[Congressional Record (Bound Edition), Volume 149 (2003), Part 1]
[Senate]
[Pages 1310-1325]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DURBIN (for himself and Mr. DeWine):
  S. 178. A bill to amend title XVIII of the Social Security Act to 
provide adequate coverage for immunosuppressive drugs furnished to 
beneficiaries under the medicare program that have received an organ 
transplant; to the Committee on Finance.
  Mr. DURBIN. Mr. President, I rise to make a few remarks concerning 
this bill I am introducing today with my colleague from Ohio, which 
will help many Medicare beneficiaries who have had organ transplants.
  Last year over 4,400 people died while waiting for an organ 
transplant, including 257 in my home State of Illinois. Currently, over 
80,000 Americans are waiting for a donor organ with 4,349 waiting in 
Illinois. It is this scarcity that has fueled the controversy over 
organ allocation.
  Given that organs are extremely scarce, Federal law should not 
compromise the success of organ transplantation. Yet that is exactly 
what current Medicare policy does, because Medicare denies certain 
transplant patients coverage for the drugs needed to prevent rejection.
  Medicare does this in several different ways. First, Medicare does 
not pay for anti-rejection drugs for Medicare beneficiaries, who 
received their transplants prior to becoming a Medicare beneficiary. So 
for instance, if a person received a transplant at aged 64 through 
their health insurance plan, when they retire and rely on Medicare for 
their health care they will no longer have immunosuppressive drug 
coverage. Transplanation is the only medical condition that Medicare 
treats as a pre-existing condition so as to deny a Medicare beneficiary 
a health care service that would otherwise be covered.
  Second, Medicare only pays for anti-rejection drugs for transplants 
performed in a Medicare approved transplant facility. However, many 
beneficiaries are completely unaware of this fact and how it can 
jeopardize their future coverage of immunosuppressive drugs. To receive 
an organ transplant, a person must be very ill and many are far too ill 
at the time of transplantation to be researching the intricate nuances 
of Medicare coverage policy.
  Finally, Medicare has a special program for End Stage Renal Disease, 
ESRD, patients. Medicare pays for their dialysis at a cost of over 
$100,000 per year and provides for all their health care costs. 
However, it a transplant becomes available to an ESRD patient, Medicare 
only provides them with health care for three years post-
transplantation. The fact is, however, that they will need to use 
immunosuppressive drugs for the rest of their life to maintain their 
transplant. But after the three years are up, their entire Medicare 
coverage, including immunosuppressive drug coverage is terminated. If 
that person's transplant is rejected because they can no longer afford 
their immunosuppressive drugs, then Medicare will again pay for their 
dialysis and all of their health care costs. This is ludicrous. It 
would make more sense for Medicare to continue to provide them with the 
lifesaving immunosuppressive drugs that they need.
  The bill that I am introducing today, the ``Comprehensive Immunosup-
pressive Drug Coverage for Transplant Patients of 2000 Act'' would 
remove these short-sighted limitations. The bill sets up a new, easy to 
follow policy: All Medicare beneficiaries who have had a transplant and 
need immunosuppressive drugs to prevent rejection of their transplant, 
would be covered as long as such anti-rejection drugs were needed.
  I am introducing this bill on behalf of some of the constituents that 
I have met who are unfortunately very adversely affected by the current 
gaps in Medicare coverage.
  Richard Hevrdejs was a Chicago attorney in private practice until 
1993. Unfortunately, he suffered a debilitating heart attack that year, 
which left him unable to work and on disability. In 1997 suffering from 
congestive heart failure, he was placed on a Heart-Mate machine at the 
University of Illinois Medical Center, UIC. In April of 1998, he 
received a heart transplant at UIC but because UIC was not


[[Page 1311]]

at the time 
a Medicare approved facility for heart transplants, Medicare will
not cover his immunosuppressive drugs. Richard was near death when he 
had his transplant and was in no condition to research the intricacies 
of Medicare coverage policies. His drug costs are now around $25,000 
per year. He gets some assistance from the drug company medical 
assistance plans and he has a Medigap policy that provides a little 
assistance. But for the most part, he is forced to watch all his 
savings dwindle because of Medicare's coverage gaps.
  Anita Milton was from Morris, Illinois. In 1995, she became so 
disabled that she was no longer able to work and was forced onto 
disability. The following year, he lungs gave up and she had to have a 
bilateral lung transplant. Because Medicare is not available for 2 
years after a person becomes eligible for disability, Anita was not on 
Medicare when she had the transplant. The huge bills for the transplant 
remained at collection agencies till her death several years ago. 
Because Anita was not on Medicare when she received her transplant, she 
did not receive Medicare coverage for the anti-rejection drugs that she 
needs. She received $940 in disability payments per month. She than 
went on Medicaid but due to the spend down requirements in Illinois, 
she had to spend $689 on drug costs to get Medicare coverage for her 
drugs. In effect she got coverage every second month. Anita couldn't 
afford her anti-rejection drugs and she tried to scale back on them. 
This caused her to nearly reject the transplant. Consequently, she lost 
a third of her lung capacity permanently. As Anita said at a Town Hall 
meeting in Chicago in January 1998 ``these Medicare and Medicaid rules 
make no sense.''
  I am introducing this bill on the same day that another bill the 
``Living Donor Access Act of 2003'', which I am an original cosponsor, 
is also being introduced by my colleague Senator DeWine. The ``Living 
Donor Access Act'' also seeks to improve the lives of transplant 
patients. The ``Living Donor Access Act'' would prohibit insurers in 
the group market from imposing additional premiums or preexisting 
condition exclusions on living organ donors. There are currently more 
than 25,000 living organ donors, but no law protects these individuals 
against discrimination in the group health insurance market. The two 
bills are good companions. It is important that we root out all 
discrimination against both those who have received transplants and 
those who are so generous as to donate.
  I ask unanimous consent that the text of the bill, the 
``Comprehensive Immunosuppressive Drug Coverage for Transplant Patients 
of 2003'', be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 178

       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 ``Comprehensive 
     Immunosuppressive Drug Coverage for Transplant Patients Act 
     of 2003''.

     SEC. 2. COMPREHENSIVE COVERAGE OF IMMUNOSUPPRESSIVE DRUGS 
                   UNDER THE MEDICARE PROGRAM.

       (a) In General.--Section 1861(s)(2)(J) of the Social 
     Security Act (42 U.S.C. 1395x(s)(2)(J)) is amended by 
     striking ``, to an individual who receives'' and all that 
     follows before the semicolon at the end and inserting ``to an 
     individual who has received an organ transplant''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to drugs furnished on or after the date of 
     enactment of this Act.

     SEC. 3. PROVISION OF APPROPRIATE COVERAGE OF 
                   IMMUNOSUPPRESSIVE DRUGS UNDER THE MEDICARE 
                   PROGRAM FOR ORGAN TRANSPLANT RECIPIENTS.

       (a) Continued Entitlement to Immunosuppressive Drugs.--
       (1) Kidney transplant recipients.--Section 226A(b)(2) of 
     the Social Security Act (42 U.S.C. 426-1(b)(2)) is amended by 
     inserting ``(except for coverage of immunosuppressive drugs 
     under section 1861(s)(2)(J))'' after ``shall end''.
       (2) Other transplant recipients.--The flush matter 
     following paragraph (2)(C)(ii)(II) of section 226(b) of the 
     Social Security Act (42 U.S.C. 426(b)) is amended by striking 
     ``of this subsection)'' and inserting ``of this subsection 
     and except for coverage of immunosuppressive drugs under 
     section 1861(s)(2)(J))''.
       (3) Application.--Section 1836 of the Social Security Act 
     (42 U.S.C. 1395o) is amended--
       (A) by striking ``Every individual who'' and inserting 
     ``(a) In General.--Every individual who''; and
       (B) by adding at the end the following new subsection:
       ``(b) Special Rules Applicable to Individuals Only Eligible 
     for Coverage of Immunosuppressive Drugs.--
       ``(1) In general.--In the case of an individual whose 
     eligibility for benefits under this title has ended except 
     for the coverage of immunosuppressive drugs by reason of 
     section 226(b) or 226A(b)(2), the following rules shall 
     apply:
       ``(A) The individual shall be deemed to be enrolled under 
     this part for purposes of receiving coverage of such drugs.
       ``(B) The individual shall be responsible for the full 
     amount of the premium under section 1839 in order to receive 
     such coverage.
       ``(C) The provision of such drugs shall be subject to the 
     application of--
       ``(i) the deductible under section 1833(b); and
       ``(ii) the coinsurance amount applicable for such drugs (as 
     determined under this part).
       ``(D) If the individual is an inpatient of a hospital or 
     other entity, the individual is entitled to receive coverage 
     of such drugs under this part.
       ``(2) Establishment of procedures in order to implement 
     coverage.--The Secretary shall establish procedures for--
       ``(A) identifying beneficiaries that are entitled to 
     coverage of immunosuppressive drugs by reason of section 
     226(b) or 226A(b)(2); and
       ``(B) distinguishing such beneficiaries from beneficiaries 
     that are enrolled under this part for the complete package of 
     benefits under this part.''.
       (4) Technical amendment.--Subsection (c) of section 226A of 
     the Social Security Act (42 U.S.C. 426-1), as added by 
     section 201(a)(3)(D)(ii) of the Social Security Independence 
     and Program Improvements Act of 1994 (Public Law 103-296; 108 
     Stat. 1497), is redesignated as subsection (d).
       (b) Extension of Secondary Payer Requirements for ESRD 
     Beneficiaries.--Section 1862(b)(1)(C) of the Social Security 
     Act (42 U.S.C. 1395y(b)(1)(C)) is amended by adding at the 
     end the following new sentence: ``With regard to 
     immunosuppressive drugs furnished on or after the date of 
     enactment of the Comprehensive Immunosuppressive Drug 
     Coverage for Transplant Patients Act of 2003, this 
     subparagraph shall be applied without regard to any time 
     limitation.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to drugs furnished on or after the date of 
     enactment of this Act.

     SEC. 4. PLANS REQUIRED TO MAINTAIN COVERAGE OF 
                   IMMUNOSUPPRESSIVE DRUGS.

       (a) Application to Certain Health Insurance Coverage.--
       (1) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 2707. COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.

       ``A group health plan (and a health insurance issuer 
     offering health insurance coverage in connection with a group 
     health plan) shall provide coverage of immunosuppressive 
     drugs that is at least as comprehensive as the coverage 
     provided by such plan or issuer on the day before the date of 
     enactment of the Comprehensive Immunosuppressive Drug 
     Coverage for Transplant Patients Act of 2003, and such 
     requirement shall be deemed to be incorporated into this 
     section.''.
       (2) Conforming amendment.--Section 2721(b)(2)(A) of the 
     Public Health Service Act (42 U.S.C. 300gg-21(b)(2)(A)) is 
     amended by inserting ``(other than section 2707)'' after 
     ``requirements of such subparts''.
       (b) Application to Group Health Plans and Group Health 
     Insurance Coverage Under the Employee Retirement Income 
     Security Act of 1974.--
       (1) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 714. COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.

       ``A group health plan (and a health insurance issuer 
     offering health insurance coverage in connection with a group 
     health plan) shall provide coverage of immunosuppressive 
     drugs that is at least as comprehensive as the coverage 
     provided by such plan or issuer on the day before the date of 
     enactment of the Comprehensive Immunosuppressive Drug 
     Coverage for Transplant Patients Act of 2003, and such 
     requirement shall be deemed to be incorporated into this 
     section.''.
       (2) Conforming amendments.--
       (A) Section 732(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1185(a)) is amended by 
     striking ``section 711'' and inserting ``sections 711 and 
     714''.
       (B) The table of contents in section 1 of the Employee 
     Retirement Income Security Act 
     
     
[[Page 1312]]    
     
     of 1974 is amended by 
     inserting after the item relating to section 713 the 
     following new item:

``Sec. 714. Coverage of immunosuppressive drugs.''.

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

``Sec. 9813. Coverage of immunosuppressive drugs.'';

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

     ``SEC. 9813. COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.

