[Congressional Record (Bound Edition), Volume 149 (2003), Part 10]
[Senate]
[Pages 12848-12925]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. HARKIN (for himself, Mr. Specter, Mr. Kohl, Mr. Durbin, 
        Mr. Feingold, Mrs. Clinton, and Mr. Schumer):
  S. 1103. A bill to clarify the authority of the Secretary of 
Agriculture to prescribe performance standards for the reduction of 
pathogens in meat, meat products, poultry, and poultry products 
processed by establishments receiving inspection services and to 
enforce the Hazard Analysis and Critical Control Point (HACCP) System 
requirements, sanitation requirements, and the performance standards; 
to the Committee

[[Page 12849]]

on Agriculture, Nutrition, and Forestry.
  Mr. HARKIN. Mr. President, today I am introducing the Meat and 
Poultry Pathogen Reduction Act of 2003. This legislation, commonly 
known as Kevin's Law, is dedicated to the memory of 2-year-old Kevin 
Kowalcyk, who died in 2001 after eating a hamburger contaminated with 
E.coli H7:0157 bacteria. Passage of this bill is vital because on 
December 6, 2001, the 5th Circuit Court of Appeals upheld and expanded 
an earlier District Court decision that removes the U.S. Department of 
Agriculture's, USDA, authority to enforce its Pathogen Performance 
Standard for Salmonella. The 5th Circuit's decision in Supreme Beef v. 
USDA, Supreme, seriously undermines the sweeping food safety changes 
adopted by USDA in its 1996 Hazard Analysis Critical Control Point and 
Pathogen Reduction, HACCP, rule.
  More recently, there was another court case that calls into question 
USDA's authority to enforce its microbiological performance standards. 
A company called Nebraska Beef sued USDA after the Department tried to 
shut down the plant for numerous alleged food safety violations. The 
judge in the case granted a temporary restraining order, preventing 
USDA to take enforcement action.
  According the 5th Circuit's opinion in Supreme and the Nebraska Beef 
decision, today, there is nothing USDA could do to shut down a meat 
grinding plant that insists on using low-quality, potentially 
contaminated trimmings. These decisions seriously undermine the new 
meat and poultry inspection system.
  The Pathogen Reduction Rule recognized that bacterial and viral 
pathogens were the foremost food safety threat in America, responsible 
for 5,000 deaths, 325,000 hospitalizations and 76 million illnesses 
each year. To address the threat of foodborne illness, USDA developed a 
modern inspection system based on two fundamental principles.
  The first was that industry has the primary responsibility to 
determine how to produce the safest products possible. Industry had to 
examine their plants and determine how to control contamination at 
every step of the food production process, from the moment a product 
arrives at their door until the moment it leaves their plant.
  The second, even more crucial principle was that plants nationwide 
must reduce levels of dangerous pathogens in meat and poultry products. 
To ensure the new inspection system accomplished this, USDA developed 
Pathogen Performance Standards. These standards provide targets for 
reducing pathogens and require all USDA-inspected facilities to meet 
them. Facilities failing to meet a standard are shut down until they 
create a corrective action plan to meet the standard.
  So far, USDA has only issued one Pathogen Performance Standard, for 
Salmonella. The vast majority of plants in the U.S. have been able to 
meet the new standard, so it is clearly workable. In addition, USDA 
reports that Salmonella levels for meat and poultry products have 
fallen substantially. Therefore the Salmonella standard has been 
successful. The 5th Circuit Court's and the Nebraska Beef decisions 
threaten to destroy this success and set our food safety system back 
years.
  The other major problem is we have an industry dead set on striking 
down USDA's authority to enforce meat and poultry pathogen standards. 
Ever since the original Supreme decision, I have spent untold hours 
trying to find a compromise that will allow us to ensure we have 
enforceable, science-based standards for pathogens in meat and poultry 
products. I have introduced bills to address this issue and I have even 
worked with industry leaders to reach a reasonable compromise.
  However, despite repeated attempts to address industry concerns, 
industry has continually backtracked and moved the finish line. Many 
times, I have made changes in my legislation to address their 
``pressing'' concern of the moment only to have them come back and say 
we hadn't gone far enough. We cannot let a few bullies in the meat and 
poultry industry place our children, our families at a increased risk 
of getting ill or dying, because some of the industry want to backtrack 
on food safety.
  In addition, the recent announcement that a cow in Alberta, Canada 
tested positive for bovine spongiform encephalopathy, BSE, otherwise 
known as ``mad cow disease'', provoked the U.S. government to 
immediately close the U.S.-Canadian border for the trade at beer and 
beef products. I applaud the current Administration for taking this 
action to ensure the safety of our Nation's food supply until more 
information is made available about the true extent of the problem.
  And without downplaying the seriousness of that horrible disease, I 
think its necessary to look at the impact of BSE in light of other food 
borne illnesses. Researchers believe that BSE is linked to variable 
Creutzfeldt-Jakob, vCJD, disease. Since its onset in Britain in 1995, 
129 people have died worldwide from vCJD. Foodborne pathogens, on the 
other hand, have cause 5000 deaths, 125,000 hospitalizations, and 76 
million illnesses each year. The numbers speak for themselves.
  The swift and comprehensive response provoked by a single diseased 
cow in a neighboring country stands in stark contrast to the way our 
government currently responds to outbreaks of foodbornes illness in our 
country today. USDA has the ability to shut down the trade from the 
biggest importer of beef into out country on suspicions of possible 
food safety problems, but cannot even temporarily shut down one plant 
that USDA knows has problems.
  I plan to seek every opportunity to get this language enacted. I 
think it is essential, both to ensuring the modernization of our food 
safety system, and ensuring consumers that we are making progress in 
reducing dangerous pathogens.
  I hope that both parties, and both houses of Congress will be able to 
act to pass this legislation without delay. The public's confidence in 
our meat and poultry inspection system is at stake.
  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. 1103

       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 ``Meat and Poultry Pathogen 
     Reduction and Enforcement Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the primary purpose of the Federal meat and poultry 
     inspection program is to protect public health;
       (2) the Centers for Disease Control and Prevention report 
     that human pathogens found in raw and cooked meat, meat 
     products, poultry, and poultry products are a significant 
     source of foodborne illness;
       (3) to reduce the public health burden of foodborne 
     illness, the Federal meat and poultry inspection system 
     should focus on reducing the risk of foodborne illness 
     associated with the presence of foodborne pathogens through--
       (A) establishment and enforcement of performance standards 
     for the reduction of pathogens in meat, meat products, 
     poultry, and poultry products processed by establishments 
     receiving inspection services; and
       (B) enforcement of the Hazard Analysis and Critical Control 
     Point (HACCP) System requirements and sanitation 
     requirements;
       (4) good public health practice requires controlling 
     pathogens as close as practicable to the initial source of 
     contamination to reduce pathogens and prevent foodborne 
     illness;
       (5) there is a need for strong safeguards at slaughter 
     establishments during the slaughter and processing of meat 
     and poultry products because those establishments are where 
     pathogen contamination often originates;
       (6) while proper handling and cooking of meat and poultry 
     products can virtually eliminate the risk of foodborne 
     illness from the consumption of meat and poultry, the 
     presence of pathogens in raw meat and poultry products leads 
     to cross-contamination of other foods and surrounding 
     surfaces;
       (7) to reduce the risk of foodborne illness and protect 
     public health, regulatory authorities and all parties 
     involved in the production and handling of meat, meat 
     products, poultry, or poultry products should make a 
     concerted effort to reduce, to the maximum extent 
     practicable, contamination

[[Page 12850]]

     by pathogens using the best available scientific information 
     and appropriate technology;
       (8) the distribution of meat, meat products, poultry, or 
     poultry products that contain human pathogens--
       (A) impairs the effective regulation of wholesome meat, 
     meat products, poultry, or poultry products in interstate and 
     foreign commerce; and
       (B) destroys markets for wholesome products;
       (9) all articles and other animals that are subject to this 
     Act and the amendments made by this Act are either in or 
     substantially affect interstate or foreign commerce; and
       (10) regulation by the Secretary of Agriculture and 
     cooperation by the States are necessary to prevent or 
     eliminate burdens on interstate or foreign commerce and to 
     protect the health and welfare of consumers.

     SEC. 3. PATHOGEN PERFORMANCE STANDARDS.

       (a) Meat and Meat Products.--The Federal Meat Inspection 
     Act (21 U.S.C. 601 et seq.) is amended by inserting after 
     section 8 (21 U.S.C. 608) the following:

     ``SEC. 8A. PATHOGEN PERFORMANCE STANDARDS.

       ``(a) In General.--In order to protect the public health 
     and promote food safety, the Secretary shall prescribe 
     performance standards for the reduction of pathogens in raw 
     meat and meat products processed by each establishment 
     receiving inspection services under this Act.
       ``(b) List of Pathogens.--
       ``(1) In general.--In consultation with the Secretary of 
     Health and Human Services, and taking into account data 
     available from the Centers for Disease Control and 
     Prevention, the Secretary shall identify the pathogens that 
     make a significant contribution to the total burden of 
     foodborne disease associated with meat and meat products.
       ``(2) Publication; updates.--The Secretary shall--
       ``(A) publish a list of the pathogens described in 
     paragraph (1) not later than 60 days after the date of 
     enactment of this section; and
       ``(B) update and publish the list annually thereafter.
       ``(c) Pathogen Surveys.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall initiate 
     comprehensive, statistically representative surveys to 
     determine the current levels and incidence of contamination 
     of raw meat and meat products with the pathogens listed under 
     subsection (b), including the variation in levels and 
     incidence of contamination among establishments.
       ``(2) Publication.--Not later than 2 years after the date 
     of enactment of this section, the Secretary shall compile, 
     and publish in the Federal Register, the results of the 
     surveys.
       ``(3) Updates.--At least once every 3 years after the 
     preceding surveys are conducted, the Secretary shall--
       ``(A) conduct surveys described in paragraph (1); and
       ``(B) compile and publish the results of the surveys in 
     accordance with paragraph (2).
       ``(d) Pathogen Reduction Performance Standards.--
       ``(1) In general.--The pathogen reduction performance 
     standards required under subsection (a) shall ensure the 
     lowest level or incidence of contamination that is reasonably 
     achievable using the best available processing technology and 
     practices.
       ``(2) Current contamination.--In determining what is 
     reasonably achievable, the Secretary shall consider data on 
     current levels or incidence of contamination, including what 
     is being achieved by establishments in the upper quartile of 
     performance in controlling the level or incidence of 
     contamination.
       ``(3) Initial pathogens.--Not later than 3 years after the 
     date of enactment of this section, the Secretary shall 
     propose pathogen reduction performance standards for at least 
     2 pathogens from the list published under subsection (b).
       ``(4) Subsequent pathogens.--Not later than 1 year after 
     proposing pathogen reduction standards for the initial 
     pathogens under paragraph (3), and each year thereafter, the 
     Secretary shall propose a pathogen reduction performance 
     standard for at least 1 pathogen each year from the list 
     published under subsection (b) until standards have been 
     proposed for all pathogens on the list.
       ``(5) Final standards.--Not later than 1 year after 
     proposing a pathogen reduction standard for a pathogen under 
     this subsection, the Secretary shall promulgate a final 
     pathogen reduction standard for the pathogen.
       ``(6) Zero-tolerance standards.--Nothing in this section 
     affects the authority of the Secretary to establish a zero-
     tolerance pathogen reduction performance standard.
       ``(e) Review of Standards.--
       ``(1) In general.--Not later than 3 years after 
     promulgation of a final pathogen reduction performance 
     standard for a pathogen under subsection (d)(5), the 
     Secretary shall review the standard to determine whether the 
     standard continues to ensure the lowest level or incidence of 
     contamination that is reasonably achievable using the best 
     available processing technology and practices, taking into 
     account the most recent survey conducted under subsection 
     (c).
       ``(2) Revisions.--The Secretary shall revise the standard, 
     as necessary, to comply with subsection (d).
       ``(f) Enforcement.--
       ``(1) In general.--The Secretary shall conduct regular 
     microbial testing in establishments producing raw meat and 
     meat products to determine compliance with the pathogen 
     reduction performance standards promulgated under this 
     section.
       ``(2) Inspections.--If the Secretary determines that an 
     establishment fails to meet a standard promulgated under 
     subsection (d) and that the establishment fails to take 
     appropriate corrective action, as determined by the 
     Secretary, the Secretary shall refuse to allow any meat or 
     meat product subject to the standard and processed by the 
     establishment to be labeled, marked, stamped or tagged as 
     `inspected and passed'.
       ``(g) Report on Health-Based Pathogen Performance 
     Standards.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this section, the Secretary, in consultation 
     with the Secretary of Health and Human Services, shall submit 
     to Congress a report on the scientific feasibility of 
     establishing health-based performance standards for pathogens 
     in raw meat and meat products.
       ``(2) Factors.--In preparing the report, the Secretary 
     shall consider--
       ``(A) the scientific feasibility of determining safe levels 
     for pathogens in raw meat and meat products;
       ``(B) the scientific and public health criteria that are 
     relevant to determining the safe levels; and
       ``(C) other factors determined by the Secretary.
       ``(h) Relationship to Adulteration Provisions.--Nothing in 
     this section affects the applicability to pathogens of the 
     provisions of this Act relating to adulteration.''.
       (b) Poultry and Poultry Products.--The Poultry Products 
     Inspection Act (21 U.S.C. 451 et seq.) is amended by 
     inserting after section 7 (21 U.S.C. 456) the following:

     ``SEC. 7A. PATHOGEN PERFORMANCE STANDARDS.

       ``(a) In General.--In order to protect the public health 
     and promote food safety, the Secretary shall prescribe 
     pathogen performance standards for the reduction of pathogens 
     in raw poultry and poultry products processed by each 
     establishment receiving inspection services under this Act.
       ``(b) List of Pathogens.--
       ``(1) In general.--In consultation with the Secretary of 
     Health and Human Services, and taking into account data 
     available from the Centers for Disease Control and 
     Prevention, the Secretary shall identify the pathogens that 
     make a significant contribution to the total burden of 
     foodborne disease associated with poultry and poultry 
     products.
       ``(2) Publication; updates.--The Secretary shall--
       ``(A) publish a list of the pathogens described in 
     paragraph (1) not later than 60 days after the date of 
     enactment of this section; and
       ``(B) update and publish the list annually thereafter.
       ``(c) Pathogen Surveys.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this section, the Secretary shall initiate 
     comprehensive, statistically representative surveys to 
     determine the current levels and incidence of contamination 
     of raw poultry and poultry products with the pathogens listed 
     under subsection (b), including the variation in levels and 
     incidence of contamination among establishments.
       ``(2) Publication.--Not later than 2 years after the date 
     of enactment of this section, the Secretary shall compile, 
     and publish in the Federal Register, the results of the 
     surveys.
       ``(3) Updates.--At least once every 3 years after the 
     preceding surveys are conducted, the Secretary shall--
       ``(A) conduct surveys described in paragraph (1); and
       ``(B) compile and publish the results of the surveys in 
     accordance with paragraph (2).
       ``(d) Pathogen Reduction Performance Standards.--
       ``(1) In general.--The pathogen reduction performance 
     standards required under subsection (a) shall ensure the 
     lowest level or incidence of contamination that is reasonably 
     achievable using the best available processing technology and 
     practices.
       ``(2) Current contamination.--In determining what is 
     reasonably achievable, the Secretary shall consider data on 
     current levels or incidence of contamination, including what 
     is being achieved by establishments in the upper quartile of 
     performance in controlling the level or incidence of 
     contamination.
       ``(3) Initial pathogens.--Not later than 3 years after the 
     date of enactment of this section, the Secretary shall 
     propose pathogen reduction performance standards for at least 
     2 pathogens from the list published under subsection (b).
       ``(4) Subsequent pathogens.--Not later than 1 year after 
     proposing pathogen reduction standards for the initial 
     pathogens under paragraph (3), and each year thereafter, the 
     Secretary shall propose a pathogen reduction performance 
     standard for at least 1

[[Page 12851]]

     pathogen each year from the list published under subsection 
     (b) until standards have been proposed for all pathogens on 
     the list.
       ``(5) Final standards.--Not later than 1 year after 
     proposing a pathogen reduction standard for a pathogen under 
     this subsection, the Secretary shall promulgate a final 
     pathogen reduction standard for the pathogen.
       ``(6) Zero-tolerance standards.--Nothing in this section 
     affects the authority of the Secretary to establish a zero-
     tolerance pathogen reduction performance standard.
       ``(e) Review of Standards.--
       ``(1) In general.--Not later than 3 years after 
     promulgation of a final pathogen reduction performance 
     standard for a pathogen under subsection (d)(5), the 
     Secretary shall review the standard to determine whether the 
     standard continues to ensure the lowest level or incidence of 
     contamination that is reasonably achievable using the best 
     available processing technology and practices, taking into 
     account the most recent survey conducted under subsection 
     (c).
       ``(2) Revisions.--The Secretary shall revise the standard, 
     as necessary, to comply with subsection (d).
       ``(f) Enforcement.--
       ``(1) In general.--The Secretary shall conduct regular 
     microbial testing in establishments producing raw poultry and 
     poultry products to determine compliance with the pathogen 
     reduction performance standards promulgated under this 
     section.
       ``(2) Inspections.--If the Secretary determines that an 
     establishment fails to meet a standard promulgated under 
     subsection (d) and that the establishment fails to take 
     appropriate corrective action, as determined by the 
     Secretary, the Secretary shall refuse to allow any poultry or 
     poultry product subject to the standard and processed by the 
     establishment to be labeled, marked, stamped or tagged as 
     `inspected and passed'.
       ``(g) Report on Health-Based Pathogen Performance 
     Standards.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this section, the Secretary, in consultation 
     with the Secretary of Health and Human Services, shall submit 
     to Congress a report on the scientific feasibility of 
     establishing health-based performance standards for pathogens 
     in raw poultry and poultry products.
       ``(2) Factors.--In preparing the report, the Secretary 
     shall consider--
       ``(A) the scientific feasibility of determining safe levels 
     for pathogens in raw poultry and poultry products;
       ``(B) the scientific and public health criteria that are 
     relevant to determining the safe levels; and
       ``(C) other factors determined by the Secretary.
       ``(h) Relationship to Adulteration Provisions.--Nothing in 
     this section affects the applicability to pathogens of the 
     provisions of this Act relating to adulteration.''.

     SEC. 4. NATIONAL ADVISORY COMMITTEE FOR MICROBIOLOGY CRITERIA 
                   FOR FOODS.

       (a) Establishment.--
       (1) In general.--In consultation with the Secretary of 
     Health and Human Services, the Secretary of Agriculture 
     (referred to in this section as the ``Secretary'') shall 
     establish a National Advisory Committee for Microbiology 
     Criteria for Foods (referred to in this section as the 
     ``Committee'').
       (2) Administration.--The Committee shall report to--
       (A) the Secretary of Agriculture, acting through the Under 
     Secretary for Food Safety; and
       (B) the Secretary of Health and Human Services, acting 
     through the Assistant Secretary for Health.
       (b) Membership.--
       (1) Composition.--The Committee shall be composed of not 
     fewer than 9 nor more than 15 members appointed by the 
     Secretary, including a Chairperson designated by the 
     Secretary.
       (2) Qualifications.--In appointing members of the 
     Committee, the Secretary shall appoint individuals who--
       (A) are qualified by education, training, and experience to 
     evaluate scientific and technical information on matters 
     referred to the Committee; and
       (B) to the maximum extent practicable, represent the fields 
     of microbiology, risk assessment, epidemiology, public 
     health, food science, veterinary medicine, and other relevant 
     disciplines.
       (3) Prohibition on federal government employment.--A member 
     of the Committee appointed under paragraph (1) shall not be 
     an employee of the Federal Government.
       (4) Date of appointments.--The appointment of an initial 
     member of the Committee shall be made not later than 90 days 
     after the date of enactment of this Act.
       (5) Term.--A member of the Committee shall be appointed for 
     a term established by the Secretary.
       (c) Meetings.--
       (1) Initial meeting.--Not later than 30 days after the date 
     on which all members of the Committee have been appointed, 
     the Committee shall hold the initial meeting of the 
     Committee.
       (2) Meetings.--The Committee shall meet at the call of the 
     Chairperson, in consultation with the Secretary.
       (3) Quorum.--A majority of the members of the Committee 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (4) Conflicts of interest.--
       (A) In general.--Notwithstanding sections 201 through 209 
     of title 18, United States Code, a conflict of interest 
     involving the appointment of a member of the Committee shall 
     be waived under section 208(b)(3) of that title only if the 
     member with the conflict of interest is essential to the 
     completion of the work of the Committee.
       (B) Voting.--Notwithstanding subparagraph (A), a member of 
     the Committee with a conflict of interest on a matter before 
     the Committee shall not be allowed to vote on the matter.
       (d) Duties.--
       (1) In general.--The Committee shall provide such 
     independent, impartial, scientific advice to Federal food 
     safety agencies as may be requested by the Secretary for use 
     in the development of an integrated national food safety 
     systems approach from farm-to-final consumption to ensure the 
     safety of domestic, imported, and exported foods and reduce 
     the public health burden of foodborne illness.
       (2) Food safety standards and regulations.--
       (A) In general.--At the time at which the Secretary submits 
     to any Federal agency for formal review and comment any 
     standard or regulation proposed under the Federal Meat 
     Inspection Act (21 U.S.C. 601 et seq.), the Poultry Products 
     Inspection Act (21 U.S.C. 451 et seq.), or any program 
     administered by the Under Secretary for Food Safety, the 
     Secretary shall make available to the Committee--
       (i) the standard or regulation; and
       (ii) relevant scientific and technical information 
     possessed by the Secretary on which the proposed standard or 
     regulation is based.
       (B) Advice and comments.--Not later than a date specified 
     by the Secretary that is not later than 90 days after receipt 
     of the standard or regulation, the Committee may make 
     available to the Secretary the advice and comments of the 
     Committee on the adequacy of the scientific and technical 
     basis for the proposed standard or regulation, together with 
     any additional information the Committee considers 
     appropriate.
       (C) Contemporaneous review.--To the maximum extent 
     practicable, the review by the Committee under subparagraph 
     (A) shall be conducted contemporaneously with review by other 
     Federal agencies.
       (e) Powers.--
       (1) Hearings.--The Committee may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Committee considers advisable to 
     carry out this section.
       (2) Information from federal agencies.--
       (A) In general.--The Committee may secure directly from a 
     Federal agency such information as the Committee considers 
     necessary to carry out this section.
       (B) Provision of information.--On request of the 
     Chairperson of the Committee, the head of the agency shall 
     provide the information to the Committee.
       (3) Subcommittees and investigative panels.--
       (A) In general.--The Committee may establish such 
     subcommittees and investigative panels as the Secretary and 
     the Committee determine necessary to carry out this section.
       (B) Chairperson.--Each subcommittee and investigative panel 
     shall be chaired by a member of the Committee.
       (4) Postal services.--The Committee may use the United 
     States mails in the same manner and under the same conditions 
     as other agencies of the Federal Government.
       (5) Gifts.--The Committee may accept, use, and dispose of 
     gifts or donations of services or property.
       (f) Committee Personnel Matters.--
       (1) Compensation of members.--A member of the Committee 
     shall be compensated at a rate equal to the daily equivalent 
     of the annual rate of basic pay prescribed for level IV of 
     the Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which the member is engaged in the performance of the duties 
     of the Committee.
       (2) Travel expenses.--A member of the Committee shall be 
     allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for an employee of an agency 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from the home or regular place of business 
     of the member in the performance of the duties of the 
     Committee.
       (3) Staff.--
       (A) In general.--The Chairperson of the Committee may, 
     without regard to the civil service laws (including 
     regulations), appoint and terminate an executive director and 
     such other additional personnel as are necessary to enable 
     the Committee to perform the duties of the Committee.
       (B) Confirmation of executive director.--The employment of 
     an executive director shall be subject to confirmation by the 
     Committee.
       (C) Compensation.--
       (i) In general.--Except as provided in clause (ii), the 
     Chairperson of the Committee

[[Page 12852]]

     may fix the compensation of the executive director and other 
     personnel without regard to the provisions of chapter 51 and 
     subchapter III of chapter 53 of title 5, United States Code, 
     relating to classification of positions and General Schedule 
     pay rates.
       (ii) Maximum rate of pay.--The rate of pay for the 
     executive director and other personnel shall not exceed the 
     rate payable for level V of the Executive Schedule under 
     section 5316 of title 5, United States Code.
       (4) Procurement of temporary and intermittent services.--
     The Chairperson of the Committee may procure temporary and 
     intermittent services in accordance with section 3109(b) of 
     title 5, United States Code, at rates for individuals that do 
     not exceed the daily equivalent of the annual rate of basic 
     pay prescribed for level V of the Executive Schedule under 
     section 5316 of that title.
       (g) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     such sums as are necessary to carry out this section, to 
     remain available until expended.
       (2) Existing funds.--Any funds that are available to the 
     National Advisory Committee on Microbiological Criteria in 
     existence on the date of enactment of this Act shall be made 
     available to the Committee.

     SEC. 5. ENFORCEMENT OF HACCP AND SANITATION REQUIREMENTS.

       (a) In General.--The Secretary of Agriculture shall enforce 
     the Hazard Analysis and Critical Control Point (HACCP) System 
     requirements established under part 417 of title 9, Code of 
     Federal Regulations (or successor regulations), and the 
     sanitation requirements established under part 416 of title 
     9, Code of Federal Regulations (or successor regulations), in 
     any official establishment.
       (b) Enforcement.--
       (1) In general.--If the Secretary determines that an 
     establishment fails to meet a requirement described in 
     subsection (a) and that the establishment fails to take 
     appropriate corrective action, as determined by the 
     Secretary, the Secretary may refuse to allow any meat or meat 
     product, or poultry or poultry product, subject to the 
     standard and processed by the establishment to be labeled, 
     marked, stamped or tagged as ``inspected and passed''.
       (2) Additional authority.--The authority provided under 
     paragraph (1) is in addition to any other authority the 
     Secretary may have to enforce the requirements of this 
     section.

     SEC. 6. REGULATIONS.

       (a) In General.--Consistent with section 553 of title 5, 
     United States Code, the Secretary of Agriculture shall have 
     the authority to enforce the pathogen performance standards 
     of the Secretary in accordance with the Federal Meat 
     Inspection Act (21 U.S.C. 601 et seq.) and the Poultry 
     Products Inspection Act (21 U.S.C. 451 et seq.).
       (b) Challenges.--Subsection (a) does not prevent a 
     challenge to the standards described in subsection (a) on any 
     basis other than the basis that the Secretary lacks the 
     authority to issue and enforce pathogen performance standards 
     promulgated in accordance with section 553 of title 5, United 
     States Code.
       (c) Effective Date.--This section takes effect on January 
     1, 2000.

  Mr. DURBIN. Mr. President, I am pleased to join Senator Harkin today 
in introducing Kevin's Law, which is an essential piece of legislation 
that will clarify the U.S. Department of Agriculture's authority to 
enforce pathogen reduction standards in meat and poultry products.
  Our country has been blessed with one of the safest and most abundant 
food supplies in the world. However, we can do better. While food may 
never be completely free of risk, we must strive to make our food as 
safe as possible. Foodborne illnesses and hazards are still a 
significant problem that cannot be passively dismissed.
  The Centers for Disease Control and Prevention estimate as many as 76 
million people suffer from foodborne illnesses each year. Of those 
individuals, approximately 325,000 will be hospitalized and more than 
5,000 will die. With emerging pathogens, broader distribution patterns, 
an increasing volume of food imports, and changing consumption 
patterns, this situation is not likely to improve without decisive 
action.
  Foodborne illnesses can have devastating effects on certain 
populations in our society. Children are especially vulnerable. Because 
their immune systems are not fully developed, they are at greater risk 
for developing life-threatening or fatal complications associated with 
foodborne illnesses. Quite simply, a child's lower weight means that it 
takes a smaller quantity of pathogens to make a child sick than it 
would a healthy adult. The elderly and those with compromised immune 
systems are also at high risk for developing life-threatening 
conditions associated with foodborne illnesses.
  A key tool for addressing foodborne illness in this country has been 
the USDA's pathogen reduction/hazard analysis and critical control 
point, PR/HACCP, regulations that were phased in beginning in January 
1998. Under these regulations, USDA developed a scientific approach 
aimed at protecting consumers from foodborne pathogens. Instead of a 
system based on sight, smell, and touch, USDA moved to a system that 
would successfully detect harmful pathogens whether visible or not.
  A major part of this system includes testing for harmful pathogens, 
such as salmonella. USDA uses the data from this testing to determine 
if meat and poultry plants are producing products that are safe to 
consume.
  USDA's pathogen testing regulations have provided consumers with 
increased confidence in the safety of meat and poultry products. 
However, in December of 2001, the Fifth Circuit Court of Appeals upheld 
an earlier district court decision that removes the USDA's authority to 
enforce its pathogen standards for salmonella. The result of this court 
case is that USDA can no longer ensure that meat and poultry plants 
comply with pathogen standards. This creates a significant risk that 
meat and poultry products contaminated with common but potentially 
deadly pathogens will be sold to unsuspecting consumers.
  The legislation we are introducing today will clarify USDA's 
authority to enforce strong safety standards for contamination in meat 
and poultry products. Specifically, this legislation will provide the 
Secretary of Agriculture with the clear authority to control for 
pathogens and enforce pathogen performance standards for meat and 
poultry products. Only with this authority will the Secretary of 
Agriculture be able to ensure the safety of the meat and poultry 
products sold in this country.
  We must work together to ensure that USDA has the necessary authority 
to enforce pathogen performance standards that will protect public 
health. Let's not turn our back on food safety and consumer protection 
at such a critical time for food safety and security. I encourage my 
colleagues to join this effort to protect our food supply and public 
health.
                                 ______
                                 
      By Mr. BOND:
  S. 1105. A bill to authorize the Secretary of the Interior to study 
the suitability and feasibility of designating the French Colonial 
Heritage Area in the State of Missouri as a unit of the National Park 
System, and for other purposes; to the Committee on Energy and Natural 
Resources.
  Mr. BOND. Mr. President, I rise today to introduce legislation 
recognizing the historical significance of downtown Sainte Genevieve, 
MO. Sainte Genevieve was the first European settlement west of the 
Mississippi River, and still contains many structures and artifacts 
that have survived from its rich early history. Establishing this area 
as a unit of the National Park System will provide an unparalleled 
opportunity for Americans to be educated about our Nation's colonial 
past.
  Sainte Genevieve was founded by French settlers in 1735. These early 
pioneers traveled south from French Canada, and built the rare French 
Colonial style structures that remain in place to this day. Today, the 
city contains an invaluable wealth of Native American and French 
Colonial sites, artifacts, and architecture. Perhaps most impressively, 
downtown Sainte Genevieve contains three of only five poteaux-en-Terre, 
post in the ground, vertical log French homes remaining in North 
America, dating from approximately 1800.
  In addition to the historic downtown district, the area adjacent to 
Sainte Genevieve is rich in historic sites. The ``Grand Champ'' common 
field of the French colonists still retains its original field land 
pattern. The area's saline salt springs were an important industry 
source for Native American and European settlers. And nearby ceremonial 
mounds are evidence of a prehistoric Native American village.
  This area is a truly valuable asset to the State of Missouri, and I 
feel that it is only fair to share it with the entire

[[Page 12853]]

Nation by establishing the French Colonial Heritage Area as a unit of 
the National Park System. My legislation would take the first step 
toward such an establishment by directing the National Park Service to 
conduct a study of the historic features of Sainte Genevieve. After a 
thorough study, I am confident that the National Park Service will 
determine that Sainte Genevieve is the best tool with which to tell the 
important and fascinating story of the French in the New World.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. Kerry):
  S. 1106. A bill to establish National Standards for Fishing Quota 
Systems; to the Committee on Commerce, Science, and Transportation.
  Ms. SNOWE. Mr. President, I rise today, along with Senator Kerry, to 
introduce the Fishing Quota Act of 2003 which will address one of the 
most complex policy questions in fisheries management--fishing quotas. 
This bill will amend the Magnuson-Stevens Fishery Conservation and 
Management Act to authorize the establishment of new fishing quota 
systems. This legislation will in no way whatsoever force Fishing Quota 
programs upon any regional fishery management council and this is not a 
mandate to use Fishing Quota programs. Rather, it is intended to 
provide the councils with an additional conservation and management 
tool.
  Fishing Quota programs can drastically change the face of fishing 
communities and the fundamental principles of conservation and 
management. Therefore, this legislation was developed in a careful and 
meaningful manner over the span of many years with significant input 
and participation from all of the many affected and interested parties.
  In 1996, Congress reauthorized the Magnuson-Stevens Fishery 
Conservation and Management Act through enactment of the Sustainable 
Fisheries Act, SFA. The SFA contained the most substantial improvements 
to fisheries conservation since the original passage of the Magnuson-
Stevens Act in 1976. More specifically, the SFA included a five year 
moratorium on new fishing quota programs and required the National 
Academy of Sciences, NAS, to study and report on the issue.
  In 1999, the NAS issued its report, Sharing the Fish, which contained 
a number of critically important recommendations addressing the social, 
economic, and biological aspects of Fishing Quota programs. The Fishing 
Quota Act of 2003 incorporates many of the recommendations in this 
report and provides the regional councils with the flexibility to adopt 
additional NAS recommendations.
  During the 106th Congress, the Subcommittee on Oceans and Fisheries 
traveled across the country and held six hearings on reauthorizing the 
Magnuson-Stevens Act. We began the process in Washington, DC, and then 
visited fishing communities in Maine, Louisiana, Alaska, Washington, 
and Massachusetts. During the course of those hearings, we heard 
official testimony from over 70 witnesses and received statements from 
many more fishermen during open microphone sessions at each field 
hearing. The Subcommittee heard the comments, views, and 
recommendations of Federal and State officials, regional council 
chairmen and members, other fisheries managers, commercial and 
recreational fishermen, members of the conservation community, and many 
other interested in these important issues. After these hearings, I 
introduced the Individual Fishing Quota Act of 2001, S. 637, at the 
beginning of the 107th Congress beginning the legislative dialogue. 
Since then, we have heard from many stakeholders who assisted the 
Subcommittee in shaping and re-shaping this bill.
  The Fishing Quota Act of 2003 creates a framework under which fishery 
management plans, FMPs, or plan amendments may establish a new fishing 
quota system. As with other components of fisheries conservation and 
management, there is no ``one-size-fits-all'' solution to Fishing Quota 
programs. Therefore, this bill sets certain conditions under which 
Fishing Quota programs may be developed, if such a program is desired. 
In doing so, it clearly provides the regional fishery management 
councils and the affected fishermen with the flexibility to shape any 
new Fishing Quota program to fit the needs of the fishery.
  The bill ensures that any regional council which establishes a new 
fishing quota program will promote sustainable management of the 
fishery; require fair and equitable allocation of fishing quotas; 
minimize negative social and economic impacts on local coastal 
communities; ensure adequate enforcement of the system; and take into 
account present participation and historical fishing practices of the 
relevant fishery. Additionally, the bill requires the Secretary of 
Commerce to conduct referenda to ensure that those most affected by 
fishing quotas will have the opportunity to formally approve the 
adoption of any new fishing quota program by a two-thirds vote.
  This bill authorizes the potential allocation of fishing quotas to 
fishing vessel owners, fishermen, and crew members who are citizens of 
the United States. In addition, participation in the fishery is 
required for a person to obtain quota. Moreover, this bill permits 
councils to allocate quota shares to entry-level fishermen, small 
vessel owners, or crew members who may not otherwise be eligible for 
individual quotas. While this bill authorizes the transfer of fishing 
quotas, it requires the regional councils to define and prohibit an 
excess accumulation of quota shares.
  This is a good bill which allows Fishing Quota programs to be created 
where they are needed and desired. The Fishing Quota Act of 2003 
incorporates many of the suggestions we heard from those men and women 
who fish for a living and those who are most affected by the law and 
its regulations. I appreciate the participation of Senator Kerry and 
all the impacted stakeholders who assisted in drafting this 
legislation. I look forward to moving this bill through the legislative 
process toward final passage.
  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. 1106

       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 ``Fishing Quota Act of 2003''.

     SEC. 2. FISHING QUOTA SYSTEMS.

       (a) In General.--Section 303 of the Magnuson-Stevens 
     Fishery Conservation and Management Act (16 U.S.C. 1853) is 
     amended--
       (1) by striking subsection (f)(6) and inserting the 
     following:
       ``(6) establish a limited access system for the fishery in 
     order to achieve optimum yield if, in developing such system, 
     the Council and the Secretary take into account--
       ``(A) the conservation requirements of this Act with 
     respect to the fishery;
       ``(B) present participation in the fishery;
       ``(C) historical fishing practices in, and dependence on, 
     the fishery;
       ``(D) the economics of the fishery;
       ``(E) the capability of fishing vessels used in the fishery 
     to engage in other fisheries;
       ``(F) the cultural and social framework relevant to the 
     fishery and any affected fishing communities;
       ``(G) the fair and equitable distribution of a public 
     resource; and
       ``(H) any other relevant considerations.'';
       (2) by striking subsection (d) and inserting the following:
       ``(d) Fishing Quota Systems.--
       ``(1) Establishment.--Any fishery management plan or 
     amendment that is prepared by any Council, or by the 
     Secretary, with respect to any fishery, may establish a 
     fishing quota system consistent with the provision of 
     subsection (b)(6).
       ``(2) In general.--The Councils and Secretary shall ensure 
     that any such fishing quota system submitted and approved 
     after September 30, 2002, complies with the requirements of 
     this Act, and;
       ``(A) shall prevent any person from acquiring an excessive 
     share of the fishing quotas issued, as appropriate for the 
     fishery, and establish any other limits or measures necessary 
     to prevent inequitable concentration of quota share;
       ``(B) shall provide for the fair and equitable initial 
     allocation of quota share and in such allocation--
       ``(i) shall take into account present and historic 
     participation in the fishery;
       ``(ii) shall consider allocating a portion of the annual 
     harvest to entry-level fishermen,

[[Page 12854]]

     small vessel owners, skippers, crew members, and fishing 
     communities; and
       ``(iii) may allocate shares among categories of vessels or 
     gear types.
       ``(C) shall contain provisions for the regular review and 
     evaluation of the system, including timetables and criteria 
     for evaluating performance, and actions to be taken for 
     failure to meet the criteria;
       ``(D) shall contain criteria that would govern limitation, 
     revocation, renewal, reallocation, or reissuance of fishing 
     quota, including:
       ``(i) reallocation or reissuance of quota revoked pursuant 
     to section 308 of this Act;
       ``(ii) revocation and reissuance of fishing quota if the 
     owner of the quota cease to substantially participate in the 
     fishery; and
       ``(iii) exceptions to revocation or limitation in cases of 
     death, disablement, undue hardship, or in any case in which 
     fishing is prohibited by the Secretary;
       ``(E) shall provide a process for appeals of decisions on--
       ``(i) eligibility of a person to receive or bid for an 
     allocation of quota shares; and
       ``(ii) limitations, restrictions and revocations of quota 
     held by a person.
       ``(F) shall promote management measures top improve the 
     conservation and management of the fishery, including 
     reduction by bycatch;
       ``(G) shall provide for effective enforcement, monitoring, 
     a management of such system, including adequate data 
     collection and use of observers at least at a level of 
     coverage that should yield statistically significant results;
       ``(H) may provide for the sale, lease or transfer of quota 
     shares and limitations thereto;
       ``(I) shall provide a mechanism, such as fees as authorized 
     by section 304(d)(2), including fees payable on quota 
     transfers to recover costs related to administering and 
     implementing the program, including enforcement, management 
     and data collection (including adequate observer coverage), 
     if the assessment of such fees is proportional to the amount 
     of quota held and fished by each quota holder and if such 
     fees are used only for that fishing quota system;
       ``(J) shall consider the use of community or area-based 
     approaches and strategies in developing fishing quota systems 
     and consider other management measures, including measures to 
     facilitate formation of fishery cooperative arrangements, 
     taking into account proximity to and dependence on the 
     resource, contribution of fishing to the social and economic 
     status of the community, and historic participation in the 
     fishery; and
       ``(K) shall include procedures and requirements necessary 
     to carry out subparagraphs (A) through (J).
       ``(3) No creation of right, title, or interest.--A fishing 
     quota or other limited access system authorization--
       ``(A) shall be considered a permit for the purposes of 
     sections 307, 308, and 309;
       ``(B) may be revoked or limited at any time in accordance 
     with this Act, including for failure to comply with the terms 
     of the plan or if the system is found to have jeopardized the 
     sustainability of the stock or the safety of fishermen;
       ``(C) shall not confer any right of compensation to the 
     holder of such fishing quota or other such limited access 
     system authorization if it is revoked or limited;
       ``(D) shall not create, or be construed to create, any 
     right, title, or interest in or to any fish before the fish 
     is harvested; and
       ``(E) shall be considered a grant of permission to the 
     holder of the fishing quota to engage in activities permitted 
     by the fishing quota system.
       ``(4) Eligibility.--Persons eligible to hold fishing quota 
     shares are persons who are United States citizens, or who are 
     United States nationals or permanent resident aliens 
     qualified by Federal law to participate in the fishery.
       ``(5) Duration.--Any fishing quota system established under 
     this section after the date of enactment of the Fishing Quota 
     Act of 2003 shall expire at the end of a 10-year period 
     beginning on the date the system is established, or at the 
     end of successive 10 year periods thereafter, unless extended 
     by a fishery management plan amendment is accordance with 
     this Act, for successive periods not to exceed 10 years.
       ``(6) Referendum Procedures.--
       ``(A) Except as provided in subparagraph (C) for the Gulf 
     of Mexico commercial red snapper fishery, a Council may not 
     submit, and the Secretary not approve or implement a fishery 
     management plan or amendment that creates a fishing quota 
     system, including a secretarial plan, unless such a system, 
     as ultimately developed, has been approved by more than two-
     thirds of those voting in a referendum among eligible permit 
     holders. If a fishing quota system fails to be approved by 
     the requisite number of those voting, it may be revised and 
     submitted for approval in a subsequent referendum.
       ``(B) The Secretary shall conduct the referendum referred 
     to in this paragraph, including notifying all persons 
     eligible to participate in the referendum and making 
     available to them information concerning the schedule, 
     procedures and eligibility requirements for the referendum 
     process and the proposed fishing quota system. The Secretary 
     shall within one year of enactment of the Fishing Quota Act 
     of 2003 publish guidelines and procedures to determine 
     procedures and voting eligibility requirements for referenda 
     and to conduct such referenda in a fair and equitable manner.
       ``(C) The provisions of section 407(e) shall apply in lieu 
     of this paragraph for any fishing quota system for the Gulf 
     of Mexico commercial red snapper fishery.
       ``(D) Chapter 35 of title 44, United States Code, (commonly 
     known as the ``Paperwork Reduction Act'') does not apply to 
     the referenda conducted under this paragraph.
       ``(7)(A) No provision of law shall be construed to limit 
     the authority of a Council to submit, or the Secretary to 
     approve, the termination or limitation, without compensation 
     to holders of any limited access system permits, of a fishery 
     management plan, plan amendment, or regulation that provides 
     for a limited access system, including a fishing quota 
     system.
       ``(B) This subsection shall not apply to, or be construed 
     to prohibit a Council from submitting, or the Secretary from 
     approving and implementing, amendments to the North Pacific 
     halibut and sablefish, Southern Atlantic wreckfish, or Mid-
     Atlantic surf clam and ocean (including mahogany) quahog 
     individual fishing quota programs.
       ``(8)(A) A Council may submit, and the Secretary may 
     approve and implement, a program which reserves up to 25 
     percent of any fees collected from a fishery under section 
     304(d)(2) to be used, pursuant to section 1104A(a)(7) of the 
     Merchant Marine Act, 1936 (46 U.S.C. App. 1274(a)(7)), to 
     issue obligations that aid in financing the----
       ``(i) purchase of fishing quotas in that fishery by 
     fishermen who fish from small vessels; and
       ``(ii) first-time purchase of fishing quotas in that 
     fishery by entry level fishermen.
       ``(B) A Council making a submission under subparagraph (A) 
     shall recommend criteria, consistent with the provisions of 
     this Act, that a fisherman must meet to qualify for 
     guarantees under clauses (i) and (ii) of subparagraph (A) and 
     the portion of funds to be allocated for guarantees under 
     each clause.''.
       (b) Independent Review.--Section 303 of the Magnuson-
     Stevens Fishery Conservation and Management Act (16 U.S.C. 
     1853) is further amended by adding at the end the following:
       ``(e)(1) Within 5 years after the date of enactment of the 
     Fishing Quota Act of 2003, and every 5 years thereafter, the 
     National Research Council shall provide an independent review 
     of the effectiveness of fishing quota systems conducted in 
     Federal fisheries.
       ``(2) The review shall be conducted by an independent panel 
     of individuals who have knowledge and experience in fisheries 
     conservation and management, in the implementation of fishing 
     quota systems, or in the social or economic characteristics 
     of fisheries. The National Research Council shall ensure that 
     members of the panel are qualified for appointment, are not 
     active quota share holders, and provide fair representation 
     to interests affected by such programs.
       ``(3) The independent review of fishing quota systems shall 
     include--
       ``(A) a determination of how fishing quota systems affect 
     fisheries management and contribute to improved management, 
     conservation (including bycatch reduction) and safety in the 
     fishery;
       ``(B) formal input in the form of testimony from quota 
     holders relative to the effectiveness of the fishing quota 
     system;
       ``(C) an evaluation of the social, economic and biological 
     consequences of the quota system, including the economic 
     effects of the system on fishing communities;
       ``(D) an evaluation of the costs of implementing, 
     monitoring and enforcing the systems and the methods used to 
     establish or allocate individual quota shares; and
       ``(E) recommendations to the Councils and the Secretary to 
     ensure that quota systems meet the requirements of this Act 
     and the goals of the plans, and recommendations to the 
     Secretary for any changes to regulations issued under section 
     304(i).
       ``(4) The Secretary shall submit the report to the Congress 
     and any appropriate Councils within 60 days after the review 
     is completed.''.
       (c) Action on Limited Access Systems.--Section 304 of the 
     Magnuson-Stevens Fishery Conservation and Management Act (16 
     U.S.C. 1854) is amended by adding at the end the following:
       ``(i) Action on limited access systems.--Within 1 year 
     after the date of enactment of the Fishing Quota Act of 2003, 
     the Secretary shall issue regulations which establish 
     requirements for establishing a fishing quota system. Nothing 
     in this paragraph prohibits a Council or the Secretary from 
     initiating development of a fishing quota system consistent 
     with the provisions of this Act pending publication of the 
     final regulations.''.
       (d) Definitions.--Section 3 of the Magnuson-Stevens Fishery 
     Management and Conservation Act (16 U.S.C. 1802) is amended 
     by--
       (1) adding at the end the following:
       ``(46) The term `United States Citizen' means an individual 
     who is a citizen of the United States or a corporation, 
     partnership, association or other entity that qualifies to 
     document a fishing vessel as a vessel of the United States 
     under chapter 121 of title 46, United States Code.''; and

[[Page 12855]]

       (2) striking `` `individual fishing quota' '' in paragraph 
     (21) and inserting `` `fishing quota system' ''.
       (e) Conforming Amendments.--
       (1) The following provisions of that Act are amended by 
     striking ``individual fishing quota'' and inserting ``fishing 
     quota'';
       (A) Section 304(c)(3) (16 U.S.C. 1854(c)(3)).
       (B) Section 304(d)(2)(A)(i) (16 U.S.C. 1854(D)(2)(A)(i)).
       (C) Section 402(b)(1)(D) (16 U.S.C. 1881a(b)(1)(D)).
       (D) Section 407(a)(1)(D), (c)(1), and (c)(2)(B) (16 U.S.C. 
     1883(a)(1)(D), (c)(1), and (c)(2)(B)).
       (2) section 305(h)(1) (16 U.S.C. 1855(h)(1) is amended by 
     striking ``individual''.

     SEC. 3. GULF OF MEXICO FISHING QUOTA SYSTEMS.

       Section 407(c) of the Magnuson-Stevens Fishery Conservation 
     and Management Act (16 U.S.C. 1883) is amended by adding at 
     the end the following:
       ``(3) The initial referendum described in paragraph (1) 
     shall be used to determine support for whether the sale, 
     transfer, or lease of quota shares shall be allowed.''.

  Mr. KERRY. Mr. President, I rise today with my colleague, Ms. Snowe, 
to introduce the Fishing Quota Act of 2003, legislation to establish 
national criteria governing the use of individual fishing quota IFQ 
systems. Work began in earnest on this bipartisan bill in the Commerce 
Committee last spring, as the expiration of the national moratorium on 
the use of IFQs approached, and small boat fishermen voiced concerns 
that existing legislative criteria governing the use of IFQs would not 
offer sufficient protection to communities. I would like to thank 
Subcommittee Chair Snowe for her efforts to work with me and with other 
members of the Commerce Committee on this legislation, which draws from 
separate IFQ legislation that both Senator Snowe and I introduced 
beginning in the 106th Congress.
  The IFQ moratorium established under the 1996 Sustainable Fisheries 
Act was set to expire September 30, 2000. Senator Snowe and I supported 
a 2-year extension of that moratorium to allow for hearings and full 
consultation with affected groups on the issues surrounding IFQs. Our 
discussions focused on the need to provide regional flexibility to use 
IFQs as a management tool, while providing national ``rules of the 
road.'' Such rules of the road would ensure IFQ systems developed after 
expiration of the moratorium are adopted with the support of the 
fishery, allocate quota fairly and equitably, address region-specific 
needs, further the conservation and management goals of the Magnuson-
Stevens Act, prevent consolidation of quota, address the needs of small 
fishing communities, and recognize both the public nature of the 
resource and that issuance of an IFQ does not give rise to a 
compensable property right.
  To develop such rules, we worked with fellow Commerce Committee 
members, including Senators Breaux, Lott, Boxer, Stevens, and Cantwell, 
consulted with interested groups, and obtained technical advice from 
the National Marine Fisheries Service. While New England has 
historically been opposed to IFQs, other regions are interested in 
utilizing IFQ programs in certain fisheries. I believe the resulting 
bill provides a balance between the need to provide national policy 
guidance that considers the concerns of communities and harvesters, but 
allows for development of IFQ systems, where appropriate, on a fishery-
by-fishery basis. This preserves the balanced regional approach to 
fishery management that Congress intended in the Magnuson-Stevens Act. 
I also want to clarify that this bill does not authorize the 
establishment of ``processor quota,'' and relates only to issuance of 
harvester quota.
  The bill Senator Snowe and I are introducing today sets forth a set 
of national criteria that councils wishing to adopt IFQs would follow. 
Importantly, this bill contains a provision that directs councils to 
consider the use of community or area-based approaches and strategies 
that would preserve the vitality of small fishing communities, 
including the allocation of quota to a fishing community. It also 
directs councils to consider use of other management measures, 
including those that would facilitate formation of fishery cooperative 
arrangements, taking account of the dependence of coastal communities 
on these fisheries.
  This bill addresses many of the concerns raised by fishermen, and I 
understand the many concerns of small fisherman in New England 
regarding the use of IFQs. I believe this bill gives fishermen the 
power to decide whether to implement an IFQ program and ensures that 
those who do will operate under a fair system. First, no region could 
implement an IFQ system without approval of a two-thirds majority of 
eligible permit holders through a referendum process run by the 
Secretary of Commerce. In addition, any IFQ system developed under the 
legislation would have to meet a set of national criteria. These 
national criteria would include: (1) ensuring a fair and equitable 
initial allocation of quota, including the establishment of an appeals 
process for qualification and allocation decisions, taking into account 
present and historic participation in the fishery; (2) establishing 
limits necessary to prevent inequitable concentration of quota share; 
(3) preventing any person from acquiring an ``excessive share''; (4) 
considering allocation of a portion of the annual harvest specifically 
to small fishermen, skippers, crew members, fishing communities, or 
categories of vessels or gear types; and (5) providing for revocation 
of quota if the owner is no longer an active fisherman.
  I also believe this bill responds to concerns that IFQ systems would 
undermine the national interest in conserving fishery resources held in 
the public trust. In order to respond to those concerns, the bill 
would: (1) specify that an IFQ is a permit under the Magnuson-Stevens 
Act and does not confer any right of compensation or any right, title 
or interest to any fish before it is harvested; (2) established that 
the quota expires after 10 years, unless extended by a fishery 
management plan; (3) require that the systems promote management 
measures to improve the conservation and management of the fishery, 
including reduction of bycatch; (4) provide for regular review and 
evaluation of the system, including specifying actions to be taken for 
any failure to meet the criteria; (5) require that the systems provide 
for effective enforcement, monitoring, and management, including use of 
observers; and (6) require that quota be revoked from individuals found 
to be subject to civil penalties under section 308 of the Magnuson-
Stevens Act.
  The bill also would require a 5-year recurring independent review of 
IFQ systems by the National Research Council, to: (1) evaluate the 
effectiveness of such systems and determine who the systems contribute 
to improved management, conservation and safety; (2) evaluate the 
social, economic and biological consequences of the systems, including 
economic impacts on fishing communities; (3) evaluate the costs of 
implementation; and (4) provide recommendations to ensure the systems 
meet Magnuson-Stevens Act requirements and the goals of the plans.
  I believe this legislation provides guidelines for the use of IFQs 
that will help ensure the health of our marine fisheries. During the 
last reauthorization of the Magnuson-Stevens Act, our Nation's 
fisheries were at a crossroads, and action was required to remedy our 
marine resource management problems, to preserve the way of life in our 
coastal communities, and to promote the sustainable use and 
conservation of our marine resources for future generations and for the 
economic good of the Nation. We must stay the course, and this bill 
will help us do just that. I remain committed to the goal of 
establishing biologically and economically sustainable fisheries so 
that fishing will continue to be an important part of the culture and 
economy of coastal communities throughout Massachusetts, as well as the 
economy of the Nation.
                                 ______
                                 
      By Mr. THOMAS:
  S. 1107. A bill to enhance the Recreation Fee Demonstration Program 
for the National Park Service, and for other purposes; to the Committee 
on Energy and Natural Resources.
  Mr. THOMAS. Mr. President, I rise today to introduce the Recreation 
Fee Authority Act of 2003. This legislation

[[Page 12856]]

modifies the congressionally created Recreation Fee Demonstration 
Program.
  The issue of user fees on public lands is a difficult one. As you 
know, our Nation's parks and recreation areas are in serious trouble 
and have significant maintenance and infrastructure needs. The National 
Park Service alone has roughly a $5 billion backlog in maintenance and 
infrastructure repair. There are a number of reasons for this funding 
shortage, including poor park management, congressional inaction and 
apathy from the American public.
  Currently, the Recreation Fee Demonstration Program allows the 
National Park Service, Bureau of Land Management, Fish and Wildlife 
Service and the U.S. Forest Service to collect and expend funds for 
areas in need of additional financial support. Agencies collect fees 
for admission to a unit or site for special uses such as boating and 
back country camping fees and are able to use 80 percent of the 
receipts for protection and enhancement in that area. Fees are 
typically used for visitor services, maintenance and repair of 
facilities as well as cultural and natural resource management. The 
remaining 20 percent is used on an agency-wide basis for parts of the 
system, which are precluded from participating in the Recreation Fee 
Demonstration program.
  The legislation I am introducing today allows permanent authorization 
of the Recreation Fee Demonstration Program for national parks, and 
provides some new flexibility. For example, many visitors frequent 
national and State parks, but are not allowed to use State and national 
passes interchangeably. In cooperation with State agencies, the 
Secretary of the Interior will be authorized to enter into revenue 
sharing agreements to accept state and national park passes at sites 
within that state--providing a cost savings and convenience for the 
visitor.
  In the past, concerns have been expressed about ``nickel and dime'' 
efforts where there appears to be a lack of planning and coordination 
by agency officials. Fee programs under this legislation would be 
established at fair and equitable rates. Each unit would perform an 
analysis to consider benefits and services provided to the visitor, 
cumulative effect of fees, public policy and management objectives and 
feasibility of fee collection. This review would serve as a business 
plan for each site so that managers could utilize scarce resources in 
the most efficient manner.
  The Recreation Fee Demonstration program was an effort by Congress to 
allow public land agencies to obtain funding in addition to their 
annual appropriations. This legislation will help provide resources for 
badly needed improvement projects and ensure an enhanced experience for 
all visitors.
  We need to guarantee our national treasures are available for 
generations to come. I believe that Congress, the National Park Service 
and those interested in helping our parks should cooperate on 
initiatives to protect resources, increase visitor services and improve 
management throughout the system. Working together, we can ensure that 
these areas will remain affordable and accessible for everyone.
  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. 1107

       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 ``Recreational Fee Authority 
     Act of 2003''.

     SEC. 2. RECREATION FEE AUTHORITY.

       (a) In General.--Beginning in Fiscal Year 2004 and 
     thereafter, the Secretary of the Interior (``Secretary'') may 
     establish, modify, charge, and collect fees for admission to 
     a unit of the National Park System and the use of National 
     Park Service (``Service'') administered areas, lands, sites, 
     facilities, and services (including reservations) by 
     individuals and/or groups. Fees shall be based on an analysis 
     by the Secretary of--
       (A) the benefits and services provided to the visitor;
       (B) the cumulative effect of fees;
       (C) the comparable fees charged elsewhere and by other 
     public agencies and by nearby private sector operators;
       (D) the direct and indirect cost and benefit to the 
     government;
       (E) public policy or management objectives served;
       (F) economic and administrative feasibility of fee 
     collection, and
       (G) other factors or criteria determined by the Secretary.
       (b) Number of Fees.--The Secretary shall establish the 
     minimum number of fees and shall avoid the collection of 
     multiple or layered fees for a wide variety of uses, 
     activities or programs.
       (c) Analysis.--The results of the analysis together with 
     the Secretary's determination of appropriate fee levels shall 
     be transmitted to the Congress at least three months prior to 
     publication of such fees in the Federal Register. New fees 
     and any increases or decreases in established fees shall be 
     published in the Federal Register and no new fee or change in 
     the amount of fees shall take place until at least 12 months 
     after the date the notice is published in the Federal 
     Register.
       (d) Additional Authorities.--Beginning on October 1, 2003 
     the Secretary may enter into agreements, including contracts 
     to provide reasonable commissions or reimbursements with any 
     public or private entity for visitor reservation services, 
     fee collection and/or processing services.
       (e) Administration.--The Secretary may provide discounted 
     or free admission days or use, may modify the National Park 
     Passport, established pursuant to Public Law 105-391, and 
     shall provide information to the public about the various fee 
     programs and the costs and benefits of each program.
       (f) State Agency Admission and Special Use Passes.--
     Effective October 1, 2003 and notwithstanding the Federal 
     Grants Cooperative Agreements Act, the Secretary may enter 
     into revenue sharing agreements with State agencies to accept 
     their annual passes and convey the same privileges, terms and 
     conditions as offered under the auspices of the National Park 
     Passport, to State agency annual passes and shall only be 
     accepted for all of the units of the National Park System 
     within the boundaries of the State in which the specific 
     revenue sharing agreement is entered into except where the 
     Secretary has established a fee that includes a unit or units 
     located in more than one State.

     SEC. 3. DISTRIBUTION OF RECEIPTS.

       (a) Without further appropriation, all receipts collected 
     pursuant to the Act or from sales of the National Park 
     Passport shall be retained by the Secretary and may be 
     expended as follows--
       (1) 80 percent of amounts collected at a specific area, 
     site, or project as determined by the Secretary, shall remain 
     available for use at the specific area, site or project, 
     except for those units of the National Park System that 
     participate in an active revenue sharing agreement with a 
     State under Section 2(f) of this Act, not less than 90 
     percent of amounts collected at a specific area, site, or 
     project shall remain available for use.
       (2) The balance of the amounts collected shall remain 
     available for use by the Service on a Service-wide basis as 
     determined by the Secretary.
       (3) Monies generated as a result of revenue sharing 
     agreements established pursuant to Section 2(f) may provide 
     for a fee-sharing arrangement. The Service shares of fees 
     shall be distributed equally to all units of the National 
     Park System in the specific States that are parties to the 
     revenue sharing agreement.
       (4) Not less than 50 percent of the amounts collected from 
     the sale of the National Park Passport shall remain available 
     for use at the specific area, site, or project at which the 
     fees were collected and the balance of the receipts shall be 
     distributed in accordance with paragraph 2 of this Section.

     SEC. 4. EXPENDITURES

       (a) Use of Fees at Specific Area, Site, or Project.--
     Amounts available for expenditure at a specific area, site or 
     project shall be accounted for separately and may be used 
     for--
       (1) repair, maintenance, facility enhancement, media 
     services and infrastructure including projects and expenses 
     relating to visitor enjoyment, visitor access, environmental 
     compliance, and health and safety;
       (2) interpretation, visitor information, visitor service, 
     visitor needs assessments, monitoring, and signs;
       (3) habitat enhancement, resource assessment, preservation, 
     protection, and restoration related to recreation use, and
       (4) law enforcement relating to public use and recreation.
       (b) The Secretary may use not more than fifteen percent of 
     total revenues to administer the recreation fee program 
     including direct operating or capital costs, cost of fee 
     collection, notification of fee requirements, direct 
     infrastructure, fee program management costs, bonding of 
     volunteers, start-up costs, and analysis and reporting on 
     program accomplishments and effects.

     SEC. 5. REPORTS.

