
  The tracking of released sex offenders is critical to protecting our 
children. Most sex offenders are not in prison, about 60 percent of 
convicted sex offenders are under conditional supervision in the 
community, and those who are in prison often serve limited sentences. 
This is of great concern because sex offenders, particularly if 
untreated, are at risk of re-offending.
  This bill makes several important changes to improve the tracking of 
sex offenders and the recovery of missing children. The bill: amends 
the definition of ``minimally sufficient program'' to include: the 
registration of all convicted sex offenders prior to release; the 
collection of information to assist in tracking individuals, including 
a DNA sample, current photograph, driver's license and vehicle 
information; and verification of address and employment information for 
all offenders every 90 days; amends penalties for non-compliance with 
registry requirements. It provides that State programs must designate 
non-compliance as a felony and permits the issuance of a warrant. This 
provision is intended to encourage compliance by offenders as well as 
provide a tool for prosecutors; improves the chances for recovering 
missing children and aides law enforcement in solving cases by 
preventing the removal of missing children from the National Crime 
Information Center (NCIC) database and making sure that convicted sex 
offenders do not become exempt from the lifetime registration 
requirement; improves the chances for recovery of missing children by 
requiring entry of child information into the NCIC database within 2 
hours.
  We must make the tracking of convicted sex offenders and the post-
release supervision of child sexual predators a higher priority. It is 
not enough to ensure that an offender completes his sentence.
  Since most sexual offenders are in the community, we must ensure that 
there is continuing contact and supervision of released sexual 
offenders. We have an obligation to protect our children from sexual 
offenders and sexual predators who prey on our children.
  I urge my colleagues to join us in supporting this legislation.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Kennedy, Mrs. Murray, Mrs. Boxer, 
        Mr. Inouye, Mr. Akaka, and Mr. Corzine):
  S. 3141. A bill to amend the Family and Medical Leave Act of 1993 to 
expand the scope of the Act, and for other purposes; to the Committee 
on Health, Education, Labor, and Pensions.
  Mr. DODD: Mr. President, I am pleased to join with my colleagues 
Senator Kennedy, Senator Murray, Senator Boxer, Senator Inouye, Senator 
Akaka, and Senator Corzine to introduce the ``Family and Medical Leave 
Expansion Act.'' Since enactment in 1993, more than 35 million 
Americans have taken leave under the Family and Medical Leave Act.
  Despite the many Americans the Family and Medical Leave Act has 
helped, too many continue to be left behind. Too many continue to have 
to choose between job and family. The facts are clear: millions of 
Americans remain uncovered by the Family and Medical Leave Act. And, 
too many who are eligible for the Family and Medical Leave Act cannot 
afford to take unpaid

[[Page 21063]]

leave from work. The ``Family and Medical Leave Expansion Act'' 
addresses both these problems.
  The ``Family and Medical Leave Expansion Act'' would expand the scope 
and coverage of FMLA. It would fund pilot programs at the state level 
to offer partial or full wage replacement programs to ensure that 
employees do not have to choose between job and family.
  Times have changed over the years. More and more mothers are working. 
While only 27 percent of mothers with infants were in the labor force 
in 1960, by 1999 that percentage rose to nearly 60 percent. Even as 
employment rates within this group rises, family responsibilities 
remain constant, a reality that lies at the core of the FMLA. According 
to an employee survey by the Department of Labor, about one fifth of US 
workers have a need for some form of leave covered under the FMLA, and 
about 40 percent of all employees think they will need FMLA-covered 
leave within the next five years.
  According to a Department of Labor study in 2000, leave to care for 
one's own health or for the health of a seriously ill child, spouse or 
parent, together account for almost 80 percent of all FMLA leave. 
Approximately 52 percent of the leave taken is due to employees' own 
serious health problems, while 26 percent of the leave is taken by 
young parents caring for their children at birth or adoption.
  The FMLA requires that all public sector employers and private 
employers of 50 or more employees provide up to twelve weeks of unpaid 
leave for medical and family care reasons for eligible employees. About 
77 percent of employees, in the private and public sector, currently 
work in FMLA-covered sites, although only 62 percent of employees are 
actually eligible for leave.
  However, only 11 percent of private sector work sites are covered 
under FMLA. Individuals working for small private employers deserve the 
same work protections afforded to other employees. As a step toward 
expanding protection to all hard-working Americans, this bill would 
extend FMLA coverage to all private sector worksites with 25 or more 
employees within a 75-mile radius.
  Mothers and fathers, sons and daughters have the same family 
responsibilities and personal health problems, regardless of whether 
they work for the government, a large private enterprise, or a small 
private business. Expanding the FMLA to businesses with 25 or more 
employees is a crucial acknowledgment of this reality.
  The bill recognizes the enormous physical and emotional toll domestic 
violence takes on victims. The bill expands the scope of FMLA to 
include leave for individuals to care for themselves or to care for a 
daughter, son, or parent suffering from domestic violence.
  Expanding the scope and coverage of FMLA is a positive step for many 
Americans. But, alone, it is not enough. According to a Department of 
Labor study, 3.5 million covered Americans needed leave but, without 
wage replacement, could not afford to take leave. Over four-fifths of 
those who needed leave but did not take it said they could not afford 
unpaid leave. Others cut their leave short, with the average duration 
of FMLA leave being 10 days. Of those individuals taking leave under 
the Family and Medical Leave Act, nearly three-quarters had incomes 
above $30,000.
  While the financial sacrifice is often enormous, the need for leave 
can be even more so. Every year, many Americans bite the bullet and 
accept unpaid leave. As a result, nine percent of leave takers go on 
public assistance to cover their lost wages. Almost twelve percent of 
female leave takers use public assistance for this reason. These 
individuals are far from unwilling to work. Instead, they are trying to 
balance work with family, often during a crisis, too often with 
inadequate means to get by.
  Other major industrialized nations have implemented policies far more 
family-friendly to promote early childhood development and family 
caregiving. At least 128 countries provide paid and job-protected 
maternity leave, with sixteen weeks the average basic paid leave. In 
1992, before we enacted the Family and Medical Leave Act, the European 
Union mandated a paid fourteen week maternity leave as a health and 
safety measure. Among the 29 Organization for Economic Cooperation and 
Development, OECD, countries, the average childbirth-related leave is 
44 weeks, while the average duration of paid leave is 36 weeks.
  Compared to these other developed nations, the United States is far 
behind in efforts to promote worker welfare and productivity. The 
``Family and Medical Leave Expansion Act'' builds on current law to 
provide pilot programs for states and the federal government to provide 
for partial or full wage replacement for 6 weeks. At a minimum, this 
will ensure that parents can continue to make ends meet while taking 
family and medical leave.
  No one should have to choose between work and family. Women and men 
deserve to take leave when family or health conditions require it 
without fear of losing their job or livelihood. We must not simply pay 
lip service to family integrity and the promotion of a healthy 
workplace. Instead, we must actively work to reduce workplace barriers. 
I urge my colleagues to support the ``Family and Medical Leave 
Expansion Act'' to promote our national values and ensure the welfare 
and health of hard-working Americans.
                                 ______
                                 
      By Mrs. LINCOLN:
  S. 3144. A bill to amend title XVI of the Social Security Act to 
clarify that the value of certain funeral and burial arrangements are 
not to be considered available resources under the supplemental 
security income program; to the Committee on Finance.
  Mrs. LINCOLN. Mr. President, I am pleased to introduce legislation 
that codifies the exclusion of irrevocable funeral trusts from 
Supplemental Security Income, SSI, resource calculations.
  Irrevocable funeral trusts are funds set aside for funeral and burial 
expenses. These funds cannot be accessed until after the owner's death. 
Until recently, these trusts were not included in SSI resource 
calculations, but an administrative misinterpretation in 2001 dropped 
this important exclusion.
  This misinterpretation has since been corrected, but it had serious 
repercussions for many senior citizens while it was in effect. When 
irrevocable funeral and burial trusts were included in SSI 
calculations, it penalized those SSI applicants who chose to save for 
their funeral by inflating their actual individual wealth, even though 
the trusts could not be accessed. The end result was that many senior 
citizens' SSI applications were rejected. Because the SSI definition of 
resources and exclusions is used for Medicaid eligibility 
determinations, the inclusion also affected Medicaid applicants.
  I am introducing this bill to codify the exclusion to give senior 
citizens certainty that future administrations will not be able to 
misinterpret Congressional intent.
  In the past, Congress has recognized the value of funeral planning as 
good social policy. We have encouraged consumers to engage in ``pre-
need'' funeral planning in a number of ways.
  This legislation will encourage people to engage in pre-need 
planning. It will codify the existing practice of excluding irrevocable 
funeral trusts from SSI calculations and ensure that future 
misinterpretations are avoided. We must ensure that people are not 
penalized for providing for their own funerals. I encourage my 
colleagues to give this legislation serious consideration.
                                 ______
                                 
      By Mr. DODD (for himself, Mr. Edwards, and Mr. DeWine):
  S. 3145. A bill to amend the Higher Education Act of 1965 to 
establish a scholarship program to encourage and support students who 
have contributed substantial public services; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. DODD. Mr. President, I rise to introduce, along with Senators 
Edwards and DeWine, the Youth Service Scholarship Act. This Act would 
authorize the Secretary of Education to award college scholarships of 
up to $5,000 to students who perform at least

[[Page 21064]]

300 hours of community service in each of two years of high school and 
continuing scholarships to students who continue their service in 
college.
  I believe that education is the hub of the wheel of our democracy. 
There is no better way to address any and all of the challenges we face 
as a nation than by providing all of our children with the education 
they need and deserve. In the 21st Century, higher education is not a 
luxury, it is a necessity, and this Act would extend access to higher 
education to more low-income students who otherwise might have 
difficulty attending college.
  Naturally, education means reading and math and history and science, 
but it also means learning to be a citizen. It's not easy to be a good 
citizen, and this Act will encourage our young people to engage in 
community service and reward them for that, and in so doing, will help 
ensure that our next generation of leaders understands that being an 
American is not just a privilege, but a responsibility.
  We know that students who participate in community service and youth 
development are less likely to use drugs and alcohol and to misbehave 
in school, and are more likely to receive good grades and be interested 
in going to college. We also know that Federal resources can be an 
effective incentive to leverage broader community support.
  So, I urge my colleagues to join me, and Senators Edwards and DeWine, 
in supporting the Youth Service Scholarship Act so that we can achieve 
more of those and other positive outcomes.
                                 ______
                                 
      By Mr. LEAHY (for himself and Mrs. Carnahan):
  S. 3146. A bill to reauthorize funding for the National Center for 
Missing and Exploited Children, and for other purposes; to the 
Committee on the Judiciary.
  Mr. LEAHY. Mr. President, I rise today to introduce the ``Protecting 
Our Children Comes First Act of 2002,'' which will double funding for 
the National Center for Missing and Exploited Children, NCMEC, 
reauthorize the Center through fiscal year 2006, and increase Federal 
support to help NCMEC programs to find missing children across the 
Nation. I am pleased that Senator Carnahan joins me as the original 
cosponsor of this legislation.
  It is painful to see on TV or in the newspapers photo after photo of 
missing children from every corner of the Nation. As a father and 
grandfather, I know that an abducted child is the worst nightmare. 
Unfortunately, it is a nightmare that happens all too often. Indeed, 
the Justice Department estimates that 2,200 children are reported 
missing each day of the year. There are approximately 114,600 attempted 
stranger abductions every year, with 3,000-5,000 of those attempts 
succeeding. These families deserve the assistance of the American 
people and helping hand of the Congress.
  As the Nation's top resource center for child protection, the 
National Center for Missing & Exploited Children spearheads national 
efforts to locate and recover missing children and raises public 
awareness about ways to prevent child abduction, molestation, and 
sexual exploitation.
  As a national voice and advocate for those too young to vote or speak 
up for their own rights, the NCMEC works to make our children safer. 
The Center operates under a Congressional mandate and works in 
cooperation with the U.S. Department of Justice's, DOJ, Office of 
Juvenile Justice and Delinquency Prevention in coordinating the efforts 
of law enforcement officers, social service agencies, elected 
officials, judges, prosecutors, educators, and the public and private 
sectors to break the cycle of violence that historically has 
perpetuated these needless crimes against children.
  NCMEC professionals have disturbingly busy jobs, they have worked on 
more than 90,000 cases of missing and exploited children since its 1984 
founding, helping to recover more than 66,000 children, and raised its 
recovery rate from 60 percent in the 1980s to 94 percent today. The 
Center has set up a nationwide, toll free, 24-hour telephone hotline to 
take reports about missing children and clues that might lead to their 
recovery, a National Child Pornography Tipline to handle calls from 
individuals reporting the sexual exploitation of children through the 
production and distribution of pornography, and a CyberTipline to 
process online leads from individuals reporting the sexual exploitation 
of children. It has taken the lead in circulating millions of 
photographs of missing children, and serves as a vital resource for the 
17,000 law enforcement agencies located throughout the U.S. in the 
search for missing children and the quest for child protection.
  Today, NCMEC is truly a national organization, having established its 
headquarters in Alexandria, VA; and operating branch offices in five 
other locations throughout the country to provide hands-on assistance 
to families of missing children, advocating legislative changes to 
better protect children, conducting an array of prevention and 
awareness programs, and motivating individuals to become personally 
involved in child-protection issues. It has also grown into an 
international organization, establishing the International Division of 
the National Center for Missing and Exploited Children, which has been 
working to fulfill the Hague Convention on the Civil Aspects of 
International Child Abduction. The International Division provides 
assistance to parents, law enforcement, attorneys, nonprofit 
organizations, and other concerned individuals who are seeking 
assistance in preventing or resolving international child abductions.
  NCMEC manages to do all of this good work with only a $10 million 
annual DOJ grant, which will expire after fiscal year 2003. We should 
act now both to extend its authorization and increase the Center's 
funding to $20 million each year through fiscal year 2006 so that it 
can continue to help keep children safe and families intact around the 
nation. There is so much more to be done to ensure the safety of our 
children, and the legislation we introduce today will help the Center 
in its efforts to prevent crimes that are committed against them.
  The ``Protecting Our Children Comes First Act'' also increases 
Federal support of NCMEC programs to find missing children by allowing 
the U.S. Secret Service to provide forensic and investigative support 
to the NCMEC.
  The bill also amends of the Missing Children's Assistance Act to 
coordinate the operation of the Center's CyberTipline to provide all 
online users an effective means of reporting Internet-related child 
sexual exploitation, such as child pornography, child enticement, and 
child prostitution. Since its creation in 1998, the NCMEC CyberTipline 
has fielded almost 100,000 reports, which has allowed Internet users to 
quickly and easily report suspicious activities linked to the Internet.
  Our legislation gives Federal authorities the authority to share the 
facts or circumstances of sexual exploitation crimes against children 
with state authorities without a court order. The bill also gives the 
NCMEC the power to make reports directly to state and local law 
enforcement officials instead of only through the FBI and other 
agencies. Finally, it provides that reports to NCMEC by Internet 
Service Providers may include additional information, such as the 
identity of a subscriber who sent a message containing child 
pornography, in addition to the required reporting of the contents of 
such a communication.
  I applaud the ongoing work of the Center and hope both the Senate and 
the House of Representatives will promptly pass this bill to provide 
more Federal support for the NCMEC to continue to find missing children 
and protect exploited children across the country.
                                 ______
                                 
      By Mr. DeWINE (for himself, Mr. Leahy, Mr. Grassley, Ms. 
        Cantwell, Mr. Brownback, and Mr. Domenici):
  S. 3147. A bill to foster local collaborations which will ensure that 
resources are effectively and efficiently used within the criminal and 
juvenile justice systems; to the Committee on the Judiciary.
  Mr. DeWINE. Mr. President, I rise today, along with Senators Leahy,

[[Page 21065]]