       ``A group health plan shall provide coverage of 
     immunosuppressive drugs that is at least as comprehensive as 
     the coverage provided by such plan on the day before the date 
     of enactment of the Comprehensive Immunosuppressive Drug 
     Coverage for Transplant Patients Act of 2003, and such 
     requirement shall be deemed to be incorporated into this 
     section.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning on or after January 1, 
     2004.
                                 ______
                                 
      By Mr. CORZINE:
  S. 179. A bill to amend title 23, United States Code, to provide for 
a prohibition on use of mobile telephones while operating a motor 
vehicle; to the Committee on Environment and Public Works.
  Mr. CORZINE. Mr. President, today I am introducing legislation, the 
Mobile Telephone Driving Safety Act, to enhance highway safety by 
encouraging States to restrict the use of cell phones by drivers while 
they are operating a motor vehicle.
  I am introducing this legislation because of the significant threat 
posed by people who use cell phones while driving. According to a study 
by the Harvard Center for Risk Analysis released in December of 2002, 
``the use of cell phones by drivers may result in approximately 2,600 
deaths, 330,000 moderate to critical injuries and 1.5 million instances 
of property damage in America per year''. Other studies have reached 
similar conclusions. One, published in the New England Journal of 
Medicine in 1997, concluded that the ``use of cellular telephones in 
motor vehicles is associated with a quadrupling of the risks of a 
collision during the brief period of a call''. That study went on to 
say ``this relative risk is similar to the hazard associated with 
driving with a blood alcohol level at the legal limit''.
  States, counties and municipalities around the country have 
considered bans on hand-held cell phone use while driving. New York 
actually enacted such a ban in 2001. The Governor of New Jersey has 
proposed such a ban and related legislation has been unanimously 
approved by the New Jersey State Senate. A number of New Jersey 
municipalities also have chosen to enforce bans within their borders, 
including Marlboro, Carteret and Nutley.
  This patchwork of laws, however, does not take the place of a 
consistent, nation-wide ban. Congress needs to step forward and pass 
legislation that will ban the use of hand-held cell phones nationwide.
  The Mobile Telephone Driving Safety Act of 2003 is structured in a 
manner similar to other federal laws designed to promote highway 
safety, such as laws that encourage states to enact tough drunk driving 
standards. Under the legislation, a portion of Federal highway funds 
would be withheld from States that do not enact a ban on cell phone use 
while driving. Initially, this funding could be restored if states act 
to move into compliance. Later, the highway funding forfeited by one 
state would be distributed to other states that are in compliance. 
Experience has shown that the threat of losing highway funding is very 
effective in ensuring that states comply.
  To meet the bill's requirements, States would have to ban cell phone 
use while driving. However, such a ban need not be absolute. It could 
include an exception where there are exceptional circumstances, such as 
the use of a phone to report a disabled vehicle or medical emergency. 
In addition, if a State makes a determination that the use of ``hands 
free'' cell phones does not pose a threat to public safety, such use 
could be exempted from the ban, as well.
  This is a necessary bill to keep our streets and highways safe. I 
urge my colleagues to support this legislation and 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. 179

       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 ``Mobile Telephone Driving 
     Safety Act of 2003''.

     SEC 2. MOBILE TELEPHONE USE WHILE OPERATING MOTOR VEHICLES.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 165. Mobile telephone use while operating motor 
       vehicles

       ``(a) Definition of Motor Vehicle.--In this section, the 
     term `motor vehicle' means a vehicle driven or drawn by 
     mechanical power and manufactured primarily for use on public 
     highways, but does not include a vehicle operated only on a 
     rail.
       ``(b) Withholding of Apportionments for Noncompliance.--
       ``(1) Fiscal year 2005.--The Secretary shall withhold 5 
     percent of the amount required to be apportioned to any State 
     under each of paragraphs (1), (3), and (4) of section 104(b) 
     on October 1, 2004, if the State does not meet the 
     requirements of paragraph (3) on that date.
       ``(2) Subsequent fiscal years.--The Secretary shall 
     withhold 10 percent of the amount required to be apportioned 
     to any State under each of paragraphs (1), (3), and (4) of 
     section 104(b) on October 1, 2005, and on October 1 of each 
     fiscal year thereafter, if the State does not meet the 
     requirements of paragraph (3) on that date.
       ``(3) Requirements.--
       ``(A) In general.--A State meets the requirements of this 
     paragraph if the State has enacted and is enforcing a law 
     that prohibits an individual from using a mobile telephone 
     (other than a mobile telephone used as described in 
     subparagraph (B)) while operating a motor vehicle, except in 
     the case of an emergency or other exceptional circumstance 
     (as determined by the State).
       ``(B) Hands-free devices.--A State law described in 
     subparagraph (A) may permit an individual operating a motor 
     vehicle to use a mobile telephone with a device that permits 
     hands-free operation of the telephone if the State determines 
     that such use does not pose a threat to public safety.
       ``(c) Period of Availability; Effect of Compliance and 
     Noncompliance.--
       ``(1) Period of availability of withheld funds.--Any funds 
     withheld under subsection (b) from apportionment to any State 
     shall remain available until the end of the fourth fiscal 
     year following the fiscal year for which the funds are 
     authorized to be appropriated.
       ``(2) Apportionment of withheld funds after compliance.--
     If, before the last day of the period for which funds 
     withheld under subsection (b) from apportionment are to 
     remain available for apportionment to a State under paragraph 
     (1), the State meets the requirements of subsection (a)(3), 
     the Secretary shall, on the first day on which the State 
     meets the requirements, apportion to the State the funds 
     withheld under subsection (b) that remain available for 
     apportionment to the State.
       ``(3) Period of availability of subsequently apportioned 
     funds.--
       ``(A) In general.--Any funds apportioned under paragraph 
     (2) shall remain available for expenditure until the end of 
     the third fiscal year following the fiscal year in which the 
     funds are so apportioned.
       ``(B) Treatment of certain funds.--Any funds apportioned 
     under paragraph (2) that are not obligated at the end of the 
     period referred to in subparagraph (A) shall be allocated 
     equally among the States that meet the requirements of 
     subsection (a)(3).
       ``(4) Effect of noncompliance.--If, at the end of the 
     period for which funds withheld under subsection (b) from 
     apportionment are available for apportionment to a State 
     under paragraph (1), the State does not meet the requirements 
     of subsection (a)(3), the funds shall be allocated equally 
     among the States that meet the requirements of subsection 
     (a)(3).''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     adding at the end the following:

``165. Mobile telephone use while operating motor vehicles.''.
                                 ______
                                 
      By Mr. DeWINE (for himself and Mr. Voinovich):
  S. 180. A bill to establish the National Aviation Heritage Area, and 
for other purposes; to the Committee on Energy and Natural Resources.
  Mr. DeWINE. Mr. President, today I join my friend and colleague from 


[[Page 1313]]


Ohio, Senator George Voinovich, to introduce the National Aviation 
Heritage Area Act, an act to establish a National Aviation Heritage 
Area within our home State of Ohio.
  For hundreds of years prior to the 20th Century, man dreamt of 
flying. Some of the earliest records of mankind reveal a fascination 
with birds and the ability to leave the ground. In fact, the 
Renaissance revolution in art showed us many of the first recorded 
designs for achieving this feat. By 1903, man succeeded, altering the 
course of modern history.
  This year, we mark the 100th anniversary of manned flight. I am proud 
to say that the famed Wright Brothers, Wilbur and Orville, were native 
Ohioans. These two men are important symbols of an evolving age of 
discovery, an age beginning with the Wright Brothers' first controlled, 
heavier-than-air flight on December 17, 1903. A mere half-a-century or 
so later, mankind was flying not just above the ground, but above our 
planet Earth, which was quickly followed by Neil Armstrong's first 
steps on the moon. It is amazing to just sit back and consider that all 
of these things, all of these incredible achievements have all occurred 
in a very short span of less than one hundred years.
  There is so much to say about the historical and cultural 
significance of the birth of aviation, but I think one of its unique 
educational aspects is its ability to be interactive with students 
outside of the classroom. And, that is one of the main reasons we are 
introducing our National Aviation Heritage Area legislation today.
  Our bill seeks to help foster strong public and private investments 
in many of Ohio's aviation landmarks, landmarks that have enormous 
educational value. Some of these landmarks include the Wright Brothers' 
``Wright Cycle Company,'' located in Dayton and the Wright-Dunbar 
Interpretive Center, where students of all ages can learn about the 
painstaking measures the Wright Brothers and many of their predecessors 
took to achieve what today seems to be so commonplace. Other landmarks 
include the Huffman Prairie Flying Field, where, after the Wright 
Brothers' famous flight in Kitty Hawk, NC, the Brothers returned home 
to perfect the design of the world's first airplane and the Paul 
Laurence Dunbar State Memorial, which showcases this great African 
American poet's strong international voice for racial equality and 
justice. The Heritage Area also includes the Neil Armstrong Museum, 
which highlights the great achievements of man's first walk on the 
moon. If I may add also, Neil Armstrong is a native Ohioan.
  Flight has become a very important square in the patchwork of our 
nation's history, and I am proud that my home State of Ohio has played 
such a large role in its evolution. We are reminded of how manned 
flight has changed our history every time we look skyward and see the 
crisscross of jet contrails. We are reminded of this every time we walk 
through the Rotunda of our very own U.S. Capitol and see the last 
frieze square that depicts the Wright Brothers and their invention. 
And, we are reminded of this by one of the great symbols of America, 
the eagle, a flying bird that represents the freedom of a people.
  It is vital that we protect the sites that have played such an 
important role in aviation. In doing so, we can enhance the education 
and enrichment of our children and our grandchildren for many years to 
come.
                                 ______
                                 
      By Mr. LEVIN (for himself and Mr. McCain):
  S. 181. A bill to require a review of accounting treatment of stock 
option plans, and the establishment of an appropriate stock option 
accounting principle within 1 year; to the Committee on Banking, 
Housing, and Urban Affairs.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. McCain, Mr. Durbin, and Mr. 
        Feingold):
  S. 182. A bill to amend the Internal Revenue Code of 1986 to provide 
that corporate tax benefits from stock option compensation expenses are 
allowed only to the extent such expenses are included in a 
corporation's financial statements; to the Committee on Finance.
  Mr. LEVIN. Mr. President, I am introducing today on behalf of myself 
and Sen. McCain two separate bills relating to stock options. Stock 
options are unfinished business from the last Congress. They are the 
800-pound gorilla that has yet to be caged by corporate reform.
  Stock options allow a company's employees, usually its top 
executives, to purchase company stock at a set price for a specified 
period of time, perhaps 10 years. If the stock price rises after the 
option is issued, the executive can exercise the option, buy the stock 
at the set price, and then sell it on the open market at a profit. 
Today, most CEOs of U.S. publicly traded companies receive a large 
percentage of their pay from stock options.
  Despite their widespread use, stock options remain a stealth form of 
compensation because, under current accounting rules, they never have 
to appear on the company books as a compensation expense. In fact, they 
are the only form of compensation that companies do not have to book as 
an expense at any time. In addition, stock options are the only form of 
compensation that a company can claim as a deductible business expense 
on its tax return, even when no expense is ever recorded on the company 
books.
  These stock option accounting and tax rules are inconsistent and 
illogical. The two bills we are introducing today, the Stock Option 
Accounting Review Act, and the Ending the Double Standard for Stock 
Options Act, were introduced in the last Congress to address this 
problem. Each bill tackles a different aspect of the stock option 
issue. One addresses stock option accounting; the other addresses the 
stock option tax deduction.
  Last year, Senator McCain and I proposed the accounting provision as 
an amendment to the Sarbanes-Oxley corporate reform bill that was 
before the Senate in July. There appeared to be sufficient support to 
pass it at the time, but we were unable to obtain a vote on it or on 
any other stock option legislation. That is why we are back this 
Congress.
  Congress failed to resolve the issue last year, even though stock 
option abuses were repeatedly linked to serious corporate abuses and 
dishonest accounting. In fact, virtually every corporate disaster that 
has struck in recent years has had a stock option component.
  Enron, of course, was the poster child. Congressional investigations, 
including by the Permanent Subcommittee on Investigations on which I 
sit, showed that, at the same time Enron investors and employees were 
losing their shirts, Enron executives were cashing in their stock 
options for tens or hundreds of millions of dollars. Ken Lay, the 
Chairman of the Board, took home $123 million from stock options in 
2000 alone. Jeff Skilling, the CEO, took home over $60 million. Another 
executive, Lou Pai, topped them all by cashing in Enron stock options, 
in 2000, for $265 million.
  Stock options also contributed to Enron's inflated earnings, since 
despite providing the lion's share of executive pay, this compensation 
never appeared on the company books as an expense nor was it ever 
deducted from earnings. And many have blamed stock options for 
encouraging Enron management to rig the company's financial statements 
through other accounting deceptions to help boost apparent income and, 
in turn, the company stock price, so they could sell their Enron stock 
at enormous profit.
  Still others have noted that Enron used about $600 million in stock 
option tax deductions to avoid paying any corporate income taxes in 
four out of the last five years before its bankruptcy while, at the 
same time, touting record amounts of corporate income. What is now only 
beginning to be understood is that Enron's stock option tax deductions 
played a central role in much of its wrongdoing, after all, Enron was 
able to inflate its corporate income with impunity, in part, because 
its stock option tax deductions allowed it to avoid paying taxes on any 
of its phony inflated income.
  