       (a) On January 1, 2006 and every three years thereafter the 
     Secretary shall submit to the Congress a report detailing the 
     status of the Recreation Fee Program conducted in units of 
     the National Park System including an evaluation of the 
     Recreation Fee Program

[[Page 12857]]

     conducted at each unit of the National Park System; a 
     description of projects that were funded, work accomplished, 
     and future projects and programs for funding with fees, and 
     any recommendations for changes in the overall fee system.
                                 ______
                                 
      By Mr. TALENT (for himself and Mr. Wyden):
  S. 1109. A bill to provide $50,000,000,000 in new transportation 
infrastructure funding through Federal bonding to empower States and 
local governments to complete significant infrastructure projects 
across all modes of transportation, including roads, rail, transit, 
aviation, and water, and for other purposes; to the Committee on 
Finance.
  Mr. TALENT. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1109

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

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Build 
     America Bonds Act of 2003''.
       (b) References to Internal Revenue Code of 1986.--Except as 
     otherwise expressly provided, whenever in this Act an 
     amendment or repeal is expressed in terms of an amendment to, 
     or repeal of, a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of the Internal Revenue Code of 1986.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Our Nation's highways, transit systems, railroads, 
     airports, ports, and inland waterways drive our economy, 
     enabling all industries to achieve growth and productivity 
     that makes America strong and prosperous.
       (2) The establishment, maintenance, and improvement of the 
     national transportation network is a national priority, for 
     economic, environmental, energy, security, and other reasons.
       (3) The ability to move people and goods is critical to 
     maintaining State, metropolitan, rural, and local economies.
       (4) The construction of infrastructure requires the skills 
     of numerous occupations, including those in the contracting, 
     engineering, planning and design, materials supply, 
     manufacturing, distribution, and safety industries.
       (5) Investing in transportation infrastructure creates 
     long-term capital assets for the Nation that will help the 
     United States address its enormous infrastructure needs and 
     improve its economic productivity.
       (6) Investment in transportation infrastructure creates 
     jobs and spurs economic activity to put people back to work 
     and stimulate the economy.
       (7) Every billion dollars in transportation investment has 
     the potential to create up to 47,500 jobs.
       (8) Every dollar invested in the Nation's transportation 
     infrastructure yields at least $5.70 in economic benefits 
     because of reduced delays, improved safety, and reduced 
     vehicle operating costs.

     SEC. 3. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

       (a) In General.--Part IV of subchapter A of chapter 1 
     (relating to credits against tax) is amended by adding at the 
     end the following new subpart:

  ``Subpart H--Nonrefundable Credit for Holders of Build America Bonds

``Sec. 54. Credit to holders of Build America bonds.

     ``SEC. 54. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a Build America bond on a credit allowance date of such 
     bond which occurs during the taxable year, there shall be 
     allowed as a credit against the tax imposed by this chapter 
     for such taxable year an amount equal to the sum of the 
     credits determined under subsection (b) with respect to 
     credit allowance dates during such year on which the taxpayer 
     holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a Build America bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any Build America bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (2), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of sale of the issue) on outstanding long-
     term corporate debt obligations (determined in such manner as 
     the Secretary prescribes).
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.

     Such term includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this part 
     (other than this subpart and subpart C).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(e) Build America Bond.--For purposes of this part, the 
     term `Build America bond' means any bond issued as part of an 
     issue if--
       ``(1) 95 percent or more of the proceeds from the sale of 
     such issue are to be used--
       ``(A) for expenditures incurred after the date of the 
     enactment of this section for any qualified project, or
       ``(B) for deposit in the Build America Trust Account for 
     repayment of Build America bonds at maturity,
       ``(2) the bond is issued by the Build America Corporation, 
     is in registered form, and meets the Build America bond 
     limitation requirements under subsection (f),
       ``(3) the Build America Corporation certifies that it meets 
     the State contribution requirement of subsection (k) with 
     respect to such project, as in effect on the date of 
     issuance,
       ``(4) the Build America Corporation certifies that the 
     State in which an approved qualified project is located meets 
     the requirement described in subsection (l),
       ``(5) except for bonds issued in accordance with subsection 
     (f)(4), the term of each bond which is part of such issue 
     does not exceed 30 years,
       ``(6) the payment of principal with respect to such bond is 
     the obligation of the Build America Corporation, and
       ``(7) the issue meets the requirements of subsection (g) 
     (relating to arbitrage).
       ``(f) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a Build America bond 
     limitation for each calendar year. Such limitation is--
       ``(A) for 2004--
       ``(i) with respect to bonds described in subsection 
     (e)(1)(A), $50,000,000,000, plus
       ``(ii) with respect to bonds described in subsection 
     (e)(1)(B), such amount (not to exceed $15,000,000,000) as 
     determined necessary by the Build America Corporation to 
     provide funds in the Build America Trust Account for the 
     repayment of Build America bonds at maturity, and
       ``(B) except as provided in paragraph (3), zero thereafter.
       ``(2) Limitation allocated to qualified projects among 
     states.--
       ``(A) In general.--Subject to subparagraph (B), the 
     limitation applicable under paragraph (1)(A)(i) for any 
     calendar year shall be allocated by the Build America 
     Corporation for qualified projects among the States under an 
     allocation plan established by the Corporation and submitted 
     to Congress for consideration.
       ``(B) Minimum allocations to states.--In establishing the 
     allocation plan under subparagraph (A), the Build America 
     Corporation shall ensure that the aggregate amount allocated 
     for qualified projects located in each State under such plan 
     is not less than $500,000,000.
       ``(3) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the Build America bond limitation amount, exceeds
       ``(B) the amount of bonds issued during such year by the 
     Build America Corporation,
     the Build America bond limitation amount for the following 
     calendar year shall be increased by the amount of such 
     excess. Any carryforward of a Build America bond limitation 
     amount may be carried only to calendar year 2005 or 2006.
       ``(4) Issuance of small denomination bonds.--From the Build 
     America bond limitation for each year, the Build America 
     Corporation shall issue a limited quantity of

[[Page 12858]]

     Build America bonds in small denominations suitable for 
     purchase as gifts by individual investors wishing to show 
     their support for investing in America's infrastructure.
       ``(g) Special Rules Relating to Arbitrage.--
       ``(1) In general.--Subject to paragraph (2), an issue shall 
     be treated as meeting the requirements of this subsection if 
     as of the date of issuance, the Build America Corporation 
     reasonably expects--
       ``(A) to spend at least 95 percent of the proceeds from the 
     sale of the issue for 1 or more qualified projects within the 
     3-year period beginning on such date,
       ``(B) to incur a binding commitment with a third party to 
     spend at least 10 percent of the proceeds from the sale of 
     the issue, or to commence construction, with respect to such 
     projects within the 6-month period beginning on such date, 
     and
       ``(C) to proceed with due diligence to complete such 
     projects and to spend the proceeds from the sale of the 
     issue.
       ``(2) Rules regarding continuing compliance after 3-year 
     determination.--If at least 95 percent of the proceeds from 
     the sale of the issue is not expended for 1 or more qualified 
     projects within the 3-year period beginning on the date of 
     issuance, but the requirements of paragraph (1) are otherwise 
     met, an issue shall be treated as continuing to meet the 
     requirements of this subsection if either--
       ``(A) the Build America Corporation uses all unspent 
     proceeds from the sale of the issue to redeem bonds of the 
     issue within 90 days after the end of such 3-year period, or
       ``(B) the following requirements are met:
       ``(i) The Build America Corporation spends at least 75 
     percent of the proceeds from the sale of the issue for 1 or 
     more qualified projects within the 3-year period beginning on 
     the date of issuance.
       ``(ii) The Build America Corporation spends at least 95 
     percent of the proceeds from the sale of the issue for 1 or 
     more qualified projects within the 4-year period beginning on 
     the date of issuance, and uses all unspent proceeds from the 
     sale of the issue to redeem bonds of the issue within 90 days 
     after the end of the 4-year period beginning on the date of 
     issuance.
       ``(h) Recapture of Portion of Credit Where Cessation of 
     Compliance.--
       ``(1) In general.--If any bond which when issued purported 
     to be a Build America bond ceases to be such a qualified 
     bond, the Build America Corporation shall pay to the United 
     States (at the time required by the Secretary) an amount 
     equal to the sum of--
       ``(A) the aggregate of the credits allowable under this 
     section with respect to such bond (determined without regard 
     to subsection (c)) for taxable years ending during the 
     calendar year in which such cessation occurs and the 2 
     preceding calendar years, and
       ``(B) interest at the underpayment rate under section 6621 
     on the amount determined under subparagraph (A) for each 
     calendar year for the period beginning on the first day of 
     such calendar year.
       ``(2) Failure to pay.--If the Build America Corporation 
     fails to timely pay the amount required by paragraph (1) with 
     respect to such bond, the tax imposed by this chapter on each 
     holder of any such bond which is part of such issue shall be 
     increased (for the taxable year of the holder in which such 
     cessation occurs) by the aggregate decrease in the credits 
     allowed under this section to such holder for taxable years 
     beginning in such 3 calendar years which would have resulted 
     solely from denying any credit under this section with 
     respect to such issue for such taxable years.
       ``(3) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (2) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     paragraph (2) shall not be treated as a tax imposed by this 
     chapter for purposes of determining--
       ``(i) the amount of any credit allowable under this part, 
     or
       ``(ii) the amount of the tax imposed by section 55.
       ``(i) Build America Trust Account.--
       ``(1) In general.--The following amounts shall be held in a 
     Build America Trust Account by the Build America Corporation:
       ``(A) The proceeds from the sale of all bonds issued under 
     this section.
       ``(B) The amount of any matching contributions with respect 
     to such bonds.
       ``(C) The investment earnings on proceeds from the sale of 
     such bonds.
       ``(D) Any earnings on any amounts described in subparagraph 
     (A), (B), or (C).
       ``(2) Use of funds.--Amounts in the Build America Trust 
     Account may be used only to pay costs of qualified projects, 
     redeem Build America bonds, and fund the operations of the 
     Build America Corporation, except that amounts withdrawn from 
     the Build America Trust Account to pay costs of qualified 
     projects may not exceed the aggregate proceeds from the sale 
     of Build America bonds described in subsection (e)(1)(A).
       ``(3) Use of remaining funds in build america trust 
     account.--Upon the redemption of all Build America bonds 
     issued under this section, any remaining amounts in the Build 
     America Trust Account shall be available to the Build America 
     Corporation for any qualified project.
       ``(j) Qualified Project.--For purposes of this section--
       ``(1) In general.--The term `qualified project' means the 
     financing of capital improvements for any transportation 
     infrastructure project of any governmental unit or other 
     person, including highways, transit systems, railroads, 
     airports, ports, and inland waterways, proposed by a State 
     and approved by the Build America Corporation.
       ``(2) Approval guidelines and criteria.--Not later than 60 
     days after the date of the enactment of this section, the 
     Build America Corporation shall consult with the appropriate 
     committees of Congress regarding the development of 
     guidelines and criteria for the approval by the Corporation 
     of projects as qualified projects for inclusion in the 
     allocation plan established under subsection (f)(2)(A) and 
     shall submit such guidelines and criteria to such committees. 
     The guidelines and criteria shall--
       ``(A) to the maximum extent, be consistent with statutory 
     provisions governing the approval of transportation projects, 
     as in effect on such date, and
       ``(B) require the Build America Corporation--
       ``(i) to base such approval on--

       ``(I) the results of alternatives analysis and preliminary 
     engineering, and
       ``(II) a comprehensive review of mobility improvements, 
     environmental benefits, cost effectiveness, and operating 
     efficiencies, and

       ``(ii) to give preference to--

       ``(I) projects supported by evidence of stable and 
     dependable financing sources to construct, maintain, and 
     operate the infrastructure,
       ``(II) projects expected to have a significant impact on 
     traffic congestion, and
       ``(III) projects which promote regional balance in 
     infrastructure investment.

       ``(k) State Contribution Requirements.--
       ``(1) In general.--For purposes of subsection (e)(3), the 
     State contribution requirement of this subsection is met with 
     respect to any qualified project if the Build America 
     Corporation has received from 1 or more States, not later 
     than the date of issuance of the bond, written commitments 
     for matching contributions of not less than 20 percent of the 
     cost of the qualified project.
       ``(2) State matching contributions may not include federal 
     funds.--For purposes of this subsection, State matching 
     contributions shall not be derived, directly or indirectly, 
     from Federal funds, including any transfers from the Highway 
     Trust Fund under section 9503.
       ``(l) Utilization of Updated Construction Technology for 
     Qualified Projects.--For purposes of subsection (e)(4), the 
     requirement of this subsection is met if the appropriate 
     State agency relating to the qualified project has updated 
     its accepted construction technologies to match a list 
     prescribed by the Secretary of Transportation and in effect 
     on the date of the approval of the project as a qualified 
     project.
       ``(m) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Treatment of changes in use.--For purposes of 
     subsection (e)(1)(A), the proceeds from the sale of an issue 
     shall not be treated as used for a qualified project to the 
     extent that the Build America Corporation takes any action 
     within its control which causes such proceeds not to be used 
     for a qualified project. The Secretary shall specify remedial 
     actions that may be taken (including conditions to taking 
     such remedial actions) to prevent an action described in the 
     preceding sentence from causing a bond to fail to be a Build 
     America bond.
       ``(3) Partnership; s corporation; and other pass-thru 
     entities.--In the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41(g) shall apply with respect to the credit 
     allowable under subsection (a).
       ``(4) Bonds held by regulated investment companies.--If any 
     Build America bond is held by a regulated investment company, 
     the credit determined under subsection (a) shall be allowed 
     to shareholders of such company under procedures prescribed 
     by the Secretary.
       ``(5) Credits may be stripped.--Under regulations 
     prescribed by the Secretary--
       ``(A) In general.--There may be a separation (including at 
     issuance) of the ownership of a Build America bond and the 
     entitlement to the credit under this section with respect to 
     such bond. In case of any such separation, the credit under 
     this section shall be allowed to the person who on the credit 
     allowance date holds the instrument evidencing the 
     entitlement to the credit and not to the holder of the bond.
       ``(B) Certain rules to apply.--In the case of a separation 
     described in subparagraph (A), the rules of section 1286 
     shall apply to the Build America bond as if it were a 
     stripped bond and to the credit under this section as if it 
     were a stripped coupon.
       ``(6) Reporting.--The Build America Corporation shall 
     submit reports similar to the reports required under section 
     149(e).''.

[[Page 12859]]

       (b) Amendments to Other Code Sections.--
       (1) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(8) Reporting of credit on build america bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54(d) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A), subsection (b)(4) shall be 
     applied without regard to subparagraphs (A), (H), (I), (J), 
     (K), and (L)(i) of such subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (2) Treatment for estimated tax purposes.--
       (A) Individual.--Section 6654 (relating to failure by 
     individual to pay estimated income tax) is amended by 
     redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following new subsection:
       ``(m) Special Rule for Holders of Build America Bonds.--For 
     purposes of this section, the credit allowed by section 54 to 
     a taxpayer by reason of holding a Build America bond on a 
     credit allowance date shall be treated as if it were a 
     payment of estimated tax made by the taxpayer on such 
     date.''.
       (B) Corporate.--Subsection (g) of section 6655 (relating to 
     failure by corporation to pay estimated income tax) is 
     amended by adding at the end the following new paragraph:
       ``(5) Special rule for holders of build america bonds.--For 
     purposes of this section, the credit allowed by section 54 to 
     a taxpayer by reason of holding a Build America bond on a 
     credit allowance date shall be treated as if it were a 
     payment of estimated tax made by the taxpayer on such 
     date.''.
       (c) Clerical Amendments.--
       (1) The table of subparts for part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     item:

``Subpart H. Nonrefundable Credit for Holders of Build America 
              Bonds.''.

       (2) Section 6401(b)(1) is amended by striking ``and G'' and 
     inserting ``G, and H''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 4. BUILD AMERICA CORPORATION.

       (a) Establishment and Status.--There is established a body 
     corporate to be known as the ``Build America Corporation'' 
     (hereafter in this section referred to as the 
     ``Corporation''). The Corporation is not a department, 
     agency, or instrumentality of the United States Government, 
     and shall not be subject to title 31, United States Code.
       (b) Principal Office; Application of Laws.--The principal 
     office and place of business of the Corporation shall be in 
     the District of Columbia, and, to the extent consistent with 
     this section, the District of Columbia Business Corporation 
     Act (D.C. Code 29-301 et seq.) shall apply.
       (c) Functions of Corporation.--The Corporation shall--
       (1) issue Build America bonds for the financing of 
     qualified projects as required under section 54 of the 
     Internal Revenue Code of 1986,
       (2) establish an allocation plan as required under section 
     54(f)(2)(A) of such Code,
       (3) establish and operate the Build America Trust Account 
     as required under section 54(i) of such Code,
       (4) perform any other function the sole purpose of which is 
     to carry out the financing of qualified projects through 
     Build America bonds, and
       (5) not later than February 15 of each year submit a report 
     to Congress--
       (A) describing the activities of the Corporation for the 
     preceding year, and
       (B) specifying whether the amounts deposited and expected 
     to be deposited in the Build America Trust Account are 
     sufficient to fully repay at maturity the principal of any 
     outstanding Build America bonds issued pursuant to such 
     section 54.
       (d) Powers of Corporation.--The Corporation--
       (1) may sue and be sued, complain and defend, in its 
     corporate name, in any court of competent jurisdiction,
       (2) may adopt, alter, and use a seal, which shall be 
     judicially noticed,
       (3) may prescribe, amend, and repeal such rules and 
     regulations as may be necessary for carrying out the 
     functions of the Corporation,
       (4) may make and perform such contracts and other 
     agreements with any individual, corporation, or other private 
     or public entity however designated and wherever situated, as 
     may be necessary for carrying out the functions of the 
     Corporation,
       (5) may determine and prescribe the manner in which its 
     obligations shall be incurred and its expenses allowed and 
     paid,
       (6) may, as necessary for carrying out the functions of the 
     Corporation, employ and fix the compensation of employees and 
     officers,
       (7) may lease, purchase, or otherwise acquire, own, hold, 
     improve, use, or otherwise deal in and with such property 
     (real, personal, or mixed) or any interest therein, wherever 
     situated, as may be necessary for carrying out the functions 
     of the Corporation,
       (8) may accept gifts or donations of services or of 
     property (real, personal, or mixed), tangible or intangible, 
     in furtherance of the purposes of this Act, and
       (9) shall have such other powers as maybe necessary and 
     incident to carrying out this Act.
       (e) Nonprofit Entity; Restriction on Use of Moneys; 
     Conflict of Interests; Independent Audits.--
       (1) Nonprofit entity.--The Corporation shall be a nonprofit 
     corporation and shall have no capital stock.
       (2) Restriction.--No part of the Corporation's revenue, 
     earnings, or other income or property shall inure to the 
     benefit of any of its directors, officers, or employees, and 
     such revenue, earnings, or other income or property shall 
     only be used for carrying out the purposes of this Act.
       (3) Conflict of interests.--No director, officer, or 
     employee of the Corporation shall in any manner, directly or 
     indirectly participate in the deliberation upon or the 
     determination of any question affecting his or her personal 
     interests or the interests of any corporation, partnership, 
     or organization in which he or she is directly or indirectly 
     interested.
       (4) Independent audits.--An independent certified public 
     accountant shall audit the financial statements of the 
     Corporation each year. The audit shall be carried out at the 
     place at which the financial statements normally are kept and 
     under generally accepted auditing standards. A report of the 
     audit shall be available to the public and shall be included 
     in the report required under subsection (c)(5).
       (f) Tax Exemption.--The Corporation, including its 
     franchise and income, is exempt from taxation imposed by the 
     United States, by any territory or possession of the United 
     States, or by any State, county, municipality, or local 
     taxing authority.
       (g) Management of Corporation.--
       (1) Board of directors; membership; designation of 
     chairperson and vice chairperson; appointment considerations; 
     term; vacancies.--
       (A) Board of directors.--The management of the Corporation 
     shall be vested in a board of directors composed of 7 members 
     appointed by the President, by and with the advice and 
     consent of the Senate.
       (B) Chairperson and vice chairperson.--The President shall 
     designate 1 member of the Board to serve as Chairperson of 
     the Board and 1 member to serve as Vice Chairperson of the 
     Board.
       (C) Individuals from private life.--Five members of the 
     Board shall be appointed from private life.
       (D) Federal officers and employees.--Two members of the 
     Board shall be appointed from among officers and employees of 
     agencies of the United States concerned with infrastructure 
     development.
       (E) Appointment considerations.--All members of the Board 
     shall be appointed on the basis of their understanding of and 
     sensitivity to infrastructure development processes. Members 
     of the Board shall be appointed so that not more than 4 
     members of the Board are members of any 1 political party.
       (F) Terms.--Members of the Board shall be appointed for 
     terms of 3 years, except that of the members first appointed, 
     as designated by the President at the time of their 
     appointment, 2 shall be appointed for terms of 1 year and 2 
     shall be appointed for terms of 2 years.
       (G) Vacancies.--A member of the Board appointed to fill a 
     vacancy occurring before the expiration of the term for which 
     that member's predecessor was appointed shall be appointed 
     only for the remainder of that term. Upon the expiration of a 
     member's term, the member shall continue to serve until a 
     successor is appointed and is qualified.
       (2) Compensation, actual, necessary, and transportation 
     expenses.--Members of the Board shall serve without 
     additional compensation, but may be reimbursed for actual and 
     necessary expenses not exceeding $100 per day, and for 
     transportation expenses, while engaged in their duties on 
     behalf of the Corporation.
       (3) Quorum.--A majority of the Board shall constitute a 
     quorum.
       (4) President of corporation.--The Board of Directors shall 
     appoint a president of the Corporation on such terms as the 
     Board may determine.
                                 ______
                                 
      By Mr. BINGAMAN (for himself, Mr. Baucus, Mr. Rockefeller, Mr. 
        Daschle, Mrs. Murray, Ms. Cantwell, Mr. Dayton, Mr. Lieberman, 
        Mrs. Lincoln, and Mrs. Feinstein):

[[Page 12860]]

  S. 1110. A bill to amend the Trade Act of 1974 to provide trade 
adjustment assistance for communities, and for other purposes; to the 
Committee on Finance.
  Mr. BINGAMAN. Mr. President, I rise today to introduce the Trade 
Adjustment Assistance for Communities Act of 2003. This legislation is 
co-sponsored by Senators Baucus, Rockefeller, Daschle, Murray, 
Cantwell, Dayton, Lieberman, Lincoln, and Feinstein. Companion 
legislation will be introduced in the House by Congressman Sander Levin 
tomorrow.
  I first introduced Trade Adjustment Assistance legislation in the 
last Congress, and I was very pleased when that legislation--the 
provisions relating to both individuals and communities--passed the 
Senate as part of the Trade Act of 2002. I would like to take this 
opportunity to thank all of my colleagues for their efforts in making 
this happen. But I would like to thank Senator Baucus in particular for 
making Trade Adjustment Assistance one of his priorities last session 
and pushing on it to the very end. And I would also like to thank 
Senator Grassley for understanding the importance of Trade Adjustment 
Assistance to the ongoing trade debate, and his decision to make it 
part of the trade package that went through Congress.
  But I also have to express my disappointment with the way the process 
ended. In spite of the bi-partisan consensus that formed around Trade 
Adjustment Assistance during the negotiations last year and the efforts 
of my colleagues, I regret to say that the provisions related to 
communities did not make it out of conference. I can not tell you why 
this happened. However, I can tell you that it is incredibly naive to 
ignore the problems that are occurring right now across the country and 
not understand what it means for our country's long-term economic 
interests. Look at the newspaper and you will see that in many 
communities, people are pretty much out of work for good, at least when 
you look at the jobs they had and the wages they were making. And as 
the lay-offs have expanded, the impact the lay-offs have had on entire 
communities have become more pronounced. Now it is not just the 
individuals who are struggling, but the communities in which hundreds 
or thousands of people live, all because a company or a group of 
companies have closed their doors for good.
  From what I can tell from statements some of my colleagues have made 
in committee or on the floor of the Senate, this is really nothing more 
than tough luck. This is the way markets work and you simply make do 
with what you have. I disagree completely. From where I sit you can't 
just let individuals who have worked their whole life at a company, who 
have played by the rules for their entire life, who have committed 
their entire life to keeping their communities intact, be reduced to 
little more than hope that something will change for the better. They 
deserve more than that. You also can't let the communities where these 
people live just die, because they form the foundation of what we are 
as a society. These are the networks that have lasted generations, that 
connect us, and define who we are. I firmly believe we need to do 
everything we can for these folks and the communities where they live, 
simply because we owe them something for what they have given us and 
our country. I believe we have a responsibility to give these 
communities a shot at a new future. The legislation I am introducing 
today does just that.
  Let me make it clear that writing this legislation is not an abstract 
exercise. For me, this is about my friends and neighbors that I have 
known for years. Right now, in my hometown of Silver City, NM, I have 
folks that I grew up with, wondering what they are going to do next.
  Over the last few years the copper mines closed, and then the 
businesses that supported the copper mines closed, and then the tax 
base began to disappear, and then services started to be cut, and it 
seems to everyone like the whole community has been caught in a 
downward spiral. In spite of what some of my colleagues might claim, 
this is not because of lack of effort on the part of the people of 
Silver City. These people are not content with the way things are. On 
the contrary, they are trying desperately to change direction. They 
have ideas about where they want to go and what they need to do to make 
things better. They have acted on these ideas to the best of their 
ability. And I want to commend them for that. But right now they are 
stuck because there is no money available to get things started, to 
take the first step so other steps can be taken afterward.
  And this is the way it is across the country in a good many 
communities just like Silver City. I strongly believe this has to 
change. We have let things stand just the way they are for far too 
long. The status quo is not acceptable, and it is time for Congress to 
make a serious effort to change how we manage these kinds of problems.
  My interest in Trade Adjustment Assistance actually began in 
November, 1997 when Levi-Strauss announced its decision to close most 
of its plants in the United States and transfer production to other 
countries. Levi-Strauss decided to close two plants in New Mexico one 
in Albuquerque and one in Roswell--with the Roswell facility alone 
losing close to 600 workers. This number didn't even include the 
contract workers and other folks that relied on Levi-Strauss for their 
living. They lost their jobs as well. Six-hundred plus individuals 
would be a significant blow in any town, but in a town of 50,000 
people--which is what Roswell is--with a workforce of only 25,000 
people, this lay-off was truly devastating. What exactly were these 
people going to do? Where could they go to get work so they could pay 
their mortgage, pay for health care, pay for their kids' education? 
Sure, some of them could be re-trained through Trade Adjustment 
Assistance, but the question that was on everyone's mind was: Retrained 
for what? What do you retrain 600 people for when there are no other 
jobs available in town, and no new companies coming into town?
  The questions surrounding what happened in Roswell--actually, what 
should have happened in Roswell if we had more effective Trade 
Adjustment Assistance policies in place--combined with other plant 
closures across the country in towns just like Roswell, made me ask 
what actually could be done to help individuals and communities adapt 
to this kind of collective crisis. In cooperation with Senators Roth 
and Moynihan, who were the Chair and Ranking Member of the Finance 
Committee at the time, I requested studies from the General Accounting 
Office on the overall efficacy of Trade Adjustment Assistance program. 
I also asked them to study how communities across the country had 
responded to the changes that derive from international trade 
agreements and globalization.
  I have to say that the answers we got back from the General 
Accounting Office were not very encouraging. To begin with, the Trade 
Adjustment Assistance for individuals program suffered from 
inconsistencies, incoherence, and a general lack of accountability. 
Some states managed their programs well, but others--my home State of 
New Mexico being one--did not. There was no Trade Adjustment Assistance 
for Communities program at the time, but in analyzing how particular 
communities responded to economic crises, the General Accounting Office 
report clearly stated that government funds available for economic 
recovery efforts were limited and the road to real recovery was 
difficult even when funds were available. There were no ``best 
practices'', no obvious answers, to refer to because success had been 
so limited. In most cases, there was no way out of the downward spiral 
at all.
  But over time some individual lessons appeared, and interestingly 
enough, those lessons were very similar to the ones we learned in 
Roswell. Among other things, technical assistance is needed early on in 
the process to ensure that a community-wide recovery strategy can be 
developed. Funding needs to be made available to assist in strategic 
planning. Individual and institutional differences need to be

[[Page 12861]]

bridged in the community so there is a tangible collective interest in 
the strategic plan. Short-term, medium-term, and long-term funding 
needs to be available for communities to use as they pursue their 
economic strategy. U.S. government agencies need to cooperate to ensure 
that their efforts are not duplicative or contradictory. State 
governments need to be involved in the recovery process to encourage 
cooperation where there has been none before.
  I admit that it is very difficult to make sure all these things 
happen, especially in communities that are struggling to stay on an 
even keel. Clearly much of the burden for the activities fall on 
communities, because they are the ones that have to decide what is best 
for them. And that is the way it should be. But Congress can play a 
role in helping communities attain the goals they have set for 
themselves, and I believe the bill I am introducing today offers a very 
good start. The key components of the legislation are as follows: 
First, the legislation establishes a Trade Adjustment Assistance for 
Communities Program at the Department of Commerce, signaling that 
communities that are negatively impacted by trade are deserving of a 
separate stream of funds to help them through their economic crisis. 
Ideally this program will be located at the Economic Development 
Administration, which has the expertise and experience to manage a 
program of this type.
  Second, the legislation establishes a U.S. government inter-agency 
Trade Adjustment Assistance for Communities working group, the goal 
being to ensure that agencies work in cooperation to assist communities 
negatively impacted by trade, integrating personnel, activities, and 
resources as they respond to existing or anticipated problems.
  Third, the legislation provides funding for strategic planning and 
development grants for communities negatively impacted by trade. As 
written, there is no limit on the funds that a community can receive. 
Instead, the level of funding is determined by the individual needs of 
each community, the coherence of their strategic plan, and the 
cooperation that exists among the stakeholders applying for the grant.
  Fourth, the legislation allows funding from programs at other 
agencies to be used in concurrence with Trade Adjustment Assistance for 
Communities funding, and, furthermore, allows Federal funding to be 
used to fulfill most non-Federal matching requirements that exist. In 
the past, some economic development efforts have been stopped in their 
tracks because communities don't have the matching funds necessary to 
get grants. This legislation would give communities that are now 
suffering under serious financial constraints some initial flexibility 
in their effort to get funding.
  Fifth, the legislation gives preference to rural communities in 
funding guidelines, since these are the communities that have the 
fewest options available to them as they attempt to respond to trade-
related problems.
  Sixth, the legislation authorizes $350 million per year for the Trade 
Adjustment Assistance for Communities program, essentially doubling the 
funds that are currently available for economic adjustment in the 
United States. I believe this amount is consistent with the needs that 
we see of communities across the United States.
  Seventh, the legislation establishes a look-back to January 1998, 
allowing communities that were negatively impacted by trade and have 
yet to overcome their problems an opportunity to obtain funds and begin 
their recovery.
  Finally, the legislation establishes a set of new triggers for 
eligibility that are designed to help not only communities that have 
been negatively impacted by trade, but also communities that have 
experienced some negative impacts but want to set a new course so any 
future impacts will be limited. This approach is far different than 
anything that has been done before in Trade Adjustment Assistance 
legislation--far different even than the legislation that my colleagues 
and I introduced last year--and is designed specifically to avoid the 
criticism that Trade Adjustment Assistance is really nothing but 
``death insurance''.
  The inclusion of the category of ``affected domestic producers'' as a 
trigger, for example, would allow certain companies to work with their 
communities to create a coherent strategic plan to renovate or 
construct basic or advanced infrastructure, diversify the local 
economy, attract new investment, and encourage long-term economic 
stability and global competitiveness--all this before a company is 
closed and the entire community is affected. The inclusion of TAA for 
firms as a trigger would allow restructuring at a firm to occur in 
tandem with restructuring in a community. The inclusion of TAA for 
workers as a trigger would allow funds to be directed into a community 
at the initial onset of problems at a company--at the moment when lay-
offs are first occurring--not when the problems are so far down the 
line that there is very little that can be done about it.
  Let me say straight out that this legislation cannot be considered a 
substitute for a strong trade or manufacturing policy. But I do believe 
this legislation is complementary to those policies. From where I sit, 
there will always be individuals and communities negatively impacted by 
trade, and it is incumbent upon Congress to ensure that these 
individuals and communities are treated with the respect they deserve 
and with the strategic economic interests of our country in mind. The 
economic ideology that suggests we just let things take their course 
and things will work out the way they are supposed to is, from my 
perspective, wrongheaded and misguided. The fact is we must look very 
carefully at the changes that are occurring to our national economy as 
a result of globalization and position ourselves to do better than we 
are now.
  This legislation carves out an area of real need and addresses it in 
a coherent, comprehensive, and innovative fashion. If enacted, it will 
have an immediate, concrete, and important impact on communities across 
the country. Every State in the country would benefit from the 
legislation. It will allow communities to take charge of the future and 
contribute to the economic welfare of the Nation. It is a practical 
approach that is designed to keep our communities intact and our 
country competitive and strong. I urge my colleagues to support it.
  Mr. BAUCUS. Mr. President, I rise today in support of the Trade 
Adjustment Assistance for Communities Act of 2003.
  I want to commend Senator Bingaman for introducing this bill today. 
He has been a strong advocate of Trade Adjustment Assistance and a 
strong voice for communities that need a helping hand facing the 
challenges of the global economy.
  Trade and trade-opening policies create benefits for our country. But 
that fact should not keep us from acknowledging that the benefits of 
trade are seldom evenly distributed. In fact, there can be losers from 
trade, even when the economy as a whole is better off.
  In 1962, President Kennedy said that ``those injured by . . . trade 
competition should not be required to bear the full brunt of the 
impact.'' ``There is an obligation,'' he said, for the Federal 
government ``to render assistance to those who suffer as a result of 
national trade policy.''
  That year, President Kennedy and a bipartisan majority of Congress 
created Trade Adjustment Assistance--a program designed to help those 
who are displaced by trade policy to retrain and get back on their 
feet.
  Last year, with help of another bipartisan majority of Congress, we 
passed the Trade Adjustment Assistance Reform Act of 2002--a historic 
expansion of the TAA program.
  The Trade Adjustment Assistance for Communities Act continues to 
build on this important tradition by creating a new TAA program for 
communities.
  In a recent study, the General Accounting Office found that, even 
with TAA benefits available to displaced workers, the loss of a major 
employer can have ripple effects on the local economy.

[[Page 12862]]

  In addition to the direct job losses, local economies can experience 
reduced tax revenues, reduced sales by the closed plant's supplier 
firms and by local retailers, and rising social services costs. Until 
they can attract well-paying new jobs, these communities can face 
extended periods of economic distress.
  This is especially true in smaller and rural communities, such as we 
have in Montana. These communities may not have a lot of job 
opportunities for displaced workers, even with TAA retraining. Indeed, 
one of the main criticisms of the current TAS program has been that it 
does nothing to make sure there are jobs for workers at the end of the 
retraining process.
  There are a number of Federal programs out there that might offer 
some help. They are all over the map--in Commerce, Treasury, Labor, 
Agriculture, HUD and the SBA, just to name a few. But these communities 
have no way to start, no go-to person or resource to guide them through 
this maze of potential help. And the Federal government doesn't make it 
any easier. There is very little coordination of response among the 
various agencies. Finally, even if communities can find these Federal 
resources, most existing programs are not tailored to the special needs 
of trade-impacted communities.
  This bill tries to make Federal economic assistance work better for 
trade-impacted distressed communities in a few simple ways.
  It creates a single office responsible for coordinating the Federal 
response.
  It creates a simple trigger process to identify potentially eligible 
communities and bring appropriate resources to their attention.
  It gives communities the technical assistance they need to develop a 
strategic plan--basically a roadmap for economic recovery. That helps 
ensure that Federal resources are being used in the most coordinated 
and cost-effective way possible.
  Finally, it makes sure that there are expertise and resources 
tailored to the special needs of trade-impacted communities.
  I am pleased to be a cosponsor of this bill. I hope we will be able 
to consider it in the Finance Committee this year.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 1111. A bill to provide suitable grazing arrangements on National 
Forest System land to persons that hold a grazing permit adversely 
affected by the standards and guidelines contained in the Record of 
Decision of the Sierra Nevada Forest Plan Amendment and pertaining to 
the Willow Flycatcher and the Yosemite Toad; to the Committee on Energy 
and Natural Resources.
  Mrs. FEINSTEIN. Mr. President, I rise today to introduce a bill to 
prevent unnecessary hardship for ranching families in the Sierra Nevada 
Mountains.
  This summer, restrictions imposed for the Yosemite Toad and willow 
flycatcher will force about fifteen to thirty ranchers off the land 
that they have long used for grazing.
  This bill requires the Forest Service to explore all the options 
available to avoid this outcome. For example, the bill makes it easier 
for the Forest Service to offer ranchers suitable alternative grazing 
land.
  Besides alternative grazing arrangements, the Forest Service should 
look at fencing, active management of the cattle, and other options. If 
none of these alternatives are feasible, the bill provides relief for 
the most seriously affected ranchers.
  The bill would allow ranchers to keep using 15 parcels of land during 
this calendar year where Yosemite Toad and willow flycatcher 
restrictions would otherwise make grazing unworkable. For many other 
ranches, where grazing and the species could coexist with some 
adjustments, environmental protections would fully remain in place.
  I urge the Forest Service to quickly devise a long-term strategy to 
promote the coexistence of ranchers and the species. The Forest Service 
should work proactively with the Fish and Wildlife Service to establish 
a conservation plan for the species--with the goal of avoiding the need 
for any listing of it.
  I believe that if the regulatory agencies collect better information 
on the Yosemite Toad and the willow flycatcher, we can find ways to 
protect the species without completely shutting down long-term ranching 
operations. I am committed to expediting these long-term solutions.
                                 ______
                                 
      By Mr. KERRY (for himself and Mr. Harkin):
  S. 1112. A bill to amend title 38, United States Code, to permit 
Department of Veterans Affairs pharmacies to dispense medications on 
prescriptions written by private practitioners to veterans who are 
currently awaiting their first appointment with the Department for 
medical care, and for other purposes; to the Committee on Veterans' 
Affairs.
  Mr. KERRY. Mr. President, there are now nearly 200,000 American 
veterans today who are forced to wait at least 6 months for their first 
visit with a Department of Veterans Affairs physician. Despite having 
served their country and been promised health benefits, these veterans 
are receiving deferred and rationed health care because of chronic 
underfunding and bureaucratic red tape. It amounts to a broken promise 
with men and women who have served in our armed forces. To help ensure 
that our veterans receive the care they need and have been guaranteed, 
today I am pleased to introduce the Veterans' Prescription Drug Reform 
Act of 2003.
  Veterans enrolled in the VA health care program are entitled to a 
prescription drug benefit. This is an essential benefit given the 
importance of pharmaceuticals in health care today. However, there's a 
bureaucratic catch: The benefit only applies to prescriptions written 
by a VA physician, and there are nearly 200,000 veterans who now wait 6 
months or longer for their first visit with a VA physician. For those 
veterans in need of medicine and waiting months on end to see a VA 
physician, the benefit has little value.
  The VA has reported to Congress that, while it has no exact figure, 
it estimates that tens of thousands of the veterans now on the waiting 
list are there primarily to access their prescription drug benefit. In 
many of these cases, veterans have already seen a private physician and 
have a prescription. But in order to use the VA pharmacy and receive 
their prescription benefit, these individuals must duplicate their 
health care visits and see a VA physician. This delays health care 
benefits for far too many veterans.
  The Veterans' Prescription Drug Reform Act of 2003 would permit 
veterans already on the waiting list to fill a prescription written by 
a private physician at the VA pharmacy.
  Specifically, the Veterans' Prescription Drug Reform Act of 2003 
would give the Secretary of Veterans Affairs the authority to permit 
veterans on the waiting list for their first appointment with a VA 
physician at the date of enactment to use the VA pharmacy to fill 
prescriptions written by a private physician. It would also preserve 
the core healthcare mission of the VA by limiting this initiative only 
to those currently waiting for their first appointment. The proposal 
calls for a report to Congress in 1 year so that its potential 
expansion can be evaluated.
  The Secretary of Veterans Affairs has told Congress that he would 
support such a proposal, and I look forward to working with Senator 
Harkin, who joins me in sponsoring this legislation, and my other 
colleagues in the Senate on this common-sense approach to reducing the 
lengthy wait-lines for veterans' healthcare.
  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. 1112

       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 ``Veterans' Prescription Drug 
     Reform Act of 2003''.

[[Page 12863]]



     SEC. 2. AUTHORITY OF DEPARTMENT OF VETERANS AFFAIRS 
                   PHARMACIES TO DISPENSE MEDICATIONS TO CERTAIN 
                   VETERANS FOR PRESCRIPTIONS WRITTEN BY PRIVATE 
                   PRACTITIONERS.

       (a) Authority to Dispense Medications to Certain 
     Veterans.--Section 1712 of title 38, United States Code, is 
     amended--
       (1) by redesignating subsection (e) as subsection (f); and
       (2) by inserting after subsection (d) the following new 
     subsection (e):
       ``(e)(1) The Secretary may authorize the pharmacies of the 
     Department to dispense medications to a veteran described in 
     paragraph (2) pursuant to a valid prescription of the veteran 
     written by a private practitioner.
       ``(2) A veteran described in this paragraph is any veteran 
     who is on a waiting list for such veteran's first appointment 
     with the Department for medical services as of the date of 
     the enactment of this section.
       ``(3) A veteran dispensed a medication under this 
     subsection shall pay the Secretary an amount for such 
     medication determined in accordance with the provisions of 
     section 1722A(a) of this title.
       ``(4) Any amounts paid under paragraph (3) shall be 
     deposited in the Department of Veterans Affairs Medical Care 
     Collections Fund.''.
       (b) Deposit of Collections.--Section 1729A(b) of such title 
     is amended--
       (1) by redesignating paragraphs (4) through (8) as 
     paragraphs (5) through (9), respectively; and
       (2) by inserting after paragraph (3) the following new 
     paragraph (4):
       ``(4) Section 1712(e) of this title.''.
       (c) Report.--(1) Not later than one year after the date of 
     the enactment of this Act, the Secretary of Veterans Affairs 
     shall submit to the Committees on Veterans' Affairs of the 
     Senate and the House of Representatives a report on the 
     exercise by the Secretary of the authority provided in 
     subsection (e) of section 1712 of title 38, United States 
     Code (as amended by subsection (a) of this section).
       (2) The report shall include--
       (A) a description of the exercise of the authority by the 
     Secretary; and
       (B) such recommendations for additional legislative or 
     administrative action with respect to the authority as the 
     Secretary considers appropriate in light of the exercise of 
     the authority.
                                 ______
                                 
      By Mrs. MURRAY (for herself, Mr. Dayton, Ms. Cantwell, Mr. 
        Baucus, Mr. Leahy, Mrs. Boxer, and Mr. Jeffords):
  S. 1115. A bill to amend the Toxic Substances Control Act to reduce 
the health risks posed by asbestos-containing products; to the 
Committee on Environment and Public Works.
  Mrs. MURRAY. Mr. President, today I rise to introduce legislation to 
do what should have been done decades ago: Fully ban asbestos in the 
United States. I am introducing the Ban Asbestos in America Act of 2003 
to prohibit this known carcinogen from being used to manufacture 
products in this country. The bill also bans imports of asbestos 
products from other countries where asbestos is still legal. I am 
pleased that Senators Baucus, Boxer, Cantwell, Dayton, Jeffords and 
Leahy are original cosponsors of this important legislation.
  The primary purpose of the Ban Asbestos in America Act of 2003 is to 
require the Environmental Protection Agency, EPA, to ban the substance 
within two years. Most people think that asbestos has already been 
banned. In fact, in 1989 EPA finalized regulations to phase out and ban 
the substance by 1997. But in 1991, the 5th Circuit Court of Appeals 
overturned EPA's ban, arguing that EPA did not ``first evaluate and 
then reject the less burdensome alternatives'' under the Toxic 
Substances Control Act. Unfortunately, the first Bush Administration 
did not appeal the decision to the Supreme Court. While new uses of 
asbestos were banned, existing ones were not.
  As a result, it is still legal in 2003 to construct buildings in the 
United States with asbestos cement shingles and to treat them with 
asbestos roof coatings. It is still legal to construct new water 
systems using asbestos cement pipes imported from other countries. It 
is still legal for cars and trucks to be made and serviced with 
asbestos brake pads and clutch facings.
  Asbestos is still not banned, and as a result, we're still using it. 
According to the U.S. Geological Survey, in 2001, businesses in this 
country consumed 26 million pounds of chrysotile asbestos to make 
roofing products, gaskets, friction materials and other products. Last 
month, my staff walked into a local home improvement store and bought 
off the shelf roofing sealants made with asbestos. In addition, we are 
still importing asbestos products from other countries, many of which 
have less stringent environmental and public health standards.
  Everyone knows that asbestos is harmful. The term asbestos, like 
arsenic, lead, mercury or DDT, is synonymous with poison. Asbestos may 
well be the most regulated toxic substance that Federal and State 
agencies have ever dealt with. At least eleven different Federal 
statutes address asbestos. The EPA, Occupational Safety and Health 
Administration, OSHA, Mine Safety and Health Administration and 
Consumer Product Safety Commission are only some of the Federal 
agencies tasked with implementing rules to protect workers and 
consumers from the dangers of this substance.
  But the sheer volume of rules and regulations in place does not 
guarantee that public health and the environment are being adequately 
protected. We have significant evidence suggesting that because 
asbestos is still not banned, we're still not safe from its dangers. 
I'd like to highlight some of this evidence for my colleagues.
  First, workers in this country are still being exposed to dangerous 
levels of asbestos. According to OSHA, ``An estimated 1.3 million 
employees in construction and general industry face significant 
asbestos exposure on the job. Heaviest exposures occur in the 
construction industry, particularly during the removal of asbestos 
during renovation or demolition. Employees are also likely to be 
exposed during the manufacture of asbestos products, such as textiles, 
friction products, insulation, and other building materials, and during 
automotive brake and clutch repair work.''
  It is important to remember that there is no known safe threshold 
level of asbestos exposure. OSHA's permissible exposure limit of 0.1 
fibers per cubic centimeter is based on technical measurement 
limitations. OSHA's limit assumes that workers exposed to this 
concentration have a lifetime exposure risk of 3 to 5 in 1,000 for 
cancer and 2 in 1,000 for asbestosis. This is a very high risk compared 
to the cancer risk levels that are considered acceptable for some 
environmental cleanups.
  The extent to which workers are exposed to dangerous levels of 
asbestos is especially troublesome when one considers the frequency 
with which OSHA's standards are violated. On July 31, 2001, I chaired a 
Senate Health, Education, Labor and Pensions hearing on asbestos and 
workplace safety. At the hearing I learned from OSHA that since 1995, 
the agency had cited employers for violations of its asbestos standards 
15,691 times. This is astounding given the known dangers of asbestos 
and the high risks of disease even when OSHA's exposure limit is being 
met.
  As follow-up to the hearing, I asked OSHA to provide more information 
about asbestos-related violations. In an October 17, 2001 letter to me, 
Mr. John Henshaw, Assistant Secretary for Occupational Safety and 
Health, wrote that between fiscal year 1996 and fiscal year 2001, OSHA 
conducted a total of 190,971 inspections generating a total of 427,786 
violations. Of these, 3,000 inspections and 15,691 violations involved 
asbestos. According to Mr. Henshaw, about 2 percent of inspections and 
4 percent of violations were asbestos-related. In his letter to me, Mr. 
Henshaw wrote, ``OSHA does not consider any level to be an acceptable 
noncompliance level. We strive for 100 percent compliance.'' Despite 
OSHA's best intentions, workers are still being exposed to dangerous 
levels of asbestos.
  It is also important to consider that the vast majority of workplaces 
where asbestos exposure occurs, such as construction jobs and auto 
repair shops, are not regularly inspected by OSHA. The Administration 
conducts inspections only in response to complaints or as a result of 
referrals from law enforcement or the media. Many more violations of 
the standard occur in the real world than are actually recorded by 
regulators. Many employees likely do not contact OSHA about potential

[[Page 12864]]

asbestos exposure on the job because they think asbestos has been 
banned long ago and is no longer a problem.
  But asbestos in the workplace is clearly still a problem. Recent news 
investigations provide more evidence that workers are being exposed to 
dangerous levels of this mineral. According to an article in the 
Seattle Post-Intelligencer on November 16, 2000, ``During the past 
three months, the P-I collected samples of dust from floors, work areas 
and tool bins in 31 brake-repair garages in Baltimore, Boston, Chicago, 
Denver, Richmond, Seattle, and Washington, D.C. Asbestos, almost 
exclusively chrysotile, which has been used for decades in brakes, was 
detected in 21 of the locations. The amount of asbestos in the dust 
ranged from 2.26 percent to 63.8 percent.''
  When dust with these concentrations of asbestos in them is disturbed, 
airborne concentrations of asbestos occur that are well above OSHA's 
permissible exposure limit of 0.1 fiber per cubic centimeter. Under 
current OSHA regulations, if airborne asbestos concentrations exceed 
this level, employers must conduct air monitoring, take measures to 
reduce asbestos emissions, post warning signs and record concentrations 
of airborne asbestos. Workers are supposed to wear respirators and 
protective clothing and are required to undergo long-term medical 
monitoring.
  Now I recognize that much of the exposure to asbestos in the 
workplace comes from asbestos products installed years, and in many 
cases, decades ago. By one estimate, about 30 million tons of asbestos 
was used in this country between 1900 and 1980. Asbestos in place, in 
our buildings, schools and homes, will be with us for decades to come.
  But given the known dangers of this mineral, why are we still using 
it? Why are we still adding it to products on purpose when there are 
perfectly acceptable substitutes? In retrospect, it is tragic that 
asbestos was so widely used during the 20th century, for the economic 
and public health impacts have been disastrous. One very important step 
in overcoming the problems caused by asbestos is to stop adding to the 
problem--however incrementally--by continuing to use this dangerous 
mineral in products on purpose.
  I'd like to point out some additional evidence supporting the need to 
ban asbestos in the United States and to raise awareness about this 
issue. Most of my colleagues are familiar with the tragedy in Libby, 
MT, where hundreds of workers and their families suffer from asbestos-
related diseases caused by exposure to asbestos-tainted vermiculite.
  For decades, the W.R. Grace mine in Libby supplied about 80 percent 
of the vermiculite used in this country. W.R. Grace very successfully 
marketed its product, without any warning labels, even though the 
company was well aware its product was contaminated with this known 
carcinogen. Asbestos-contaminated ore was shipped to more than 300 
sites around the country for processing and use in industrial and 
consumer products. According to the EPA, 14 of these sites are so 
contaminated with asbestos that they still need to be cleaned up, even 
though the Libby mine closed in 1990. While this is a problem that came 
from a small mining town in Montana, the ramifications and consequences 
are clearly national in scope.
  In addition, vermiculite from Libby is still around and is still a 
threat to public health. It is estimated that tens of millions of 
homes, schools and businesses contain insulation made with Libby 
vermiculite, known as Zonolite. A recent study conducted for EPA, 
entitled Asbestos Exposure Assessment for Vermiculite Attic Insulation, 
found that Zonolite in homes today contains up to 2 percent asbestos. 
This study included tests on Zonolite insulation from Seattle Public 
Utilities and from a home in Washington State. It found that when this 
insulation was disturbed, airborne concentrations of 3.3 asbestos 
fibers per cubic centimeters were measured. In other words, handling 
Zonolite asbestos can cause levels of asbestos in the air that 
significantly exceed OSHA's exposure limit for workers. Even more 
troubling, perhaps, the study found ``vermiculite that tests non-detect 
for asbestos by bulk analysis can still generate airborne asbestos 
concentrations when disturbed.'' When vermiculite without significant 
amounts of asbestos in bulk was disturbed, concentrations of asbestos 
in the air up to 0.5 fibers per cubic centimeters were detected. This 
means that even vermiculite with only trace amounts of asbestos in bulk 
can generate unhealthy concentrations of asbestos in the air.
  Yesterday EPA launched a national consumer education campaign warning 
people not to disturb Zonolite attic insulation if they have it in 
their homes. The agency also warned people not to let their children 
play in attics with vermiculite for fear of asbestos exposure. EPA has 
developed a consumer education brochure and has created an asbestos 
hotline for people to call for more information. The Agency for Toxic 
Substances and Disease Registry and National Institute for Occupational 
Safety and Health have joined EPA in this education effort by creating 
materials to educate consumers and workers about the dangers of 
asbestos-contaminated vermiculite.
  While we need to ensure that we are no longer adding asbestos to our 
products on purpose, we also need to ensure that asbestos in harmful 
concentrations isn't ending up in our consumer products by accident. I 
am glad EPA, ATSDR and NIOSH are now proactively reaching out to 
consumers and workers to warn them to stay away from vermiculite attic 
insulation. This is an important first step in dealing with just one 
aspect of the legacy created by W.R. Grace in Libby.
  There is another important reason to ban asbestos that I would like 
to share with my colleagues. As I mentioned previously, the United 
States is still importing products that contain asbestos. 
Unfortunately, we do not have precise statistics on which products 
coming into this country contain the deadly mineral. The Department of 
Commerce's import database does not distinguish between asbestos-
containing products and products containing asbestos substitutes. 
According to the U.S. International Trade Commission, in 2002 this 
country imported more than 44,000 tons of asbestos-cement products, 
some of which may have contained cellulose instead of asbestos.
  With increased globalization and international trade, U.S. imports of 
asbestos containing consumer and industrial products will continue to 
rise--unless we prohibit these products from crossing our borders in 
the first place.
  Although we do not have accurate numbers for the extent to which 
asbestos products are flowing across our borders, we do know that 
asbestos is being heavily marketed to developing countries. According 
to an August 2, 1999 USA Today article, ``As asbestos demand has 
plummeted in the industrialized world the past 25 years, it has soared 
in many developing nations and formerly communist countries. Its use in 
these countries is largely unregulated, haphazard and deadly.''
  A more recent editorial in the Canadian Medical Association Journal 
compares the asbestos industry to the tobacco industry. The February 
20, 2001 article by Doctors Joseph LaDou, Philip Landrigan, John C. 
Bailar III, Vito Foa and Arthur Frank reads:
  ``The commercial tactics of the asbestos industry are very similar to 
those of the tobacco industry. In the absence of international 
sanctions, losses resulting from reduced cigarette consumption in the 
developed countries are offset by heavy selling to developing nations. 
In a similar fashion, the developed world has responded to the asbestos 
health catastrophe with a progressive ban on the use of asbestos. In 
response, the asbestos industry is progressively transferring its 
commercial activities and the health hazards to the developing 
countries.''
  Banning asbestos in the United States sends an important message to 
the rest of the world. The asbestos industry will no longer be able to 
justify its marketing to developing countries by pointing out that 
asbestos is still legal in the U.S., and therefore, it must be safe. 
More than 30 countries have already banned asbestos, and it is time for 
this country to follow suit. It is our moral responsibility as the 
world's strongest economy, the most powerful

[[Page 12865]]

Nation and a leader in environmental protection and public health to 
ban this harmful substance.
  That is why today I am introducing the Ban Asbestos in America Act. 
The legislation has five main parts. First, this bill protects public 
health by doing what the EPA tried to do 14 years ago: ban asbestos in 
the United States. The legislation requires EPA to ban it within 2 
years of passage of the Act. As under the regulations EPA finalized in 
1989, companies may file for an exemption to the ban if there is no 
substitute material available.
  Second, the bill requires EPA to convene a Blue Ribbon Panel on 
asbestos policy and to have the National Academy of Sciences conduct an 
asbestos study. In response to the 2001 EPA Inspector General's report 
on Libby, Montana, the EPA promised to convene a Blue Ribbon Panel on 
asbestos and non-regulated fibers. But instead of convening a high 
level panel, EPA hired a non-profit organization, the Global 
Environment and Technology Foundation, to develop an asbestos policies 
focus group. Just yesterday EPA released GETF's Asbestos Strategies 
Report. I am very pleased that the Report recommends several aspects of 
the Ban Asbestos in America Act, including that Congress pass 
legislation to ban asbestos.
  While the recommendations are certainly helpful in providing guidance 
to EPA, Congress and other federal agencies on the next steps to 
address asbestos, the GETF report does not replace a full fledged Blue 
Ribbon Panel. The Ban Asbestos in America Act codifies creation of a 
Blue Ribbon Panel as EPA first committed to in 2001. The panel will 
include participation from the Department of Labor and the Consumer 
Product Safety Commission. It will review the current laws and rules in 
place to protect workers and consumers, and make recommendations for 
improving protections within 2 years of passage of the Act.
  In addition, the bill calls for EPA to have the NAS conduct a study 
on the current state of the science relating to the human health 
effects of exposure to asbestos and other durable fibers. The NAS study 
shall also include recommendations for a uniform system of asbestos 
exposure standards and for a uniform system to create protocols to 
detect and measure asbestos. As I mentioned previously, asbestos is 
regulated under multiple statutes. There are different standards within 
EPA and across Federal agencies, and agencies rely on different 
protocols to identify the substance. The NAS shall be required to 
submit the study to EPA, other Federal agencies and Congress within 18 
months of passage of the Act.
  Third, the legislation requires a survey to determine which products 
contain asbestos, either on purpose or as a contaminant. EPA will be 
required to conduct this review with input from the Department of 
Labor, the Consumer Product Safety Commission and the International 
Trade Commission.
  The bill directs the EPA to conduct a survey on the status of 
asbestos-containing products, such as roofing materials, brake pads and 
gaskets, which contain asbestos on purpose. EPA must also study 
contaminant-asbestos products, such as some insulation and 
horticultural products, which contain asbestos as a contaminant of 
another substance. The study will examine how people use these products 
and the extent to which people are exposed to harmful levels of 
asbestos. The study must be finalized within 18 months to inform the 
Blue Ribbon Panel and the education campaign.
  Fourth, based on the results of the study, EPA shall conduct a public 
education campaign to increase awareness of the dangers posed by 
asbestos-containing products and contaminant-asbestos products, 
including those in homes and workplaces. The agency shall give priority 
to those products posing the greatest risk, as determined by the study 
required by the bill. The education campaign must be conducted within 2 
years of passage of the bill.
  EPA and the Consumer Product Safety Commission shall still be 
required to conduct a national education campaign about vermiculite 
insulation within 6 months of passage of the Act. As many as 35 million 
homes and businesses may contain asbestos-contaminated insulation made 
with ver-
miculite from Libby. This requirement is still in the bill despite 
EPA's recent announcement of an education campaign about vermiculite 
attic insulation. This will ensure EPA's long-term commitment to 
educating the public.
  Finally, the Ban Asbestos in America Act increases the federal 
commitment to finding new treatments for the terrible diseases caused 
by asbestos. At least 2,000 people per year die from mesothelioma, a 
deadly cancer of the lining of the lungs and internal organs caused by 
exposure to asbestos. The legislation would direct the head of NIH to 
``expand, intensify and coordinate programs for the conduct and support 
of research on diseases caused by exposure to asbestos.'' The Centers 
for Disease Control would be required to create a National Mesothelioma 
Registry to improve tracking of the disease, which in many cases goes 
undiagnosed and thus unrecorded. In addition, the bill creates 10 
mesothelioma treatment centers around the country to improve treatments 
for and awareness of this fatal cancer.
  Our hope is that by continuing to work together, we will build 
support for the Ban Asbestos in America Act. If we can get this 
legislation passed, fewer people will be exposed to asbestos, fewer 
people will contract asbestos diseases in the first place, and those 
who already have asbestos diseases will receive treatments to prolong 
and improve quality of life. I urge my colleagues to support this 
important legislation.
  In the meantime, we should do all we can to ensure that the rules in 
place to protect workers, consumers and schoolchildren from asbestos 
are followed and are strengthened if necessary. We also need to make 
sure that Federal agencies are given adequate resources to fully 
implement Congress' many mandates.
  I ask unanimous consent that the text of the Ban Asbestos in America 
Act of 2003 be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1115

       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 ``Ban Asbestos in America Act 
     of 2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Administrator of the Environmental Protection 
     Agency has classified asbestos as a category A human 
     carcinogen, the highest cancer hazard classification for a 
     substance;
       (2) there is no known safe level of exposure to asbestos;
       (3)(A) in hearings before Congress in the early 1970s, the 
     example of asbestos was used to justify the need for 
     comprehensive legislation on toxic substances; and
       (B) in 1976, Congress passed the Toxic Substances Control 
     Act (15 U.S.C. 2601 et seq.);
       (4) in 1989, the Administrator promulgated final 
     regulations under title II of the Toxic Substances Control 
     Act (15 U.S.C. 2641 et seq.) to phase out asbestos in 
     consumer products by 1997;
       (5) in 1991, the United States Court of Appeals for the 5th 
     Circuit overturned portions of the regulations, and the 
     Government did not appeal the decision to the Supreme Court;
       (6) as a result, while new applications for asbestos were 
     banned, asbestos is still being used in some consumer and 
     industrial products in the United States;
       (7) the United States Geological Survey has determined that 
     in 2000, companies in the United States consumed 15,000 
     metric tons of chrysotile asbestos, of which approximately 62 
     percent was consumed in roofing products, 22 percent in 
     gaskets, 12 percent in friction products, and 4 percent in 
     other products;
       (8) available evidence suggests that--
       (A) imports of some types of asbestos-containing products 
     may be increasing; and
       (B) some of those products are imported from foreign 
     countries in which asbestos is poorly regulated;
       (9) many people in the United States incorrectly believe 
     that--
       (A) asbestos has been banned in the United States; and
       (B) there is no risk of exposure to asbestos through the 
     use of new commercial products;
       (10) the Department of Commerce estimates that in 2000, the 
     United States imported 51,483 metric tons of asbestos-cement 
     products;
       (11) banning asbestos from being used in or imported into 
     the United States will provide

[[Page 12866]]

     certainty to manufacturers, builders, environmental 
     remediation firms, workers, and consumers that after a 
     specific date, asbestos will not be added to new construction 
     and manufacturing materials used in this country;
       (12) asbestos has been banned in Argentina, Australia, 
     Austria, Belgium, Chile, Croatia, the Czech Republic, 
     Denmark, Finland, France, Germany, Iceland, Ireland, Italy, 
     Latvia, Luxembourg, the Netherlands, Norway, Poland, Saudi 
     Arabia, the Slovak Republic, Spain, Sweden, Switzerland, and 
     the United Kingdom;
       (13) asbestos will be banned throughout the European Union 
     in 2005;
       (14) in 2000, the World Trade Organization upheld the right 
     of France to ban asbestos, with the United States Trade 
     Representative filing a brief in support of the right of 
     France to ban asbestos;
       (15) the 1999 brief by the United States Trade 
     Representative stated, ``In the view of the United States, 
     chrysotile asbestos is a toxic material that presents a 
     serious risk to human health.'';
       (16) people in the United States have been exposed to 
     harmful levels of asbestos as a contaminant of other 
     minerals;
       (17) in the town of Libby, Montana, workers and residents 
     have been exposed to dangerous levels of asbestos for 
     generations because of mining operations at the W.R. Grace 
     vermiculite mine located in that town;
       (18) the Agency for Toxic Substances and Disease Registry 
     found that over a 20-year period, ``mortality in Libby 
     resulting from asbestosis was approximately 40 to 80 times 
     higher than expected. Mesothelioma mortality was also 
     elevated.'';
       (19)(A) in response to this crisis, in January 2002, the 
     Governor of Montana requested that the Administrator of the 
     Environmental Protection Agency designate Libby as a 
     Superfund site; and
       (B) on October 23, 2002, the Administrator placed Libby on 
     the National Priorities List;
       (20)(A) vermiculite from Libby was shipped for processing 
     to 42 States; and
       (B) Federal agencies are investigating potential harmful 
     exposures to asbestos-contaminated vermiculite at sites 
     throughout the United States;
       (21) the Administrator has identified 14 sites that have 
     dangerous levels of asbestos-tainted vermiculite and require 
     cleanup efforts; and
       (22) although it is impracticable to eliminate exposure to 
     asbestos entirely because asbestos is a naturally occurring 
     mineral in the environment and occurs in several deposits 
     throughout the United States, Congress needs to do more to 
     protect the public from exposure to asbestos and Congress has 
     the power to prohibit the continued, intentional use of 
     asbestos in consumer products.