Grassley, Cantwell, Domenici, and Brownback, to introduce the 
``Mentally Ill Offender Treatment and Crime Reduction Act.'' This 
bipartisan measure would, among other things, create a program of 
planning and implementation grants for communities so they may offer 
more treatment and other services to mentally ill offenders. Under this 
bill, programs receiving grant funds would be operated collaboratively 
by both a criminal justice agency and a mental health agency.
  The mentally ill population poses a particularly difficult challenge 
for our criminal justice system. People afflicted with mental illness 
are incarcerated at significantly higher rates than the general 
population. According to the Bureau of Justice Statistics, while only 
about five percent of the American population has a mental illness, 
about 16 percent of the State prison population has such an illness. 
The Los Angeles County Jail, for example, typically has more mentally 
ill inmates than any hospital in the country.
  Unfortunately, however, the reality of our criminal justice system is 
that jails and prisons do not provide a therapeutic environment for the 
mentally ill and are unlikely to do so any time soon. Indeed, the 
mentally ill inmate often is preyed upon by other inmates or becomes 
even sicker in jail. Once released from jail or prison, many mentally 
ill people end up on the streets. With limited personal resources and 
little or no ability to handle their illness alone, they often commit 
further offenses resulting in their re-arrest and re-incarceration. 
This ``revolving door'' is costly and disruptive for all involved.
  Although these problems tend to manifest themselves primarily within 
the prison system, the root cause of our current situation is found in 
the mental health system and its failure to provide sufficient 
community-based treatment solutions. Accordingly, the solution will 
necessarily involve collaboration between the mental health system and 
criminal justice system. In fact, it also will require greater 
collaboration between the substance abuse treatment and mental health 
treatment communities, because many mentally ill offenders have a drug 
or alcohol problem in addition to their mental illness.
  The purpose of the ``Mentally Ill Offender Treatment and Crime 
Reduction Act'' is to foster exactly this type of collaboration at the 
federal, state, and local levels. The bill provides incentives for the 
criminal justice, juvenile justice, mental health, and substance abuse 
treatment systems to work together at each level of government to 
establish a network of services for offenders with mental illness. The 
bill's approach is unique, in that it not only would promote public 
safety by helping curb the incidence of repeat offenders, but it also 
would promote public health, by ensuring that those with a serious 
mental illness are treated as soon as possible and as efficiently and 
effectively as possible.
  Among its major provisions, this legislation calls for the 
establishment of a new competitive grant program, which would be housed 
at the U.S. Department of Justice, but administered by the Attorney 
General with the active involvement of the Secretary of Health and 
Human Services. To ensure that collaboration occurs at the local level, 
the bill requires that two entities jointly submit a single grant 
application on behalf of a community.
  Applications demonstrating the greatest commitment to collaboration 
would receive priority for grant funds. If applicants can show that 
grant funds would be used to promote public health, as well as public 
safety, and if the program they propose would have the active 
participation of each joint applicant, and if their grant application 
has the support of both the Attorney General and the Secretary of 
Health and Human Services, then it would receive priority for funding.
  The bill permits grant funds to be used for a variety of purposes, 
each of which embodies the goal of collaboration. First, grant funds 
may be used to provide courts with more options, such as specialized 
dockets, for dealing with the non-violent offender who has a serious 
mental illness or a co-occurring mental illness and drug or alcohol 
problem. Second, grant funds could be used to enhance training of 
mental health and criminal justice system personnel, who must know how 
to deal appropriately with the mentally ill offender. Third, grant 
funds could be devoted to programs that divert non-violent offenders 
with severe and persistent mental illness from the criminal justice 
system into treatment. Finally, correctional facilities may use grant 
funds to promote the treatment of inmates and ease their transition 
back into the community upon release from jail or prison.
  In specifically authorizing grant funds to be used to promote more 
options for courts to deal with mentally ill offenders, this bill 
builds on legislation that I introduced with Congressman Ted Strickland 
two years ago. That measure, which became law, authorized $10 million 
per year for the establishment of more mental health courts. I have 
long supported mental health courts, which enable the criminal justice 
system to provide an individualized treatment solution for a mentally 
ill offender, while also requiring accountability of the offender. The 
legislation we are introducing today would make possible the creation 
or expansion of more mental health courts, and it also would promote 
the funding of treatment services that support such courts.
  In addition to making planning and implementation grants available to 
communities, the ``Mentally Ill Offender Treatment and Crime Reduction 
Act'' also calls for an Interagency Task Force to be established at the 
federal level. This Task Force would include the Attorney General and 
the Secretary of Health and Human Services, as well as the Secretary of 
Housing and Urban Development, the Secretary of Labor, the Secretary of 
Education, the Secretary of Veterans Affairs, and the Commissioner of 
Social Security. The Task Force would be charged with identifying new 
ways that federal departments can work together to reduce recidivism 
among mentally ill adults and juveniles.
  Finally, the bill directs the Attorney General and Secretary of 
Health and Human Services to develop a list of ``best practices'' for 
criminal justice personnel to use when diverting mentally ill offenders 
from the criminal justice system.
  This is a good bill and one that is long overdue. I encourage my 
colleagues to support this important measure. I ask unanimous consent 
that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3147

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Mentally Ill Offender 
     Treatment and Crime Reduction Act of 2002''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) According to the Bureau of Justice Statistics, over 16 
     percent of adults incarcerated in United States jails and 
     prisons have a mental illness.
       (2) According to the Office of Juvenile Justice and 
     Delinquency Prevention, over 20 percent of youth in the 
     juvenile justice system have serious mental health problems, 
     and many more have co-occurring mental health and substance 
     abuse disorders.
       (3) According to the National Alliance for the Mentally 
     Ill, up to 40 percent of adults who suffer from a serious 
     mental illness will come into contact with the American 
     criminal justice system at some point in their lives.
       (4) According to the Office of Juvenile Justice and 
     Delinquency Prevention, over 150,000 juveniles who come into 
     contact with the juvenile justice system each year meet the 
     diagnostic criteria for at least 1 mental or emotional 
     disorder.
       (5) A significant proportion of adults with a serious 
     mental illness who are involved with the criminal justice 
     system are homeless or at imminent risk of homelessness; and 
     many of these individuals are arrested and jailed for minor, 
     nonviolent offenses.
       (6) The majority of individuals with a mental illness or 
     emotional disorder who are involved in the criminal or 
     juvenile justice systems are responsive to medical and 
     psychological interventions that integrate treatment, 
     rehabilitation, and support services.

[[Page 21066]]

       (7) According to the Bureau of Justice Statistics, as of 
     July 1999, 75 percent of mentally ill inmates had previously 
     been sentenced at least once to time in prison or jail or 
     probation.
       (8) Collaborative programs between mental health, substance 
     abuse, and criminal or juvenile justice systems that ensure 
     the provision of services for those with mental illness or 
     co-occurring mental illness and substance abuse disorders can 
     reduce the number of such individuals in adult and juvenile 
     corrections facilities, while providing improved public 
     safety.

     SEC. 3. PURPOSE.

       The purpose of this Act is to increase public safety by 
     facilitating collaboration among the criminal justice, 
     juvenile justice, mental health treatment, and substance 
     abuse systems. Such collaboration is needed to--
       (1) reduce rearrests among adult and juvenile offenders 
     with mental illness, or co-occurring mental illness and 
     substance abuse disorders;
       (2) provide courts, including existing and new mental 
     health courts, with appropriate mental health and substance 
     abuse treatment options;
       (3) maximize the use of alternatives to prosecution through 
     diversion in appropriate cases involving non-violent 
     offenders with mental illness;
       (4) promote adequate training for criminal justice system 
     personnel about mental illness and substance abuse disorders 
     and the appropriate response to people with such illnesses;
       (5) promote adequate training for mental health treatment 
     personnel about criminal offenders with mental illness and 
     the appropriate response to such offenders in the criminal 
     justice system; and
       (6) promote communication between criminal justice or 
     juvenile justice personnel, mental health treatment 
     personnel, nonviolent offenders with mental illness, and 
     other support services such as housing, job placement, 
     community, and faith-based organizations.

     SEC. 4. DEPARTMENT OF JUSTICE MENTAL HEALTH AND CRIMINAL 
                   JUSTICE COLLABORATION PROGRAM.

       (a) In General.--Title I of the Omnibus Crime Control and 
     Safe Streets Act of 1968 (42 U.S.C. 3711 et seq.) is amended 
     by adding at the end the following:

       ``PART HH--ADULT AND JUVENILE COLLABORATION PROGRAM GRANTS

     ``SEC. 2991. ADULT AND JUVENILE COLLABORATION PROGRAMS.

       ``(a) Definitions.--In this section, the following 
     definitions shall apply:
       ``(1) Applicant.--The term `applicant' means States, units 
     of local government, Indian tribes, and tribal organizations 
     that apply for a grant under this section.
       ``(2) Collaboration program.--The term `collaboration 
     program' means a program to promote public safety by ensuring 
     access to adequate mental health and other treatment services 
     for mentally ill adults or juveniles that is overseen 
     cooperatively by--
       ``(A) a criminal justice agency, a juvenile justice agency, 
     or a mental health court; and
       ``(B) a mental health agency.
       ``(3) Criminal or juvenile justice agency.--The term 
     `criminal or juvenile justice agency' means an agency of a 
     State or local government that is responsible for detection, 
     arrest, enforcement, prosecution, defense, adjudication, 
     incarceration, probation, or parole relating to the violation 
     of the criminal laws of that State or local government.
       ``(4) Diversion.--The term `diversion' means the 
     appropriate use of effective mental health treatment 
     alternatives to juvenile justice or criminal justice system 
     institutional placements for adult offenders with severe and 
     persistent mental illness or juvenile offenders with serious 
     mental or emotional disorders.
       ``(5) Mental health agency.--The term `mental health 
     agency' means an agency of a State or local government that 
     is responsible for mental health services.
       ``(6) Mental health court.--The term `mental health court' 
     means a judicial program that meets the requirements of part 
     V of this title.
       ``(7) Mental illness.--The term `mental illness' means a 
     diagnosable mental, behavioral, or emotional disorder--
       ``(A) of sufficient duration to meet diagnostic criteria 
     within the most recent edition of the Diagnostic and 
     Statistical Manual of Mental Disorders published by the 
     American Psychiatric Association; and
       ``(B) that has resulted in the substantial impairment of 
     thought processes, sensory input, mood balance, memory, or 
     ability to reason and substantially interferes with or limits 
     1 or more major life activities.
       ``(8) Preliminarily qualified offender.--The term 
     `preliminarily qualified offender' means an adult or juvenile 
     who--
       ``(A)(i) previously or currently has been diagnosed by a 
     qualified mental health professional as having a mental 
     illness or co-occurring mental illness and substance abuse 
     disorders; or
       ``(ii) manifests obvious signs of mental illness or co-
     occurring mental illness and substance abuse disorders during 
     arrest or confinement or before any court; and
       ``(B) has faced or is facing criminal charges and is deemed 
     eligible by a designated pretrial screening and diversion 
     process, or by a magistrate or judge.
       ``(9) Secretary.--The term `Secretary' means the Secretary 
     of the Department of Health and Human Services.
       ``(10) Unit of local government.--The term `unit of local 
     government' means any city, county, township, town, borough, 
     parish, village, or other general purpose political 
     subdivision of a State, including a State court, local court, 
     or a governmental agency located within a city, county, 
     township, town, borough, parish, or village.
       ``(b) Planning and Implementation Grants.--
       ``(1) In general.--The Attorney General, in consultation 
     with the Secretary, may award nonrenewable grants to eligible 
     applicants to prepare a comprehensive plan for and implement 
     an adult or juvenile collaboration program, which targets 
     adults or juveniles with mental illness or co-occurring 
     mental illness and substance abuse disorders in order to 
     promote public safety and public health.
       ``(2) Purposes.--Grants awarded under this section shall be 
     used to create or expand--
       ``(A) mental health courts;
       ``(B) programs that offer specialized training to the 
     officers and employees of a criminal or juvenile justice 
     agency and mental health personnel in procedures for 
     identifying the symptoms of mental illness and co-occurring 
     mental illness and substance abuse disorders in order to 
     respond appropriately to individuals with such illnesses; and
       ``(C) programs that support cooperative efforts by criminal 
     and juvenile justice agencies and mental health agencies to 
     promote public safety by offering mental health treatment 
     services and, where appropriate, substance abuse treatment 
     services for--
       ``(i) preliminarily qualified offenders with mental illness 
     or co-occurring mental illness and substance abuse disorders;
       ``(ii) juveniles and adults with mental illness for whom 
     diversion is appropriate; or
       ``(iii) adult offenders with mental illness during periods 
     of incarceration, while under the supervision of a criminal 
     justice agency, or following release from correctional 
     facilities.
       ``(3) Applications.--
       ``(A) In general.--To receive a planning grant or an 
     implementation grant, the joint applicants shall prepare and 
     submit a single application to the Attorney General at such 
     time, in such manner, and containing such information as the 
     Attorney General and the Secretary shall reasonably require. 
     An application under part V of this title may be made in 
     conjunction with an application under this section.
       ``(B) Combined planning and implementation grant 
     application.--The Attorney General shall develop a procedure 
     under which applicants may apply at the same time and in a 
     single application for a planning grant and an implementation 
     grant, with receipt of the implementation grant conditioned 
     on successful completion of the activities funded by the 
     planning grant.
       ``(4) Planning grants.--
       ``(A) Application.--The joint applicants may apply to the 
     Attorney General for a nonrenewable planning grant to develop 
     a collaboration program.
       ``(B) Contents.--The Attorney General may not approve a 
     planning grant unless the application for the grant includes 
     or provides, at a minimum, for a budget and a budget 
     justification, a description of the outcome measures that 
     will be used to measure the effectiveness of the program in 
     promoting public safety and public health, the activities 
     proposed (including the provision of substance abuse 
     treatment services, where appropriate) and a schedule for 
     completion of such activities, and the personnel necessary to 
     complete such activities.
       ``(C) Period of grant.--A planning grant shall be effective 
     for a period of 1 year, beginning on the first day of the 
     month in which the planning grant is made. Applicants may not 
     receive more than 1 such planning grant.
       ``(D) Amount.--The amount of a planning grant may not 
     exceed $75,000, except that the Attorney General may, for 
     good cause, approve a grant in a higher amount.
       ``(5) Implementation grants.--
       ``(A) Application.--Joint applicants that have prepared a 
     planning grant application may apply to the Attorney General 
     for approval of a nonrenewable implementation grant to 
     develop a collaboration program.
       ``(B) Collaboration.--To receive an implementation grant, 
     the joint applicants shall--
       ``(i) document that at least 1 criminal or juvenile justice 
     agency (which can include a mental health court) and 1 mental 
     health agency will participate in the administration of the 
     collaboration program;
       ``(ii) describe the responsibilities of each participating 
     agency, including how each agency will use grant resources to 
     jointly ensure that the provision of mental health treatment 
     services is integrated with the provision of substance abuse 
     treatment services, where appropriate;
       ``(iii) in the case of an application from a unit of local 
     government, document that a State mental health authority has 
     provided comment and review; and
       ``(iv) involve, to the extent practicable, in developing 
     the grant application--

[[Page 21067]]

       ``(I) individuals with mental illness or co-occurring 
     mental illness and substance abuse disorders; or
       ``(II) the families or advocates of such individuals under 
     subclause (I).

       ``(C) Content.--To be eligible for an implementation grant, 
     joint applicants shall comply with the following:
       ``(i) Definition of target population.--Applicants for an 
     implementation grant shall--

       ``(I) describe the population with mental illness or co-
     occurring mental illness and substance abuse disorders that 
     is targeted for the collaboration program; and
       ``(II) develop guidelines that can be used by personnel of 
     a criminal or juvenile justice agency to identify individuals 
     with mental illness or co-occurring mental illness and 
     substance abuse disorders.

       ``(ii) Services.--Applicants for an implementation grant 
     shall--

       ``(I) ensure that offenders with mental illness who are to 
     receive services under the collaboration program will first 
     receive individualized, needs-based assessments to determine, 
     plan, and coordinate the most appropriate services for such 
     individuals;
       ``(II) specify plans for making mental health treatment 
     services available and accessible to mentally ill offenders 
     at the time of their release from the criminal justice 
     system, including outside of normal business hours;
       ``(III) ensure that mentally ill offenders served by the 
     collaboration program will have access to community-based 
     mental health services, such as crisis intervention, case 
     management, assertive community treatment, medications, 
     medication management, psychiatric rehabilitation, peer 
     support, or, where appropriate, integrated substance abuse 
     treatment services;
       ``(IV) make available, to the extent practicable, 
     individualized mental health treatment services, other 
     support services (such as housing, education, job placement, 
     mentoring, or health care), benefits (such as disability 
     income, disability insurance, and medicaid, where 
     appropriate), and the services of faith-based and community 
     organizations for mentally ill individuals served by the 
     collaboration program; and
       ``(V) include strategies to address developmental and 
     learning disabilities and problems arising from a documented 
     history of physical or sexual abuse, if the population 
     targeted for the collaboration program includes juveniles 
     with mental illness.

       ``(D) Housing and job placement.--Recipients of an 
     implementation grant may use grant funds to assist mentally 
     ill offenders compliant with the program in seeking housing 
     or employment assistance.
       ``(E) Policies and procedures.--Applicants for an 
     implementation grant shall strive to ensure prompt access to 
     defense counsel by criminal defendants with mental illness 
     who are facing charges that would trigger a constitutional 
     right to counsel.
       ``(F) Financial.--Applicants for an implementation grant 
     shall--
       ``(i) explain the applicant's inability to fund the 
     collaboration program adequately without Federal assistance;
       ``(ii) specify how the Federal support provided will be 
     used to supplement, and not supplant, State, local, Indian 
     tribe, or tribal organization sources of funding that would 
     otherwise be available, including billing third-party 
     resources for services already covered under programs (such 
     as medicaid, medicare, and the State Children's Insurance 
     Program); and
       ``(iii) outline plans for obtaining necessary support and 
     continuing the proposed collaboration program following the 
     conclusion of Federal support.
       ``(G) Outcomes.--Applicants for an implementation grant 
     shall--
       ``(i) identify methodology and outcome measures, as 
     required by the Attorney General and the Secretary, to be 
     used in evaluating the effectiveness of the collaboration 
     program;
       ``(ii) ensure mechanisms are in place to capture data, 
     consistent with the methodology and outcome measures under 
     clause (i); and
       ``(iii) submit specific agreements from affected agencies 
     to provide the data needed by the Attorney General and the 
     Secretary to accomplish the evaluation under clause (i).
       ``(H) State plans.--Applicants for an implementation grant 
     shall describe how the adult or juvenile collaboration 
     program relates to existing State criminal or juvenile 
     justice and mental health plans and programs.
       ``(I) Use of funds.--Applicants that receive an 
     implementation grant may use funds for 1 or more of the 
     following purposes:
       ``(i) Mental health courts and diversion.--Funds may be 
     used to create or expand existing mental health courts that 
     meet program requirements established by the Attorney General 
     under part V of this title or diversion programs (including 
     crisis intervention teams and treatment accountability 
     services for communities) that meet requirements established 
     by the Attorney General and the Secretary.
       ``(ii) Training.--Funds may be used to create or expand 
     programs, such as crisis intervention training, which offer 
     specialized training to--

       ``(I) criminal justice system personnel to identify and 
     respond appropriately to the unique needs of an adult or 
     juvenile with mental illness or co-occurring mental illness 
     and substance abuse disorders; or
       ``(II) mental health system personnel to respond 
     appropriately to the treatment needs of criminal offenders 
     with mental illness or co-occurring mental illness and 
     substance abuse disorders.