[[Page 1314]]

  Enron was the poster child for stock option abuses, but it was far 
from the only company in that category last year. Worldcom, Tyco, Qwest 
Communications, and many others have stock option stories that are 
equally disturbing.
  And the problems did not stop with companies engaged in accounting 
deceptions or other corporate misconduct. Even companies that never 
appeared on the 2002 rollcall of corporate deception have been 
excoriated in media reports for giving huge stock option pay to 
executives while socking employees and investors with lower stock 
prices, mounting losses, and lousy corporate performance.
  High tech companies that have been the biggest promoters of stock 
options have been some of the biggest culprits. Company after company 
in Silicon Valley paid their executives big bucks via stock options 
while laying off employees, losing money or market share, and stiffing 
investors. One example frequently cited in the media is Lawrence 
Ellison, CEO of Oracle Corp., who exercised options in 2001 to obtain 
profits of $706 million, while his company's stock price dropped by 
more than 50 percent.
  Aggregate stock option statistics are also sobering. Business Week, 
for example, has estimated that stock options now account for ``a 
staggering 15 percent of all shares outstanding.'' Federal Reserve 
Chairman Alan Greenspan estimated that stock options have been used to 
overstate reported company earnings by an average of 6 to 9 percent. 
Perhaps that is why Chairman Greenspan has picked honest stock option 
accounting as his number one post-Enron reform.
  Stock option abuses have been linked to inflated company earnings, 
dishonest accounting, and executive misconduct. These abuses have been 
facilitated by existing accounting and tax rules which allow stock 
option compensation to never appear on a company's books as an expense, 
even when a company claims this compensation as a business expense on 
its tax return. This double standard is fueling Enron-style abuses, and 
it is time for it to end.
  Many in the U.S. business community apparently agree and, unlike the 
Congress, have taken direct action on the stock option issue. In fact, 
over the last year, there has been significant movement in the business 
world to end dishonest stock option accounting.
  Over 120 companies, including such American giants as Coca-Cola, 
General Motors, General Electric, Dow Chemical, Wal-Mart, and Home 
Depot have announced that they will begin expensing options in 2003, 
joining longtime expensers like Boeing and Winn-Dixie. Standard and 
Poors has created additional pressure for honest stock option 
accounting by announcing a new ``core earnings'' calculation for 
companies which requires stock option compensation to be subtracted 
from a company's earnings.
  Accounting experts are also moving. The International Accounting 
Standards Board in London has announced that, by the end of 2003, it 
will issue accounting standards requiring companies to expense stock 
options. The U.S. equivalent, the Financial Accounting Standards Board, 
or FASB, has announced that it will decide by the end of the first 
quarter of this year whether it will issue stock option accounting 
standards similar to those of the International Board.
  While there has been a major shift in the U.S. business world toward 
honest stock option accounting, not all companies are on board. Some 
companies, especially those in the high tech sector, have announced 
that they will not expense stock options until forced to do so. That 
means, until FASB acts, there will be a discrepancy between those 
companies that are voluntarily expensing options and those that are 
not, when there ought to be a level playing field where everyone plays 
by the same accounting rules. It is this discrepancy that continues to 
make our stock option legislation relevant and necessary for 
Congressional action this year.
  Let me describe both bills.
  First is the Stock Option Accounting Review Act. This bill is very 
simple. It would direct FASB to conduct a fresh review of the current 
accounting treatment for stock options and, within one year, establish 
what it deems to be the appropriate stock option accounting standards.
  The bill does not specify the stock option accounting standards that 
FASB should issue; that matter is left to the experts where it belongs. 
But the bill does put the Senate on record as urging FASB to review the 
existing rules and take appropriate action within one year. This 
legislative directive is important, because the only other time the 
Senate has spoken on this issue, in 1994, the Senate majority urged 
FASB to keep allowing companies to exclude stock option expenses from 
their financial statements. The Senate's position contradicted FASB's 
position at the time which was to require stock option expensing. It is 
long past time for the Senate to rescind its mistaken advice.
  The second bill we are introducing today is the Ending the Double 
Standard for Stock Options Act. This bill would not address the 
accounting treatment of stock options. Instead, it would address the 
tax treatment of stock option compensation, ending the costly double 
standard in federal law which allows a company to take a tax deduction 
for stock option compensation, even if the company does not show that 
compensation as a business expense on its financial statements.
  Essentially, our bill would prevent a company from claiming a stock 
option expense on its tax return unless the company also includes that 
expense on its books. It would require companies to be consistent in 
how they treat stock options, and take a corporate tax deduction that 
mirrors the expense shown on the company books. If a company took the 
position that it incurred no expense from stock option compensation on 
its books, the bill would allow the company to take that position, but 
would also require it to take the same approach on its tax return and 
forego any deduction. The bill would stop companies from telling 
stockholders one thing, that it has no stock option expenses, while 
telling the opposite to Uncle Sam.
  And to add insult to injury, in 2001, the IRS issued Revenue Ruling 
2001-1 which determined that companies whose tax liability was erased 
through stock option expenses were not subject to the corporate 
alternative minimum tax. That revenue ruling meant that our most 
successful publicly traded companies, if they doled out enough stock 
options to insiders, could arrange their affairs to escape paying any 
taxes. That absurd result leaves the average taxpayer feeling like a 
chump for paying his fair share when a company like Enron can use its 
success in the stock market to apparently end up tax free.
  One last point. Some opponents of stock option reform argue that 
reining in stock options would hurt the average worker, but this 
contention is nothing more than a red herring. While many average 
workers are eligible for stock options, few actually receive them. 
Stock options are overwhelmingly reserved for top corporate executives.
  A recent Bureau of Labor Statistics survey did the research. This 
nationwide government survey found that in 2000, a banner year for 
stock options, only 1.7 percent of non-executive workers actually got 
any stock options. The BLS survey also looked at corporate executives 
and found that only about 5 percent of these corporate executives 
received any stock options. These results are consistent with the 
findings of a private sector group not associated with the government 
called the National Center for Employee Ownership, which favors stock 
options. Looking at a small sample of companies, the Center reported 
that 70 percent of all stock options were given to managers rather than 
other employees, and about 50 percent were given to the most senior 
executives. The reality is that stock options are a perk mainly 
reserved for a very small group, and neither average workers nor most 
executives would be affected by honest accounting or consistent tax and 
accounting treatment for stock options.
  It is also important to understand that neither of our bills would 
bar 


[[Page 1315]]

any company from issuing stock options. Companies would still be 
able to issue stock options to their executives and other employees. 
The goal of this legislation is not to stop the use of stock options, 
but to promote honest accounting and consistent treatment of stock 
options on federal corporate tax returns.
  Stock option abuses have damaged investor confidence in American 
business. I hope our colleagues will support enactment of these bills 
to help restore investor confidence and end stock option abuses. I ask 
unanimous consent to have reprinted in the Record after my remarks the 
text of both bills.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 181

       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 ``Stock Option Accounting 
     Review Act''.

     SEC. 2. REVIEW OF STOCK OPTION ACCOUNTING TREATMENT.

       Section 108 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
     7218, 116 Stat. 768) is amended by adding at the end the 
     following:
       ``(e) Stock Option Accounting Treatment.--The standard 
     setting body described in section 19(b)(1) of the Securities 
     Act of 1933 shall, for purposes of establishing generally 
     accepted accounting principles--
       ``(1) review the accounting treatment of employee stock 
     options; and
       ``(2) not later than 1 year after the date of enactment of 
     this subsection, adopt an appropriate generally accepted 
     accounting principle for the treatment of employee stock 
     options.''.
                                  ____


                                 S. 182

       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 ``Ending the Double Standard 
     for Stock Options Act''.

     SEC. 2. REQUIREMENTS FOR CONSISTENT TREATMENT OF STOCK 
                   OPTIONS BY CORPORATIONS.

       (a) Consistent Treatment for Tax Deduction.--Section 83(h) 
     of the Internal Revenue Code of 1986 (relating to deduction 
     of employer) is amended--
       (1) by striking ``In the case of'' and inserting:
       ``(1) In general.--In the case of'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Special rules for property transferred pursuant to 
     stock options.--
       ``(A) In general.--In the case of property transferred in 
     connection with a stock option, the deduction otherwise 
     allowable under paragraph (1) shall not exceed the amount the 
     taxpayer has treated as an expense for the purpose of 
     ascertaining income, profit, or loss in a report or statement 
     to shareholders, partners, or other proprietors (or to 
     beneficiaries). In no event shall such deduction be allowed 
     before the taxable year described in paragraph (1).
       ``(B) Special rules for controlled groups.--The Secretary 
     shall prescribe rules for the application of this paragraph 
     in cases where the stock option is granted by a parent or 
     subsidiary corporation (within the meaning of section 424) of 
     the employer corporation.''.
       (b) Consistent Treatment for Research Tax Credit.--Section 
     41(b)(2)(D) of the Internal Revenue Code of 1986 (defining 
     wages for purposes of credit for increasing research 
     expenses) is amended by inserting at the end the following 
     new clause:
       ``(iv) Special rule for stock options and stock-based 
     plans.--The term `wages' shall not include any amount of 
     property transferred in connection with a stock option and 
     required to be included in a report or statement under 
     section 83(h)(2) until it is so included, and the portion of 
     such amount which may be treated as wages for a taxable year 
     shall not exceed the amount of the deduction allowed under 
     section 83(h) for such taxable year with respect to such 
     amount.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property transferred and wages provided on or 
     after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. Nelson of Florida, Mr. Corzine, 
        and Mr. Biden):
  S. 183. A bill to address Securities and Exchange Commission 
authority to impose civil money penalties in administrative proceedings 
for violations of securities laws, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. LEVIN. Mr. President, I am introducing today legislation to 
provide the Securities and Exchange Commission with stronger 
administrative authority to detect, investigate, and punish corporate 
and individual misconduct. This legislation, the SEC Civil Enforcement 
Act, among other measures, would provide the SEC with new authority to 
impose administrative civil fines on those who violate federal 
securities laws. The bill is cosponsored by Senators Bill Nelson, 
Corzine, and Biden. 
  The SEC has repeatedly requested the new enforcement tools that this 
bill would provide, and I ask unanimous consent to print in the Record 
after my remarks a copy of a letter from SEC Chairman Harvey Pitt 
supporting enactment of this legislation.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
                                      United States Securities and


                                          Exchange Commission,

                                  Washington, DC, August 30, 2002.
     Hon. Carl Levin,
     Chairman, Permanent Subcommittee on Investigations, Russell 
         Senate Office Building, Washington, DC.
       Dear Chairman Levin: This letter responds to your letter of 
     August 9th, seeking my views on your proposal to enhance the 
     Commission's authority to seek civil penalties for violations 
     of the federal securities laws, increase the penalties the 
     Commission may seek, and eliminate a procedural requirement 
     that may slow the Commission's efforts to trace and recover 
     misappropriated investor funds.
       The three additional enforcement tools you contemplate 
     reflect recommendations we have made previously in an effort 
     to facilitate our goal of achieving ``real-time 
     enforcement.'' Especially in light of recent events, I 
     believe these proposals would enhance our efforts and the 
     interest of investors. As you know, during this Congressional 
     session, with the bipartisan support of Congress and the 
     Administration, the Commission already has been given, and 
     has begun to implement, greater authority to pursue and 
     punish corporate wrongdoers and enhance corporate 
     accountability. The additional authority about which you 
     inquire would be a welcome addition to our enforcement 
     arsenal, if the proposals achieve bipartisan support.
       Again, thank you for your interest in strengthening 
     penalties for securities fraud violations. Please do not 
     hesitate to contact me or Stephen Cutler, Director of the 
     Division of Enforcement, at (202) 942-4500 if we can be of 
     further assistance.
           Yours truly,
                                                   Harvey L. Pitt.

  Here is a description of what the bill would do.
  First, the bill would grant the SEC additional administrative 
authority to impose civil monetary fines on those who violate federal 
securities laws. Under current law, only broker dealers, investment 
advisers, and certain other persons regulated by the SEC are now 
subject to civil fines. Our bill would expand SEC authority to allow it 
to impose fines on such wrongdoers as, for example, corporate officers, 
directors, auditors, lawyers, or publicly traded companies, none of 
which can now be fined by the SEC in an administrative proceeding. 
These fines would, of course, be subject to judicial review, as are all 
current SEC administrative determinations.
  Hearings held and reports issued by the Permanent Subcommittee on 
Investigations, which spent the last year investigating Enron's 
collapse, determined that the Enron Board of Directors and certain 
highly respected financial institutions helped Enron carry out 
deceptive accounting transactions or other corporate abuses, misleading 
investors and analysts about the company's finances. The latest hearing 
in December also highlighted the fact that the SEC needs additional 
tools to deal with financial institutions. Our bill would give the SEC 
new authority to impose an administrative fine on any bank or 
individual banker who violates the federal securities laws including, 
as in Enron, by helping a public company doctor its books or engage in 
misleading transactions.
  Second, this bill would significantly increase the maximum civil fine 
that the SEC could impose on those whom it has authority to regulate. 
The civil fines that the SEC currently may impose have maximum amounts 
that range from $6,500 to $600,000 per violation. In a day and age 
where some CEOs are making $100 million in a year, and a company like 
Enron reported gross revenues of $100 billion in a single year, a civil 
fine of $6,500 is laughable. Here is what one SEC staff 

[[Page 1316]]

document stated in June 2002, explaining why the agency is seeking 
an increase in its civil fine limits:        

The current maximum penalty amounts may not have the 
desired deterrent effect on  an individual or corporate violator. 
For example, an individual who commits a negligent act is subject 
to a maximum penalty amount of $6,500 per violation. This amount 
is so trivial it cannot possibly have a deterrent effect on 
the violator.
  Our bill would increase the maximum fines from a range of $6,500 to 
$600,000 per violation, to a range that goes from $100,000 to $2 
million per violation. When we are seeing corporate restatements and 
corporate misconduct involving billions of dollars, these larger cash 
fines are critical if they are to have an effective deterrent or 
punitive impact on wrongdoers in the corporate world today.
  Third, the bill would grant the SEC new administrative authority, 
when the SEC has opened an official SEC investigation, to subpoena 
financial records from a financial institution without having to notify 
the subject that such a records request has been made. This authority 
will allow the SEC to evaluate financial transactions, trace funds, and 
analyze relationships without having to alert the subject of the 
investigation to the SEC's actions. Under current law, the SEC either 
has to give the subject advance notice of the subpoena or obtain a 
court order that can delay notification for no longer than 90 days.
  In the cases we are seeing today, where there are allegations that 
officers, directors, and companies are using offshore accounts to 
deposit millions of dollars, enlist foreign investors, and affect the 
accounting and tax treatment of various complex transactions, the SEC 
must be able to look at financial records without giving the account 
holder an opportunity to move funds, change accounts, and further muddy 
the investigative waters. This authority is particularly important in 
light of the Patriot Act, which Congress enacted after the 9-11 
tragedy, requiring the SEC to be on the lookout for money laundering 
through securities accounts. The SEC cannot afford to alert potential 
money launderers to the agency's efforts to review their financial 
accounts for possible money laundering. This bill would bring the SEC's 
subpoena authority into alignment with the subpoena authority of 
federal banking agencies that are already exempted by statute from 
having to notify account holders of agency subpoenas to review their 
financial records. Again, the SEC has requested this new enforcement 
tool, and this bill would provide it.
  This bill is an important compliment to the new Sarbanes-Oxley law 
which stiffened criminal penalties for securities fraud, because this 
bill would stiffen enforcement mechanisms on the civil side. Last year, 
I tried to incorporate it into the Sarbanes-Oxley Act, but was unable 
to obtain a vote on my amendment. That is why I am reintroducing the 
legislation this year. Since many corporate and accounting cases 
warrant civil rather than criminal treatment, strengthening the SEC's 
civil enforcement authority is another critical step in improving its 
effectiveness as an enforcement agency to deter and punish this 
misconduct.
  Given the current disillusionment among the American people and other 
investors with American public companies, Congress needs to provide 
leadership to restore investor confidence in our markets, in SEC 
oversight, and in company financial statements so that investors can 
trust them to reflect the true state of a company's financial 
condition. I hope my colleagues will join me in supporting this 
legislation and winning its enactment during the 108th Congress.
  I ask unanimous consent to have printed in the Record the full text 
of the bill.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 183

       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 ``SEC Civil Enforcement Act''.