     SEC. 3. ASBESTOS-CONTAINING PRODUCTS.

       (a) In General.--Title II of the Toxic Substances Control 
     Act (15 U.S.C. 2641 et seq.) is amended--
       (1) by inserting before section 201 (15 U.S.C. 2641) the 
     following:

                  ``Subtitle A--General Provisions'';

     and
       (2) by adding at the end the following:

               ``Subtitle B--Asbestos-containing Products

     ``SEC. 221. DEFINITIONS.

       ``In this subtitle:
       ``(1) Asbestos-containing product.--The term `asbestos-
     containing product' means any product (including any part) to 
     which asbestos is deliberately or knowingly added or in which 
     asbestos is deliberately or knowingly used in any 
     concentration.
       ``(2) Contaminant-asbestos product.--The term `contaminant-
     asbestos product' means any product that contains asbestos as 
     a contaminant of any mineral or other substance, in any 
     concentration.
       ``(3) Distribute in commerce.--
       ``(A) In general.--The term `distribute in commerce' has 
     the meaning given the term in section 3.
       ``(B) Exclusions.--The term `distribute in commerce' does 
     not include--
       ``(i) an action taken with respect to an asbestos-
     containing product in connection with the end use of the 
     asbestos-containing product by a person that is an end user; 
     or
       ``(ii) distribution of an asbestos-containing product by a 
     person solely for the purpose of disposal of the asbestos-
     containing product in compliance with applicable Federal, 
     State, and local requirements.
       ``(4) Durable fiber.--
       ``(A) In general.--The term `durable fiber' means a 
     silicate fiber that--
       ``(i) occurs naturally in the environment; and
       ``(ii) is similar to asbestos in--

       ``(I) resistance to dissolution;
       ``(II) leaching; and
       ``(III) other physical, chemical, or biological processes 
     expected from contact with lung cells and other cells and 
     fluids in the human body.

       ``(B) Inclusions.--The term `durable fiber' includes--
       ``(i) richterite;
       ``(ii) winchite;
       ``(iii) erionite; and
       ``(iv) nonasbestiform varieties of crocidolite, amosite, 
     anthophyllite, tremolite, and actinolite.
       ``(5) Fiber.--The term `fiber' means an acicular single 
     crystal or similarly elongated polycrystalline aggregate 
     particle with a length to width ratio of 3 to 1 or greater.
       ``(6) Person.--The term `person' means--
       ``(A) any individual;
       ``(B) any corporation, company, association, firm, 
     partnership, joint venture, sole proprietorship, or other 
     for-profit or nonprofit business entity (including any 
     manufacturer, importer, distributor, or processor);
       ``(C) any Federal, State, or local department, agency, or 
     instrumentality; and
       ``(D) any interstate body.

     ``SEC. 222. NATIONAL ACADEMY OF SCIENCES STUDY.

       ``The Administrator shall enter into a contract with the 
     National Academy of Sciences to study and, not later than 18 
     months after the date of enactment of this subtitle, provide 
     the Administrator, and other Federal agencies, as 
     appropriate--
       ``(1) a description of the current state of the science 
     relating to the human health effects of exposure to asbestos 
     and other durable fibers; and
       ``(2) recommendations for the establishment of--
       ``(A) a uniform system for the establishment of asbestos 
     exposure standards for workers, school children, and other 
     populations; and
       ``(B) a uniform system for the establishment of protocols 
     for detecting and measuring asbestos.

     ``SEC. 223. ASBESTOS POLICIES PANEL.

       ``(a) Panel.--
       ``(1) In general.--The Administrator shall establish an 
     Asbestos Policies Panel (referred to in this section as the 
     `panel') to study asbestos and other durable fibers.
       ``(2) Membership.--The panel shall be comprised of 
     representatives of--
       ``(A) the Secretary of Labor;
       ``(B) the Secretary of Health and Human Services; and
       ``(C) the Chairman of the Consumer Product Safety 
     Commission;
       ``(D) nongovernmental environmental, public health, and 
     consumer organizations;
       ``(E) industry;
       ``(F) school officials;
       ``(G) public health officials;
       ``(H) labor organizations; and
       ``(I) the public.
       ``(b) Duties.--The panel shall--
       ``(1) provide independent advice and counsel to the 
     Administrator and other Federal agencies on policy issues 
     associated with the use and management of asbestos and other 
     durable fibers; and
       ``(2) study and, not later than 2 years after the date of 
     enactment of this subtitle, provide the Administrator, other 
     Federal agencies, and Congress recommendations concerning--
       ``(A) implementation of subtitle A;
       ``(B) grant programs under subtitle A;
       ``(C) revisions to the national emissions standards for 
     hazardous air pollutants promulgated under the Clean Air Act 
     (42 U.S.C. 7401 et seq.);
       ``(D) legislative and regulatory options for improving 
     consumer and worker protections against harmful health 
     effects of exposure to asbestos and durable fibers;
       ``(E) whether the definition of asbestos-containing 
     material, meaning any material that contains more than 1 
     percent asbestos by weight, should be modified throughout the 
     Code of Federal Regulations;
       ``(F) the feasibility of establishing a durable fibers 
     testing program;
       ``(G) options to improve protections against exposure to 
     asbestos from asbestos-containing products and contaminant-
     asbestos products in buildings;
       ``(H) current research on and technologies for disposal of 
     asbestos-containing products and contaminant-asbestos 
     products; and
       ``(I) at the option of the panel, the effects on human 
     health that may result from exposure to ceramic, carbon, and 
     other manmade fibers.

     ``SEC. 224. STUDY OF ASBESTOS-CONTAINING PRODUCTS AND 
                   CONTAMINANT-ASBESTOS PRODUCTS.

       ``(a) In General.--In consultation with the Secretary of 
     Labor, the Chairman of the International Trade Commission, 
     the Chairman of the Consumer Product Safety Commission, and 
     the Assistant Secretary for Occupational Safety and Health, 
     the Administrator shall conduct a study on the status of the 
     manufacture, processing, distribution in commerce, ownership, 
     importation, and disposal of asbestos-containing products and 
     contaminant-asbestos products in the United States.
       ``(b) Issues.--In conducting the study, the Administrator 
     shall examine--
       ``(1) how consumers, workers, and businesses use asbestos-
     containing products and contaminant-asbestos products that 
     are entering commerce as of the date of enactment of this 
     subtitle; and
       ``(2) the extent to which consumers and workers are being 
     exposed to unhealthful levels of asbestos through exposure to 
     products described in paragraph (1).
       ``(c) Report.--Not later than 18 months after the date of 
     enactment of this subtitle, the Administrator shall submit to 
     the Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Environment and Public 
     Works of the Senate a report on the results of the study.

[[Page 12867]]



     ``SEC. 225. PROHIBITION ON ASBESTOS-CONTAINING PRODUCTS.

       ``(a) In General.--Subject to subsection (b), the 
     Administrator shall promulgate--
       ``(1) not later than 1 year after the date of enactment of 
     this subtitle, proposed regulations that--
       ``(A) prohibit persons from manufacturing, processing, or 
     distributing in commerce asbestos-containing products; and
       ``(B) provide for implementation of subsections (b) and 
     (c); and
       ``(2) not later than 2 years after the date of enactment of 
     this subtitle, final regulations that, effective 60 days 
     after the date of promulgation, prohibit persons from 
     manufacturing, processing, or distributing in commerce 
     asbestos-containing products.
       ``(b) Exemptions.--
       ``(1) In general.--Any person may petition the 
     Administrator for, and the Administrator may grant an 
     exemption from the requirements of subsection (a) if the 
     Administrator determines that--
       ``(A) the exemption would not result in an unreasonable 
     risk of injury to public health or the environment; and
       ``(B) the person has made good faith efforts to develop, 
     but has been unable to develop, a substance, or identify a 
     mineral, that--
       ``(i) does not present an unreasonable risk of injury to 
     public health or the environment; and
       ``(ii) may be substituted for an asbestos-containing 
     product.
       ``(2) Terms and conditions.--An exemption granted under 
     this subsection shall be in effect for such period (not to 
     exceed 1 year) and subject to such terms and conditions as 
     the Administrator may prescribe.
       ``(c) Disposal.--
       ``(1) In general.--Except as provided in paragraph (2), not 
     later than 3 years after the date of enactment of this 
     subtitle, each person that possesses an asbestos-containing 
     product that is subject to the prohibition established under 
     this section shall dispose of the asbestos-containing 
     product, by a means that is in compliance with applicable 
     Federal, State, and local requirements.
       ``(2) Exemption.--Nothing in paragraph (1)--
       ``(A) applies to an asbestos-containing product that--
       ``(i) is no longer in the stream of commerce; or
       ``(ii) is in the possession of an end user; or
       ``(B) requires that an asbestos-containing product 
     described in subparagraph (A) be removed or replaced.

     ``SEC. 226. PUBLIC EDUCATION PROGRAM.

       ``(a) In General.--Not later than 2 years after the date of 
     enactment of this subtitle, and subject to subsection (c), in 
     consultation with the Chairman of the Consumer Product Safety 
     Commission and the Secretary of Labor, the Administrator 
     shall establish a program to increase awareness of the 
     dangers posed by asbestos-containing products and 
     contaminant-asbestos products in homes and workplaces.
       ``(b) Greatest Risks.--In establishing the program, the 
     Administrator shall--
       ``(1) base the program on the results of the study 
     conducted under section 224;
       ``(2) give priority to asbestos-containing products and 
     contaminant-asbestos products used by consumers and workers 
     that pose the greatest risk of injury to human health; and
       ``(3) at the option of the Administrator on receipt of a 
     recommendation from the Asbestos Policies Panel, include in 
     the program the conduct of projects and activities to 
     increase public awareness of the effects on human health that 
     may result from exposure to--
       ``(A) durable fibers; and
       ``(B) ceramic, carbon, and other manmade fibers.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.
       (b) Vermiculite Insulation.--Not later than 180 days after 
     the date of enactment of this Act, the Administrator of the 
     Environmental Protection Agency and the Consumer Product 
     Safety Commission shall begin a national campaign to educate 
     consumers concerning--
       (1) the dangers of vermiculite insulation that may be 
     contaminated with asbestos; and
       (2) measures that homeowners and business owners can take 
     to protect against those dangers.

     SEC. 4. ASBESTOS-CAUSED DISEASES.

       Subpart 1 of part C of title IV of the Public Health 
     Service Act (42 U.S.C. 285 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 417D. RESEARCH ON ASBESTOS-CAUSED DISEASES.

       ``(a) In General.--The Secretary, acting through the 
     Director of NIH and the Director of the Centers for Disease 
     Control and Prevention, shall expand, intensify, and 
     coordinate programs for the conduct and support of research 
     on diseases caused by exposure to asbestos, particularly 
     mesothelioma, asbestosis, and pleural injuries.
       ``(b) Administration.--The Secretary shall carry out this 
     section--
       ``(1) through the Director of NIH and the Director of the 
     CDC (Centers for Disease Control and Prevention); and
       ``(2) in collaboration with the Administrator of the Agency 
     for Toxic Substances and Disease Registry and the head of any 
     other agency that the Secretary determines to be appropriate.
       ``(c) Mesothelioma Registry.--Not later than 1 year after 
     the date of enactment of this section, the Director of the 
     Centers for Disease Control and Prevention, in cooperation 
     with the Director of the National Institute for Occupational 
     Safety and Health and the Administrator of the Agency for 
     Toxic Substances and Disease Registry, shall establish a 
     mechanism by which to obtain data from State cancer 
     registries and other cancer registries, which shall form the 
     basis for establishing a Mesothelioma Registry.
       ``(d) Authorization of Appropriations.--In addition to 
     amounts made available for the purposes described in 
     subsection (a) under other law, there are authorized to be 
     appropriated to carry out this section such sums as are 
     necessary for fiscal year 2004 and each fiscal year 
     thereafter.

     ``SEC. 417E. MESOTHELIOMA RESEARCH AND TREATMENT CENTERS.

       ``(a) In General.--The Director of NIH shall provide 
     $1,000,000 for each of fiscal years 2004 through 2008 for 
     each of up to 10 mesothelioma disease research and treatment 
     centers.
       ``(b) Requirements.--The Centers shall--
       ``(1) be chosen through competitive peer review;
       ``(2) be geographically distributed throughout the United 
     States with special consideration given to areas of high 
     incidence of mesothelioma disease;
       ``(3) be closely associated with Department of Veterans 
     Affairs medical centers to provide research benefits and care 
     to veterans, who have suffered excessively from mesothelioma;
       ``(4) be engaged in research to provide mechanisms for 
     detection and prevention of mesothelioma, particularly in the 
     areas of pain management and cures;
       ``(5) be engaged in public education about mesothelioma and 
     prevention, screening, and treatment;
       ``(6) be participants in the National Mesothelioma 
     Registry;
       ``(7) be coordinated in their research and treatment 
     efforts with other Centers and institutions involved in 
     exemplary mesothelioma research; and
       ``(8) be focused on research and treatments for 
     mesothelioma that have historically been underfunded.
       ``(c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $10,000,000 for 
     each of fiscal years 2004 through 2008.''.

     SEC. 5. CONFORMING AMENDMENTS.

       The table of contents in section 1 of the Toxic Substances 
     Control Act (15 U.S.C. prec. 2601) is amended--
       (1) by inserting before the item relating to section 201 
     the following:

                  ``Subtitle A--General Provisions'';

     and
       (2) by adding at the end of the items relating to title II 
     the following:

               ``Subtitle B--Asbestos-Containing Products

``Sec. 221. Definitions.
``Sec. 222. National Academy of Sciences Study.
``Sec. 223. Asbestos Policies Panel.
``Sec. 224. Study of asbestos-containing products and contaminant-
              asbestos products.
``Sec. 225. Prohibition on asbestos-containing products.
``Sec. 226. Public education program.''.
                                 ______
                                 
      By Mr. LEVIN (for himself, Mr. DeWine, Ms. Stabenow, and Mr. 
        Voinovich):
  S. 1116. A bill to amend the Federal Water Pollution Control Act to 
direct the Great Lakes National Program Office of the Environmental 
Protection Agency to develop, implement, monitor, and report on a 
series of indicators of water quality and related environmental factors 
in the Great Lakes; to the Committee on Environmental and Public Works.
  Mr. LEVIN. Mr. President, my colleagues Senators DeWine and Voinovich 
of Ohio, Senator Stabenow of Michigan, and I are pleased to introduce 
the Great Lakes Water Quality Indicators and Monitoring Act. This bill 
will provide science-based assessments of the health of the Great Lakes 
and whether restoration projects are working. The bill directs the 
Environmental Protection Agency to develop indicators of Great Lakes 
water quality and related environmental factors and a comprehensive 
network to monitor those indicators.
  The Great Lakes contain almost 20 percent of the world's fresh water. 
Millions of people rely on the lakes for drinking water, for economic 
livelihoods such as fishing and shipping, and for recreational 
opportunities, including swimming and boating. But the

[[Page 12868]]

Great Lakes have suffered from decades of toxic discharges, urban and 
agricultural runoff, and other environmental challenges. We've made 
some progress in improving water quality, but we know we have a long 
way to go.
  The stewards of the lakes at the Federal, State, and local levels use 
a variety of methods to determine the health of the Great Lakes and 
whether they are improving. For example, EPA and the Fish and Wildlife 
Service monitor the accumulation of chemicals in Great Lakes fish. The 
National Oceanic and Atmospheric Administration detects changes in the 
ecosystem from space-based satellites and waterborne buoys. The 
Geological Survey samples stream flow and quality, and the states 
inspect for compliance with water quality standards.
  But these efforts to collect scientific data are largely voluntary 
and suffer from a lack of funding and coordination. They use 
inconsistent methods that often produce incompatible results.
  This week, members of the Great Lakes Task Force released a General 
Accounting Office report on Great Lakes environmental programs. GAO 
looked at almost 200 Federal and State programs and found that a lack 
of coordination, poorly defined goals, and insufficient data make it 
difficult to evaluate the success of these programs. GAO found that 
there are no data collected regularly throughout the Great Lakes, and 
that the existing data are inadequate to determine whether water 
quality and other environmental conditions are improving.
  In 1990, I authored the Great Lakes Critical Programs Act, which 
strengthened the water quality standards in the Great Lakes region. 
This year, Congress passed the Great Lakes Legacy Act, to speed the 
cleanup of contaminated bottom sediment. But we haven't established a 
way to evaluate the impact of these measures.
  A restoration program is only as good as its ability to demonstrate 
results. To show results, we need science-based indicators of water 
quality and related environmental factors, and we need to monitor those 
indicators regularly throughout the ecosystem.
  GAO recommends that EPA's Great Lakes National Program Office lead an 
effort to develop indicators and a monitoring network. Our bill gives 
that office the mandate to work with other Federal agencies and Canada 
to identify and measure water quality and other environmental factors 
on a regular basis. The initial set of data collected through this 
network will serve as a benchmark against which to measure future 
improvements. Those measurements will help us make decisions on how to 
steer future restoration efforts. With a clear picture of how the Great 
Lakes are changing, we can change course when needed and spend public 
funds on the most pressing demands.
  This bill serves a second purpose--it provides EPA with dedicated 
funding to make sure that data collection can begin in a timely manner 
and be carried out consistently and comprehensively as long as the 
Great Lakes are in need.
  I encourage my colleagues to support this bill and help speed its 
passage.
  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. 1116

       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 ``Great Lakes Water Quality 
     Indicators and Monitoring Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) there are no comprehensive, regularly-collected data 
     that reveal whether the water quality or related 
     environmental factors of the Great Lakes have improved as a 
     result of efforts to remediate and protect the Great Lakes;
       (2) that lack of data was confirmed in May 2003 in a report 
     by the General Accounting Office that concluded that existing 
     data were inadequate to assess the overall progress of 
     restoration efforts in the Great Lakes; and
       (3) without those data, it is impossible to determine 
     whether--
       (A) progress is being made toward achieving the goals 
     contained in the Great Lakes Water Quality Agreement between 
     the United States and Canada; or
       (B) Federal and State water quality standards and 
     remediation programs are effective.

     SEC. 3. GREAT LAKES WATER QUALITY INDICATORS AND MONITORING.

       (a) In General.--Section 118(c)(1) of the Federal Water 
     Pollution Control Act (33 U.S.C. 1268(c)(1)) is amended by 
     striking subparagraph (B) and inserting the following:
       ``(B)(i) not later than 2 years after the date of enactment 
     of this clause, in cooperation with Canada and appropriate 
     Federal agencies (including the United States Geological 
     Survey, the National Oceanic and Atmospheric Administration, 
     and the United States Fish and Wildlife Service), develop and 
     implement a set of science-based indicators of water quality 
     and related environmental factors in the Great Lakes, 
     including, at a minimum, measures of toxic pollutants that 
     have accumulated in the Great Lakes for a substantial period 
     of time, as determined by the Program Office;
       ``(ii) not later than 4 years after the date of enactment 
     of this clause--
       ``(I) establish a Federal network for the regular 
     monitoring of, and collection of data throughout, the Great 
     Lakes basin with respect to the indicators described in 
     clause (i); and
       ``(II) collect an initial set of benchmark data from the 
     network; and
       ``(iii) not later than 2 years after the date of collection 
     of the data described in clause (ii)(II), and biennially 
     thereafter, in addition to the report required under 
     paragraph (10), submit to Congress, and make available to the 
     public, a report that--
       ``(I) describes the water quality and related environmental 
     factors of the Great Lakes (including any changes in those 
     factors), as determined through the regular monitoring of 
     indicators under clause (ii)(I) for the period covered by the 
     report; and
       ``(II) identifies any emerging problems in the water 
     quality or related environmental factors of the Great 
     Lakes.''.
       (b) Authorization of Appropriations.--Section 118 of the 
     Federal Water Pollution Control Act (33 U.S.C. 1268) is 
     amended by striking subsection (h) and inserting the 
     following:
       ``(h) Authorization of Appropriations.--
       ``(1) In general.--There is authorized to be appropriated 
     to carry out this section (other than subsection (c)(1)(B)) 
     $25,000,000 for each of fiscal years 2004 through 2008.
       ``(2) Great lakes water quality indicators and 
     monitoring.--There are authorized to be appropriated to carry 
     out subsection (c)(1)(B)--
       ``(A) $4,000,000 for fiscal year 2004;
       ``(B) $6,000,000 for fiscal year 2005;
       ``(C) $8,000,000 for fiscal year 2006; and
       ``(D) $10,000,000 for fiscal year 2007.''.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Kennedy, and Mr. Jeffords):
  S. 1117. A bill to provide a definition of a prevailing party for 
Federal fee-shifting statutes; to the Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, I am pleased today to introduce the 
Settlement Encouragement and Fairness Act of 2003. This bill provides 
that when plaintiffs bring a lawsuit that acts as a catalyst for a 
change in position by the opposing party, they will be considered the 
``prevailing party'' for purposes of recovering attorneys' fees under 
Federal law. The bill will help ensure that people who are the victims 
of civil rights, environmental and worker rights' abuses can obtain 
legal representation to enforce their rights.
  Over the course of our history, Congress has often enacted laws 
encouraging private litigants to implement public policy through our 
court system. An integral part of many such laws are provisions that 
help individuals obtain adequate legal representation by providing that 
the defendants will pay the plaintiffs' attorneys fees in cases where 
the plaintiff prevails. In laws involving public accommodations, 
housing, labor, disabilities, age discrimination, violence against 
women, voting rights, pollution and others, Congress has acted over and 
over again to empower private litigants in their pursuit of justice. 
Presently, there are over two hundred statutory fee-shifting provisions 
that allow for some sort of payment of attorneys' fees to a prevailing 
plaintiff.
  Until 2001, in interpreting these fee-shifting statutes in cases 
where a settlement was reached before trial, nine circuit courts of 
appeals embraced the ``catalyst theory'' to determine whether 
attorneys' fees could be obtained. The catalyst theory required the 
payment of fees where the lawsuit caused

[[Page 12869]]

a change in the position or conduct of the defendant. Only one circuit 
court, the Fourth Circuit, applied a more narrow definition of 
prevailing party, requiring a judgment or a court approved settlement 
in order for a plaintiff to obtain attorneys' fees.
  In Buckhannon Board of Care & Home Inc. v. West Virginia Department 
of Health and Human Services (2001), a case arising out of the Fourth 
Circuit, the U.S. Supreme Court ruled, in a 5-4 decision, that 
plaintiffs may recover attorneys' fees from defendants only if they 
have been awarded relief by a court, not if they prevailed through a 
voluntary change in the defendant's behavior or a private settlement. 
The Buckhannon ruling eliminated the catalyst theory for all fee 
shifting statutes in federal law.
  The bill I introduce today restores the catalyst theory that the vast 
majority of courts had approved prior to the Buckhannon decision as a 
basis for seeking attorneys fees under Federal fee shifting statutes. 
It provides a new definition of ``prevailing party'' for all such 
statutes to encompass the common situation where defendants alter their 
conduct after a lawsuit has commenced but without waiting for a court 
order requiring them to do so. This critical change in the definition 
of ``prevailing party'' will allow attorneys representing clients who 
cannot otherwise afford to hire a lawyer to recover their costs and to 
be paid a reasonable rate for their work.
  The Buckhannon case itself illustrates the need for this legislation. 
Buckhannon Board and Care Home in West Virginia, an operator of 
assisted living residences, failed a state inspection because some 
residents were incapable of ``self-preservation'' as defined by state 
law. After receiving orders to close its facilities, Buckhannon sued 
the state seeking declaratory and injunctive relief that the ``self-
preservation'' requirement violated the Fair Housing Amendments Act and 
the Americans with Disabilities Act. While the lawsuit was pending but 
before the court ruled, the state legislature eliminated the ``self-
preservation'' requirement.
  Imagine how the plaintiffs felt when they learned that their lawsuit 
had forced a change in the law not only for their own case but also for 
all of the other individuals who had been subject to the improper self-
preservation doctrine. If ever there was a complete and total victory 
caused by litigation, this was it. But, as Casey Stengall once said, 
``It ain't over 'til it's over.'' Once the state legislature changed 
the law, the District Court granted defendant's motion to dismiss the 
case as moot and denied Buckhannon's request for attorneys' fees. The 
court ruled that the legislative action did not amount to a judicially 
required change in position that would permit Buckhannon to be 
considered a ``prevailing party'' in the case. On appeal, the Court of 
Appeals for the Fourth Circuit and then the U.S. Supreme Court denied 
attorneys' fees for the plaintiffs, ruling that because the change in 
the defendants' conduct was voluntary rather than ordered by the court, 
Buckhannon was not a prevailing party.
  I believe the narrow definition of ``prevailing party'' endorsed by 
the Buckhannon decision will result in many injustices going 
unchallenged. Indeed, in calculating whether to take a case, an 
attorney for a plaintiff will have to consider not only the chances of 
losing, but the chances of winning too easily. If businesses or 
individuals are able to engage in egregious conduct, refuse to change 
their behavior without a lawsuit being filed against them, and then 
avoid paying attorneys' fees by changing their conduct on the eve of 
trial, the effect will be that some lawyers will decide they cannot 
afford to take a case even if the claims are very strong.
  Imagine a case involving a legitimate claim of housing discrimination 
where, after many months, perhaps even years of work, as the attorney 
who labored for the plaintiff prepares into the evening for opening 
statements, the attorney learns that the defendant has admitted its 
wrongful conduct and offered substantial compensation and a promise to 
change its practices. This offer came about only because of the 
spotlight the lawsuit put on the defendant and the possibility of a 
large jury verdict. This would be a complete victory for the plaintiff, 
but under Buckhannon, the attorney who labored for years to bring about 
this result may not be paid. Later, if the same defendant returns to 
discriminatory practices, the next plaintiff might very well not be 
able to find competent counsel who will take the case.
  Ironically, the failure to correct the Buckhannon decision could lead 
to plaintiffs' attorneys dragging out law suits far beyond a point in 
time where the parties could reach a fair settlement, in order to 
insure that they meet the Buckhannon definition of ``prevailing 
party.'' This will increase the costs of litigation and discourage 
settlement. Simply put, Buckhannon creates unnatural tensions between 
attorneys and clients and may even push attorneys to not act in the 
best interest of their clients.
  Certainly we can do better. Congress has passed important laws to 
protect the public in the work place and in our communities; we must 
ensure that these laws can be enforced, when necessary, in court. The 
Settlement Encouragement and Fairness Act of 2003 will help insure that 
all our citizens have the ability to meaningfully challenge injustice.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Leahy, Mr. Schumer, and Mrs. 
        Clinton):
  S. 1118. A bill to establish the Champlain Valley National Heritage 
Partnership in the States of Vermont and New York, and for other 
purposes; to the Committee on Energy and Natural Resources.
  Mr. JEFFORDS. Mr. President, I am very pleased to introduce the 
Champlain Valley National Heritage Act of 2003. I am joined by Senator 
Leahy and Senators Schumer and Clinton of New York. This bill will 
establish a National Heritage Partnership within the Champlain Valley. 
Passage of this bill will culminate a process to enhance the incredible 
cultural resources of the Champlain Valley.
  The Champlain Valley of Vermont and New York has one of the richest 
and most intact collections of historic resources in the United States. 
Fort Ticonderoga still stands where it has for centuries, at the scene 
of numerous battles critical to the birth of our Nation. Revolutionary 
gunboats have recently been found fully intact on the bottom of Lake 
Champlain. Our cemeteries are the permanent resting place for great 
explorers, soldiers and sailors. The United States and Canada would not 
exist today but for events that occurred in this region.
  We in Vermont and New York take great pride in our history. We 
preserve it, honor it and show it off to visitors from around the 
world. These visitors are also very important to our economy. Tourism 
is among the most important industries in this region and has much 
potential for growth.
  The Champlain Valley Heritage Partnership will bring together more 
than one hundred local groups working to preserve and promote our 
heritage. Up to $2 million a year will be made available from the 
National Park Service through the Lake Champlain Basin Program to 
support local efforts to preserve and interpret our heritage and 
present it to the world. Most of the funding will be given to small 
communities to help preserve their heritage and develop economic 
opportunities.
  This project has taken many years for me to bring to the point of 
introducing legislation. This has been time well spent working at the 
grass-roots level to develop a framework to direct federal resources to 
where it will do the most good. I am confident that we have found the 
best model. This will be a true partnership that supports each member 
but does not impose any new federal requirements.
  The Champlain Valley National Heritage Partnership will preserve our 
historic resources, interpret and teach about the events that shaped 
our nation and will be an engine for economic growth. I am hopeful that 
this bill, which was considered by the Senate last year, will become 
law during this Congress.

[[Page 12870]]

  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. 1118

       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 ``Champlain Valley National 
     Heritage Partnership Act of 2003''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the Champlain Valley and its extensive cultural and 
     natural resources have played a significant role in the 
     history of the United States and the individual States of 
     Vermont and New York;
       (2) archaeological evidence indicates that the Champlain 
     Valley has been inhabited by humans since the last retreat of 
     the glaciers, with the Native Americans living in the area at 
     the time of European discovery being primarily of Iroquois 
     and Algonquin descent;
       (3) the linked waterways of the Champlain Valley, including 
     the Richelieu River in Canada, played a unique and 
     significant role in the establishment and development of the 
     United States and Canada through several distinct eras, 
     including--
       (A) the era of European exploration, during which Samuel de 
     Champlain and other explorers used the waterways as a means 
     of access through the wilderness;
       (B) the era of military campaigns, including highly 
     significant military campaigns of the French and Indian War, 
     the American Revolution, and the War of 1812; and
       (C) the era of maritime commerce, during which canals 
     boats, schooners, and steamships formed the backbone of 
     commercial transportation for the region;
       (4) those unique and significant eras are best described by 
     the theme ``The Making of Nations and Corridors of 
     Commerce'';
       (5) the artifacts and structures associated with those eras 
     are unusually well-preserved;
       (6) the Champlain Valley is recognized as having one of the 
     richest collections of historical resources in North America;
       (7) the history and cultural heritage of the Champlain 
     Valley are shared with Canada and the Province of Quebec;
       (8) there are benefits in celebrating and promoting this 
     mutual heritage;
       (9) tourism is among the most important industries in the 
     Champlain Valley, and heritage tourism in particular plays a 
     significant role in the economy of the Champlain Valley;
       (10) it is important to enhance heritage tourism in the 
     Champlain Valley while ensuring that increased visitation 
     will not impair the historical and cultural resources of the 
     region;
       (11) according to the 1999 report of the National Park 
     Service entitled ``Champlain Valley Heritage Corridor 
     Project'', ``the Champlain Valley contains resources and 
     represents a theme `The Making of Nations and Corridors of 
     Commerce', that is of outstanding importance in U.S. 
     history''; and
       (12) it is in the interest of the United States to preserve 
     and interpret the historical and cultural resources of the 
     Champlain Valley for the education and benefit of present and 
     future generations.
       (b) Purposes.--The purposes of this Act are--
       (1) to establish the Champlain Valley National Heritage 
     Partnership in the States of Vermont and New York to 
     recognize the importance of the historical, cultural, and 
     recreational resources of the Champlain Valley region to the 
     United States;
       (2) to assist the State of Vermont and New York, including 
     units of local government and nongovernmental organizations 
     in the States, in preserving, protecting, and interpreting 
     those resources for the benefit of the people of the United 
     States;
       (3) to use those resources and the theme ``The Making of 
     Nations and Corridors of Commerce'' to--
       (A) revitalize the economy of communities in the Champlain 
     Valley; and
       (B) generate and sustain increased levels of tourism in the 
     Champlain Valley;
       (4) to encourage--
       (A) partnerships among State and local governments and 
     nongovernmental organizations in the United States; and
       (B) collaboration with Canada and the Province of Quebec 
     to--
       (i) interpret and promote the history of the waterways of 
     the Champlain Valley region;
       (ii) form stronger bonds between the United States and 
     Canada; and
       (iii) promote the international aspects of the Champlain 
     Valley region; and
       (5) to provide financial and technical assistance for the 
     purposes described in paragraphs (1) through (4).

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Heritage partnership.--The term ``Heritage 
     Partnership'' means the Champlain Valley National Heritage 
     Partnership established by section 4(a).
       (2) Management entity.--The term ``management entity'' 
     means the Lake Champlain Basin Program.
       (3) Management plan.--The term ``management plan'' means 
     the management plan developed under section 4(b)(B)(i).
       (4) Region.--
       (A) In general.--The term ``region'' means any area or 
     community in 1 of the States in which a physical, cultural, 
     or historical resource that represents the theme is located.
       (B) Inclusions.--The term ``region'' includes
       (i) the linked navigable waterways of--

       (I) Lake Champlain;
       (II) Lake George;
       (III) the Champlain Canal; and
       (IV) the portion of the Upper Hudson River extending south 
     to Saratoga;

       (ii) portions of Grand Isle, Franklin, Chittenden, Addison, 
     Rutland, and Bennington Counties in the State of Vermont; and
       (iii) portions of Clinton, Essex, Warren, Saratoga and 
     Washington Counties in the State of New York.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (6) State.--the term ``State'' means--
       (A) the State of Vermont; and
       (B) the State of New York.
       (7) Theme.--The term ``theme'' means the theme ``The Making 
     of Nations and Corridors of Commerce'', as the term is used 
     in the 1999 report of the National Park Service entitled 
     ``Champlain Valley Heritage Corridor Project'', that 
     describes the periods of international conflict and maritime 
     commerce during which the region played a unique and 
     significant role in the development of the United States and 
     Canada.

     SEC. 4. HERITAGE PARTNERSHIP.

       (a) Establishment.--There is established in the regional 
     the Champlain Valley National Heritage Partnership.
       (b) Management Entity.--
       (1) Duties.--
       (A) In general.--The management entity shall implement the 
     Act.
       (B) Management plan.--
       (i) In general.--Not later than 3 years after the date of 
     enactment of this Act, the management entity shall develop a 
     management plan for the Heritage Partnership.
       (ii) Existing plan.--Pending the completion and approval of 
     the management plan, the management entity may implement the 
     provisions of this Act based on its federally authorized plan 
     ``Opportunities for Action, an Evolving Plan For Lake 
     Champlain''.
       (iii) Contents.--The management plan shall include--

       (I) recommendations for funding, managing, and developing 
     the Heritage Partnership;
       (II) a description of activities to be carried out by 
     public and private organizations to protect the resources of 
     the Heritage Partnership;
       (III) a list of specific, potential sources of funding for 
     the protection, management, and development of the Heritage 
     Partnership;
       (IV) an assessment of the organizational capacity of the 
     management entity to achieve the goals for implementation; 
     and
       (V) recommendations of ways in which to encourage 
     collaboration with Canada and the Province of Quebec in 
     implementing this Act.

       (iv) Considerations.--In developing the management plan 
     under clause (i), the management entity shall take into 
     consideration existing Federal, State, and local plans 
     relating to the region.
       (v) Submission to secretary for approval.--

       (I) In general.--Not later than 3 years after the date of 
     enactment of this Act, the management entity shall submit the 
     management plan to the Secretary for approval.
       (II) Effect of failure to submit.--If a management plan is 
     not submitted to the Secretary by the date specified in 
     paragraph (I), the Secretary shall not provide any additional 
     funding under this Act until a management plan for the 
     Heritage Partnership is submitted to the Secretary.

       (vi) Approval.--Not later than 90 days after receiving the 
     management plan submitted under subparagraph (V)(I), the 
     Secretary, in consultation with the States, shall approve or 
     disapprove the management plan.
       (vii) Action following disapproval.--

       (I) General.--If the Secretary disapproves a management 
     plan under subparagraph (vi), the Secretary shall--

       (aa) advise the management entity in writing of the reasons 
     for the disapproval;
       (bb) make recommendations for revisions to the management 
     plan; and
       (cc) allow the management entity to submit to the Secretary 
     revisions to the management plan.

       (II) Deadline for approval of revision.--Not later than 90 
     days after the date on which a revision is submitted under 
     subparagraph (vii)(I)(cc), the Secretary shall approve or 
     disapprove the revision.

       (viii) Amendment.--

       (I) In general.--After approval by the Secretary of the 
     management plan, the management entity shall periodically--

       (aa) review the management plan; and
       (bb) submit to the Secretary, for review and approval by 
     the Secretary, the recommendations of the management entity 
     for

[[Page 12871]]

     any amendments to the management plan that the management 
     entity considers to be appropriate.

       (II) Expenditure of funds.--No funds made available under 
     this Act shall be used to implement any amendment proposed by 
     the management entity under subparagraph (viii)(1) until the 
     Secretary approves the amendments.

       (2) Partnerships.--
       (A) In general.--In carrying out this Act, the management 
     entity may enter into partnerships with--
       (i) the States, including units of local governments in the 
     States;
       (ii) nongovernmental organizations;
       (iii) Indian Tribes; and
       (iv) other persons in the Heritage Partnership.
       (B) Grants.--Subject to the availability of funds, the 
     management entity may provide grants to partners under 
     subparagraph (A) to assist in implementing this Act.
       (3) Prohibition on the acquisition of real property.--The 
     management entity shall not use Federal funds made available 
     under this Act to acquire real property or any interest in 
     real property.
       (c) Assistance From Secretary.--To carry out the purposes 
     of this Act, the Secretary may provide technical and 
     financial assistance to the management entity.

     SEC. 5. EFFECT.

       Nothing in this Act--
       (1) grants powers of zoning or land use to the management 
     entity;
       (2) modifies, enlarges, or diminishes the authority of the 
     Federal Government or a State or local government to manage 
     or regulate any use of land under any law (including 
     regulations); or
       (3) obstructs or limits private business development 
     activities or resource development activities.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated to 
     carry out this Act not more than a total of $10,000,000, of 
     which not more than $1,000,000 may be made available for any 
     fiscal year.
       (b) Non-Federal Share.--The non-Federal share of the cost 
     of any activities carried out using Federal funds made 
     available under subsection (a) not be less than 50 percent.

     SEC. 7. TERMINATION OF AUTHORITY.

       The authority of the Secretary to provide assistance under 
     this Act terminates on the date that is 15 years after the 
     date of enactment of this Act.

  Mr. LEAHY. Mr. President, I am very pleased to join with my Senate 
colleagues from Vermont and New York as we reintroduce the Lake 
Champlain Heritage Act of 2003. Last year, we took a significant step 
in helping all Americans better appreciate Lake Champlain with the 
passage of Daniel Patrick Moynihan Lake Champlain Basin Program Act. 
Today, we reaffirm our commitment to the continuing preservation of 
Lake Champlain's important historic sites and artifacts.
  The role of Lake Champlain cannot be overlooked. From the earliest 
human habitation 10,000 years ago, to the Revolutionary War and the 
conduct of trade in the 19th and 20th centuries, this 120-mile-long 
basin has played a pivotal role in the Course of American history.
  It was on Lake Champlain that Benedict Arnold's motley group of 15 
American ships engaged a much larger and far superior British fleet in 
the Battle at Valcour Island. While the battle ended in a loss for the 
Americans, it successfully delayed the British fleet and became known 
as one of the most crucial engagements of the American Revolution.
  This act is intended to promote and preserve these centuries of 
struggle in the Lake Champlain Valley. It will advance the cultural 
heritage goals of ``Opportunities for Action,'' a comprehensive 
pollution prevention, control, and restoration plan developed by the 
Lake Champlain Basin Program. And it will also promote such things as 
locally planned and managed heritage networks and a management strategy 
for the lake's underwater cultural resources. With the 400th 
anniversary of Samuel De Champlain's arrival in the valley coming up in 
2009, this bill could not be more needed.
  Vermonters and New Yorkers have a serious responsibility to preserve 
the historical and cultural heritage of the Lake Champlain Valley for 
future generations. Local communities on both sides of the lake have 
helped us develop a bold vision to enhance the conservation, 
interpretation, and enjoyment of our shared history. We can help 
revitalize local economies, promote heritage tourism, and improve the 
valley's cultural legacy by making additional resources available to 
communities and organizations through the Lake Champlain Basin Program.
  It is with great pride that I stand here today with my colleagues 
from Vermont and New York to reassert our partnership for Champlain 
Valley National Heritage Act and continue our cooperative effort to 
conserve, interpret, and honor our common heritage.
                                 ______
                                 
      By Mr. GRAHAM of Florida (for himself, Mr. Hatch, and Mr. 
        Jeffords):
  S. 1119. A bill to amend the Internal Revenue Code of 1986 to clarify 
the eligibility of certain expenses for the low-income housing credit; 
to the Committee on Finance.
  Mr. GRAHAM of Florida. Mr. President, today I am re-introducing 
legislation that will improve the effectiveness of one of the most 
successful programs we have to help Americans get affordable housing, 
the Low-Income Housing Tax Credit. I am proud to be joined in this 
effort by my esteemed colleagues, Senators Hatch and Jeffords.
  The need for affordable housing is as great today as ever. The 
generally accepted definition of affordability is for a household to 
pay no more than 30 percent of annual income on housing. Today, twelve 
million renter and homeowner households pay more than 50 percent toward 
housing costs. In fact, nowhere in the country can a family with one 
minimum wage worker afford the rent on a two-bedroom apartment.
  The Low-Income Housing Tax Credit was created in 1986 to attract 
private sector capital to the affordable housing market. It has been 
the major engine for financing the production of low-income multi-
family housing. The program offers developers and investors in 
affordable housing credit against their Federal income tax in return 
for their investment. Since its inception, the Low-Income Housing Tax 
Credit has assisted in the development and availability of roughly 
850,000 new and rehabilitated units of affordable housing.
  In the fall of 2000, the Internal Revenue Service issued its first 
guidance in the program's 16-year history. That guidance was issued in 
the form of several technical advice memoranda, or TAMs, and specified 
which development costs will be eligible and ineligible for the credit, 
known as eligible basis.
  TAMs are not official guidance, reviewed by the Treasury Department, 
but instead, are IRS legal opinions providing direction to IRS agents 
conducting audits. They are not citable in court proceedings because 
they are not official guidance. In the absence of official guidance, 
TAMs could be taken as the official government position. In fact, that 
is exactly what is happening.
  The problem is that the IRS's position is contrary to common industry 
practice, and eliminates many reasonable, legitimate and necessary 
costs from the tax credit. This has caused uncertainty among investors 
as to whether the credits for which they have paid, will be realized. 
Moreover, these guidelines could adversely affect the ability of States 
to target affordable housing to those who need it the most.
  It is important to understand, this legislation will not increase the 
pool of low-income housing tax credits. The Internal Revenue Code sets 
the maximum amount of credits that States may allocate to developers of 
affordable housing properties. Thanks to legislation that we enacted in 
2000, the amount available to each State has increased from $1.50 to 
$1.75 times the State's population. That 40 percent increase is 
expected to produce about 30,000 more units a year. Since the unmet 
demand for affordable housing is many times greater than what can be 
built with the help of the credit, our legislation should not affect 
revenues. In fact, the only way for this legislation to have a revenue 
impact is if the legislation makes it easier for the States to use the 
credits we intend for them to have under present law.
  What this legislation does do, however, is very important. To 
understand its importance, it may be useful to have a little background 
on how the low-income housing tax credit works.
  In economic terms, the credit is equity financing which replaces a 
portion

[[Page 12872]]

of debt that would otherwise be necessary to finance a property. By 
replacing debt, credits work to reduce interest costs. This allows a 
property owner to offer lower rents than otherwise would be the case.
  The most unique feature of the program is that State housing finance 
agencies award Federal tax credits to developers of rental housing. 
Since these agencies have considerable flexibility in how they 
distribute the credits, developers compete for the limited number of 
tax credits by submitting project proposals. The agencies rate the 
proposals, and allocate credits to individual properties based on 
criteria provided in the Internal Revenue Code, and on the State's 
particular housing needs and priorities.
  The Internal Revenue Code also limits the amount of credits a State 
may allocate to a particular property. The limit is determined as 
percentage of the basis of a property. The basis is, generally 
speaking, the cost of constructing a building that is part of an 
affordable housing project. Non-federally subsidized new construction 
may receive a 9 percent credit. Existing buildings and new buildings 
receiving other Federal subsidies may get a 4 percent credit.
  The IRS takes the position that certain construction costs should not 
be included in basis. This position makes a large number of affordable 
housing properties financially unfeasible, and weakens the economics of 
those that still pass minimum underwriting requirements. The loss of 
equity would surely affect the properties that serve the lowest income 
tenants, provide higher levels of service, or operate in high cost 
areas. The reason that this is problematic is simple. Reducing the 
amount of credits does not reduce the development costs. It merely 
alters the source of financing from equity to debt, forcing either 
higher rents or lower quality construction.
  Apparently, the Treasury Department and Internal Revenue Service 
agree that this is an issue worthy of review, as both agencies have 
included it in their business plan. Last year, the IRS issued new 
guidance on one of the items addressed by the TAMs, but there does not 
appear to be a full review of the effect of the positions set forth in 
the TAMs anytime soon.
  This legislation would amend the Internal Revenue Code to specify 
that certain associated development costs are to be included in 
eligible basis. In many cases, the largest item excluded from eligible 
basis under the TAMs is ``impact fees.'' Impact fees are fees required 
by the government ``as a condition to the development'' and considered 
ineligible because they are one- time costs, unlike building permits 
that need to be renewed each time a building is built. These fees cover 
a wide range of infrastructure improvements including sewer lines, 
schools, and roads. Certainly, whether or not they are includable in 
basis for the purpose of calculating the amount of tax credit, these 
costs will be incurred and will impact the economics of the property. 
As I mentioned previously, the IRS has recently addressed the inclusion 
of impact fees in eligible basis, but not other costs directly related 
to building construction.
  Other items that would be severely restricted or excluded from 
eligible basis under the interpretations expressed in the TAMs are site 
preparation costs, development fees, professional fees related to 
developing the property, and construction financing costs. The 
legislation we are introducing today will clarify that any cost 
incurred in preparing a site which is reasonably related to the 
development of a qualified low-income housing property, any reasonable 
fee paid to the developer, any professional fee relating to an item 
includable in basis, and any cost of financing attributable to 
construction of the building is includable in basis for the purpose of 
calculating the maximum amount of credit a State may allocate to a low-
income housing property.
  The intent of these clarifications is simply to codify common 
industry practice before the issuance of the TAMs. Not only will the 
legislation allow the low-income tax credit program to provide better 
quality housing at lower rental rates than would be possible if the 
positions taken in the TAMs are followed, but clarification will help 
simplify administration of the credit by giving both taxpayers and the 
Internal Revenue Service a clearer statement of the standards that 
apply in calculating credit amounts.
  Our economy is not doing as well as we would like, and there is a 
significant likelihood that we are going to need even more affordable 
housing in the not too distant future. We should be proud that we 
increased the amount of low-income housing tax credits that will be 
available to help finance this housing. What we need to do now is to 
make sure that these credits are used as efficiently as possible to 
provide housing for those who need it the most. The legislation we are 
introducing today will help achieve that goal.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1119

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

     SECTION 1. ELIGIBILITY OF CERTAIN EXPENSES FOR LOW-INCOME 
                   HOUSING CREDIT.

       (a) In General.--Subsection (d) of section 42 of the 
     Internal Revenue Code of 1986 (relating to low-income housing 
     credit) is amended by adding at the end the following new 
     paragraph:
       ``(8) Associated development costs included in basis.--
       ``(A) In general.--Solely for purposes of this section, 
     associated development costs shall be taken into account in 
     determining the basis of any building which is part of a low-
     income housing project to the extent not otherwise so taken 
     into account.
       ``(B) Associated development costs.--For purposes of 
     subparagraph (A), the term `associated development costs' 
     means, with respect to any building, such building's 
     allocable share of--
       ``(i) any cost incurred in preparing the site which is 
     reasonably related to the development of the qualified low-
     income housing project of which the building is a part,
       ``(ii) any fee imposed by a State or local government as a 
     condition to development of such project,
       ``(iii) any reasonable fee paid to any developer of such 
     project,
       ``(iv) any professional fee relating to any item includible 
     in the basis of the building pursuant to this paragraph, and
       ``(v) any cost of financing attributable to construction of 
     the building (without regard to the source of such financing) 
     which is required to be capitalized.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) housing credit dollar amounts allocated after December 
     31, 2002, and
       (2) buildings placed in service after such date to the 
     extent paragraph (1) of section 42(h) of the Internal Revenue 
     Code of 1986 does not apply to any building by reason of 
     paragraph (4) thereof, but only with respect to bonds issued 
     after such date.
                                 ______
                                 
      By Mr. BAUCUS (for himself, Mr. Rockefeller, Mr. Bingaman, Mr. 
        Dayton, and Mrs. Murray):
  S. 1120. A bill to establish an Office of Trade Adjustment 
Assistance, and for other purposes; to the Committee on Finance.
  Mr. BAUCUS. Mr. President, I rise today to introduce the Trade 
Adjustment Assistance for Firms Reorganization Act.
  The Trade Adjustment Assistance for Firms program assists hundreds of 
mostly small and medium-sized manufacturing and agricultural companies 
in Montana and nationwide when they face layoffs and lost sales due to 
import competition. Qualifying companies develop adjustment plans and 
receive technical assistance to become more competitive, so they can 
retain and expand employment.
  The program is very cost effective. It requires the firms being 
helped to match the Federal assistance with their own funds, and it 
pays the government back in Federal and State tax revenues when the 
firms succeed.
  Currently, TAA for Firms clients receive assistance preparing 
petitions and adjustment plans from twelve Trade Adjustment Assistance 
Centers, which are Commerce Department contractors. Program and policy 
decisions are made by a small Headquarters staff in Commerce's Economic 
Development Administration. This organizational structure is efficient 
and has served the program well for many years.
  For example, TAA for Firms is helping Montola Growers from 
Culbertson,

[[Page 12873]]

Montana, to develop cosmetic applications for its rapeseed oil. The 
program is helping Pyramid Mountain Lumber of Seeley Lake, MT to 
upgrade its production process and train employees to use new process 
controls. And it is helping Porterbilt Company of Hamilton to expand 
its product line.
  Last year, in the Trade Act of 2002, a bipartisan majority of 
Congress voted to reauthorize this important program for seven years 
and to increase its authorized funding level. The program seemed headed 
toward some years of smooth sailing. But it turns out that is not the 
case.
  For reasons unrelated to TAA for Firms, EDA is about to move all its 
Headquarters program operations to its six regional offices, with a 
policy office in Washington. For TAA for Firms, that means clients will 
get the same local services from the TAACs, but decisions will be made 
in six regional offices and the national policy office--a net increase 
in layers of government. The likely result is more personnel needed to 
run the program, less centralized and consistent decision making, and 
less accountability--all without any likely improvement in customer 
service.
  The organizational structure of TAA for Firms is not broken and it 
doesn't need to be fixed. This bill preserves the existing efficient 
management structure of the TAA for Firms program. Instead of moving 
the program out of Commerce Headquarters entirely, it simply moves the 
program to a different part of the Commerce Department. That way it can 
continue to be centrally managed with a minimal staff.
  Under this bill, administration of TAA for Firms will move from the 
Economic Development Administration at the Department of Commerce to 
DOC's International Trade Administration.
  Relocating the program to ITA makes a lot more sense that dividing it 
up among seven different EDA offices, for several reasons. First, ITA 
has experience running this program, which was located there prior to 
1990. Second, relocating TAA for Firms to ITA will result in fewer 
layers of government and more centralized and accountable program 
management. It also creates synergies by allowing better coordination 
of the TAA for Firms program with other trade and trade remedy programs 
administered by ITA. And it enhances the ability of the Finance 
Committee to carry out its oversight responsibilities for this program 
and for trade policy in general.
  I want to thank Senators Rockefeller, Bingaman, Dayton, and Murray 
who have joined me in co-sponsoring this bill. This is a simple matter 
of good, sensible government and I encourage more of my colleagues to 
lend it their support. I urge Chairman Grassley to take up this bill in 
the Finance Committee as soon as possible.
  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. 1120

       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 ``Trade Adjustment Assistance 
     for Firms Reorganization Act''.

     SEC. 2. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

       (a) In General.--Chapter 3 of title II of the Trade Act of 
     1974 (19 U.S.C. 2341 et seq.) is amended by inserting after 
     section 255 the following new section:

     ``SEC. 255A. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

       ``(a) Establishment.--Not later than 90 days after the date 
     of enactment of the Trade Adjustment Assistance for Firms 
     Reorganization Act, there shall be established in the 
     International Trade Administration of the Department of 
     Commerce an Office of Trade Adjustment Assistance.
       ``(b) Personnel.--The Office shall be headed by a Director, 
     and shall have such staff as may be necessary to carry out 
     the responsibilities of the Secretary of Commerce described 
     in this chapter.
       ``(c) Functions.--The Office shall assist the Secretary of 
     Commerce in carrying out the Secretary's responsibilities 
     under this chapter.''.
       (b) Conforming Amendment.--The table of contents for the 
     Trade Act of 1974 is amended by inserting after the item 
     relating to section 255, the following new item:

``Sec. 255A. Office of Trade Adjustment Assistance.''.
                                 ______
                                 
      By Mr. BAUCUS (for himself and Mr. McCain):
  S. 1121. A bill to extend certain trade benefits to countries of the 
greater Middle East; to the Committee on Finance.
  Mr. BAUCUS. Mr. President, I rise today to introduce, on behalf of my 
self and Senator McCain, the Middle East Trade and Engagement Act of 
2003.
  For more than a thousand years, the most important trade route in the 
world ran through the heart of the Middle East. The Silk Road that 
linked the Western world with China wound its way through what is today 
Egypt, Iraq, Jordan, Turkey, and a host of other countries in the 
Middle East.
  Merchants who traveled either direction along the Silk Road brought 
with them not only their goods for sale, but also their ideas and 
culture. In this way, all peoples from the West through the East were 
enriched with both money and knowledge.
  But in modern times, the countries of the Middle East have retreated 
from their historically critical role in world trade. Today, few 
countries in the Middle East engage fully in the global trading system.
  Many are not members of the World Trade Organization. Many have high 
barriers to international trade and investment. Their economies have 
suffered as a result. A declining share of world trade and investment 
has led to decades of deepening poverty and slow job creation in the 
countries of the Middle East.
  At the same time, they have been experiencing population growth rates 
among the highest in the world. That means that a growing number of 
young people will be entering the workforce to look for jobs that don't 
now exist.
  The United States cannot stand idly by as a generation of young 
people in the Middle East grows up to discover that there is no 
meaningful work for them, and that they have no way to provide for a 
family of their own.
  The problem will only get worse if we don't act now. As the rest of 
the world continues to liberalize its trade, the countries of the 
Middle East will only be left further behind.
  That is why we're today introducing the Middle East Trade and 
Engagement ACt of 2003. Under this Act, countries in the Middle East 
will be given preferential access to the U.S. market.
  This is not a one-way street. Countries must meet certain conditions. 
They must support our war on terrorism, and they must pursue economic 
reforms. Only then will they reap the benefits of this legislation.
  Our proposal can have an immediate impact. Opening our markets to the 
countries of the Middle East will encourage higher levels of trade and 
direct investment in those countries. And we know it can be a success 
because if has worked before in other regions. Our bill is modeled on 
successful programs that increased economic development in sub-Saharan 
Africa and the Andean countries.
  This legislation will do the same for the countries of the Middle 
East. Increased economic development in that region means jobs for the 
young and the unemployed, some of whom may otherwise be recruited by 
our enemies in the war on terrorism.
  By helping to strengthen these economies, we also increase the number 
of people who can afford to purchase American products and services. 
That means increased export opportunities for American businesses and 
more jobs for American farmers and workers.
  President Bush recently announced an initiative to create a free 
trade area for the United States and the countries of the Middle East 
by the year 2013. This is a good long-term goal. But the people in the 
Middle East need our help now. They need jobs now, not ten years from 
now.
  The Middle East Trade and Engagement Act would bring the benefits of 
trade to the people of the countries in the Middle East in a much 
shorter time. It would also help those countries make the economic 
reforms

[[Page 12874]]

they'll need to make before a free trade area can become a realistic 
option.
  And just as trade in the time of the Silk Road allowed the exchange 
of ideas and culture as well as goods, increased trade now can 
strengthen ties between the United States and the countries in the 
Middle East.
  Now, in the Aftermath of the war in Iraq, the whole world's attention 
is focused on the Middle East. It is the ideal time for the United 
States to engage these countries in a comprehensive way and help bring 
them more fully into the global trading system.
  I hope that my colleagues will join Senator McCain and me in 
cosponsoring this important legislation, and I hope we will have a 
change to consider this in the Finance Committee this year.
  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. 1121

       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 ``Middle East Trade and 
     Engagement Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) it is in the mutual interest of the United States and 
     the countries of the greater Middle East to promote stable 
     and sustainable growth and development throughout the greater 
     Middle East;
       (2) Congress views democratization and economic progress in 
     the countries of the greater Middle East as important 
     elements of a policy to address terrorism and endemic 
     instability;
       (3) free trade relationships are not a substitute for, but 
     a complement to, necessary political and economic reforms 
     that lead to political liberalization and economic freedom;
       (4) the countries of the greater Middle East have enormous 
     economic potential and are of enduring political significance 
     to the United States;
       (5) despite their economic potential, the countries of the 
     greater Middle East are experiencing deepening poverty, slow 
     job creation, and a declining share of world trade and 
     investment, while at the same time experiencing population 
     growth rates among the highest in the world;
       (6) these economic conditions are in part the result of 
     barriers to trade and investment, a failure to engage fully 
     in the global trading system, lack of participation in the 
     World Trade Organization, and, often, a lack of economic 
     diversification and over-reliance on the energy sector;
       (7) offering the countries of the greater Middle East 
     enhanced trade preferences will encourage higher levels of 
     trade and direct investment and help bring those countries 
     more fully into the global trading system;
       (8) higher levels of trade and investment and greater 
     involvement in the global trading system can lead to 
     increased economic development, which can in turn lead to 
     more jobs for people in the countries of the greater Middle 
     East; and
       (9) encouraging the reciprocal reduction of trade and 
     investment barriers in the greater Middle East will enhance 
     the benefits of trade and investment for all the countries in 
     the greater Middle East as well as enhance commercial and 
     political ties between the United States and the greater 
     Middle East.

     SEC. 3. STATEMENT OF POLICY.

       Congress supports--
       (1) encouraging increased trade and investment between the 
     United States and the countries of the greater Middle East 
     and among the countries of the greater Middle East;
       (2) reducing tariff and nontariff barriers and other 
     obstacles to trade between the United States and the 
     countries of the greater Middle East and among the countries 
     of the greater Middle East;
       (3) strengthening and expanding the private sector and 
     accelerating the rate of job creation in the countries of the 
     greater Middle East;
       (4) focusing on countries committed to the rule of law, 
     economic reform, political liberalization, respect for human 
     rights, and the eradication of poverty;
       (5) facilitating the development of civil societies and 
     political freedom in the countries of the greater Middle 
     East;
       (6) promoting sustainable development, and protecting and 
     preserving the environment in a manner consistent with 
     economic development; and
       (7) encouraging the countries of the greater Middle East to 
     diversify their economies, implement domestic economic 
     reforms, open to trade, and adopt anticorruption measures, 
     including through accession to the Organization for Economic 
     Cooperation and Development (OECD) Convention on Combating 
     Bribery of Foreign Public Officials in International Business 
     Transactions.

     SEC. 4. DESIGNATION OF ELIGIBLE COUNTRIES.

       (a) In General.--The President is authorized to designate 
     any country listed in subsection (c) as a beneficiary country 
     if the President determines that the country--
       (1) has established, or is making continual progress toward 
     establishing--
       (A) a market-based economy that protects private property 
     rights, incorporates an open rules-based trading system, and 
     minimizes government interference in the economy through 
     measures such as price controls, subsidies, and government 
     ownership of economic assets;
       (B) the rule of law and the right to due process, a fair 
     trial, and equal protection under the law;
       (C) political pluralism, a climate free of political 
     intimidation and restrictions on peaceful political activity, 
     and democratic elections that meet international standards of 
     fairness, transparency, and participation;
       (D) the elimination of barriers to United States trade and 
     investment, including by--
       (i) providing national treatment and measures to create an 
     environment conducive to domestic and foreign investment;
       (ii) protecting intellectual property; and
       (iii) resolving bilateral trade and investment disputes;
       (E) economic policies that reduce poverty, increase the 
     availability of health care and educational opportunities, 
     expand physical infrastructure, promote the development of 
     private enterprise, and encourage the formation of capital 
     markets through micro-credit or other programs;
       (F) a system to combat corruption and bribery, such as 
     signing and implementing the OECD Convention on Combating 
     Bribery of Foreign Public Officials in International Business 
     Transactions;
       (G) protection of internationally recognized worker rights, 
     including the right of association, the right to organize and 
     bargain collectively, a prohibition on the use of any form of 
     forced or compulsory labor, a minimum age for the employment 
     of children, and acceptable conditions of work; and
       (H) policies that provide a high level of environmental 
     protection;
       (2) does not engage in activities that undermine United 
     States national security or foreign policy interests, and 
     supports a peaceful resolution of the Israeli-Palestinian 
     conflict;
       (3) is a signatory of the United Nations Declaration of 
     Human Rights, does not engage in gross violations of 
     internationally recognized human rights, and is making 
     continuing and verifiable progress on the protection of 
     internationally recognized human rights, including freedom of 
     speech and press, freedom of peaceful assembly and 
     association, and freedom of religion;
       (4) is not listed by the United States Department of State 
     as a state sponsor of terrorism and cooperates fully in 
     international efforts to combat terrorism;
       (5) does not participate in the primary, secondary, or 
     tertiary economic boycott of Israel; and
       (6) otherwise meets the eligibility criteria set forth in 
     section 502(b)(2) of the Trade Act of 1974 (19 U.S.C. 
     2462(b)(2)), other than section 502(b)(2)(B).
       (b) Continuing Compliance.--If the President determines 
     that a designated beneficiary country no longer meets the 
     requirements described in subsection (a), the President shall 
     terminate the designation of the country made pursuant to 
     subsection (a) and inform Congress of the President's 
     determination and the reasons therefor.
       (c) Countries Eligible for Designation.--In designating 
     countries as beneficiary countries under this Act, the 
     President shall consider only the following countries of the 
     greater Middle East or their successor political entities:
       (1) Afghanistan.
       (2) Algeria.
       (3) Azerbaijan.
       (4) Bahrain.
       (5) Bangladesh.
       (6) Egypt.
       (7) Iraq.
       (8) Kuwait.
       (9) Lebanon.
       (10) Morocco.
       (11) Oman.
       (12) Pakistan.
       (13) Qatar.
       (14) Saudi Arabia.
       (15) Tunisia.
       (16) Turkey.
       (17) United Arab Emirates.
       (18) Yemen.
       (d) The Palestinian Authority.--The President is also 
     authorized to designate the Palestinian Authority or its 
     successor political entity as a beneficiary political entity 
     which, if so designated, shall be accorded benefits under 
     this Act as if it were a beneficiary country, if the 
     President determines that the Palestinian Authority--
       (1) satisfies the conditions of subsection (a) (1) and (2);
       (2) does not participate in acts of terrorism, and takes 
     active measures to combat terrorism;
       (3) cooperates fully in international efforts to combat 
     terrorism;
       (4) does not engage in gross violations of internationally 
     recognized human rights,

[[Page 12875]]

     and is making continuing and verifiable progress on the 
     protection of internationally recognized human rights, 
     including freedom of speech and the press, freedom of 
     peaceful assembly and association, and freedom of religion; 
     and
       (5) accepts Israel's right to exist in peace within secure 
     borders.