       ``(iii) Service delivery.--Funds may be used to create or 
     expand local treatment programs that promote public safety by 
     serving individuals with mental illness or co-occurring 
     mental illness and substance abuse disorders.
       ``(iv) In-jail and transitional services.--Funds may be 
     used to promote and provide mental health treatment for those 
     incarcerated or for transitional re-entry programs for those 
     released from any penal or correctional institution.
       ``(J) Geographic distribution.--The Attorney General, in 
     consultation with the Secretary, shall ensure that 
     implementation grants are equitably distributed among the 
     geographical regions of the United States and between urban 
     and rural populations.
       ``(c) Priority.--The Attorney General, in awarding funds 
     under this section, shall give priority to applications 
     that--
       ``(1) demonstrate the strongest commitment to ensuring that 
     such funds are used to promote both public health and public 
     safety;
       ``(2) demonstrate the active participation of each co-
     applicant in the administration of the collaboration program; 
     and
       ``(3) have the support of both the Attorney General and the 
     Secretary.
       ``(d) Matching Requirements.--
       ``(1) Federal share.--The Federal share of the cost of a 
     collaboration program carried out by a State, unit of local 
     government, Indian tribe, or tribal organization under this 
     section shall not exceed--
       ``(A) 80 percent of the total cost of the program during 
     the first 2 years of the grant;
       ``(B) 60 percent of the total cost of the program in year 
     3; and
       ``(C) 25 percent of the total cost of the program in years 
     4 and 5.
       ``(2) Non-federal share.--The non-Federal share of payments 
     made under this section may be made in cash or in-kind fairly 
     evaluated, including planned equipment or services.
       ``(e) Federal Use of Funds.--The Attorney General, in 
     consultation with the Secretary, in administering grants 
     under this section, may use up to 3 percent of funds 
     appropriated to--
       ``(1) research the use of alternatives to prosecution 
     through pretrial diversion in appropriate cases involving 
     individuals with mental illness;
       ``(2) offer specialized training to personnel of criminal 
     and juvenile justice agencies in appropriate diversion 
     techniques;
       ``(3) provide technical assistance to local governments, 
     mental health courts, and diversion programs, including 
     technical assistance relating to program evaluation;
       ``(4) help localities build public understanding and 
     support for community reintegration of individuals with 
     mental illness;
       ``(5) develop a uniform program evaluation process; and
       ``(6) conduct a national evaluation of the collaboration 
     program that will include an assessment of its cost-
     effectiveness.
       ``(f) Interagency Task Force.--
       ``(1) In general.--The Attorney General and the Secretary 
     shall establish an interagency task force with the 
     Secretaries of Housing and Urban Development, Labor, 
     Education, and Veterans Affairs and the Commissioner of 
     Social Security, or their designees.
       ``(2) Responsibilities.--The task force established under 
     paragraph (1) shall--
       ``(A) identify policies within their departments which 
     hinder or facilitate local collaborative initiatives for 
     adults or juveniles with mental illness or co-occurring 
     mental illness and substance abuse disorders; and
       ``(B) submit, not later than 2 years after the date of 
     enactment of this section, a report to Congress containing 
     recommendations for improved interdepartmental collaboration 
     regarding the provision of services to adults and juveniles 
     with mental illness or co-occurring mental illness and 
     substance abuse disorders.
       ``(g) Minimum Allocation.--Unless all eligible applications 
     submitted by any State or unit of local government within 
     such State for a planning or implementation grant under this 
     section have been funded, such State, together with grantees 
     within the State (other than Indian tribes), shall be 
     allocated in each fiscal year under this section not less 
     than 0.75 percent of the total amount appropriated in the 
     fiscal year for planning or implementation grants pursuant to 
     this section.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Department of Justice to 
     carry out this section--
       ``(1) $100,000,000 for each of fiscal years 2003 and 2004; 
     and
       ``(2) such sums as may be necessary for fiscal years 2005 
     through 2007.''.
       (b) List of ``Best Practices''.--The Attorney General, in 
     consultation with the Secretary of Health and Human Services, 
     shall

[[Page 21068]]

     develop a list of ``best practices'' for appropriate 
     diversion from incarceration of adult and juvenile offenders.
       (c) Technical Amendment.--The table of contents of title I 
     of the Omnibus Crime Control and Safe Streets Act of 1968 (42 
     U.S.C. 3711 et seq.) is amended by adding at the end the 
     following:

       ``Part HH--Adult and Juvenile Collaboration Program Grants

``Sec. 2991. Adult and juvenile collaboration programs.''.

  Mr. LEAHY. Mr. President, I have joined today with Senators DeWine, 
Cantwell, Brownback, and Grassley to introduce legislation that will 
help State and local governments reduce crime by providing more 
effective treatment for the mentally ill. All too often, people with 
mental illness rotate repeatedly between the criminal justice system 
and the streets of our communities, committing a series of minor 
offenses. Their crimes occupy the ever scarcer time of law enforcement 
officers, diverting them from their more urgent responsibilities, and 
leave the offenders themselves in prisons or jails where little or no 
medical care is available for them. With this legislation, we are 
trying to give State and local governments the tools they need to break 
this cycle, for the good of law enforcement, corrections officers, our 
public safety, and mentally ill offenders.
  I held a Judiciary Committee hearing in June on the criminal justice 
system and mentally ill offenders. At that hearing, we heard from State 
mental health officials, law enforcement officers, corrections 
officials, and the representative of counties around our Nation. All 
agreed that people with untreated mental illness are more likely to 
commit crimes, and that our State mental health systems, prisons and 
jails do not have the resources they need to treat the mentally ill, 
and prevent crime and recidivism. As this legislation's findings 
detail, 16 percent of adults incarcerated in U.S. jails and prisons 
have a mental illness, more than 20 percent of youth in the juvenile 
justice system have serious mental health problems, and up to 40 
percent of adults who suffer from a serious mental illness will come 
into contact with the American criminal justice system at some point in 
their lives. This is a serious problem that has not received the 
legislative or public attention it deserves.
  Under this bill, State and local governments can apply for funding 
to: a. create or expand mental health courts, which divert qualified 
offenders from prison to receive treatment; b. create or expand 
programs to provide specialized training for criminal justice and 
mental health system personnel; c. create or expand local treatment 
programs that serve individuals with mental illness or co-occurring 
mental illness and substance abuse disorders; and d. promote and 
provide mental health treatment for those incarcerated in or released 
from and penal or correctional institution. This new program authorizes 
$100 million for each of the next two fiscal years, and such sums as 
necessary through fiscal year 2007.
  I would like to thank a number of people for their advice and 
involvement in this legislation. First, we would not be here today 
without the hard work of the Bazelon Center for Mental Health Law. I 
know that the Bazelon Center has additional ideas to improve this 
legislation, and I look forward to working with the Center as this bill 
moves through the legislative process. For example, I think we need to 
do more to ensure close coordination between the Department of Justice 
and the Department of Health and Human Services in designing and making 
these grants. Through this legislation, we are forcing States to bring 
together their health and law enforcement officials to make grant 
requests it only makes sense to have the joint perspectives of DOJ and 
HHS fully involved in evaluating those requests. This is an issue that 
we will continue to work on, and I hope we will continue to receive the 
input of the Bazelon Center as we do so.
  Second, we have received great advice and support from officials in 
my State of Vermont. Susan Besio, the commissioner of Vermont's 
Department of Developmental and Mental Health Services, and John 
Gorczyk, the commissioner of Vermont's Department of Corrections, 
reviewed this legislation and offered their comments, which have been 
adopted in the version that we introduce today. Gary Margolis, the 
Chief of Police Services at the University of Vermont, testified at our 
June hearing and helped me understand the importance of this issue for 
law enforcement officers in Vermont and around the nation.
  Third, the Council of State Governments has also provided invaluable 
assistance and advice on this issue. Indeed, their report on mentally 
ill offenders and the criminal justice system was instrumental in 
focusing the attention of the Judiciary Committee on this important 
topic.
  Although I am pleased that we have introduced this bill before the 
end of this Congress, I think we all understand that the passage of 
meaningful mental health legislation may have to wait until the next 
Congress. I want to work with all of the officials and groups I have 
mentioned, the other sponsors of this legislation, and any other 
interested parties, to continue to make improvements to this bill. This 
is a topic that should be a priority for the Judiciary Committee next 
year, and I will work to make it so.
  Mr. GRASSLEY. Mr. President, I'm pleased today to be introducing with 
Senators DeWine, Leahy, Brownback, and Cantwell the Mentally Ill 
Offender Treatment and Crime Reduction Act of 2002. This bipartisan 
bill authorizes the Attorney General to administer a grant program to 
assist communities in planning and implementing services for mentally 
ill offenders. These grants will increase public safety by fostering 
collaborative efforts by criminal justice, mental health, and substance 
abuse agencies. I've seen these types of collaborative programs work in 
Iowa and I know that they can work elsewhere.
  We have an obligation to ensure that the public is protected from 
these offenders who suffer from mental illness. The Bureau of Justice 
Statistics has reported that over 16 percent of adults incarcerated in 
U.S. jails and prisons have a mental illness. In addition, the Office 
of Juvenile Justice and Delinquency Prevention has reported that over 
20 percent of youth in the juvenile justice system have serious mental 
problems. This grant program will help increase public safety, as well 
as reduce the number of mentally ill adults and juveniles incarcerated 
in correctional facilities.
  These grant dollars may be used by States and localities to establish 
mental health courts or other diversion programs, create or expand 
community-based treatment programs, provide in-jail treatment and 
transitional services, and for training of criminal justice and mental 
health system employees. The State of Iowa and a number of its counties 
are already leading the way in finding creative and collaborative 
programs to address the problems presented by these mentally ill 
criminals. Working together, the criminal justice, mental health, and 
substance abuse professionals can make a difference in the lives of 
this special class of offenders and also increase the safety of the 
public.
  I want to thank Senator DeWine for his leadership on this important 
issue. He has drafted a bill that reflects a common sense approach to a 
serious public safety issue. I also want to encourage my colleagues to 
support this important piece of legislation.
  Ms. CANTWELL. Mr. President, I am proud to join with Senator DeWine 
and Judiciary Chairman Patrick Leahy along with Senators Grassley and 
Brownback in cosponsoring this important legislation. This bill will 
take steps to reduce the prevalence of mentally ill individuals in the 
criminal justice system by providing more effective treatment. Forty 
percent of the mentally ill in this country come in contact with the 
criminal justice system, many for minor but repeated offenses. This 
wastes tremendous law enforcement resources that can be better focused 
on more urgent responsibilities and results in many of the mentally ill 
sitting in jail cells with little treatment available to them. My State 
has already taken some forward looking action in this area, and this 
legislation is an important next step.

[[Page 21069]]

  The Mentally Ill Crime Reduction Act of 2002 funds new grants that 
will give States the tools they need to work collaboratively to break 
the cycle of mentally ill people repeatedly moving through the 
corrections system. This legislation will allow more jurisdictions to 
follow Seattle's lead in creating mental health courts that monitor 
individuals to keep them in treatment and out of jail. It will provide 
much needed funding to mental health and substance abuse programs, and 
it will provide critical dollars for treatment of those incarcerated 
in, or released from, prisons. The legislation has the support of 
Washington State Corrections Director Joe Lehman and the Washington 
Department of Social and Health Services as well as the National 
Alliance for the Mentally Ill and the Council of State Governments. I'd 
like to especially thank the Bazelon Center for their work in this area 
and their commitment to improving this situation.
  Earlier this year, the Council on State Governments Criminal Justice/
Mental Health Consensus Project issued a report that detailed the 
disparate proportions of the mentally ill in the criminal justice 
system. The Project found that while those suffering from serious 
mental illness represent approximately 5 percent of the population of 
this country, they represent over 16 percent of the prison population. 
Of that 16 percent, nearly three-quarters also have a substance abuse 
problem, and nearly half were incarcerated for committing a nonviolent 
crime. In some jurisdictions recidivism rates for mentally ill inmates 
can reach over 70 percent. Police, judges and prosecutors are usually 
without options of what to do with mentally ill patients given the lack 
of health services, and thus many end up in jail for minor crimes. The 
Los Angeles County Jail alone holds as many as 3,300 individuals with 
mental illness, more than any state hospital or mental health 
institution in the United States.
  Each time a mentally ill individual is incarcerated, his or her 
mental condition will likely worsen. Once incarcerated, people with 
mental illness are particularly susceptible to harming themselves or 
others. This environment exacerbates their mental illness, yet access 
to effective counseling or medication is severely limited. This in turn 
brings on depression or delusions that immobilize them; many have spent 
years trying to mask torments or hallucinations with alcohol or drugs 
which leads to these individuals, on average, spending more time in 
prisons.
  This problem is particularly acute in the area of juvenile offenders. 
The Office of Juvenile Justice and Delinquency Prevention reports that 
over 20 percent of children in the juvenile justice system, over 
155,000, have serious mental health problems. This bill creates 
specialized training programs for juvenile and criminal justice agency 
personnel in identifying symptoms of mentally ill individuals that will 
help identify and treat juveniles at an earlier stage.
  The prevalence of people with mental illness in the criminal justice 
system comes at a high price to taxpayers. In King County, WA officials 
identified 20 people who had been repeatedly hospitalized, jailed or 
admitted to detoxification centers. These emergency services cost the 
county approximately $1.1 million in a single year. In contrast, an 
Illinois Cooperative Program, which brought criminal justice and mental 
health service personnel together to provide services to those mentally 
ill patients released from jail, calculated that the 30 individuals in 
the study spent approximately 2,200 days less in jail, and 2,100 fewer 
days, in hospitals than they had the previous year for a savings of 
$1.2 million dollars.
  In 1997, Seattle Fire Department Captain Stanley Stevenson was 
murdered by an individual who had been found incompetent by the local 
municipal court but was released because of the lack of alternative 
options. This murder was the impetus for the creation of a Task Force 
that led directly to the formation of the Seattle mental health court 
in 1999. The primary reason why this Court has been growing more 
effective in dealing with mentally ill offenders is that it has 
increased cooperation between the mental health and criminal justice 
systems, operations that have traditionally not worked closely 
together. Building on the model of the drug court, the mental health 
court closely monitors compliance with treatment regimens through a 
team proficient in dealing with the mentally ill and at using the stick 
of the criminal justice system to make that treatment work. The vast 
majority of these individuals are responsive to treatment.
  This program has progressed well and is becoming an effective means 
of helping mentally ill offenders, assuring public safety, and running 
a more cost efficient system. Yet to allow this system to continue to 
expand in Seattle and other communities in Washington state, as well as 
to allow other states to begin using these types of programs, federal 
grant funding is critical. That is what this bill provides.
  Collaboration between mental health, substance abuse, law 
enforcement, judicial, and other criminal justice personnel is also 
critical to the success of our mental health court program in Seattle. 
It is only through full coordination between the criminal justice and 
the mental health treatment community at the federal and the local 
level that these efforts will be successful.
  Similarly, only through full coordination at the federal and local 
level will this bill be able to make a critical difference. I believe 
that some additional improvements can be made to strengthen that 
critical coordination and I look forward to working with Senator DeWine 
and Chairman Leahy to accomplish that goal. I welcome the introduction 
of this legislation and look forward to working with my cosponsors to 
make this bill law in the next Congress.
                                 ______
                                 
      By Mr. LIEBERMAN (for himself and Mr. Hatch):
  S. 3148. A bill to provide incentives to increase research by private 
sector entities to develop antivirals, antibiotics and other drugs, 
vaccines, microbicides, and diagnostic technologies to prevent and 
treat illnesses associated with a biological, chemical, or radiological 
weapons attack; to the Committee on Finance.
  Mr. LIEBERMAN. Mr. President, America has a major flaw in its 
defenses against bioterrorism. Hearings I chaired in the Governmental 
Affairs Committee on bioterrorism demonstrated that America has not 
made a national commitment to research and development of treatments 
and cures for those who might be exposed to or infected by a biological 
agent, chemical toxin, or radiological material. Correcting this 
critical gap is the purpose of legislation we are introducing today. 
This legislation is a refined and upgraded version of legislation I 
introduced last year (S. 1764, December 4, 2001) and I am delighted 
that Senator Hatch has joined me as the lead cosponsor of the new bill.
  Obviously, our first priority must be to attempt to prevent the use 
of these agents and toxins by terrorists, quickly assess when an attack 
has occurred, take appropriate public health steps to contain the 
exposure, stop the spread of contagion, and then detoxify the site. 
These are all critical functions, but in the end we must recognize that 
some individuals may be exposed or infected. Then the critical issue is 
whether we can treat and cure them and prevent death and disability.
  In short, we need a diversified portfolio of medicines. In cases 
where we have ample advance warning of an attack and specific 
information about the agent, toxin, or material, we may be able to 
vaccinate the vulnerable population in advance. In other cases, even if 
we have a vaccine, we might well prefer to use medicines that would 
quickly stop the progression of the disease or the toxic effects. We 
also need a powerful capacity quickly to develop new countermeasures 
where we face a new agent, toxin, or material.
  Unfortunately, we are woefully short of vaccines and medicines to 
treat individuals who are exposed or infected. We have antibiotics that 
seem to work for most of those infected in the current

[[Page 21070]]

anthrax attack, but these have not prevented five deaths. We have no 
effective vaccines or medicines for most other biological agents and 
chemical toxins we might confront. We have very limited capacity to 
respond medically to a radiological attack. In some cases we have 
vaccines to prevent, but no medicines to treat, an agent. We have 
limited capacity to speed the development of vaccines and medicines to 
prevent or treat novel agents and toxins not currently known to us.
  We have provided, and should continue to provide, direct Federal 
funding for research and development of new medicines, however, this 
funding is unlikely to be sufficient. Even with ample Federal funding, 
many private companies will be reluctant to enter into agreements with 
government agencies to conduct this research. Other companies would be 
willing to conduct the research with their own capital and at their own 
risk but are not able to secure the funding from investors.
  The legislation we introduce today would provide incentives for 
private biotechnology companies to form capital to develop 
countermeasures--medicines--to prevent, treat and cure victims of 
bioterror, chemical and radiological attacks. This will enable this 
industry to become a vital part of the national defense infrastructure 
and do so for business reasons that make sense for their investors on 
the bottom line.
  Enactment of these incentives is necessary because most biotech 
companies have no approved products or revenue from product sales to 
fund research. They rely on investors and equity capital markets to 
fund the research. They must necessarily focus on research that will 
lead to product sales and revenue and, thus, to an end to their 
dependence on investor capital. There is no established or predictable 
market for countermeasures. These concerns are shared by pharmaceutical 
firms. Investors are justifiably reluctant to fund this research, which 
will present challenges similar in complexity to AIDS. Investors need 
assurances that research on countermeasures has the potential to 
provide a rate of return commensurate with the risk, complexity and 
cost of the research, a rate of return comparable to that which may 
arise from a treatment for cancer, MS, Cystic Fibrosis and other major 
diseases.
  It is in our national interest to enlist these companies in the 
development of countermeasures as biotech companies tend to be 
innovative and nimble and intently focused on the intractable diseases 
for which no effective medical treatments are available.
  The incentives we have proposed are innovative and some may be 
controversial. We invite everyone who has an interest and a stake in 
this research to enter into a dialogue about the issue and about the 
nature and terms of the appropriate incentives. We have attempted to 
anticipate the many complicated technical and policy issues that this 
legislation raises. The key focus of our debate should be how, not 
whether, we address this critical gap in our public health 
infrastructure and the role that the private sector should play. 
Millions of Americans will be at risk if we fail to enact legislation 
to meet this need.


         relationship to bioterrorism preparedness legislation

  My proposal is complimentary to legislation on bioterrorism 
preparedness we enacted earlier this year. That law, Bioweapons 
Preparedness Act, focuses on many needed improvements in our public 
health infrastructure. These investments provide the infrastructure 
where we could deploy the countermeasures that could be developed 
pursuant to the incentives proposed in my legislation.
  Among the provisions in the Frist-Kennedy law are initiatives 
regarding bioterrorism preparedness capacities, improvements in 
communications about bioterrorism, protection of children, protection 
of food safety, and global pathogen surveillance and response. We need 
to fully fund these new programs and capacities.
  My legislation builds on these provisions by providing incentives to 
enable the biotechnology industry acting on its own initiative to fund 
and conduct research on countermeasures. It includes tax, procurement, 
intellectual property and liability incentives. Accordingly, my 
proposal raises issues falling within the jurisdiction of the HELP, 
Finance, and Judiciary Committees.
  The Frist-Kennedy law and my bill are complimentary. The bottom line 
is that we need both bills--one focusing on public health and one 
focusing on medical research. Without medical research, public health 
workers will not have the single most important tool to use in an 
attack--medicine to prevent death and disability and medicine that will 
help us avoid public panic.