     SEC. 2. SECURITIES CIVIL ENFORCEMENT PROVISIONS.

       (a) Authority To Assess Civil Money Penalties.--
       (1) Securities act of 1933.--Section 8A of the Securities 
     Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end 
     the following new subsection:
       ``(g) Authority of the Commission To Assess Money 
     Penalty.--
       ``(1) In general.--In any cease-and-desist proceeding under 
     subsection (a), the Commission may impose a civil monetary 
     penalty if it finds, on the record after notice and 
     opportunity for hearing, that a person is violating, has 
     violated, or is or was a cause of the violation of, any 
     provision of this title or any rule or regulation thereunder, 
     and that such penalty is in the public interest.
       ``(2) Maximum amount of penalty.--
       ``(A) First tier.--The maximum amount of penalty for each 
     act or omission described in paragraph (1) shall be $100,000 
     for a natural person or $250,000 for any other person.
       ``(B) Second tier.--Notwithstanding subparagraph (A), the 
     maximum amount of penalty for such act or omission described 
     in paragraph (1) shall be $500,000 for a natural person or 
     $1,000,000 for any other person, if the act or omission 
     involved fraud, deceit, manipulation, or deliberate or 
     reckless disregard of a statutory or regulatory requirement.
       ``(C) Third tier.--Notwithstanding subparagraphs (A) and 
     (B), the maximum amount of penalty for each act or omission 
     described in paragraph (1) shall be $1,000,000 for a natural 
     person or $2,000,000 for any other person, if--
       ``(i) the act or omission involved fraud, deceit, 
     manipulation, or deliberate or reckless disregard of a 
     statutory or regulatory requirement; and
       ``(ii) such act or omission directly or indirectly resulted 
     in substantial losses or created a significant risk of 
     substantial losses to other persons or resulted in 
     substantial pecuniary gain to the person who committed the 
     act or omission.
       ``(3) Evidence concerning ability to pay.--In any 
     proceeding in which the Commission or the appropriate 
     regulatory agency may impose a penalty under this section, a 
     respondent may present evidence of the ability of the 
     respondent to pay such penalty. The Commission or the 
     appropriate regulatory agency may, in its discretion, 
     consider such evidence in determining whether the penalty is 
     in the public interest. Such evidence may relate to the 
     extent of the person's ability to continue in business and 
     the collectability of a penalty, taking into account any 
     other claims of the United States or third parties upon the 
     assets of that person and the amount of the assets of that 
     person.''.
       (2) Securities exchange act of 1934.--Section 21B(a) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a)) is 
     amended--
       (A) in paragraph (4), by striking ``supervision;'' and all 
     that follows through the end of the subsection and inserting 
     ``supervision.'';
       (B) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively, and moving the 
     margins 2 ems to the right;
       (C) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (D) by striking ``In any proceeding'' and inserting the 
     following:
       ``(1) In general.--In any proceeding''; and
       (E) by adding at the end the following:
       ``(2) Other money penalties.--In any proceeding under 
     section 21C against any person, the Commission may impose a 
     civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, or is or was a cause of the 
     violation of, any provision of this title or any rule or 
     regulation thereunder, and that such penalty is in the public 
     interest.''.
       (3) Investment company act of 1940.--Section 9(d)(1) of the 
     Investment Company Act of 1940 (15 U.S.C. 80a-9(d)(1)) is 
     amended--
       (A) in subparagraph (C), by striking ``therein;'' and all 
     that follows through the end of the paragraph and inserting 
     ``supervision.'';
       (B) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively, and moving the 
     margins 2 ems to the right;
       (C) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (D) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (E) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (f) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, or is or was a cause of the 
     violation of, any provision of this title or any rule or 
     regulation thereunder, and that such penalty is in the public 
     interest.''.
       (4) Investment advisers act of 1940.--Section 203(i)(1) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(1)) 
     is amended--
       (A) in subparagraph (D), by striking ``supervision;'' and 
     all that follows through the end of the paragraph and 
     inserting ``supervision.'';
     
[[Page 1317]]     
     
       (B) by redesignating subparagraphs (A) through (D) as 
     clauses (i) through (iv), respectively, and moving the 
     margins 2 ems to the right;
       (C) by inserting ``that such penalty is in the public 
     interest and'' after ``hearing,'';
       (D) by striking ``In any proceeding'' and inserting the 
     following:
       ``(A) In general.--In any proceeding''; and
       (E) by adding at the end the following:
       ``(B) Other money penalties.--In any proceeding under 
     subsection (k) against any person, the Commission may impose 
     a civil monetary penalty if it finds, on the record after 
     notice and opportunity for hearing, that such person is 
     violating, has violated, or is or was a cause of the 
     violation of, any provision of this title or any rule or 
     regulation thereunder, and that such penalty is in the public 
     interest.''.
       (b) Increased Maximum Civil Money Penalties.--
       (1) Securities act of 1933.--Section 20(d)(2) of the 
     Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is amended--
       (A) in subparagraph (A)(i)--
       (i) by striking ``$5,000'' and inserting ``$100,000''; and
       (ii) by striking ``$50,000'' and inserting ``$250,000'';
       (B) in subparagraph (B)(i)--
       (i) by striking ``$50,000'' and inserting ``$500,000''; and
       (ii) by striking ``$250,000'' and inserting ``$1,000,000''; 
     and
       (C) in subparagraph (C)(i)--
       (i) by striking ``$100,000'' and inserting ``$1,000,000''; 
     and
       (ii) by striking ``$500,000'' and inserting ``$2,000,000''.
       (2) Securities exchange act of 1934.--
       (A) Penalties.--Section 32 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78ff) is amended--
       (i) in subsection (b), by striking ``$100'' and inserting 
     ``$10,000''; and
       (ii) in subsection (c)--

       (I) in paragraph (1)(B), by striking ``$10,000'' and 
     inserting ``$500,000''; and
       (II) in paragraph (2)(B), by striking ``$10,000'' and 
     inserting ``$500,000''.

       (B) Insider trading.--Section 21A(a)(3) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u-1(a)(3)) is amended by 
     striking ``$1,000,000'' and inserting ``$2,000,000''.
       (C) Administrative proceedings.--Section 21B(b) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78u-2(b)) is 
     amended--
       (i) in paragraph (1)--

       (I) by striking ``$5,000'' and inserting ``$100,000''; and
       (II) by striking ``$50,000'' and inserting ``$250,000'';

       (ii) in paragraph (2)--

       (I) by striking ``$50,000'' and inserting ``$500,000''; and
       (II) by striking ``$250,000'' and inserting ``$1,000,000''; 
     and

       (iii) in paragraph (3)--

       (I) by striking ``$100,000'' and inserting ``$1,000,000''; 
     and
       (II) by striking ``$500,000'' and inserting ``$2,000,000''.

       (D) Civil actions.--Section 21(d)(3)(B) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended--
       (i) in clause (i)--

       (I) by striking ``$5,000'' and inserting ``$100,000''; and
       (II) by striking ``$50,000'' and inserting ``$250,000'';

       (ii) in clause (ii)--

       (I) by striking ``$50,000'' and inserting ``$500,000''; and
       (II) by striking ``$250,000'' and inserting ``$1,000,000''; 
     and

       (iii) in clause (iii)--

       (I) by striking ``$100,000'' and inserting ``$1,000,000''; 
     and
       (II) by striking ``$500,000'' and inserting ``$2,000,000''.

       (3) Investment company act of 1940.--
       (A) Ineligibility.--Section 9(d)(2) of the Investment 
     Company Act of 1940 (15 U.S.C. 80a-9(d)(2)) is amended--
       (i) in subparagraph (A)--

       (I) by striking ``$5,000'' and inserting ``$100,000''; and
       (II) by striking ``$50,000'' and inserting ``$250,000'';

       (ii) in subparagraph (B)--

       (I) by striking ``$50,000'' and inserting ``$500,000''; and
       (II) by striking ``$250,000'' and inserting ``$1,000,000''; 
     and

       (iii) in subparagraph (C)--

       (I) by striking ``$100,000'' and inserting ``$1,000,000''; 
     and
       (II) by striking ``$500,000'' and inserting ``$2,000,000''.

       (B) Enforcement of investment company act.--Section 
     42(e)(2) of the Investment Company Act of 1940 (15 U.S.C. 
     80a-41(e)(2)) is amended--
       (i) in subparagraph (A)--

       (I) by striking ``$5,000'' and inserting ``$100,000''; and
       (II) by striking ``$50,000'' and inserting ``$250,000'';

       (ii) in subparagraph (B)--

       (I) by striking ``$50,000'' and inserting ``$500,000''; and
       (II) by striking ``$250,000'' and inserting ``$1,000,000''; 
     and

       (iii) in subparagraph (C)--

       (I) by striking ``$100,000'' and inserting ``$1,000,000''; 
     and
       (II) by striking ``$500,000'' and inserting ``$2,000,000''.

       (4) Investment advisers act of 1940.--
       (A) Registration.--Section 203(i)(2) of the Investment 
     advisers Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended--
       (i) in subparagraph (A)--

       (I) by striking ``$5,000'' and inserting ``$100,000''; and
       (II) by striking ``$50,000'' and inserting ``$250,000'';

       (ii) in subparagraph (B)--

       (I) by striking ``$50,000'' and inserting ``$500,000''; and
       (II) by striking ``$250,000'' and inserting ``$1,000,000''; 
     and

       (iii) in subparagraph (C)--

       (I) by striking ``$100,000'' and inserting ``$1,000,000''; 
     and
       (II) by striking ``$500,000'' and inserting ``$2,000,000''.

       (B) Enforcement of investment advisers act.--Section 
     209(e)(2) of the Investment advisers Act of 1940 (15 U.S.C. 
     80b-9(e)(2)) is amended--
       (i) in subparagraph (A)--

       (I) by striking ``$5,000'' and inserting ``$100,000''; and
       (II) by striking ``$50,000'' and inserting ``$250,000'';

       (ii) in subparagraph (B)--

       (I) by striking ``$50,000'' and inserting ``$500,000''; and
       (II) by striking ``$250,000'' and inserting ``$1,000,000''; 
     and

       (iii) in subparagraph (C)--

       (I) by striking ``$100,000'' and inserting ``$1,000,000''; 
     and
       (II) by striking ``$500,000'' and inserting ``$2,000,000''.

       (c) Authority To Obtain Financial Records.--Section 21(h) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78u(h)) is 
     amended--
       (1) by striking paragraphs (2) through (8);
       (2) in paragraph (9), by striking ``(9)(A)'' and all that 
     follows through ``(B) The'' and inserting ``(3) The'';
       (3) by inserting after paragraph (1), the following:
       ``(2) Access to financial records.--
       ``(A) In general.--Notwithstanding section 1105 or 1107 of 
     the Right to Financial Privacy Act of 1978, the Commission 
     may obtain access to and copies of, or the information 
     contained in, financial records of any person held by a 
     financial institution, including the financial records of a 
     customer, without notice to that person, when it acts 
     pursuant to a subpoena authorized by a formal order of 
     investigation of the Commission and issued under the 
     securities laws or pursuant to an administrative or judicial 
     subpoena issued in a proceeding or action to enforce the 
     securities laws.
       ``(B) Nondisclosure of requests.--If the Commission so 
     directs in its subpoena, no financial institution, or 
     officer, director, partner, employee, shareholder, 
     representative or agent of such financial institution, shall, 
     directly or indirectly, disclose that records have been 
     requested or provided in accordance with subparagraph (A), if 
     the Commission finds reason to believe that such disclosure 
     may--
       ``(i) result in the transfer of assets or records outside 
     the territorial limits of the United States;
       ``(ii) result in improper conversion of investor assets;
       ``(iii) impede the ability of the Commission to identify, 
     trace, or freeze funds involved in any securities 
     transaction;
       ``(iv) endanger the life or physical safety of an 
     individual;
       ``(v) result in flight from prosecution;
       ``(vi) result in destruction of or tampering with evidence;
       ``(vii) result in intimidation of potential witnesses; or
       ``(viii) otherwise seriously jeopardize an investigation or 
     unduly delay a trial.
       ``(C) Transfer of records to government authorities.--The 
     Commission may transfer financial records or the information 
     contained therein to any government authority, if the 
     Commission proceeds as a transferring agency in accordance 
     with section 1112 of the Right to Financial Privacy Act of 
     1978 (12 U.S.C. 3412), except that a customer notice shall 
     not be required under subsection (b) or (c) of that section 
     1112, if the Commission determines that there is reason to 
     believe that such notification may result in or lead to any 
     of the factors identified under clauses (i) through (viii) of 
     subparagraph (B) of this paragraph.'';
       (4) by striking paragraph (10); and
       (5) by redesignating paragraphs (11), (12), and (13) as 
     paragraphs (4), (5), and (6), respectively.