     SEC. 5. DESIGNATION OF ELIGIBLE ARTICLES.

       (a) Eligible Articles.--Except as provided in sections 
     503(b)(2) and (3) of the Trade Act of 1974 (19 U.S.C. 
     2463(b)(2) and (3)), the President is authorized to designate 
     articles as eligible for duty-free treatment from all 
     beneficiary countries for purposes of this Act by Executive 
     order or Presidential proclamation after receiving the advice 
     of the International Trade Commission in accordance with 
     subsection (c).
       (b) Rules of Origin.--
       (1) General rule.--The duty-free treatment provided under 
     this Act shall apply to any eligible article which is the 
     growth, product, or manufacture of 1 or more beneficiary 
     countries if--
       (A) that article is imported directly from a beneficiary 
     country into the customs territory of the United States; and
       (B) the sum of--
       (i) the cost or value of the materials produced in 1 or 
     more beneficiary countries, plus
       (ii) the direct cost of processing operations performed in 
     such beneficiary country or countries,

     is not less than 35 percent of the appraised value of such 
     article at the time it is entered.
       (2) Additional countries.--For purposes of the rules of 
     origin in paragraph (1) and the regulations prescribed 
     pursuant to paragraph (4), the term ``beneficiary country'' 
     includes Israel and Jordan.
       (3) Exclusions.--An article shall not be treated as the 
     growth, product, or manufacture of a beneficiary country by 
     virtue of having merely undergone--
       (A) simple combining or packaging operations; or
       (B) mere dilution with water or mere dilution with another 
     substance that does not materially alter the characteristics 
     of the article.
       (4) Regulations.--The Secretary of the Treasury, after 
     consulting with the United States Trade Representative, shall 
     prescribe such regulations as may be necessary to carry out 
     this subsection, including, but not limited to, regulations 
     providing that, in order to be eligible for duty-free 
     treatment under this Act, an article--
       (A) must be wholly the growth, product, or manufacture of 1 
     or more beneficiary countries, including Israel and Jordan; 
     or
       (B) must be a new or different article of commerce which 
     has been grown, produced, or manufactured in 1 or more 
     beneficiary countries, including Israel and Jordan.
       (c) International Trade Commission Advice.--Before 
     designating an article as an eligible article under 
     subsection (a), the President shall publish in the Federal 
     Register and furnish the International Trade Commission with 
     a list of articles that may be considered for designation as 
     eligible articles for purposes of this Act. The President 
     shall comply with the provisions of sections 131, 132, 133, 
     and 134 of the Trade Act of 1974 as if an action under this 
     Act were an action taken under section 123 of the Trade Act 
     of 1974 to carry out a trade agreement entered into under 
     section 123.

     SEC. 6. UNITED STATES-MIDDLE EAST TRADE AND ECONOMIC 
                   COOPERATION FORUM.

       (a) Declaration of Policy.--The President shall convene 
     annual high-level meetings among appropriate officials of the 
     United States Government, officials of the governments of 
     eligible beneficiary countries, and officials of the 
     Governments of Israel and Jordan in order to foster close 
     economic ties between the United States and the countries of 
     the greater Middle East.
       (b) Establishment.--Not later than 12 months after the date 
     of enactment of this Act, the President, after consulting 
     with Congress and the governments concerned, shall establish 
     a United States-Middle East Trade and Economic Cooperation 
     Forum (in this section referred to as the ``Forum'').
       (c) Requirements.--In creating the Forum, the President 
     shall meet the following requirements:
       (1) The President shall direct the Secretary of Commerce, 
     the Secretary of the Treasury, the Secretary of State, and 
     the United States Trade Representative to host the first 
     annual meeting with their counterparts from the governments 
     of designated beneficiary countries, and those countries and 
     political entities listed in section 4 (c) and (d) that the 
     President determines are taking substantial positive steps 
     toward meeting the eligibility requirements in section 4. The 
     purpose of the meeting shall be to discuss expanding trade 
     and investment relations between the United States and the 
     countries of the greater Middle East and the implementation 
     of this Act including encouraging joint ventures between 
     small and large businesses. The President shall also direct 
     the Secretaries and the United States Trade Representative to 
     invite to the meeting representatives from appropriate 
     organizations and government officials from countries and 
     political entities in the greater Middle East.
       (2)(A) The President, in consultation with Congress, shall 
     encourage United States nongovernmental organizations to host 
     annual meetings with nongovernmental organizations from the 
     countries and political entities of the greater Middle East 
     in conjunction with the annual meetings of the Forum for the 
     purpose of discussing the issues described in paragraph (1).
       (B) The President, in consultation with Congress, shall 
     encourage United States representatives of the private sector 
     to host annual meetings with representatives of the private 
     sector from the countries and political entities of the 
     greater Middle East in conjunction with the annual meetings 
     of the Forum for the purpose of discussing the issues 
     described in paragraph (1).
       (3) The President shall, to the extent practicable, meet 
     with the heads of governments of designated beneficiary 
     countries, and those countries and political entities listed 
     in section 4 (c) and (d) that the President determines are 
     taking substantial positive steps toward meeting the 
     eligibility requirements in section 4, not less than once 
     every 2 years for the purpose of discussing the issues 
     described in paragraph (1). The first such meeting should 
     take place not later than 12 months after the date of 
     enactment of this Act.
       (d) Dissemination of Information by USIS.--In order to 
     assist in carrying out the purposes of the Forum, the United 
     States Information Service shall disseminate regularly, 
     through multiple media, economic information in support of 
     the free market economic reforms described in this Act.

     SEC. 7. FREE TRADE AGREEMENTS WITH COUNTRIES OR POLITICAL 
                   ENTITIES IN THE GREATER MIDDLE EAST.

       (a) Declaration of Policy.--Congress declares that 
     bilateral free trade agreements should be negotiated, where 
     feasible, with interested countries or political entities in 
     the greater Middle East, in order to serve as the catalyst 
     for increasing trade between the United States and the 
     greater Middle East and increasing private sector investment 
     in the greater Middle East.
       (b) Eligibility.--Any country or political entity that 
     desires to negotiate a bilateral free trade agreement with 
     the United States shall be a member of the World Trade 
     Organization or be working diligently toward membership and 
     shall satisfy the criteria in section 4(a) of this Act.
       (c) Plan Requirement.--
       (1) In general.--The President, taking into account the 
     willingness of the governments of the beneficiary countries 
     to engage in negotiations to enter into free trade 
     agreements, shall develop a plan for the purpose of 
     negotiating and entering into 1 or more trade agreements with 
     interested beneficiary countries.
       (2) Elements of plan.--The plan shall include the 
     following:
       (A) The specific objectives of the United States with 
     respect to negotiations described in paragraph (1) and a 
     suggested timetable for achieving those objectives.
       (B) The benefits to both the United States and the relevant 
     beneficiary countries with respect to the applicable free 
     trade agreement or agreements.
       (C) A mutually agreed-upon timetable for the negotiations.
       (D) Subject matter anticipated to be covered by the 
     negotiations and United States laws, programs, and policies, 
     as well as the laws of participating eligible countries of 
     the greater Middle East and existing bilateral and 
     multilateral and economic cooperation and trade agreements, 
     that may be affected by the agreement or agreements.
       (E) Procedures to ensure the following:
       (i) Adequate consultation with Congress and the private 
     sector during the negotiations.
       (ii) Consultation with Congress regarding all matters 
     relating to implementation of the agreement or agreements.
       (iii) Approval by Congress of the agreement or agreements.
       (iv) Adequate consultations with the relevant governments 
     of the greater Middle East during the negotiation of the 
     agreement or agreements.
       (d) Reporting Requirement.--Not later than 12 months after 
     the date of enactment of this Act, the President shall 
     prepare and transmit to Congress a report containing the plan 
     developed pursuant to subsection (c).

     SEC. 8. REPORTING REQUIREMENT.

       (a) In General.--The President shall monitor, review, and 
     prepare a report annually on the progress of each country and 
     political entity listed in section 4 (c) and (d) in meeting 
     the requirements described in section 4(a) in order to 
     determine the current or potential eligibility of each 
     country or political entity to be designated as a beneficiary 
     country under this Act. The report shall also include a 
     comprehensive discussion of the implementation of this Act 
     and an analysis of the trade and investment policy of the 
     United States with respect to the countries and political 
     entities listed in section 4 (c) and (d). To the extent that 
     any subject matter required by the report is included in 
     another report submitted by the President, the

[[Page 12876]]

     report required by this section may reference the other 
     report.
       (b) Time For Submitting Report.--The President shall submit 
     the report described in subsection (a) to Congress not later 
     than 1 year after the date of enactment of this Act, and 
     annually thereafter through 2011.

     SEC. 9. PRESERVATION OF BENEFITS OF UNITED STATES-ISRAEL AND 
                   UNITED STATES-JORDAN FREE TRADE AGREEMENTS.

       Nothing in this Act shall be deemed to nullify or impair 
     any right or benefit accorded either to Israel or to Jordan 
     under the existing trade agreements with the United States.

     SEC. 10. TERMINATION OF PREFERENTIAL TREATMENT.

       No duty-free treatment or other preferential treatment 
     extended to beneficiary countries under this Act shall remain 
     in effect after December 31, 2011.

  Mr. McCAIN. Mr. President, today I join Senator Baucus in introducing 
the Middle East Trade and Engagement Act of 2003. Our legislation would 
permit eligible countries in the greater Middle East to gain greater 
access to American markets through the duty-free treatment of certain 
exports, and ultimately to negotiate free trade agreements with the 
United States. It would condition broader trade relations on 
fundamental political and economic reforms, cooperation in the fight 
against terrorism, and support for the Israeli-Palestinian peace 
process, among other issues, in order to promote liberalization and 
reform across the Arab and Muslim worlds.
  Free trade is a powerful tool for opening up closed societies, if 
leaders in the greater Middle East are willing to make necessary and 
overdue political and economic reforms. It is past time for nations in 
the region to join the global economy, and for rulers to lead 
increasingly restive populations in the direction of democracy and free 
markets.
  Today, the countries of the Middle East account for a small 
percentage of non-energy sector trade for the United States. With the 
exception of oil, most Arab nations barely trade with each other, much 
less with the rest of the world, and many still maintain a hostile 
economic boycott on Israel--policies that isolate the Middle East from 
the global economy and perpetuate conflict instead of building 
prosperity. The wave of free-market reform and democratization that 
swept Europe, Latin America, Asia, and parts of Africa in the 1980s and 
1990s has left most of the Middle East untouched and unchanged.
  America's interest in economic opening and political liberalization 
in the region requires a new level of engagement with the countries of 
the greater Middle East, premised on the acceleration and active 
implementation of a host of reforms without which prosperity and 
democracy are not possible. Our legislation would tie preferential 
trade access to American markets to progress towards adoption of these 
reforms, as well as meaningful progress on human rights protections, 
decisive movement towards democracy, full cooperation in the war on 
terrorism, and an end to the primary, secondary, and tertiary economic 
boycott of Israel.
  Our bill is modeled on the success of the Andean Trade Preferences 
Act and the African Growth and Opportunity Act. Ideally, enactment of 
the bill we are introducing today would create a regime of duty-free 
trade in a number of goods from the greater Middle East. Such a trade 
preference program would encourage and often require eligible nations 
to undertake the kind of significant economic reforms that ultimately 
lead to free trade agreements, as President Bush has called for and 
which we support.
  The Andean Trade Preferences Act was created to expand the economies 
of Bolivia, Colombia, Ecuador, and Peru. By granting duty-free and 
reduced rate treatment to various products from these nations, we took 
action to strengthen the fragile economies of the region, expand their 
export bases, and provide Andean farmers and workers with legitimate 
employment outside of the drug trade. It has worked. The trade 
agreement created new industries in the region outside of the drug 
trade and expanded the economies of the region which helped to create 
legitimate jobs. We foresee similar effects from this legislation on 
parts of the Middle East, if leaders have the courage and vision to 
complement progress on trade with internal political and economic 
reforms.
  Reform in the Arab and Muslim worlds requires not just greater trade 
but accelerated political and economic liberalization, including 
respect for fundamental human freedom. It is my hope that the spirit 
and effect of our legislation will help move countries of the greater 
Middle East in that direction.
                                 ______
                                 
      By Mrs. BOXER (for herself and Mr. Biden):
  S. 1123. A bill to provide enhanced Federal enforcement and 
assistance in preventing and prosecuting crimes of violence against 
children; to the Committee on the Judiciary.
  Mrs. BOXER. Mr. President, today I am introducing the Violence 
Against Children Act of 2003. The legislation, modeled on the 
successful Violence Against Women Act, will both toughen Federal 
penalties for crimes against children and assist local communities in 
their efforts to fight violence against children. It has been endorsed 
by over 100 prominent individuals and organizations.
  We were all horrified by the tragic murders of Samantha Runion and 
Danielle van Dam. We were horrified by the kidnaping of Elizabeth 
Smart, Erica Pratt, and Nichole Taylor Timmons who were snatched right 
from their homes. We were horrified by the kidnaping and rape of 
Jacqueline Marris and Tamara Brooks.
  But there are thousands more stories we do not hear--thousands of 
children who each year are victims of sexual molestation, kidnaping, 
murder--thousands of children whose stories do not make the nightly 
news--thousands of children and thousands of families who suffer in 
silence and often without help.
  In fact, 71 percent of all sex crime victims are under the age of 
18--and 38 percent of all kidnaping victims are under age 18. Those 
between the ages of 12 and 17 are over two times more likely to be 
victims of a violent crime than adults. And as alarming as those 
statistics are, according to a study published in 1999, only 28 percent 
of all crimes against children are actually reported.
  While we are horrified by these and other stories, we must not let 
them paralyze us. We must do for children what we have done on behalf 
of women, by changing attitudes and changing the culture. The Violence 
Against Children Act would create a new Federal criminal statute for 
willfully injuring or attempting to injure any person under the age of 
18. Those who injure a child or try to will be imprisoned for up to 10 
years and fined. And if the crime is kidnaping, aggravated sexual 
abuse, or murder, the maximum penalty will be life in prison.
  In addition to enhanced penalties for crimes against children, the 
Violence Against Children Act provides Federal assistance--including 
technical, forensic, and prosecutorial assistance--to any State, Indian 
tribe, or local government that requests assistance with a violent 
felony against a child. The bill also establishes a grant program to 
help local police and prosecutors to strengthen effective law 
enforcement and prosecution for these crimes.
  This Act builds upon the Protect Act, recently signed into law, by 
requiring that States have an Amber Alert system to help locate missing 
children in order to qualify for the local law enforcement grants. In 
addition, to cut down on the number of abused and neglected children, 
states are required to have a Safe Haven program that would allow 
parents to leave newborn babies in hospital emergency rooms, 
anonymously and with no fear of penalty. These requirements will ensure 
that states take action to improve systems that can protect our 
Nation's children.
  I am pleased to be joined in this effort by Senator Biden, who I 
teamed up with over a decade ago in introducing the Violence Against 
Women Act. And Representative Millender-McDonald is the sponsor of the 
House bill.
  This is a critical issue to safeguard our children and youth 
nationwide. I urge my colleagues to cosponsor this bill.

[[Page 12877]]

  I ask unanimous consent to print in the Record a section-by-section 
summary of the bill and a list of those who have endorsed it.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Violence Against Children Act--Section-by-Section Summary

     Section 1. Short title
       Names the Act the ``Violence Against Children Act of 
     2003.''
     Section 2. Findings
       Includes findings on the extent of crimes against children 
     and the effect of those crimes against children. Also finds 
     that failure to pay child support is a form of neglect.


       title I--enHANCED FedERAL ROle In CRIMES against CHILDREN

     Section 101. Enhanced penalties
       (1) New Criminal Statute
       Creates a new federal criminal statute for willfully 
     injuring or attempting to injure any person under the age of 
     18. Establishes a maximum penalty of 10 years in prison and a 
     fine. If death of the child results from the crime or if the 
     crime is kidnapping, an attempt to kidnap, aggravated sexual 
     abuse, an attempt to commit aggravated sexual abuse, or an 
     attempt to kill, the maximum penalty is a fine and life in 
     prison.
       For constitutional purposes, the criminal statute applies 
     only under certain circumstances: (1) if the defendant or the 
     victim engages in interstate or foreign commerce, including 
     crossing a state line, during the course of or as the result 
     of committing the crime; or (2) the defendant uses a firearm 
     or other weapon that has traveled in interstate or foreign 
     commerce.
       (2) Enhanced Penalties of Existing Crimes
       Directs the United States Sentencing Commission to provide 
     enhanced penalties for existing federal crimes when the 
     victim is under the age of 18.
       (3) Review of State Laws
       Directs the General Accounting Office, within 6 months, to 
     review state criminal penalties for crimes against children 
     and state laws regarding enhanced penalties when the victim 
     of a crime is under the age of 18.
     Section 102. Enhanced assistance for criminal investigations 
         and prosecutions by state and local law enforcement 
         officials
       Requires the Attorney General to provide federal 
     assistance--including technical, forensic, and prosecutorial 
     assistance--to any state, Indian tribe, or local government 
     that requests assistance with a violent felony against a 
     child.
       If the Attorney General determines that there are 
     insufficient resources to fulfill all such requests, priority 
     is given to (a) requests that involve offenders who have 
     committed crimes in more than one state; and (b) rural areas 
     that do not have sufficient resources to investigate and 
     prosecute the crime.


                        TITLE II--GRANT PROGRAMS

     Section 201. State and local law enforcement assistance 
         grants
       Creates a new grant program to assist states, Indian 
     tribes, and local governments to strengthen law enforcement 
     and prosecution of crimes against children. Grants could be 
     used for a variety of purposes, including: (a) training law 
     enforcement officers, prosecutors, and judges; (b) developing 
     or expanding law enforcement units or courts that 
     specifically target crimes against children; (c) developing 
     policies to prevent, identify, and respond to crimes against 
     children; (d) establishing data collection and communication 
     systems to link police, prosecutors, and courts in helping to 
     track arrests, prosecutions, and convictions of crimes 
     against children; and (e) establishing and strengthening 
     collaboration and communication between law enforcement and 
     child services agencies.
       To be eligible for funds, a state must have in place an 
     AMBER Alert system (see section 301) and must use, or be in 
     the process of using, the National Incident-Based Reporting 
     System (see section 302).
       Authorizes $25 million for each of the next five years. 
     Federal funds must supplement, not supplant, non-federal 
     funds.
     Section 202. Education, prevention, and victims' assistance 
         grants
       Creates a new grant program to assist states, Indian 
     tribes, local governments, and nongovernmental organizations 
     to provide education, prevention, intervention, and victims' 
     assistance services regarding crimes against children. Grants 
     could be used for a variety of purposes, including: (a) 
     hotlines; (b) training of professionals; (c) informational 
     and educational services and materials; (d) intervention 
     services; (e) emergency medical treatment; (f) counseling to 
     child victims and their families; and (g) increasing the 
     number of mental health professionals that specialize in 
     child victims.
       To be eligible for funds, a state must have a Safe Haven 
     program (see section 303).
       Authorizes $25 million for each of the next five years. 
     Federal funds must supplement, not supplant, non-federal 
     funds.


                     TITLE III--NATIONWIDE PROGRAMS

     Section 301. Nationwide AMBER Alert
       Requires each state receiving a law enforcement assistance 
     grant (see section 201) to have in place a state-wide AMBER 
     Alert communications network for child abduction cases.
       This system must be in place within 3 years after the date 
     of enactment of the Violence Against Children Act.
     Section 302. Improved statistical gathering
       Requires each state receiving a law enforcement assistance 
     grant (see section 201) to use, or to be in the process of 
     testing or developing protocols to use, the National 
     Incident-Based Reporting System. (This program provides the 
     most detailed statistical profile of crimes in the United 
     States, including by the age of the victims. However, it is a 
     voluntary program, and less than half the states currently 
     participate.)
     Section 303. National safe haven
       Requires each state receiving a victims' assistance grant 
     (see section 202) to have a Safe Haven program, which permits 
     a parent to leave a newborn baby with a medically-trained 
     employee of a hospital emergency room anonymously without 
     penalty. The state program must have a mechanism to 
     voluntarily collect information about the medical history of 
     the family, must require a search of the child in the state 
     and federal missing person databases, and must include a plan 
     to publicize the state program.
       To ensure that an abused or intentionally harmed newborn is 
     not left at a hospital so a parent can escape responsibility, 
     a state may have a limited exception to the Safe Haven 
     program in those circumstances.
     Section 304. Improved child protection services programs
       Directs each state, within 6 months, to report to the 
     Department of Health and Human Services on its child 
     protective services program, including how the state 
     maintains records, keeps track of the children under its 
     care, and verifies the well-being of the children.
       Directs the General Accounting Office, within 6 months, to 
     review state child protective services practices, including 
     how states keep track of the children under their care, and 
     to report to Congress on any legislative changes needed to 
     improve the program.


                  TITLE IV--CHILD SUPPORT ENFORCEMENT

     Section 401. Child support bad debt deduction
       Expresses the sense of the Senate that Congress should 
     extend the existing federal tax law on bad debt to nonpayment 
     of child support. That is, those who do not receive the child 
     support they are owed should be able to deduct that from 
     their federal income taxes; those who fail to pay ordered 
     child support should be required to add the unpaid amount to 
     their income and pay federal taxes on it.
                                  ____


            Violence Against Children Act Letters of Support


                   national organizations/individuals

       KlaasKids Foundation (Marc Klaas).
       Children's Defense Fund.
       National Children's Alliance.
       American Academy of Child and Adolescent Psychiatry.
       American Humane Association.
       Crimes Against Children Research Center.
       Dr. Laura Schlessinger.


                       California Law Enforcement

       California Police Activities Leagues.
       Auburn Chief of Police.
       Butte County Sheriff-Coroner.
       Chico Chief of Police.
       Colusa County Sheriff-Coroner.
       Fairfield Chief of Police.
       Glenn County Sheriff-Coroner.
       Kern County Sheriff-Coroner.
       Lassen County Sheriff-Coroner.
       Long Beach Chief of Police.
       Los Angeles Chief of Police.
       Manteca Chief of Police.
       Marin County Sheriff.
       Marysville Chief of Police.
       Napa Chief of Police.
       Oxnard Chief of Police.
       Redding Chief of Police.
       Roseville Chief of Police.
       Sacramento Chief of Police.
       Sacramento County Sheriff.
       San Diego Chief of Police.
       San Mateo Chief of Police.
       San Mateo County Sheriff.
       Santa Ana Chief of Police.
       Santa Clara Chief of Police.
       Shasta County Sheriff.
       Stanislaus County Sheriff-Coroner.
       Stockton Chief of Police.
       Woodland Chief of Police.
       Yolo County Sheriff.
       Yuba City Chief of Police.


                         other law enforcement

       Pierce County (WA) Sheriff.


                      california public officials

       Bill Lockyer, California Attorney General.
       Jack O'Connell, California State Superintendent of Public 
     Instruction.
       Steve Westly, California State Controller.
       John L. Burton, President Pro Tempore, California State 
     Senate.
       James Hahn, Mayor, Los Angeles.
       Jan Scully, Sacramento County District Attorney.
       Chula Vista City Council (Stephen C. Padilla, Mayor).

[[Page 12878]]

       Santa Rosa City Council (Sharon Wright Mayor).
       Ed Henderson, Mayor, Napa.
       Steve Cooley, Los Angeles County District Attorney.
       Pete Knoll, Siskiyou County District Attorney.
       Claire Mack, Mayor, San Mateo.
       Karin MacMillan, Mayor, Fairfield.
       John A. Russo, Oakland City Attorney.
       Alan D. Bersin, San Diego Superintendent of Public 
     Instruction.
       City of Santa Clara (Patricia M. Mahan, Mayor).


                        california organizations

       Family Violence Law Center (Oakland).
       Children's Interview Center (San Pablo).
       Child Abuse Prevention Council of Sacramento.
       Latino Coalition for a Healthy California.
       Healthy Children's Collaborative (Stockton).
       Sacramento Pediatric Society.
       Sacramento County Children's Coalition.
       Didi Hirsch Community Mental Health Center (Culver City).
       Prevent Child Abuse--California.
       Fresno Council on Child Abuse Prevention.
       Rancho Cordova Neighborhood Center.
       The Mutual Assistance Network of Del Paso Heights.
       FamiliesFirst (Davis).
       La Familia Counseling Center (Sacramento).
       Orange County Child Advocacy Center.
       Shasta County Child Abuse Prevention Coordinating Council.
       Bienvenidos Family Services (Los Angeles).
       Break the Cycle (Los Angeles).
       SHEILDS For Families (Los Angeles).
       South Central Prevention Coalition (Los Angeles).
       Violence Prevention Coalition of Greater Los Angeles.
       Prototypes (Culver City).
       Five Acres Boys' and Girls' Aid Society of Los Angeles.
       Heart of Los Angeles Youth.
       Jewish Family Service of Los Angeles.
       Marjaree Mason Center (Fresno).
       Phoenix Houses of California.
       Boys & Girls Club of San Fernando Valley.
       Community Violence Solutions.
       California Coalition for Youth.
       The Jeffrey Foundation (Los Angeles).
       The Center for the Advancement of Nonviolence (Los 
     Angeles).
       The Community Clinic Association of Los Angeles County.
       A Place Called Home (Los Angeles).
       LA's Best.
       Prevent Child Abuse, Tuolumne County.
       Child Advocacy Center, San Joaquin County.
       Multi-Disciplinary Interview Center, Placer County District 
     Attorney's Office.
       YMCA Youth and Family Services, San Diego.
       Advokids (Core Madera).
       Northridge Hospital Medical Center.
       Holmes & Holmes Attorneys at Law (Glendale).
       San Fernando Valley Interfaith Council.
       Chicano Youth Center (Fresno).
       LA Family Housing.
       Child Abuse Listening & Mediation (Santa Barbara).
       Department of Children and Family Services, Alameda County.


                          other organizations

       Children's Advocacy Center of Delaware.
       Friends of the Children's Justice Center of West Hawaii.
       Friends of the Children's Justice Center of East Hawaii.
       Caring House (Iron Mountain, MI).
       Garrett County Family Violence Coalition (Oakland, MD).
       Dove Center (Oakland, MD).
       Logan County Children's Services (Bellefontaine, OH).
       CornerHouse (Minneapolis, MN).
       Children's Advocacy Center (Pittsburgh, KS).
       Prevent Child Abuse Illinois.
       Children's Advocacy Center (Chicago).
                                  ____

  Mr. BIDEN. Mr. President, I rise today to help introduce a bill with 
my good friend from California that will bring new and needed tools to 
the battle to end violence against children in America, whether it 
takes place inside the home or out on the street. Today, Senator Boxer 
and I are introducing the Violence Against Children Act, VACA, which 
provides a comprehensive approach to prevent crimes against children, 
treat child victims, and prosecute those who harm our Nation's 
children.
  In 1994, this body passed a piece of legislation that I authored, the 
Violence Against Women Act. When we passed this landmark legislation, 
we said as a Congress, and as a Nation as a whole, that domestic 
violence is not a family problem to be dealt with quietly behind the 
scenes, but a national crisis in need of a coordinated response from 
law enforcement, the courts and the medical community. Backed by almost 
one and half billion dollars of Federal funds, the Violence Against 
Women Act spurred a sea change on the Federal, State and local levels 
in how police, prosecutors, judges, medical personnel and others, 
process and handle cases of domestic abuse, sexual assault and 
stalking. Most importantly, the Violence Against Women Act also made it 
clear that victims of domestic violence and sexual assault were, in 
fact, victims: Victims who deserved the full extend of this Nation's 
medical and legal resources. The Violence Against Children Act, offered 
by Senator Boxer and myself today, is designed to bring this same type 
of concentered focus and coordinated response to end all child abuse, 
the most heinous and incomprehensible form of violence against the most 
vulnerable people in our lives.
  Last year in my state of Delaware there were 1,073 substantiated 
cases of child abuse and neglect--46 percent were cases of neglect, 31 
percent were cases of abuse and 12 percent were cases of sexual abuse. 
Nationally, 3.9 million of the nation's 22.3 million children between 
the ages of 12 and 17 have been seriously physically assaulted. One in 
three girls and one in five boys are sexually abused before the age of 
18. One study recently reported that in 2000, the homicide rate for 
U.S. infants is almost equal to the murder rate of teens. As stunning 
as these numbers are, we should be aware that these numbers are not the 
totals. Like incidents of domestic violence, we know that violence 
against children is under-reported. We also know that violence against 
kids cuts across all lines--it happens to children of doctors and 
lawyers, not just to poor children. We must do more to protect our 
children, and with the Violence Against Children Act we can.
  Designed to be a comprehensive measure, the Violence Against Children 
Act will fight the battle against child abuse on a number of fronts: by 
providing states with new resources, law enforcement with additional 
tools and families with more places to turn to for help. What 
specifically the legislation do? The Violence Against Children Act has 
three major provisions; 1. it deters crime by toughening Federal 
criminal penalties for crimes against children; 2. it requires the 
Federal Government to provide investigative, forensic and prosecutorial 
assistance to states working on cases of violent crimes against 
children; and 3. it authorizes two new grant programs--one aimed at 
providing more resources to state and local law enforcement for 
training, creating new courts and enforcement units focused solely on 
child crimes, and a second grant program for local governments and 
nonprofit organizations to provide emergency medical treatment and 
counseling for child victims, to increase the number of mental health 
professionals who specialize in child victims, and to establish child 
abuse and crime prevention programs.
  The Violence Against Children Act also encourages State and 
localities to take affirmative steps to fight crimes against children 
by conditioning receipt of grant monies on three points: 1. creating a 
statewide Amber Alert system to alert the public immediately after a 
child abduction has been discovered; 2. creating Safe Haven programs 
which allow parents to leave newborn babies for whom they cannot care 
in hospital emergency room anonymously and without fear of penalty; and 
3. improving data gathering so that police, treatment providers and 
policy makers get a clearer view of the circumstances surrounding child 
crimes. We need to stop nibbling around the edges with piecemeal 
legislation that tackles just one aspect of child abuse or child 
exploitation. The Violence Against Children Act takes into account the 
larger landscape and provides wide-reaching tools and resources. I feel 
certain that once my colleagues become aware of this effort, this bill 
will gather broad and bipartisan support.
  Recently the Nation was stunned and relieved at the return of 
Elizabeth Smart to her parents Ed and Lois. As a father and grandfather 
my heart went out to them. I don't want to read about these types of 
cases anymore. My State of Delaware has an Amber Alert system in place. 
Delaware has a Safe

[[Page 12879]]

Haven law. Not every State has these critical tools at their disposal. 
Senator Boxer and I are introducing the Violence Against Children Act 
for a reason. We must do everything that we can to prevent crimes 
against children and, if God forbid they do occur, we must do 
everything we can to treat the victims and their families and prosecute 
their perpetrators to the fullest extent of the law. As one child 
advocates succinctly said, ``a civilized society says children 
matter.'' The Violence Against Children Act says loud and clear, kids 
matter.
                                 ______
                                 
      By Ms. MIKULSKI:
  S. 1124. A bill to amend title 38, United States Code, to increase 
burial benefits for veterans, and for other purposes; to the Committee 
on Veterans' Affairs.
  Ms. MIKULSKI. Mr. President, I rise to introduce the Veterans Burial 
Benefits Improvement Act.
  During the upcoming Memorial Day holiday, we will honor our U.S. 
soldiers who died in the name of their country. These service men and 
women are America's true heroes and on this day we pay tribute to their 
courage and sacrifice. Some have given their lives for our country. All 
have given their time and dedication to ensure our country remains the 
land of the free and the home of the brave. We owe a special debt of 
gratitude to each and every one of them.
  This holiday serves as an important reminder that our nation has a 
sacred commitment to honor the promises made to soldiers when they 
signed up to serve our country. As the Ranking Member of the Senate 
Appropriations Subcommittee that funds veterans programs, I fight hard 
to make sure promises made to our service men and women are promises 
kept. These promises include access to quality, affordable health care 
and a proper burial for our veterans.
  I am deeply concerned that burial benefits for the families of our 
wounded or disabled veterans have not kept up with inflation and rising 
funeral costs. We are losing over 1,000 World War II veterans each day, 
but Congress has failed to increase veterans' burial benefits to keep 
up with rising costs and inflation. While these benefits were never 
intended to cover the full costs of burial, they now pay for only a 
fraction of what they covered in 1973, when the Federal Government 
first started paying burial benefits for our veterans.
  I want to thank my colleagues on the Veterans' Affairs Committee for 
working with me in the 107th Congress. Together, we were able to 
increase modestly the service-connected benefit from $1,500 to $2,000, 
and the plot allowance from $150 to $300. While I believe these 
increases are a step in the right direction, they are not a substitute 
for the amounts included in my bill.
  That's why I am again introducing the Veterans Burial Benefits 
Improvement Act. This bill will increase burial benefits to cover the 
same percentage of funeral costs as they did in 1973. It will also 
provide for these benefits to be increased annually to keep up with 
inflation.
  In 1973, the service-connected benefit paid for 72 percent of 
veterans' funeral costs. Today, this benefit covers just 39 percent of 
funeral costs. My bill will increase the service-connected benefit from 
$2,000 to $3,713, bringing it back up to the original 72 percent level.
  In 1973, the non-service connected benefit paid for 22 percent of 
funeral costs. It has not been increased since 1978, and today it 
covers just 6 percent of funeral costs. My bill will increase the non-
service connected benefit from $300 to $1,135, bringing it back up to 
the original 22 percent level.
  In 1973, the plot allowance paid for 13 percent of veterans' funeral 
costs. Yet it now covers just 3 percent of funeral costs. My bill will 
increase the plot allowance from $300 to $670, bringing it back up to 
the original 13 percent level.
  Finally, the Veterans Burial Benefits Improvement Act will also 
ensure that these burial benefits are adjusted for inflation annually, 
so veterans won't have to fight this fight again.
  This legislation is just one way to honor our Nation's service men 
and women. I want to thank the millions of veterans, Marylanders, and 
people across the nation for their patriotism, devotion, and commitment 
to honoring the true meaning of Memorial Day. U.S. soldiers from every 
generation have shared in the duty of defending America and protecting 
our freedom. For these sacrifices, America is eternally grateful.
  I ask unanimous consent that the text of this legislation, and 
letters from several veterans' advocacy groups supporting it, be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1124

       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 ``Veterans Burial Benefits 
     Improvement Act of 2003''.

     SEC. 2. INCREASE IN BURIAL BENEFITS FOR VETERANS.

       (a) Burial and Funeral Expenses.--(1) Section 2302(a) of 
     title 38, United States Code, is amended by striking ``$300'' 
     and inserting ``$1,135 (as increased from time to time under 
     section 2309 of this title)''.
       (2) Section 2303(a)(1)(A) of that title is amended by 
     striking ``$300'' and inserting ``$1,135 (as increased from 
     time to time under section 2309 of this title)''.
       (3) Section 2307 of that title is amended by striking 
     ``$2,000,'' and inserting ``$3,712 (as increased from time to 
     time under section 2309 of this title),''.
       (b) Plot Allowance.--Section 2303(b) of that title is 
     amended--
       (1) by striking ``$300'' the first place it and inserting 
     ``$670 (as increased from time to time under section 2309 of 
     this title)''; and
       (2) by striking ``$300'' the second place it appears and 
     inserting ``$670 (as so increased)''.
       (c) Annual Adjustment.--(1) Chapter 23 of that title is 
     amended by adding at the end the following new section:

     ``Sec. 2309. Annual adjustment of amounts of burial benefits

       ``With respect to any fiscal year, the Secretary shall 
     provide a percentage increase (rounded to the nearest dollar) 
     in the burial and funeral expenses under sections 2302(a), 
     2303(a), and 2307 of this title, and in the plot allowance 
     under section 2303(b) of this title, equal to the percentage 
     by which--
       ``(1) the Consumer Price Index (all items, United States 
     city average) for the 12-month period ending on the June 30 
     preceding the beginning of the fiscal year for which the 
     increase is made, exceeds
       ``(2) the Consumer Price Index for the 12-month period 
     preceding the 12-month period described in paragraph (1).''.
       (2) The table of sections at the beginning of that chapter 
     is amended by adding at the end the following new item:

``2309. Annual adjustment of amounts of burial benefits.''.

       (d) Effective Date.--(1) Except as provided in paragraph 
     (2), the amendments made by this section shall apply to 
     deaths occurring on or after the date of the enactment of 
     this Act.
       (2) No adjustments shall be made under section 2309 of 
     title 38, United States Code, as added by subsection (c), for 
     fiscal year 2004.
                                  ____

                                                     May 15, 2003.
     Hon. Barbara Mikulski,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Mikulski: As Memorial Day 2003 approaches, the 
     co-authors of The Independent Budget would like to express 
     our strong support for your legislation which would 
     revitalize veterans' burial benefits and honor those who have 
     sacrificed for this country. This legislation would provide a 
     meaningful increase in burial benefits that is long overdue.
       Veterans' burial benefits have seriously eroded in value 
     over the years. The proposed increase would cover the same 
     percentage of veterans' burial costs that they covered in 
     1973 when they were initiated. The annual adjustment to cover 
     the costs of inflation is also something that The Independent 
     Budget has argued in favor of in the past.
       The Independent Budget produced by AMVETS, Disabled 
     American Veterans, Paralyzed Veterans of America, and the 
     Veterans of Foreign Wars fully supports the proposed 
     adjustment of burial allowances to reflect the increases in 
     burial costs. Clearly, it is time these benefits were raised 
     to provide a more meaningful contribution to the costs of 
     burial for veterans. We applaud your efforts to responsibly 
     address this matter, and we appreciate your continued 
     commitment to the men and women who have served this country 
     and are continuing to do so even today.
           Sincerely,
     Rick Jones,
       National Legislative Director, AMVETS.
     Richard B. Fuller,
       National Legislative Director, Paralyzed Veterans of 
     America.

[[Page 12880]]


     Joseph A. Violante,
       National Legislative Director, Disabled American Veterans.
     Dennnis Cullinan,
       National Legislative Director, Veterans of Foreign Wars of 
     the United States.
                                  ____



                                    Fleet Reserve Association,

                                     Alexandria, VA, May 21, 2003.
     Hon. Barbara A. Mikulski,
     U.S. Senate, Hart Building, Washington, DC.
       Dear Senator Mikulski: The Fleet Reserve Association (FRA) 
     and its 135,000 members extend its strong support for the 
     reintroduction of the Veterans Burial Benefits Improvement 
     Act. FRA applauds your leadership on working on this 
     important issue.
       As it has for more than 79 years, FRA effectively 
     represents the interests of Sea Services enlisted 
     communities, and is committed to ensuring equitable 
     compensation and benefits for active duty, reserve and 
     retired personnel.
       The FRA stands ready to assist you and your staff on the 
     introduction of this important legislation.
           Sincerely,
                                                 Joseph L. Barnes,
     National Executive Secretary.
                                  ____

         The National Association of State Directors of Veterans 
           Affairs, Inc.,
                                                     May 20, 2003.
     Senator Barbara Mikulski,
     Hart Senate Office Building,
     Wasington, DC.
       Dear Senator Mikulski: The National Association of State 
     Directors of Veterans Affairs (NASDVA) is in strong support 
     of the legislation you are proposing with regards to burial 
     benefits for our Nation's deceased veterans, namely, ``The 
     Veterans Burial Benefits Improvement Act of 2003.''
       We recognize and thank you for your outstanding earlier 
     work with regards to veterans' burial benefits, including 
     authoring, introducing, and shepherding the Veterans Burial 
     Benefits Improvement Act of 2001 through the legislative 
     process. While it is regrettable that Congress declined to 
     enact all of the much needed measures you proposed, your work 
     did lead to important increases in the authorized allowance 
     for burial and funeral expenses for deceased veterans. We 
     appreciate and thank you for your introduction of this new 
     legislation.
       As you are aware, the 95th Congress enacted the State 
     Cemeteries Grant as part of Public Law 95-476 in order to 
     provide Federal assistance to the States to construct, 
     expand, and improve State veterans' cemeteries. State 
     veterans' cemeteries must be State-owned, and operated solely 
     for the interment of eligible veterans and their dependents 
     and/or spouses. Operational costs are paid by the States.
       State veterans' cemeteries continue to provide a cost-
     effective supplement to the VA's National Cemetery System. 
     However, Federal veterans' burial plot allowances currently 
     offset the costs of operation of State veterans' cemeteries 
     by only one-third of the total cost. Furthermore, the actual 
     allowances have been increased only incrementally since the 
     programs were first instituted in 1973, and the rate of 
     reimbursement has fallen far short of increases in the actual 
     costs of burial expenses and cemetery plots.
       Your bill proposes an increase to $3,713 for the burial 
     plot allowance for veterans who die as a direct result of a 
     service-connected illness or injury. When first enacted in 
     1973, the amount of the benefit at that time covered 72 
     percent of the average burial expense at that time. Today, 
     the current benefit of $2,000 covers just 39 percent of those 
     costs. Your earlier work helped to provide a much-needed 
     increase to the current level, and we fully endorse your 
     current efforts to ensure that the allowance is raised to at 
     least the 1973 rate.
       Your proposed legislation would also increase the amount of 
     the burial benefit to $1,135 for the non-service-connected 
     death of veterans in receipt of or otherwise found entitled 
     to VA compensation, VA pension, and veterans who die while 
     hospitalized or domiciled in a VA facility. The original 1973 
     benefit aided grieving families of deceased veterans by 
     offsetting the cost of burial and funeral expenses by 22 
     percent. Today, the $300 that is provided covers just 6 
     percent of those costs.
       Finally, your bill addresses the amount of funding provided 
     for veterans' burial plot allowances. Your earlier work 
     helped to provide a much-needed increase in that amount from 
     $150 to $300. However, as you know, the current amount 
     provides only 5.85 of the average cost of a burial plot, 
     while the 1973 rate provided 13 percent. We are in strong 
     support of your efforts to raise the allowance to its 1973 
     rate, at $670.
       We are hopeful that Congress will see fit to fully enact 
     the provisions of the Veterans Burial Benefits Improvement 
     Act of 2003. We also that Congress will enact legislation to 
     expand eligibility for the burial plot allowance for burial 
     in State Veterans Cemeteries to include all honorably 
     discharged veterans.
       Thank you again for your efforts on behalf of our Nation's 
     veterans. Your work is greatly appreciated.
           Sincerely,
                                                Raymond G. Boland,
     President, NASDVA.
                                  ____

                                                  National Funeral


                                        Directors Association,

                                     Washington, DC, May 15, 2003.
     Hon. Barbara A. Mikulski,
     U.S. Senate, Senate Hart Office Building, Washington, DC.
       Dear Senator Mikulski: The National Funeral Directors 
     Association (NFDA) represents more than 13,000 funeral homes 
     in all 50 states. It is the leading funeral service 
     organization in the United States, providing a national voice 
     for the profession. The NPDA has been the premier 
     organization chosen by top funeral directors for more than 
     120 years. NFDA members stand for credibility, ethics, 
     excellence and trust.
       The NFDA would like to thank you for your support of 
     legislation to increase the amount paid for veteran funeral 
     and burial expenses by the Department of Veterans Affairs 
     (DVA), as well as to increase the amount for veteran plot 
     allowances.
       As you are well aware, the amount payable for veterans' 
     memorial benefits has remained constant for many years in 
     spite of inflation. Today, the average cost of a funeral, 
     including casket, vault and cemetery charges is about $7,500. 
     While funerals are still a modest expense when compared to 
     the cost of other items an individual must purchase during 
     the course of their lifetime, it is still a significant 
     expense, particularly for those least able to afford it.
       At a time of unimaginable grief, funeral directors deal 
     with the families of service members who must plan for the 
     funeral of their loved one. This process is never easy, but 
     it is even more difficult when a family must plan a funeral 
     within the current DVA funeral and burial expense limits.
       The NFDA strongly supports legislation that recognizes the 
     reality of the cost of a funeral and burial in 2003, and that 
     seeks to help the families of veterans manage this expense.
       Again, thank you for your interest and action on this 
     important issue.
           Sincercly,
                                               William A. Isokait,
                                        NFDA Director of Advocacy.
                                 ______
                                 
      By Mr. JOHNSON (for himself, Mr. Kerry, and Mr. Smith):
  S. 1126. A bill to establish the Office of Native American Affairs 
within the Small Business Administration, to create the Native American 
Small Business Development Program, and for other purposes; to the 
Committee on Small Business and Entrepreneurship.
  Mr. JOHNSON. Mr. President, today, I proudly join with Senator Kerry 
and Senator Smith to reintroduce the Native American Small Business 
Development Act. This important legislation is designed to help 
American Indians, Alaska Natives, and Native Hawaiians to overcome 
barriers which inhibit business development and job creation. We 
greatly appreciate the support of the distinguished Senators who join 
us in sponsoring the legislation including Senators: Akaka, Baucus, 
Bingaman, Daschle, Cantwell, Murray, Stabenow.
  The communities served this initiative represent some of the most 
traditionally isolated, disadvantaged, and underserved populations in 
our country. Despite the unique and persistent challenges to business 
development in these areas, many of the supportive services the federal 
government provides to entrepreneurs are not available in these 
distressed regions. The Native American Small Business Development Act 
endeavors to develop and disseminate culturally tailored business 
assistance to assure Native American businesses may secure and sustain 
long-term success.
  Native American communities continue to struggle with the social, 
economic, and cultural repercussions derived from persistent and 
pervasive poverty and unemployment. A recent report released by the 
U.S. Census Bureau, entitled Poverty in the United States: 2000, 
indicates that the ``three year average poverty rate for American 
Indians and Alaska Natives [from 1998-2000] was 25.9 percent. Higher 
than for any other race groups.''
  The Native American Small Business Development Act is a deliberate 
effort to enhance the availability of technical assistance to support 
entrepreneurship in Indian Country. The communities served by this 
initiative represent some of the most traditionally isolated, 
disadvantaged, and underserved populations in our country.
  Too many Native American communities are plagued by feelings of 
hopelessness and helplessness. We must

[[Page 12881]]

work to transform this disappointment and discouragement into a 
sensible, workable, strategy for economic opportunity.
  According to U.S. Department of Commerce census data, unemployment 
rates on Indian Lands in the continental United States range up to 80 
percent compared to 5.6 percent for the U.S. as a whole. Census data 
also show that the poverty rate for Native Americans during the late 
1990s was 26 percent, compared to the national average of 12 percent. 
In fact, overall, Native American household income is only three-
quarters of the national average.
  This disparity is particularly evident in my home state of South 
Dakota where Native Americans represent over 8 percent of the State's 
population. While the overall State economy is relatively strong with a 
low 3.1 percent unemployment rate, the Native American population 
continues to suffer. South Dakota counties with Indian Reservations are 
ranked by the U.S. Census Bureau as among the most impoverished in the 
United States.
  Among the achievements included in the bill is the establishment of a 
statutory office within the U.S. Small Business Administration to focus 
on concerns specific to Native American populations. The Office of 
Native American Affairs will serve as an advocate in the SBA for the 
interests of Native Americans. In addition to administering the Native 
American Development Program, the Assistant Administrator will consult 
with Tribal Colleges, Tribal Governments, Alaska Native Corporations 
and Native Hawaiian Organizations to enhance the development and 
implementation of culturally specific approaches to support the growth 
and prosperity of Native American small businesses.
  Furthermore, the Act creates the Native American Development Program 
to provide necessary business development assistance. These services 
are vital to establish and support small businesses. The Federal 
Government currently invests to provide these services in communities 
throughout the country. It is past time for these services to be 
integrated into our efforts to promote self-sufficiency and economic 
development in Indian Country.
  In addition, we recognize that in order to remain competitive, 
businesses and entrepreneurs must be innovative and flexible to change. 
This legislation reflects the needs of businesses, tribes, and regional 
interests to pursue unique approaches that will complement local needs 
and improve the overall quality of services. Two pilot programs are 
integrated in this approach to promote new and creative solutions to 
assist American Indians to awaken economic opportunities in their 
communities.
  We must strive to eliminate the impediments that stifle Native 
American entrepreneurs. By providing business planning services and 
technical assistance to potential and existing small businesses, we can 
unlock the capacity for individuals and families to pursue their dreams 
of business ownership. Not only will these efforts combat poverty and 
unemployment, but they will bring new services and opportunities to 
communities that enhance the quality of life for local families.
  We must also work to improve access to investment capital to support 
economic and community development for Native Americans. As the 
Chairman of the Senate Banking Financial Institutions Subcommittee, I 
am conducting hearings last year to identify opportunities and 
techniques which may foster greater access to capital markets for 
Tribal and Native American entities.
  Together, these initiatives will help to turn an important corner as 
we endeavor to enhance the livelihood of the First Americans.
  I would like to thank Congressman Udall for his leadership in the 
U.S. House of Representatives in bringing these issues to the forefront 
and for his cooperation on this historic legislation. I would like to 
thank Senator John Kerry, the Ranking Member of the Senate Small 
Business and Entrepreneurship Committee, for his hard work on this 
legislation and his serious commitment to these critical issues. In 
addition, I would like to express my sincere appreciation to Senator 
Smith for his strong support of this effort. We are grateful to the 
many cosponsors who join us in introducing the bill today.
  I encourage the Senate to fully consider this historic legislation 
and to work expeditiously to enact it into law. The Native American 
Small Business Development Act will forge a more hopeful and prosperous 
future for Native American families and communities. By investing in 
adequate infrastructure and by making the appropriate tools available, 
we can empower individuals to pursue, achieve, and sustain economic 
opportunities that enrich their lives and their communities. The 
American dream will never be fully realized until it becomes a reality 
for all Americans. This legislation is critical to ensuring that 
economic growth and economic opportunity permeate the lives of Native 
American families.
  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. 1126

       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 ``Native American Small 
     Business Development Act''.

     SEC. 2. NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT PROGRAM.

       The Small Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by redesignating section 36 as section 37; and
       (2) by inserting after section 35 the following:

     ``SEC. 36. NATIVE AMERICAN SMALL BUSINESS DEVELOPMENT 
                   PROGRAM.

       ``(a) Definitions.--In this section--
       ``(1) the term `Alaska Native' has the same meaning as the 
     term `Native' in section 3(b) of the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1602(b));
       ``(2) the term `Alaska Native corporation' has the same 
     meaning as the term `Native Corporation' in section 3(m) of 
     the Alaska Native Claims Settlement Act (43 U.S.C. 1602(m));
       ``(3) the term `Assistant Administrator' means the 
     Assistant Administrator of the Office of Native American 
     Affairs established under subsection (b);
       ``(4) the terms `center' and `Native American business 
     center' mean a center established under subsection (c);
       ``(5) the term `Native American business development 
     center' means an entity providing business development 
     assistance to federally recognized tribes and Native 
     Americans under a grant from the Minority Business 
     Development Agency of the Department of Commerce;
       ``(6) the term `Native American small business concern' 
     means a small business concern that is owned and controlled 
     by--
       ``(A) a member of an Indian tribe or tribal government;
       ``(B) an Alaska Native or Alaska Native corporation; or
       ``(C) a Native Hawaiian or Native Hawaiian organization;
       ``(7) the term `Native Hawaiian' has the same meaning as in 
     section 625 of the Older Americans Act of 1965 (42 U.S.C. 
     3057k);
       ``(8) the term `Native Hawaiian organization' has the same 
     meaning as in section 8(a)(15) of this Act;
       ``(9) the term `tribal college' has the same meaning as the 
     term `tribally controlled college or university' has in 
     section 2(a)(4) of the Tribally Controlled Community College 
     Assistance Act of 1978 (25 U.S.C. 1801(a)(4));
       ``(10) the term `tribal government' has the same meaning as 
     the term `Indian tribe' has in section 7501(a)(9) of title 
     31, United States Code; and
       ``(11) the term `tribal lands' means all lands within the 
     exterior boundaries of any Indian reservation.
       ``(b) Office of Native American Affairs.--
       ``(1) Establishment.--There is established within the 
     Administration the Office of Native American Affairs, which, 
     under the direction of the Assistant Administrator, shall 
     implement the Administration's programs for the development 
     of business enterprises by Native Americans.
       ``(2) Purpose.--The purpose of the Office of Native 
     American Affairs is to assist Native American entrepreneurs 
     to--
       ``(A) start, operate, and grow small business concerns;
       ``(B) develop management and technical skills;
       ``(C) seek Federal procurement opportunities;
       ``(D) increase employment opportunities for Native 
     Americans through the start and expansion of small business 
     concerns; and
       ``(E) increase the access of Native Americans to capital 
     markets.

[[Page 12882]]

       ``(3) Assistant administrator.--
       ``(A) Appointment.--The Administrator shall appoint a 
     qualified individual to serve as Assistant Administrator of 
     the Office of Native American Affairs in accordance with this 
     paragraph.
       ``(B) Qualifications.--The Assistant Administrator 
     appointed under subparagraph (A) shall have--
       ``(i) knowledge of the Native American culture; and
       ``(ii) experience providing culturally tailored small 
     business development assistance to Native Americans.
       ``(C) Employment status.--The Assistant Administrator shall 
     be a Senior Executive Service position under section 
     3132(a)(2) of title 5, United States Code, and shall serve as 
     a noncareer appointee, as defined in section 3132(a)(7) of 
     title 5, United States Code.
       ``(D) Responsibilities and duties.--The Assistant 
     Administrator shall--
       ``(i) administer and manage the Native American Small 
     Business Development program established under this section;
       ``(ii) recommend the annual administrative and program 
     budgets for the Office of Native American Affairs;
       ``(iii) consult with Native American business centers in 
     carrying out the program established under this section;
       ``(iv) recommend appropriate funding levels;
       ``(v) review the annual budgets submitted by each applicant 
     for the Native American Small Business Development program;
       ``(vi) select applicants to participate in the program 
     under this section;
       ``(vii) implement this section; and
       ``(viii) maintain a clearinghouse to provide for the 
     dissemination and exchange of information between Native 
     American business centers.
       ``(E) Consultation requirements.--In carrying out the 
     responsibilities and duties described in this paragraph, the 
     Assistant Administrator shall confer with and seek the advice 
     of--
       ``(i) Administration officials working in areas served by 
     Native American business centers and Native American business 
     development centers;
       ``(ii) the Bureau of Indian Affairs of the Department of 
     the Interior;
       ``(iii) tribal governments;
       ``(iv) tribal colleges;
       ``(v) Alaska Native corporations; and
       ``(vi) Native Hawaiian organizations.
       ``(c) Native American Small Business Development Program.--
       ``(1) Authorization.--
       ``(A) In general.--The Administration, through the Office 
     of Native American Affairs, shall provide financial 
     assistance to tribal governments, tribal colleges, Native 
     Hawaiian organizations, and Alaska Native corporations to 
     create Native American business centers in accordance with 
     this section.
       ``(B) Use of funds.--The financial and resource assistance 
     provided under this subsection shall be used to overcome 
     obstacles impeding the creation, development, and expansion 
     of small business concerns, in accordance with this section, 
     by--
       ``(i) reservation-based American Indians;
       ``(ii) Alaska Natives; and
       ``(iii) Native Hawaiians.
       ``(2) 5-year projects.--
       ``(A) In general.--Each Native American business center 
     that receives assistance under paragraph (1)(A) shall conduct 
     5-year projects that offer culturally tailored business 
     development assistance in the form of--
       ``(i) financial education, including training and 
     counseling in--

       ``(I) applying for and securing business credit and 
     investment capital;
       ``(II) preparing and presenting financial statements; and
       ``(III) managing cash flow and other financial operations 
     of a business concern;

       ``(ii) management education, including training and 
     counseling in planning, organizing, staffing, directing, and 
     controlling each major activity and function of a small 
     business concern; and
       ``(iii) marketing education, including training and 
     counseling in--

       ``(I) identifying and segmenting domestic and international 
     market opportunities;
       ``(II) preparing and executing marketing plans;
       ``(III) developing pricing strategies;
       ``(IV) locating contract opportunities;
       ``(V) negotiating contracts; and
       ``(VI) utilizing varying public relations and advertising 
     techniques.

       ``(B) Business development assistance recipients.--The 
     business development assistance under subparagraph (A) shall 
     be offered to prospective and current owners of small 
     business concerns that are owned by--
       ``(i) American Indians or tribal governments, and located 
     on or near tribal lands;
       ``(ii) Alaska Natives or Alaska Native corporations; or
       ``(iii) Native Hawaiians or Native Hawaiian organizations.
       ``(3) Form of federal financial assistance.--
       ``(A) Documentation.--
       ``(i) In general.--The financial assistance to Native 
     American business centers authorized under this subsection 
     may be made by grant, contract, or cooperative agreement.
       ``(ii) Exception.--Financial assistance under this 
     subsection to Alaska Native corporations or Native Hawaiian 
     organizations may only be made by grant.
       ``(B) Payments.--
       ``(i) Timing.--Payments made under this subsection may be 
     disbursed in an annual lump sum or in periodic installments, 
     at the request of the recipient.
       ``(ii) Advance.--The Administration may disburse not more 
     than 25 percent of the annual amount of Federal financial 
     assistance awarded to a Native American small business center 
     after notice of the award has been issued.
       ``(iii) No matching requirement.--The Administration shall 
     not require a grant recipient to match grant funding received 
     under this subsection with non-Federal resources as a 
     condition of receiving the grant.
       ``(4) Contract and cooperative agreement authority.--A 
     Native American business center may enter into a contract or 
     cooperative agreement with a Federal department or agency to 
     provide specific assistance to Native American and other 
     under-served small business concerns located on or near 
     tribal lands, to the extent that such contract or cooperative 
     agreement is consistent with the terms of any assistance 
     received by the Native American business center from the 
     Administration.
       ``(5) Application process.--
       ``(A) Submission of a 5-year plan.--Each applicant for 
     assistance under paragraph (1) shall submit a 5-year plan to 
     the Administration on proposed assistance and training 
     activities.
       ``(B) Criteria.--
       ``(i) In general.--The Administration shall evaluate and 
     rank applicants in accordance with predetermined selection 
     criteria that shall be stated in terms of relative 
     importance.
       ``(ii) Public notice.--The criteria required by this 
     paragraph and their relative importance shall be made 
     publicly available, within a reasonable time, and stated in 
     each solicitation for applications made by the 
     Administration.
       ``(iii) Considerations.--The criteria required by this 
     paragraph shall include--

       ``(I) the experience of the applicant in conducting 
     programs or ongoing efforts designed to impart or upgrade the 
     business skills of current or potential owners of Native 
     American small business concerns;
       ``(II) the ability of the applicant to commence a project 
     within a minimum amount of time;
       ``(III) the ability of the applicant to provide quality 
     training and services to a significant number of Native 
     Americans;
       ``(IV) previous assistance from the Small Business 
     Administration to provide services in Native American 
     communities; and
       ``(V) the proposed location for the Native American 
     business center site, with priority given based on the 
     proximity of the center to the population being served and to 
     achieve a broad geographic dispersion of the centers.

       ``(6) Program examination.--
       ``(A) In general.--Each Native American business center 
     established pursuant to this subsection shall annually 
     provide the Administration with an itemized cost breakdown of 
     actual expenditures incurred during the preceding year.
       ``(B) Administration action.--Based on information received 
     under subparagraph (A), the Administration shall--
       ``(i) develop and implement an annual programmatic and 
     financial examination of each Native American business center 
     assisted pursuant to this subsection; and
       ``(ii) analyze the results of each examination conducted 
     under clause (i) to determine the programmatic and financial 
     viability of each Native American business center.
       ``(C) Conditions for continued funding.--In determining 
     whether to renew a grant, contract, or cooperative agreement 
     with a Native American business center, the Administration--
       ``(i) shall consider the results of the most recent 
     examination of the center under subparagraph (B), and, to a 
     lesser extent, previous examinations; and
       ``(ii) may withhold such renewal, if the Administration 
     determines that--

       ``(I) the center has failed to provide adequate information 
     required to be provided under subparagraph (A), or the 
     information provided by the center is inadequate; or
       ``(II) the center has failed to provide adequate 
     information required to be provided by the center for 
     purposes of the report of the Administration under 
     subparagraph (E).

       ``(D) Continuing contract and cooperative agreement 
     authority.--
       ``(i) In general.--The authority of the Administrator to 
     enter into contracts or cooperative agreements in accordance 
     with this subsection shall be in effect for each fiscal year 
     only to the extent and in the amounts as are provided in 
     advance in appropriations Acts.
       ``(ii) Renewal.--After the Administrator has entered into a 
     contract or cooperative agreement with any Native American 
     business center under this subsection, it shall not suspend, 
     terminate, or fail to renew or extend any such contract or 
     cooperative agreement unless the Administrator provides the 
     center with written notification setting forth the reasons 
     therefore and affords the center an opportunity for a 
     hearing, appeal, or other administrative proceeding under 
     chapter 5 of title 5, United States Code.