                       Cipro as a Countermeasure

  We are fortunate that we have broad-spectrum antibiotics, including 
Cipro, to treat the type of anthrax to which so many have been exposed. 
This treatment seems to be effective before the anthrax symptoms become 
manifest, and effective to treat cutaneous anthrax, and we have been 
able to effectively treat some individuals who have inhalation anthrax. 
I am thankful that this drug exists to treat those who have been 
exposed, including my own Senate staff. Our offices are immediately 
above those of Senator Daschle.
  We have seen how reassuring it is that we have an effective treatment 
for this biological agent. We see long lines of Congressional staffers 
and postal workers awaiting their Cipro. Think what it would be like if 
we could only say, ``We have nothing to treat you and hope you don't 
contract the disease.'' Think of the public panic that we might see.
  I am grateful that this product exists and proud of the fact that the 
Bayer Company is based in Connecticut. The last thing we should be 
doing is criticizing this company for their research success. The 
company has dispensed millions of dollars worth of Cipro free of 
charge. Criticizing it for the price that it charges tells other 
research companies that the more valuable their products are in 
protecting the public health, the more likely they are to be criticized 
and bullied.
  It is fortuitous that Cipro seems to be effective against anthrax. 
The product was not developed with this use in mind. My point with this 
legislation is we cannot rely on good fortune and chance in the 
development of countermeasures. We need to make sure that these 
countermeasures will be developed. We need more companies like Bayer, 
we need them focused specifically on developing medicines to deal with 
the new bioterror threat, and we need to tell them that there are good 
business reasons for this focus.
  We also are fortunate to have an FDA-licensed vaccine, made by 
BioPort Corporation, that is recommended by our country's medical 
experts at the DOD and CDC for pre-anthrax exposure vaccination of 
individuals in the military and some individuals in certain laboratory 
and other occupational settings where there is a high risk of exposure 
to anthrax. This vaccine is also recommended for use with Cipro after 
exposure to anthrax to give optimal and long-lasting protection. That 
vaccine is not now available for use. We must do everything necessary 
to make this and other vaccines available in adequate quantities to 
protect against future attacks.
  The point of this legislation is that we need many more Cipro-like 
and anthrax vaccine-like products. That we have these products is the 
good news; that we have so few others is the problem.


                     Biological Weapons Convention

  One unfortunate truth in this debate is that we cannot rely upon 
international legal norms and treaties alone to protect our citizens 
from the threat of biological or chemical attack.
  The United States ratified the Biological and Toxin Weapons 
Convention (BWC) on January 22, 1975. That Convention now counts 144 
nations as parties. Twenty-two years later, on April 24, 1997, the 
United States Senate joined 74 other countries when it ratified the 
Chemical Weapons Convention (CWC). While these Conventions serve 
important purposes, they do not in any way guarantee our safety in a 
world with rogue states and terrorist organizations.

[[Page 21071]]

  The effectiveness of both Conventions is constrained by the fact that 
many countries have failed to sign on to either of them. Furthermore, 
two signatories of the BWC, Iran and Iraq, are among the seven 
governments that the Secretary of State has designated as state 
sponsors of international terrorism, and we know for a fact that they 
have both pursued clandestine biological weapons programs. The BWC, 
unlike the CWC, has no teeth--it does not include any provisions for 
verification or enforcement. Since we clearly cannot assume that any 
country that signs on to the Convention does so in good faith, the 
Convention does so in good faith, the Convention's protective value is 
limited.
  On November 1 of 2001, the President announced his intent to 
strengthen the BWC as part of his comprehensive strategy for combating 
terrorism. A BWC review conference, held every five years to consider 
ways of improving the Convention's effectiveness, will convene in 
Geneva beginning November 19. In anticipation of that meeting, the 
President has urged that all parties to the Convention enact strict 
national criminal legislation to crack down on prohibited biological 
weapons activities, and he has called for an effective United Nations 
procedures for investigation suspicious outbreaks of disease or 
allegations of biological weapons use.
  These steps are welcomed, but they are small. Even sweeping reforms, 
like creating a more stringent verification and enforcement regime, 
would not guarantee our safety. The robust verification and enforcement 
mechanisms in the CWC, for instance, have proven to be imperfect, and 
scientists agree that it is much easier to conceal the production of 
biological agents than chemical weapons.
  The inescapable fact, therefore, is that we cannot count on 
international regimes to prevent those who wish us ill from acquiring 
biological and chemical weapons. We must be prepared for the reality 
that these weapons could fall into the hands of terrorists, and could 
be used against Americans on American soil. And we must be prepared to 
treat the victims of such an attack if it were ever to occur.


                          CDC Quarantine Plans

  On November 26 of last year, the Centers for Disease Control issued 
its interim working draft plan for responding to an outbreak of 
smallpox. The plan does not call for mass vaccination in advance of a 
smallpox outbreak because the risk of side effects from the vaccine 
outweighs the risks of someone actually being exposed to the smallpox 
virus. At the heart of the plan is a strategy sometimes called ``search 
and containment.''
  This strategy involves identifying infected individual or individuals 
with confirmed smallpox, identifying and locating those people who come 
in contact with that person, and vaccinating those people in outward 
rings of contact. The goal is to produce a buffer of immune individuals 
and was shown to prevent smallpox and to ultimately eradicate the 
outbreak. Priorities would be set on who is vaccinated, perhaps 
focusing on the outward rings before those at the center of the 
outbreak. The plan assumes that the smallpox vaccination is effective 
for persons who have been exposed to the disease as long as the disease 
has not taken hold.
  In practice it may be necessary to set a wide perimeter for these 
areas because smallpox is highly contagious before it might be 
diagnosed. There may be many areas subject to search and containment 
because people in our society travel frequently and widely. Terrorists 
might trigger attacks in a wide range of locations to multiply the 
confusion and panic. The most common form of smallpox has a 30 percent 
mortality rate, but terrorists might be able to obtain supplies of 
``flat-type'' smallpox with a mortality rate of 96 percent and 
hemorrhagic-type smallpox, which is almost always fatal. For these 
reasons, the CDC plan accepts the possibility that whole cities or 
other geographic areas could be cordoned off, letting no one in or 
out--a quarantine enforced by police or troops.
  The plan focuses on enforcement authority through police or National 
Guard, isolation and quarantine, mandatory medical examinations, and 
rationing of medicines. It includes a discussion of ``population-wide 
quarantine measures which restrict activities or limit movement of 
individuals [including] suspension of large public gatherings, closing 
of public places, restriction on travel [air, rail, water, motor 
vehicle, and pedestrian], and/or `cordon sanitaire' [literally a 
`sanitary cord' or line around a quarantined area guarded to prevent 
spread of disease by restricting passage into or out of the area].'' 
The CDC recommends that states update their laws to provide authority 
for ``enforcing quarantine measures'' and it recommends that States in 
``pre-event planning'' identify personnel who can enforce these 
isolation and quarantine measures, if necessary.'' Guide C--Isolation 
and Quarantine, page 17.
  On October 23, 2001, the CDC published a ``Model State Emergency 
Health Powers Act.'' It was prepared by the Center for Law and the 
Public's Health at Georgetown and Johns Hopkins Universities, in 
conjunction with the National Governors Association, National 
Conference of State Legislatures, Association of State and Territorial 
Health Officials, National Association of City and County Health 
Officers, and National Association of Attorneys General. A copy of the 
model law is printed at www.publichealthlaw.net. The law would provide 
powers to enforce the ``compulsory physical separation (including the 
restriction of movement and confinement) of individuals and/or groups 
believed to have been exposed to or known to have been infected with a 
contagious disease from individuals who are believed not to have been 
exposed or infected, in order to prevent or limit the transmission of 
the disease to others.'' Federal law on this subject is very strong and 
the Administration can always rely on the President's Constitutional 
authority as Commander in Chief.
  Let us try to imagine, however, what it would be like if a quarantine 
is imposed. Let us assume that there is not enough smallpox vaccine 
available for use in a large outbreak, that the priority is to 
vaccinate those in the outward rings of the containment area first, 
that the available vaccines cannot be quickly deployed inside the 
quarantined area, that it is not possible to quickly trace and identify 
all of the individuals who might have been exposed, and/or that public 
health workers themselves might be infected. We know that there is no 
medicine to treat those who do become infected. We know the mortality 
rates. It is not hard to imagine how much force might be necessary to 
enforce the quarantine. It would be quite unacceptable to permit 
individuals to leave the quarantined area no matter how much panic had 
taken hold.
  Think about how different this scenario would be if we had medicines 
that could effectively treat and cure those who become infected by 
smallpox. We still might implement the CDC plan but a major element of 
the strategy would be to persuade people to visit their local clinic or 
hospital to be dispensed their supply of medicine. We could trust that 
there would be a very high degree of voluntary compliance. This would 
give us more time, give us options if the containment is not 
successful, give us options to treat those in the containment area who 
are infected, and enable us to quell the public panic.
  Because we have no medicine to treat those infected by smallpox, we 
have to be prepared to implement a plan like the one CDC has proposed. 
Theirs is the only option because our options are so limited. We need 
to expand our range of options.


                    the countermeasure research gap

  We should not be lulled by the apparent successes with Cipro and the 
strains of anthrax we have seen in the recent attacks. We have not been 
able to prevent death in some of the patients with late-stage 
inhalation anthrax and Robert Stevens, Thomas Morris, Jr., Joseph 
Curseen, Kathy Nguyen, and Ottilie Lundgren died. This legislation is 
named in honor of them. What we needed for them, and did not have, is a 
drug or vaccine that

[[Page 21072]]

would treat late stage inhalation anthrax.
  As I have said, we need an effective treatment for those who become 
infected with smallpox. We have a vaccine that effectively prevents 
smallpox infection, and administering this vaccine within four days of 
first exposure has been shown to offer some protections against 
acquiring infection and significant protection against a fatal outcome. 
The problem is that administering the vaccine in this time frame to all 
those who might have been exposed may be exceedingly difficult. And 
once infection has occurred, we have no effective treatment options.
  In the last century 500 million people have died of smallpox--more 
than have from any other infectious disease--as compared to 320 million 
deaths in all the wars of the twentieth century. Smallpox was one of 
the diseases that nearly wiped out the entire Native American 
population in this hemisphere. The last naturally acquired case of 
smallpox occurred in Somalia in 1977 and the last case from laboratory 
exposure was in 1978.
  Smallpox is a nasty pathogen, carried in microscopic airborne 
droplets inhaled by its victims. The first signs are headache, fever, 
nausea and backache, sometimes convulsions and delirium. Soon, the skin 
turns scarlet. When the fever lets up, the telltale rash appears--flat 
red spots that turn into pimples, then big yellow pustules, then scabs. 
Smallpox also affects the throat and eyes, and inflames the heart, 
lungs, liver, intestines and other internal organs. Death often came 
from internal bleeding, or from the organs simply being overwhelmed by 
the virus. Survivors were left covered with pockmarks--if they were 
lucky. The unlucky ones were left blind, their eyes permanently clouded 
over. Nearly one in four victims died. The infection rate is estimated 
to be 25-40 percent for those who are unvaccinated and a single case 
can cause 20 or more additional infections.
  During the 16th Century, 3.5 million Aztecs--more than half the 
population--died of smallpox during a two-year span after the Spanish 
army brought the disease to Mexico. Two centuries later, the virus 
ravaged George Washington's troops at Valley Forge. And it cut a deadly 
path through the Crow, Dakota, Sioux, Blackfoot, Apache, Comanche and 
other American Indian tribes, helping to clear the way for white 
settlers to lay claim to the western plains. The epidemics began to 
subside with one of medicine's most famous discoveries: the finding by 
British physician Edward Jenner in 1796 that English milkmaids who were 
exposed to cowpox, a mild second cousin to smallpox that afflicts 
cattle, seemed to be protected against the more deadly disease. 
Jenner's work led to the development of the first vaccine in Western 
medicine. While later vaccines used either a killed or inactivated form 
of the virus they were intended to combat, the smallpox vaccine worked 
in a different way. It relied on a separate, albeit related virus: 
first cowpox and the vacinnia, a virus of mysterious origins that is 
believed to be a cowpox derivative. The last American was vaccinated 
back in the 1970s and half of the US population has never been 
vaccinated. It is not known how long these vaccines provide protection, 
but it is estimated that the term is 3-5 years.
  In an elaborate smallpox biowarfare scenario enacted in February 1999 
by the Johns Hopkins Center for Civilians Biodefense Studies, it was 
projected that within two months 15,000 people had died, epidemics were 
out of control in fourteen countries, all supplies of smallpox vaccine 
were depleted, the global economy was on the verge of collapse, and 
military control and quarantines were in place. Within twelve months it 
was projected that eighty million people worldwide had died.
  A single case of smallpox today would become a global public health 
threat and it has been estimated that a single smallpox bioterror 
attack on a single American city would necessitate the vaccination of 
30-40 million people.
  The U.S. government is now in the process of purchasing substantial 
stocks of the smallpox vaccine. We then face a very difficult decision 
on deploying the vaccine. We know that some individuals will have an 
adverse reaction to this vaccine. No one in the United States has been 
vaccinated against smallpox in twenty-five years. Those that were 
vaccinated back then may not be protected against the disease today. If 
we had an effective treatment for those who might become infected by 
smallpox, we would face much less pressure regarding deploying the 
vaccine. If we face a smallpox epidemic from a bioterrorism attack, we 
will have no Cipro to reassure the public and we will be facing a 
highly contagious disease and epidemic. To be blunt, it will make the 
current anthrax attack look benign by comparison.
  Smallpox is not the only threat. We have seen other epidemics in this 
century. The 1918 influenza epidemic provides a sobering admonition 
about the need for research to develop medicines. In two years, a fifth 
of the world's population was infected. In the United States the 1918 
epidemic killed more than 650,000 people in a short period of time and 
left 20 million seriously ill, one fourth of the entire population. The 
average lifespan in the U.S. was depressed by ten years. In just one 
year, the epidemic killed 21 million human beings worldwide--well over 
twice the number of combat deaths in the whole of World War I. The flu 
was exceptionally virulent to begin with and it then underwent several 
sudden and dramatic mutations in its structure. Such mutations can turn 
flu into a killer because its victims' immune systems have no 
antibodies to fight off the altered virus. Fatal pneumonia can rapidly 
develop.
  Another deadly toxin, ricin toxin, was of interest to the al-Qaeda 
terrorist network. At an al-Qaeda safehouse in Saraq Panza, Kabul 
reporters found instructions for making ricin. The instructions make 
chilling reading. ``A certain amount, equal to a strong dose, will be 
able to kill an adult, and a dose equal to seven seeds will kill a 
child,'' one page reads. Another page says: ``Gloves and face mask are 
essential for the preparation of ricin. Period of death varies from 3-5 
days minimum, 4-14 days maximum.'' The instructions listed the symptoms 
of ricin as vomiting, stomach cramps, extreme thirst, bloody diarrhoea, 
throat irritation, respiratory collapse and death.
  No specific treatment or vaccine for ricin toxin exists. Ricin is 
produced easily and inexpensively, highly toxic, and stable in 
aerosolized form. A large amount of ricin is necessary to infect whole 
populations--the amount of ricin necessary to cover a 100-km\2\ area 
and cause 50 percent lethality, assuming aerosol toxicity of 3 mcg/kg 
and optimum dispersal conditions, is approximately 4 metric tons, 
whereas only 1 kg of Bacillus anthracis is required. But it can be used 
to terrorize a large population with great effect because it is so 
lethal.
  Use of ricin as a terror weapon is not theoretical. In 1991 in 
Minnesota, 4 members of the Patriots Council, an extremist group that 
held antigovernmental and antitax ideals and advocated the overthrow of 
the U.S. government, were arrested for plotting to kill a U.S. marshal 
with ricin. The ricin was produced in a home laboratory. They planned 
to mix the ricin with the solvent dimethly sulfoxide (DMSO) and then 
smear it on the door handles of the marshal's vehicle. The plan was 
discovered, and the 4 men were convicted. In 1995, a man entered Canada 
from Alaska on his way to North Carolina. Canadian custom officials 
stopped the man and found him in possession of several guns, $98,000, 
and a container of white powder, which was identified as ricin. In 
1997, a man shot his stepson in the face. Investigators discovered a 
makeshift laboratory in his basement and found agents such as ricin and 
nicotine sulfate. And, ricin was used by the Bulgarian secret police 
when they killed Georgi Markov by stabbing him with a poison umbrella 
as he crossed Waterloo Bridge in 1978.
  Going beyond smallpox, influenza, and ricin, we do not have an 
effective vaccine or treatment for dozens of other deadly and disabling 
agents and toxin. Here is a partial list of some of