                                 ______
                                 
      By Mr. DODD (for himself, Ms. Mikulski, Mr. Jeffords, Mrs. 
        Murray, Ms. Landrieu, and Mr. Dayton):
  S. 184. A bill to amend section 401(b)(2) of the Higher Education Act 
of 1965 regarding the Federal Pell Grant maximum amount; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. DODD. Mr. President, I rise, and am joined by my colleagues 
Senator Mikulski, Senator Jeffords, Senator 


[[Page 1318]]

Murray, Senator Landrieu 
and Senator Dayton, to introduce legislation to amend the Higher 
Education Act to improve access to higher education for low- and 
middle-income students by
doubling the authorized maximum Pell Grant within six years. This bill 
has the strong support of the Student Aid Alliance, whose 60 
organizations represent students, colleges, parents, and others who 
care about higher education.
  Pell Grants were established in the early 1970s by our former 
colleague, Claiborne Pell, of Rhode Island. They are the largest source 
of federal grant aid for college students. For millions of low- and 
middle-income students they are the difference between attending or not 
attending college. But, unfortunately, they don't make as much of a 
difference as they used to.
  In 1975, the maximum appropriated Pell Grant covered all of the 
average student's tuition, fees, room, and board at community colleges. 
It covered about 80 percent of those costs at public universities and 
about 40 percent at private universities. Today, Pell Grant's 
purchasing power has dropped by more than 30 percent at community 
colleges and been more than cut in half at universities. It covers only 
38 percent of the costs at public universities and 15 percent at 
private universities. That's not just a drop, it's a free-fall.
  For students from the lowest income families, college is getting 
farther and farther out of reach. Since 1975, as a percentage of the 
family income of the poorest 20 percent of families, the cost of public 
universities has increased by half and the cost of private universities 
has doubled. For middle-income families, the cost of college also has 
increased significantly as a percentage of income.
  As a result of all this, low- and middle-income students who want to 
attend college are forced to finance their education with an ever-
increasing percentage of loans as opposed to grants, which effectively 
increases their cost of attendance even more and in many cases, keeps 
them from going to college at all.
  Of course, the President's budget would have frozen the maximum Pell 
Grant. So, on top of leaving millions of children behind by failing to 
meet the bipartisan promises of the No Child Left Behind Act, the 
President's budget would leave even more children behind who work hard 
and do well in school and want to go on to college.
  We can't kid ourselves, if we're serious about leaving no child 
behind, if we're serious about having a society where equal opportunity 
for all is more than just rhetoric, then we need to reinvigorate the 
Pell program.
  The Student Aid Alliance put it very well, in talking about students, 
when they said that ``investing in their future is investing in our 
nation's future.'' We can start investing in our Nation's future by 
supporting the amendment that will be offered to the Omnibus 
appropriations bill today to increase the maximum appropriated Pell 
Grant to $4,500.
  That won't bring Pell Grant's purchasing power back to where it was 
in 1975, but it is a critical first step, and I intend to continue the 
effort through this bill and other measures as we reauthorize the 
Higher Education Act this Congress.
  I hope that my colleagues will join me.
  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. 184

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

     SECTION 1. FEDERAL PELL GRANT MAXIMUM AMOUNT.

       Section 401(b)(2) of the Higher Education Act of 1965 (20 
     U.S.C. 1070a(b)(2)) is amended--
       (1) by redesignating subparagraph (B) as subparagraph (C);
       (2) by amending subparagraph (A) to read as follows:
       ``(A) Except as provided in subparagraph (B), the amount of 
     the Federal Pell Grant for a student eligible under this part 
     shall be--
       ``(i) $6,700 for academic year 2004-2005;
       ``(ii) $7,600 for academic year 2005-2006;
       ``(iii) $8,600 for academic year 2006-2007;
       ``(iv) $9,600 for academic year 2007-2008;
       ``(v) $10,600 for academic year 2008-2009; and
       ``(vi) $11,600 for academic year 2009-2010,
     less an amount equal to the amount determined to be the 
     expected family contribution with respect to that student for 
     that year.''; and
       (3) by inserting after subparagraph (A) (as so amended) the 
     following:
       ``(B) If the Secretary determines that the increase from 
     one academic year to the next in the amount of the maximum 
     Federal Pell Grant authorized under subparagraph (A) does not 
     increase students' purchasing power (relative to the cost of 
     attendance at an institution of higher education) by at least 
     5 percentage points, then the amount of the maximum Federal 
     Pell Grant authorized under subparagraph (A) for the academic 
     year for which the determination is made shall be increased 
     by an amount sufficient to achieve such a 5 percentage point 
     increase.''.
                                 ______
                                 
      By Mr. DeWINE (for himself and Mr. Durbin):
  S. 186. A bill to amend the Employee Retirement Income Security Act 
of 1974, the Public Health Service Act, and the Internal Revenue Code 
of 1986 to provide health insurance protections for individuals who are 
living organ donors; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. DeWINE. Mr. President, I rise today to raise further awareness of 
an issue that affects over 22,000 people a year, and that issue is 
organ donation. The sad fact about organ donations is this: We have the 
medical know-how to save lives, but we lack the organs. We lack organs 
because most Americans simply are unaware of the life-giving difference 
they can make by choosing to become organ donors.
  Sadly, each day the waiting list for those needing organs continues 
to grow. Today, over 80,000 people remain on the national transplant 
waiting list. Right now, more than 56,000 people, alone, are waiting 
for kidney transplants. That number is expected to double within the 
next decade. Additionally, close to 6,000 people die each year just 
waiting for an available organ.
  To remedy the organ shortage, we must increase public awareness. By 
educating the public and raising awareness, more people will choose to 
become organ donors. At the very least, through these efforts, we can 
encourage more families to discuss what their wishes are and whether 
they would want to be organ donors.
  But, our efforts must not stop there. We must do more than just 
implement public awareness campaigns, because the face of organ 
donation is changing. For the first time ever, the number of living 
organ donors outnumbered cadaver donors. In 2001, there were 6,082 
donor cadavers while 6,534 people opted to become living donors, 
usually giving up a healthy kidney to help a family member or friend.
  Recognizing this, my colleague, Senator Durbin, and I are introducing 
a bill today that would help protect living organ donors in the group 
insurance market. Our bill would ensure that those individuals who 
choose to be living organ donors are not discriminated against in the 
insurance marketplace. Our bill builds on the protections provided by 
the Health Insurance Portability and Accountability Act, so that living 
organ donors are not denied insurance nor are they applied 
discriminatory insurance premiums because of their living organ donor 
status.
  Quite simply, a brother who donates a part of his kidney to his 
sister should not be denied health insurance. But tragically, that is 
what oftentimes happens. Frequently, individuals who are living organ 
donors are denied health insurance or restricted from the insurance 
market. Instead, we should celebrate living organ donors and remove 
obstacles and barriers for the successful donation of organs. Insurance 
concerns should not undermine someone's decision to be a living organ 
donor.
  Some states are evaluating how living organ donors affect the market. 
States are amending their Family Medical Leave eligibility so that 
living organ donors can participate and benefit from the program. The 
Federal Government, with the Organ Donor Leave Act of 1999, offered 30 
days paid leave to Federal employees who chose 

[[Page 1319]]

to be an organ donor. 
But, paid leave and job protection doesn't mean much if people are 
denied health insurance or are required to pay higher premiums because 
they donated an organ to save another person's life.
  The impact of living organ donation is profound. A living organ donor 
not only can save the life of one patient, but can also take that person 
off the waiting list for a cadaver donation. That means the next person 
on the waiting list is ``bumped up'' a spot, giving additional hope to 
the 86,000 persons on the national transplant waiting list.
  Living organ donors give family members and friends a second chance 
at life and the opportunity to reduce the number of people on the 
waiting list to receive an organ. It is time for Congress to make a 
sensible decision in support of a person's decision to be a living 
organ donor.
  I encourage my colleagues to join me in co-sponsoring this bill.
                                 ______
                                 
      By Mr. EDWARDS:
  S. 187. A bill to provide for the elimination of significant 
vulnerabilities in the information technology of the Federal 
Government, and for other purposes; to the Committee on Governmental 
Affairs.
  Mr. EDWARDS. Mr. President, I rise today to introduce the National 
Cyber Security Leadership Act of 2003, a bill that calls on the Federal 
Government to lead by example in shoring up its computers and 
protecting them against cyber attacks.
  I introduce this bill because our Nation's computers and networks are 
increasingly vulnerable to cyber attacks. A week after the September 11 
attacks, a cyber attack spread across 86,000 computers over several 
days, causing unknown amounts of financial and economic damage. Two 
months before that, a cyber attack called Code Red infected 150,000 
computers in 14 hours. According to cyber security experts, Federal 
computers have already been used as weapons in large-scale cyber 
attack.
  There aren't just amateur teenage hackers. Terrorists, including al 
Qaeda operatives, have browsed Internet sites offering software that 
would help them take down power, water, transport and communications 
grids.
  One of the principal reasons that companies do not act to secure 
their systems is that the Federal Government does not act to secure its 
own systems. Unfortunately, Federal agencies continue to be among the 
worst offenders failing to protect themselves against cyber attack. 
Last November, a Congressional report card gave 14 agencies a failing 
grade for their computer security efforts. These vulnerabilities leave 
our Federal agencies exposed to hackers, system shutdowns, and cyber 
terrorist infiltration.
  Clearly, we need to act now to strengthen our computer systems. I 
believe the first step in this process is to have our Federal agencies 
lead by example.
  The National Cyber Security Leadership Act of 2003 would establish 
higher standards for Federal Government computer safety. The National 
Institute of Standards and Technology would establish the standards 
after individual agencies conduct comprehensive tests of their network 
systems and report on their weaknesses. These procedures will 
strengthen our government's resistance to cyber attacks and will 
demonstrate to the business community the tremendous value in 
conducting comprehensive security tests and monitoring new 
developments.
  I have developed this important piece of legislation with assistance 
from Mr. Alan Paller, Director of Research for the SANS Institute; Mr. 
Franklin S. Reeder, Chairman of the Center for Internet Security and of 
the Computer System Security and Privacy Advisory Committee; and 
several computer security experts in the Federal Government.
  We cannot afford to wait until we experience a computer meltdown. I 
urge my colleagues to join with me in helping our Federal agencies to 
lead by example.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Corzine, Mr. Wyden, and Mr. 
        Nelson of Florida):
  S. 188. A bill to impose a moratorium on the implementation of data-
mining under the Total Information Awareness program of the Department 
of Defense and any similar program of the Department of Homeland 
Security, and for other purposes; to the Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, I am pleased today to introduce the 
Data-Mining Moratorium Act of 2003. Like many Americans, I was 
surprised to learn during the last few months that the Department of 
Defense has spent hundreds of millions of dollars developing a data-
mining system called Total Information Awareness while permitting the 
progeny of Total Information Awareness to appear in places like the 
Department of Homeland Security. The untested and controversial 
intelligence procedure known as data-mining is capable of maintaining 
extensive files containing both public and private records on each and 
every American. Coupled with the expanded domestic surveillance already 
underway by this Administration, this unchecked system is a dangerous 
step forward and threatens one of the values that we're fighting for, 
freedom. The Administration has a heavy burden of proof that such 
extreme measures are necessary.
  The Data-Mining Moratorium Act of 2003 would immediately suspend 
data-mining in the Department of Defense and the Department of Homeland 
Security until Congress has conducted a thorough review of Total 
Information Awareness and the practice of data-mining.
  Without Congressional review and oversight, data-mining would allow 
the Department of Homeland Security, the Department of Defense and 
other government agencies to collect and analyze a combination of 
intelligence data and personal information like individuals' traffic 
violations, credit card purchases, travel records, medical records, 
communications records, and virtually any information collected on 
commercial or public databases. Through comprehensive data-mining, as 
envisioned with Total Information Awareness, everything from people's 
video rentals or drugstore purchases made with a credit card to their 
most private health concerns could be fed into a computer and monitored 
by the Federal Government.
  Using massive data mining, like Total Information Awareness, the 
government hopes to be able to detect potential terrorists. There is no 
evidence that data-mining will, in fact, prevent terrorism. And when 
one considers the potential for errors in data, for example, credit 
agencies that have data about John R. Smith on John D. Smith's credit 
report, the prospect of ensnaring many innocents is real. This approach 
might also lead to the same kinds of so-called ``preventive'' 
detentions that are unconstitutional and put more than 1,100 
individuals in jail after September 11. Although none of these people 
were ever charged with orchestrating or aiding the attacks, they were 
often held for months on end, and went for weeks without access to 
counsel. There is every reason to be concerned that uncontrolled data-
mining systems would lead to the same abuse of power.
  The Administration's assurances that a data-mining system will not 
abuse our privacy rights ring hollow, particularly to those of us who 
questioned the breathtaking new Federal powers in the USA PATRIOT Act. 
We heard these same assurances when the Administration pressed for 
enactment of that sweeping legislation in the months after September 
11th, that the government would act with restraint to ensure that its 
application of the Act would not infringe on our liberties. The 
opposite has turned out to be true. In fact, some of the most serious 
infringements on our personal freedoms in the USA PATRIOT Act can now 
contribute to the data-mining effort.
  The USA PATRIOT Act allows the government to compel businesses to 
produce records about people who had only a remote contact with a 
person sought in connection with an investigation of terrorism, 
including sitting on an airplane with the suspect, or having used the 
same payphone as the 