[[Page 12883]]

       ``(E) Management report.--
       ``(i) In general.--The Administration shall prepare and 
     submit to the Committee on Small Business of the House of 
     Representatives and the Committee on Small Business and 
     Entrepreneurship of the Senate an annual report on the 
     effectiveness of all projects conducted by Native American 
     business centers under this subsection and any pilot programs 
     administered by the Office of Native American Affairs.
       ``(ii) Contents.--Each report submitted under clause (i) 
     shall include, with respect to each Native American business 
     center receiving financial assistance under this subsection--

       ``(I) the number of individuals receiving assistance from 
     the Native American business center;
       ``(II) the number of startup business concerns created;
       ``(III) the number of existing businesses seeking to expand 
     employment;
       ``(IV) jobs created or maintained, on an annual basis, by 
     Native American small business concerns assisted by the 
     center since receiving funding under this Act;
       ``(V) to the maximum extent practicable, the capital 
     investment and loan financing utilized by emerging and 
     expanding businesses that were assisted by a Native American 
     business center; and
       ``(VI) the most recent examination, as required under 
     subparagraph (B), and the subsequent determination made by 
     the Administration under that subparagraph.

       ``(7) Annual report.--Each entity receiving financial 
     assistance under this subsection shall annually report to the 
     Administration on the services provided with such financial 
     assistance, including--
       ``(A) the number of individuals assisted, categorized by 
     ethnicity;
       ``(B) the number of hours spent providing counseling and 
     training for those individuals;
       ``(C) the number of startup small business concerns created 
     or maintained;
       ``(D) the gross receipts of assisted small business 
     concerns;
       ``(E) the number of jobs created or maintained at assisted 
     small business concerns; and
       ``(F) the number of Native American jobs created or 
     maintained at assisted small business concerns.
       ``(8) Record retention.--
       ``(A) Applications.--The Administration shall maintain a 
     copy of each application submitted under this subsection for 
     not less than 7 years.
       ``(B) Annual reports.--The Administration shall maintain 
     copies of the information collected under paragraph (6)(A) 
     indefinitely.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated $5,000,000 for each of the 
     fiscal years 2004 through 2008, to carry out the Native 
     American Small Business Development Program, authorized under 
     subsection (c).''.

     SEC. 3. PILOT PROGRAMS.

       (a) Definitions.--In this section:
       (1) Incorporation by reference.--The terms defined in 
     section 36(a) of the Small Business Act (as added by this 
     Act) have the same meanings as in that section 36(a) when 
     used in this section.
       (2) Administrator.--The term ``Administrator'' means the 
     Administrator of the Small Business Administration.
       (3) Joint project.--The term `joint project' means the 
     combined resources and expertise of 2 or more distinct 
     entities at a physical location dedicated to assisting the 
     Native American community;
       (b) Native American Development Grant Pilot Program.--
       (1) Authorization.--
       (A) In general.--There is established a 4-year pilot 
     program under which the Administration is authorized to award 
     Native American development grants to provide culturally-
     tailored business development training and related services 
     to Native Americans and Native American small business 
     concerns.
       (B) Eligible organizations.--The grants authorized under 
     subparagraph (A) may be awarded to--
       (i) any small business development center; or
       (ii) any private, nonprofit organization that--

       (I) has members of an Indian tribe comprising a majority of 
     its board of directors;
       (II) is a Native Hawaiian organization; or
       (III) is an Alaska Native corporation.

       (C) Amounts.--The Administration shall not award a grant 
     under this subsection in an amount which exceeds $100,000 for 
     each year of the project.
       (D) Grant duration.--Each grant under this subsection shall 
     be awarded for not less than a 2-year period and not more 
     than a 4-year period.
       (2) Conditions for participation.--Each entity desiring a 
     grant under this subsection shall submit an application to 
     the Administration that contains--
       (A) a certification that the applicant--
       (i) is a small business development center or a private, 
     nonprofit organization under paragraph (1)(B)(i);
       (ii) employs an executive director or program manager to 
     manage the facility; and
       (iii) agrees--

       (I) to a site visit as part of the final selection process;
       (II) to an annual programmatic and financial examination; 
     and
       (III) to the maximum extent practicable, to remedy any 
     problems identified pursuant to that site visit or 
     examination;

       (B) information demonstrating that the applicant has the 
     ability and resources to meet the needs, including cultural 
     needs, of the Native Americans to be served by the grant;
       (C) information relating to proposed assistance that the 
     grant will provide, including--
       (i) the number of individuals to be assisted; and
       (ii) the number of hours of counseling, training, and 
     workshops to be provided;
       (D) information demonstrating the effective experience of 
     the applicant in--
       (i) conducting financial, management, and marketing 
     assistance programs designed to impart or upgrade the 
     business skills of current or prospective Native American 
     business owners;
       (ii) providing training and services to a representative 
     number of Native Americans;
       (iii) using resource partners of the Administration and 
     other entities, including universities, tribal governments, 
     or tribal colleges; and
       (iv) the prudent management of finances and staffing;
       (E) the location where the applicant will provide training 
     and services to Native Americans; and
       (F) a multiyear plan, corresponding to the length of the 
     grant, that describes--
       (i) the number of Native Americans and Native American 
     small business concerns to be served by the grant;
       (ii) in the continental United States, the number of Native 
     Americans to be served by the grant; and
       (iii) the training and services to be provided to a 
     representative number of Native Americans.
       (3) Review of applications.--The Administration shall--
       (A) evaluate and rank applicants under paragraph (2) in 
     accordance with predetermined selection criteria that is 
     stated in terms of relative importance;
       (B) include such criteria in each solicitation under this 
     subsection and make such information available to the public; 
     and
       (C) approve or disapprove each completed application 
     submitted under this subsection not more than 60 days after 
     submission.
       (4) Annual report.--Each recipient of a Native American 
     development grant under this subsection shall annually report 
     to the Administration on the impact of the grant funding, 
     including--
       (A) the number of individuals assisted, categorized by 
     ethnicity;
       (B) the number of hours spent providing counseling and 
     training for those individuals;
       (C) the number of startup small business concerns created 
     or maintained with assistance from a Native American business 
     center;
       (D) the gross receipts of assisted small business concerns;
       (E) the number of jobs created or maintained at assisted 
     small business concerns; and
       (F) the number of Native American jobs created or 
     maintained at assisted small business concerns.
       (5) Record retention.--
       (A) Applications.--The Administration shall maintain a copy 
     of each application submitted under this subsection for not 
     less than 7 years.
       (B) Annual reports.--The Administration shall maintain 
     copies of the information collected under paragraph (4) 
     indefinitely.
       (c) American Indian Tribal Assistance Center Grant Pilot 
     Program.--
       (1) Authorization.--
       (A) In general.--There is established a 4-year pilot 
     program, under which the Administration shall award not less 
     than 3 American Indian Tribal Assistance Center grants to 
     establish joint projects to provide culturally tailored 
     business development assistance to prospective and current 
     owners of small business concerns located on or near tribal 
     lands.
       (B) Eligible organizations.--
       (i) Class 1.--Not fewer than 1 grant shall be awarded to a 
     joint project performed by a Native American business center, 
     a Native American business development center, and a small 
     business development center.
       (ii) Class 2.--Not fewer than 2 grants shall be awarded to 
     joint projects performed by a Native American business center 
     and a Native American business development center.
       (C) Amounts.--The Administration shall not award a grant 
     under this subsection in an amount which exceeds $200,000 for 
     each year of the project.
       (D) Grant duration.--Each grant under this subsection shall 
     be awarded for a 3-year period.
       (2) Conditions for participation.--Each entity desiring a 
     grant under this subsection shall submit to the 
     Administration a joint application that contains--
       (A) a certification that each participant of the joint 
     application--
       (i) is either a Native American Business Center, a Native 
     American Business Development Center, or a Small Business 
     Development Center;

[[Page 12884]]

       (ii) employs an executive director or program manager to 
     manage the center; and
       (iii) as a condition of receiving the American Indian 
     Tribal Assistance Center grant, agrees--

       (I) to an annual programmatic and financial examination; 
     and
       (II) to the maximum extent practicable, to remedy any 
     problems identified pursuant to that examination;

       (B) information demonstrating an historic commitment to 
     providing assistance to Native Americans--
       (i) residing on or near tribal lands; or
       (ii) operating a small business concern on or near tribal 
     lands;
       (C) information demonstrating that each participant of the 
     joint application has the ability and resources to meet the 
     needs, including the cultural needs of the Native Americans 
     to be served by the grant;
       (D) information relating to proposed assistance that the 
     grant will provide, including--
       (i) the number of individuals to be assisted; and
       (ii) the number of hours of counseling, training, and 
     workshops to be provided;
       (E) information demonstrating the effective experience of 
     each participant of the joint application in--
       (i) conducting financial, management, and marketing 
     assistance programs, as described above, designed to impart 
     or upgrade the business skills of current or prospective 
     Native American business owners; and
       (ii) the prudent management of finances and staffing; and
       (F) a plan for the length of the grant, that describes--
       (i) the number of Native Americans and Native American 
     small business concerns to be served by the grant; and
       (ii) the training and services to be provided.
       (3) Review of applications.--The Administration shall--
       (A) evaluate and rank applicants under paragraph (2) in 
     accordance with predetermined selection criteria that is 
     stated in terms of relative importance;
       (B) include such criteria in each solicitation under this 
     subsection and make such information available to the public; 
     and
       (C) approve or disapprove each application submitted under 
     this subsection not more than 60 days after submission.
       (4) Annual report.--Each recipient of an American Indian 
     tribal assistance center grant under this subsection shall 
     annually report to the Administration on the impact of the 
     grant funding received during the reporting year, and the 
     cumulative impact of the grant funding received since the 
     initiation of the grant, including--
       (A) the number of individuals assisted, categorized by 
     ethnicity;
       (B) the number of hours of counseling and training provided 
     and workshops conducted;
       (C) the number of startup business concerns created or 
     maintained with assistance from a Native American business 
     center;
       (D) the gross receipts of assisted small business concerns;
       (E) the number of jobs created or maintained at assisted 
     small business concerns; and
       (F) the number of Native American jobs created or 
     maintained at assisted small business concerns.
       (5) Record retention.--
       (A) Applications.--The Administration shall maintain a copy 
     of each application submitted under this subsection for not 
     less than 7 years.
       (B) Annual reports.--The Administration shall maintain 
     copies of the information collected under paragraph (4) 
     indefinitely.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated--
       (1) $1,000,000 for each of the fiscal years 2004 through 
     2007, to carry out the Native American Development Grant 
     Pilot Program, authorized under subsection (b); and
       (2) $1,000,000 for each of the fiscal years 2004 through 
     2007, to carry out the American Indian Tribal Assistance 
     Center Grant Pilot Program, authorized under subsection (c).

  Mr. KERRY. Mr. President, I am pleased today to join with my 
colleagues, Senators Johnson and Smith, as well as the cosponsors of 
our legislation, Senators Akaka, Baucus, Bingaman, Cantwell, Daschle, 
Murray, and Stabenow in introducing the Native American Small Business 
Development Act.
  As many of my colleagues are aware, last Congress the Committee on 
Small Business and Entrepreneurship unanimously passed nearly identical 
legislation, S. 2335, yet the bill was not taken up by the full Senate. 
Today, Senator Johnson, Senator Smith and I are reintroducing this bill 
because we recognize that there is an even a greater need for this 
legislation on tribal lands across the Nation. The economy continues to 
slump, access to capital is even more limited, and state funding for 
small business initiatives is being pulled back.
  According to a report released by the U.S. Census Bureau, the ``three 
year average poverty rate for American Indians and Alaska Natives [from 
1998-2000] was 25.9 percent. Higher than for any other race groups.'' 
With an unemployment rate well above the national average and household 
income at just three-quarters of the national average, Native American 
communities need a commitment from the Federal government that we will 
help them, particularly during these difficult economic times. To 
reaffirm this commitment, the Johnson-Kerry-Smith bill provides Native 
Americans the resources they need to take advantage of the 
opportunities of entrepreneurship.
  Mr. President, this legislation bears the same name as legislation 
that recently passed the House, H.R. 1166, which was reintroduced by 
Congressman Tom Udall, a recognized leader in promoting the interests 
of American Indians. I would like to thank Congressman Udall for his 
work in stewarding the Native American Small Business Development Act 
through the House, this Congress and last, and for his assistance in 
working with Senators Johnson and Smith and me in drafting the Senate 
version of our legislation. And I would specifically like to thank 
Senator Smith for his continued support on this issue.
  I would again like to thank the National Indian Business Association, 
the National Center for American Indian Enterprise Development, the 
Association of Small Business Development Centers, the Oregon Native 
American Business Entrepreneurial Network (ONABEN), Native American 
Management Services, Inc., and all of the tribes that met with us or 
provided information to help in the drafting of this legislation.
  The Senate version of the Native American Small Business Development 
Act, while incorporating the heart of the Udall legislation, is more 
comprehensive and provides greater assistance to Native American 
communities. Senator Johnson, who serves on the Indian Affairs 
Committee, and I, as the lead Democrat on the Senate Committee on Small 
Business and Entrepreneurship, were able to combine the resources and 
experiences of our committees in developing this legislation.
  Mr. President, our need to fashion a more comprehensive business 
assistance package for Native American small businesses stems in part 
from a growing lack of commitment from the Small Business 
Administration (SBA) to our Native American communities under this 
Administration.
  While I applaud the Bush Administration for responding to 
congressional requests by including $1 million in the Administration's 
FY 2003 budget request for Native American outreach, I was disappointed 
that it did not seek the full level of $2.5 million requested in a 
letter I sent with my colleagues Senators Daschle, Wellstone, Johnson, 
Bingaman and Baucus. Our request specifically sought funding for the 
SBA's Tribal Business Information Center (TBIC) program, an initiative 
started and successfully operated under the Clinton Administration. The 
TBIC program was designed to address the unique conditions faced by 
American Indians when they seek to start or expand small businesses.
  Mr. President, I am disappointed that the Administration has 
eliminated all funding for Native American outreach in FY2004. With an 
average unemployment rate on reservations as high as 43 percent, it is 
inconceivable that two years of outreach is sufficient to have met our 
shared goal of building sustainable economic opportunities in those 
communities.
  Mr. President, I do not believe that anyone in this Congress would 
dispute that economic development in Indian Country has often been 
difficult to achieve and that one important way to help American 
Indians who live on reservations is to provide them with assistance to 
open and run their own small businesses. Helping Native Americans open 
and run small businesses not only instills a sense of pride in the 
owner and his or her community, it also provides much-needed job 
opportunities, as well as other economic benefits.

[[Page 12885]]

  Although underfunded, the TBIC program has provided assistance to a 
number of small businesses on Indian reservations. TBICs have the 
support of the American Indian communities they serve because they 
provide desperately needed, culturally tailored business development 
assistance in those communities. The Administration should be seeking 
to strengthen its commitment to programs that assist Native American 
communities. Unfortunately, the SBA cut off TBIC funding on March 31, 
2002, and now 14 months later, has not met a request by a bipartisan 
group of Senators to begin the reprogramming process in order to keep 
the TBICs open.
  The Native American Small Business Development Act will ensure that 
the SBA's programs to assist Native American communities cannot be 
dissolved by making the SBA's Office of Native American Affairs (ONAA) 
and its Assistant Administrator permanent. Our legislation would also 
create a statutory grant program, known as the Native American 
Development grant program, to assist Native Americans. It would also 
establish two pilot programs to try new means of assisting Native 
American communities and require Native American communities to be 
consulted regarding the future of SBA programs designed to assist them. 
In short, this legislation will ensure that our Native American 
communities receive the adequate assistance they need to help start and 
grow small businesses.
  The ONAA will be responsible for helping Native Americans and Native 
American communities start, operate, and grow small businesses; develop 
management and technical skills; seek out Federal procurement 
opportunities; increase employment opportunities through the start and 
expansion of small business concerns; and increase their access to 
capital markets.
  To be selected to serve as the Assistant Administrator for ONAA, a 
candidate must have knowledge of Native American cultures and 
experience providing culturally tailored small business development 
assistance to Native Americans. Under our legislation, the Assistant 
Administrator would be statutorily required to consult with Tribal 
Colleges and Tribal Governments, Alaska Native Corporations (ANC) and 
Native Hawaiian Organizations (NHO) when carrying out responsibilities 
under this legislation, which would give Native American communities a 
true voice within the SBA. The Assistant Administrator for ONAA would 
be responsible for administering the Native American Development 
program and the pilot programs created by the Native American Small 
Business Development Act.
  The Native American Development program is designed to be the SBA's 
primary program for providing business development assistance to Native 
American communities. To offer this support, the SBA will provide 
financial assistance to establish and keep Native American Business 
Centers (NABC) in operation. Financial assistance under the Native 
American Development program would be available to Tribal Governments 
and Tribal Colleges. Unlike the SBA's TBIC program, however, ANCs and 
NHOs would also be eligible for the grants.
  NABCs would address the unique conditions faced by reservation-based 
American Indians, as well as Native Hawaiians and Native Alaskans, in 
their efforts to create, develop and expand small business concerns. 
Grant funding would be used by the NABCs to provide culturally tailored 
financial education assistance, management education assistance, and 
marketing education assistance.
  The first pilot program under the legislation establishes a Native 
American development grant. This grant is modeled after the Udall 
legislation and is designed to bring the expertise of SBA's Small 
Business Development Centers (SBDC) to Native American Communities. 
Additionally, any private nonprofit organization, which has members of 
an Indian tribe comprising a majority of its board of governors or is 
an NHO or an ANC, may also apply for the grant. Nonprofits were 
included in the Senate version thanks to the thoughtful input of 
Senator Cantwell. Many American Indian communities in Washington state 
are served by an organization called ONABEN, which provides SBDC-like 
services to Native American communities in Washington, Oregon, Idaho, 
and California. Organizations like ONABEN, which also has the strong 
support of Senator Smith, should be encouraged to continue their good 
work assisting Native American communities, and including them in the 
grant program available to SBDCs was an important addition to the 
legislation.
  Finally, our legislation establishes a second pilot program to try a 
unique experiment in Indian Country. Grant funding would be made 
available to establish American Indian Tribal Assistance Centers. These 
centers will consist of joint entities, such as a partnership between 
an NABC, a Native American development center (which receive grants 
from the Department of Commerce) and possibly an SBDC. The purpose of 
this grant is to coordinate experts from various entities to provide 
culturally tailored business development assistance to prospective and 
current owners of small business concerns on or near Tribal Lands.
  Mr. President, I would again like to thank Senators Johnson and Smith 
and all of the cosponsors of this important legislation to assist our 
Native American communities. I would also, again like to thank 
Congressman Udall for taking the lead in the House on providing 
critical assistance for small businesses in Native American 
communities. I would urge all of my colleagues to cosponsor this 
legislation to help us fulfill our commitment to Native American 
communities.
                                 ______
                                 
      By Ms. STABENOW (for herself, Mr. Kennedy, Mr. Leahy, Mr. Dodd, 
        Mr. Corzine, Mr. Lautenberg, Mr. Harkin, Mr. Bingaman, Mr. 
        Durbin, and Mr. Rockefeller):
  S. 1127. A bill to establish administrative law judges involved in 
the appeals process provided for under the medicare program under title 
XVIII of the Social Security Act within the Department of Health and 
Human Services, to ensure the independence of, and preserve the role 
of, such administrative law judges, and for other purposes; to the 
Committee on Finance.
  Ms. STABENOW. Mr. President, today I rise to introduce the Fair and 
Impartial Rights, FAIR, for Medicare Act and bring attention to growing 
concerns I have heard about the possible politicization of the Medicare 
appeals process.
  The Administrator of the Centers for Medicare and Medicaid Services, 
CMS, has indicated that the Administration would like to alter the 
current practice of requiring that Medicare beneficiaries or Medicare 
providers be granted a hearing before an independent Administrative Law 
Judge, ALJ, when their initial claim is denied.
  Instead of taking the side of beneficiaries and providers, this 
proposed action would seek to inject political interference in the 
Medicare appeals process to try to deny benefits to claimants. When 
Medicare beneficiaries and Medicare providers are denied payment for 
services, the 2000 BIPA law allows them a five-step process for them to 
appeal this decision.
  Unfortunately, the first two steps of this appeals process has been 
working against beneficiaries and providers. In the last five years, 
ALJs have reversed 53 percent of these preliminary rulings. This means 
that 53 percent of all cases were decided incorrectly by the 
preliminary steps in the Medicare appeals process. It was only when 
beneficiaries or providers appealed to an independent ALJ that they 
received the proper ruling.
  ALJs serve an essential role in the claims review process because 
there is often conflicting and confusing information to guide 
beneficiaries and providers. In its 2001 report as part of its ongoing 
review of CMS communications, the General Accounting office described 
the information CMS's carriers gives to providers as ``often 
incomplete, confusing, out of date, or even incorrect.'' GAO found that 
``the norm'' for many carriers were documents over 50 pages that 
``often contained long articles, written in dense

[[Page 12886]]

language and printed in small type.'' Documents ``were also poorly 
organized, making it difficult for a physician to identify relevant or 
new information.'' ALJs base their decisions on administrative rules, 
which have the benefit of being open to public comment and review, as 
well as case law and statutes.
  Unfortunately, the Administration is seeking to undermine the 
independent role of ALJs who hear Medicare cases and replace ALJs with 
Federal employees, perhaps even political appointees, with closer ties 
to the Administration's policy goals. The Administration's plan is not 
just an abstract proposal. It would hurt Medicare beneficiaries and 
Medicare providers.
  The FAIR for Medicare Act would stop this political attempt to weaken 
the role of independent ALJs. Specifically, it would: Prohibit non-
ALJs, like political appointees, from performing the duties of ALJs. 
Transfer Medicare ALJs from the Social Security Administration to the 
Department of HHS, just like a bipartisan bill introduced in the House 
by Congresswoman Nancy Johnson. Ensure ALJs are organizationally and 
functionally separated from CMS and all other political appointees 
other than the Secretary of HHS.
  Similar legislation has been introduced in the House by 
Representative Nancy Johnson, and it received bipartisan support. I 
hope that my proposal will achieve the same result.
  I ask unanimous consent that the text of the bill and several 
articles be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1127

       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 ``Fair And Impartial Rights 
     (FAIR) for Medicare Act of 2003''.

     SEC. 2. ADMINISTRATIVE LAW JUDGES WITHIN HHS; ENSURING 
                   INDEPENDENCE OF ADMINISTRATIVE LAW JUDGES; 
                   PRESERVATION OF THE ROLE OF ADMINISTRATIVE LAW 
                   JUDGES.

       (a) ALJs Within HHS.--Any administrative law judge 
     performing the administrative law judge functions described 
     in section 1869 of the Social Security Act (42 U.S.C. 1395ff) 
     shall be within the Department of Health and Human Services.
       (b) Ensuring Independence of ALJs.--
       (1) In general.--The Secretary of Health and Human Services 
     shall ensure the independence of administrative law judges 
     described in subsection (a).
       (2) Independence described.--In order to ensure the 
     independence described in paragraph (1), each administrative 
     law judge described in subsection (a) shall--
       (A) be an impartial decisionmaker;
       (B) be bound only by applicable statutes, regulations, and 
     rulings issued in accordance with subchapter II of chapter 5, 
     and chapter 7, of title 5, United States Code (commonly known 
     as the ``Administrative Procedures Act'');
       (C) be placed by the Secretary in an administrative office 
     that is organizationally and functionally separate from the 
     Centers for Medicare & Medicaid Services; and
       (D) report to, and be under the general supervision of, the 
     Secretary, but shall not report to, or be subject to 
     supervision by, another officer of the Department of Health 
     and Human Services.
       (c) Preservation of the Role of ALJs.--An individual who is 
     not an administrative law judge appointed pursuant to section 
     3105 of title 5, United States Code, may not perform the 
     functions of an administrative law judge specified in section 
     1869 of the Social Security Act (42 U.S.C. 1395ff).
       (d) Conforming Amendment.--Section 1869(f)(2)(A)(i) of the 
     Social Security Act (42 U.S.C. 1395ff(f)(2)(A)(i)) is amended 
     by striking ``of the Social Security Administration''.
                                  ____


               [From The New York Times, March 16, 2003]

           Bush Pushes Plan To Curb Appeals in Medicare Cases

                            (By Robert Pear)

       Washington, March 15.--The Bush administration says it is 
     planning major changes in the Medicare program that would 
     make it more difficult for beneficiaries to appeal the denial 
     of benefits like home health care and skilled nursing home 
     care.
       In thousands of recent cases, federal judges have ruled 
     that frail elderly people with severe illnesses were 
     improperly denied coverage for such services.
       In the last year, Medicare beneficiaries and the providers 
     who treated them won more than half the cases--39,796 of the 
     77,388 Medicare cases decided by administrative law judges. 
     In the last five years, claimants prevailed in 186,300 cases, 
     for a success rate of 53 percent.
       Under federal law, the judges are independent, impartial 
     adjudicators who hold hearings and make decisions based on 
     the facts. They must follow the Medicare law and rules, but 
     are insulated from political pressures and sudden shifts in 
     policy made by presidential appointees.
       President Bush is proposing both legislation and rules that 
     would limit the judges' independence and could replace them 
     in many cases.
       The administration's draft legislation says, ``The 
     secretary of health and human services may use alternate 
     mechanisms in lieu of administrative law judge review'' to 
     resolve disputes over Medicare coverage.
       Under the legislative proposal, cases could be decided by 
     arbitration or mediation or by lawyers or hearing officers at 
     the Department of Health and Human Services. The department 
     recently began testing the use of arbitration in Connecticut 
     under a law that permits demonstration projects.
       Tommy G. Thompson, the secretary of health and human 
     services, said the proposed legislative changes would give 
     his agency ``flexibility to reform the appeals system'' so 
     the government could decide cases in a more ``efficient and 
     effective manner.''
       The department said there was an ``urgent need for 
     improvements to the Medicare claim appeal system,'' in part 
     because the number of appeals was rising rapidly.
       Consumer groups, administrative law judges and lawyers 
     denounced the proposals. Judith A. Stein, Director of the 
     Center for Medicare Advocacy in Willimantic, Conn., said, 
     ``The president's proposals would compromise the independence 
     of administrative law judges, who have protected 
     beneficiaries in case after case, year after year.''
       Beneficiaries have a personal stake in the issue. When 
     claims are denied, a beneficiary is often required to pay 
     tens of thousands of dollars for services already received. 
     In a typical case, an administrative law judge ordered 
     Medicare to pay for 230 home care visits to a 67-year-old 
     woman with breast cancer, heart disease and arthritis. 
     Medicare officials had said the woman should pay the cost. 
     But the judge ordered Medicare to pay because the woman was 
     homebound and the services were ``reasonable and necessary.''
       When federal agencies issue rules or decide cases; they 
     generally must follow the Administrative Procedure Act, a 
     1946 law intended to guarantee the fairness of government 
     proceedings.
       Ronald G. Bernoski, president of the Association of 
     Administrative Law Judges, said: ``We see President Bush's 
     proposals as a serious assault on the Administrative 
     Procedure Act, a stealth attack on the rights of citizens to 
     fair, impartial hearings. These hearings guarantee due 
     process of law, as required by the Constitution.''
       The American Bar Association and the Federal Bar 
     Association, which represents lawyers who practice in federal 
     courts and before federal agencies, have expressed similar 
     concerns.
       Health care providers, which are involved in many of the 
     appeals, share those concerns.
       Robert L. Roth, a Washington lawyer who has represented 
     hospitals and suppliers of medical equipment, said: ``The 
     interests of providers and beneficiaries are aligned. Access 
     to an independent decision maker, an administrative law 
     judge, is quite valuable because it's often your first 
     opportunity to get a fair review of government action.''
       Medicare officials could adopt the proposed rules, 
     regardless of whether Congress accepts Mr. Bush's 
     recommendation for changes in the law.
       The proposed rules would require administrative law judges 
     to ``give deference'' to policies adopted by Medicare and its 
     contractors, which review and pay claims for the government. 
     Beneficiaries would have to show why such policies should be 
     disregarded,
       That would be a significant change. Administrative law 
     judges are now required to follow Medicare statutes and 
     regulations, but not the agency's policies. As a result, the 
     judges often grant benefits previously denied by the Medicare 
     agency or its contractors.
       In the Connecticut experiment, arbitration will be used to 
     resolve some claims disputes, and beneficiaries may opt out. 
     If this approach produces prompt, fair decisions with less 
     paperwork, it could be a model for Congress in changing the 
     appeals process.
       But Matthew L. Spitzer, dean of the University of Southern 
     California Law School, said that consumers ``should think 
     long and hard before they agree to binding arbitration.'' It 
     is, he said, extremely difficult for an individual to 
     overturn an arbitrator's decision.
       Ms. Stein, who has represented Medicare patients in 
     hundreds of cases, agreed. ``The president proposes replacing 
     administrative law judges with some form of dispute 
     resolution,'' Ms. Stein said. ``This puts beneficiaries at a 
     disadvantage, with unequal bargaining power and inadequate 
     expertise to do battle with the Medicare agency.''
       The judges are full-time government employees who typically 
     receive salaries of $95,000 to $140,000 a year.
       To ensure that federal agency hearings would be fair, 
     Congress in 1946 protected the decision makers, providing 
     that they could

[[Page 12887]]

     be dismissed or demoted ``only for good cause.'' The judges 
     who hear Medicare cases have extra protection because they 
     are employed by the Social Security Administration, an 
     independent agency.
       Congress revamped the appeals process in 2000, to enhance 
     the rights of beneficiaries and to expedite decisions. The 
     changes were supposed to take effect in October 2002. But 
     Medicare officials said that without more money, they could 
     not meet the new deadlines, so they have postponed many of 
     the changes.
       Medicare officials said they wanted to end the arrangement 
     under which Social Security judges decide Medicare cases. 
     They have announced plans to transfer responsibility for 
     hearing appeals to the Medicare agency from Social Security, 
     and they hope to do so by Oct. 1.
       A bipartisan bill introduced by Representative Nancy L. 
     Johnson, Republican of Connecticut, would make the transfer 
     in 2005. The bill requires the secretary of health and human 
     services to preserve the judge's role as independent decision 
     makers.
       The potential for conflict seems to be inherent in the 
     relationship between agency officials and administrative law 
     judges, with tensions flaring periodically. In 1983, the 
     Association of Administrative Law Judges filed a lawsuit, 
     saying that Social Security officials appointed by President 
     Ronald Reagan had put improper pressure on them to deny 
     benefits to people with disabilities.
       A Federal District Court found that Social Security had 
     engaged in practices ``of dubious legality,'' which tended to 
     encroach on the judges' independence. The agency halted the 
     practices after the lawsuit was filed.
                                  ____


            [From the Philadelphia Inquirer, March 20, 2003]

                                 Tilt!


           medicare looks to rig appeals system in its favor

       If the score's going against you, just change the rules of 
     the game.
       That is, if you're president.
       The Bush administration's plan to rework the appeals 
     process for Medicare recipients denied treatment appear to be 
     just that: a rules change that tilts the playing field.
       In losing thousands of these appeal annually, the federal 
     government is being ordered to pay millions of dollars for 
     health-care services.
       So administration officials start calling for ``flexibility 
     to reform the appeals system.'' Translation: We want to win 
     more cases and pay out less.
       It's not as though the appeals process is a runaway train; 
     in the last year, only a little more than half the cases were 
     won by Medicare recipients. But nearly 40,000 appeals were 
     upheld; put another way, that means 40,000 elderly citizens 
     had been improperly denied care.
       It wasn't for face lifts or tummy tucks, either. Rather, it 
     was for things that make all the difference to frail seniors, 
     things like home health assistance and skilled nursing care.
       Independent administrative judges handle these appeals now. 
     Under proposed new rules, the Department of Health and Human 
     Services could steer the cases into arbitration or 
     mediation--both of which experts view as less likely to favor 
     the citizens.
       The administration also wants to turn the independent 
     judges into Medicare employees--and to require them to ``give 
     deference'' to policies adopted under Medicare.
       At this rate, why not drop all pretense and just ban 
     appeals? That way every Medicare recipient--including those 
     much-coveted Florida voters--would know exactly where they 
     stand with this White House.
       Medicare's money troubles are real enough. But trimming 
     expenses by undercutting a fair appeals process is wrong. And 
     to pursue this policy while seeking huge tax cuts and 
     claiming to attend to seniors' health care needs is cynical.
                                  ____


                 [From The Seattle Times, May 7, 2003]

             Medicare Appeal Process Should Not Be Weakened

                         (By Kathleen O'Connor)

       With our focus riveted on Iraq and the state's dramatic 
     budget shortfalls, virtually no attention is being paid to 
     the proposed, ominous changes in Medicare. No, not the 
     Medicare prescription-drug benefit that hogs headlines. It's 
     something more dramatic, more important. The proposed changes 
     could essentially eliminate Medicare due process.
       How? By removing the independence of the administrative law 
     judges who now hear Medicare appeals and by axing most of the 
     current terms and conditions under which those appeals can be 
     made. The Bush administration wants to let the secretary of 
     the Department of Health and Human Services (HHS) use 
     arbitration or mediation and--get this--lawyers or hearing 
     officers inside the HHS to make decisions on Medicare 
     appeals. This means appeals would no longer be heard by 
     independent judges in a separate agency. Instead, appeals 
     would be heard in-house by Medicare employees.
       Nothing like letting the fox guard the hen house. Where is 
     due process or equal protection in this? How can inside 
     gatekeepers be fair? How do you hear an appeal when your job 
     is to guard the treasury? How long would these Medicare 
     employee-judges keep their jobs if they keep agreeing that 
     the beneficiaries are right, as they have been in over 50 
     percent of the appeals?
       Even as far back as 1996, the Office of the Inspector 
     General--the internal audit arm of HHS that manages 
     Medicare--found that Medicare was dead wrong in 55 percent of 
     the claims it processed. Recent data cited in The New York 
     Times revealed that over half the appeals in the past five 
     years eventually were found to be in the beneficiaries' 
     favor. In 2002 alone, Medicare beneficiaries and their 
     providers prevailed in almost 40,000 of the 77,000 appeals 
     that were filed, or 52 percent of the time.
       What's remarkable about this is that Medicare appeals had 
     to have been lost at two lower levels before the 
     beneficiaries even got to these judges. The 1946 
     Administrative Procedure Act was designed to assure we have 
     fair and just recourse when we have complaints against the 
     government.
       Since the creation of Medicare, appeals have been heard 
     before these administrative law judges and have been based on 
     Medicare laws and regulations rather than internal Medicare 
     policies that frequently change with each administration. If 
     the appeals function is brought in-house, independent appeals 
     would vanish and coverage decisions could be made by the whim 
     of an internal policy, whether written or not. Worse yet, the 
     administration says these changes don't really need 
     congressional approval and can simply be made by procedural 
     rules that would have the administrative law judges ``give 
     deference'' to Medicare's policies and those of Medicare 
     contractors.
       What this really means is the burden of proof would be 
     placed on the harmed beneficiaries and their providers, who 
     would have to show why these policies should be ignored. Why 
     does this matter? Follow the money. Let's take a look at what 
     Medicare covers. Part A pays for inpatient hospital care, 
     skilled nursing home care, home health care and hospice 
     stays. Part B basically covers all outpatient care (doctors) 
     and outpatient hospital services, cancer screening, lab tests 
     and medical equipment, such as wheel chairs.
       Take the case of Mrs. H in Brooklyn, N.Y. She sought 
     coverage for a prescribed transcutaneous electronic nerve 
     stimulator (TENS) to treat her fibromyalgia, a chronic 
     disorder characterized by widespread musculoskeletal pain and 
     fatigue. Medicare initially denied coverage for this device, 
     noting that the information provided did not support the need 
     for the item. Mrs. H appealed and was denied at what's called 
     the fair hearing level, based on internal coverage 
     guidelines. After that denial, the appeal went to an 
     administrative law judge for an independent ruling. The judge 
     found in Mrs. H's favor, deeming the device to be ``medically 
     necessary.''
       The finding provided on $646, but when you're poor and 
     living on Social Security, $600 is a lot of money. Other 
     findings are in the tens of thousands of dollars. How many 
     internal Medicare judge employees would be that independent? 
     Administrative law judges can be dismissed ``only for good 
     cause.'' If the appeals function is an in-house post, the 
     employee decision-maker can be transferred or reassigned. The 
     administration law judges can be dismissed ``only for good 
     cause.'' If the appeals function is an in-house post, the 
     employee decision-maker can be transferred or reassigned. The 
     administration will say it is only making ``procedural 
     changes''; that an appeals process still ``exists.'' Sure, 
     but it is one that harms rather than helps the beneficiary. 
     They may say there is still due process. But it will no 
     longer be an independent review. Not any real due process. 
     Which is the issue after all. As a friend is fond of saying: 
     ``Token due process is not due process at all.''
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Leahy, and Mr. Kohl:
  S. 1128. A bill to amend title 11 of the United States Code with 
respect to the dismissal of certain involuntary cases; to the Committee 
on the Judiciary.
  Mr. FEINGOLD. Mr. President, today I introduce the ``Involuntary 
Bankruptcy Improvement Act,'' along with Senator Leahy, the ranking 
member of the Judiciary Committee, and my colleague Senator Kohl, the 
senior Senator from Wisconsin. This bill addresses the growing problem 
of the use of involuntary bankruptcy petitions as a means to harass 
public officials. A similar bill has been introduced in the other body 
by the Chairman of the House Judiciary Committee. I believe this bill 
should be enacted on its own as soon as possible or, if necessary, be a 
part of any bankruptcy-related legislation that goes through the 
Congress this year.
  Involuntary bankruptcy petitions are a rarely used, but legitimate, 
creditor tool to prevent the wasting of an asset that would otherwise 
be available to satisfy creditor claims. Unfortunately, tax protestors 
and others with real or imagined grievances against the government have 
filed fraudulent involuntary bankruptcy petitions against government 
officials as a way to harass

[[Page 12888]]

and harm them. This problem came to my attention recently because of a 
case in my home State of Wisconsin.
  In that case, a man named Steven Magritz undertook a vendetta against 
thirty-six Ozaukee County officials after the County pursued a 
foreclosure action against him for failing to pay taxes by filing 
involuntary bankruptcy petitions against those officials. Although the 
petitions were ultimately dismissed and Magritz was convicted of 
criminal slander and sentenced to five years in prison, the petitions 
had, and are still having, an impact on the credit ratings of the 
officials.
  Current law provides for punitive damages to be assessed against 
someone who files an erroneous petition of this kind. But because 
bankruptcy filings are public records and credit reporting agencies 
include information in their reports for ten years, erroneous or 
fraudulent filings can have a devastating impact on the credit ratings 
of the individuals involved even if the perpetrator is punished. The 
local government officials that were the subject of this vendetta have 
had great difficulty in obtaining loans or refinancing their homes.
  Although a comprehensive study of this problem has not been done, I 
understand that fraudulent involuntary bankruptcy petitions have been 
filed against federal district court judges in Ohio and Maine, a U.S. 
Attorney in Maine, and IRS agents in Ohio. A district in California 
reported that over 10 percent of the involuntary bankruptcy petitions 
filed in recent years were likely filed in bad faith.
  The bill I am introducing today will address this problem in two 
ways. First, it requires the bankruptcy court on motion of the debtor 
to expunge from the court's file all records relating to the filing of 
an involuntary petition and any references to such petition, if 1. the 
debtor is an individual; 2. the petition is dismissed; and 3. the 
petition is false or contains a materially false, fictitious, or 
fraudulent statement.
  Second, the bill authorizes a bankruptcy court to prohibit credit 
reporting agencies from issuing a consumer report that contains any 
information relating to an involuntary bankruptcy petition or to the 
case commenced by such petition where the debtor is an individual and 
the court has dismissed the petition.
  These steps will retain involuntary bankruptcy as a legitimate tool 
to preserve debtor assets, but will allow the courts to address the 
real harm that can befall an innocent victim of harassment. I urge my 
colleagues to support this reasonable and necessary reform of the 
bankruptcy laws. 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. 1128

       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 ``Involuntary Bankruptcy 
     Improvement Act of 2003''.

     SEC. 2. INVOLUNTARY CASES.

       Section 303 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(l)(1) If--
       ``(A) the petition under this section is false or contains 
     any materially false, fictitious, or fraudulent statement;
       ``(B) the debtor is an individual; and
       ``(C) the court dismisses such petition;

     the court, upon motion of the debtor, shall expunge from the 
     records of the court such petition, all the records relating 
     to such petition in particular, and all references to such 
     petition.
       ``(2) If the debtor is an individual and the court 
     dismisses a petition under this section, the court may enter 
     an order prohibiting all consumer reporting agencies (as 
     defined in section 603(f) of the Fair Credit Reporting Act 
     (15 U.S.C. 1681a(f))) from making any consumer report (as 
     defined in section 603(d) of that Act) that contains any 
     information relating to such petition or to the case 
     commenced by the filing of such petition.''.

  Mr. KOHL. Mr. President, I rise today to join my colleagues, Senators 
Leahy and Feingold in introducing the Involuntary Bankruptcy 
Improvement Act of 2003.
  This bill responds to an unfortunate abuse of the involuntary 
bankruptcy laws which occurred in my home state of Wisconsin last year. 
There, a tax protestor filed involuntary bankruptcy petitions against 
36 public officials. Even though none of the filings had any merit, the 
protestor succeeded in ruining the credit ratings of many of the public 
officials by filing what the Milwaukee Journal-Sentinel described as 
``an avalanche of legal documents against them.'' Some of the victims 
did not even know they were the subject of an involuntary bankruptcy 
case until they tried to use their lines of credit or obtain credit.
  Involuntary bankruptcy plays an important role in our system, but 
when it is abused by frivolous and fraudulent filings the victims 
deserve the right to clear their good names.
  Some background on involuntary bankruptcy is in order. Under current 
law, one or more creditors can file an involuntary bankruptcy petition 
against an individual or corporation. The credit problems were created 
because the filing of an involuntary bankruptcy case is a matter of 
public record pursuant to bankruptcy code section 107. In addition, 
credit reporting agencies include the filing on a person's credit 
report for up to ten years.
  The abuse of the involuntary bankruptcy laws is not common, but the 
Wisconsin case is not unique either. The National Conference of 
Bankruptcy Clerks advises that after an initial review, they found that 
federal district judges in Ohio and Maine have been the subject of 
involuntary petitions, as well as a United States Attorney in Maine, 
and two IRS agents in Ohio. Finally, the bankruptcy clerk in the 
Central District of California reported that approximately 11 percent 
of involuntary petitions were bad faith filings over a 27 month period 
ending in March 2003.
  This bill addresses the problem in two primary ways. First, it amends 
the bankruptcy code to require that on the motion of the debtor that 
the bankruptcy courts expunge from the courts file all records relating 
to the filing of an involuntary petition under certain conditions. 
Those conditions are: (1) the petition is false or contains a 
materially false, fictitious, or fraudulent statement, (2) the debtor 
is an individual; and (3) the petition is dismissed.
  Second, the bill amends the bankruptcy code to authorize a bankruptcy 
court to prohibit all credit reporting agencies from issuing a consumer 
report that contains any information relating to the involuntary 
bankruptcy petition or to the case commenced by such petition where the 
debtor is an individual and the court has dismissed the petition.
  So while this bill cannot prohibit someone from filing involuntary 
bankruptcy petitions like the man in Wisconsin, it can make it 
significantly easier for the victim to contain the impact on his or her 
credit rating and to remove the unfortunate incident from the record.
  Mr. President, I understand that Chairman Sensenbrenner is moving the 
same bill on the House side. I look forward to working with him and my 
Senate cosponsors to get this important change to the bankruptcy code 
into law.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Brownback, Mr. Voinovich, Ms. 
        Cantwell, Mr. DeWine, Mr. Lautenberg, Mr. Feingold, and Mr. 
        Kennedy):
  S. 1129. A bill to provide for the protection of unaccompanied alien 
children, and for other purposes; to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I rise to introduce the 
``Unaccompanied Alien Child Protection Act of 2003,'' bipartisan 
legislation to reform the way the Federal Government treats 
unaccompanied alien children who are in Federal immigration custody. I 
am pleased to be joined by my colleagues, Senators Brownback, 
Voinovich, Kennedy, Cantwell, DeWine, Feingold, and Lautenberg in 
introducing this important measure.
  Approximately 5,000 foreign-born children under the age of 18 enter 
the United States each year unaccompanied by parents or other legal 
guardians. These children are among the most vulnerable of the 
immigrant population.

[[Page 12889]]

  Many have often entered the country under traumatic circumstances. 
They are young and alone, subject to abuse and exploitation. They are 
often unable to articulate their fears, their views, or testify to 
their needs as accurately as adults can.
  Despite these facts, U.S. Immigration laws and policies have been 
developed and implemented without regard for their effect on children, 
particularly on unaccompanied alien children.
  Under current immigration law, these children are forced to struggle 
through a system designed primarily for adults, even though they lack 
the capacity to understand nuances legal principles and procedures. 
Children who may very well be eligible for relief are often vulnerable 
to being deported back to the very life-threatening situations from 
which they fled--before they are even able to make their cases before 
the Department of Homeland Security or an immigration judge.
  Prior to March 1, 2003, the Immigration Naturalization Service, INS, 
had responsibility for the care, custody, and treatment of 
unaccompanied alien children. Too often, the INS, fell short in 
fulfilling the protection side of these responsibilities.
  The legislation that I am introducing today builds on Section 462 of 
Public Law 107-296, the ``Homeland Security Act of 2002'', which 
provided for the transfer of responsibility for the care and placement 
of unaccompanied alien children from the now-abolished INS to the 
Office of Refugee Resettlement, ORR, within the Department of Health 
and Human Services. This provision was based on S. 121, comprehensive 
legislation relating to unaccompanied alien children that I introduced 
at the beginning of the 107th Congress.
  With the enactment of the Homeland Security Act, we set into motion 
the centralization of responsibility for the care and custody of 
unaccompanied alien children in the Office of Refugee Resettlement. The 
first phase of this transfer of responsibility occurred on March 1, 
2003. Once the transition is completed, we have finally resolved the 
conflict of interest inherent in the former system.
  I am pleased that the provision transferring responsibility for the 
care and custody of unaccompanied alien children was contained in the 
Homeland Security Act. Its inclusion in the new law was an important 
first step in reforming the way unaccompanied alien children are 
treated. It was a key provision for two reasons: First, it will help 
ensure that the Secretary of Homeland Security is not burdened with 
policy issues unrelated to the threat of terrorism. The new Department 
has a huge and important mission and its attention should be focused on 
that mission. Second, it recognizes that the Federal Government has a 
special responsibility to protect these children who are in federal 
custody. The INS did not always live up to that responsibility.
  But, the transfer of authority to the ORR--by itself--is not enough 
to ensure that these children are properly treated. Congress now has a 
responsibilty to go beyond the simple transfer and set the priorities 
for ORR and its new jurisdiction over unaccompanied foreign-born 
minors.
  A number of other important reforms that were contained in last 
year's S. 121 were left out of the Homeland Security Act. Enactment of 
these reforms will be crucial if we truly are to reform the manner in 
which these children are treated. As I mentioned, the Unaccompanied 
Alien Child Protection Act of 2003 builds on the Homeland Security Act 
in two ways: First, it would make a number of technical and conforming 
changes in law to bring about the smooth transfer of the INS's 
unaccompanied alien child-related functions to ORR. Second, it would 
make a number of more substantive reforms in law with respect to the 
treatment of these children--reforms that are designed to ensure that 
such children are treated with fairness and compassion.
  Other provisions include those that would keep children who are 
criminals or who pose a threat to national security under the custody 
of the Department of Homeland Security rather than transfer 
responsibility of them to the ORR.
  I first became involved in this issue when I heard about a young 15-
year old Chinese girl who stood before a U.S. immigration court facing 
deportation proceedings. She had found her way to the United States as 
a stowaway in a container ship captured off of Guam, hoping to escape 
the repression she had experienced in her home country.
  She had been placed on a boat bound for the United States by her very 
own parents, fleeing China's rigid family planning laws. Under these 
laws, she was denied citizenship, education, and medical care. She came 
to this country alone and desperate.
  And what did our immigration authorities do when they found her? The 
INS detained her in a juvenile jail in Portland, OR, for 8 months 
before her asylum hearing, and 4 months after she was granted asylum.
  At her asylum hearing, the young girl stood before a judge, 
unrepresented by counsel, confused, and unable to understand the 
proceedings against her. She could not wipe away the tears from her 
face because her hands were chained to her waist. According to a lawyer 
who later came to represent her, ``her only crime was that her parents 
had put her on a boat so she could get a better life over here.''
  While the young girl eventually received asylum in our country, she 
unnecessarily faced an ordeal no child should bear under our 
immigration system. This young Chinese girl represents only one of 
5,000 foreign-born children who, without parents or legal guardians to 
protect them, are discovered in the United States each year in need of 
protection. This, is unacceptable treatment. We have a responsibility 
to do better than this.
  Central throughout the Unaccompanied Alien Child Protection Act of 
2003 are two concepts: 1. The United States Government has a 
fundamental responsibility to protect unaccompanied children in its 
custody; and 2. in all proceedings and actions, the government should 
have as a high priority protecting the interests of these children, 
most of whom are unable to understand the nature of the proceedings in 
which they are involved.
  This bill would ensure that children who are apprehended by 
immigration authorities are treated humanely and appropriately by: 
ensuring that eligible unaccompanied alien children are promptly placed 
in the custody of the Office of Refugee Resettlement after they are 
encountered by immigration officials; ensuring that the children have 
counsel to represent them in immigration proceedings and matters; 
authorizing the Director of ORR to provide guardians ad litem for the 
children to look after their interests; establishing clear guidelines 
and uniformity for detention alternatives such as shelter care, foster 
care, and other child custody arrangements; establishing minimum 
standards for detention and alternative settings that take into account 
the special needs of children; improving such children's access to 
existing options for permanent protection when U.S. immigration and 
child welfare authorities believe such protection is warranted; setting 
forth procedures that immigration officers should follow when 
apprehending unaccompanied alien children at the United States border 
or at United States ports of entry; establishing procedures to ensure 
that the true age of an alien who claims to be under the age of 18 is 
determined; ensuring that the Department of Homeland Security, rather 
than the Office of Refugee Resettlement, maintain custody over children 
who are either criminals or threats to national security; and 
establishing procedures to ensure that certain unaccompanied alien 
children from Mexico or Canada, encountered along the United States 
border, are returned to their homes, subject to formal agreements 
between the United States and those countries providing for their safe 
return without undue delay.
  Without enactment of my legislation, none of these important 
parameters would be placed on the Office of Refugee Resettlement or the 
Department of Homeland Security.
  This bill also includes provisions that provide for the safety of the 
significant number of unaccompanied alien children who are victims of 
smuggling or

[[Page 12890]]

trafficking rings. For example, 2 years ago, Phanupong Khaisri, a 2-
year old Thai child, was brought to the United States by two 
individuals falsely claiming to be his parents, but who were actually 
part of a major alien trafficking ring.
  The INS was prepared to deport the child back to Thailand. It was not 
until Members of Congress and the local Thai community had intervened, 
however, that the INS decided to allow the child to remain in the 
United States until the agency could provide proper medical attention 
and determine what course of action would be in his best interest.
  The Unaccompanied Alien Child Protection Act aims to prevent 
situations like this from recurring. Moreover, the legislation would 
ensure that children are released into safe and humane environments 
while awaiting a determination of their status when that is 
appropriate, and it would ensure that the children are protected from 
smugglers, traffickers, or others who might exploit them.
  Further, it would require the ORR to take steps to ensure that 
unaccompanied alien children are protected from smugglers or others who 
may wish to do them harm, and authorizes reimbursement for State and 
local expenses associated with caring for unaccompanied alien children.
  Children, even more than adults, have incredible difficulty 
understanding the complexities of the immigration system without the 
assistance of counsel. Despite this reality, most children in 
immigration custody are overlooked and unrepresented. Without legal 
representation, children are at risk of being returned to their home 
countries where they may face further human rights abuses.
  The Unaccompanied Alien Child Protection Act of 20032 would require 
that all unaccompanied alien children in Federal custody by reason of 
their immigration status have counsel to represent them in any 
immigration proceedings involving them. It would vest in the Director 
of ORR responsibility for ensuring that the children have counsel, and 
it would provide the Director power to establish an infrastructure for 
developing a system to recruit and support pro bono counsel who can 
represent these children without cost to them or to the government.
  It provides, as a last resort, that counsel could be provided for the 
children at government expense, capping the fees that such counsel 
could charge in the event that the government pays for such counsel.
  This bill would authorize, but not mandate, the Director of ORR to 
put into place a system of guardians ad litem who would help the court 
in determining the best interests of children in U.S. custody.
  The vast majority of unaccompanied alien children have been forced to 
maneuver the immigration system without any representation or without 
any assistance. This is unacceptable. It results in many children 
participating in a system without any understanding of the process they 
are undergoing or the ramifications of their situation.
  Under this section, the guardian ad litem would not be working ``for 
the child.'' Nor would he or she be working for the Department of 
Homeland Security. Instead, he or she would be an impartial observer 
reporting to the court and to the Office of Refugee Resettlement on 
what he or she thinks is in the best interest of the child.
  The guardians ad litem system could be modeled after any of a number 
of systems already existing in juvenile courts throughout the American 
juvenile justice system. This system is not a novel legal concept, but 
one that is trusted and already in place in every state in proceedings 
involving juveniles.
  Imagine the fear of a foreign-born child, in the United States alone 
without a parent or guardian. Imagine that child being thrust into a 
system she did not understand, given no legal aid, placed in jail that 
housed juveniles with serious criminal convictions. Mr. President, I 
find it hard to believe that our country would have allowed innocent 
children to be treated in such a manner.
  That is why my colleagues and I are introducing this legislation 
today. The Unaccompanied Alien Child Protection Act of 2003 will help 
our country fulfill the special obligation to these children.
  I am proud to have the support of the United States Conference of 
Catholic Bishops, the Women's Commission on Refugee Women and Children, 
the Lutheran Immigration and Refugee Service, the American Bar 
Association, the United National High Commissioner for Refugees, and 
many other organizations with whom I have worked closely to develop 
this legislation.
  I urge my colleagues to join me by cosponsoring this important 
measure and ensuring that these reforms are finally enacted.
  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. 1129

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Unaccompanied Alien Child Protection Act of 2003''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.

     TITLE I--CUSTODY, RELEASE, FAMILY REUNIFICATION, AND DETENTION

Sec. 101. Procedures when encountering unaccompanied alien children.
Sec. 102. Family reunification for unaccompanied alien children with 
              relatives in the United States.
Sec. 103. Appropriate conditions for detention of unaccompanied alien 
              children.
Sec. 104. Repatriated unaccompanied alien children.
Sec. 105. Establishing the age of an unaccompanied alien child.
Sec. 106. Effective date.

TITLE II--ACCESS BY UNACCOMPANIED ALIEN CHILDREN TO GUARDIANS AD LITEM 
                              AND COUNSEL

Sec. 201. Guardians ad litem.
Sec. 202. Counsel.
Sec. 203. Effective date; applicability.

  TITLE III--STRENGTHENING POLICIES FOR PERMANENT PROTECTION OF ALIEN 
                                CHILDREN

Sec. 301. Special immigrant juvenile visa.
Sec. 302. Training for officials and certain private parties who come 
              into contact with unaccompanied alien children.
Sec. 303. Report.
Sec. 304. Effective date.

             TITLE IV--CHILDREN REFUGEE AND ASYLUM SEEKERS

Sec. 401. Guidelines for children's asylum claims.
Sec. 402. Unaccompanied refugee children.
Sec. 403. Exceptions for unaccompanied alien children in asylum and 
              refugee-like circumstances.

                TITLE V--AUTHORIZATION OF APPROPRIATIONS

Sec. 501. Authorization of appropriations.

       TITLE VI--AMENDMENTS TO THE HOMELAND SECURITY ACT OF 2002

Sec. 601. Additional responsibilities and powers of the Office of 
              Refugee Resettlement with respect to unaccompanied alien 
              children.
Sec. 602. Technical corrections.
Sec. 603. Effective date.

     SEC. 2. DEFINITIONS.

       (a) In General.--In this Act:
       (1) Competent.--The term ``competent'', in reference to 
     counsel, means an attorney who complies with the duties set 
     forth in this Act and--
       (A) is a member in good standing of the bar of the highest 
     court of any State, possession, territory, Commonwealth, or 
     the District of Columbia;
       (B) is not under any order of any court suspending, 
     enjoining, restraining, disbarring, or otherwise restricting 
     the attorney in the practice of law; and
       (C) is properly qualified to handle matters involving 
     unaccompanied immigrant children or is working under the 
     auspices of a qualified nonprofit organization that is 
     experienced in handling such matters.
       (2) Director.--The term ``Director'' means the Director of 
     the Office.
       (3) Directorate.--The term ``Directorate'' means the 
     Directorate of Border and Transportation Security established 
     by section 401 of the Homeland Security Act of 2002 (6 U.S.C. 
     201).
       (4) Office.--The term ``Office'' means the Office of 
     Refugee Resettlement as established by section 411 of the 
     Immigration and Nationality Act (8 U.S.C. 1521).
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Homeland Security.

[[Page 12891]]

       (6) Unaccompanied alien child.--The term ``unaccompanied 
     alien child'' has the same meaning as is given the term in 
     section 462(g)(2) of the Homeland Security Act of 2002 (6 
     U.S.C. 279(g)(2)).
       (7) Voluntary agency.--The term ``voluntary agency'' means 
     a private, nonprofit voluntary agency with expertise in 
     meeting the cultural, developmental, or psychological needs 
     of unaccompanied alien children, as certified by the Director 
     of the Office of Refugee Resettlement.
       (b) Amendments to the Immigration and Nationality Act.--
     Section 101(a) of the Immigration and Nationality Act (8 
     U.S.C. 1101(a)) is amended by adding at the end the 
     following:
       ``(51) The term `unaccompanied alien child' means a child 
     who--
       ``(A) has no lawful immigration status in the United 
     States;
       ``(B) has not attained the age of 18; and
       ``(C) with respect to whom--
       ``(i) there is no parent or legal guardian in the United 
     States; or
       ``(ii) no parent or legal guardian in the United States is 
     able to provide care and physical custody.
       ``(52) The term `unaccompanied refugee children' means 
     persons described in paragraph (42) who--
       ``(A) have not attained the age of 18; and
       ``(B) with respect to whom there are no parents or legal 
     guardians available to provide care and physical custody.''.

     TITLE I--CUSTODY, RELEASE, FAMILY REUNIFICATION, AND DETENTION

     SEC. 101. PROCEDURES WHEN ENCOUNTERING UNACCOMPANIED ALIEN 
                   CHILDREN.

       (a) Unaccompanied Children Found Along the United States 
     Border or at United States Ports of Entry.--
       (1) In general.--Subject to paragraph (2), if an 
     immigration officer finds an unaccompanied alien child who is 
     described in paragraph (2) at a land border or port of entry 
     of the United States and determines that such child is 
     inadmissible under the Immigration and Nationality Act (8 
     U.S.C. 1101 et seq.), the officer shall--
       (A) permit such child to withdraw the child's application 
     for admission pursuant to section 235(a)(4) of the 
     Immigration and Nationality Act (8 U.S.C. 1225(a)(4)); and
       (B) return such child to the child's country of nationality 
     or country of last habitual residence.
       (2) Special rule for contiguous countries.--
       (A) In general.--Any child who is a national or habitual 
     resident of a country that is contiguous with the United 
     States and that has an agreement in writing with the United 
     States providing for the safe return and orderly repatriation 
     of unaccompanied alien children who are nationals or habitual 
     residents of such country shall be treated in accordance with 
     paragraph (1), unless a determination is made on a case-by-
     case basis that--
       (i) such child is a national or habitual resident of a 
     country described in subparagraph (A);
       (ii) such child has a fear of returning to the child's 
     country of nationality or country of last habitual residence 
     owing to a fear of persecution;
       (iii) the return of such child to the child's country of 
     nationality or country of last habitual residence would 
     endanger the life or safety of such child; or
       (iv) the child cannot make an independent decision to 
     withdraw the child's application for admission due to age or 
     other lack of capacity.
       (B) Right of consultation.--Any child described in 
     subparagraph (A) shall have the right to consult with a 
     consular officer from the child's country of nationality or 
     country of last habitual residence prior to repatriation, as 
     well as consult with the Office, telephonically, and such 
     child shall be informed of that right in the child's native 
     language.
       (3) Rule for apprehensions at the border.--The custody of 
     unaccompanied alien children not described in paragraph (2) 
     who are apprehended at the border of the United States or at 
     a United States port of entry shall be treated in accordance 
     with the provisions of subsection (b).
       (b) Care and Custody of Unaccompanied Alien Children Found 
     in the Interior of the United States.--
       (1) Establishment of jurisdiction.--
       (A) In general.--Except as otherwise provided under 
     subparagraphs (B) and (C) and subsection (a), the care and 
     custody of all unaccompanied alien children, including 
     responsibility for their detention, where appropriate, shall 
     be under the jurisdiction of the Office.
       (B) Exception for children who have committed crimes.--
     Notwithstanding subparagraph (A), the Directorate shall 
     retain or assume the custody and care of any unaccompanied 
     alien child who--
       (i) has been charged with any felony, excluding offenses 
     proscribed by the Immigration and Nationality Act (8 U.S.C. 
     1101 et seq.), while such charges are pending; or
       (ii) has been convicted of any such felony.
       (C) Exception for children who threaten national 
     security.--Notwithstanding subparagraph (A), the Directorate 
     shall retain or assume the custody and care of an 
     unaccompanied alien child if the Secretary has substantial 
     evidence, based on an individualized determination, that such 
     child could personally endanger the national security of the 
     United States.
       (D) Trafficking victims.--For purposes of section 462 of 
     the Homeland Security Act of 2002 (6 U.S.C. 279) and this 
     Act, an unaccompanied alien child who is eligible for 
     services authorized under the Victims of Trafficking and 
     Violence Protection Act of 2000 (Public Law 106-386), shall 
     be considered to be in the custody of the Office.
       (2) Notification.--
       (A) In general.--The Secretary shall promptly notify the 
     Office upon--
       (i) the apprehension of an unaccompanied alien child;
       (ii) the discovery that an alien in the custody of the 
     Directorate is an unaccompanied alien child;
       (iii) any claim by an alien in the custody of the 
     Directorate that such alien is under the age of 18; or
       (iv) any suspicion that an alien in the custody of the 
     Directorate who has claimed to be over the age of 18 is 
     actually under the age of 18.
       (B) Special rule.--In the case of an alien described in 
     clause (iii) or (iv) of subparagraph (A), the Director shall 
     make an age determination in accordance with section 105 and 
     take whatever other steps are necessary to determine whether 
     or not such alien is eligible for treatment under section 462 
     of the Homeland Security Act of 2002 (6 U.S.C. 279) or this 
     Act.
       (3) Transfer of unaccompanied alien children.--
       (A) Transfer to the office.--The care and custody of an 
     unaccompanied alien child shall be transferred to the 
     Office--
       (i) in the case of a child not described in subparagraph 
     (B) or (C) of paragraph (1), not later than 72 hours after 
     the apprehension of such child; or
       (ii) in the case of a child whose custody and care has been 
     retained or assumed by the Directorate pursuant to 
     subparagraph (B) or (C) of paragraph (1), immediately 
     following a determination that the child no longer meets the 
     description set forth in such subparagraphs.
       (B) Transfer to the directorate.--Upon determining that a 
     child in the custody of the Office is described in 
     subparagraph (B) or (C) of paragraph (1), the Director shall 
     promptly make arrangements to transfer the care and custody 
     of such child to the Directorate.
       (c) Age Determinations.--In any case in which the age of an 
     alien is in question and the resolution of questions about 
     the age of such alien would affect the alien's eligibility 
     for treatment under section 462 of the Homeland Security Act 
     of 2002 (6 U.S.C. 279) or this Act, a determination of 
     whether or not such alien meets the age requirements for 
     treatment under this Act shall be made by the Director in 
     accordance with section 105.