[[Page 21073]]

the other biological agents and chemical toxins for which we have no 
effective treatments: clostridium botulinum toxin (botulism), 
francisella tularensis (tularaemia), Ebola hemorrhagic fever, Marbug 
hemorrhagic fever, Lassa fever, Julin (Argentine hemorrhagic fever), 
Coxiella burnetti (Q fever), brucella species (brucellosis), 
burkholderia mallei (glanders), Venezuelan encephalomyelitis, eastern 
and western equine encephalomyelitis, epsilon toxin of clostridium 
perfringens, staphylococcus entretoxin B, salmonella species, shigella 
dysenteriae, escherichia coli O157:H7, vibrio cholerae, cryptosporidium 
parvum, nipah virus, hantaviruses, tickborne hemorrhagic fever viruses, 
tickborne encephalitis virus, yellow fever, nerve agents (tabun, sarin, 
soman, GF, and VX), blood agents (hydrogen cyanide and cyanogens 
chloride), blister agents (lewisite, nitrogenadn sulfur mustards, and 
phosgene oxime), heavy metals (arsenic, lead, and mercury), and 
volatile toxins (benzene, chloroform, trihalomethanes), pulmonary 
agents (Phosgene, chlorine, vinly chloride), and incapacitating agents 
(BZ).
  The naturally occurring forms of these agents and toxins are enough 
to cause concern, but we also know that during the 1980s and 1990s the 
Soviet Union conducted bioweapons research at forty-seven laboratories 
and testing sites, employed nearly fifty thousand scientists in the 
work, and that they developed genetically modified versions of some of 
these agents and toxins. The goal was to develop an agent or toxin that 
was particularly virulent or not vulnerable to available antibiotic.
  The United States has publicly stated that five countries are 
developing biological weapons in violation of the Biological Weapons 
convention, North Korea, Iraq, Iran, Syria, and Libya, and stated that 
additional countries not yet named (possibly including Russia, China, 
Israel, Sudan and Egypt) are also doing so as well.
  What is so insidious about biological weapons is that in many cases 
the symptoms resulting from a biological weapons attack would likely 
take time to develop, so an act of bioterrorism may go undetected for 
days or weeks. Affected individuals would seek medical attention not 
from special emergency response teams but in a variety of civilian 
settings at scattered locations. This means we will need medicines that 
can treat a late stage of the disease, long after the infection has 
taken hold.
  We must recognize that the distinctive characteristic of biological 
weapons is that they are living micro-organisms and are thus the only 
weapons that can continue to proliferate without further assistance 
once released in a suitable environment.
  The lethality of these agents and toxins, and the panic they can 
cause, is quite frightening. The capacity for terror is nearly beyond 
comprehension. We do not believe it is necessary to describe the facts 
here. Our point is simple: we need more than military intelligence, 
surveillance, and public health capacity. We also need effective 
medicines. We also need more powerful research tools that will enable 
us to quickly develop treatments for agents and toxins not on this or 
any other list.
  We need to do whatever it takes to be able to reassure the American 
people that hospitals and doctors have powerful medicines to treat them 
if they are exposed to biological agents or toxins, that we can contain 
an outbreak of an infectious agent, and that there is little to fear. 
To achieve this objective, we need to rely on the entrepreneurship of 
the biotechnology industry.


                 direct government funding of research

  There is already some direct funding of research by the Defense 
Advanced Research Projects Agency (DARPA), the National Institutes of 
Health (NIH), and the Centers for Disease Control (CDC). This research 
should go forward.
  DARPA, for instance, has been described as the Pentagon's ``venture 
capital fund,'' its mission to provide seed money for novel research 
projects that offer the potential for revolutionary findings. Last 
year, DARPA's Unconventional Pathogen Countermeasures program awarded 
contracts totalling $50 million to universities, foundations, 
pharmaceutical and biotechnology companies seeking new ways to fight 
biological agents and toxins.
  The Unconventional Pathogen Countermeasures program now funds 43 
separate research efforts on anti-bacterials, anti-toxins, anti-virals, 
decontamination, external protection from pathogens, immunization and 
multi-purpose vaccines and treatments. A common thread among many of 
these undertakings is the goal of developing drugs that provide broad-
spectrum protection against several different pathogens. This year, 
with a budget of $63 million, the program has received over 100 
research proposals in the last two months alone.
  Some of this DARPA research is directed at developing revolutionary, 
broad-spectrum, medical countermeasures against significantly 
pathogenic products. This goal is to develop countermeasures that are 
versatile enough to eliminate biological threats, whether from natural 
sources or modified through bioengineering or other manipulation. The 
countermeasures would need the potential to provide protection both 
within the body and at the most common portals of entry (e.g., 
inhalation, ingestion, transcutaneous). The strategies might include 
defeating the pathogen's ability to enter the body, traverse the 
bloodstream or lymphatics, and enter target tissues; identifying novel 
pathogen vulnerabilities based on fundamental, critical molecular 
mechanisms of survival or pathogenesis (e.g., Type III secretion, 
cellular energetics, virulence modulation); constructing unique, robust 
vehicles for the delivery of countermeasures into or within the body; 
and modulating the advantageous and/or deleterious aspects of the 
immune response to significantly pathogenic microorganisms and/or the 
pathogenic products in the body.
  While DAPRA's work is specifically aimed at protecting our military 
personnel, the National Institutes of Health also spent $49.7 million 
in the last fiscal year to find new therapies for those who contract 
smallpox and on systems for detecting the disease. In recent years, 
NIH's research programs have sought to create more rapid and accurate 
diagnostics, develop vaccines for those at risk of exposure to 
biological agents, and improve treatment for those infected. Moreover, 
in the last fiscal year, the Centers for Disease Control has allocated 
$18 million to continue research on an anthrax vaccine and $22.3 
million on smallpox research.
  Some companies are willing to enter into a research relationships 
funded by DARPA and other agencies to develop countermeasures. 
Relationships between the government and private industry can be very 
productive, but they can also involve complex issues reflecting the 
different cultures of government and industry. Some companies--
including some of the most entrepreneurial--might prefer to take their 
own initiative to conduct this research. Relationships with government 
entities involve risks, issues, and bureaucracy that are not present in 
relationships among biotechnology companies and between them and non-
governmental partners.
  The Defense Department's Joint Vaccine Acquisition Program (JVAP) 
illustrates the problems with a government led and managed program. A 
report in December 2000 by a panel of independent experts found that 
the current program ``is insufficient and will fail'' and recommended 
it adopt an approach more on the model of a private sector effort. It 
needs to adopt ``industry practices,'' ``capture industry interest,'' 
``implement an organizational alignment that mirrors the vaccine 
industry's short chain of command and decision making,'' ``adopt an 
industry-based management philosophy,'' and ``develop a sound 
investment strategy.'' It bemoaned the ``extremely limited'' input from 
industry in the JVAP program.
  It is clear from this experience that we should not rely exclusively 
on government funding of countermeasures research. We should take 
advantage of the entrepreneurial fervor, and the independence, of our 
biotechnology industry entrepreneurs. It is not likely

[[Page 21074]]

that the government will be willing or able to provide sufficient 
funding for the development of the countermeasures we need. Some of the 
most innovative approaches to vaccines and medicines might not be 
funded with the limited funds available to the government. We need to 
provide incentives that will encourage every biotech company to review 
its research priorities and technology portfolio for its relevance and 
potential for countermeasure research. Some of this research is early 
stage, basic research that is being developed and considered only for 
its value in treating an entirely different disease. We need to kindle 
the imagination of biotechnology companies and their tens of thousands 
of scientists regarding countermeasure research.


                  industry research on countermeasures

  My proposal would supplement direct Federal government funding of 
research with incentives that make it possible for private companies to 
form the capital to conduct this research on their own initiative, 
utilizing their own capital, and at their own risk--all for good 
business reasons going to their bottom line.
  The U.S. biotechnology industry, approximately 1,300 companies, spent 
$13.8 billion on research last year. Only 350 of these companies have 
managed to go public. The industry employs 124,000 (Ernst & Young data) 
people. The top five companies spent an average of $89,000 per employee 
on research, making it the most research-intensive industry in the 
world. The industry has 350 products in human clinical trials targeting 
more than 200 diseases. Losses for the industry were $5.8 billion in 
2001, $5.6 billion in 2000, $4.4 billion in 1999, $4.1 billion in 1998, 
$4.5 billion in 1997, $4.6 billion in 1996, and similar amounts before 
that. In 2000 fully 38 percent of the public biotech companies had less 
than 2 years of funding for their research. Only one quarter of the 
biotech companies in the United States are publicly traded and they 
tend to be the best funded.
  There is a broad range of research that could be undertaken under 
this legislation. Vaccines could be developed to prevent infection or 
treat an infection from a bioterror attack. Broad-spectrum antibiotics 
are needed. Also, promising research has been undertaken on antitoxins 
that could neutralize the toxins that are released, for example, by 
anthrax. With anthrax it is the toxins, not the bacteria itself, that 
cause death. An antitoxin could act like a decoy, attaching itself to 
sites on cells where active anthrax toxin binds and then combining with 
normal active forms of the toxin and inactivating them. An antitoxin 
could block the production of the toxin.
  We can rely on the innovations of the biotech industry, working in 
collaboration with academic medical centers, to explore a broad range 
of innovative approaches. This mobilizes the entire biotechnology 
industry as a vital component of our national defense against bioterror 
weapons.


                   incentives needed to spur research

  The legislation takes a comprehensive approach to the challenges the 
biotechnology industry faces in forming capital to conduct research on 
countermeasures. It includes capital formation tax incentives, 
guaranteed purchase funds, patent protections, and liability 
protections. We believe we will have to include each of these types of 
incentives to ensure that we mobilize the biotechnology industry for 
this urgent national defense research.
  Some of the tax incentives in this legislation, and both of the two 
patent incentives I have proposed, may be controversial. In our view, 
we can debate tax or patent policy as long as you want, but let's not 
lose track of the issue here--development of countermeasures to treat 
people infected or exposed to lethal and disabling bioterror weapons.
  We know that incentives can spur research. In 1983 we enacted the 
Orphan Drug Act to provide incentives for companies to develop 
treatments for rare diseases with small potential markets deemed to be 
unprofitable by the industry. In the decade before this legislation was 
enacted, fewer than 10 drugs for orphan diseases were developed and 
these were mostly chance discoveries. Since the Act became law, 218 
orphan drugs have been approved and 800 more are in the pipeline. The 
Act provides 7 years of market exclusivity and a tax credit covering 
some research costs. The effectiveness of the incentives we have 
enacted for orphan disease research shows us how much we can accomplish 
when we set a national priority for certain types of research.
  The incentives we have proposed differ from those set by the Orphan 
Drug Act. We need to maintain the effectiveness of the Orphan Drug Act 
and not undermine it by adding many other disease research targets. In 
addition, the tax credits for research for orphan drug research have no 
value for most biotechnology companies because few of them have tax 
liability with respect to which to claim the credit. This explains why 
we have not proposed to utilize tax credits to spur countermeasures 
research. It is also clear that the market for countermeasures is even 
more speculative than the market for orphan drugs and we need to enact 
a broader and deeper package of incentives.


        decision making on targets and registration of research

  The government determines which research is covered by the 
legislation and which companies qualify for the incentives for this 
research. No company is entitled to utilize the incentives until the 
government certifies its eligibility.
  These decisions are vested in the Secretary, Department of Homeland 
Security. In S. 1764, the decisions were vested in the White House 
Office of Homeland Security, but it is now likely that a Department 
will be created. I have strongly endorsed that concept and led the 
effort to enact the legislation forming the new Department.
  The legislation confers on the Secretary, in consultation with the 
Secretary of Defense and Secretary of Health and Human Services, 
authority to set the list of agents and toxins with respect to which 
the legislation and incentives applies.
  The Secretary determines which agents and toxins present a threat and 
whether the countermeasures are ``more likely'' to be developed with 
the application of the incentives in the legislation. The Secretary may 
determine that an agent or toxin does not present a threat or that 
countermeasures are not more likely to be developed with the 
incentives. It may determine that the government itself should fund the 
research and development effort and not rely on private companies. The 
Department is required to consider the status of existing research, the 
availability of non-countermeasure markets for the research, and the 
most effective strategy for ensuring that the research goes forward. 
The legislation includes an illustrative, non-binding list of fifty-
four agents and toxins that might be included on the Secretary's list. 
The decisions of the Secretary are final and are not subject to 
judicial review.
  The Department then must provide information to potential 
manufacturers of these countermeasures in sufficient detail to permit 
them to conduct the research and determine when they have developed the 
needed countermeasure. It may exempt from publication such information 
as it deems to be sensitive.
  The Department also must specify the government market that will be 
available when a countermeasure is successfully developed, including 
the minimum number of dosages that will be purchased, the minimum price 
per dose, and the timing and number of years projected for such 
purchases. Authority is provided for the Department to make advance, 
partial, progress, milestone, or other payments to the manufacturers.
  The Department is responsible for determining when a manufacturer 
has, in fact, successfully developed the needed countermeasure. It must 
provide information in sufficient detail so that manufacturers and the 
government may determine when the manufacturer has successfully 
developed the countermeasure the government needs. If and when the 
manufacturer has successfully developed the countermeasure, it becomes 
entitled to the procurement, patent, and liability incentives in the 
legislation.

[[Page 21075]]

  Once the list of agents and toxins is set, companies may register 
with the Department their intent to undertake research and development 
of a countermeasure to prevent or treat the agent or toxin. This 
registration is required only for companies that seek to be eligible 
for the tax, purchase, patent, and liability provisions of the 
legislation. The registration requirement gives the Department vital 
information about the research effort and the personnel involved with 
the research, authorizes inspections and other review of the research 
effort, and the filing of reports by the company.
  The Secretary then may certify that the company is eligible for the 
tax, purchase, patent, and liability incentives in the legislation. It 
bases this certification on the qualifications of the company to 
conduct the countermeasure research. Eligibility for the purchase fund, 
patent and liability incentives is contingent on successful development 
of a countermeasure according to the standards set in the legislation, 
as determined by the Secretary.
  The legislation contemplates that a company might well register and 
seek certification with respect to more than one research project and 
become eligible for the tax, purchase, patent, and liability incentives 
for each. There is no policy rationale for limiting a company to one 
registration and one certification.
  This process is similar to the current registration process for 
research on orphan (rare) diseases. In that case, companies that are 
certified by the FDA become eligible for both tax and market 
exclusivity incentives. This process gives the government complete 
control on the number of registrations and certifications. This gives 
the government control over the cost and impact of the legislation on 
private sector research.


                     diagnostics and research tools

  The registration and certification process applies to research to 
develop diagnostics and research tools, not just drugs and vaccines.
  Diagnostics are vital because healthcare professionals need to know 
which agent or toxin has been used in an attack. This enables them to 
determine which treatment strategy is likely to be most effective. We 
need quickly to determine which individuals have been exposed or 
infected, and to separate them from the ``worried well.'' It is likely 
in an attack that large numbers of individuals who have not been 
exposed or infected will flood into healthcare facilities seeking 
treatment. We need to be able to focus on those individuals who are at 
risk and reassure those who are not at risk.
  In terms of research tools, it is possible that we will face 
biological agents and chemical agents we have never seen before. As 
I've mentioned, the Soviet Union bioterror research focused in part on 
use of genetic modification technology to develop agents and toxins 
that currently-available antibiotics can not treat. Australian 
researchers accidentally created a modified mousepox virus, which does 
not affect humans, but it was 100 percent lethal to the mice. Their 
research focused on trying to make a mouse contraceptive vaccine for 
pest control. The surprise was that it totally suppressed the ``cell-
medicated response''--the arm of the immune system that combats viral 
infection. To make matters worse, the engineered virus also appears 
unnaturally resistant to attempts to vaccinate the mice. A vaccine that 
would normally protect mouse strains that are susceptible to the virus 
only worked in half the mice exposed to the killer version. If 
bioterrorists created a human version of the virus, vaccination 
programs would be of limited use. This highlights the drawback of 
working on vaccines against bioweapons rather than treatments.
  With the advances in gene sequencing--genomics--we will know the 
exact genetic structure of a biological agent. This information in the 
wrong hands could easily be manipulated to design and possibly grow 
lethal new bacterial and viral strains not found in nature. A scientist 
might be able to mix and match traits from different microorganisms--
called recombinant technology--to take a gene that makes a deadly toxin 
from one strain of bacteria and introduce it into other bacterial 
strains. Dangerous pathogens or infectious agents could be made more 
deadly, and relatively benign agents could be designed as major public 
health problems. Bacteria that cause diseases such as anthrax could be 
altered in such a way that would make current vaccines or antibiotics 
against them ineffective. It is even possible that a scientist could 
develop an organism that develops resistance to antibiotics at an 
accelerated rate.
  This means we need to develop technology--research tools--that will 
enable us to quickly develop a tailor-made, specific countermeasure to 
a previously unknown organism or agent. These research tools will 
enable us to develop a tailor-made vaccine or drug to deploy as a 
countermeasure against a new threat. The legislation authorizes 
companies to register and receive a certification making them eligible 
for the incentives in the bill for this vital research.