[[Page 1320]]


suspect. Under the PATRIOT Act, any business 
records can be compelled, including those containing sensitive personal 
information like medical records from hospitals or doctors, financial 
records, or records of what books someone has taken out of the 
liberary. This information is exactly the kind of data
that data-mining programs like Total Information Awareness will use 
when compiling its files on the American people.
  The danger of data-mining is compounded not only by provisions in the 
USA PATRIOT Act, but also by the Administration's loosening of domestic 
surveillance restrictions for FBI agents last year, restrictions that 
were put in place following FBI abuses under J. Edgar Hoover. These 
various initiatives of the Administration are building on each other to 
give away more and more of our personal information, and give away more 
and more of our personal freedoms.
  It is reasonable to ask Americans to sacrifice some personal freedom 
like submitting to more extensive security screenings at airports. But 
should we allow the government to track our every move, from what items 
we purchase online, to our medical records, to our financial records, 
without limits and without accountability? I believe most Americans 
would say that that's a police state, not the America we know and love. 
We would catch more terroists in a police state. I don't doubt that. 
But that's not a country in which most Americans would want to live.
  Each time we have been told that government authorities would use 
restraint with its new powers, but Congress and the American people 
should not find comfort in these assurances, especially since they have 
been made by an Administration that has been operating in greater and 
greater secrecy. The Administration must suspend this massive data 
mining project until Congress can determine whether the proposed 
benefits of this practice come at too high a price to our privacy and 
personal liberties.
  I urge my colleagues to support this measure, and 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. 188

       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 ``Data-Mining Moratorium Act 
     of 2003''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Use of advanced technology is an essential tool in the 
     fight against terrorism.
       (2) There has been no demonstration that data-mining by a 
     government, including data-mining such as that which is to 
     occur under the Total Information Awareness program, is an 
     effective tool for preventing terrorism.
       (3) Data-mining under the Total Information Awareness 
     program or a similar program would provide the Federal 
     Government with access to extensive files of private as well 
     as public information on an individual.
       (4) There are significant concerns regarding the extent to 
     which privacy rights of individuals would be adversely 
     affected by data-mining carried out by their government.
       (5) Congress has not reviewed any guidelines, rules, or 
     laws concerning implementation and use of data-mining by 
     Federal Government agencies.

     SEC. 3. MORATORIUM ON IMPLEMENTATION OF TOTAL INFORMATION 
                   AWARENESS PROGRAM FOR DATA-MINING.

       (a) Moratorium.--During the period described in subsection 
     (b), no officer or employee of the Department of Defense or 
     the Department of Homeland Security may take any action to 
     implement or carry out for data-mining purposes any part of 
     (including any research or development under)--
       (1) the Department of Defense component of the Total 
     Information Awareness program or any other data-mining 
     program of the Department of Defense; or
       (2) any data-mining program of the Department of Homeland 
     Security that is similar or related to the Total Information 
     Awareness program.
       (b) Moratorium Period.--The period referred to in 
     subsection (a) for a department of the Federal Government is 
     the period beginning on the date of the enactment of this Act 
     and ending on the date (after the date of the enactment of 
     this Act) on which there is enacted a law specifically 
     authorizing data-mining by such department.

     SEC. 4. REPORTS ON DATA-MINING ACTIVITIES.

       (a) Requirement for Report.--The Secretary of Defense, the 
     Attorney General, and the head of each other department or 
     agency of the Federal Government that is engaged in any 
     activity to use or develop data-mining technology shall each 
     submit to Congress a report on all such activities of the 
     department or agency under the jurisdiction of that official.
       (b) Content of report.--A report submitted under subsection 
     (a) shall include, for each activity to use or develop data-
     mining technology that is required to be covered by the 
     report, the following information:
       (1) A thorough description of the activity.
       (2) A thorough discussion of the plans for the use of such 
     technology.
       (3) A thorough discussion of the policies, procedures, and 
     guidelines that are to be applied in the use of such 
     technology for data-mining in order to--
       (A) protect the privacy rights of individuals; and
       (B) ensure that only accurate information is collected.
       (c) Time for Report.--Each report required under subsection 
     (a) shall be submitted not later than 90 days after the date 
     of the enactment of this Act.

     SEC. 5. CONSTRUCTION OF PROVISIONS.

       Nothing in this Act shall be construed to preclude the 
     Department of Defense or the Department of Homeland Security 
     from conducting--
       (1) computer searches of public information; or
       (2) computer searches that are based on a particularized 
     suspicion of an individual.

                                 ______
                                 
      By Mr. WYDEN (for himself, Mr. Allen, Mr. Lieberman, Mr. Warner, 
        Ms. Mikulski, Mr. Hollings, Ms. Landrieu, Mrs. Clinton, Mr. 
        Levin, and Mr. Bayh):
  S. 189. A bill to authorize appropriations for nanoscience, 
nanoengineering, and nanotechnology research, and for other purposes; 
to the Committee on Commerce, Science, and Transportation.
  Mr. WYDEN. Mr. President, far from the stuff of science fiction, 
nanotechnology has become a reality in the lives of many Americans. 
While there is tremendous potential for further study in this field, 
nanotechnology's current impacts range from the pedestrian to the 
extraordinary. A TV commercial demonstrates the practicality of 
nanotechnology through stain-resistant pants. Prosthetic and medical 
implants have been improved through molecularly designed surfaces that 
interact with the cells of the body. There is no question that this 
field will dramatically change the way Americans live.
  I was pleased that my colleagues in the Commerce Committee in the 
last Congress recognized the tremendous potential of nanotechnology and 
passed this bill out of committee with unanimous bipartisan support. 
Nanotechnology innovations will bring enormous benefits to America's 
economy and to nearly every aspect of life in the coming decades. My 
own judgment is the nanotechnology revolution has the potential to 
change America on a scale equal to, if not greater than, the computer 
revolution. I am determined that the United States will not miss, but 
will mine the opportunities of nanotechnology. At present, efforts in 
the nanotechnology field are strewn across a half-dozen Federal 
agencies. I want America to marshal its various nanotechnology efforts 
into one driving force to remain the world's leader in this burgeoning 
field. And I believe Federal support is essential to achieving that 
goal.
  Legislation I am introducing today will provide a smart, accelerated, 
and organized approach to nanotechnology research, development, and 
education. In my view, there are three major steps America must take to 
ensure the highest success for its nanotechnology efforts.
  First, a National nanotechnology Research Program should be 
established to superintend long-term fundamental nanoscience and 
engineering research. The program's goals will be to ensure America's 
leadership and economic competitiveness in nanotechnology, and to make 
sure ethical and social concerns are taken into account alongside the 
development of this discipline.
  Second, the Federal Government should support nanoscience through a 
program of research grants, and also through the establishment of 
nanotechnology research centers. These 


[[Page 1321]]

centers would serve as key 
components of a national research infrastructure, bringing together 
experts from the various disciplines that must intersect for nanoscale 
projects to succeed and building a network that includes State-
supported centers. As these research efforts take shape, educational 
opportunities will be the key to their long-
term success. Through this legislation, I commit to helping students 
who would enter the field of nanotechnology. This discipline requires 
multiple areas of expertise. Students with the drive and the talent to 
tackle physics, chemistry, and the material sciences simultaneously 
deserve all the support we can offer.
  Third, the government should create connections across its agencies 
to aid in the meshing of various nanotechnology efforts. These could 
include a national steering office, and a Presidential nanotechnology 
Advisory Committee, modeled on the President's Information Technology 
Advisory Committee.
  I also believe that as these organizational support structures are 
put into place, rigorous evaluation must take place to ensure the 
maximum efficiency of our efforts. Personally, I would call for an 
annual review of America's nanotechnology efforts from the Presidential 
Advisory Committee, and a periodic review from the National Academy of 
Sciences. In addition to monitoring our own progress, the United States 
should keep abreast of the world's nanotechnology efforts through a 
series of benchmarking studies.
  If the Federal Government fails to get behind nanotechnology now with 
organized, goal-oriented support, this Nation runs the risk of falling 
behind others in the world who recognize the potential of this 
discipline. Nanotechnology is already making pants more stain-
resistant, making windows self-washing and making car parts stronger 
with tiny particles of clay. What America risks missing is the next 
generation of nanotechnology. In the next wave, nanoparticles and 
nanodevices will become the building blocks of our health care, 
agriculture, manufacturing, environmental cleanup, and even national 
security.
  America risks missing a revolution in electronics, where a device the 
size of a sugar cube could hold all of the information in the Library 
of Congress. Today's silicon-based technologies can only shrink so 
small. Eventually, nanotechnologies will grow devices from the 
molecular level up. Small though they may be, their capabilities and 
their impact will be enormous. Spacecraft could be the size of mere 
molecules.
  America risks missing a revolution in health care. In my home State, 
Oregon State University researchers are working on the microscale to 
create lapel-pin-sized biosensors that use the color-changing cells of 
the Siamese fighting fish to provide instant visual warnings when a 
biotoxin is present. An antimicrobial dressing for battlefield wounds 
is already available today, containing silver nanocrystals that prevent 
infection and reduce inflammation. The health care possibilities for 
nanotechnology are limitless. Eventually, nanoscale particles will 
travel human bodies to detect and cure disease. Chemotherapy could 
attack individual cancer cells and leave healthy cells intact. Tiny 
bulldozers could unclog blocked arteries. Human disease will be fought 
cell by cell, molecule by molecule, and nanotechnology will provide 
victories over disease that we can't even conceive today.
  America risks missing a host of beneficial breakthroughs. American 
scientists could be the first to create nanomaterials for manufacturing 
and design that are stronger, lighter, harder, self-repairing, and 
safer. Nanoscale devices could scrub automobile pollution out of the 
air as it is produced. Nanoparticles could cover armor to make American 
soldiers almost invisible to enemies and even tend their wounds. 
Nanotechnology could grow steel stronger than what's made today, with 
little or no waste to pollute the environment.
  Moreover, and this is even more important given our struggling 
economy, America risks missing an economic revolution based on 
nanotechnology. With much of nanotechnology existing in a research 
milieu, venture capitalists are already investing $1 billion in 
American nanotech interests this year alone. It's estimated that 
nanotechnology will become a trillion-dollar industry over the next 10 
years. As nanotechnology grows, the ranks of skilled workers needed to 
discover and apply its capabilities must grow too. In the 
nanotechnology revolution, areas of high unemployment could become 
magnets for domestic production, engineering and research for 
nanotechnology applications--but only if government doesn't miss the 
boat.
  Our country's National Nanotechnology Initiative is a step in the 
right direction. This Nation has already committed substantial funds to 
nanotechnology research and development in the coming years. But 
funding is not enough. There must be careful planning to make sure that 
money is used for sound science over the long-term. That is the reason 
for the legislation I am issuing today. The strategic planning it 
prescribes will ensure that scientists get the support they need to 
realize nanotechnology's greatest potential.
  In 1944 the visionary President Franklin Delano Roosevelt requested a 
leading American scientist's opinion on advancing the United States' 
scientific efforts to benefit the world. Dr. Vannevar Bush offered his 
reply to President Harry S Truman the next year, following FDR's death. 
In his report to the President, Dr. Bush wrote, ``The Government should 
accept new responsibilities for promoting the flow of new scientific 
knowledge and the development of scientific talent in our youth. These 
responsibilities are the proper concern of the Government, for they 
vitally affect our health, our jobs, and our national security. It is 
in keeping also with basic United States policy that the Government 
should foster the opening of new frontiers and this is the modern way 
to do it.''
  Those principles, so true nearly 60 years ago, are truer still today. 
I propose that the government now accept new responsibilities in 
promoting and developing nanotechnology. I am pleased to be joined on 
this legislation by Senators Allen, Lieberman, Mikulski, Hollings, 
Landrieu, Clinton, and Levin. I ask unanimous consent that this 
statement be entered in the Record.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 190. A bill to establish the Director of National Intelligence as 
head of the intelligence community, to modify and enhance authorities 
and responsibilities relating to the administration of intelligence and 
the intelligence community, and for other purposes; to the Select 
Committee on Intelligence.
  Mrs. FEINSTEIN. Mr. President, I rise today to offer the Intelligence 
Community Leadership Act of 2003. This legislation creates the position 
of Director of National Intelligence to provide budget and statutory 
authority over coordinating our intelligence efforts. This will help 
assure that the sort of communication problems that prevented the 
various elements of our intelligence community from working together 
effectively before September 11 never happens again.
  Today there are 14 different agencies and departments which make up 
the Intelligence Community: the Central Intelligence Agency, the 
Defense Intelligence Agency, the National Security Agency, the National 
Reconnaissance Office, the National Imagery and Mapping Agency, Army 
Intelligence, Air Force Intelligence, Marine Corps Intelligence, 
intelligence elements of the Departments of State, Treasury, Energy, as 
well as the Federal Bureau of Investigation and the United States Coast 
Guard. Together they make up a huge network, with thousands of 
employees and a significant, secret, budget.
  Interestingly, there is no real head of this sprawling Community. In 
law the Director of Central Intelligence leads both the CIA and the 
Intelligence Community, but in practice he is unable to exercise 
meaningful control and leadership. The Community is plagued by 