     SEC. 102. FAMILY REUNIFICATION FOR UNACCOMPANIED ALIEN 
                   CHILDREN WITH RELATIVES IN THE UNITED STATES.

       (a) Placement Authority.--
       (1) Order of preference.--Subject to the discretion of the 
     Director under paragraph (4) and section 103(a)(2), an 
     unaccompanied alien child in the custody of the Office shall 
     be promptly placed with 1 of the following individuals or 
     entities in the following order of preference:
       (A) A parent who seeks to establish custody, as described 
     in paragraph (3)(A).
       (B) A legal guardian who seeks to establish custody, as 
     described in paragraph (3)(A).
       (C) An adult relative.
       (D) An entity designated by the parent or legal guardian 
     that is capable and willing to care for the well-being of the 
     child.
       (E) A State-licensed juvenile shelter, group home, or 
     foster care program willing to accept physical custody of the 
     child.
       (F) A qualified adult or entity seeking custody of the 
     child when it appears that there is no other likely 
     alternative to long-term detention and family reunification 
     does not appear to be a reasonable alternative. For purposes 
     of this subparagraph, the qualification of the adult or 
     entity shall be decided by the Office.
       (2) Suitability assessment.--Notwithstanding paragraph (1), 
     no unaccompanied alien child shall be placed with a person or 
     entity unless a valid suitability assessment conducted by an 
     agency of the State of the child's proposed residence, by an 
     agency authorized by that State to conduct such an 
     assessment, or by an appropriate voluntary agency contracted 
     with the Office to conduct such assessments has found that 
     the person or entity is capable of providing for the child's 
     physical and mental well-being.
       (3) Right of parent or legal guardian to custody of 
     unaccompanied alien child.--
       (A) Placement with parent or legal guardian.--If an 
     unaccompanied alien child is placed with any person or entity 
     other than a parent or legal guardian, but subsequent to that 
     placement a parent or legal guardian seeks to establish 
     custody, the Director shall assess the suitability of placing 
     the child with the parent or legal guardian and shall make a 
     written determination on the child's placement within 30 
     days.
       (B) Rule of construction.--Nothing in this Act shall be 
     construed to--
       (i) supersede obligations under any treaty or other 
     international agreement to which

[[Page 12892]]

     the United States is a party, including The Hague Convention 
     on the Civil Aspects of International Child Abduction, the 
     Vienna Declaration and Program of Action, and the Declaration 
     of the Rights of the Child; or
       (ii) limit any right or remedy under such international 
     agreement.
       (4) Protection from smugglers and traffickers.--
       (A) Policies and programs.--
       (i) In general.--The Director shall establish policies and 
     programs to ensure that unaccompanied alien children are 
     protected from smugglers, traffickers, or other persons 
     seeking to victimize or otherwise engage such children in 
     criminal, harmful, or exploitative activity.
       (ii) Witness protection programs included.--The programs 
     established pursuant to clause (i) may include witness 
     protection programs.
       (B) Criminal investigations and prosecutions.--Any officer 
     or employee of the Office or the Department of Homeland 
     Security, and any grantee or contractor of the Office, who 
     suspects any individual of being involved in any activity 
     described in subparagraph (A) shall report such individual to 
     Federal or State prosecutors for criminal investigation and 
     prosecution.
       (C) Disciplinary action.--Any officer or employee of the 
     Office or the Department of Homeland Security, and any 
     grantee or contractor of the Office, who suspects an attorney 
     of being involved in any activity described in subparagraph 
     (A) shall report the individual to the State bar association 
     of which the attorney is a member, or to other appropriate 
     disciplinary authorities, for appropriate disciplinary action 
     that may include private or public admonition or censure, 
     suspension, or disbarment of the attorney from the practice 
     of law.
       (5) Grants and contracts.--Subject to the availability of 
     appropriations, the Director may make grants to, and enter 
     into contracts with, voluntary agencies to carry out section 
     462 of the Homeland Security Act of 2002 (6 U.S.C. 279) or to 
     carry out this section.
       (6) Reimbursement of state expenses.--Subject to the 
     availability of appropriations, the Director may reimburse 
     States for any expenses they incur in providing assistance to 
     unaccompanied alien children who are served pursuant to 
     section 462 of the Homeland Security Act of 2002 (6 U.S.C. 
     279) or this Act.
       (b) Confidentiality.--All information obtained by the 
     Office relating to the immigration status of a person 
     described in subsection (a) shall remain confidential and may 
     be used only for the purposes of determining such person's 
     qualifications under subsection (a)(1).

     SEC. 103. APPROPRIATE CONDITIONS FOR DETENTION OF 
                   UNACCOMPANIED ALIEN CHILDREN.

       (a) Standards for Placement.--
       (1) Prohibition of detention in certain facilities.--Except 
     as provided in paragraph (2), an unaccompanied alien child 
     shall not be placed in an adult detention facility or a 
     facility housing delinquent children.
       (2) Detention in appropriate facilities.--An unaccompanied 
     alien child who has exhibited a violent or criminal behavior 
     that endangers others may be detained in conditions 
     appropriate to the behavior in a facility appropriate for 
     delinquent children.
       (3) State licensure.--In the case of a placement of a child 
     with an entity described in section 102(a)(1)(E), the entity 
     must be licensed by an appropriate State agency to provide 
     residential, group, child welfare, or foster care services 
     for dependent children.
       (4) Conditions of detention.--
       (A) In general.--The Director shall promulgate regulations 
     incorporating standards for conditions of detention in such 
     placements that provide for--
       (i) educational services appropriate to the child;
       (ii) medical care;
       (iii) mental health care, including treatment of trauma, 
     physical and sexual violence, or abuse;
       (iv) access to telephones;
       (v) access to legal services;
       (vi) access to interpreters;
       (vii) supervision by professionals trained in the care of 
     children, taking into account the special cultural, 
     linguistic, and experiential needs of children in immigration 
     proceedings;
       (viii) recreational programs and activities;
       (ix) spiritual and religious needs; and
       (x) dietary needs.
       (B) Notification of children.--Regulations promulgated in 
     accordance with subparagraph (A) shall provide that all 
     children are notified orally and in writing of such standards 
     in the child's native language.
       (b) Prohibition of Certain Practices.--The Director and the 
     Secretary shall develop procedures prohibiting the 
     unreasonable use of--
       (1) shackling, handcuffing, or other restraints on 
     children;
       (2) solitary confinement; or
       (3) pat or strip searches.
       (c) Rule of Construction.--Nothing in this section shall be 
     construed to supersede procedures favoring release of 
     children to appropriate adults or entities or placement in 
     the least secure setting possible, as defined in the 
     Stipulated Settlement Agreement under Flores v. Reno.

     SEC. 104. REPATRIATED UNACCOMPANIED ALIEN CHILDREN.

       (a) Country Conditions.--
       (1) Sense of congress.--It is the sense of Congress that, 
     to the extent consistent with the treaties and other 
     international agreements to which the United States is a 
     party, and to the extent practicable, the United States 
     Government should undertake efforts to ensure that it does 
     not repatriate children in its custody into settings that 
     would threaten the life and safety of such children.
       (2) Assessment of conditions.--
       (A) In general.--The Secretary of State shall include each 
     year in the State Department Country Report on Human Rights, 
     an assessment of the degree to which each country protects 
     children from smugglers and traffickers.
       (B) Factors for assessment.--The Office shall consult the 
     State Department Country Report on Human Rights and the 
     Victims of Trafficking and Violence Protection Act of 2000: 
     Trafficking in Persons Report in assessing whether to 
     repatriate an unaccompanied alien child to a particular 
     country.
       (b) Report on Repatriation of Unaccompanied Alien 
     Children.--
       (1) In general.--Not later than 18 months after the date of 
     enactment of this Act, and annually thereafter, the Director 
     shall submit a report to the Committees on the Judiciary of 
     the House of Representatives and the Senate on efforts to 
     repatriate unaccompanied alien children.
       (2) Contents.--The report submitted under paragraph (1) 
     shall include, at a minimum, the following information:
       (A) The number of unaccompanied alien children ordered 
     removed and the number of such children actually removed from 
     the United States.
       (B) A description of the type of immigration relief sought 
     and denied to such children.
       (C) A statement of the nationalities, ages, and gender of 
     such children.
       (D) A description of the procedures used to effect the 
     removal of such children from the United States.
       (E) A description of steps taken to ensure that such 
     children were safely and humanely repatriated to their 
     country of origin.
       (F) Any information gathered in assessments of country and 
     local conditions pursuant to subsection (a)(2).

     SEC. 105. ESTABLISHING THE AGE OF AN UNACCOMPANIED ALIEN 
                   CHILD.

       (a) In General.--The Director shall develop procedures to 
     determine the age of an alien in the custody of the 
     Department of Homeland Security or the Office, when the age 
     of the alien is at issue. Such procedures shall permit the 
     presentation of multiple forms of evidence, including 
     testimony of the child, to determine the age of the 
     unaccompanied alien for purposes of placement, custody, 
     parole, and detention. Such procedures shall allow the appeal 
     of a determination to an immigration judge.
       (b) Prohibition on Sole Means of Determining Age.--Neither 
     radiographs nor the attestation of an alien shall be used as 
     the sole means of determining age for the purposes of 
     determining an alien's eligibility for treatment under 
     section 462 of the Homeland Security Act of 2002 (6 U.S.C. 
     279) or this Act.
       (c) Rule of Construction.--Nothing in this section shall be 
     construed to place the burden of proof in determining the age 
     of an alien on the government.

     SEC. 106. EFFECTIVE DATE.

       This title shall take effect 90 days after the date of 
     enactment of this Act.

TITLE II--ACCESS BY UNACCOMPANIED ALIEN CHILDREN TO GUARDIANS AD LITEM 
                              AND COUNSEL

     SEC. 201. GUARDIANS AD LITEM.

       (a) Establishment of Guardian Ad Litem Program.--
       (1) Appointment.--The Director may, in the Director's 
     discretion, appoint a guardian ad litem who meets the 
     qualifications described in paragraph (2) for such child. The 
     Director is encouraged, wherever practicable, to contract 
     with a voluntary agency for the selection of an individual to 
     be appointed as a guardian ad litem under this paragraph.
       (2) Qualifications of guardian ad litem.--
       (A) In general.--No person shall serve as a guardian ad 
     litem unless such person--
       (i) is a child welfare professional or other individual who 
     has received training in child welfare matters; and
       (ii) possesses special training on the nature of problems 
     encountered by unaccompanied alien children.
       (B) Prohibition.--A guardian ad litem shall not be an 
     employee of the Directorate, the Office, or the Executive 
     Office for Immigration Review.
       (3) Duties.--The guardian ad litem shall--
       (A) conduct interviews with the child in a manner that is 
     appropriate, taking into account the child's age;
       (B) investigate the facts and circumstances relevant to 
     such child's presence in the United States, including facts 
     and circumstances arising in the country of the child's 
     nationality or last habitual residence and facts and 
     circumstances arising subsequent to the child's departure 
     from such country;

[[Page 12893]]

       (C) work with counsel to identify the child's eligibility 
     for relief from removal or voluntary departure by sharing 
     with counsel information collected under subparagraph (B);
       (D) develop recommendations on issues relative to the 
     child's custody, detention, release, and repatriation;
       (E) take reasonable steps to ensure that the best interests 
     of the child are promoted while the child participates in, or 
     is subject to, proceedings or matters under the Immigration 
     and Nationality Act (8 U.S.C. 1101 et seq.);
       (F) take reasonable steps to ensure that the child 
     understands the nature of the legal proceedings or matters 
     and determinations made by the court, and ensure that all 
     information is conveyed in an age-appropriate manner; and
       (G) report factual findings relating to--
       (i) information gathered pursuant to subparagraph (B);
       (ii) the care and placement of the child during the 
     pendency of the proceedings or matters; and
       (iii) any other information gathered pursuant to 
     subparagraph (D).
       (4) Termination of appointment.--The guardian ad litem 
     shall carry out the duties described in paragraph (3) until--
       (A) those duties are completed;
       (B) the child departs the United States;
       (C) the child is granted permanent resident status in the 
     United States;
       (D) the child attains the age of 18; or
       (E) the child is placed in the custody of a parent or legal 
     guardian;
     whichever occurs first.
       (5) Powers.--The guardian ad litem--
       (A) shall have reasonable access to the child, including 
     access while such child is being held in detention or in the 
     care of a foster family;
       (B) shall be permitted to review all records and 
     information relating to such proceedings that are not deemed 
     privileged or classified;
       (C) may seek independent evaluations of the child;
       (D) shall be notified in advance of all hearings or 
     interviews involving the child that are held in connection 
     with proceedings or matters under the Immigration and 
     Nationality Act (8 U.S.C. 1101 et seq.), and shall be given a 
     reasonable opportunity to be present at such hearings or 
     interviews;
       (E) shall be permitted to consult with the child during any 
     hearing or interview involving such child; and
       (F) shall be provided at least 24 hours advance notice of a 
     transfer of that child to a different placement, absent 
     compelling and unusual circumstances warranting the transfer 
     of such child prior to notification.
       (b) Training.--The Director shall provide professional 
     training for all persons serving as guardians ad litem under 
     this section in the--
       (1) circumstances and conditions that unaccompanied alien 
     children face; and
       (2) various immigration benefits for which such alien child 
     might be eligible.
       (c) Pilot Program.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this Act, the Director shall establish and begin 
     to carry out a pilot program to test the implementation of 
     subsection (a).
       (2) Purpose.--The purpose of the pilot program established 
     pursuant to paragraph (1) is to--
       (A) study and assess the benefits of providing guardians ad 
     litem to assist unaccompanied alien children involved in 
     immigration proceedings or matters;
       (B) assess the most efficient and cost-effective means of 
     implementing the guardian ad litem provisions in this 
     section; and
       (C) assess the feasibility of implementing such provisions 
     on a nationwide basis for all unaccompanied alien children in 
     the care of the Office.
       (3) Scope of program.--
       (A) Selection of site.--The Director shall select 3 sites 
     in which to operate the pilot program established pursuant to 
     paragraph (1).
       (B) Number of children.--To the greatest extent possible, 
     each site selected under subparagraph (A) should have at 
     least 25 children held in immigration custody at any given 
     time.
       (4) Report to congress.--Not later than 1 year after the 
     date on which the first pilot program is established pursuant 
     to paragraph (1), the Director shall report to the Committees 
     on the Judiciary of the Senate and the House of 
     Representatives on subparagraphs (A) through (C) of paragraph 
     (2).

     SEC. 202. COUNSEL.

       (a) Access to Counsel.--
       (1) In general.--The Director shall ensure that all 
     unaccompanied alien children in the custody of the Office, or 
     in the custody of the Directorate, who are not described in 
     section 101(a)(2) shall have competent counsel to represent 
     them in immigration proceedings or matters.
       (2) Pro bono representation.--To the maximum extent 
     practicable, the Director shall utilize the services of 
     competent pro bono counsel who agree to provide 
     representation to such children without charge.
       (3) Government-funded legal representation as a last 
     resort.--
       (A) Appointment of competent counsel.--Notwithstanding 
     section 292 of the Immigration and Nationality Act (8 U.S.C. 
     1362) or any other provision of law, if no competent counsel 
     is available to represent an unaccompanied alien child 
     without charge, the Director shall appoint competent counsel 
     for such child at the expense of the Government.
       (B) Limitation on attorney fees.--Counsel appointed under 
     subparagraph (A) shall not be compensated at a rate in excess 
     of the rate provided under section 3006A of title 18, United 
     States Code.
       (C) Availability of funding.--In carrying out this 
     paragraph, the Director may make use of funds derived from 
     any source designated by the Secretary of Health and Human 
     Services from discretionary funds available to the Department 
     of Health and Human Services.
       (D) Assumption of the cost of government-paid counsel.--In 
     the case of a child for whom counsel is appointed under 
     subparagraph (A) who is subsequently placed in the physical 
     custody of a parent or legal guardian, such parent or legal 
     guardian may elect to retain the same counsel to continue 
     representation of the child, at no expense to the Government, 
     beginning on the date that the parent or legal guardian 
     assumes physical custody of the child.
       (4) Development of necessary infrastructures and systems.--
     In ensuring that legal representation is provided to such 
     children, the Director shall develop the necessary mechanisms 
     to identify entities available to provide such legal 
     assistance and representation and to recruit such entities.
       (5) Contracting and grant making authority.--
       (A) In general.--Subject to the availability of 
     appropriations, the Director shall enter into contracts with 
     or make grants to national nonprofit agencies with relevant 
     expertise in the delivery of immigration-related legal 
     services to children in order to carry out this subsection. 
     National nonprofit agencies may enter into subcontracts with 
     or make grants to private voluntary agencies with relevant 
     expertise in the delivery of immigration-related legal 
     services to children in order to carry out this subsection.
       (B) Ineligibility for grants and contracts.--In making 
     grants and entering into contracts with agencies in 
     accordance with subparagraph (A), the Director shall ensure 
     that no such agency receiving funds under this subsection is 
     a grantee or contractee for more than 1 of the following 
     services:
       (i) Services provided under section 102.
       (ii) Services provided under section 201.
       (iii) Services provided under paragraph (2).
       (iv) Services provided under paragraph (3).
       (6) Model guidelines on legal representation of children.--
       (A) Development of guidelines.--The Executive Office for 
     Immigration Review, in consultation with voluntary agencies 
     and national experts, shall develop model guidelines for the 
     legal representation of alien children in immigration 
     proceedings based on the children's asylum guidelines, the 
     American Bar Association Model Rules of Professional Conduct, 
     and other relevant domestic or international sources.
       (B) Purpose of guidelines.--The guidelines developed in 
     accordance with subparagraph (A) shall be designed to help 
     protect a child from any individual suspected of involvement 
     in any criminal, harmful, or exploitative activity associated 
     with the smuggling or trafficking of children, while ensuring 
     the fairness of the removal proceeding in which the child is 
     involved.
       (C) Implementation.--The Executive Office for Immigration 
     Review shall adopt the guidelines developed in accordance 
     with subparagraph (A) and submit them for adoption by 
     national, State, and local bar associations.
       (b) Duties.--Counsel shall--
       (1) represent the unaccompanied alien child in all 
     proceedings and matters relating to the immigration status of 
     the child or other actions involving the Directorate;
       (2) appear in person for all individual merits hearings 
     before the Executive Office for Immigration Review and 
     interviews involving the Directorate; and
       (3) owe the same duties of undivided loyalty, 
     confidentiality, and competent representation to the child as 
     is due an adult client.
       (c) Access to Child.--
       (1) In general.--Counsel shall have reasonable access to 
     the unaccompanied alien child, including access while the 
     child is being held in detention, in the care of a foster 
     family, or in any other setting that has been determined by 
     the Office.
       (2) Restriction on transfers.--Absent compelling and 
     unusual circumstances, no child who is represented by counsel 
     shall be transferred from the child's placement to another 
     placement unless advance notice of at least 24 hours is made 
     to counsel of such transfer.
       (d) Termination of Appointment.--Counsel appointed under 
     subsection (a)(3) shall carry out the duties described in 
     subsection (b) until--
       (1) those duties are completed;
       (2) the child departs the United States;
       (3) the child is granted withholding of removal under 
     section 241(b)(3) of the Immigration and Nationality Act (8 
     U.S.C. 1231(b)(3));
       (4) the child is granted protection under the Convention 
     Against Torture;

[[Page 12894]]

       (5) the child is granted asylum in the United States under 
     section 208 of the Immigration and Nationality Act (8 U.S.C. 
     1158);
       (6) the child is granted permanent resident status in the 
     United States; or
       (7) the child attains 18 years of age;
     whichever occurs first.
       (e) Notice to Counsel During Immigration Proceedings.--
       (1) In general.--Except when otherwise required in an 
     emergency situation involving the physical safety of the 
     child, counsel shall be given prompt and adequate notice of 
     all immigration matters affecting or involving an 
     unaccompanied alien child, including adjudications, 
     proceedings, and processing, before such actions are taken.
       (2) Opportunity to consult with counsel.--An unaccompanied 
     alien child in the custody of the Office may not give consent 
     to any immigration action, including consenting to voluntary 
     departure, unless first afforded an opportunity to consult 
     with counsel.
       (f) Access to Recommendations of Guardian Ad Litem.--
     Counsel shall be afforded an opportunity to review the 
     recommendation by the guardian ad litem affecting or 
     involving a client who is an unaccompanied alien child.

     SEC. 203. EFFECTIVE DATE; APPLICABILITY.

       (a) Effective Date.--This title shall take effect 180 days 
     after the date of enactment of this Act.
       (b) Applicability.--The provisions of this title shall 
     apply to all unaccompanied alien children in Federal custody 
     on, before, or after the effective date of this title.

  TITLE III--STRENGTHENING POLICIES FOR PERMANENT PROTECTION OF ALIEN 
                                CHILDREN

     SEC. 301. SPECIAL IMMIGRANT JUVENILE VISA.

       (a) J Visa.--Section 101(a)(27)(J) of the Immigration and 
     Nationality Act (8 U.S.C. 1101(a)(27)(J)) is amended to read 
     as follows:
       ``(J) an immigrant under the age of 21 on the date of 
     application who is present in the United States--
       ``(i) who by a court order, which shall be binding on the 
     Secretary of Homeland Security for purposes of adjudications 
     under this subparagraph, was declared dependent on a juvenile 
     court located in the United States or whom such a court has 
     legally committed to, or placed under the custody of, a 
     department or agency of a State, or an individual or entity 
     appointed by a State or juvenile court located in the United 
     States, due to abuse, neglect, or abandonment, or a similar 
     basis found under State law;
       ``(ii) for whom it has been determined in administrative or 
     judicial proceedings that it would not be in the alien's best 
     interest to be returned to the alien's or parent's previous 
     country of nationality or country of last habitual residence; 
     and
       ``(iii) with respect to a child in Federal custody, for 
     whom the Office of Refugee Resettlement of the Department of 
     Health and Human Services has certified to the Director of 
     the Bureau of Citizenship and Immigration Services that the 
     classification of an alien as a special immigrant under this 
     subparagraph has not been made solely to provide an 
     immigration benefit to that alien;

     except that no natural parent or prior adoptive parent of any 
     alien provided special immigrant status under this 
     subparagraph shall thereafter, by virtue of such parentage, 
     be accorded any right, privilege, or status under this 
     Act;''.
       (b) Adjustment of Status.--Section 245(h)(2) of the 
     Immigration and Nationality Act (8 U.S.C. 1255(h)(2)) is 
     amended--
       (1) by amending subparagraph (A) to read as follows:
       ``(A) paragraphs (1), (4), (5), (6), and (7)(A) of section 
     212(a) shall not apply;'';
       (2) in subparagraph (B), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(C) the Secretary of Homeland Security may waive 
     subparagraphs (A) and (B) of paragraph (2) of section 212(a) 
     in the case of an offense which arose as a consequence of the 
     child being unaccompanied.''.
       (c) Eligibility for Assistance.--A child who has been 
     granted relief under section 101(a)(27)(J) of the Immigration 
     and Nationality Act (8 U.S.C. 1101(a)(27)(J)), as amended by 
     subsection (a), shall be eligible for all funds made 
     available under section 412(d) of that Act (8 U.S.C. 1522(d)) 
     until such time as the child attains the age designated in 
     section 412(d)(2)(B) of that Act (8 U.S.C. 1522(d)(2)(B)), or 
     until the child is placed in a permanent adoptive home, 
     whichever occurs first.

     SEC. 302. TRAINING FOR OFFICIALS AND CERTAIN PRIVATE PARTIES 
                   WHO COME INTO CONTACT WITH UNACCOMPANIED ALIEN 
                   CHILDREN.

       (a) Training of State and Local Officials and Certain 
     Private Parties.--The Secretary of Health and Human Services, 
     acting jointly with the Secretary, shall provide appropriate 
     training to be available to State and county officials, child 
     welfare specialists, teachers, public counsel, and juvenile 
     judges who come into contact with unaccompanied alien 
     children. The training shall provide education on the 
     processes pertaining to unaccompanied alien children with 
     pending immigration status and on the forms of relief 
     potentially available. The Director shall be responsible for 
     establishing a core curriculum that can be incorporated into 
     education, training, or orientation modules or formats that 
     are currently used by these professionals.
       (b) Training of Directorate Personnel.--The Secretary, 
     acting jointly with the Secretary of Health and Human 
     Services, shall provide specialized training to all personnel 
     of the Directorate who come into contact with unaccompanied 
     alien children. In the case of Border Patrol agents and 
     immigration inspectors, such training shall include specific 
     training on identifying children at the United States borders 
     or at United States ports of entry who have been victimized 
     by smugglers or traffickers, and children for whom asylum or 
     special immigrant relief may be appropriate, including 
     children described in section 101(a)(2).

     SEC. 303. REPORT.

       Not later than January 31, 2004, and annually thereafter, 
     the Secretary of Health and Human Services shall submit a 
     report for the previous fiscal year to the Committees on the 
     Judiciary of the House of Representatives and the Senate that 
     contains--
       (1) data related to the implementation of section 462 of 
     the Homeland Security Act (6 U.S.C. 279);
       (2) data regarding the care and placement of children in 
     accordance with this Act;
       (3) data regarding the provision of guardian ad litem and 
     counsel services in accordance with this Act; and
       (4) any other information that the Director or the 
     Secretary of Health and Human Services determines to be 
     appropriate.

     SEC. 304. EFFECTIVE DATE.

       The amendment made by section 301 shall apply to all aliens 
     who were in the United States before, on, or after the date 
     of enactment of this Act.

             TITLE IV--CHILDREN REFUGEE AND ASYLUM SEEKERS

     SEC. 401. GUIDELINES FOR CHILDREN'S ASYLUM CLAIMS.

       (a) Sense of Congress.--Congress commends the Immigration 
     and Naturalization Service for its issuance of its 
     ``Guidelines for Children's Asylum Claims'', dated December 
     1998, and encourages and supports the implementation of such 
     guidelines by the Immigration and Naturalization Service (and 
     its successor entities) in an effort to facilitate the 
     handling of children's asylum claims. Congress calls upon the 
     Executive Office for Immigration Review of the Department of 
     Justice to adopt the ``Guidelines for Children's Asylum 
     Claims'' in its handling of children's asylum claims before 
     immigration judges and the Board of Immigration Appeals.
       (b) Training.--The Secretary shall provide periodic 
     comprehensive training under the ``Guidelines for Children's 
     Asylum Claims'' to asylum officers, immigration judges, 
     members of the Board of Immigration Appeals, and immigration 
     officers who have contact with children in order to 
     familiarize and sensitize such officers to the needs of 
     children asylum seekers. Voluntary agencies shall be allowed 
     to assist in such training.

     SEC. 402. UNACCOMPANIED REFUGEE CHILDREN.

       (a) Identifying Unaccompanied Refugee Children.--Section 
     207(e) of the Immigration and Nationality Act (8 U.S.C. 
     1157(e)) is amended--
       (1) by redesignating paragraphs (3), (4), (5), (6), and (7) 
     as paragraphs (4), (5), (6), (7), and (8), respectively; and
       (2) by inserting after paragraph (2) the following:
       ``(3) An analysis of the worldwide situation faced by 
     unaccompanied refugee children, by region, which shall 
     include an assessment of--
       ``(A) the number of unaccompanied refugee children, by 
     region;
       ``(B) the capacity of the Department of State to identify 
     such refugees;
       ``(C) the capacity of the international community to care 
     for and protect such refugees;
       ``(D) the capacity of the voluntary agency community to 
     resettle such refugees in the United States;
       ``(E) the degree to which the United States plans to 
     resettle such refugees in the United States in the coming 
     fiscal year; and
       ``(F) the fate that will befall such unaccompanied refugee 
     children for whom resettlement in the United States is not 
     possible.''.
       (b) Training on the Needs of Unaccompanied Refugee 
     Children.--Section 207(f)(2) of the Immigration and 
     Nationality Act (8 U.S.C. 1157(f)(2)) is amended by--
       (1) striking ``and'' after ``countries,''; and
       (2) inserting before the period at the end the following: 
     ``, and instruction on the needs of unaccompanied refugee 
     children''.

     SEC. 403. EXCEPTIONS FOR UNACCOMPANIED ALIEN CHILDREN IN 
                   ASYLUM AND REFUGEE-LIKE CIRCUMSTANCES.

       (a) Placement in Removal Proceedings.--Any unaccompanied 
     alien child apprehended by the Directorate, except for an 
     unaccompanied alien child subject to exceptions under 
     paragraph (1)(A) or (2) of section (101)(a) of this Act, 
     shall be placed in removal proceedings under section 240 of 
     the Immigration and Nationality Act (8 U.S.C. 1229a).
       (b) Exception from Time Limit for Filing Asylum 
     Application.--Section 208(a)(2) of the Immigration and 
     Nationality Act (8 U.S.C. 1158(a)(2)) is amended by adding at 
     the end the following:

[[Page 12895]]

       ``(E) Applicability.--Subparagraphs (A) and (B) shall not 
     apply to an unaccompanied child as defined in section 
     101(a)(51).''.

                TITLE V--AUTHORIZATION OF APPROPRIATIONS

     SEC. 501. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated 
     such sums as may be necessary to carry out--
       (1) section 462 of the Homeland Security Act of 2002 (6 
     U.S.C. 279); and
       (2) this Act.
       (b) Availability of Funds.--Amounts appropriated pursuant 
     to subsection (a) are authorized to remain available until 
     expended.

       TITLE VI--AMENDMENTS TO THE HOMELAND SECURITY ACT OF 2002

     SEC. 601. ADDITIONAL RESPONSIBILITIES AND POWERS OF THE 
                   OFFICE OF REFUGEE RESETTLEMENT WITH RESPECT TO 
                   UNACCOMPANIED ALIEN CHILDREN.

       (a) Additional Responsibilities of the Director.--Section 
     462(b)(1) of the Homeland Security Act of 2002 (6 U.S.C. 
     279(b)(1)) is amended--
       (1) in subparagraph (K), by striking ``and'' at the end;
       (2) in subparagraph (L), by striking the period at the end 
     and inserting ``, including regular follow-up visits to such 
     facilities, placements, and other entities, to assess the 
     continued suitability of such placements; and''; and
       (3) by adding at the end the following:
       ``(M) ensuring minimum standards of care for all 
     unaccompanied alien children--
       ``(i) for whom detention is necessary; and
       ``(ii) who reside in settings that are alternative to 
     detention.''.
       (b) Additional Powers of the Director.--Section 462(b) of 
     the Homeland Security Act of 2002 (6 U.S.C. 279(b)) is 
     amended by adding at the end the following:
       ``(4) Powers.--In carrying out the duties under paragraph 
     (3), the Director shall have the power to--
       ``(A) contract with service providers to perform the 
     services described in sections 102, 103, 201, and 202 of the 
     Unaccompanied Alien Child Protection Act of 2003; and
       ``(B) compel compliance with the terms and conditions set 
     forth in section 103 of the Unaccompanied Alien Child 
     Protection Act of 2003, including the power to--
       ``(i) declare providers to be in breach and seek damages 
     for noncompliance;
       ``(ii) terminate the contracts of providers that are not in 
     compliance with such conditions; and
       ``(iii) reassign any unaccompanied alien child to a similar 
     facility that is in compliance with such section.''.
       (c) Clarification of Director's Authority To Hire 
     Personnel.--Section 462(f)(3) of the Homeland Security Act of 
     2002 (6 U.S.C. 279(f)(3)) is amended--
       (1) by striking ``(3) Transfer and allocation of 
     appropriations and personnel.--The personnel'' and inserting 
     the following:
       ``(3) Transfer and allocation of appropriations and 
     personnel.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the personnel''; and
       (2) by inserting at the end the following:
       ``(B) Exception.--The Director may hire and fix the level 
     of compensation of an adequate number of personnel to carry 
     out the duties of the Office. Notwithstanding the provisions 
     of subparagraph (A), the Director may elect not to receive 
     the transfer of any personnel of the Department of Justice 
     employed in connection with the functions transferred by this 
     section or, at the Director's discretion, to assign different 
     duties to such personnel.''.

     SEC. 602. TECHNICAL CORRECTIONS.

       Section 462(b) of the Homeland Security Act of 2002 (6 
     U.S.C. 279(b)), as amended by section 601, is amended--
       (1) in paragraph (3), by striking ``paragraph (1)(G)'' and 
     inserting ``paragraph (1)''; and
       (2) by adding at the end the following:
       ``(5) Statutory construction.--Nothing in paragraph (2)(B) 
     may be construed to require that a bond be posted for 
     unaccompanied alien children who are released to a qualified 
     sponsor.''.

     SEC. 603. EFFECTIVE DATE.

       The amendments made by this title shall take effect as if 
     enacted as part of the Homeland Security Act of 2002 (6 
     U.S.C. 101 et seq.).

  Mr. BROWNBACK. Mr. President, I am honored to join my distinguished 
colleagues, Senators Feinstein and Voinovich, to introduce this 
important piece of legislation that will address an area of our 
immigration law that is sorely neglected--unaccompanied alien children. 
Currently, these children face a legal loophole that can leave them in 
a confusing maze of technicalities, none of which actually help the 
child or the nation. This bill will fix that problem through several 
very straightforward remedies.
  Last year, through the Homeland Security Act, the responsibility for 
the care and custody of unaccompanied alien children was transferred 
from the now-defunct Immigration and Naturalization Service to the 
Department of Health and Human Services's Office of Refugee 
Resettlement. This was an important step in the right direction, but it 
did not accomplish everything we had hoped to do last year. That is why 
I am pleased to join my colleagues in taking one more crack at 
providing safeguards for these vulnerable children.
  These safeguards are simple, but to the point. This legislation will 
ensure that the transfer of responsibilities mandated last year 
actually occurs in an orderly manner. It will remind Federal 
authorities to keep in mind the special needs and circumstances of 
unaccompanied children. It will ensure that these children have access 
to competent counsel and guardians ad litem when appropriate. Minimum 
standards for the care and custody of these unaccompanied alien 
children will be established, and the procedures for access to 
permanent protection for abused, abandoned or neglected children will 
be reformed. Finally, the legislation will require an annual report to 
Congress to ensure these provisions are being carried out faithfully.
  But that is all simply the legalese surrounding this issue. What's 
truly important are the children. That's the whole point of this 
legislation, and why I--and all of my colleagues who are cosponsors--
got involved and are committed to seeing this legislation pass. It is 
the children who suffer, through no fault of their own, if they're run 
through the legal system in the United States without any accounting 
for their unique situation as children.
  Last year, the Senate Judiciary Committee held a hearing on this 
topic, inviting Senator Feinstein to speak--her testimony and the 
testimony of the children who came, moved me to cosponsor the bill that 
very day. I still remember the story the Senator told of a young girl 
from China, standing before a judge, unable to speak the language, her 
arms shackled to her sides, crying. That sort of situation is shameful.
  Or how about the case of Edwin Munoz, a Honduran youth who testified 
last year during this hearing? His story was simple but appalling: 
abandoned by his parents at age 7, he was left in the care of a cousin, 
who beat him mercilessly. At 13, he finally escaped, and hitchhiked 
alone to the United States. I can only imagine how frightening that 
experience was--but unfortunately it was only the start: once he 
arrived in the U.S., he was thrown into a San Diego juvenile facility 
filled with violent offenders. Without a lawyer or court-appointed 
guardian for weeks, this became a nightmare of taunts from the other 
inmates and being shackled each time he had to appear in court.
  These are children--not common criminals--and they should not be 
treated as such. They should be treated as children.
  The main purpose of our legislation is to ensure just that--that 
children who come to the United States are still treated as children. 
That does not mean that they will escape a proper and appropriate 
accounting and ruling on whether they may stay or not--it simply means 
that their age and circumstances will be considered at all times.
  I therefore urge my colleagues to support this critically important 
legislation. We are still the Nation described upon the Statue of 
Liberty--let's ensure our legal system remembers this point as well.
                                  ____

  Mr. KENNEDY. Mr. President, it is a privilege to join Senator 
Feinstein in the introduction of the Unaccompanied Alien Child 
Protection Act, and I commend her long-standing commitment to this 
issue.
  In recent years, increasing numbers of foreign-born children have 
come to the United States, unaccompanied by their parents or their 
guardians. Last year, more than 5,000 arrived, and the numbers have 
continued to rise this year. Some are fleeing from armed conflict or 
other dangerous conditions in their home countries. Others are fleeing 
from human rights abuses, including forced recruitment as soldiers, 
slavery, child labor, prostitution, or forced marriage. Still others 
escape to the United States because they have

[[Page 12896]]

been abused or abandoned by their parents or care givers. Additional 
numbers are brought to the United States by a family friend or 
relative, by paid smugglers, or by traffickers involved in organized 
crime.
  Regardless of how they arrive, these children often enter our country 
after traumatic experiences, speaking little to no English, and unaware 
of their rights under U.S. law. They may well be good candidates for 
asylum, but they have no way to apply for it, and they are left to 
represent themselves in an immigration court against experienced trial 
lawyers for INS.
  Their plight is exacerbated by the fact that when they arrive, they 
are frequently detained. Many of them languish for long periods in 
shelters designed for short-term use, without access to translators, 
telephones, or medical care and other vital services. But these are the 
``fortunate'' ones, compared to many others detained, with dangerous 
criminals, put in handcuffs, shackles, strip-searched, and required to 
wear prison uniforms.
  Shamefully, this is happening every day in the United States of 
America. It's no wonder other countries criticize us for hypocrisy on 
human rights.
  Last year, in the Homeland Security Act, we took the important first 
step of transferring responsibility for the care and custody of these 
children to the Office of Refugee Resettlement in the Department of 
Health and Human Services. This office has decades of experience 
working with foreign-born children and can easily include the care of 
these unaccompanied children in its existing functions.
  That Act, however, left out critical safeguards for these children. 
The legislation we are introducing corrects these omissions. It 
addresses many of the problems facing unaccompanied children and will 
help bring our treatment of them in line with international standards.
  Essential to these efforts is providing an appointed counsel and a 
special guardian to assist them. Statistics demonstrate that 
applications for asylum are four times more likely to be granted when 
represented by counsel. Yet, less than half of the children in INS 
custody are represented by an attorney.
  Children are given appointed counsel in important non-immigration 
cases, and they should be afforded the same right in immigration cases. 
In addition, a special guardian can be indispensable in identifying the 
needs of a child when language and cultural barriers prevent an 
attorney from communicating effectively with the child.
  Our bill will require that these vulnerable children receive the 
representation they need to see that their rights are protected, and 
the care they deserve to see their needs are properly considered as 
they go through complicated immigration proceedings.
  The vast majority of these children are not criminals, and they 
should not be treated as criminals. We must prevent the use of 
detention in these cases. Children who are not a danger to others or a 
flight risk should be released to their families or appropriate care-
givers. Our bill requires the release of children whenever possible, 
and supports the expanded use of shelters and foster care for children 
who do not have such care givers. Other needed protections in the bill 
will establish standards for detention, better training for immigration 
personnel on these issues, and more effective opportunities for 
permanent protection.
  We look forward to working with our colleagues to enact these long 
overdue safeguards. It is time to end the gross abuses in our current 
immigration system and to ensure that the best interests of these 
children are fully protected and respected.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 1130. A bill for the relief of Esidronio Arreola-Saucedo, Maria 
Elena Cobian Arreola, Nayely Bibiana Arreola, and Cindy Jael Arreola; 
to the Committee on the Judiciary.
  Mrs. FEINSTEIN. Mr. President, I rise today to offer legislation to 
provide lawful permanent residence status to Esidronio Arreola-Saucedo, 
Maria Elena Cobian Arreola, Nayely Bibiana Arreola, and Cindy Jael 
Arreola, Mexican nationals who live in the Fresno area of California.
  Mr. and Mrs. Arreola have lived in he United States for nearly 20 
years. They are the parents of Nayely and Cindy, who also stand to 
benefit from this legislation. The Arreolas also have three United 
States citizens children: Roberto, who is 11 year old; Daniel, who is 
8; and Saray, their youngest daughter, who is six-years old. Today, Mr. 
and Mrs. Arreola, and her children face deportation.
  The story of the Arreola family is quite compelling and I believe 
they merit Congress' special consideration for humanitarian relief. The 
Arreolas are in uncertain situation in part because of grievous errors 
committed by their previous counsel, who has since been disbarred. In 
fact, the attorney's conduct was so egregious that it compelled an 
immigration judge to write the Executive Office of Immigration Review 
seeking his disbarment for the legal detriment he caused his immigrant 
clients.
  Mr. Arreola has lived in the United States since 1986. He was an 
agricultural migrant worker in the fields of California for several 
years, and as such would have been eligible for permanent residence 
through the Seasonal Agricultural Workers, SAW, program had he known 
that he could apply for it. Mrs. Arreola was living in the United 
States at the time she became pregnant with her daughter Cindy, but 
returned to Mexico to give birth to Cindy to avoid any problems with 
the Immigration and Naturalization Service. It is quite likely that the 
family would have qualified for cancellation of removal but for the 
conduct of their previous attorney.
  Perhaps one of the most compelling reasons for permitting the family 
to remain in the United States is the devastating impact their 
deportation would have on their children: three of whom are U.S. 
citizens; the other two have lived in the United States virtually all 
of their lives. This country is the only the country they really know.
  Nayely, the oldest child, is a junior in high school. She is an 
outstanding student with a 3.91 Grade Point Average who ranks fourth in 
her class of approximately 300 students. At her relatively young age, 
Nayely has demonstrated a strong commitment to the ideals of 
citizenship in her adopted country. She has worked hard to achieve her 
full potential both in her academic endeavors and through the service 
she provides her community.
  Nayely is a member of Advancement Via Individual Determination, AVID, 
a college preparatory program in which students commit to determining 
their own futures through achieving a college degree. Nayely is also 
President of the key Club, a community service organization. She helps 
mentor freshmen and participates in several other student organizations 
in her school. Perhaps the greatest hardship to this family if she is 
forced to return to Mexico will be her lost opportunity to realize here 
dreams and further contribute to her community and to this country.
  As the principal of her high school wrote, ``[s]he epitomizes what we 
seek to instill in all of our students. She has accepted the challenges 
and has made a commitment to better her future, to better her life, and 
to better herself through education.''
  It is clear to me that Nayely feels a strong sense of responsibility 
for her community and country. By all indication, this is the case as 
well for all of the members of her fine family.
  I understand that the Arreolas also have other family who are lawful 
permanent residents here in the United States. Mrs. Arreola also has 
three brothers who are U.S. citizens and Mr. Arreola has a sister who 
is a U.S. citizen. It is my understanding that they do not have any 
family to whom they might return in Mexico.
  According to immigration authorities, this family has never had any 
problems with law enforcement. I am told that they have filed their 
taxes for every year from 1990 to the present. They have always worked 
hard to support themselves. As I previously mentioned, Mr. Arreola was 
previously employed as a farmworker, but now has his own business 
repairing electronics. His business has been successful

[[Page 12897]]

enough to enable him to purchase a home for his family.
  It seems so clear to me that this family has embraced the American 
dream and their continued presence in our country would do so much to 
enhance the values we hold dear. Enactment of the legislation I have 
introduced today will enable the Arreolas to continue to make 
significant contributions to their community and to the United States 
as well.
  I ask unanimous consent that the letter of Xavier De La Torre, 
Principal of Granite Hills High School, as well as the numerous letters 
of support our office has received from members of the Porterville 
community be entered into the Record. I also ask unanimous consent that 
Nayely's essay entitled ``If I Could Change the World,'' which she 
wrote at age 15, be printed in the Record.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:


                                    Granite Hills High School,

                                     Porterville, CA, May 7, 2003.
       Dear Senator Feinstein: It is with a sense of urgency that 
     I write this letter in support of Nayely Arreola, a student 
     at Granite Hills High School. I have known Nayely for the 
     past three years and have found her to be an outstanding 
     student and a fine young lady with many of the personal 
     attributes I would want for my own daughters.
       Nayely is a leader and a pioneer. She is among a very small 
     cadre of second language learners that have overcome 
     seemingly insurmountable conditions and adversities many of 
     us will never know and emerged as a respected scholar. She is 
     a classic success story. Nayely, with her spirit and drive, 
     has helped open and establish Granite Hills High School, the 
     newest high school in our community. She epitomizes what we 
     seek to instill in all of our students. She has accepted the 
     challenges and has made a commitment to better her future, to 
     better her life, and to better herself, through education. 
     Her leadership qualities were evident immediately, as she 
     became very involved in the Link Crew program, the American 
     Cancer Society's Relay for Life, the Porterville Celebrates 
     Reading program, and the Key Club.
       As a first time principal of a new high school, I rely on 
     students like Nayely to establish a strong foundation for our 
     school. She and others like her have been instrumental in all 
     the success that we have had as a school in a relatively 
     short period of time. Much of this success has come on the 
     heels of adverse conditions. She is resilient and sees life 
     from an optimistic lens, something very difficult to teach.
       As a student, Nayely is well liked by her peers, teachers, 
     and our learning community in general. A top student in her 
     class, Nayely is studious, polite, possesses a staunch work 
     ethic, and is determined to succeed in any endeavor she 
     pursues. I attribute this attitude to her parental 
     upbringing, her sense of moral obligation and a strong value 
     system. I have all the confidence in the world that Nayely 
     will be successful in life.
       If there are any further questions, or if elaboration is 
     required, please contact me at your convenience.
           Sincerely,
                                               Xavier De La Torre,
     Principal, Granite Hills High School.
                                  ____



                                    Granite Hills High School,

                                     Porterville, CA, May 7, 2003.
       Dear Senator Feinstein: Nayely Arreola is one of the most 
     conscientious students I have even had in school. When I 
     first met her last year, she introduced herself and said she 
     would be the top student in my advanced Placement U.S. 
     History class. As it turned out, schedule conflicts forced 
     her into a college prep class, but her intentions and 
     performance remained the same. She has been one of the very 
     top academic students. She also has demonstrated a deep sense 
     of patriotism and commitment to our country. Often times in 
     discussion, she has been the first to voice her support of 
     government policies and has an understanding of the complex 
     reasoning behind difficult decisions legislators and other 
     elected government people must make. In all the process of 
     having to return to Mexico, she has never once been negative 
     or derogatory towards the laws and procedures. Of all the 
     people who should be given residency, Nayely and her family 
     should be at the top of the list. They have demonstrated 
     their dependability, loyalty, hard work and individual 
     responsibility in their lives in this country. There is the 
     ``letter of the law'' and there is then the ``spirit of the 
     law.'' The Arreolas are a family that truly deserve the 
     ``spirit of the law'' in allowing them to stay and become 
     officially citizens. They have consistently demonstrated 
     their intentions to be such for the last decade or more.

                                                  Sally Howen,

                                                    Social Science
     Chair, Granite Hills High School.
                                  ____



                                    Granite Hills High School,

                                     Porterville, CA, May 7, 2003.
       Dear Senator Feinstein: Nayely Arreola is an outstanding 
     person. Having taught 30 years, I've met few students who are 
     as dedicated to working to improve themselves as Nayely. Not 
     only is she hard working, she is very intelligent. Nayely was 
     in my Geometry class two years ago and she not only worked 
     hard but she also has a wonderful understanding of the 
     connectedness of mathematics. She was always ready and 
     willing to help others who might not understand.
       Nayely is more than just a shining example of a student, 
     she is also one of the nicest students I've ever had. She is 
     always courteous and respectful to everyone. I have never 
     seen her act unkindly to anyone around campus. She is the 
     type of person of intelligence, character and integrity that 
     this country desperately needs.
       Nayely has the qualities that will make her a leader and a 
     peacekeeper in whatever situation she finds herself. If she 
     is deported to Mexico, she will do well there and enrich that 
     country. My hope and prayer is that she can stay and enrich 
     this country.
       If there is anything I can do to help in her family's need, 
     please contact me.
           Sincerely,
                                                      Carol Bentz,
     Teacher, Granite Hills High School.
                                  ____



                                    Granite Hills High School,

                                                  Porterville, CA.
       Senator Diane Feinstein: My name is Filomena Lewis and I 
     serve as the chairperson for the World Language Department 
     here at Granite Hills High School. I am pleased to be writing 
     this letter on behalf of Nayely Arreola.
       It has been a pleasure having Nayely as my student. She is 
     among the top students in my Advance Placement Spanish 
     Language class. Nayely functions effectively in both 
     leadership and group roles. Her properly developed social 
     skills are well received by her peers.
       Nayely is a terrific young lady. I have no doubt in my mind 
     that she will be a contributing asset to our society. I 
     highly recommend, with utmost regard, that Nayely be extended 
     every possible consideration to allow her to complete this 
     portion of her education at Granite Hills High School.
           Respectfully,
     Filomena Rocha Lewis.
                                  ____



                                    Granite Hills High School,

                                    Porterville, CA, May 13, 2003.
       To Whom It May Concern: It is a great pleasure to write 
     this letter for Nayely Arreola. One of Granite Hills High 
     School's most distinguished high academic students, Nayely is 
     a junior, the daughter of Esidronio and Maria Elena Arreola, 
     1384 E. Success Dr., Porterville, CA (559) 782-3278.
       Nayely is currently earning a total grade point average of 
     3.9. She is enrolled in a college preparatory program called 
     AVID and is taking Advanced Placement Spanish Literature 3 
     and Advanced Placement English 3P. She also has nearly 
     perfect attendance.
       Not only is Nayely excelling in academics, she also excels 
     and participates in various curricular and extracurricular 
     activities on and off campus. Including Grizzly basketball 
     and clubs. She also participates in her church youth group 
     activities at her church.
       Nayely hopes to attend University of California upon 
     graduating from Granite Hills High School, where she will 
     major in medicine. Nayely also hopes to see how far she can 
     go with an honors program.
       When asked what she liked about school, especially Granite 
     Hills, she said the instructors, classes and the academic 
     programs, especially AVID. She is our top AVID student in the 
     program.
       Nayely across the years has also received many honors and 
     awards. Some of those being for leadership and the 
     Renaissance Academic Program here at Granite Hills. She has 
     also been on the Honor Roll for three years.
       I know this student has all the tools to be successful in 
     life. She will definitely be a very successful individual.
       I know Nayely on a personal basis. She has done so much to 
     be where she's at. She has achieved so many things because of 
     her efforts and motivation. She deserves so much in life. I 
     feel very proud of her.
                                                 Raul B. Bermudez,
     Guidance Tech., Granite Hills High School.
                                  ____



                                    Granite Hills High School,

                                                  Porterville, CA.
       Dear Senator Feinstein: It is with a grateful heart I write 
     to thank you for your recent support of Nayely Arreola and 
     her family. It has been my extreme pleasure to work with 
     Nayely at Granite Hills High for the past three years. Nayely 
     is by far one of the hardest working students I have met in 
     my twenty years of teaching. She is currently ranked fourth 
     in a class of three hundred students and has received honors 
     here at Granite Hills High. Recently she was selected as the 
     runner-up to Girls State. She is the President of the Key 
     Club where she has assisted in food, coat and toy drives for 
     the needy of our community. She is a LINK leader, which works 
     with freshmen, and I have known her as one of my prized 
     speech students. Last year she won the Club and Zone levels 
     of the Optimist Speech Contest and this year she was a Club 
     winner in the Lions Club Speech Contest.

[[Page 12898]]

       It has surprised many that I, a conservative Republican, 
     would try to assist Nayely and her family with their problem 
     of gaining residency her in the United States. I believe our 
     country was founded with people just like the Arreola family 
     who came here with a dream to improve their lives and the 
     lives of their family. The Arreola family has proved that 
     they are honest, hard working, tax paying people. It is 
     unfortunate that they received poor advice from their first 
     attorney that caused them to have their case sent to the 
     deportation court. I truly believe if they had received 
     proper representation they would have received residency long 
     ago.
       Nayely Arreola is more than a remarkable student, she is a 
     remarkable person. Everything she has done has been to 
     prepare here to go to a University here in the United States. 
     I spent almost a year teaching in Mexico and I beg our 
     Congress not to send her there. She is America's dream--her 
     contribution to our country will be great. I have watched 
     with great pride as she has grown into a wonderful young 
     lady, ready to take on the world.
       Once again, I thank you for all your help.
                                               Christine L. Amann,
     Reading Specialist/Speech Coordinator.
                                  ____



                                    Granite Hills High School,

                                    Porterville, CA, May 14, 2003.
       To Whom It May Concern: It is with great pleasure that I 
     write this letter on behalf of Nayely Arreola, a student of 
     mine at Granite Hills High School.
       Nayely is currently enrolled in my Chemistry class. She has 
     proven herself to be a conscientious, intelligent, hard-
     working young lady. She consistently has the highest grade in 
     her class and often goes ``above and beyond'' on her 
     assignments.
       I strongly support Nayely and her family in their quest for 
     legal residence in this country. I have no doubt Nayely will 
     one day be a successful, contributing member of our society. 
     She has the drive and determination to achieve any goal she 
     desires.
           Sincerely,

                                                Sara E. Silva,

                                                Chemistry Teacher,
     Granite Hills High School.
                                  ____



                                    Granite Hills High School,

                                                  Porterville, CA.
       Nayely Arreola is one of my top 5 Pre-calculus/Trig 
     students. This student is basically a model student. She is 
     the kind of student that teachers dream about. She is self-
     motivated, intelligent, has a good heart, sincere, involved, 
     etc. etc. etc. Every teacher should get an opportunity to 
     have such a student.
       It is truly sad that our government doesn't allow such 
     students to remain in the U.S. These kinds of students are 
     the ones that will help our country grow stronger. Students 
     like Nayely are the kind of resources this country needs. I 
     am in disbelief that other students that have no respect for 
     authority, do not care for education, and eventually, we will 
     have to pay for their existence in one way or another, are 
     allowed to stay. Yet great hard working people like the 
     Arreola family are obligated to leave this country.
       The qualities that Nayely possesses are indeed rare. If our 
     students possessed half of her qualities we would be second 
     to no nation in terms of education. We can not afford to lose 
     these precious resources. If our country is to grow stronger 
     we must change our way of thinking. We must change our laws. 
     We must attract people like Nayely and abolish those that 
     harm our country. We are hurting ourselves by forcing Nayely 
     Arreola to leave this country. Howe can politics be so blind?
           Truly,

                                               Jose Velazquez,

                                         Granite Hills High School
     Trigonometry teacher.
                                  ____


                   If I Could Change the World . . .

                         (By Nayely B. Arreola)

       The world has changed dramatically throughout the years. 
     Disrespect, abuse, and quick judgment are major factors that 
     have caused human suffering. They are my main concern because 
     we need to value individuality. In my speech today I am going 
     to talk about three ways I feel we could change the world.
       If I could change our interactions with elderly people, the 
     world would be a better place. I disagree with the 
     pessimistic attitude that some young Americans take towards 
     the elderly. Our country should honor and respect our senior 
     citizens. For example, in other countries convalescent homes 
     do not exist, because family members take care of their older 
     family members. They demonstrate an appreciation, and respect 
     by giving their elderly person a special significance in 
     their own life. The children take care of the parents when 
     they grow older and cannot do it themselves. The sons or 
     daughters give their loved ones a special value and view age 
     as a wonderful experience because they can learn from the 
     elderly family members. If this were not possible, then I 
     would change the convalescent homes from a hospital 
     environment to more of a home environment. In order to ensure 
     better treatment of the elderly the main focus should be on 
     their dignity, comfort, and well-being.
       By keeping the elderly at home, the children can receive 
     love and attention from someone other than their parents. 
     Some kids come home to empty houses when their parents are 
     working hard to maintain their career. Instead of watching 
     TV, they can actually learn something about themselves and 
     the origin of their family history. In order to change the 
     world, we should appreciate our elderly people because they 
     have a lot to offer us.
       Elderly people have a lot to teach us about the world, 
     society, and culture because they have grown wise throughout 
     the years. They can help us learn from their mistakes so that 
     we won't have to go through it again and learn the hard way. 
     It is an honor to sit by them and hear so many things that 
     they have encountered during their lifetime. We have degraded 
     the value of age in America drastically by placing so much 
     emphasis on youth and looking youthful.
       Second, we have degraded the beauty of other races. I would 
     make people colorblind, so that they would not care about a 
     person's color or race. Prejudice ignores a person's 
     character, causing one person to feel superior over another 
     person. Racism has caused conflicts and problems throughout 
     history. A person who is racist does not know the big mistake 
     that he or she is making. They fail to truly meet the 
     wonderful people who they neglect.
       Furthermore, another thing that I would change in the world 
     is the suffering and abuse of an innocent child. Children are 
     gifts from heaven, but when they go through a life of torment 
     or anguish, they reflect that later in their lives. These 
     children have low self-esteem.
       Most of them repeat the same type of abuse toward their 
     children, causing the chain to repeat itself, again and again 
     throughout generations. The life of an abused child is a sad 
     life. If child suffering were eliminated, we would have 
     happier children, thus healthier adults. They would be 
     prepared to succeed in the light of success and would not be 
     left in the darkness of despair. It would make them view the 
     world as a wonderful place.
       In conclusion, I cannot change the world into a wonderful 
     place or impact it without changing myself. If I were able to 
     change the world, I would begin with myself and erase all 
     evil within my heart, in hopes of setting an example for 
     others to follow. I can only change one life at a time in 
     order to change the world into honoring the life of an 
     individual. We cannot disrespect the elderly, judge a person 
     by their color or abuse a child who in its innocence didn't 
     ask to be born. We should show respect and dignity without 
     caring the size, age or color. We should get past the 
     fashion, clothes, and looking good in order for us to truly 
     be compassionate to see what lies in the depths of a person's 
     heart. In order to change our world the answer is definitely 
     in changing the hearts of our people. We must all do our 
     part. Today I have accepted this challenge--I ask you can 
     you?
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Bunning):
  S. 1131. A bill to increase, effective December 1, 2003, the rates of 
compensation for veterans with service-connected disabilities and the 
rates of dependency and indemnity compensation for the survivors of 
certain disabled veterans; to the Committee on Veterans' Affairs.
  Mr. SPECTER. Mr. President, I have sought recognition to comment on 
legislation I am introducing today to provide a cost-of-living, COLA, 
adjustment for certain veterans' benefits programs. This COLA 
adjustment would affect payments made to nearly 3 million Department of 
Veterans Affairs, VA, beneficiaries, and would be reflected in 
beneficiary checks that are received in January 2004, and thereafter.
  An annual cost-of-living adjustment in veterans benefits is an 
important tool which protects veterans' cash-transfer benefits against 
the corrosive effects of inflation. The principal programs affected by 
the adjustment would be compensation paid to disabled veterans, and 
dependency and indemnity compensation, DIC, payments made to the 
surviving spouses, minor children and other dependents of persons who 
died in service, or who died after service as a result of service-
connected injuries or diseases.
  The President's budget anticipates inflation to be at a two percent 
level at the close of this year as measured by the consumer price 
index, CPI, published by the Department of Labor's Bureau of Labor 
Statistics. If inflation is held to the 2 percent level, that will be 
the level of COLA adjustment under this legislation since it ties the 
increase directly to the CPI increase as measured by the Department of 
Labor. Whatever the CPI increase eventually turns out to be, however, 
veterans' and

[[Page 12899]]

survivors' benefits payments must be protected by being increased by a 
like amount. The Congress already concurred with that judgment with the 
recent passage of the budget resolution; that resolution sets aside the 
funds necessary to finance the COLA increase envisioned by this 
legislation.
  I ask my colleagues to support this vital legislation.
  I yield the floor, 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. 1131

       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 ``Veterans' Compensation Cost-
     of-Living Adjustment Act of 2003''.

     SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND 
                   DEPENDENCY AND INDEMNITY COMPENSATION.

       (a) Rate Adjustment.--The Secretary of Veterans Affairs 
     shall, effective on December 1, 2003, increase the dollar 
     amounts in effect for the payment of disability compensation 
     and dependency and indemnity compensation by the Secretary, 
     as specified in subsection (b).
       (b) Amounts To Be Increased.--The dollar amounts to be 
     increased pursuant to subsection (a) are the following:
       (1) Compensation.--Each of the dollar amounts in effect 
     under section 1114 of title 38, United States Code.
       (2) Additional compensation for dependents.--Each of the 
     dollar amounts in effect under sections 1115(1) of such 
     title.
       (3) Clothing allowance.--The dollar amount in effect under 
     section 1162 of such title.
       (4) New dic rates.--The dollar amounts in effect under 
     paragraphs (1) and (2) of section 1311(a) of such title.
       (5) Old dic rates.--Each of the dollar amounts in effect 
     under section 1311(a)(3) of such title.
       (6) Additional dic for surviving spouses with minor 
     children.--The dollar amount in effect under section 1311(b) 
     of such title.
       (7) Additional dic for disability.--The dollar amounts in 
     effect under sections 1311(c) and 1311(d) of such title.
       (8) DIC for dependent children.--The dollar amounts in 
     effect under sections 1313(a) and 1314 of such title.
       (c) Determination of Increase.--(1) The increase under 
     subsection (a) shall be made in the dollar amounts specified 
     in subsection (b) as in effect on November 30, 2003.
       (2) Except as provided in paragraph (3), each such amount 
     shall be increased by the same percentage as the percentage 
     by which benefit amounts payable under title II of the Social 
     Security Act (42 U.S.C. 401 et seq.) are increased effective 
     December 1, 2003, as a result of a determination under 
     section 215(i) of such Act (42 U.S.C. 415(i)).
       (3) Each dollar amount increased pursuant to paragraph (2) 
     shall, if not a whole dollar amount, be rounded down to the 
     next lower whole dollar amount.
       (d) Special Rule.--The Secretary may adjust 
     administratively, consistent with the increases made under 
     subsection (a), the rates of disability compensation payable 
     to persons within the purview of section 10 of Public Law 85-
     857 (72 Stat. 1263) who are not in receipt of compensation 
     payable pursuant to chapter 11 of title 38, United States 
     Code.