                  Tax Incentives for Capital Formation

  The legislation includes four tax incentives to enable biotechnology 
and pharmaceutical companies to form capital to fund research and 
development of countermeasures. Companies must irrevocably elect only 
one of the incentives with regard to the countermeasure research.
  Four different tax incentives are available so that companies have 
flexibility in forming capital to fund the research. Each of the 
options comes with advantages and limitations that may make it 
appropriate or inappropriate for a given company or research project. 
We do not now know fully how investors and capital markets will respond 
to the different options, but we assume that companies will consult 
with the investor community about which option will work best for a 
given research project. Capital markets are diverse and investors have 
different needs and expectations. Over time these markets and investor 
expectations evolve. If companies register for more than one research 
project, they may well utilize different tax incentives for the 
different projects.
  Companies are permitted to undertake a series of discrete and 
separate research projects and make this election with respect to each 
project. They may only utilize one of the options with respect to each 
of these research projects.
  The first option is for the company to establish an R&D Limited 
Partnership to conduct the research. The partnership passes through all 
business deductions and credits to the partners. For example, under 
this arrangement, the research and development tax credits and 
depreciation deductions for the company may be passed by the 
corporation through to its partners to be used to offset their 
individual tax liability. These deductions and credits are then lost to 
the corporation. This alternative is available only to companies with 
less than $750,000,000 in paid-in capital.
  The second option is for the company to issue a special class of 
stock for the entity to conduct the research. The investors would be 
entitled to a zero capital gains tax rate on any gains realized on the 
stock held for at least three years. This is a modification of the 
current Section 1202 where only 50 percent of the gains are not taxed. 
This provision is adapted from legislation I have introduced, S. 1134, 
and introduced in the House by Representatives Dunn and Matsui (H.R. 
2383). A similar bill has been introduced by Senator Collins, S. 455. 
This option also is available to small companies.
  The third and fourth options grant special tax credits to the company 
for the research. The first credit is for research conducted by the 
company and the other for research conducted at a teaching hospital or 
similar institution. Tax credits are available to any company, but they 
are only useful to a company with tax liability against which to claim 
the credit. Very few biotechnology companies receive revenue from 
product sales and therefore have no tax liability. Companies with 
revenue may be able to fund the research from retained earnings rather 
than secure funding from investors.
  A company that elects to utilize one of these incentives is not 
eligible to receive benefits of the Orphan Drug Tax

[[Page 21076]]

Credit. Companies that can utilize tax credits--companies with taxable 
income and tax liability--might find the Orphan Credit more valuable. 
The legislation includes an amendment to the Orphan Credit to correct a 
defect in the current credit. The amendment has been introduced in the 
Senate as S. 1341 by Senators Hatch, Kennedy and Jeffords. The 
amendment simply states that the Credit is available starting the day 
an application for orphan drug status is filed, not the date the FDA 
finally acts on it. The amendment was one of many initiatives 
championed by Lisa J. Raines, who died on September 11 in the plane 
that hit the Pentagon, and the amendment is named in her honor. As we 
go forward in the legislative process, I hope we will have an 
opportunity to speak in more detail about the service of Ms. Raines on 
behalf of medical research, particularly on rare diseases.
  The guaranteed purchase fund, and the patent protections, and 
liability provisions described below provide an additional incentive 
for investors and companies to fund the research.


                Government Countermeasure Purchase Fund

  The market for countermeasures is speculative and small. This means 
that if a company successfully develops a countermeasure, it may not 
receive sufficient revenue on sales to justify the risk and expense of 
the research. This is why the legislation establishes a countermeasures 
purchase fund that will define the market for the products with some 
specificity before the research begins.
  The Secretary will set standards for which countermeasures it will 
purchase and define the financial terms of the purchase commitment. 
This will enable companies to evaluate the market potential of its 
research before it launches into the project. The specifications will 
need to be set with sufficient specificity so that the company--and its 
investors--can evaluate the market and with enough flexibility so that 
it does not inhibit the innovativeness of the researchers. This 
approach is akin to setting a performance standard for a new military 
aircraft.
  The legislation provides that the Secretary will determine whether 
the government will purchase more than one product per class. It might 
make sense--as an incentive--for the government to commit to purchasing 
more than one product so that many more than one company conduct the 
research. A winner-take-all system may well intimidate some companies 
and we may end up without a countermeasure to be purchased. It is also 
possible that we will find that we need more than one countermeasure 
because different products are useful for different patients. We may 
also find that the first product developed is not the most effective.
  The purchase commitment for countermeasures is available to any 
company irrespective of its paid-in capital.


                   intellectual property protections

  Intellectual property protection of research is essential to 
biotechnology and pharmaceutical companies for one simple reason: they 
need to know that if they successfully develop a medical product 
another company cannot expropriate it. It's a simple matter of 
incentives.
  The patent system has its basis in the U.S. Constitution where the 
federal government is given the mandate to ``promote the progress of 
Science and the Useful Arts by securing for a limited time to Authors 
and Inventors the exclusive right to their respective Writings and 
Discoveries.'' In exchange for full disclosure of the terms of their 
inventions, inventors are granted the right to exclude others from 
making, using, or selling their inventions for a limited period of 
time. This quid pro quo provides investors with the incentive to 
invent. In the absence of the patent law, discoverable inventions would 
be freely available to anyone who wanted to use them and inventors 
would not be able to capture the value of their inventions or secure a 
return on their investments.
  The patent system strikes a balance. Companies receive limited 
protection of their inventions if they are willing to publish the terms 
of their invention for all to see. At the end of the term of the 
patent, anyone can practice the invention without any threat of an 
infringement action. During the term of the patent, competitors can 
learn from the published description of the invention and may well find 
a new and distinct patentable invention.
  The legislation provides two types of intellectual property 
protection. The first simply provides that the term of the patent on 
the countermeasure will be the term of the patent granted by the Patent 
and Trademark Office without any erosion due to delays in approval of 
the product by the Food and Drug Administration. The second provides 
that a company that successfully develops a countermeasure will receive 
a bonus of two years on the term of any patent held by that company. 
Companies must elect one of these two protections, but only small 
biotechnology companies may elect the second protection. Large, 
profitable pharmaceutical companies may elect only the first of the two 
options.
  The first protection against erosion of the term of the patent is an 
issue that is partially addressed in current law, the Hatch-Waxman 
Patent Term Restoration Act. That act provides partial protection 
against erosion of the term (length) of a patent when there are delays 
at the FDA in approving a product. The erosion occurs when the PTO 
issues a patent before the product is approved by the FDA. In these 
cases, the term of the patent is running but the company cannot market 
the product. The Hatch-Waxman Act provides some protections against 
erosion of the term of the patent, but the protections are incomplete. 
As a result, many companies end up with a patent with a reduced term, 
sometimes substantially reduced.
  The issue of patent term erosion has become more serious due to 
changes at the PTO in the patent system. The term of a patent used to 
be fixed at 17 years from the date the patent was granted by the PTO. 
It made no difference how long it took for the PTO to process the 
patent application and sometimes the processing took years, even 
decades. Under this system, there were cases where the patent would 
issue before final action at the FDA, but there were other cases where 
the FDA acted to approve a product before the patent was issued. 
Erosion was an issue, but it did not occur in many cases.
  Since 1995 the term of a patent has been set at 20 years from the 
date of application for the patent. This means that the processing time 
by the PTO of the application all came while the term of the patent is 
running. This gives companies a profound incentive to rush the patent 
through the PTO. (Under the old system, companies had the opposite 
incentive.) With patents being issued earlier by the PTO, the issue of 
erosion of patent term due to delays at the FDA is becoming more 
serious and more common.
  The provision in the legislation simply states that in the case of 
bioterrorism countermeasures, no erosion in the term of the patent will 
occur. The term of the patent at the date of FDA approval will be the 
same as the term of the patent when it was issued by the PTO. There is 
no extension of the patent, simply protections against erosion. Under 
the new 20 year term, patents might be more or less than 17 years 
depending on the processing time at the PTO, and all this legislation 
says is that whatever term is set by the PTO will govern irrespective 
of the delays at the FDA. This option is available to any company that 
successfully develops a countermeasure eligible to be purchased by the 
fund.
  The second option, the bonus patent term, is only available to small 
companies with less than $750,000,000 in paid-in capital. It provides 
that a company that successfully develops a countermeasure is entitled 
to a two-year extension of any patent in its portfolio. This does not 
apply to any patent of another company bought or transferred in to the 
countermeasure research company.
  I am well aware that this bonus patent term provision will be 
controversial with some. A company would tend to utilize this option if 
it owned the patent on a product that still had, or

[[Page 21077]]

might have, market value at the end of the term of the patent. Because 
this option is only available to small biotechnology companies, most of 
whom have no product on the market, in most cases they would be 
speculating about the value of a product at the end of its patent. The 
company might apply this provision to a patent that otherwise would be 
eroded due to FDA delays or it might apply it to a patent that was not 
eroded. The result might be a patent term that is no longer than the 
patent term issued by the PTO. It all depends on which companies elect 
this option and which patent they select. In some cases, the effect of 
this provision might be to delay the entry onto the market of lower 
priced generics. This would tend to shift some of the cost of the 
incentive to develop a countermeasure to insurance companies and 
patients with an unrelated disease.
  My rationale for including the patent bonus in the legislation is 
simple: I want this legislation to say emphatically that we mean 
business, we are serious, and we want biotechnology companies to 
reconfigure their research portfolios to focus in part on development 
of countermeasures. The other provisions in the legislation are 
powerful, but they may not be sufficient.


                        limitation on liability

  This proposal protects companies willing to take the risks of 
producing anti-terrorism products for the American public from 
potential losses incurred from lawsuits alleging adverse reactions to 
these products. It also preserves the right for plaintiffs to seek 
recourse for alleged adverse reactions in Federal District Court, with 
procedural and monetary limitations.
  Under the plan, the Secretary of HHS is required to indemnify and 
defend entities engaged in qualified countermeasure research through 
execution of ``indemnification and defense agreements.'' This 
protection is only available for countermeasures purchased under the 
legislation or to use of such countermeasures as recommended by the 
Surgeon General in the event of a public health emergency.
  An exclusive means of resolving civil cases that fall within the 
scope of the indemnification and defense agreements is provided with 
litigation rights for injured parties. Non-economic damages are limited 
to $250,000 per plaintiff and no punitive or exemplary damages may be 
awarded.
  Some have tried to apply the existing Vaccine Injury Compensation 
Program (VICP) to this national effort. That is inappropriate because 
that program will be extremely difficult to use, both administratively 
and scientifically. For example, it would take several years to develop 
the appropriate ``table'' that identifies a compensable injury. 
Companies will be liable during this process. Note that when VICP was 
created, there had been studies of what adverse reactions to mandated 
childhood vaccines had occurred and the table was based largely on this 
experience. Even so, it has taken years of effort, ultimately resulting 
in wholesale revisions to the table by regulation, to get the current 
table in place. For anti-bioterrorism products currently being 
developed, it will simply be impossible to construct a meaningful 
Vaccine Injury Table--there will be no experience with the product.


                        miscellaneous provisions

  The legislation contains a series of provisions designed to enhance 
countermeasure research.
  The legislation provides for accelerated approval by the FDA of 
countermeasures developed under the legislation. In most cases, the 
products would clearly qualify for accelerated approval, but the 
legislation ensures that they will be reviewed under this process.
  It provides a statutory basis for the FDA approving countermeasures 
where human clinical trials are not appropriate or ethical. Rules 
regarding such products have been promulgated by the FDA.
  It grants a limited antitrust exemption for certain cooperative 
research and development of countermeasures.
  It provides incentives for the construction of biologics 
manufacturing facilities and research to increase the efficiency of 
current biologics manufacturing facilities.
  It enhances the synergy between our for-profit and not-for-profit 
biomedical research entities. The Bayh-Dole Act and Stevenson-Wydler 
Act form the legal framework for mutually beneficial partnerships 
between academia and industry. My legislation strengthens this synergy 
and these relationships with two provisions, one to upgrade the basic 
research infrastructure available to conduct research on 
countermeasures and the other to increase cooperation between the 
National Institutes of Health and private companies.
  Research on countermeasures necessitates the use of special 
facilities where biological agents can be handled safely without 
exposing researchers and the public to danger. Very few academic 
institutions or private companies can justify or capitalize the 
construction of these special facilities. The Federal government can 
facilitate research and development of countermeasures by financing the 
construction of these facilities for use on a fee-for-service basis. 
The legislation authorizes appropriations for grants to non-profit and 
for-profit institutions to construct, maintain, and manage up to ten 
Biosafety Level 3-4 facilities, or their equivalent, in different 
regions of the country for use in research to develop countermeasures. 
BSL 3-4 facilities are ones used for research on indigenous, exotic or 
dangerous agents with potential for aerosol transmission of disease 
that may have serious or lethal consequences or where the agents pose 
high risk of life-threatening disease, aerosol-transmitted lab 
infections, or related agents with unknown risk of transmission. The 
Director of the Office and NIH shall issue regulations regarding the 
qualifications of the researchers who may utilize the facilities. 
Companies that have registered with and been certified by the 
Director--to develop countermeasures under Section 5(d) of the 
legislation--shall be given priority in the use of the facilities.
  The legislation also reauthorizes a very successful NIH-industry 
partnership program launched in FY 2000 in Public Law 106-113. The 
funding is for partnership challenge grants to promote joint ventures 
between NIH and its grantees and for-profit biotechnology, 
pharmaceutical and medical device industries with regard to the 
development of countermeasures (as defined in Section 3 of the bill) 
and research tools (as defined in Section 4(d)(3) of the bill). Such 
grants shall be awarded on a one-for-one matching basis. So far the 
matching grants have focused on development of medicines to treat 
malaria, tuberculosis, emerging and resistant infections, and 
therapeutics for emerging threats. My proposal should be matched by 
reauthorization of the challenge grant program for these deadly 
diseases.
  The legislation also sets incentives for the development of adjuvents 
to enhance the potency, and efficacy of antigens in responding to a 
biological agent.
  It requires the new Department to issue annual reports on the 
effectiveness of this legislation and these incentives, and directs it 
to host an international conference each year on countermeasure 
research.


                       calibration of incentives

  The legislation is carefully calibrated to provide incentives only 
where they are needed. This accounts for the choices in the legislation 
about which provisions are available to small biotechnology companies 
and large pharmaceutical companies.
  The legislation makes choices. It sets the priorities. It provides a 
dose of incentives and seeks a response in the private sector. We are 
attempting here to do something that has not been done before. This is 
uncharted territory. And it also an urgent mission.
  There may be cases where a countermeasure developed to treat a 
biological toxin or chemical agent will have applications beyond this 
use. A broad-spectrum antibiotic capable of treating many different 
biological agents may well have the capacity to treat naturally 
occurring diseases.
  This same issue arises with the Orphan Drug Act, which provides both

[[Page 21078]]

tax and FDA approval incentives for companies that develop medicines to 
treat rare diseases. In some cases these treatments can also be used 
for larger disease populations. There are few who object to this 
situation. We have come to the judgment that urgency of this research 
is worth the possible additional benefits that might accrue to a 
company.
  In the context of research to develop countermeasures, I do not 
consider it a problem that a company might find a broader commercial 
market for a countermeasure. Indeed, it may well be the combination of 
the incentives in this legislation and these broader markets that 
drives the successful development of a countermeasure. If our intense 
focus on developing countermeasures, and research tools, provides 
benefits for mankind going well beyond terror weapons, we should 
rejoice. If this research helps us to develop an effective vaccine or 
treatment for AIDS, we should give the company the Nobel Prize for 
Medicine. If we do not develop a vaccine or treatment for AIDS, we may 
see 100 million people die of AIDS. We also have 400 million people 
infected with malaria and more than a million annual deaths. Millions 
of children die of diarrhea, cholera and other deadly and disabling 
diseases. Countermeasures research may deepen our understanding of the 
immune system and speed and development of treatments for cancer and 
autoimmune diseases. That is not the central purpose of this 
legislation, but it is also an additional rationale for it.


                               conclusion

  This issue raised by my legislation is very simple: do we want the 
Federal government to fund and supervise much of the research to 
develop countermeasures or should we also provide incentives that make 
it possible for the private sector, at its own expense, and at its own 
risk, to undertake this research for good business reasons. This Frist-
Kennedy law focuses effectively on direct Federal funding and 
coordination issues, but it does not include the sufficient incentives 
for the private sector to undertake this research on its own 
initiative. That law and my legislation are perfectly complimentary. We 
need to enact both to ensure that we are prepared for bioterror 
attacks.
  I ask unanimous consent that an outline of the legislation appear at 
this point in the Record.