[[Page 1322]]

acute 
turf battles, incompatible information systems and uncoordinated 
operations. The present structure makes coordination and movement of 
personnel within the Intelligence Community more difficult than it 
should be.
  Last Spring I offered legislation to address this problem, S. 2645, 
which created the position of Director of National Intelligence.
  Since then the Joint Inquiry of the Senate and House Intelligence 
Committees completed its investigations into the Intelligence Community 
role in the attacks of September 11.
  The Joint Inquiries' major recommendation was the creation of a 
``Director of National Intelligence'', DNI, with real authority to run 
the Intelligence Community, separate from the head of the CIA, and thus 
free from having to run both the Community and one of its major 
constituent agencies.
  Working with those recommendations, I have updated the bill I 
introduced last year to reflect the Joint Inquiries' findings. The 
changes include adding specific language to ensure that the new 
Director of National Intelligence has meaningful and effective budget 
and personnel authority.
  Specifically this legislation would create the new position of 
Director of National Intelligence who would head the intelligence 
community, serving at the pleasure of the President, with the proper 
and necessary authority to coordinate activities, direct priorities, 
and develop and execute the budget for our nation's national 
intelligence community.
  The DNI would be responsible for all of the functions now performed 
by the Director of Central Intelligence in his role as head of the 
intelligence community, while a separate individual would be Director 
of the CIA.
  Nominated by the President and confirmed by the Senate, the DNI would 
be empowered to create and execute the national intelligence budget in 
conjunction with the various intelligence agencies within our 
government.
  The Director of the Central Intelligence Agency, DCIA, freed from the 
double burden as head of the intelligence community, would then be able 
to concentrate on the critical missions of the CIA alone: Assure the 
collection of intelligence from human sources, and that intelligence is 
properly correlated, evaluated, and disseminated throughout the 
intelligence community and to decision makers.
  I recognize that this bill will certainly not solve every problem 
within the intelligence community, but I believe it is an important, 
perhaps critical, first step. My hope is that introduction of this bill 
will move the much-needed debate on Intelligence Community reform 
forward.
                                 ______
                                 
      By Mr. DeWINE:
  S. 191. A bill to amend title XVIII of the Social Security Act to 
provide adequate coverage for immunosuppressive drugs furnished to 
beneficiaries under the medicare program that have received a kidney 
transplant, and for other purposes; to the Committee on Finance.
  Mr. DeWINE. Mr. President, I rise today to join my friend and 
colleague, Senator Durbin, in introducing a bill to help organ 
transplant patients maintain access to the life-saving drugs necessary 
to prevent their immune systems from rejecting their new organs.
  Tragically, today over 86,000 Americans are waiting for a donor 
organ. Those individuals who are blessed to receive an organ transplant 
must take immunosuppressive drugs every day for the life of their 
transplant. Failure to take these drugs significantly increases the 
risk that the transplanted organ will be rejected.
  We need this bill, because Federal law is compromising the success of 
organ transplants. Let me explain. Right now, current Medicare policy 
denies certain transplant patients coverage for the drugs needed to 
prevent rejection. Medicare does not pay for anti-rejection drugs for 
Medicare beneficiaries, who received their transplants prior to 
becoming a Medicare beneficiary. So, for instance, if a person received 
a transplant at age 64 through his or her health insurance plan, when 
that person retires and relies on Medicare for health care coverage, he 
or she would no longer have immunosuppressive drug coverage.
  Medicare only pays for anti-rejection drugs for transplants performed 
in a Medicare-approved transplant facility. However, many beneficiaries 
are completely unaware of this fact and how it can jeopardize their 
future coverage of immunosuppressive drugs. To receive an organ 
transplant, a person must be very ill and many are far too ill at the 
time of transplantation to be researching the intricate nuances of 
Medicare coverage policy.
  End Stage Renal Disease, ESRD, patients qualify for Medicare on the 
basis of needing dialysis. If End Stage Renal Disease patients receive 
a kidney transplant, they qualify for Medicare coverage for three years 
after the transplant. After the three years are up, they lose not only 
their general Medicare coverage, but also their coverage for 
immunosuppressive drugs.
  The amendment that Senator Durbin and I are introducing today would 
remove the Medicare limitations and make clear that all Medicare 
beneficiaries including End Stage Renal Disease patients who have had a 
transplant and need immunosuppressive drugs to prevent rejection of 
their transplant, will be covered as long as such anti-rejection drugs 
are needed.
  In the Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act, Congress eliminated the 36-month time limitation for 
transplant recipients who both receive a Medicare eligible transplant 
and are eligible for Medicare based on age or disability. Our bill 
would provide the same indefinite coverage to kidney transplant 
recipients who are not Medicare-aged or Medicare-disabled.
  I urge my colleagues to support this legislation and help those who 
receive Medicare-eligible transplants to gain access to the 
immunosuppressive drugs they need to live healthy, productive lives.
                                 ______
                                 
      By Mr. CORZINE:
  S. 192. A bill to amend title 23, United States Code, to provide for 
criminal and civil liability for permitting an intoxicated arrestee to 
operate a motor vehicle; to the Committee on Environment and Public 
Works.
  Mr. CORZINE. Mr. President, today I am introducing legislation that 
would address the serious national problem of drunk driving. This bill, 
entitled ``John's Law of 2003,'' would help ensure that when drunken 
drivers are arrested, they cannot simply get back into the car and put 
the lives of others in jeopardy.
  On July 22, 2000, Navy Ensign John Elliott was driving home from the 
United States Naval Academy in Annapolis for his mother's birthday when 
his car was struck by another car. Both Ensign Elliott and the driver 
of that car were killed. The driver of the car that caused the 
collision had a blood alcohol level that exceeded twice the legal 
limit.
  When makes this tragedy especially distressing is that this same 
driver had been arrested and charged with driving under the influence 
of alcohol, DUI, just three hours before the crash. After being 
processed for that offense, he had been released into the custody of a 
friend who drove him back to his car and allowed him to get behind the 
wheel, with tragic results.
  We need to ensure that drunken drivers do not get back behind the 
wheel before they sober up. New Jersey took steps to do this when they 
enacted John's Law at the State level. I am pleased to offer a Federal 
version of this legislation today.
  This bill would require States to impound the vehicle of an offender 
for a period of at least 12 hours after the offense. This would ensure 
that the arrestee cannot get back behind the wheel of his car until he 
is sober.
  Further, the bill would require States to ensure that if a DUI 
offender arrestee is released into the custody of another, that person 
must be provided with notice of his or her potential civil or criminal 
liability for permitting the arrestee's operation of a motor vehicle 
while intoxicated. While this bill does not create new liability under 
Federal law, notifying such individuals of their prospective liability 
under State law 

[[Page 1323]]

should encourage them to act responsibly.
  John's Law of 2003 is structured in a manner similar to other Federal 
laws designed to promote highway safety, such as laws that encourage 
States to enact tough drunk driving standards. Under the legislation, a 
portion of Federal highways funds would be withheld from States that do 
not comply. Initially, this funding could be restored if
States move into compliance. Later, the highway funding forfeited by 
one State would be distributed to other States that are in compliance. 
Experience has shown that the threat of losing highway funding is very 
effective in ensuring that States comply.
  Mr. President, I believe that this legislation would help make our 
roads safer and save many lives. I hope my colleagues will support it, 
and 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. 192

       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 ``John's Law of 2003''.

     SEC. 2. LIABILITY FOR PERMITTING AN INTOXICATED ARRESTEE TO 
                   OPERATE A MOTOR VEHICLE.

       (a) In General.--Subchapter I of chapter 1 of title 23, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec. 165. Liability for permitting an intoxicated arrestee 
       to operate a motor vehicle

       ``(a) Definition of Motor Vehicle.--In this section, the 
     term `motor vehicle' means a vehicle driven or drawn by 
     mechanical power and manufactured primarily for use on public 
     highways, but does not include a vehicle operated only on a 
     rail.
       ``(b) Withholding of Apportionments for Noncompliance.--
       ``(1) Fiscal year 2005.--The Secretary shall withhold 5 
     percent of the amount required to be apportioned to any State 
     under each of paragraphs (1), (3), and (4) of section 104(b) 
     on October 1, 2004, if the State does not meet the 
     requirements of paragraph (3) on that date.
       ``(2) Subsequent fiscal years.--The Secretary shall 
     withhold 10 percent of the amount required to be apportioned 
     to any State under each of paragraphs (1), (3), and (4) of 
     section 104(b) on October 1, 2005, and on October 1 of each 
     fiscal year thereafter, if the State does not meet the 
     requirements of paragraph (3) on that date.
       ``(3) Requirements.--A State meets the requirements of this 
     paragraph if the State has enacted and is enforcing a law 
     that is substantially as follows:
       ``(A) Written statement.--If a person is summoned by or on 
     behalf of a person who has been arrested for public 
     intoxication in order to transport or accompany the arrestee 
     from the premises of a law enforcement agency, the law 
     enforcement agency shall provide that person with a written 
     statement advising him of his potential criminal and civil 
     liability for permitting or facilitating the arrestee's 
     operation of a motor vehicle while the arrestee remains 
     intoxicated. The person to whom the statement is issued shall 
     acknowledge, in writing, receipt of the statement, or the law 
     enforcement agency shall record the fact that the written 
     statement was provided, but the person refused to sign an 
     acknowledgment. The State shall establish the content and 
     form of the written statement and acknowledgment to be used 
     by law enforcement agencies throughout the State and may 
     issue directives to ensure the uniform implementation of this 
     subparagraph. Nothing in this subparagraph shall impose any 
     obligation on a physician or other health care provider 
     involved in the treatment or evaluation of the arrestee.
       ``(B) Impoundment of vehicle operated by arrestee; 
     conditions of release; fee for towing, storage.--
       ``(i) If a person has been arrested for public 
     intoxication, the arresting law enforcement agency shall 
     impound the vehicle that the person was operating at the time 
     of arrest.
       ``(ii) A vehicle impounded pursuant to this subparagraph 
     shall be impounded for a period of 12 hours after the time of 
     arrest or until such later time as the arrestee claiming the 
     vehicle meets the conditions for release in clause (iv).
       ``(iii) A vehicle impounded pursuant to this subparagraph 
     may be released to a person other than the arrestee prior to 
     the end of the impoundment period only if--

       ``(I) the vehicle is not owned or leased by the person 
     under arrest and the person who owns or leases the vehicle 
     claims the vehicle and meets the conditions for release in 
     clause (iv); or
       ``(II) the vehicle is owned or leased by the arrestee, the 
     arrestee gives permission to another person, who has 
     acknowledged in writing receipt of the statement to operate 
     the vehicle and the conditions for release in clause (iv).

       ``(iv) A vehicle impounded pursuant to this subparagraph 
     shall not be released unless the person claiming the 
     vehicle--

       ``(I) presents a valid operator's license, proof of 
     ownership or lawful authority to operate the vehicle, and 
     proof of valid motor vehicle insurance for that vehicle;
       ``(II) is able to operate the vehicle in a safe manner and 
     would not be in violation driving while intoxicated laws; and
       ``(III) meets any other conditions for release established 
     by the law enforcement agency.