     SEC. 3. PUBLICATION OF ADJUSTED RATES.

       At the same time as the matters specified in section 
     215(i)(2)(D) of the Social Security Act (42 U.S.C. 
     415(i)(2)(D)) are required to be published by reason of a 
     determination made under section 215(i) of such Act during 
     fiscal year 2004, the Secretary of Veterans Affairs shall 
     publish in the Federal Register the amounts specified in 
     subsection (b) of section 2, as increased pursuant to that 
     section.
                                 ______
                                 
      By Mr. SPECTER (for himself, Mr. Bunning, and Mr. Graham of South 
        Carolina):
  S. 1132. A bill to amend title 38, United States Code, to improve and 
enhance certain benefits for survivors of veterans, and for other 
purposes; to the Committee on Veterans' Affairs.

  Mr. SPECTER. Mr. President, I have sought recognition to comment on 
legislation I have introduced today to further honor the sacrifices 
made by the family members of those who were killed or injured in 
service to our country. As we celebrate the victory won on the 
battlefield in Iraq, we must remember that the loss of American lives--
even a relative few--was a sobering price to pay.
  The loss of life in service is most acutely felt by the spouses and 
children left behind. For them, we must make every effort--however 
inadequate that effort might be in comparison to the enormity of their 
loss--to recognize their needs. This bill attempts to do so by 
increasing educational assistance benefits for survivors, by providing 
additional dependency and indemnity compensation payments for bereaved 
families, by authorizing a remarried spouse to be buried in a national 
cemetery with his or her deceased veteran-spouse, and by providing 
health, training and compensation benefits to children of certain 
veterans who served in or near the Korean demilitarized zone, DMZ, in 
the late 1960s, and who were born with Agent Orange-induced spina 
bifida.
  The legislation I introduce today would increase the rate of monthly 
Survivors' and Dependents' Education Assistance, DEA, benefits from 
$680 to $985. DEA benefits are provided to the spouses and children of 
veterans who were killed, or profoundly wounded, in service. The 
increase I propose today would create parity between DEA benefits and 
veterans' educational assistance, Montgomery GI Bill, benefits. Such 
parity was recommended by a recent Department of Veterans Affairs, VA, 
program evaluation and is dictated by the common sense observation that 
college tuition is no less expensive for widows and orphans than it is 
for veterans.
  Under this legislation, DEA-eligible survivors, like Montgomery GI 
Bill beneficiaries, would receive an aggregate of $35,460 worth of 
education benefits--$985 monthly for a total of 36 months. Thus, both 
veterans and survivors would have the resources necessary to meet the 
average cost of tuition, fees, and room and board at four-year, public 
institutions of higher learning. As was stated by VA's Deputy 
Secretary, Dr. Leo Mackay, at a Committee on Veterans Affairs hearing 
on June 28, 2001, VA ``believe[s] it is only fair that these benefits 
should be at the same level as those provided to veterans.'' VA 
estimates that a monthly benefit at that level will entice 90% of 
eligible persons to use the benefit.
  This legislation would also put into effect a key policy 
recommendation made by a VA-contracted study examining the adequacy of 
survivors' Dependency and Indemnification Compensation, DIC, benefit. 
The 2001 study called for the DIC benefit--the basic rate of which is 
now set at $948 per month--to be increased by $250 per month during the 
5-year period following the death of a veteran to further ease the 
transition of surviving spouses with dependent children. The contractor 
study based its recommendations on the reported income needs and 
expenses of DIC recipients; it found that spouses with children 
reported higher levels of unmet need than spouses without children--
even though spouses with dependent children already receive an 
additional $237 in monthly DIC benefits per child. In short, the 
contractor found that while widows with children are already afforded 
additional DIC benefits, they need more.
  In July 2001, VA estimated that there were approximately 14,500 
surviving spouses with dependent children. Reading the profiles of some 
of the young men and women who lost their lives in Iraq, I know that 
several spouses will, sadly, be added to that number. This provision of 
my bill is a small way to further recognize the needs of families based 
on an objective assessment of what those needs are.
  Section four of this bill would codify a practice that VA routinely 
allows through a waiver process. Under current practice, when the 
remarried widow of a deceased veteran dies, her second husband must 
grant VA permission before VA will allow, under a waiver process, the 
widow to be buried in a national cemetery with her deceased veteran-
husband. A woman, for example, who was married for 50 years to a World 
War II veteran and who remarries late in life after her first husband 
dies should not have to depend on a waiver process to ensure burial 
with her first husband. Remarried spouses whose second marriages end 
due to death or divorce have a statutory right to burial with their 
deceased veteran-spouse. The same statutory right should be afforded to 
remarried spouses who, though married at death, never

[[Page 12900]]

lost their desire to be united with a prior spouse already at rest in a 
national cemetery.
  Finally, my legislation would provide benefits to spina bifida 
children of veterans who served in or near the Korean DMZ between 1967 
and 1969. Benefits would be provided on the same basis, and under the 
same rationale, as they are to children of Vietnam veterans who are 
born with spina bifida. In 1996, Congress authorized benefits for 
Vietnam children born with spina bifida based on evidence reported by 
the Institute of Medicine of an association between exposure to Agent 
Orange and the appearance of the birth defect spina bifida in a 
veteran's offspring. The same contaminant found in Agent Orange--
dioxin--was also used to clear brush in and near the Korean DMZ during 
the late 1960s. Indeed, veterans who served near the Korean DMZ during 
that time are already presumed by VA to have been exposed to 
herbicides, unless military records demonstrate otherwise, and they 
are, accordingly, already awarded compensation on a presumptive basis 
if they fall ill from conditions presumed by law to be presumptively 
service-connected for Vietnam veterans. VA, however, exercises no such 
latitude in addressing the needs of the children of Korean DMZ veterans 
born with spina bifida. It should--and this bill would direct VA to do 
so.
  I first learned of this inequity from Mr. John Ruzalski, a resident 
of Hawley, PA. Mr. Ruzalski is a Korean DMZ veteran whose 27-year-old 
son suffers from spina bifida. I am grateful to Mr. Ruzalski for his 
service in Korea, and for bringing this matter to light, and am hopeful 
that the Congress can reward his vigilance on behalf of his son. 
Clearly, it makes no sense for VA to presume that Korean DMZ veterans 
should be treated like Vietnam veterans for purposes of compensating 
the veteran's service-related illnesses and yet treat their spina 
bifida children differently.
  In summary, the provisions of this legislation will make a difference 
in the lives of those who fallen servicemembers loved even more than 
country--their families. I ask my colleagues for their support.
  I ask unanimous consent that the text of this bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1132

       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 ``Veterans' Survivors Benefits 
     Enhancements Act of 2003''.

     SEC. 2. INCREASE IN RATES OF SURVIVORS' AND DEPENDENTS' 
                   EDUCATIONAL ASSISTANCE.

       (a) Survivors' and Dependents' Educational Assistance.--
     Section 3532 of title 38, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``at the monthly rate 
     of'' and all that follows and inserting ``at the monthly rate 
     of $985 for full-time, $740 for three-quarter-time, or $492 
     for half-time pursuit.''; and
       (B) in paragraph (2), by striking ``at the rate of'' and 
     all that follows and inserting ``at the rate of the lesser 
     of--
       ``(A) the established charges for tuition and fees that the 
     educational institution involved requires similarly 
     circumstanced nonveterans enrolled in the same program to 
     pay; or
       ``(B) $985 per month for a full-time course.'';
       (2) in subsection (b), by striking ``$670'' and inserting 
     ``$985''; and
       (3) in subsection (c)(2), by striking ``shall be'' and all 
     that follows and inserting ``shall be $795 for full-time, 
     $596 for three-quarter-time, or $398 for half-time 
     pursuit.''.
       (b) Correspondence Courses.--Section 3534(b) of that title 
     is amended by striking ``$670'' and inserting ``$985''.
       (c) Special Restorative Training.--Section 3542(a) of that 
     title is amended--
       (1) by striking ``$670'' and inserting ``$985''; and
       (2) by striking ``$210'' each place it appears and 
     inserting ``$307''.
       (d) Apprenticeship Training.--Section 3687(b)(2) of that 
     title is amended by striking ``shall be $488 for the first 
     six months'' and all that follows and inserting ``shall be 
     $717 for the first six months, $536 for the second six 
     months, $356 for the third six months, and $179 for the 
     fourth and any succeeding six-month period of training.''.
       (e) Effective Date.--(1) The amendments made by this 
     section shall take effect on October 1, 2003, and shall apply 
     with respect to educational assistance allowances payable 
     under chapter 35 and section 3687(b)(2) of title 38, United 
     States Code, for months beginning on or after that date.
       (2) No adjustment in rates of monthly training allowances 
     shall be made under section 3687(d) of title 38, United 
     States Code, for fiscal year 2004.

     SEC. 3. MODIFICATION OF DURATION OF EDUCATIONAL ASSISTANCE.

       Section 3511(a)(1) of title 38, United States Code, is 
     amended by striking ``45 months'' and all that follows and 
     inserting ``45 months, or 36 months in the case of a person 
     who first files a claim for educational assistance under this 
     chapter after the date of the enactment of the Veterans' 
     Survivors Benefits Enhancements Act of 2003, or the 
     equivalent thereof in part-time training.''.

     SEC. 4. ADDITIONAL DEPENDENCY AND INDEMNITY COMPENSATION FOR 
                   SURVIVING SPOUSES WITH DEPENDENT CHILDREN.

       (a) Additional Dependency and Indemnity Compensation.--
     Section 1311 of title 38, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(e)(1) Subject to paragraphs (2) and (3), if there is a 
     surviving spouse with one or more children below the age of 
     eighteen, the dependency and indemnity compensation paid 
     monthly to the surviving spouse shall be increased by $250, 
     regardless of the number of such children.
       ``(2) Dependency and indemnity compensation shall be 
     increased for a month under this subsection only for months 
     occurring during the five-year period beginning on the date 
     of death of the veteran on which such dependency and 
     indemnity compensation is based.
       ``(3) The increase in dependency and indemnity compensation 
     of a surviving spouse under this subsection shall cease 
     beginning with the first month commencing after the month in 
     which all children of the surviving spouse have attained the 
     age of eighteen.
       ``(4) Dependency and indemnity compensation under this 
     subsection is in addition to any other dependency and 
     indemnity compensation payable by law.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 5. ELIGIBILITY OF SURVIVING SPOUSES WHO REMARRY FOR 
                   BURIAL IN NATIONAL CEMETERIES.

       (a) In General.--Section 2402(5) of title 38, United States 
     Code, is amended by striking ``(which for purposes of this 
     chapter includes an unremarried surviving spouse who had a 
     subsequent remarriage which was terminated by death or 
     divorce)'' and inserting ``(which for purposes of this 
     chapter includes a surviving spouse who had a subsequent 
     remarriage)''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to deaths occurring on or after 
     January 1, 2000.

     SEC. 6. BENEFIT FOR CHILDREN WITH SPINA BIFIDA OF VETERANS OF 
                   CERTAIN SERVICE IN KOREA.

       (a) In General.--Chapter 18 of title 38, United States 
     Code, is amended--
       (1) by redesignating subchapter III, and sections 1821, 
     1822, 1823, and 1824, as subchapter IV, and sections 1831, 
     1832, 1833, and 1834, respectively; and
       (2) by inserting after subchapter II the following new 
     subchapter III:

``SUBCHAPTER III--CHILDREN OF CERTAIN KOREA SERVICE VETERANS BORN WITH 
                              SPINA BIFIDA

     ``Sec. 1821. Benefits for children of certain Korea service 
       veterans born with spina bifida

       ``(a) Benefits Authorized.--The Secretary may provide to 
     any child of a veteran of covered service in Korea who is 
     suffering from spina bifida the health care, vocational 
     training and rehabilitation, and monetary allowance required 
     to be paid to a child of a Vietnam veteran who is suffering 
     from spina bifida under subchapter I of this chapter as if 
     such child of a veteran of covered service in Korea were a 
     child of a Vietnam veteran who is suffering from spina bifida 
     under such subchapter I.
       ``(b) Spina Bifida Conditions Covered.--This section 
     applies with respect to all forms and manifestations of spina 
     bifida, except spina bifida occulta.
       ``(c) Veteran of Covered Service in Korea.--For purposes of 
     this section, a veteran of covered service in Korea is any 
     individual, without regard to the characterization of that 
     individual's service, who--
       ``(1) served in the active military, naval, or air service 
     in or near the Korean demilitarized zone (DMZ), as determined 
     by the Secretary in consultation with the Secretary of 
     Defense, during the period beginning on January 1, 1967, and 
     ending on December 31, 1969; and
       ``(2) is determined by the Secretary, in consultation with 
     the Secretary of Defense, to have been exposed to a herbicide 
     agent during such service in or near the Korean demilitarized 
     zone.
       ``(d) Herbicide Agent.--For purposes of this section, the 
     term `herbicide agent'

[[Page 12901]]

     means a chemical in a herbicide used in support of United 
     States and allied military operations in or near the Korean 
     demilitarized zone, as determined by the Secretary in 
     consultation with the Secretary of Defense, during the period 
     beginning on January 1, 1967, and ending on December 31, 
     1969.''.
       (b) Child Defined.--Section 1831 of that title, as 
     redesignated by subsection (a), is further amended by 
     striking paragraph (1) and inserting the following new 
     paragraph (1):
       ``(1) The term `child' means the following:
       ``(A) For purposes of subchapters I and II of this chapter, 
     an individual, regardless of age or marital status, who--
       ``(i) is the natural child of a Vietnam veteran; and
       ``(ii) was conceived after the date on which that veteran 
     first entered the Republic of Vietnam during the Vietnam era.
       ``(B) For purposes of subchapter III of this chapter, an 
     individual, regardless of age or marital status, who--
       ``(i) is the natural child of a veteran of covered service 
     in Korea (as determined for purposes of section 1821 of this 
     title); and
       ``(ii) was conceived after the date on which that veteran 
     first entered service described in subsection (c) of that 
     section.''.
       (c) Nonduplication of Benefits.--Section 1834(a) of that 
     title, as redesignated by subsection (a), is further amended 
     by adding at the end the following new sentence: ``In the 
     case of a child eligible for benefits under subchapter I or 
     II of this chapter who is also eligible for benefits under 
     subchapter III of this chapter, a monetary allowance shall be 
     paid under the subchapter of this chapter elected by the 
     child.''.
       (d) Conforming Amendment.--(1) Section 1811(1)(A) of that 
     title is amended by striking ``section 1821(1)'' and 
     inserting ``section 1831(1)''.
       (2) The heading for chapter 18 of that title is amended to 
     read as follows:

  ``CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS AND CERTAIN 
                           OTHER VETERANS''.

       (e) Clerical Amendments.--(1) The table of sections at the 
     beginning of chapter 18 of that title is amended by striking 
     the items relating to subchapter III and inserting the 
     following new items:

``SUBCHAPTER III--CHILDREN OF CERTAIN KOREA SERVICE VETERANS BORN WITH 
                              SPINA BIFIDA

``1821. Benefits for children of certain Korea service veterans born 
              with spina bifida.

                  ``SUBCHAPTER IV--GENERAL PROVISIONS

``1831. Definitions.
``1832. Applicability of certain administrative provisions.
``1833. Treatment of receipt of monetary allowance and other benefits.
``1834. Nonduplication of benefits.''.
       (2) The table of chapters at the beginning of title 38, 
     United States Code, and at the beginning of part II of such 
     title, are each amended by striking the item relating to 
     chapter 18 and inserting the following new item:

``18. Chapter 18--Benefits for Children of Vietnam Veterans and Certain 
    Other Veterans..........................................1802''.....

                                 ______
                                 
      By Mr. SPECTER (by request):
  S. 1133. A bill to amend title 38, United States Code, to improve the 
authorities of the Department of Veterans Affairs relating to 
compensation, dependency and indemnity compensation, pension, education 
benefits, life insurance benefits, and memorial benefits, to improve 
the administration of benefits for veterans, and for other purposes; to 
the Committee on Veterans' Affairs.
  Mr. SPECTER. Mr. President, as Chairman of the Committee on Veterans' 
Affairs, I have today introduced, at the request of the Secretary of 
Veterans Affairs, S.1133, the proposed ``Veterans Programs Improvement 
Act of 2003.'' The Secretary of Veterans Affairs has submitted this 
proposed legislation to the President of the Senate by letter dated 
April 25, 2003.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all Administration-proposed draft legislation referred to the 
Committee on Veterans' Affairs. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record, together with the transmittal letter and a section-by-section 
analysis which accompanied it.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1133

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

     SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES 
                   CODE.

       (a) Short Title.--This act may be cited as the ``Veterans 
     Programs Improvement Act of 2003''.
       (b) References.--Except as otherwise expressly provided, 
     wherever in this Act an amendment is expressed in terms of an 
     amendment to a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of title 38, United States Code.

     SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND 
                   DEPENDENCY AND INDEMNITY COMPENSATION.

       (a) Rate Adjustment.--The Secretary of Veterans Affairs 
     shall, effective on December 1, 2003, increase the dollar 
     amounts in effect for the payment of disability compensation 
     and dependency and indemnity compensation by the Secretary, 
     as specified in subsection (b).
       (b) Amounts To Be Increased.--The dollar amounts to be 
     increased pursuant to subsection (a) are the following:
       (1) Compensation.--Each of the dollar amounts in effect 
     under section 1114;
       (2) Additional compensation for dependents.--Each of the 
     dollar amounts in effect under section 1115(1);
       (3) Clothing allowance.--The dollar amount in effect under 
     section 1162;
       (4) New dic rates.--Each of the dollar amounts in effect 
     under paragraphs (1) and (2) of section 1311(a);
       (5) Old dic rates.--Each of the dollar amounts in effect 
     under section 1311(a)(3);
       (6) Additional dic for surviving spouses with minor 
     children.--The dollar amount in effect under section 1311(b);
       (7) Additional dic for disability.--Each of the dollar 
     amounts in effect under subsections (c) and (d) of section 
     1311; and
       (8) DIC for dependent children.--Each of the dollar amounts 
     in effect under sections 1313(a) and 1314.
       (c) Determination of Increase.--(1) The increase under 
     subsection (a) shall be made in the dollar amounts specified 
     in subsection (b) as in effect on November 30, 2003.
       (2) Except as provided in paragraph (3), each such amount 
     shall be increased by the same percentage as the percentage 
     by which benefit amounts payable under title II of the Social 
     Security Act (42 U.S.C. 401 et seq.) are increased effective 
     December 1, 2003, as a result of a determination under 
     section 215(i) of such Act (42 U.S.C. 415(i)).
       (3) Each dollar amount increased pursuant to paragraph (2) 
     shall, if not a whole dollar amount, be rounded down to the 
     next lower whole dollar amount.
       (d) Special Rule.--The Secretary may adjust 
     administratively, consistent with the increases made under 
     subsection (a), the rates of disability compensation payable 
     to persons within the purview of section 10 of Public Law No. 
     85-857 (72 Stat. 1263) who are not in receipt of compensation 
     payable pursuant to chapter 11 of title 38, United States 
     Code.
       (e) Publication of Adjusted Rates.--At the same time as the 
     matters specified in section 215(i)(2)(D) of the Social 
     Security Act (42 U.S.C. 415(i)(2)(D)) are required to be 
     published by reason of a determination made under section 
     215(i) of such Act during fiscal year 2004, the Secretary of 
     Veterans Affairs shall publish in the Federal Register the 
     amounts specified in subsection (b) as increased pursuant to 
     subsection (a).

     SEC. 3. REPEAL OF 45-DAY RULE FOR EFFECTIVE DATE OF AWARD OF 
                   DEATH PENSION.

       Subsection (d) of section 5110 is amended--
       (1) by striking the designation ``(1)'';
       (2) by striking ``death compensation or dependency and 
     indemnity compensation'' and inserting ``death compensation, 
     dependency and indemnity compensation, or death pension''; 
     and
       (3) by striking paragraph (2).

     SEC. 4. EXCLUSION OF LUMP-SUM LIFE INSURANCE PROCEEDS FROM 
                   DETERMINATIONS OF ANNUAL INCOME FOR PENSION 
                   PURPOSES.

       Subsection (a) of section 1503 is amended--
       (1) by striking ``and'' at the end of paragraph (9);
       (2) by striking ``materials.'' at the end of paragraph 
     (10)(B) and inserting ``materials; and''; and
       (3) by adding at the end the following new paragraph:
       ``(11) lump-sum proceeds of any life insurance policy or 
     policies on a veteran, for purposes of pension under 
     subchapter III of this chapter.''.

     SEC. 5. CLARIFICATION OF PROHIBITION ON PAYMENT OF 
                   COMPENSATION FOR ALCOHOL OR DRUG-RELATED 
                   DISABILITY.

       (a) Clarification.--Chapter 11 is amended--
       (1) in section 1110, by striking ``drugs.'' and inserting 
     ``drugs, even if the abuse is secondary to a service-
     connected disability.''; and
       (2) in section 1131, by striking ``drugs.'' and inserting 
     ``drugs, even if the abuse is secondary to a service-
     connected disability.''.
       (b) Applicability.--The amendments made by subsection (a) 
     shall apply to any claim--

[[Page 12902]]

       (1) filed on or after the date of enactment of this Act; or
       (2) filed before the date of enactment of this Act and not 
     finally decided as of that date.

     SEC. 6. ALTERNATIVE BENEFICIARIES FOR NATIONAL SERVICE LIFE 
                   INSURANCE AND UNITED STATES GOVERNMENT LIFE 
                   INSURANCE.

       (a) National Service Life Insurance.--(1) Section 1917 is 
     amended by adding at the end the following new subsection:
       ``(f)(1) Following the death of the insured and in a case 
     not covered by subsection (d)--
       ``(A) if the first beneficiary otherwise entitled to 
     payment of the insurance does not make a claim for such 
     payment within two years after the death of the insured, 
     payment may be made to another beneficiary designated by the 
     insured, in the order of precedence as designated by the 
     insured, as if the first beneficiary had predeceased the 
     insured; and
       ``(B) if, within four years after the death of the insured, 
     no claim has been filed by a person designated by the insured 
     as a beneficiary and the Secretary has not received any 
     notice in writing that any such claim will be made, payment 
     may (notwithstanding any other provision of law) be made to 
     such person as may in the judgment of the secretary be 
     equitably entitled thereto.
       ``(2) Payment of insurance under paragraph (1) shall be a 
     bar to recovery by any other person.''.
       (b) United States Government Life Insurance.--Section 1952 
     is amended by adding at the end the following new subsection:
       ``(c)(1) Following the death of the insured and in a case 
     not covered by section 1950 of this title--
       ``(A) if the first beneficiary otherwise entitled to 
     payment of the insurance does not make a claim for such 
     payment within two years after the death of the insured, 
     payment may be made to another beneficiary designated by the 
     insured, in the order of precedence as designated by the 
     insured, as if the first beneficiary had predeceased the 
     insured; and
       ``(B) if, within four years after the death of the insured, 
     no claim has been filed by a person designated by the insured 
     as a beneficiary and the Secretary has not received any 
     notice in writing that any such claim will be made, payment 
     may (notwithstanding any other provision of law) be made to 
     such person as may in the judgment of the Secretary be 
     equitably entitled thereto.
       ``(2) Payment of insurance under paragraph (1) shall be a 
     bar to recovery by any other person.''.
       (c) Transition Provision.--In the case of a person insured 
     under subchapter I or II of chapter 19, title 38, United 
     States Code, who dies before the date of the enactment of 
     this Act, the two-year and four-year periods specified in 
     subsection (f)(1) of section 1917 of title 38, United States 
     Code, as added by subsection (a), and subsection (c)(1) of 
     section 1952 of such title, as added by subsection (b), as 
     applicable, shall for purposes of the applicable subsection 
     be treated as being the two-year and four-year periods, 
     respectively, beginning on the date of the enactment of this 
     Act.

     SEC. 7. TIME LIMITATION ON RECEIPT OF CLAIM INFORMATION 
                   PURSUANT TO REQUEST BY DEPARTMENT OF VETERANS 
                   AFFAIRS.

       (a) In General.--Section 5102 is amended by adding at the 
     end the following new subsection:
       ``(c) Time Limitation.--(1) If information that a claimant 
     and the claimant's representative, if any, are notified under 
     subsection (b) is necessary to complete an application is not 
     received by the Secretary within one year from the date of 
     such notification, no benefit may be paid or furnished by 
     reason of the claimant's application.
       ``(2) This subsection shall not apply to any application or 
     claim for Government life insurance benefits.''.
       (b) Repeal of Superseded Provisions.--Section 5103 is 
     amended--
       (1) by striking ``(a) Required information and evidence.--
     ''; and
       (2) by striking subsection (b).
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if enacted on November 9, 2000, 
     immediately after the enactment of the Veterans Claims 
     Assistance Act of 2000 (Public Law 106-475; 114 Stat. 2096).

     SEC. 8. BURIAL PLOT ALLOWANCE.

       (a) Subsection (b) of section 2303 is amended--
       (1) in the matter preceding paragraph (1), by striking ``a 
     burial allowance under such section 2302, or under such 
     subsection, who was discharged from the active military, 
     naval, or air service for a disability incurred or aggravated 
     in line of duty, or who is a veteran of any war'' and 
     inserting ``burial in a national cemetery under section 2402 
     of this title''; and
       (2) in paragraph (2), by striking ``(other than a veteran 
     whose eligibility for benefits under this subsection is based 
     on being a veteran of any war)'' and inserting ``is eligible 
     for a burial allowance under section 2302 of title or under 
     subsection (a) of this section, or was discharged from the 
     active military, naval, or air service for a disability 
     incurred or aggravated in line of duty, and such veteran''.
       (b) Section 2307 is amended in the last sentence by 
     striking ``and (b)'' and inserting ``and (b)(2)''.

     SEC. 9. PROVISION OF MARKERS FOR PRIVATELY MARKED GRAVES.

       (a) In General.--Subsection (d) of section 502 of the 
     Veterans Education and Benefits Expansion Act of 2001 (Public 
     Law 107-103; 115 Stat. 995), as amended by section 203 of the 
     Veterans Benefits Act of 2002 (Public Law 107-330; 116 Stat. 
     2824), is further amended by striking ``September 11, 2001'' 
     and inserting ``November 1, 1990''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of section 
     502 of Public Law 107-103.

     SEC. 10. EXPANSION OF BURIAL ELIGIBILITY FOR REMARRIED 
                   SPOUSES.

       (a) In General.--Paragraph (5) of section 2402 is amended 
     by striking ``(which for purposes of this chapter includes an 
     unremarried surviving spouse who had a subsequent remarriage 
     which was terminated by death or divorce)'' and inserting 
     ``(which for purposes of this chapter includes a surviving 
     spouse who remarries following the veteran's death)''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to deaths occurring on or after the date of the 
     enactment of this Act.

     SEC. 11. MAKE PERMANENT AUTHORITY FOR STATE CEMETERY GRANTS 
                   PROGRAM.

       (a) Permanent Authorization.--Paragraph (2) of section 
     2408(a) is amended--
       (1) by striking ``for fiscal year 1999 and for each 
     succeeding fiscal year through fiscal year 2004''; and
       (2) by adding at the end ``Funds appropriated under the 
     preceding sentence shall remain available until expended.''.
       (b) Technical Amendment.--Subsection (e) of section 2408 is 
     amended by striking ``Sums appropriated under subsection (a) 
     of this section shall remain available until expended.''.

     SEC. 12. FORFEITURE OF BENEFITS FOR SUBVERSIVE ACTIVITIES.

       (a) Addition of Certain Offenses.--Paragraph (2) of section 
     6105(b) is amended by striking ``sections 792, 793, 794, 798, 
     2381, 2382, 2383, 2384, 2385, 2387, 2388, 2389, 2390, and 
     chapter 105 of title 18'' and inserting ``sections 175, 229, 
     792, 793, 794, 798, 831, 1091, 2332a, 2332b, 2381, 2382, 
     2383, 2384, 2385, 2387, 2388, 2389, 2390, and chapter 105 of 
     title 18''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to claims filed after the date of the enactment 
     of this Act.

     SEC 13. VETERANS' ADVISORY COMMITTEE ON EDUCATION.

       Section 3692 is amended--
       91) in subsection (a), by inserting ``as far as 
     practicable'' after ``include'';
       (2) in subsections (a) and (b), by striking ``chapter 106'' 
     and inserting ``chapter 1606'' both places it appears; and
       (3) in subsection (c), by striking ``2003'' and inserting 
     ``2013''.

     SEC. 14. REPEAL OF EDUCATION LOAN PROGRAM.

       (a) Termination of Program.--No loans shall be made under 
     subchapter III of chapter 36 after the date of the enactment 
     of this Act, and such subchapter shall be repealed 90 days 
     after such date of enactment.
       (b) Closing of Loan Fund.--All monies in the revolving fund 
     established in the Treasury of the United States of America 
     known as the ``Department of Veterans Affairs Education Loan 
     Fund'' (the ``Fund'') on the day before the date of repeal of 
     such subchapter III shall be transferred to the Department of 
     Veterans Affairs Readjustment Benefits Account, and the Fund 
     shall be closed.
       (c) Discharge of Liability.--The liability on any education 
     loan debt outstanding under such subchapter III shall be 
     discharged, and any overpayments declared under section 
     3698(e)(1) of that subchapter shall be waived without further 
     process on the date funds are transferred as referred to in 
     subsection (b) of this section.
       (d) Technical Amendment.--On the date of repeal of such 
     subchapter III, as provided herein, the table of sections at 
     the beginning of chapter 36 shall be amended by striking the 
     items relating to subchapter III.
       (e) Conforming Amendment.--(1) Chapter 34 is amended--
       (A) by repealing paragraph (2) of section 3462(a); and
       (B) in paragraph (1) of section 3485(e), by striking 
     ``(other than an education loan under subchapter III)''.
       (2) Section 3512 is amended by repealing subsection (f).
       (3) The amendments made by paragraphs (1)(B) and (2) shall 
     take effect 90 days after the date of the enactment of this 
     Act.

     SEC. 15. RESTORATION OF CHAPTER 35 EDUCATION BENEFITS OF 
                   CERTAIN INDIVIDUALS.

       (a) Restoration.--Subsection (h) of section 3512 is amended 
     by inserting ``or is involuntarily ordered to full-time 
     National Guard duty under section 502(f) of title 32'' 
     following ``title 10''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as of September 11, 2001.

     SEC. 16. EXPANSION OF MONTGOMERY GI BILL EDUCATION BENEFITS 
                   FOR CERTAIN SELF-EMPLOYMENT TRAINING.

       (a) Self-employment Training.--Subparagraph (B) of section 
     3002(3) is amended--

[[Page 12903]]

       (1) in clause (i) by striking ``and'';
       (2) by adding at the end the following clause:
       ``(iii) a program of self-employment on-job training 
     approved as provided in section 3677(d) of this title; and''.
       (b) Program Approval.--Section 3677 is amended--
       (1) in subsections (a) and (c), by inserting ``self-
     employment on-job training or'' after ``other than'';
       (2) in subsection (b)(1), by inserting ``described in 
     subsection (a)'' after ``offering training''; and
       (3) by adding at the end the following new subsection:
       ``(d)(1) Any State approving agency may approve a program 
     of self-employment on-job training for purposes of chapter 30 
     of this title only when it finds that the training is 
     generally recognized as needed or accepted for purposes of 
     obtaining licensure to engage in the self-employment 
     occupation or is required for ownership and operation of a 
     franchise that is the objective of the training.
       ``(2) The training entity offering the training for which 
     approval is sought under this chapter must submit to the 
     State approving agency a written application for approval, in 
     the form and with the content as prescribed by the Secretary, 
     which shall include such information as is required by the 
     State approving agency.
       ``(3) As a condition for approving a program of self-
     employment on-job training, the State approving agency must 
     find upon investigation that the following criteria are met:
       ``(A) The training content is adequate to qualify the 
     eligible individual for the self-employment occupation that 
     is the objective of the training.
       ``(B) The training consists of full-time training for a 
     period of less than six months.
       ``(C) The length of the training period is not longer than 
     that customarily required to obtain the knowledge, skills, 
     and experience needed to successfully engage in the 
     particular self-employment occupation that is the objective 
     of the training.
       ``(D) The training entity has adequate instructional space, 
     equipment, materials, and personnel to provide satisfactory 
     training on the job.
       ``(E) The training entity keeps adequate records of each 
     trainee's progress toward the self-employment objective and, 
     at the end of the training period, issues a license, 
     certificate, or other document recording the individual's 
     successful completion of the training program.
       ``(F) The training entity and the self-employment on-job 
     training program meet such other criteria as the Secretary 
     may prescribe and as the State approving agency, with the 
     Secretary's approval, may establish.''.
       (c) Conforming Amendment.--Paragraph (2) of section 3687(a) 
     is amended by inserting ``subsections (a), (b), and (c) of'' 
     before ``section 3677''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date six months after the enactment 
     of this Act and shall apply to self-employment on-job 
     training approved and pursued on or after that date.

                                                  The Secretary of


                                             Veterans Affairs,

                                   Washington, DC, April 25, 2003.
     Hon. Richard B. Cheney,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: I am transmitting a draft bill, the 
     ``Veterans Programs Improvement Act of 2003'. I request that 
     this draft bill be referred to the appropriate committee for 
     prompt consideration and enactment.


    Increase in Rates of Disability compensation and Dependency and 
                         Indemnity Compensation

       Section 2 of the draft bill would direct the Secretary of 
     Veterans Affairs to increase administratively the rates of 
     disability compensation for veterans with service-connected 
     disability and of dependency and indemnity compensation (DIC) 
     for the survivors of veterans whose deaths are service 
     related, effective December 1, 2003. As provided in the 
     Presidents fiscal year (FY) 2004 budget request, the rate of 
     increase would be the same as the cost-of-living adjustment 
     (COLA) that will be provided under current law to Social 
     Security recipients, which is currently estimated to be 2 
     percent. We believe this proposed COLA is necessary and 
     appropriate to protect the affected benefits from the eroding 
     effects of inflation.
       We estimate that enactment of this section would cost $355 
     million during FY 2004 and $4.3 billion over the period FY 
     2004 through FY 2013. However, this cost is already assumed 
     in the Budget baseline and, therefore, would not have any 
     effect on direct spending.


REPEAL OF 45-DAY RULE FOR EFFECTIVE DATE OF AWARD OF DEATH PENSION AND 
EXCLUSION OF LUMP-SUM INSURANCE PROCEEDS FROM DETERMINATIONS OF ANNUAL 
                      INCOME FOR PENSION PURPOSES

       Section 3 of the draft bill would amend 38 U.S.C. 
     Sec. 5110(d) to make an award of death pension effective the 
     first day of the month in which the death occurred if the 
     claim is received within one year from the date of death. 
     Section 4 of the draft bill would amend 38 U.S.C. 
     Sec. 1503(a) to add lump-sum proceeds of life insurance 
     policies to the list of payments that do not count as income 
     for purposes of determining eligibility for death pension 
     benefits administered by the Department of Veterans Affairs 
     (VA) under chapter 15 of title 38, United States Code.
       Under 38 U.S.C. Sec. 5110(a), an award based on a death 
     pension claim received more than 45 days after the veterans 
     death can be effective no earlier than the date of the claim. 
     Pursuant to current 38 U.S.C. Sec. 5110(d)(2), however, if VA 
     receives an application for death pension within 45 days of 
     the veteran's death, then the effective date of a death 
     pension award is the first day of the month in which the 
     death occurred. Section 5110(d)(2)'s original one-year period 
     was reduced to the current 45 days by the Deficit Reduction 
     Act of 1984, Pub. L. No. 98-369, 98 Stat. 494, 854-901, as a 
     cost-saving measure. Unfortunately, the ``45-day rule'' 
     created a situation that has led to unfair and unequal 
     treatment of applications for VA death pension.
       The practical effect of the ``45-day rule'' in many cases 
     has been to exclude lump-sum life insurance proceeds received 
     within 45 days of the veteran's death from the countable 
     income for pension claimants who file their claims more than 
     45 days after the date of the veteran's death. In contrast, 
     claimants who both receive insurance proceeds and file 
     pension claims within 45 days of the veteran's death have 
     insurance proceeds counted as annual income, often reducing 
     or precluding pension benefits during their first year of 
     potential eligibility. In other words, claimants who receive 
     insurance proceeds within 45 days of death, but who wait 45 
     days or longer to file pension claims, can receive pension 
     effective from the date of claim without regard to recently-
     received insurance proceeds. In essence, claimants receiving 
     lump-sum insurance proceeds under the current law are 
     encouraged to forego entitlement from the date of death in 
     exchange for the exclusion of the insurance payment in 
     determining countable income for the following 12 months.
       While many veterans' advocates are aware of this situation 
     and advise claimants who receive life insurance proceeds 
     within 45 days of death to postpone filing their claims, the 
     current law unfairly penalizes claimants who are not well 
     versed in such technical details. Fairness dictates that VA 
     rules and procedures be straightforward, particularly for 
     claimants who are coping with the losses of loved ones. 
     Consequently, we believe the ``45-day rule'' should be 
     eliminated in favor of a rule making death pension benefits 
     effective from the first day of the month of the veterans 
     death if the claim is received within one year of that date.
       However, we believe that this change must go hand in hand 
     with an amendment, provided in section 4 of the draft bill, 
     excluding lump-sum life insurance proceeds from the 
     computation of income for death pension purposes. Lump-sum 
     life insurance proceeds of genuine consequence are more 
     appropriately addressed in terms of net worth, as provided in 
     38 U.S.C. Sec. 1543, than in terms of income. Pursuant of 
     section 1543, a claimant is ineligible to receive death 
     pension benefits if his or her net worth is such that it is 
     reasonable that some portion of it should be consumed for his 
     or her maintenance. In our view, a surviving spouse whose 
     income, excluding lump-sum life insurance proceeds, and net 
     worth do not constitute a bar to pension deserves help from 
     VA.
       We believe these proposed amendments are necessary and 
     appropriate to eliminate unequal treatment of death pension 
     applicants and to uphold one of the fundamental principles of 
     the pension program, which is to ensure that those with the 
     greatest need receive the greatest benefit.
       We estimate that the net effect of enactment of both 
     section 3 and section 4 would cost $649 thousand for FY 2004 
     and $12.8 million for the ten-year period FY 2004 through FY 
     2013.


clarification of prohibition on payment of compensation for alcohol or 
                        drug-related disability

       Section 5(a) of the draft bill would amend 38 U.S.C. 
     Sec. Sec. 1110 and 1131 to clarify that the prohibition on 
     payment of compensation for a disability that is a result of 
     the veteran's own abuse of alcohol or drugs applies even if 
     the abuse is secondary to a service-connected disability. 
     Section 5(b) would make that amendment applicable to claims 
     filed on or after the date of enactment and to claims filed 
     before then but not finally decided as of that date.
       Sections 1110 and 1131 of title 38, United States Code, 
     authorize the payment of compensation for disability 
     resulting from injury or disease incurred or aggravated in 
     line of duty in active service, during a period of war or 
     during other than a period of war, respectively. Section 1110 
     also currently provides, ``but on compensation shall be paid 
     if the disability is a result of the veteran's own willful 
     misconduct or abuse of alcohol or drugs.'' Before their 
     amendment in 1990, the provisions currently codified in 
     sections 1110 and 1131 prohibited compensation ``if the 
     disability is the result of the veteran's own willful 
     misconduct.'' In 1990, they were amended to also prohibit 
     compensation if the disability is a result of the veteran's 
     own alcohol or drug abuse.
       VA has long interpreted those provisions to authorize 
     compensation not only for disability immediately resulting 
     from injury or

[[Page 12904]]

     disease incurred or aggravated in service, but also for 
     disability more remotely resulting from such injury or 
     disease. That interpretation is embodied in 38 C.F.R. 
     Sec. 3.310(a), which provides that, generally, disability 
     which is proximately due to or the result of a service-
     connected disease or injury shall be service connected. Thus, 
     VA pays compensation for primary service-connected disability 
     and for secondary service-connected disability. However, 
     consistent with the plain meaning of sections 1110 and 1131, 
     if a disability, whether primary or secondary, is a result of 
     the veteran's own alcohol or drug abuse, VA did not pay 
     compensation.
       This has changed. On February 2, 2001, a three-judge panel 
     of the United States Court of Appeals for the Federal Circuit 
     interpreted section 1110 as not precluding compensation for 
     an alcohol or drug-abuse-related disability arising 
     secondarily from a service-connected disability. Allen v. 
     Principi, 237 F.3d 1368, 1370 (Fed. Cir. 2001). More 
     specifically, the panel held that section 1110 ``does not 
     preclude compensation for an alcohol or drug abuse disability 
     secondary to a service-connected disability or use of an 
     alcohol or drug abuse disability as evidence of the increased 
     severity of a service-connected disability.'' Id. at 1381. 
     The Government filed a petition for rehearing and rehearing 
     en banc, which the panel and full court denied on October 16, 
     2001. Allen v. Principi, 268 F.3d 1340, 1341 (Fed. Cir. 
     2001). However, five of the eleven judges who considered the 
     petition for rehearing en banc dissented from the order 
     denying rehearing, opening that that court's interpretation 
     is wrong. 268 F.3d at 1341-42.
       We are concerned that payment of additional compensation 
     based on the abuse of alcohol or drugs is contrary to 
     congressional intent and is not in veterans' best interests 
     because it removes an incentive to refrain from debilitating 
     and self-destructive behavior.
       The Federal Circuit's interpretation in Allen could also 
     greatly increase the amount of compensation VA pays for 
     service-connected disabilities. Under the court's 
     interpretation, any veteran with a service-connected 
     disability who abuses alcohol or drugs is potentially 
     eligible for an increased amount of compensation if he or she 
     can offer evidence that the substance abuse is a way of 
     coping with the pain or loss the disability causes. Under 
     this interpretation, alcohol or drug abuse disabilities that 
     are secondary to either physical or mental disorders are 
     compensable.
       The potential for increased costs is illustrated by mental 
     disorders, which are frequently associated with alcohol and 
     drug abuse. Almost 421,000 veterans are currently receiving 
     compensation for a service-connected mental disability. All 
     but 97,000 of those disabilities are currently rated less 
     than 100 percent disabling and could potentially be rated 
     totally disabling on the basis of secondary alcohol or drug 
     abuse. Even if the service connection of disability from 
     alcohol or drug abuse does not result in an increased 
     schedular evaluation, temporary total evaluations could be 
     assigned whenever a veteran is hospitalized for more than 
     twenty-one days for treatment or observation related to the 
     abuse. Even the 97,000 cases of a service-connected mental 
     disability evaluated at 100 percent disabling have potential 
     for increased compensation for secondary alcohol or drug 
     abuse if the statutory criteria for special monthly 
     compensation are met.
       The potential increase in compensation does not end there. 
     Under the Federal Circuit's interpretation, VA is required to 
     pay compensation for the secondary effects of the abuse of 
     alcohol or drugs. Once alcohol or drug abuse is service 
     connected as being secondary to another service-connected 
     disability, then service connection can be established for 
     any disability that is a result of the service-connected 
     abuse of alcohol or drugs. If alcohol or drug abuse results 
     in a disease, such as cirrhosis of the liver, then that 
     disease would also be service connected and provide a basis 
     for compensation under the court's interpretation.
       Of course, an increase in the amount of compensation VA 
     pays for service-connected disabilities will increase the 
     benefit cost of the compensation program. Section 5 of this 
     draft would avoid those increased costs. Our estimate of 
     savings that would result from enactment of the draft bill is 
     based on the payment of only basic compensation for alcohol 
     or drug abuse disabilities secondary to service-connected 
     disabilities (i.e., it does not consider temporary total 
     evaluations, special monthly compensation, or compensation 
     for the secondary effects of alcohol or drug abuse). We 
     estimate that this provision would result in benefit cost 
     savings of $127 million and administrative cost savings of 
     $44 million in FY 2004 and benefit cost savings of $4.6 
     billion and administrative cost savings of $97 million for 
     the ten-month period FY 2004 through FY 2013.


   alternative beneficiaries for national service life insurance and 
                united states government life insurance

       Section 6 would authorize the payment of unclaimed National 
     Service Life Insurance (NSLI) and United States Government 
     Life Insurance (USGLI) proceeds to an alternative 
     beneficiary.
       Under current law, there is no time limit under which a 
     named beneficiary of an NSLI or USGLI policy is required to 
     claim the proceeds. Consequently, when the insured dies and 
     the beneficiary does not file a claim for the proceeds, VA is 
     required to hold the unclaimed funds indefinitely in order to 
     honor any possible future claims by the beneficiary. VA holds 
     the proceeds as a liability. While extensive efforts are made 
     to locate and pay these individuals, there are cases where 
     the beneficiary simply cannot be found. Under current law, we 
     are not permitted to pay the proceeds to a contingent or 
     alternative beneficiary unless we can determine that the 
     principal beneficiary predeceased the insured. Consequently, 
     payment of the proceeds to other beneficiaries is withheld.
       A majority of the existing liabilities of unclaimed 
     proceeds were established over ten years ago. As time passes, 
     the likelihood of locating and paying a principal beneficiary 
     becomes more remote. In fact, the older a liability becomes, 
     the more unlikely it is that it will ever be paid even though 
     other legitimate heirs of the insured have been located.
       Section 6 would authorize the Secretary to pay NSLI and 
     USGLI proceeds to an alternative beneficiary when the 
     proceeds have not been claimed by the named beneficiary 
     within two years following the death of the insured or within 
     two years of this bill's enactment, whichever is later. The 
     principal beneficiary would have two years following the 
     insured's death to file a claim. Afterward, a contingent 
     beneficiary would have two additional years within which to 
     file a claim. Payment would be made as if the principal 
     beneficiary had predeceased the insured. If there is no 
     contingent beneficiary to receive the proceeds, payment would 
     be made to those equitably entitled, as determined by the 
     Secretary. As occurs under current law, no payment would be 
     made if payment would escheat to a State. Such payment would 
     bar recovery of the proceeds by any other individual.
       Section 6 of the bill would apply retroactively as well as 
     prospectively, and is similar to the time-limitation 
     provisions of the Servicemember's and Veterans' Group Life 
     Insurance programs and the Federal Employees Group Life 
     Insurance program.
       Insofar as payment to beneficiaries is made from the 
     insurance trust funds, there are no direct appropriated 
     benefit costs associated with this section of the bill. The 
     liabilities are already set aside and would eventually be 
     paid, either as payment to beneficiaries that eventually 
     claim the proceeds, or released from liability reserves and 
     paid as dividends.
       There are approximately 4,000 existing policies in which 
     payment has not been made due to the fact that we cannot 
     locate the primary beneficiary, despite extensive efforts. 
     Over the years, the sum of moneys had as aggregated to 
     approximately $23 million. Each year, about 200 additional 
     policies (with an average face value of $9600, or 
     approximately $1.9 million annually) are placed into this 
     liability because the law prohibits payment to a contingent 
     beneficiary or to the veteran's heirs. It is estimated that 
     approximately two-thirds of the 4,000 policies would 
     eventually be paid as a result of this legislation. 
     Additionally, in anticipation of the fact that VA will not be 
     able to pay about one-third of these policies, nearly $7 
     million has already been released to surplus and made 
     available for dividend distribution.
       VA estimates that the enactment of this section would 
     result in costs of $15 million during the five-year period FY 
     2004 through FY 2008 and a total of $17 million during the 
     ten-year period FY 2004 through FY 2013.


time limitation on receipt of claim information pursuant to request by 
                     department of veterans affairs

       Section 7(a) and (b) of the draft bill would make a 
     technical correction to the statutory provisions created by 
     the Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. 
     No. 106-475, 114 Stat. 2096. Section 7(c) would make that 
     correction effective as if enacted immediately after the 
     VCAA.
       Before the enactment of the VCAA, 38 U.S.C. Sec. 5103(a) 
     required VA, if a claimant's application for benefits was 
     incomplete, to notify the claimant of the evidence necessary 
     to complete the application. Section 5103(a) further 
     provided: ``If such evidence is not received within one year 
     from the date of such notification, no benefits may be paid 
     or furnished by reason of such application.''
       In accordance with former section 5103(a), VA regulations 
     provide that, if evidence requested in connection with a 
     claim is not furnished within one year after the date of 
     request, the claim will be considered abandoned. After the 
     expiration of one year, VA will take no further action unless 
     it receives a new claim. Furthermore, should the right to 
     benefits be finally established, benefits based on such 
     evidence would commence no earlier than the date the new 
     claim was filed. 38 C.F.R. Sec. 3.158(a).
       Before the enactment of the VCAA, title 38, United States 
     Code, contained no provision requiring VA to notify a 
     claimant of the evidence necessary to substantiate a claim.
       Section 3(a) of the VCAA struck former 38 U.S.C. 
     Sec. Sec. 5102 and 5103 and added new sections 5102 and 5103. 
     114 Stat. at 2096-97. Now section 5102(b) requires VA, if a 
     claimant's application for a benefit is incomplete, to notify 
     the claimant (and his or her representative, if any) of the 
     information necessary to

[[Page 12905]]

     complete the application. Section 5102 contains no provision 
     concerning a time limitation for the submission of 
     information necessary to complete an application.
       Now section 5103(a) requires VA, upon receipt of a complete 
     or substantially complete application for benefits, to notify 
     the claimant (and his or her representative, if any) of any 
     information and evidence not previously provided to VA that 
     is necessary to substantiate the claim. Furthermore, that 
     notice must indicate which portion of that information and 
     evidence, if any, is to be provided by the claimant and which 
     portion, if any, VA will attempt to obtain on the claimant's 
     behalf. Section 5103(b)(1) provides, in the case of 
     information or evidence that the claimant is notified is to 
     be provided by him or her, if VA does not receive such 
     information or evidence within one year from the date of such 
     notification, no benefit may be paid or furnished by reason 
     of the claimant's application.
       As a result of the amendments made by the VCAA, the 
     statutory provision imposing a one-year limitation now 
     relates to the substantiation of claims rather than to the 
     completion of applications. We do not believe Congress 
     intended this change from prior law. This change raises 
     several potential problems.
       Without a statutory limitation of one year to complete an 
     application, VA no longer has a statutory basis for closing 
     an application as abandoned. Thus, if a claimant were to 
     submit an incomplete application for benefits, but not 
     respond to VA's notice of the information necessary to 
     complete it until many years later, the award of any benefit 
     granted on the basis of that application would have to be 
     effective from the date of the application, even though the 
     claimant took no action to complete it for many years. 
     Further, it appears that VA would be authorized to close or 
     deny the claim based on the claimant's failure to respond. We 
     do not believe Congress intended this result. Rather, we 
     believe that the former one-year statutory limitation on the 
     time available to complete an application should be restored.
       The statutory limitation of one year to substantiate a 
     claim also raises potential problems. One such problem is the 
     possibility that courts will interpret the provision to 
     preclude VA from deciding a claim until one year has expired 
     from the date VA gives notice of the information and evidence 
     necessary to substantiate the claim. Exactly that 
     interpretation was offered by several veterans service 
     organizations challenging VA's regulations implementing the 
     VCAA. Under those regulations, as part of VA's notice under 
     section 5103(a), VA will request the claimant to provide any 
     evidence in the claimant's possession that pertains to the 
     claim. We ask for the evidence within 30 days, but tell the 
     claimant that one year is available to respond. If the 
     claimant has not responded to the request within 30 days, VA 
     may decide the claim before expiration of the one year, based 
     on all the information and evidence contained in the file, 
     including information and evidence it has obtained on the 
     claimant's behalf. However, VA will have to readjudicate the 
     claim if the claimant subsequently provides the information 
     and evidence within one year of the date of the request. 38 
     C.F.R. Sec. 3.159(b)(1).
       VA issued those rules ``to allow for the timely processing 
     of claims.'' 66 Fed. Reg. 17,834, 17,835 (2001). Once an 
     application had been substantially completed, VA does not 
     want to have to wait one year to decide the claim, given the 
     large backlog of claims awaiting adjudication by VA and the 
     Secretary's commitment to reducing the backlog and shortening 
     the time VA takes to adjudicate claims. What VA considers to 
     be Congress' inadvertent moving of the one-year limitation 
     from the provision relating to completion of applications to 
     the provision relating to the substantiation of claims could 
     impede VA's efforts to improve service to veterans. VA doubts 
     that Congress intended to require VA, after requesting 
     evidence from a claimant, to keep the claim open and pending 
     for a full year if the claimant has not responded.
       Furthermore, section 5103(b)(1)'s clear and unambiguous 
     language appears to prohibit the payment of benefits even 
     though VA could allow a claim. For example, VA might be able 
     to allow a claim on the basis of evidence VA obtained on the 
     claimant's behalf, even though the claimant has not provided 
     the evidence requested of him or her. Or VA might find clear 
     and unmistakable error in a prior denial and need to grant 
     benefits on the claim that was erroneously denied. Yet 
     section 5103(b)(1) prohibits the payment or furnishing of any 
     benefit if VA does not receive within one year the 
     information or evidence the claimant is to provide according 
     to VA's notice. Surely, Congress did not intend such a 
     results.
       Finally, some of VA's pro-veteran regulations will have to 
     be changed unless the one-year time limitation is removed 
     from section 5103. For example, 38 C.F.R. Sec. 20.1304(a) 
     permits an appellant to submit additional evidence during the 
     90 days following notice that an appeal has been certified to 
     the Board of Veterans' Appeals and the appellate record has 
     been transferred to the Board. That 90-day period may extend 
     beyond the one-year period following notice of the 
     information and evidence necessary to substantiate the claims 
     given under section 5103(a), in which case it would conflict 
     with the statutory mandate that ``no benefit may be paid or 
     furnished by reason of the claimant's application'' if VA 
     does not receive the evidence within one year from the date 
     of the section 5103(a) notice. Another potentially 
     conflicting regulation is 38 C.F.R. Sec. 3.156(b), which 
     deems new and material evidence received before expiration of 
     the one-year appeal period (beginning when notice of the 
     decision on a claim is sent) or before an appellate decision 
     is made if a timely appeal is filed to have been filed in 
     connection with the claim pending at the beginning of the 
     appeal period. Because the one-year appeal period necessarily 
     extends beyond the one-year substantiation period, the 
     regulation authorizes the grant of benefits based on evidence 
     not timely received under section 5103(b), contrary to the 
     statutory mandate.
       Accordingly, we propose a technical amendment to sections 
     5102 and 5103 that would prevent these problems. Section 7 
     would restore the one-year limitation to section 5102 and 
     remove it from section 5103. It would make these technical 
     amendments effective as if enacted immediately after the 
     VCAA.
       No costs are associated with this proposal. These 
     amendments would allow VA to close inactive or abandoned 
     claims and would prevent unjustified retroactive awards.


                         burial plot allowance

       Section 8 of the draft bill would amend 38 U.S.C. 
     Sec. Sec. 2303(b) and 2307 to authorize payment of the burial 
     plot allowance to states for each veteran interred in a state 
     veterans cemetery at not cost to the veteran's estate or 
     survivors.
       Current section 2302(b)(1) authorizes VA to pay to a state 
     a $300 plot or interment allowance for each eligible veteran 
     buried in qualifying state veterans' cemetery. Such allowance 
     authorized only if the veteran: (1) was a veteran of any war; 
     (2) was discharged from active service for a service-
     connected disability; (3) was receiving VA compensation or 
     pension at the time of death; or (4) died in a VA facility. 
     Under current section 2307, survivors of veterans who die as 
     a result of service-connected disabilities may seek 
     reimbursement of burial and funeral expenses not exceeding 
     $2,000. If, however, a burial and funeral allowance is paid 
     to a veteran's survivors under section 2307, states cannot 
     also receive a plot allowance for burial of the veteran. The 
     proposed amendment would expand VA's authority to pay the 
     plot allowance to states for burial in State veterans' 
     cemeteries of all eligible peacetime veterans and all wartime 
     veterans who die of service-connected disabilities.
       This amendment would encourage state participation in the 
     State Cemetery Grants Program. In 1978, Congress established 
     the State Cemetery Grants Program to complement VA's national 
     cemetery system by assisting states in providing burial plots 
     for veterans in areas where existing national cemeteries 
     cannot satisfy veterans' burial needs. State officials have 
     indicated to VA that they consider future maintenance costs 
     when deciding whether to pursue a state cemetery grant. To 
     the extent that the amendment would help defray those 
     maintenance costs and encourage states to establish veterans' 
     cemeteries, it would make the benefit of burial in such a 
     cemetery an accessible option for more veterans.
       The proposed amendment would allow states to receive plot 
     allowance payments for approximately 1,200 additional 
     interments annually. We estimate the costs associated with 
     the enactment of this amendment would be $360,000 for FY 2004 
     and $3.6 million for the ten-year period from FY 2004 through 
     FY 2013.


            PROVISION OF MARKERS FOR PRIVATELY MARKED GRAVES

       Section 9 would change the applicability date of VA's 
     current authority to provide a marker for the private-
     cemetery grave of a veteran, regardless of whether the grave 
     has been marked at private expense. Section 2306(a) of title 
     38, United States Code, has long authorized VA to provide a 
     Government headstone or marker for the unmarked grave of an 
     eligible individual. Section 502 of the Veterans Education 
     and Benefits Expansion Act of 3001, Pub. L. No. 107-103, 
     Sec. 502, 115 Stat. 976, 994, which was signed into law on 
     December 27, 2001, authorized VA to furnish appropriate 
     marker for the grave of an eligible veteran buried in a 
     private cemetery, regardless of whether the grave was already 
     marked with a non-Government marker. This authorization was 
     made applicable to veterans who died on or after that Act's 
     enactment date. Public Law 107-440 extended this authority to 
     include deaths.
       Under current law, if a veteran died before September 11, 
     2001, provision of a Government headstone or market is 
     authorized only if the veterans' grave is unmarked. If a 
     veteran died after September 11, 2001, provision of a 
     Government headstone or market is authorized regardless of 
     whether the grave is already marked at private expense. While 
     recent changes in the law have allowed VA to begin to meet 
     the needs of families who view the government-furnished 
     market as a means of honoring and publicly recognizing a 
     veteran's military service, VA is now in the difficult 
     position of having to deny a benefit based solely on when a 
     veteran died.