Biological, Chemical and Radiological Weapons Countermeasures Research 
                              Act of 2002

       The legislation, a refined version of S. 1764 introduced on 
     December 4, 2001, proposes incentives that will enable 
     biotechnology and pharmaceutical companies to take the 
     initiative--for good business reasons--to conduct research to 
     develop countermeasures, including diagnostics, drugs, and 
     vaccines, to treat those who might be exposed to or infected 
     by biological, chemical or radiological agents and materials 
     in a terror attack.
       The premise of this legislation is that direct government 
     funding of this research is likely to be much more expensive 
     to the government and less likely to produce the 
     countermeasures we need to defend America. Shifting some of 
     the risk and expense of this research to entrepreneurial 
     private sector firms is likely to be less expensive to the 
     government and much more likely to produce the 
     countermeasures we need to protect ourselves in the event of 
     an attack.
       For biotechnology companies, incentives for capital 
     formation are needed because most such companies have no 
     approved products or revenue from product sales to fund 
     research. They rely on investors and equity capital markets 
     to fund the research. These companies must focus on research 
     that will lead to product sales and revenue and end their 
     dependence on investor capital. When they are able to form 
     the capital to fund research, biotech companies tend to be 
     innovative and nimble and focused on the intractable diseases 
     for which no effective medical treatments are available. 
     Special research credits for pharmaceutical companies are 
     also needed.
       For both biotech and pharmaceutical companies, there is no 
     established or predictable market for these countermeasures. 
     Investors and companies are justifiable reluctant to fund 
     this research, which will present technical challenges 
     similar in complexity to development of effective treatments 
     for AIDS. Investors and companies need assurances that 
     research on countermeasures has the potential to provide a 
     rate of return commensurate with the risk, complexity and 
     cost of the research, a rate of return comparable to that 
     which may arise from a treatment for cancer, MS, Cystic 
     Fibrosis and other major diseases or from other investments.
       The legislation provides tax incentives to enable companies 
     to form capital to conduct the research and tax credits 
     usable by larger companies with tax liability with respect to 
     which to claim the credits. It provides a guaranteed and pre-
     determined market for the countermeasures and special 
     intellectual property protections to serve as a substitute 
     for a market. Finally, it establishes liability protections 
     for the countermeasures that are developed.
       Specifics of the legislation are as follows:
       (1) Setting Research Priorities (Section 101): The 
     Department of Homeland Security sets the countermeasure 
     research priorities in advance. It focuses the priorities on 
     threats for which countermeasures are needed, and with regard 
     to which the incentives make it ``more likely'' that the 
     private sector will conduct the research to develop 
     countermeasures. It is required to consider the status of 
     existing research, the availability of non-countermeasure 
     markets for the research, and the most effective strategy for 
     ensuring that the research goes forward. The Department then 
     provides information to potential manufacturers of these 
     countermeasures in sufficient detail to permit them to 
     conduct the research and determine when they have developed 
     the needed countermeasure. The Department is responsible for 
     determining when a manufacturer has, in fact, successfully 
     developed the needed countermeasure.
       (2) Registration of Companies (Section 102): Biotechnology 
     and pharmaceutical companies register with the Department to 
     become eligible for the incentives in the legislation. They 
     are obligated to provide reports to the Department as 
     requested and be open to inspections. The Department 
     certifies with companies are eligible for the incentives. 
     Once a company is certified as eligible for the incentives, 
     it becomes eligible for the tax incentives for capital 
     formation, and if it successfully develops a countermeasure 
     that meets the specifications of the Department, it becomes 
     eligible for the procurement, patent, and liability 
     provisions.
       (3) Diagnostics (Section 103): The incentives apply to 
     development of diagnostics, as well as drugs, vaccines and 
     other needed countermeasures.
       (4) Research tools (Section 104): A company is also 
     eligible for certification for the tax and patent provisions 
     if it seeks to develop a research tool that will make it 
     possible to quickly develop a countermeasure to a previously 
     unknown agent or toxin, or an agent or toxin not targeted by 
     the Department for research.
       (5) Capital Formation for Countermeasure Research (Section 
     201): The legislation provides that a company seeking to fund 
     research is eligible to elect from among four tax incentives. 
     The companies are eligible to:
       (a) Establish an R&D Limited Partnership to conduct the 
     research. The partnership passes through all business 
     deductions and credits to the partners. Section 201 (b)(1).
       (b) Issue a special class of stock for the entity to 
     conduct the research. The investors would be entitled to a 
     zero capital gains tax rate on any gains realized on the 
     stock. Section 201(b)(2).
       (c) Receive a special tax credit to help fund the research. 
     Section 201 (b)(3).
       (d) Receive a special tax credit for research conducted at 
     a non-profit and academic research institution. Section 201 
     (b)(4).
       A company must elect only one of these incentives and, if 
     it elects one of these incentives, it is then not eligible to 
     receive benefits under the Orphan Drug Act. The legislation 
     includes amendments (Section 218) to the Orphan Drug Act 
     championed by Senators Hatch, Kennedy and Jeffords (S. 1341). 
     the amendments make the Credit available from the date of the 
     application for Orphan Drug status, not the date the 
     application is approved as provided under current law.
       (6) Countermeasure Purchase Fund (Section 202): The 
     legislation provides that a company that successfully 
     develops a countermeasure--through FDA approval--is eligible 
     to sell the product to the Federal government at a pre-
     established price and in a pre-determined amount. The company 
     is given notice of the terms of the sale before it commences 
     the research.
       (7) Intellectual Property Incentives (Section 203): The 
     legislation provides that a company that successfully 
     develops a countermeasure is eligible to elect one of two 
     patent incentives. The two alternatives are as follows:
       (a) The company is eligible to receive a patent for its 
     invention with a term as long as the term of the patent when 
     it was issued by the Patent and Trademark Office, without any 
     erosion due to delays in the FDA approval process. This 
     alternative is available to any company that successfully 
     develops a countermeasure irrespective of its paid-in 
     capital.
       (b) The company is eligible to extend the term of any 
     patent owned by the company for two years. The patent may not 
     be one that is acquired by the company from a third party. 
     This is included as a capital formation incentive for small 
     biotechnology companies with less than $750 million in paid-
     in capital, or, at the discretion of the Department of

[[Page 21079]]

     Homeland Security, to any firm that successfully develops a 
     countermeasure.
       In addition, a company that successfully develops a 
     countermeasure is eligible for a 10 year period of market 
     exclusivity on the countermeasure.
       (8) Liability Protections (Section 204): The legislation 
     provides for protections against liability for the company 
     that successfully develops a countermeasure.
       (9) Accelerated Approval of Countermeasure (Section 211): 
     The countermeasures are considered for approval by the FDA on 
     a ``fast track'' basis.
       (10) Special Approval Standards (Section 212): The 
     countermeasures may be approved in the absence of human 
     clinical trails if such trails are impractical or unethical.
       (11) Limited Antitrust Exemption (Section 213): Companies 
     are granted a limited exemption from the antitrust laws as 
     they seek to expedite research on countermeasures.
       (12) Biologics Manufacturing Capacity and Efficiency 
     (Sections 214-215): Special incentives are incorporated to 
     ensure that manufacturing capacity is available for 
     countermeasures.
       (13) Strengthening of Biomedical Research Infrastructure: 
     Authorizes appropriations for grants to construct specialized 
     biosafety containment facilities where biological agents can 
     be handled safely without exposing researchers and the public 
     to danger (Section 216). Also reauthorizes a successful NIH-
     industry partnership challenge grants to promote joint 
     ventures between NIH and its grantees and for-profit 
     biotechnology, pharmaceutical and medical device industries 
     with regard to the development of countermeasures and 
     research tools (Section 217).
       (14) Adjuvents (Section 219): The legislation provides 
     incentives for the development and use of adjuvents to 
     enhance the potency of countermeasures.
       (15) Annual Report (Section 220): The Department is 
     required to prepare for the Congress an annual report on the 
     implementation of these incentives.
       (16) International Conference (Section 221): The Department 
     is required to organize an annual international conference on 
     countermeasure research.

  Mr. HATCH. Mr. President, I rise today to cosponsor, with my 
colleague Senator Lieberman from Connecticut, Chairman of the 
Governmental Affairs Committee, legislation that we believe is 
essential to better prepare our nation to prepare for and respond to 
bioterrorist attacks. The goal of our bill, the Biological, Chemical 
and Radiological Measures Research Act of 2002, is to encourage private 
sector research and development of diagnostic products, drugs, and 
vaccines designed to counter biological, chemical, or radiological 
attacks.
  One year ago our country faced a series of anthrax attacks that 
exposed deficiencies in our nation's ability to respond to attacks of 
bioterrorism. We need to do more. This bill will help protect the 
American public by deterring future acts of bioterrorism and, in the 
event of another such attack, will increase our capacity to respond 
effectively to the weapon deployed.
  This legislation complements the bioterrorism bill passed by Congress 
earlier this year that focused on building up the public health 
infrastructure. Senators Kennedy, Gregg and Frist deserve much credit 
for their work on that bill as do Congressmen Tauzin, Bilirakis, 
Dingell and Brown. Also, we would be remiss if we did not recognize the 
manner in which the Appropriations Committees in both the Senate and 
the House adjusted their priorities so quickly last Fall. I salute the 
leadership of Senators Byrd, Harkin, Stevens and Specter in making 
available substantial new funding for building up the capacity of the 
public health system to protect our citizens against the threat of 
bioterrorism.
  When it comes to protecting America, partisanship has no place. 
Senator Lieberman built upon the strong tradition of bi-partisanship in 
the war against terrorism in introducing this bill today.
  Although we are far better prepared for a terrorist attack today than 
ever before, and preventing a terrorist attack is our first priority, 
there are areas where we can improve our preparedness in the case of 
such an attack. Chief among these is the development of preventive 
agents and treatments for those citizens who may become exposed to or 
infected by deadly biological, chemical, and radiological agents.
  Building up the public health infrastructure alone will be 
insufficient if our national medicine chest does not contain safe and 
effective medicines to counter particular threat agents. This bill 
creates incentives for the private sector to try to fill the medicine 
chest with new products designed to respond to biological or other 
similar attacks. We need many new treatments and vaccines and the 
Lieberman-Hatch bill will unleash the creative energy and many 
resources of the private sector biomedical research enterprise.
  America leads the world in biomedical research capacity. The 
Lieberman-Hatch bill attempts to help focus the enormous assets of our 
research expertise in a manner that will protect the public health. 
This legislation seeks to help translate the basic knowledge, much of 
it funded through the $27 billion taxpayer-investment in the National 
Institutes of Health, into tangible products developed by the private 
sector.
  Given the growing risk of further attacks and the potentially 
devastating consequences of bioterrorism, we must abandon a business as 
usual attitude and take the vigorous steps that Senator Lieberman and I 
urge through this legislation.
  Our legislation is an additional measure to other avenues we have 
pursued to protect our nation from terrorism, including the Biologic 
Weapons Convention and government funded research at NIH, the Defense 
Advanced Research Projects Agency, DARPA, and the Centers for Disease 
Control and Prevention, CDC.
  Though we have mobilized many governmental agencies and increased 
direct federal funding for research and development of new treatments, 
I agree with Senator Lieberman, that what we have done thus far, 
impressive as it has been, is not nearly enough. Direct government 
funding for this research is likely to be insufficient for our national 
defense needs unless we marry our efforts with the private sector to 
the greatest extent possible. That is exactly what this bill does.
  Unfortunately, it is hard to avoid sounding somewhat like an alarmist 
when speaking on these matters. But, the truth of the matter today is 
that we do not have effective treatment for a host of potential 
biological, chemical and radiological threat agents. We must develop 
these with a greater sense of urgency and this legislation will serve 
as a catalyst for private sector investment and research and 
development activities.
  We need to develop an expedient, efficient capacity that combines the 
best of what our society has--strong federal and academic institutions 
with the most innovative biotechnology and pharmaceutical companies in 
the world. It would be a grave mistake to ignore the tremendous 
capabilities and potential of our country's biotech and pharmaceutical 
private sector.
  We must be creative, willing to work together, putting aside partisan 
politics and our opinions of the government or the private sector when 
dealing with a potential deadly threat to our nation. I believe Senator 
Lieberman and I have done that. Though we have not agreed on all the 
details on everything related to homeland security, we agree on this 
vital component. We must provide the tools to forge a collaborative 
effort by the private sector and the Federal Government to come up with 
the cures and vaccines we may, sadly, need one day.
  The best deterrent of bioterrorist attacks is to be able to 
demonstrate the capacity to counter such dastardly acts. I think the 
case can be made that all the rapid progress we have made in smallpox 
in the last year makes an attack with that agent less likely. That is 
the good news. The bad news is that there are too many agents for which 
we do not have any vaccine or effective therapeutic response. We need 
to roll up our sleeves and get to work on many other potential tools of 
destruction. Our bill provides the private sector with important 
incentives to get this work done and to get it done now.
  Most private sector companies rely on equity capital markets and 
investments to fund research. Naturally, they focus on research that 
will lead to products that will sell and have a dependable market. As 
we know, thankfully, there is no dependable or established market for 
counter terrorism. Therefore, not unreasonably, investors

[[Page 21080]]

need some kind of assurance that the costly and complex research we are 
asking them to invest in will be rewarded--that the reward will be 
commensurate with the risk.
  Under current law, private companies are reluctant to enter into 
agreements with government agencies to conduct needed research. The 
bill Senator Lieberman and I are introducing greatly expands the 
incentives for biotechnology and pharmaceutical companies to develop 
bioterrorism countermeasures. I do not think anyone will oppose 
involving some of the most powerful research minds and new technology 
as we defend our country against these threats. We need to involve 
these biomedical research companies more directly into our national 
defense plan, as they may very well be the ones to provide us with what 
we need to the medical front.
  I know there are novel, and perhaps controversial, features in this 
bill--anything innovative usually does. I ask that each and every one 
of you who has a stake in this issue enter into this debate. Keep in 
mind that the goal is to close any gap that exists in our plan against 
terrorism--I believe this includes engaging the private sector. We need 
to make sure that these companies have the proper incentives to engage 
in expensive, arduous research that could potentially save millions of 
Americans.
  Let me now review the specifics of our proposal. We provide 
incentives, such as tax incentives, guaranteed purchase funds, and 
patent and liability protections, which make it possible for private 
companies to form the capital needed to conduct this vital research. 
Again, we cannot expect these companies to engage in expensive research 
and development for an extremely unpredictable market without providing 
them meaningful incentives and reassurance.
  In some respects this legislation is similar to another bill I co-
authored, the Orphan Drug Act. The Orphan Drug Act utilizes tax credits 
and marketing exclusivity incentives to spur research into rare 
diseases with patient populations under 200,000 in the United States. 
This modest little bill has resulted in over 220 approved orphan 
products with over 1000 more designated for investigation. It is my 
hope and expectation that, in introducing our bill today, we can 
recreate the success of the Orphan Drug Act in getting the private 
sector motivated in a particular area of research.
  The Lieberman-Hatch bill contains powerful incentives. Here is how it 
works. The bill requires the private sector to work closely with the 
appropriate governmental officials. The legislation ensures that the 
Department of Homeland Security sets the countermeasure research 
priorities in advance. The Department of Homeland Security is required 
to take into account the status of existing research, the potential for 
non-countermeasure markets for the research, and the most effective 
strategy for propelling the research forward and provides this 
information to potential manufacturers. The bill also requires 
companies to register with the Department, to provide reports as 
requested and to be open to inspections, in order to be eligible for 
incentives. Once a company is certified, it is eligible for tax 
incentives for capital formation.
  The Department then determines if a manufacturer has successfully 
developed a countermeasure. Once the specifications of the Department 
are met, the company is eligible for the procurement, patent, and 
liability provisions. These incentives apply to diagnostics, drugs, 
vaccines and other countermeasures deemed necessary, including research 
tools.
  If companies seek to develop a research tool that enables the 
advancement of a countermeasure to a previously unknown agent or toxin, 
or an agent or toxin not targeted by the Department, they are also 
eligible for incentives.
  The four tax incentives companies are eligible to select from 
include:
  (a) An R&D Limited Partnership to conduct the research. The 
partnership passes through all business deductions and credits to the 
partners.
  (b) A special class of stock for the entity to conduct the research. 
The investors would be entitled to a zero capital gains tax rate on any 
gains realized on the stock.
  (c) A special tax credit to help fund the research.
  (d) A special tax credit for research conducted at a non-profit and 
academic research institution.

  I want to point out that a company can elect only one of these 
incentives and, if it elects one of these incentives, the company is 
not eligible to further benefits under the Orphan Drug Act. That is 
only fair.
  I would like to briefly discuss the Countermeasure Purchase Fund 
contained in Section 202 of the bill. Basically, the legislation 
affords a company that successfully develops a countermeasure--through 
FDA approval--eligibility to sell the product to the Federal Government 
at a pre-established price and in a pre-determined amount. The company 
is given notice of the terms of the sale before it begins research.
  The intellectual property incentives are contained in Section 203 of 
the bill. There are two patent incentives:
  One, the company is eligible to receive full patent term restoration 
for its invention. This means that it is held harmless for patent term 
erosion due to the lengthy FDA approval process. This alternative is 
available to any company that successfully develops a countermeasure 
irrespective of its paid-in capital. This is a significant incentive 
over the normal partial patent term restoration provisions contained in 
the Drug Price Competition and Patent Term Restoration Act. I am a co-
author of this law which has contributed to consumer savings of $8 to 
$10 billion each year since its passage in 1984. This was the 
legislation that created the modern generic drug industry. But under 
this law the patent term cannot be restored beyond 14 years. When the 
1984 law was enacted the patent term was 17 years from date of patent 
issuance; with the enactment of the GATT Treaty implementing 
legislation, the patent term was changed to 20 years from date of 
application. By adopting a policy of day for day patent term 
restoration, the Lieberman-Hatch bill is sending a strong signal to the 
private sector to pour its resources into this research. By lengthening 
the patent term beyond the existing 14 year cap, drug companies will 
have a new incentive to devote their efforts to this research.
  Two, under the bill, small companies are also eligible to elect to 
extend the term of any patent owned by the company for two years. The 
patent may not be one that is acquired by the company from a third 
party. This is included as a capital formation incentive for small 
biotechnology companies with less than $750 million in paid-in capital, 
or, at the discretion of the Department of Homeland Security, to any 
firm that successfully develops a countermeasure. This provision will 
get the attention of our nation's growing biotechnology sector.
  In addition, a company that successfully develops a countermeasure is 
eligible for a 10 year period of market exclusivity on the 
countermeasure. This means that the FDA may not approve a generic copy 
of such a drug for 10 years regardless of whether the drug has any 
patent protection. This is in contrast to the 5 years of marketing 
exclusivity granted under the Drug Price Competition and Patent Term 
Restoration Act. This is an important incentive because it is the 
government that enforces the marketing exclusivity provision, not the 
firm through costly, risky, and time-consuming private patent 
infringement litigation.
  Other incentives in the bill include the liability protections set 
forth in section 204; a limited antitrust exemption designed to 
expedite and coordinate research as set forth in section 213; 
accelerated FDA approval provisions described in section 211; and, 
special FDA approval standards established in section 212 that codify 
the FDA regulations that authorize approval in the absence of human 
clinical trails if such trails are impractical or unethical.
  In addition the bill provide; incentives to enhance biologics 
manufacturing capacity for countermeasures.