       ``(v) A law enforcement agency impounding a vehicle 
     pursuant to this subparagraph is authorized to charge a 
     reasonable fee for towing and storage of the vehicle. The law 
     enforcement agency is further authorized to retain custody of 
     the vehicle until that fee is paid.
       ``(c) Period of Availability; Effect of Compliance and 
     Noncompliance.--
       ``(1) Period of availability of withheld funds.--Any funds 
     withheld under subsection (b) from apportionment to any State 
     shall remain available until the end of the fourth fiscal 
     year following the fiscal year for which the funds are 
     authorized to be appropriated.
       ``(2) Apportionment of withheld funds after compliance.--
     If, before the last day of the period for which funds 
     withheld under subsection (b) from apportionment are to 
     remain available for apportionment to a State under paragraph 
     (1), the State meets the requirements of subsection (a)(3), 
     the Secretary shall, on the first day on which the State 
     meets the requirements, apportion to the State the funds 
     withheld under subsection (b) that remain available for 
     apportionment to the State.
       ``(3) Period of availability of subsequently apportioned 
     funds.--
       ``(A) In general.--Any funds apportioned under paragraph 
     (2) shall remain available for expenditure until the end of 
     the third fiscal year following the fiscal year in which the 
     funds are so apportioned.
       ``(B) Treatment of certain funds.--Any funds apportioned 
     under paragraph (2) that are not obligated at the end of the 
     period referred to in subparagraph (A) shall be allocated 
     equally among the States that meet the requirements of 
     subsection (a)(3).
       ``(4) Effect of noncompliance.--If, at the end of the 
     period for which funds withheld under subsection (b) from 
     apportionment are available for apportionment to a State 
     under paragraph (1), the State does not meet the requirements 
     of subsection (a)(3), the funds shall be allocated equally 
     among the States that meet the requirements of subsection 
     (a)(3).''.
       (b) Conforming Amendment.--The analysis for subchapter I of 
     chapter 1 of title 23, United States Code, is amended by 
     adding at the end the following:

``165. Liability for permitting an intoxicated arrestee to operate a 
              motor vehicle.''.
                                 ______
                                 
      By Mr. HATCH (for himself, Mrs. Feinstein, Mr. Stevens, Mr. 
        Miller, Mr. Campbell, Mr. McCain, Mr. Breaux, Mr. Craig, Mr. 
        Ensign, Mr. Lugar, Mrs. Lincoln, Mr. Baucus, Mr. Bond, Mr. 
        Lott, Mr. Hollings, Mr. Dayton, Mr. Sessions, Mr. Nelson of 
        Nebraska, Mr. Inhofe, Mr. Bunning, Mr. Allard, Ms. Collins, Mr. 
        Crapo, Mr. DeWine, Mr. Frist, Mr. Grassley, Mr. Hagel, Mrs. 
        Hutchison, Mr. Roberts, Mr. Warner, Mr. Allen, Mr. Brownback, 
        Mr. Burns, Mr. Domenici, Mr. Gregg, Mr. Santorum, Mr. Shelby, 
        Ms. Snowe, Mr. Graham of South Carolina, Mr. Cornyn, Mr. 
        Talent, and Mr. Alexander):
  S.J. Res 4. A joint resolution proposing an amendment to the 
Constitution of the United States authorizing Congress to prohibit the 
physical desecration of the flag of the United States; to the Committee 
on the Judiciary.
  Mr. HATCH. Mr. President, it is with profound honor and reverence 
that I, together with my friend and colleague, Senator Feinstein, 
introduce a bipartisan constitutional amendment to permit Congress to 
prohibit the physical desecration of the American flag.
  The American flag serves as a symbol of our great Nation. The flag 
represents, in a way nothing else can, the common bond shared by an 
otherwise diverse people. As a sponsor and long-time supporter of the 
proposed constitutional amendment to protect the American flag, I am 
very pleased, but not surprised, by the way Americans have been waving 
the flag as a symbol of solidarity following the September 11 attacks 
of 2001. The emotion that Americans feel when they see the stars and 
stripes confirms my view that the 

[[Page 1324]]

flag is much more than a piece of 
cloth--it is a unifying force that represents the common core ideals 
all Americans share. Whatever our differences of party, race, religion, 
or socio-economic status, the flag reminds us that we are very much one 
people, united in a shared destiny, bonded in a common faith in our 
nation.
  More than a decade ago, Supreme Court Justice John Paul Stevens 
reminded us of the significance of our unique emblem when he wrote:

       A country's flag is a symbol of more than nationhood and 
     national unity. It also signifies the ideas that characterize 
     the society that has chosen that emblem as well as the 
     special history that has animated the growth and power of 
     those ideas. . . . So it is with the American flag. It is 
     more than a proud symbol of the courage, the determination, 
     and the gifts of a nation that transformed 13 fledgling 
     colonies into a world power. It is a symbol of freedom, of 
     equal opportunity, of religious tolerance, and of goodwill 
     for other peoples who share our aspirations.

  Throughout our history, the flag has captured the hearts and minds of 
all types of people--ranging from school teachers to union workers, 
traffic cops, grandmothers, and combat veterans. In 1861, President 
Abraham Lincoln called our young men to put their lives on the line to 
preserve the Union. When Union troops were beaten and demoralized, 
General Ulysses Grant ordered a detachment of men to make an early 
morning attack on Lookout Mountain in Tennessee. When the fog lifted 
from Lookout Mountain, the rest of the Union troops saw the American 
flag flying and cheered with a newfound courage. This courage 
eventually led to a nation of free men--not half-free and half-slave.
  In 1941, President Franklin Roosevelt called on all Americans to 
fight the aggression of the Axis powers. After suffering numerous early 
defeats, the free world watched in awe as five Marines and one sailor 
raised the American flag on Iwo Jima. Their undaunted, courageous act, 
for which three of the six men died, inspired the Allied troops to 
attain victory over fascism.
  In 1990, President Bush called on our young men and women to go to 
the Mideast for Operations Desert Shield and Desert Storm. After an 
unprovoked attack by the terrorist dictator Saddam Hussein on the 
Kingdom of Kuwait, American troops, wearing arm patches with the 
American flag on their shoulders, led the way to victory. General 
Norman Schwarzkopf addressed a joint session of Congress describing the 
American men and women who fought for the ideals symbolized by the 
American flag:

       [W]e were Protestants and Catholics and Jews and Moslems 
     and Buddhists, and many other religions, fighting for a 
     common and just cause. Because that's what your military is. 
     And we were black and white and yellow and brown and red. And 
     we noticed that when our blood was shed in the desert, it 
     didn't separate by race. It flowed together.

  General Schwarzkopf then thanked the American people for their 
support, stating:

       The prophets of doom, the naysayers, the protesters and the 
     flag-burners all said that you wouldn't stick by us, but we 
     knew better. We knew you'd never let us down. By golly, you 
     didn't.

  The pages of our history show that when this country has called our 
young men and women to serve under the American flag from Lookout 
Mountain to Iwo Jima to Kuwait, they have given their blood and lives. 
The crosses at Arlington, the Iwo Jima memorial, and the Vietnam 
Memorial honor those sacrifices. But there were those who did not.
  In 1984, Greg Johnson led a group of radicals in a protest march in 
which he doused an American flag with kerosene and set it on fire as 
his fellow protestors chanted: ``America, the red, white, and blue, we 
spit on you.'' Sadly, the radical extremists, most of whom have given 
nothing, suffered nothing, and who respect nothing, would rather burn 
and spit on the American flag than honor it.
  Contrast this image with the deeds of Roy Benavidez, an Army Sergeant 
from Texas, who led a helicopter extraction force to rescue a 
reconnaissance team in Vietnam. Despite being wounded in the leg, face, 
back, head, and abdomen by small arms fire, grenades, and hand-to-hand 
combat with vicious North Vietnamese soldiers, Benavidez held off the 
enemy and carried several wounded to the helicopters, until finally 
collapsing from a loss of blood. Benavidez earned the Medal of Honor. 
When Benavidez was buried in Arlington National Cemetery, the honor 
guard placed an American flag on his coffin and then folded it and gave 
it to his widow. The purpose of Roy Benavidez' heroic sacrifice--and 
the purpose of the American people's ratification of the First 
Amendment--was not to protect the right of radicals like Greg Johnson 
to burn and spit on the American flag.
  The American people have long distinguished between the First 
Amendment right to speak and write one's political opinions and the 
disrespectful, and often violent, physical destruction of the flag. For 
many years, the people's elected representatives in Congress and 49 
state legislatures passed statutes prohibiting the physical desecration 
of the flag. Our founding fathers, Chief Justice Earl Warren, and 
Justice Hugo Black believed these laws to be completely consistent with 
the First Amendment's protection of the spoken and written word and not 
disrespectful, extremist conduct.
  In 1989, however, the Supreme Court abandoned the history and intent 
of the First Amendment to embrace a philosophy that made no distinction 
between oral and written speech about the flag and extremist, 
disrespectful destruction of the flag. In Texas v. Johnson, five 
members of the Court, for the first time ever, struck down a flag 
protection statute. The majority argued that the First Amendment had 
somehow changed and now prevented a state from protecting the American 
flag from radical, disrespectful, and violent actions. When Congress 
responded with a federal flag protection statute, the Supreme Court, in 
United States v. Eichman, used its new and changed interpretation of 
the First Amendment to strike it down by another five-to-four vote.
  Under this new interpretation of the First Amendment, it is assumed 
that the people, their elected legislators, and the courts can no 
longer distinguish between expressions concerning the flag that are 
more akin to spoken and written expression and expressions that 
constitute the disrespectful physical desecration of the flag. Because 
of this assumed inability to make such distinctions, it is argued that 
all of our freedoms to speak and write political ideas are wholly 
dependent on Greg Johnson's newly created ``right'' to burn and spit on 
the American flag.
  This ill-advised and radical philosophy fails because its basic 
premise--that laws and judges cannot distinguish between political 
expression and disrespectful physical desecration--is so obviously 
false. It is precisely this distinction that laws and judges did in 
fact make for over 200 years. Just as judges have distinguished which 
laws and actions comply with the constitutional command to provide 
``equal protection of the laws'' and ``due process of law,'' so too 
have judges been able to distinguish between free expression and 
disrespectful destruction.
  Certainly, extremist conduct such as smashing in the doors of the 
State Department may be a way of expressing one's dissatisfaction with 
the nation's foreign policy objectives. And one may even consider such 
behavior speech. Laws, however, can be enacted preventing such actions 
in large part because there are peaceful alternatives that can be 
equally powerful. After all, right here in the United States Senate, we 
prohibit speeches or demonstrations of any kind, even the silent 
display of signs or banners, in the public galleries.
  Moreover, it was not this radical philosophy of protecting 
disrespectful destruction that the people elevated to the status of 
constitutional law. Such an extremist philosophy was never ratified. 
Such a philosophy is not found in the original and historic intent of 
the First Amendment. Thus, in this Senator's view, the Supreme Court 
erred in Texas v. Johnson and in United States v. Eichman.
  Since Johnson and Eichman, constitutional scholars have opined that 
an attempt by Congress to protect the flag with another statute would 
fail in light of the new interpretation currently embraced by the 
Supreme Court. 

[[Page 1325]]


Thus, an amendment is the only legal means to protect 
the flag.
  This amendment affects only the most radical forms of conduct and 
will leave untouched the current constitutional protections for 
Americans to speak their sentiments in a rally, to write their 
sentiments to their newspaper, and to vote their sentiments at
the ballot box. The amendment simply restores the traditional and 
historic power of the people's elected representatives to prohibit the 
radical and extremist physical desecration of the flag.
  Restoring legal protection to the American flag will not place us on 
a slippery slope to limit other freedoms. No other symbol of our bi-
partisan national ideals has flown over the battlefields, cemeteries, 
football fields, and school yards of America. No other symbol has 
lifted the hearts of ordinary men and women seeking liberty around the 
world. No other symbol has been paid for with so much blood of our 
countrymen. The American people have paid for their flag, and it is our 
duty to let them protect it.
  This amendment offers Senators, from both sides of the aisle, the 
opportunity to stand united for the protection of the sacred symbol of 
our nation.
  Restoring legal protection to the American flag is not, nor should it 
be, a partisan issue. More than 40 Senators, both Republicans and 
Democrats, have already joined with Senator Feinstein and myself as 
original cosponsors of this amendment. I am pleased that this amendment 
has the unqualified support of our distinguished colleagues: Senators 
Ted Stevens; Zell Miller; John McCain; John B. Breaux; Larry E. Craig; 
John E. Ensign; Richard G. Lugar; Blanche Lincoln; Max Baucus; 
Christopher S. Bond; Trent Lott; Ernest F. Hollings; Mark Dayton; Jeff 
Sessions; E. Benjamin Nelson; James M. Inhofe; Jim Bunning; Wayne 
Allard; Susan M. Collins; Michael D. Crapo; Michael DeWine; Bill Frist; 
Charles E. Grassley; Chuck Hagel; Kay Bailey Hutchinson; Pat Roberts; 
John W. Warner; George Allen; Sam Brownback; Conrad R. Burns; Pete V. 
Domenici; Judd Gregg; Rick Santorum; Richard C. Shelby; Olympia J. 
Snowe; Lindsey Graham; John Cornyn; James Talent; Lamar Alexander; Ben 
Nighthorse Campbell.
  Polls have shown that 80 percent of the American people want the 
opportunity to vote to protect their flag. Numerous organizations from 
the American Legion to the Women's War Veterans to the African-American 
Women's clergy all support the flag protection amendment. All 50 State 
legislatures have passed resolutions calling for constitutional 
protection for the flag.
  I am, therefore, proud to rise today to introduce a constitutional 
amendment that would restore to the people's elected representatives 
the right to protect our unique national symbol, the American flag, 
from acts of physical desecration.
  I ask unanimous consent that the text of the proposed amendment be 
printed in the Record.
  I am very honored to be a cosponsor with my dear friend from 
California, Senator Feinstein. I appreciate the effort and unwavering 
support she has put forth in this battle. I am proud and privileged to 
be able to work with her.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the joint resolution was ordered to be 
printed in the Record, as follows:

                              S.J. Res. 4

       Resolved by the Senate and House of Representatives of the 
     United States of America in Congress assembled (two-thirds of 
     each House concurring therein), That the following article is 
     proposed as an amendment to the Constitution of the United 
     States, which shall be valid to all intents and purposes as 
     part of the Constitution when ratified by the legislatures of 
     three-fourths of the several States within 7 years after the 
     date of its submission for ratification:

                              ``Article--

       ``The Congress shall have power to prohibit the physical 
     desecration of the flag of the United States.''.

                          ____________________