[[Page 21081]]

This includes grants to construct specialized biosafety containment 
facilities where biological agents can be handled safely without 
exposing researchers and the public to danger. The bill also 
reauthorizes a successful NIH-industry partnership challenge grants to 
promote joint ventures between NIH and its grantees and for-profit 
biotechnology, pharmaceutical, and medical device industries with 
regard to the development of countermeasures and research tools.
  Finally, the bill also provides incentives for the development and 
use of adjuvants to enhance the potency of countermeasures; requires 
the Department of Homeland Security to prepare an Annual Report to 
Congress on the implementation of these incentives in the legislation 
and to organize an annual international conference on countermeasure 
research.
  Let me conclude by saying that this legislation lays out an 
unabashedly aggressive set of incentives designed to stimulate 
research. There will undoubtedly be criticisms of some of the features 
of the bill. Senator Lieberman and I recognize that adjustments will 
have to be made along the way. We want to work closely with President 
Bush, Vice President Cheney, Governor Ridge, and Secretary Thompson and 
others in the Administration in refining this legislation. We recognize 
that unless the President feel that this type of program is necessary 
it is unlikely to be adopted.
  The subject mater of this legislation cuts across many Committees of 
the Senate. Senator Lieberman and I will work with the Finance 
Committee, the Judiciary Committee I serve on both of these 
committees--as well as the HELP Committee, Commerce Committee, and the 
Governmental Affairs Committee which my friend from Connecticut Chairs. 
I might add, as much as I admire Senator Lieberman, I hope that next 
month he becomes the Ranking Democratic Member of the Governmental 
Affairs Committee.
  We will continue to work with all interested parties in the private 
sector to refine this legislation. We welcome this dialog.
  Let me state clearly that my cosponsorship today is more an 
unambiguous statement that I intend to work in partnership with Senator 
Lieberman than it is a statement that I agree with each provision and 
detail of this bill. Specifically, I do not agree with--and would not 
support--the anti-trust and indemnification provisions as currently 
drafted. We must tread carefully in the areas of government 
indemnification and in holding any meetings with the private sector in 
which anti-trust concerns are triggered.
  My cosponsorship of this legislation today which will serve as a 
discussion draft between the 107th and 108th Congress--should not be 
considered as a reversal of my views on indemnification and antitrust 
policy. It is not. My cosponsorship only signals my willingness to be 
open to rethinking my traditional views of indemnification and 
antitrust policy in light of this grave threat to our national 
security. These sections--as well as many other parts of the bill need 
more work. At the end of the day, I hope we can come together on these 
questions.
  I want to stress the fact that I opposed proposed indemnification 
language in the Kennedy-Gregg-Frist bioterrorism bill passed earlier 
this year. I have opposed indemnification provisions in discussions 
over matters of homeland security. I continue to hold my position that 
indemnification is not only not the best policy but that it may also be 
counterproductive in the long run.
  Similarly, I have rejected any general policy of governmental 
indemnification of those injured by asbestos or tobacco use. The 
private sector must bare its share of the risk and responsibility when 
it produces potentially dangerous products.
  Frankly, I believe the solution to the indemnification issue may 
ultimately stem from the hard work of Senators Warner and Thompson with 
respect to their amendment, Number 4530, to the Homeland Security bill. 
This language was carefully worked out in close consultation with by 
Senators Warner and Thompson and the White House earlier this year. We 
will take advantage of amendment Number 4530 as we further refine our 
legislation in this area.
  The Warner-Thompson language builds upon the principles contained in 
Executive order No. 10879 and the authority set forth in Public Law 85-
804. These authorities grant the Department of Defense, at DoD's 
discretion, to include indemnification clauses in its contracts with 
military contractors, with certain limitations and conditions. In order 
for this authority to apply to the new Office of Homeland Security, 
current law needs to be amended.
  It is important to note that the language of the Warner-Thompson 
amendment retains the principle of discretionary authority. That is 
important. We can not write a blank check to the private sector. 
Senator Lieberman and I have included language in our bill that 
requires the new Secretary of Homeland Security ``to make a 
determination . . . that it is in the national security interest of the 
United States'' before any indemnification provision could be 
triggered. The Warner-Thompson amendment is narrowly tailored to the 
procurement of anti-terrorism technology or services by a federal 
agency directly engaged in homeland security activities. Moreover, 
consistent with the Warner-Thompson language, we need to flesh out the 
factors the Administration shall consider in negotiating the extent of 
any indemnification.
  Although we need to further refine the language in the discussion 
draft bill we introduce today, my intent is do follow the lead of and 
principles contained in the Warner-Thompson Amendment. Further, the 
Warner-Thompson Amendment language includes procurements made by State 
and local governments but only through contracts made by the head of an 
agency of the Federal Government and only to the extent that those 
loses are not covered by insurance.
  A discussion of indemnification in the context of bioterrorism 
countermeasures is a very special case. It is a unique circumstance in 
which we may very well face many issues never confronted before such as 
the possibility of using drugs that can not be ethically tested in 
human beings due to the danger of the agent the drug is intended to 
treat. We are not talking about asbestos or tobacco here, we are 
talking about potential attacks that could undermine the public health, 
economic wealth, and environmental integrity of the United States of 
America.
  We are trying to protect against the use weapons of terror in the 
hands of terrorists, not routine uses of consumer and other products. 
If unforseen side effects occur when countermeasures are dispensed, 
society may be presented with problems that will require innovative 
responses. The future of our country is at stake. I have twenty 
grandchildren and I want them to hand down our traditions and heritage 
to their grandchildren. It is for their sake that we must try to settle 
these issues.
  But let us not get to far ahead of ourselves at this point with all 
these details. This legislation is a work in progress. Anyone who has 
witnessed the extensive floor debate over the last 2 months over the 
creation of the Office of Homeland Security understands that we have 
much, much more work to do with respect to the creation of the new 
department and many other homeland security issues. I hope and expect 
that President Bush and the Congress will come together on the 
Department of Homeland Security. I commend Senator Lieberman for his 
constructive role in this ongoing debate.
  My support of this legislation should be construed as a personal 
commitment to work closely with Senator Lieberman, the White House and 
other parties to address the issues raised in the bill. It is my hope 
that we can arrive at an acceptable compromise on the indemnification 
and antitrust provisions, as well as, all the other matters taken up in 
this important legislation.
  As a pragmatic legislator, I understand that to make an omelette, you 
always have to break an egg. I hope

[[Page 21082]]

this discussion draft bill will help inspire discussion and move the 
process along.
  We are facing unprecedented threats to our Nation's security. We need 
to be open to novel solutions to these new problems. We hope that this 
bill will foster thoughtful discussion on how best to prepare the 
nation for any potential biological, chemical, or radiological attack.
  Let us not lose sight of our mission to protect our nation from the 
devastating illness and death that bioterrorism can bring. We 
desperately need to develop the technology to prevent, detect, 
diagnose, and treat our citizens who may fall victim to bioterrorism. I 
believe that strengthening the government's partnership with the 
private sector is the most effective and expedient step we can take at 
this point in time. The Kennedy-Gregg-Frist bioterrorism law was an 
enormous step forward. The funding support provided by Senators Byrd, 
Stevens, Harkin, and Specter and other appropriators is also essential. 
This public sector investment must now be joined by legislation that 
will foster a commensurate private sector response. That is exactly 
what the Lieberman-Hatch bill, the Biological, Chemical and 
Radiological Measures Research Act of 2002, will do if Congress passes 
this law.
  Let me close by saying that I have enjoyed working with Senator 
Lieberman in developing this bill and look forward to continuing this 
partnership in the future as we work with other Senators on this 
legislation. I also want to recognize the efforts of Chuck Ludlam on 
Senator Lieberman's staff for all the work he has done to bring the 
bill to this point. Senator Lieberman and I urge our colleagues to 
review the ``Biological, Chemical and Radiological Measures Research 
Act of 2002''. I hope that our colleagues will conclude that this 
legislation deserves to be near the top of the agenda when the 108th 
Congress convenes in January.
                                 ______
                                 
      By Mr. McCAIN:
  S.J. Res. 50. A joint resolution expressing the sense of the Senate 
with respect to human rights in Central Asia; to the Committee on 
Foreign Relations.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the text of 
the resolution be printed in the Record.
  There being no objection, the resolution was ordered to be printed in 
the Record, as follows:

                              S.J. Res. 50

       Whereas the Central Asian nations of Kazakhstan, 
     Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan provided 
     the United States with important assistance in the war in 
     Afghanistan, from military basing and overflight rights to 
     the facilitation of humanitarian relief;
       Whereas America's victory over the Taliban in turn provided 
     important benefits to the Central Asian nations, removing a 
     regime that threatened their security, and significantly 
     weakening the Islamic Movement of Uzbekistan, a terrorist 
     organization that had previously staged armed raids from 
     Afghanistan into the region;
       Whereas the United States has consistently urged the 
     nations of Central Asia to open their political systems and 
     economies and to respect human rights, both before and since 
     the attacks of September 11, 2001;
       Whereas Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, 
     and Uzbekistan are members of the United Nations and the 
     Organization for Security and Cooperation in Europe, both of 
     which confer a range of human rights obligations on their 
     members;
       Whereas according to the State Department Country Reports 
     on Human Rights Practices, the government of Kazakhstan 
     harasses and monitors independent media and human rights 
     activists, restricts freedom of association and opposition 
     political activity, and allows security forces to commit 
     extrajudicial executions, torture, and arbitrary detention 
     with impunity;
       Whereas according to the State Department, the government 
     of the Kyrgyz Republic engages in arbitrary arrest and 
     detention, restricts the activities of political opposition 
     figures, religious organizations deemed ``extremist,'' human 
     rights activists, and nongovernmental organizations, and 
     discriminates against ethnic minorities;
       Whereas according to the State Department, the government 
     of Tajikistan remains authoritarian, curtailing freedoms of 
     speech, assembly, and association, with security forces 
     committing extrajudicial executions, kidnappings, 
     disappearances, and torture;
       Whereas according to the State Department, Turkmenistan is 
     a Soviet-style one-party state centered around the 
     glorification of its president, which engages in serious 
     human rights abuses, including arbitrary arrest and 
     detention, severe restrictions of personal privacy, 
     repression of political opposition, and restrictions on 
     freedom of speech and nongovernmental activity;
       Whereas according to the State Department, the government 
     of Uzbekistan continues to commit serious human rights 
     abuses, including arbitrary arrest, detention and torture in 
     custody, particularly of Muslims who practice their religion 
     outside state controls, the severe restriction of freedom of 
     speech, the press, religion, independent political activity 
     and nongovernmental organizations, and detains over 7,000 
     people for political or religious reasons;
       Whereas the United States Commission on International 
     Religious Freedom has expressed concern about religious 
     persecution in the region, recommending that Turkmenistan be 
     named a Country of Particular Concern under the International 
     Religious Freedom Act of 1998, and that Uzbekistan be placed 
     on a special ``Watch List'';
       Whereas, by continuing to suppress human rights and to deny 
     citizens peaceful, democratic means of expressing their 
     convictions, the nations of Central Asia risk fueling popular 
     support for violent and extremist movements, thus undermining 
     the goals of the war on terrorism;
       Whereas President Bush has made the defense of ``human 
     dignity, the rule of law, limits on the power of the state, 
     respect for women and private property and free speech and 
     equal justice and religious tolerance'' strategic goals of 
     United States foreign policy in the Islamic world, arguing 
     that ``a truly strong nation will permit legal avenues of 
     dissent for all groups that pursue their aspirations without 
     violence''; and
       Whereas the Congress has expressed its desire to see deeper 
     reform in Central Asia in past resolutions and legislation, 
     most recently conditioning assistance to Uzbekistan on its 
     progress in meeting human rights and democracy commitments to 
     the United States: Now, therefore, be it
       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled, That it is 
     the Sense of the Congress that:
       (1) the governments of Kazakhstan, Kyrgyzstan, Tajikistan, 
     Turkmenistan, and Uzbekistan should accelerate democratic 
     reforms and fulfill their human rights obligations including, 
     where appropriate, by--
       ``(A) releasing from prison all those jailed for peaceful 
     political activism or the non-violent expression of their 
     political or religious beliefs;
       ``(B) fully investigating any credible allegations of 
     torture and prosecuting those responsible;
       ``(C) permitting the free and unfettered functioning of 
     independent media outlets, independent political parties, and 
     non-governmental organizations, whether officially registered 
     or not;
       (D) permitting the free exercise of religious beliefs and 
     ceasing the persecution of members of religious groups and 
     denominations not registered with the state;
       (E) holding free, competitive, and fair elections;
       (F) making publicly available documentation of their 
     revenues and punishing those engaged in official corruption;
       (2) the President of the United States, the Secretary of 
     State, and the Secretary of Defense should--
       (A) continue to raise at the highest levels with the 
     governments of the nations of Central Asia specific cases of 
     political and religious persecution, and urge greater respect 
     for human rights and democratic freedoms at every diplomatic 
     opportunity;
       (B) take progress in meeting the goals outlined in 
     paragraph (1) into account when determining the level and 
     frequency of United States diplomatic engagement with the 
     governments of the Central Asian nations, the allocation of 
     United States assistance, and the nature of United States 
     military engagement with the countries of the region;
       (C) ensure that the provisions of the Foreign Operations 
     Appropriations Act are fully implemented to ensure that no 
     United States assistance benefits security forces in Central 
     Asia implicated in violations of human rights;
       (D) follow the recommendations of the United States 
     Commission on International Religious Freedom by designating 
     Turkmenistan a Country of Particular Concern under the 
     International Religious Freedom Act of 1998 and by making 
     clear that Uzbekistan risks designation if conditions there 
     do not improve;
       (E) work with the Government of Kazakhstan to create a 
     political climate free of intimidation and harassment, 
     including releasing political prisoners and permitting the 
     return of political exiles, most notably Akezan Kazegeldin, 
     and to reduce official corruption, including by urging the 
     Government of Kazakhstan to cooperate with the ongoing United 
     States Department of Justice investigation;
       (F) support through United States assistance programs those 
     individuals, non-governmental organizations, and media 
     outlets in Central Asia working to build more open

[[Page 21083]]

     societies, to support the victims of human rights abuses, and 
     to expose official corruption; and
       (3) increased levels of United States assistance to the 
     governments of the Central Asian nations made possible by 
     their cooperation in the war in Afghanistan can be sustained 
     only if there is substantial and continuing progress towards 
     meeting the goals outlined in paragraph (1).
                                 ______
                                 
      By Mr. WYDEN:
  S.J. Res. 51. A resolution to recognize the rights of consumers to 
use copyright protected works, and for other purposes; to the Committee 
on the Judiciary.
  Mr. WYDEN. Mr. President, today I am introducing a resolution that 
spells out what I believe should be the basic rights of consumers to 
use and enjoy legally acquired copyrighted works. The purpose of this 
resolution is simple: to establish the principle that as the Nation's 
copyright system evolves and adapts to new technologies, it must 
respect and preserve the interests of consumers. I am joined in this 
effort by my friend and frequent collaborator, Representative Chris 
Cox, who has already introduced a similar resolution in the House.
  In today's information age, intellectual property rules are the oil 
that helps keep the economic engine running smoothly. Digitization and 
the rise of the Internet have given the engine a big boost by creating 
new and more efficient ways of circulating, manipulating, and using 
information. The pace of these developments has left the copyright 
system scrambling to keep up.
  Industry working groups have been meeting over the past several years 
to negotiate new copy protection rules, but consumers have not always 
had a prominent seat at the table, and there is a real risk that the 
interests of consumers could get short shift. That is why I believe it 
is important to affirm that new copyright protection systems must not 
be allowed to undermine or erode the existing rights and expectations 
of consumers. Existing copyright laws, under the doctrine of ``fair 
use,'' permit consumers to make copies of content for limited, non-
commercial purposes. A new copyright regime for the digital world must 
not narrow or limit these rights. It would be a terrible irony if the 
advances in digital technology were to result in a step backwards for 
consumers.
  I expect to see a great deal of activity on this subject during the 
next Congress--on the legislative front certainly, but also in further 
negotiations between industry groups and in efforts to devise new 
technological approaches. To ensure that the scope of ``fair use'' in 
the digital world will not be any narrower than it has been in the 
analog world, I believe it would be helpful for Congress to spell out 
its expectations concerning what legitimate fair use includes. That is 
what this resolution aims to do. Specifically, it says that consumers 
of legally acquired content should be permitted to make copies for 
purposes of using the content later (time-shifting), using it in a 
different place (space-shifting), or making a backup; to use the 
content on different platforms or devices; to translate the content 
into different formats; and to use technology to achieve any of these 
purposes. Copyright law should not give copyright holders the ability 
to prohibit such legitimate, personal, non-commercial activity.
  It is clear to me that the content industries face very serious 
challenges in preventing piracy, and that intellectual property 
protections must be strong. People and companies that create 
copyrighted works must be fairly compensated, and piracy must be 
punished. America's information-based economy depends on it.
  But efforts to combat piracy must not come at the expense of 
legitimate consumer uses of intellectual property. That would be 
throwing out the baby with the bathwater.
  I understand that the content industries have serious concerns about 
this resolution. I have listened to them, and I can appreciate their 
fear that, for example, expressing consumer rights in too absolute a 
fashion could open the door to someone making 1,000 copies of a CD to 
share with all their friends and acquaintances at no charge. That is 
not my intention. So the resolution I am introducing specifies that the 
rights in question must be exercised in a reasonable, personal, and 
non-commercial manner. The rights are not absolute.
  Going forward, I intend to continue to listen to both sides of this 
debate, and to support solutions that do not upset the balance in 
existing law between commercial use and non-commercial, personal use. I 
want to protect the interests of both copyright holders and consumers. 
But the fact is, as of today, nobody in the Senate has stepped forward 
with legislation on the consumer side of this issue. This resolution 
helps fill that void.
  Introducing this resolution now, with the end of this Congress 
drawing near, Congressman Cox, and I are essentially laying down a 
marker for next year's debate. I will work closely with my Chairman on 
the Senate Commerce Committee, Senator Hollings, and others to move the 
issue forward. A positive expression affirming the reasonable interests 
of consumers should be part of this Nation's evolving copyright regime.

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