[[Page 12906]]

       Moreover, the law has never precluded the addition of a 
     privately purchased headstone to a grave after place of a 
     government-furnished marker, resulting in double marking. 
     However, when a private marker had been placed in the first 
     instance, a Government marker may not be provided if the 
     veteran died before September 11, 2001. We believe this 
     creates an arbitrary distinction disadvantaging families who 
     promptly obtained a private marker.
       From October 18, 1979, until November 1, 1990, with the 
     enactment of the Omnibus Budget and Reconciliation Act of 
     1990, VA paid a headstone or marker allowance to those 
     families who purchased a private headstone or marker in lieu 
     of a Government headstone or marker. Those families all had 
     the opportunity to benefit from the VA-marker program. Our 
     proposal would benefit families of those veterans who died 
     between November 1, 1990, and September 11, 2001.
       We estimate that the mandatory cost of this proposal would 
     be $4.9 million if FY 2004 and $12.4 million during the 
     period FY 2004 through FY 2013.


         expansion of burial eligibility for remarried spouses

       Section 10 would allow a veteran's surviving spouse who 
     marries a non-veteran after the veteran's death to be 
     eligible for burial in a VA national cemetery based on his or 
     her marriage to the veteran. Over the last several years, the 
     National Cemetery Administration has seen an increase in the 
     number of requests for burial of a veteran's widow or widower 
     who has married a non-veteran after the veteran has died. 
     These cases involve spouses of veterans who have been married 
     for many years and have raised a family with the veteran. 
     Typically, the veteran's children and grandchildren, and of 
     the current spouse, support the burial of the decedent with 
     the original veteran-spouse in a VA national cemetery. 
     However, current law does not permit it if the remarriage 
     remained in effect when the veteran's survivor predeceased 
     the new spouse.
       Public Law 103-446 revised eligibility criteria for burial 
     in a national cemetery to reinstate burial eligibility for a 
     surviving spouse of an eligible veteran whose subsequent 
     remarriage to a non-veteran has been terminated by death or 
     dissolved by divorce. The current proposal would be 
     consistent with that amendment in further acknowledging the 
     importance of the first marriage to the veteran's family. 
     This proposal would allow the deceased veteran to be buried 
     with a spouse with whom he or she always expected to be 
     buried with a spouse with whom he or she always expected to 
     be buried. It would also allow the veteran's children to 
     visit a single gravesite to pay their respects to their 
     parents.
       We estimate that the cost associated with this proposal 
     would be minimal. The average number of requests for burials 
     for individuals previously married to an eligible veteran who 
     subsequently married a non-veteran is estimated to be 200 per 
     year; the majority of these burials would be second 
     interments. The cost of a second interment (including a 
     headstone or marker) in a VA national cemetery ranges from 
     just over $400 to nearly $800, depending on the type of 
     burial and placement of the remains, with an average cost of 
     approximately $550. For FY 2004, we anticipate the cost of 
     the proposal would be $110,000. Our ten-year cost estimate 
     (FY 2004 through FY 2013) is $1.1 million.


       make permanent authority for state cemetery grants program

       Section 2408 of title 38, United States Code, authorizes VA 
     to make grants to states to assist them in establishing, 
     expanding, or improving state veterans' cemeteries. Section 
     2408(a)(2) currently authorizes appropriations for making 
     those grants through fiscal year 2004. Section 11 of our 
     proposed bill would permanently authorize such 
     appropriations.
       VA's State Cemetery Grants Program is an important 
     component in meeting the burial needs of our Nation's 
     veterans. State veterans' cemeteries supplement VA's national 
     cemetery system in providing burial options to veterans 
     throughout the Nation. VA's State Cemetery Grants Program has 
     already helped to fund 49 operational state veterans' 
     cemeteries, and six more are under construction. VA has 
     received over 30 additional pre-applications from states 
     requesting grants. There is a tremendous, on-going demand for 
     grants to improve or expand existing state veterans' 
     cemeteries, and VA's proposal would assist long-term planning 
     for this important program.
       Appropriations for VA's State Home Grants Program 
     (authorized by subchapter III of chapter 81, title 38, United 
     States Code) are permanently authorized under 38 U.S.C. 
     Sec. 7133(a). The amendment made by section 11 of this bill 
     would improve the consistency in the operation of the two 
     programs.
       The costs associated with this proposal would be those 
     included in VA's annual budget request for use in providing 
     grants to states. The President's budget submission to 
     Congress for FY 2004 includes a request for $32 million for 
     the State Cemetery Grants Program.


            forfeiture of benefits for subversive activities

       Section 12 would amend 38 U.S.C. Sec. 6105 to supplement 
     the list of offenses conviction of which would result in a 
     bar to all gratuitous VA benefits. Section 6105 provides that 
     an individual convicted after September 1, 1959, of any of 
     several specified offenses involving subversive activities 
     shall have no right to gratuitous benefits, including 
     national cemetery burial, under laws administered by the 
     Secretary of Veterans Affairs and that no other person shall 
     be entitled to such benefits on account of such individual. 
     Congress' primary concern in enacting this provision was to 
     prevent VA benefits from being provided based on military 
     service of persons found guilty of offenses involving 
     national security. This proposal would amend section 6105 to 
     supplement the list of offenses conviction of which would 
     result in a bar to all gratuitous VA benefits to include 
     additional offenses that have come into being since enactment 
     of section 6105.
       This proposal would extend the current prohibition on 
     payments of gratuitous benefits to persons convicted of 
     subversive activities to include six additional classes of 
     activities. The following offenses from title 18, United 
     States Code, would be added: sections 175 (Prohibitions with 
     respect to biological weapons); 229 (Prohibited activities 
     with respect to chemical weapons); 831 (Prohibited 
     transactions involving nuclear materials); 1091 (Genocide); 
     2332a (Use of certain weapons of mass destruction); and 2332b 
     (Acts of terrorism transcending national boundaries). All of 
     these offenses, which involve serious threats to national 
     security, were added to title 18, United States Code, after 
     the enactment of section 6105.
       There is no cost associated with this proposal. Cost 
     savings would be insignificant.


               veterans' advisory committee on education

       Section 13 would extend to the year 2013 the expiration 
     date of the Veterans' Advisory Committee on Education. It 
     would also amend the language requiring that veterans from 
     specific wartime and post-wartime periods be members of the 
     Committee to state that Committee positions must be filled 
     with such individuals as far as practicable. Finally, this 
     section would make a technical amendment to reflect that, 
     under title 10, United States Code, as reorganized, chapter 
     106 is now designated chapter 1606.
       Under current law, the authority for the Committee will 
     expire on December 31, 2003. VA favors extending the 
     existence of the Education Advisory Committee. The Committee 
     has been useful for the Secretary in keeping in touch with 
     the education community, as well as the veterans' service 
     organizations. Over the last several years, the Committee has 
     made a number of recommendations that have, in turn, become 
     legislative proposals. We believe the Committee's discussions 
     and recommendations are an invaluable aid to our efforts in 
     administering the education program.
       The amendment that would require that veterans from certain 
     periods, e.g. World War II, the Korean conflict era, or post-
     Korean conflict era, be included as members of the Committee 
     only as far as practicable allows for flexibility in filling 
     Committee positions if finding members of specific 
     populations who wish to serve on the Committee might be 
     problematic.
       We estimate the costs associated with the extension of the 
     Committee would be $25,400 for FY 2004 and $200,000 for the 
     ten-year period from FY 2004 through FY 2013.


                    repeal of education loan program

       Section 14 would repeal the VA education loan program and 
     waive any existing repayment obligations, to include 
     overpayments due to default on such loans. The program, in 
     effect since January 1, 1975, currently is available to issue 
     loans up to a maximum of $2,500 per academic year to spouses 
     and surviving spouses who are past their delimiting dates 
     with remaining entitlement to chapter 35 benefits. The 
     population for this program is very limited, and with other 
     options in the public and private sectors, there is no longer 
     a demand for these loans. In fact, VA has not issued a loan 
     under this program in several years, but the government has 
     paid an estimated $70,000 a year to administer it. VA's 
     October 2002 monthly loans statistics show 20 current 
     education loans in the amount of $14,987.08 and 116 defaulted 
     education loans totaling $105,908.10. As is apparent, it 
     costs VA more to administer the loan program than to forgive 
     the debts currently outstanding.


  restoration of chapter 35 education benefits of certain individuals

       Section 15 would amend the law to provide that individuals 
     who qualify for chapter 35 benefits and are involuntarily 
     ordered to full-time National Guard duty under 32 U.S.C. 
     Sec. 502(f) after September 11, 2001, would have their 
     individual delimiting dates (the ending date of the 
     individual's eligibility) extended by an amount of time equal 
     to that period of full-time duty plus 4 months.
       Public Law 107-103 restored entitlement to National Guard 
     personnel who qualified for chapter 35 benefits who had to 
     discontinue course pursuit as a result of being called to 
     active duty under specific sections of title 10, United 
     States Code. Our proposal would provide the same delimiting 
     date extension to National Guard members who are activated 
     under title 32.
       We estimate the costs associated with the enactment of 
     section 15 would be $150,000 for

[[Page 12907]]

     FY 2004 and approximately $5 million for the ten-year period 
     from FY 2004 through FY 2013.


  EXPANSION OF MONTGOMERY GI BILL EDUCATION BENEFITS FOR CERTAIN SELF-
                          EMPLOYMENT TRAINING

       Section 16 would expand the Montgomery GI Bill chapter 30 
     program by authorizing education assistance benefits for 
     veterans under that program for on-job training in certain 
     self-employment training programs. Such training might, for 
     example, include that necessary for operation of a franchise 
     or to gain a commercial drivers' license to become an 
     independent trucker.
       The Veterans Entrepreneurship and Small Business 
     Development Act of 1999 (Pub. L. 106-50) requires that all 
     Federal agencies aggressively support self-employment for 
     veterans and service-disabled veterans, directly and through 
     public-private partnerships. This amendment will provide 
     veterans considering self-employment with improved access to 
     capital for training. Thus, more veterans will be encouraged 
     to initiate steps towards self-employment and sustainable 
     self-sufficiency.
       We estimate the costs associated with the enactment of 
     section 16 would be $357,000 for FY 2004 and approximately 
     $3.9 million for the ten-year period from FY 2004 through FY 
     2013.
       The Budget Enforcement Act's pay-as-you-go (PAYGO) 
     requirements and discretionary spending caps expired on 
     September 30, 2002. The attached proposals affect revenues 
     and direct spending. This bill is currently estimated to 
     produce cost savings of $116.1 million for FY 2004 and $4.52 
     billion for FY 2004 through FY 2013. These proposals were 
     included in the President's FY 2004 Budget and should be 
     considered in conjunction with all other proposals in the 
     Budget. The Administration supports the extension of budget 
     enforcement mechanisms in a manner that ensures fiscal 
     discipline and is consistent with the President's Budget.
       The Office of Management and Budget advises that there is 
     no objection to the transmission of this bill and that its 
     enactment would be in accord with the Administration's 
     program.
           Sincerely yours,
                                              Anthony J. Principi.
       Enclosure.

     Section-by-Section Analysis of Draft Bill--Veterans Programs 
                        Improvement Act of 2003


   section 1. short title; references to title 38, united states code

       Section 1(a) would provide a short title for the Act: the 
     ``Veterans Programs Improvement Act of 2003.'' Section 1(b) 
     would provide that all amendments made by the Act, unless 
     otherwise specified, are to a section or other provision of 
     title 38, United States Code.


section 2. increase in rates of disability compensation and dependency 
                       and indemnity compensation

       Section 2 would direct the Secretary of Veterans Affairs to 
     administratively increase the rates of disability 
     compensation for veterans with service-connected disabilities 
     and of dependency and indemnity compensation (DIC) for the 
     survivors of veterans whose deaths are service related, 
     effective December 1, 2003. As provided in the President's 
     fiscal year 2004 budget request, the rate of increase would 
     be the same as the cost of living adjustment that will be 
     provided under current law to Social Security recipients, 
     which is currently estimated to be 2 percent.


 section 3. repeal of 45-day rule for effective date of award of death 
                                pension

       Section 3 would amend 38 U.s.C. Sec. 5110(d) to make an 
     award of death pension effective the first day of the month 
     in which the death occurred if the claim is received within 
     one year from the date of death.


     section 4. exclusion of lump-sum life insurance proceeds from 
          determinations of annual income for pension purposes

       Section 4 would amend 38 U.S.C. Sec. 1503(a) to add lump-
     sum proceeds of life insurance policies to the list of 
     payments that do not count as income for purposes of 
     determining eligibility for death pension benefits 
     administered by the Department of Veterans Affairs (VA) under 
     chapter 15 of title 38, United States Code.


section 5. clarification of prohibition on payment of compensation for 
                   alcohol or drug-related disability

       Section 5(a) would amend 38 U.S.C. Sec. Sec. 1110 and 1131 
     to clarify that the prohibition on payment of compensation 
     for a disability that is a result of the veteran's own abuse 
     of alcohol or drugs applies even if the abuse is secondary to 
     a service-connected disability. Section 5(b) would make that 
     amendment applicable to claims filed on or after the date of 
     enactment and to claims filed before then but not finally 
     decided as of that date.


    section 6. alternative beneficiaries for national service life 
         insurance and united states government life insurance

       Section 6 would authorize the payment of unclaimed National 
     Service Life Insurance and United States Government Life 
     Insurance proceeds to an alternative beneficiary.


section 7. time limitation on receipt of claim information pursuant to 
               request by department of veterans affairs

       Section 7(a) and (b) would make a technical correction to 
     the statutory provisions created by the Veterans Claims 
     Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 
     2096. It would change the applicability of a one-year time 
     limit from the substantiation of a claim to the completion of 
     an application. Section 7(c) would make that correction 
     effective as if enacted immediately after the VCAA.


                    section 8. burial plot allowance

       Section 8 would amend 38 U.S.C. Sec. Sec. 2302(b) and 2307 
     to authorize payment of the burial plot allowance to states 
     for each veteran interred in a state veterans' cemetery at no 
     cost to the veteran's estate or survivors.


      section 9. provision of markers for privately marked graves

       Section 9 would change the applicability date (to deaths 
     occurring on or after November 1, 1990) of VA's current 
     authority to provide a marker for the private-cemetery grave 
     of a veteran, regardless of whether the grave has been marked 
     at private expense.


   Section 10. Expansion of Burial eligibility for Remarried Spouses

       Section 10 would allow a veteran's surviving spouse who 
     marries a non-veteran after the veteran's death to be 
     eligible for burial in a VA national cemetery based on his or 
     her marriage to the veteran.


 Section 11. Make Permanent authority for state cemetery grants program

       Section 11 would permanently authorize appropriations for 
     the State Cemetery Grants Program under 38 U.S.C. Sec. 2408, 
     which authorizes VA to make grants to states to assist them 
     in establishing, expanding, or improving state veterans' 
     cemeteries.


      Section 12. Forfeiture of benefits for subversive activities

       Section 12 would amend 38 U.S.C. Sec. 6105 to supplement 
     the list of offenses conviction of which bars entitlement to 
     all gratuitous VA benefits.


         section 13. veterans' advisory committee on education

       Section 13 would extend to the year 2013 the expiration 
     date of the Veterans' Advisory Committee on Education. It 
     would also amend the language requiring that veterans from 
     specific wartime and post-wartime periods be members of the 
     Committee to state that Committee positions must be filled 
     with such individuals when practicable. Finally, this section 
     would make a technical amendment to reflect that, under title 
     10, United States Code, as reorganized, chapter 106 is now 
     designated chapter 1606.


             Section 14. Repeal of Educational Loan Program

       Section 14 would repeal the VA education loan program and 
     waive any existing repayment obligations, to include 
     overpayments due to default on such loans.


  Section 15. Restoration of chapter 35 education benefits of certain 
                              individuals

       Section 15 would provide that individuals who qualify for 
     chapter 35 benefits and are involuntarily ordered to full-
     time National Guard duty under 32 U.S.C. Sec. 502(f) after 
     September 11, 2001, would have their individual delimiting 
     dates (the ending date of the individual's eligibility) 
     extended by an amount of time equal to that period of full-
     time duty plus 4 months.


  Section 16. Expansion of Montgomery GI bill education benefits for 
                    certain self-employment training

       Section 16 would expand the Montgomery GI Bill chapter 30 
     program by authorizing education assistance benefits for 
     veterans under that program for on-job training in certain 
     self-employment training programs.
                                 ______
                                 
      By Mr. BOND (for himself and Mr. Inhofe) (by request):
  S. 1134. A bill to reauthorize and improve the programs authorized by 
the Public Works and Economic Development Act of 1965; to the Committee 
on Environment and Public Works.
  Mr. BOND. Mr. President, in these times of economic distress and 
hardship we must focus our efforts to assist the more impoverished 
regions of our country. With this in mind, it is my pleasure to rise 
today to introduce, on behalf of President Bush, the Economic 
Development Administration Reauthorization Act of 2003.
  This bill will allow the Economic Development Administration, 
commonly known as the EDA, to assist communities in the development of 
their local economy. Simply put, it will help to bring jobs to our 
cities and towns by reauthorizing the mission of the EDA, while 
focusing the Administration's efforts on localized economic growth.
  EDA was established under the Public Works and Economic Development 
Act of 1965. Throughout the near forty years of its existence, EDA has 
helped to generate employment, retain existing jobs, and stimulate 
industrial and commercial growth in rural and urban

[[Page 12908]]

areas of the nation that experience high unemployment, low income or 
other severe economic distress.
  EDA has consistently been guided by the basic principle that 
`distressed communities must be empowered to develop and implement 
their own economic development and revitalization strategies'. To 
achieve these goals, EDA works in partnership with State and local 
governments by providing Federal grants to public and private nonprofit 
organizations, regional economic development agencies and Indian 
tribes.
  This bill seeks to improve the coordination, flexibility, and 
performance of EDA. It focuses on methods to ensure that EDA can more 
easily work in coordination with other agencies involved in economic 
development, such as the Army Corps of Engineers or the Department of 
Labor. It attempts to improve EDA's ability to respond to rapidly 
changing economic conditions within regions and it highlights the need 
to focus on the performance of grantees--whether grantees actually 
increase jobs and economic growth.
  During the last decade, in my home State of Missouri, EDA has 
implemented over 300 projects and invested more than $115 million into 
my state's economy. These projects have included improvements to the 
Cornerstone Industrial Park in St. Louis, the renovation of a blighted 
neighborhood outside Kansas City, and construction assistance for the 
Center for Emerging Technologies in St. Louis. EDA assistance in 
Missouri has truly been a boon to local investment and economic growth. 
Reauthorization of EDA will enable future projects like these 
throughout our country for years to come.
  In this time of economic difficulty, strong partnership between 
federal and local governments are crucial. My hope is that through a 
sustained focus on spurring growth in our economy through continued 
support of the EDA, we can surmount the economic challenges of today 
and prepare the way for a more prosperous future.
  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. 1134

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

     SECTION 1. SHORT TITLE.

       Short Title.--This Act may be cited as the ``Economic 
     Development Administration Reauthorization Act of 2003''.

     SEC. 2. FINDINGS AND DECLARATIONS.

       Section 2 of the Public Works and Economic Development Act 
     of 1965, as amended (``PWEDA'') (42 U.S.C. Sec. 3121), is 
     revised to read as follows:

     ``SEC. 2. FINDINGS AND DECLARATIONS.

       ``(a) Findings.--Congress finds that--
       ``(1) while the fundamentals for growth in the American 
     economy remain strong, there continue to be areas 
     experiencing chronic high unemployment, underemployment, low 
     per capita incomes, and outmigration as well as areas facing 
     sudden and severe economic dislocations due to structural 
     economic changes, changing trade patterns, certain Federal 
     actions (including environmental requirements that result in 
     the removal of economic activities from a locality), and 
     natural disasters;
       ``(2) sustained economic growth in our Nation, States, 
     cities and rural areas is produced by expanding free 
     enterprise through trade and enhanced competitiveness of 
     regions;
       ``(3) the goal of Federal economic development programs is 
     to raise the standard of living for all citizens and increase 
     the wealth and overall rate of growth of the economy by 
     encouraging local and regional communities to develop a more 
     competitive and diversified economic base by--
       ``(A) promoting job creation through increased innovation, 
     productivity, and entrepreneurship; and
       ``(B) empowering local and regional communities 
     experiencing chronic high unemployment and low per capita 
     income to attract substantially increased private-sector 
     capital investment;
       ``(4) while economic development is an inherently local 
     process, the Federal Government should work in partnership 
     with public and private local, regional, Tribal and State 
     organizations to maximize the impact of existing resources 
     and enable regions, communities, and citizens to participate 
     more fully in the American dream and national prosperity;
       ``(5) in order to avoid wasteful duplication of effort and 
     achieve meaningful, long-lasting results, Federal, State, 
     Tribal and local economic development activities should have 
     a clear focus, improved coordination, a comprehensive 
     approach, common measures of success, and simplified and 
     consistent requirements; and
       ``(6) Federal economic development efforts will be more 
     effective if they are coordinated with, and build upon, the 
     trade, workforce investment, and technology programs of the 
     United States.
       ``(b) Declarations.--Congress declares that, in order to 
     promote a strong and growing economy throughout the United 
     States:
       ``(1) assistance under this Act should be made available to 
     both rural and urban distressed communities;
       ``(2) local communities should work in partnership with 
     neighboring communities, Indian Tribes, the States, and the 
     Federal Government to increase their capacity to develop and 
     implement comprehensive economic development strategies to 
     enhance regional competitiveness in the global economy and 
     support long-term development of regional economies; and
       ``(3) whether suffering from long-term distress or a sudden 
     dislocation, distressed communities should be encouraged to 
     focus on strengthening entrepreneurship and competitiveness, 
     and to take advantage of the development opportunities 
     afforded by technological innovation and expanding and newly 
     opened global markets.''.

     SEC. 3. DEFINITIONS.

       Section 3 of PWEDA (42 U.S.C. Sec. 3122) is amended as 
     follows:
       (1) Subparagraph (4)(A) of this section is amended by 
     striking subparagraph (i) and redesignating successive 
     subpararphs (ii) through (vii) as (i) through (vi) and 
     revising subparagraph (iv) as re-designated to read as 
     follows:
       ``(iv) a city or other political subdivision of a State, 
     including a special purpose unit of State or local 
     government, or a consortium of political subdivisions;''.
       (2) Subparagraph 4(B) is amended by adding at the end 
     thereof a new sentence:

     ``The requirement under subparagraph (A)(vi) that the 
     nonprofit organization or association is `acting in 
     cooperation with officials of a political subdivision of a 
     State' does not apply in the case of research, training and 
     technical assistance grants under section 207 that are 
     national or regional in scope.''.
       (3) Paragraph (8), (9) and (10) are amended by re-
     designating them as paragraphs (9), (10) and (11) and a new 
     paragraph (8) is added as follows:
       ``(8) Regional commissions.--The term `Regional 
     Commissions' as used in section 403 of this Act refers to the 
     regional economic development authorities: the Delta Regional 
     Authority (Pub. L. No. 106-554, Sec. 1(a)(4) [Div. B, title 
     VI]. 114 Stat. 2763A-268) (7 U.S.C. Sec. 2009aa et seq.), the 
     Denali Commission (Pub. L. No. 105-277, Div. C, title III, 
     112 Stat. 2681-637)(42 U.S.C. Sec. 3121 note), and the 
     Northern Great Plains Regional Authority (Pub. L. 107-171, 
     116 Stat. 375) (7 U.S.,C. Sec. 2009bb et seq.).''.
       (4) A new paragraph (12) is added at the end to read as 
     follows:
       ``(12) University center.--The term `university center' 
     refers to a University Center for Economic Development 
     established pursuant to the authority of section 207(a)(2)(D) 
     of this Act.''.

     SEC. 4. WORKING WITH NONPROFIT ORGANIZATIONS IN ESTABLISHMENT 
                   OF ECONOMIC DEVELOPMENT PARTNERSHIPS.

       Section 101 of PWEDA (42 U.S.C. Sec. 3131) is amended as 
     follows:
       (1) In subsection (b) strike '`and multi-State regional 
     organizations'' and insert in lieu thereof ``multi-State 
     regional organizations, and nonprofit organizations.''
       (2) In subsection (d) strike ``adjoining'' each time it 
     occurs.

     SEC. 5. SUB-GRANTS IN CONNECTION WITH PUBIC WORKS PROJECTS.

       Section 201 of PWEDA (42 U.S.C. Sec. 3141) is amended by 
     adding a new subsection (d) as follows:
       ``(d) Sub-Grants.--(1) Subject to paragraph (2), a 
     recipient of a grant under this section may directly expend 
     the grant funds or may redistribute the funds in the form of 
     a sub-grant to other recipients eligible to receive 
     assistance under this section to fund required components of 
     the scope of work approved for the project.
       ``(2) Under paragraph (1), a receipt may not redistribute 
     grant funds to a for-profit entity.''.

     SEC. 6 CLARIFICATION OF GRANTS FOR STATE PLANNING.

       Section 203 of PWEDA (42 U.S.C. Sec. 3143) is amended as 
     follows:
       (1) Revise paragraph (1) of subsection (d) to read as 
     follows:
       ``(1) Development.--Any State plan developed with 
     assistance under this section shall, to the maximum extent 
     practicable, take into consideration regional economic 
     development strategies.'';
       (2) Strike paragraph (3) of subsection (d) in its entirety 
     and re-designate paragraphs (4) and (5) and (3) and (4);
       (3) Revise re-designated paragraph (3) of subsection (d) by 
     striking ``and'' at the end of subparagraph (C) and re-
     designating current subparagraph (D) as (E) and adding a new 
     subparagraph (D) to read as follows:

[[Page 12909]]

       ``(D) assist in carrying out state's workforce investment 
     strategy (as outlined in the State plan required under 
     section 112 of the Workforce Investment Act of 1998 (29 
     U.S.C. Sec. 2822)); and'';
       (4) Add a new subsection (e) at the end thereof as follows:
       ``(e) Sub-Grants.--(1) Subject to paragraph (2), a 
     recipient of a grant under this section may directly expend 
     the grant funds or may redistribute the funds in the form of 
     a sub-grant to other recipients eligible to receive 
     assistance under this section to fund required components of 
     the scope of work approved for the project.
       ``(2) Under paragraph (1), a recipient may not redistribute 
     grant funds to a for-profit entity.''.

     SEC. 7. SIMPLIFICATION OF DETERMINATION OF GRANT RATES.

       Sections 204 and 205 of PWEDA (42 U.S.C. Sec. Sec. 3144, 
     3145) are amended to read as follows:

     ``SEC. 204. COST SHARING.

       ``(a) Federal Share.--The Secretary shall issue regulations 
     to establish the applicable grant rates for projects based on 
     the relative needs of the areas in which the projects are 
     located. Except as provided in subsection (c) below, the 
     amount of a grant for a project under this title may not 
     exceed 80 percent of the cost of the project.
       ``(b) Non-Federal Share.--In determining the amount of the 
     non-Federal share of the cost of a project, the Secretary may 
     provide credit toward the non-Federal share for all 
     contributions both in cash and in-kind, fairly evaluated, 
     including contributions of space, equipment, and services, 
     and assumptions of debt.
       ``(c) Increase in Federal Share.--
       ``(1) Indian tribes.--In the case of a grant to an Indian 
     tribe, the Secretary may increase the Federal share above the 
     percentage specified in subsection (a) up to 100 percent of 
     the cost of the project.
       ``(2) Certain states, political subdivisions, and nonprofit 
     organizations.--In the case of a grant to a State (or a 
     political subdivision of a State), that the Secretary 
     determines has exhausted its effective taxing and borrowing 
     capacity, or in the case of a grant to a nonprofit 
     organization that the Secretary determines has exhausted its 
     effective borrowing capacity, the Secretary may increase the 
     Federal share above the percentage specified in subsection 
     (a) up to 100 percent of the cost of the project.

     ``SEC. 205. GRANTS SUPPLEMENTING OTHER AGENCY GRANTS. (42 
                   U.S.C. Sec. 3145)

       ``(a) Definition of Designated Federal Grant Program.--In 
     this section, the term `designated Federal grant program' 
     means any Federal grant program that--
       ``(1) provides assistance in the construction or equipping 
     of public works, public service, or development facilities;
       ``(2) is designated as eligible for an allocation of funds 
     under this section by the Secretary; and
       ``(3) assists projects that are--
       ``(A) eligible for assistance under this title; and
       ``(B) consistent with a comprehensive economic development 
     strategy.
       ``(b) Supplementary Grants.--Subject to subsection (c) 
     below, in order to assist eligible recipients to take 
     advantage of designated Federal grant programs, on the 
     application of an eligible recipient, the secretary may make 
     a supplementary grant for a project for which the eligible 
     recipient is eligible but, because of the recipient's 
     economic situation, for which the eligible recipient cannot 
     provide the required non-Federal share.
       ``(c) Requirements Applicable to Supplementary Grants.--
       ``(1) Amount of supplementary grants.--The share of the 
     project cost supported by a supplementary grant under this 
     section may not exceed the applicable grant rate under 
     section 204.
       ``(2) Form of supplementary grants.--The Secretray shall 
     make supplementary grants by
       ``(A) the payment of funds made available under this Act to 
     the heads of the Federal agencies responsible for carrying 
     out the applicable Federal programs, or
       ``(B) the award of funds under this Act which will be 
     combined with funds transferred from other Federal agencies 
     in projects administered by the secretary.''.
       ``(3) Federal share limitations specified in other laws.--
     Notwithstanding any requirement as to the amount or source of 
     non-Federal funds that may be applicable to a Federal 
     program, funds provided under this section may be used to 
     increase the Federal share for specific projects under the 
     program that are carried out in areas described in section 
     301(a) above the Federal share of the cost of the project 
     authorized by the law governing the program.''.

     SEC. 8. REGULATIONS ON ALLOCATIONS TO ENSURE JOB CREATION 
                   POTENTIAL.

       Subsection 206 of PWEDA (42 U.S.C. Sec. 3146) is amended by 
     striking ``and'' at the end of subparagraph (1)(C), inserting 
     ``and'' at the end of paragraph (2), and adding a new 
     paragraph (3) at the end thereof to read as follows:
       ``(3) allocations of assistance under this title promote 
     job creation through increased innovation, productivity, and 
     entrepreneurship, and financial assistance extended pursuant 
     to such allocations will have a high probability of meeting 
     or exceeding applicable performance requirements established 
     in connection with extension of the assistance.''.

     SEC. 9. INCREASED FLEXIBILITY IN GRANTS FOR TRAINING, 
                   RESEARCH, AND TECHNICAL ASSISTANCE.

       (a) Section 207 of PWEDA (42 U.S.C. Sec. 3147) is amended 
     by striking ``and'' at the end of subparagraph (2)(F) of 
     subsection (a), re-designating current subparagraph (G) as 
     (H), and adding a new subparagraph (G) to read as follows:
       ``(G) studies that evaluate the effectiveness of 
     collaborations between projects funded under this Act with 
     projects funded under the Workforce Investment Act of 1998 
     (29 U.S.C. Sec. 2801 et seq.); and ''.
       (b) Section 207 is further amended by adding a new 
     subsection (c) to read as follows:
       ``(c) Sub-Grants.--A recipient of a grant under this 
     section may directly expend the grant funds or may 
     redistribute the funds in the form of a sub-grant to other 
     recipients eligible to receive assistance under this section 
     to fund required components of the scope of work approved for 
     the project.''.

     SEC. 10. REMOVAL OF SECTION.

       Section 208 of PWEDA (42 U.S.C. Sec. 3148) is stricken in 
     its entirety and insert in lieu thereof:

     ``SEC. 208. [REPEALED].''.

     SEC. 11. IMPROVEMENTS IN ADMINISTRATION GRANTS FOR ECONOMIC 
                   ADJUSTMENT INVOLVING REVOLVING LOAN FUND 
                   PROJECTS.

       (a) Subsection (d) of section 209 of PWEDA (42 U.S.C. 
     Sec. 3149) is amended by striking ``an eligible'' in each 
     case it occurs in paragraphs (1) and (2) inserting in lieu 
     thereof ``a recipient''.
       (b) Section 209 of PWEDA (42 U.S.C. Sec. 3149) is amended 
     by adding a new subsection (e) at the end thereof as follows:
       ``(e) Special Provisions Relating to Revolving Loan Fund 
     Grants.--The Secretary shall promulgate regulations to ensure 
     the proper operation and financial integrity of revolving 
     loan funds established by recipients with assistance under 
     this section.
       ``(1) Efficient administration.--In order to improve the 
     ability to manage and administer the Federal interest in 
     revolving loan funds and in accordance with regulation issued 
     for such purposes, the Secretary may amend and consolidate 
     grant agreements governing revolving loan funds to provide 
     flexibility with respect to lending areas and borrower 
     criteria. In addition, the Secretary may assign or transfer 
     assets of a revolving loan fund to a third party for the 
     purpose of liquidation and a third party may retain assets of 
     the fund to defray costs related to liquidation. The 
     Secretary may also take such other actions with respect to 
     management and administration as the Secretary determines to 
     be appropriate to carry out the purposes of this Act, 
     including actions to enable revolving loan fund operators to 
     sell or securitize loans to the secondary market (except that 
     such actions may not include issuance of a Federal guaranty 
     by the Secretary).
       ``(2) Release of federal interests.--The Secretary may 
     release, in whole or in part, any property interest in 
     connection with a revolving loan fund grant after the date 
     that is 20 years after the date on which the grant was 
     awarded, provided that the recipient--
       ``(A) is in compliance with the terms of its grant and 
     operating the fund at an acceptable level of performance as 
     determined by the Secretary; and
       ``(B) reimburses the government prior to the release for 
     the amount of the Secretary's investment in the fund or the 
     pro-rata share of the fund at the time of the release, 
     whichever is less.

     Any action taken by the Secretary pursuant to this subsection 
     with respect to a revolving loan fund shall not constitute a 
     new obligation provided that all grant funds associated with 
     the original grant award have been disbursed to the 
     recipient.''.

     SEC. 12. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER PROJECTED 
                   COST.

       Section 211 of PWEDA (42 U.S.C. Sec. 3151) is amended to 
     read as follows:

     ``SEC. 211. USE OF FUNDS IN PROJECTS CONSTRUCTED UNDER 
                   PROJECTED COST.

       ``In any case in which the Secretary has made a grant for a 
     construction project under sections 201 or 209 of this title, 
     and before closeout of the project, the Secretary determines 
     that the cost of the project based on the designs and 
     specifications that were the basis of the grant has decreased 
     because of decreases in costs--
       ``(1) without further appropriations action, the Secretary 
     may approve the use of the excess funds or a portion of the 
     funds to improve the project; and
       ``(2) any amount of excess funds remaining after 
     application of paragraph (1) may used for other investments 
     authorized for support under this Act.

     In addition to paragraphs (1) and (2) of this section, in the 
     event of construction underruns in projects utilizing funds 
     transferred from other Federal agencies pursuant to section 
     604 of this Act, the Secretary may utilize thee funds in 
     conjunction with paragraphs (1) and (2) with the approval of 
     the originating agency or will return the funds to the 
     originating agency.''.

     SEC. 13. SPECIAL IMPACT AREAS.

       Title II of PWEDA is further amended by adding a new 
     section 214 as follows:

[[Page 12910]]



     ``SEC. 214. SPECIAL IMPACT AREAS.

       ``Special Impact Areas.--The Secretary is authorized to 
     make grants, enter into contracts and provide technical 
     assistance for projects and programs that the Secretary finds 
     will fulfill a pressing need of the area and be useful in 
     alleviating or preventing conditions of excessive 
     unemployment or underemployment or assist in providing useful 
     employment opportunities for the unemployed or underemployed 
     residents in the areas. In extending assistance under this 
     section, the Secretary may waive, in whole or in part, as 
     appropriate, the provisions of section 302 of this Act 
     provided that the Secretary determines that such assistance 
     will carry out the purposes of the Act.''.

     SEC. 14. PERFORMANCE INCENTIVES.

       Title II of PWEDA is further amended by adding a new 
     section 215 as follows:

     ``SEC. 215. PERFORMANCE INCENTIVES.

       ``(a) In accordance with regulations issued for such 
     purposes, the Secretary may award transferable performance 
     credits in an amount that does not exceed 10 percent of the 
     grant amount awarded under sections 201 or 209 of this Act on 
     or after the effective date of this amendment. The Secretary 
     shall base such performance incentives on the extent to which 
     a recipient meets or exceeds performance requirements 
     established in connection with extension of the assistance.
       ``(b) A recipient awarded a transferable performance credit 
     under this section may redeem the credit to increase the 
     Federal share of a subsequent grant funded under sections 201 
     and 209 of this Act above the maximum Federal share allowable 
     under section 204 up to 80 percent of the project cost. A 
     performance credit must be redeemed within 5 years of its 
     issue date.
       ``(c) An original recipient may also sell or transfer the 
     credit in its entirety to another eligible recipient for use 
     in connection with a grant approved by the Secretary under 
     this Act without reimbursement to the Secretary for 
     redemption in accordance with subsection (b) above.
       ``(d) The Secretary shall attach such terms and conditions 
     or limitations as the Secretary deems appropriate in issuing 
     a performance credit. Performance credits shall be paid out 
     of appropriations for economic development assistance 
     programs made available in the year of redemption to the 
     extent of availability.
       ``(e) The Secretary shall include information regarding 
     issuance of performance credits in the annual report under 
     section 603 of this Act.''.

     SEC. 15. COMPREHENSIVE ECONOMIC DEVELOPMENT STRATEGIES.

       Sub-paragraph (a)(3)(A) of section 302 of PWEDA (42 U.S.C. 
     Sec. 3162) is amended by adding ``maximizes effective 
     development and use of the workforce (consistent with any 
     applicable state and local workforce investment strategy 
     under the Workforce Investment Act of 1998 (29 U.S.C. 
     Sec. 2801 et. seq.),'' between ``access,'' and ``enhances''.

     SEC. 16. DESIGNATION OF ECONOMIC DEVELOPMENT DISTRICTS.

       Sub-paragraph (a)(3)(B) of section 401 of PWEDA (42 U.S.C. 
     Sec. 3171) is amended by striking ``by each affected State 
     and''.

     SEC. 17. DISTRICT INCENTIVES.

       Section 403 of PWEDA (42 U.S.C. Sec. 3173) is amended by 
     striking it in its entirety and re-designating sections 404 
     and 405 as sections 403 and 404. Section 403 as re-designated 
     is amended by adding at the end the following new sentence:

     ``If any part of an economic development district is in a 
     region covered by one or more other Regional Commissions as 
     defined in section 3(8) of this Act, the economic development 
     district shall ensure that a copy of the comprehensive 
     economic development strategy of the district is provided to 
     the affected regional commission.''.

     SEC. 18. ECONOMIC DEVELOPMENT INFORMATION CLEARINGHOUSE.

       Section 502 of PWEDA (42 U.S.C. Sec. 3192) is amended to 
     read as follows:

     ``SEC. 502. ECONOMIC DEVELOPMENT INFORMATION CLEARINGHOUSE.

       ``In carrying out this Act, the Secretary shall--
       ``(1) maintain a central information clearinghouse on the 
     Internet with information on economic development, economic 
     adjustment, disaster recovery, defense conversion, and trade 
     adjustment programs and activities of the Federal government, 
     links to State economic development organizations, and links 
     to other appropriate economic development resources;
       ``(2) assist potential and actual applications for economic 
     development, economic adjustment, disaster recovery, defense 
     conversion, and trade adjustment assistance under Federal and 
     State laws in locating and applying for the assistance;
       ``(3) assist areas described in section 301(a) and other 
     areas by providing to interested persons, communities, 
     industries, and businesses in the areas any technical 
     information, market research, or other forms of assistance, 
     information, or advice that would be useful in alleviating or 
     preventing conditions of excessive unemployment or 
     underemployment in the areas; and
       ``(4) obtain appropriate information from other Federal 
     agencies needed to carry out the duties under this Act.''.

     SEC. 19. REMOVAL OF UNUSED AUTHORITY.

       Section 505 of PWEDA (42 U.S.C. Sec. 3195) is amended by 
     striking it in its entirety and sections 506 and 507 are re-
     designated as sections 505 and 506.

     SEC. 20. PERFORMANCE EVALUATIONS OF GRANT RECIPIENTS.

       Section 505 of PWEDA (42 U.S.C. Sec. 3196) as re-designated 
     is amended as follows:
       (1) In subsection (c), strike ``after the effective date of 
     the Economic Development Administration Reform Act of 1998''.
       (2) In paragraph (d)(2), strike ``and'' before 
     ``disseminating results'' and insert ``, and measuring the 
     outcome-based results of the university centers' activities'' 
     before the period at the end thereof.
       (3) In paragraph (d)(3) of section 506, insert before the 
     period at the end thereof ``as evidenced by outcome-based 
     results, including the number of jobs created or retained, 
     and amount of private-sector funds leveraged''.
       (4) In subsection (e) of section 506, strike ``university 
     center or'' each occasion it occurs.

     SEC. 21. CITATION CORRECTIONS.

       Section 602 of PWEDA (42 U.S.C. Sec. 3212) is amended by 
     striking the citations to ``40 U.S.C. Sec. 276A-276A-5'' and 
     ``section 276c'' and inserting in lieu thereof, ``40 U.S.C. 
     Sec. 3141 et seq.'' and ``section 3145'' respectively.

     SEC. 22. DELETION OF UNNECESSARY PROVISION.

       Section 609 of PWEDA (42 U.S.C. Sec. 3219) is amended by 
     striking subsection (a) in its entirety and striking the 
     subsection designation ``(b)''.

     SEC. 23. GENERAL AUTHORIZATION OF APPROPRIATIONS.

       Section 701 of PWEDA (42 U.S.C. Sec. 3231) is amended to 
     read as follows:

     ``SEC 701. GENERAL AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Economic Development Assistance Programs.--There are 
     authorized to be appropriated for economic development 
     assistance programs to carry out this Act $331,027,000 for 
     fiscal year 2004, and such sums as may be necessary for 
     fiscal years 2005, 2006, 2007, and 2008, to remain available 
     until expended.
       ``(b) Salaries and Expenses.--There are authorized to be 
     appropriated for salaries and expenses of administering this 
     Act $33,377,000 for fiscal year 2004, and such sums as may be 
     necessary for each of the fiscal years from 2005 through 
     2008, to remain available until expended.''.
                                  ____

  Mr. INHOFE. Mr. President, today I join my colleague from Missouri, 
Senator Bond, in introducing by request a bill to reauthorize the 
Economic Development Administration.
  EDA works with partners in local communities to create wealth and 
minimize poverty by promoting favorable business environments to 
attract private investment. Studies show that EDA uses Federal dollars 
efficiently and effectively. EDA's average cost of creating and 
retaining long-term jobs is among the lowest in government.
  In my home State of Oklahoma, we have some communities that struggle 
with economic distress, and EDA has worked long and hard with those 
communities to bring in private capital investment and jobs. In fact, 
over the last ten years, EDA projects have resulted in more than 15,000 
jobs being created or saved. With an investment of about $53 million, 
we have leveraged another 50 million in State and local dollars and 
more than 1.1 billion in private sector dollars. I would call that a 
wonderful success story.
  I am pleased that the President has chosen to send to Congress a 
reauthorization bill for this agency. His bill promotes coordination, 
flexibility and performance--all excellent goals. The EDA's 
authorization is set to expire on September 30, 2003, and I look 
forward to working with the Administration, as well as my colleagues 
here in the Senate and in the House of Representatives, to try to 
reauthorize it before then.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Jeffords, Mr. Grassley, Mrs. 
        Lincoln, and Mr. Bingaman):
  S. 1135. A bill to amend title XVIII of the Social Security Act to 
establish a uniform national medicare physician fee schedule; to the 
Committee on Finance.
  Mr. HATCH. Mr. President, today I am pleased to introduce the 
``Medicare Physician Payment Equity Act of 2003,'' a bill that corrects 
a long-standing inequity in Medicare reimbursement to rural physicians. 
I am delighted that my colleagues, Senators Jeffords, Grassley, 
Lincoln, and Bingaman have joined me in addressing this issue and 
introducing this bill.
  Although many Americans are not aware of it, Medicare currently 
reimburses physicians practicing in many rural areas at a lower rate 
than those

[[Page 12911]]

practicing in more densely populated areas. A complicated formula, the 
geographic physician cost index, reimburses physicians according to 
presumed regional differences in the costs of their work, practice 
expenses, and medical liability insurance premiums. But in almost every 
case, this formula penalizes physicians who practice in rural settings.
  As a result, the unfortunate effect of the current formula is that it 
may contribute to regional disparities in access to health care. Rural 
areas tend to have fewer physicians, fewer hospitals and patients often 
have less access to subspecialty care. Penalizing doctors who practice 
in rural settings by paying them substantially less than their urban 
colleagues may contribute to this inequity in access to care.
  According to the Rural Policy Research Institute, the Medicare 
payment for an intermediate office outpatient visit in 2003 is 30 
percent higher in New York City, $59.33, than it is in St. George, UT, 
$45.75, and the reimbursement for an emergency room visit is 22 percent 
higher in New York City, $161.82, than it is in St. George, UT, 
$131.96.
  Proponents of this system that pays doctors differently for the same 
work claim that the purchasing power of physician compensation should 
be similar regardless of where the work is performed. But others, and I 
am one of them, believe that doctors should be compensated equally and 
appropriately for their work regardless of where that work is 
performed. I believe that it is time that we provide physicians with 
equal pay for equal work. Physicians deserve it and their patients do 
also. After all, the citizen in Utah pays Federal taxes at the same 
rate as the citizen in New York. Why should the citizen in Utah receive 
cheaper service?
  The practice expense component of the geographic physician cost index 
also penalizes rural physicians and their patients. Proponents of the 
current system claim that it is more expensive for doctors to practice 
medicine in urban areas where the cost of living is higher and the cost 
of paying employees is thought to be higher. The practice expense 
geographic physician cost index rewards physicians in these ``high 
practice expense'' areas by reimbursing physician services at a higher 
rate.
  While it might be tempting to think that practice expenses in urban 
areas are higher than those in rural areas, this is not necessarily the 
case. Rural physicians sometimes must offer higher wages to attract 
nurses and technicians to work in their communities. Furthermore, the 
formula that is used to calculate the geographic practice expense does 
not take certain key elements into consideration. Volume discounts can 
result in lower costs for capital goods and supplies in densely 
populated areas. Furthermore, a physician in a rural area who purchases 
an expensive, but necessary piece of equipment, such as an ultrasound 
machine, may use that equipment less frequently than a physician from a 
densely populated area. As a result, the rural doctor may not be able 
to pay for the capital investment as quickly as the urban physician. 
The practice expense for the rural physician in such a case is higher.
  In fact, we have known for years that additional resources are 
sometimes necessary to attract doctors to practice in rural settings. 
Physicians, nurses and allied health professionals are less prevalent 
and hospitals are fewer and farther between in rural settings. In some 
cases, certain services and subspecialty care are not available at all. 
For this reason, Federal and State programs have offered tuition 
payment and loan forgiveness programs to student physicians who agree 
to practice in underserved areas, many of which are rural.
  Federal payment policy with respect to physician services delivered 
in rural and underserved areas has been described as contradictory--
paying bonuses to physicians for practicing in rural and underserved 
areas on the one hand while devaluing physician clinical decision-
making and patient services in rural areas less, on the other. The 
bottom line is this: For many years we have found it difficult in this 
country to increase access to health care and improve the quality of 
health care in rural communities. Penalizing physicians for practicing 
in rural settings just does not make sense.
  All Medicare beneficiaries, whether they live in an urban or rural 
area, deserve excellent health care and access to outstanding doctors. 
The bill I am introducing today, the Medicare Physician Payment Act, 
addresses current disparities by creating a system that reimburses 
physicians equitably regardless of where they practice. The bill 
addresses all three components of the geographic physician cost index, 
work, practice expense, and medical liability costs, by increasing 
reimbursement for physicians in disadvantaged areas over a three-year 
period and by eliminating disparities in reimbursement altogether in 
the year four. If we pass this bill, doctors will no longer be 
discouraged from practicing in the rural communities that desperately 
need their services. I look forward to working with my colleagues in 
the 108th Congress to pass this legislation.
  Mr. JEFFORDS. Mr. President, I am pleased to join with my colleagues 
Senators Hatch, Grassley, Lincoln, and Bingaman in introducing the 
Medicare Physician Payment Equity Act of 2003. This bill corrects a 
longstanding inequity in the Medicare Part B reimbursement methodology 
that pays rural physicians less than what is received by physicians for 
more densely populated areas who provide the same exact service. I am 
pleased that we are able to offer a legislative solution to this 
payment inequity.
  Establishing Medicare reimbursement for physician services is a 
complex process and many factors go into setting rates. Without going 
into all of the intricacies of how fees are set, let me note that, for 
any specific service, the physician fee schedule has three components--
physician work, practice expenses, and the cost of malpractice 
insurance. Each of these components is further subjected to a 
geographic adjustment, which is lower for rural areas than for urban 
areas.
  In my own State of Vermont, we face a chronic shortage of doctors in 
our rural areas. Yet, when we need to find a physician for a rural 
clinic, we compete in a national market to find providers. The 
inequities in payments these physicians receive, however, makes it all 
the more difficult to recruit and retain physicians. Rural physicians 
have the same training, spend the same time with patients, and manage 
the same office pressures as their urban counterparts. Their work 
should be valued equally, and that is what this bill accomplishes.
  I've heard from many people in Vermont about this issue. Tim 
Thompson, M.D., President of the Vermont Medical Society, expressed his 
concern that while Vermonters pay the same premiums as other Americans 
to support the Medicare program, our doctors are paid less. This occurs 
without regard to the quality or efficiency of health care services 
they provide. In fact, according to the Center for Medicare Services, 
Vermont physicians provide the second highest quality care in the 
country, but the State is ranked forty-fourth in payments per Medicare 
beneficiary. We should do more to reward quality health care regardless 
of whether it is provided in an urban or rural setting. The Vermont 
Medical Society has told me that they strongly support the Medicare 
Physician Payment Equity Act of 2003 as an important first step in 
reducing the existing inequities in payment levels.
  I look forward to working with my colleagues to pass the Medicare 
Physician Payment Equity Act of 2003.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Bunning):
  S. 1136. A bill to restate, clarify, and revise the Soldiers' and 
Sailors' Civil Relief Act of 1940; to the Committee on Veterans' 
Affairs.
  Mr. SPECTER. Mr. President, as Chairman of the Committee on Veterans' 
Affairs, I have sought recognition today to introduce legislation that 
would restate, revise and update the Soldiers' and Sailors' Civil 
Relief Act of 1940, SSCRA.
  The SSCRA, in summary, suspends some of the legal obligations 
incurred

[[Page 12912]]

by military personnel prior to entry into the service so that they 
might give their full attention to military duty. As was stated by the 
Supreme Court in LeMaistre v. Leffers, 333 U.S. 1, 6, 1948, SSCRA is to 
be read ``with an eye friendly to those who dropped their affairs to 
answer their country's call.'' With operations in Iraq now wrapping up, 
it is an appropriate time for a review of this World War II-vintage 
legislation to see how it might be modified to better address the needs 
of 21st Century servicemen and women.
  I should mention at this point that I am aware that a bill to revise 
the SSCRA, H.R. 100, is currently pending in the House, and that my 
colleague from Georgia, Senator Zell Miller, has introduced companion 
legislation in the Senate as S. 792. My legislation is similar to H.R. 
100 and S. 792, but it contains modifications and additions to those 
bills as suggested by reservists and their families, the Department of 
Defense, and by other groups. It is my intention to work with Senator 
Miller to craft legislation that incorporates the best features of the 
two bills.
  This legislation would rename SSCRA the ``Servicemembers' Civil 
Relief Act'' to reflect that the Armed Forces are made up now of more 
than just soldiers and sailors, and keep in place the core protections 
that have been features of SSCRA for decades: stays of civil 
proceedings during a person's period of military service; an interest 
rate cap of 6 percent on debts incurred before active duty; protection 
from eviction and termination of pre-service residential leases; and 
legal residency protection. But it would also add several new 
provisions to this core.
  Currently, the Higher Education Act of 1965 prohibits the SSCRA's 6 
percent interest cap from applying to Federally-insured student loans. 
This bill would remove that prohibition. It would also require 
institutions of higher education to permit students who are called to 
active duty to return and complete classes at no additional cost.
  In addition, SSCRA now precludes evictions from premises occupied by 
servicemembers having a monthly rent $1200 or less. This $1200 ceiling 
was set in 1991; it has not been adjusted since. This legislation would 
raise the rent ceiling to $1950 or the amount of a servicemember's 
basic allowance for housing, whichever is higher. It would thereby take 
post-1991 inflation into account, and avoid the need for frequent 
amendments to the law since housing allowances are adjusted annually 
based on housing costs in the area where the servicemember is assigned.
  When the SSCRA was originally enacted in 1940, automobiles were not 
commonly leased. That, of course, has changed; many people now choose 
leasing as a way to finance their personal transportation needs. This 
legislation would protect servicemembers who have leased cars--just as 
it does those who had chosen the more traditional form of auto 
financing--in two ways. First, it would prohibit lessors, like purchase 
financers, from repossessing personal property for nonpayment or breach 
without court action. Second, it would allow servicemembers called to 
active duty to terminate automobile leases just as they can real 
property leases.
  This bill also takes steps to offer some protection to professionals 
and small business owners who are called to active duty. It would 
include the practice of law among the ``professional services'' for 
which professional liability insurance obligations could be suspended 
subject to mandatory reinstatement. It would also authorize the 
Secretary of Defense to designate other professional callings that 
would be subject to these protections. And it would protect the assets 
of small business owners during military service if the servicemember 
is personally liable for trade or business debts.
  Since 1940, the Soldiers' and Sailors' Civil Relief Act has provided 
important protections to the men and women who wear the uniform. But 
60-plus years later, it is time for Congress to take a critical look at 
this law and revise it to reflect changes in our society since it was 
originally enacted. With the assistance of the Department of Defense, 
the National Guard Bureau, the Enlisted Association of the National 
Guard, and the Small Business Administration, the staff of the 
Committee on Veterans' Affairs, most notably Mr. David Goetz, the 
Committee's Associate Counsel, has undertaken the painstaking review 
that has yielded this rather extensive bill. It is my intention to seek 
further comment and then guide this important reform legislation to 
enactment.
  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. 1136

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

     SECTION 1. RESTATEMENT OF ACT.

       The Soldiers' and Sailors' Civil Relief Act of 1940 (50 
     U.S.C. App. 501 et seq.) is amended to read as follows:

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

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

``Sec. 1. Short title; table of contents.
``Sec. 2. Purposes.

                     ``TITLE I--GENERAL PROVISIONS

``Sec. 101. Definitions.
``Sec. 102. Jurisdiction and applicability of Act.
``Sec. 103. Protection of persons secondarily liable.
``Sec. 104. Extension of protections to citizens serving with allied 
              forces.
``Sec. 105. Notification of benefits.
``Sec. 106. Extension of rights and protections to Reserves ordered to 
              report for military service and to persons ordered to 
              report for induction.
``Sec. 107. Waiver of rights pursuant to written agreement.
``Sec. 108. Exercise of rights under Act not to affect certain future 
              financial transactions.
``Sec. 109. Legal representatives.

                       ``TITLE II--GENERAL RELIEF

``Sec. 201. Protection of servicemembers against default judgments.
``Sec. 202. Stay of proceedings when servicemember defendant has 
              notice.
``Sec. 203. Fines and penalties under contracts.
``Sec. 204. Stay or vacation of execution of judgments, attachments, 
              and garnishments.
``Sec. 205. Duration and term of stays; codefendants not in service.
``Sec. 206. Statute of limitations.
``Sec. 207. Maximum rate of interest on debts incurred before military 
              service.

``TITLE III--RENT, INSTALLMENT CONTRACTS, MORTGAGES, LIENS, ASSIGNMENT, 
                                LEASES.

``Sec. 301. Evictions and distress.
``Sec. 302. Protection under installment contracts for purchase or 
              lease.
``Sec. 303. Mortgages and trust deeds.
``Sec. 304. Settlement of stayed cases relating to personal property.
``Sec. 305. Termination of leases by lessees.
``Sec. 306. Protection of life insurance policy.
``Sec. 307. Enforcement of storage liens.
``Sec. 308. Extension of protections to dependents.

                         ``TITLE IV--INSURANCE

``Sec. 401. Definitions.
``Sec. 402. Insurance rights and protections.
``Sec. 403. Application for insurance protection.
``Sec. 404. Policies entitled to protection and lapse of policies.
``Sec. 405. Policy restrictions.
``Sec. 406. Deduction of unpaid premiums.
``Sec. 407. Premiums and interest guaranteed by United States.
``Sec. 408. Regulations.
``Sec. 409. Review of findings of fact and conclusions of law.

                   ``TITLE V--TAXES AND PUBLIC LANDS

``Sec. 501. Taxes respecting personal property, money, credits, and 
              real property.
``Sec. 502. Rights in public lands.
``Sec. 503. Desert-land entries.
``Sec. 504. Mining claims.
``Sec. 505. Mineral permits and leases.
``Sec. 506. Perfection or defense of rights.
``Sec. 507. Distribution of information concerning benefits of title.
``Sec. 508. Land rights of servicemembers.
``Sec. 509. Regulations.
``Sec. 510. Income taxes.
``Sec. 511. Residence for tax purposes.

                  ``TITLE VI--ADMINISTRATIVE REMEDIES

``Sec. 601. Inappropriate use of Act.
``Sec. 602. Certificates of service; persons reported missing.
``Sec. 603. Interlocutory orders.

                      ``TITLE VII--FURTHER RELIEF

``Sec. 701. Anticipatory relief.
``Sec. 702. Power of attorney.

[[Page 12913]]

``Sec. 703. Professional liability protection.
``Sec. 704. Health insurance reinstatement.
``Sec. 705. Guarantee of residency for military personnel.
``Sec. 706. Business or trade obligations.
``Sec. 707. Return to classes at no extra cost.

     ``SEC. 2. PURPOSES.

       ``The purposes of this Act are--
       ``(1) to provide for, strengthen, and expedite the national 
     defense through protection extended by this Act to 
     servicemembers of the United States to enable such persons to 
     devote their entire energy to the defense needs of the 
     Nation; and
       ``(2) to provide for the temporary suspension of judicial 
     and administrative proceedings and transactions that may 
     adversely affect the civil rights of serv-
     icemembers during their military service.

                     ``TITLE I--GENERAL PROVISIONS

     ``SEC. 101. DEFINITIONS.

       ``For the purposes of this Act:
       ``(1) Servicemember.--The term `service-
     member' means a member of the uniformed services, as that 
     term is defined in section 101(a)(5) of title 10, United 
     States Code.
       ``(2) Military service.--
       ``(A) With respect to a member of the Army, Navy, Air 
     Force, Marine Corps, or Coast Guard, the term `military 
     service' means active duty, as that term is defined in 
     section 101(d)(1) of title 10, United States Code.
       ``(B) Active service of commissioned officers of the Public 
     Health Service or National Oceanic and Atmospheric 
     Administration shall be deemed to be `military service' for 
     the purposes of this Act.
       ``(C) Service of a member of the National Guard under a 
     call to active service authorized by the President or the 
     Secretary of Defense for a period of more than 30 consecutive 
     days under section 502(f) of title 32, United States Code, 
     for purposes of responding to a national emergency declared 
     by the President and supported by Federal funds shall be 
     deemed to be `military service' for the purposes of this Act.
       ``(3) Period of military service.--The term `period of 
     military service' means the period beginning on the date on 
     which a servicemember enters military service and ending on 
     the date on which the servicemember is released from military 
     service or dies while in military service.
       ``(4) Dependent.--The term `dependent', with respect to a 
     servicemember, means--
       ``(A) the servicemember's spouse;
       ``(B) the servicemember's child (as defined in section 
     101(4) of title 38, United States Code); or
       ``(C) an individual for whom the servicemember provided 
     more than one-half of the individual's support for 180 days 
     immediately preceding an application for relief under this 
     Act.
       ``(5) Court.--The term `court' means a court or an 
     administrative agency of the United States or of any State 
     (including any political subdivision of a State), whether or 
     not a court or administrative agency of record.
       ``(6) State.--The term `State' includes--
       ``(A) a commonwealth, territory, or possession of the 
     United States; and
       ``(B) the District of Columbia.
       ``(7) Secretary concerned.--The term `Secretary 
     concerned'--
       ``(A) with respect to a member of the armed forces, has the 
     meaning given that term in section 101(a)(9) of title 10, 
     United States Code;
       ``(B) with respect to a commissioned officer of the Public 
     Health Service, means the Secretary of Health and Human 
     Services; and
       ``(C) with respect to a commissioned officer of the 
     National Oceanic and Atmospheric Administration, means the 
     Secretary of Commerce.
       ``(8) Motor vehicle.--The term `motor vehicle' has the 
     meaning given that term in section 30102(a)(6) of title 49, 
     United States Code.

     ``SEC. 102. JURISDICTION AND APPLICABILITY OF ACT.

       ``(a) Jurisdiction.--This Act applies to--
       ``(1) the United States;
       ``(2) each of the States, including the political 
     subdivisions thereof; and
       ``(3) all territory subject to the jurisdiction of the 
     United States.
       ``(b) Applicability to Proceedings.--This Act applies to 
     any judicial or administrative proceeding commenced in any 
     court or agency in any jurisdiction subject to this Act. This 
     Act does not apply to criminal proceedings.
       ``(c) Court in Which Application May Be Made.--When under 
     this Act any application is required to be made to a court in 
     which no proceeding has already been commenced with respect 
     to the matter, such application may be made to any court 
     which would otherwise have jurisdiction over the matter.

     ``SEC. 103. PROTECTION OF PERSONS SECONDARILY LIABLE.

       ``(a) Extension of Protection When Actions Stayed, 
     Postponed, or Suspended.--Whenever pursuant to this Act a 
     court stays, postpones, or suspends (1) the enforcement of an 
     obligation or liability, (2) the prosecution of a suit or 
     proceeding, (3) the entry or enforcement of an order, writ, 
     judgment, or decree, or (4) the performance of any other act, 
     the court may likewise grant such a stay, postponement, or 
     suspension to a surety, guarantor, endorser, accommodation 
     maker, comaker, or other person who is or may be primarily or 
     secondarily subject to the obligation or liability the 
     performance or enforcement of which is stayed, postponed, or 
     suspended.
       ``(b) Vacation or Set-Aside of Judgments.--When a judgment 
     or decree is vacated or set aside, in whole or in part, 
     pursuant to this Act, the court may also set aside or vacate, 
     as the case may be, the judgment or decree as to a surety, 
     guarantor, endorser, accommodation maker, comaker, or other 
     person who is or may be primarily or secondarily liable on 
     the contract or liability for the enforcement of the judgment 
     or decree.
       ``(c) Bail Bond Not To Be Enforced During Period of 
     Military Service.--A court may not enforce a bail bond during 
     the period of military service of the principal on the bond 
     when military service prevents the surety from obtaining the 
     attendance of the principal. The court may discharge the 
     surety and exonerate the bail, in accordance with principles 
     of equity and justice, during or after the period of military 
     service of the principal.
       ``(d) Waiver of Rights.--
       ``(1) Waivers not precluded.--This Act does not prevent a 
     waiver in writing by a surety, guarantor, endorser, 
     accommodation maker, comaker, or other person (whether 
     primarily or secondarily liable on an obligation or 
     liability) of the protections provided under subsections (a) 
     and (b). Any such waiver is effective only if it is executed 
     as an instrument separate from the obligation or liability 
     with respect to which it applies.
       ``(2) Waiver invalidated upon entrance to military 
     service.--If a waiver under paragraph (1) is executed by an 
     individual who after the execution of the waiver enters 
     military service, or by a dependent of an individual who 
     after the execution of the waiver enters military service, 
     the waiver is not valid after the beginning of the period of 
     such military service unless the waiver was executed by such 
     individual or dependent during the period specified in 
     section 106.

     ``SEC. 104. EXTENSION OF PROTECTIONS TO CITIZENS SERVING WITH 
                   ALLIED FORCES.

       ``A citizen of the United States who is serving with the 
     forces of a nation with which the United States is allied in 
     the prosecution of a war or military action is entitled to 
     the relief and protections provided under this Act if that 
     service with the allied force is similar to military service 
     as defined in this Act. The relief and protections provided 
     to such citizen shall terminate on the date of discharge or 
     release from such service.

     ``SEC. 105. NOTIFICATION OF BENEFITS.

       ``The Secretary concerned shall ensure that notice of the 
     benefits accorded by this Act is provided to persons in 
     military service and to persons entering military service.

     ``SEC. 106. EXTENSION OF RIGHTS AND PROTECTIONS TO RESERVES 
                   ORDERED TO REPORT FOR MILITARY SERVICE AND TO 
                   PERSONS ORDERED TO REPORT FOR INDUCTION.

       ``(a) Reserves Ordered To Report for Military Service.--A 
     member of a reserve component who is ordered to report for 
     military service is entitled to the rights and protections of 
     this title and titles II and III during the period beginning 
     on the date of the member's receipt of the order and ending 
     on the date on which the member reports for military service 
     (or, if the order is revoked before the member so reports, or 
     the date on which the order is revoked).
       ``(b) Persons Ordered To Report for Induction.--A person 
     who has been ordered to report for induction under the 
     Military Selective Service Act (50 U.S.C. App. 451 et seq.) 
     is entitled to the rights and protections provided a 
     servicemember under this title and titles II and III during 
     the period beginning on the date of receipt of the order for 
     induction and ending on the date on which the person reports 
     for induction (or, if the order to report for induction is 
     revoked before the date on which the person reports for 
     induction, on the date on which the order is revoked).

     ``SEC. 107. WAIVER OF RIGHTS PURSUANT TO WRITTEN AGREEMENT.

       ``(a) In General.--A servicemember may waive any of the 
     rights and protections provided by this Act. In the case of a 
     waiver that permits an action described in subsection (b), 
     the waiver is effective only if made pursuant to a written 
     agreement of the parties that is executed during or after the 
     servicemember's period of military service. The written 
     agreement shall specify the legal instrument to which the 
     waiver applies and, if the servicemember is not a party to 
     that instrument, the servicemember concerned.
       ``(b) Actions Requiring Waivers in Writing.--The 
     requirement in subsection (a) for a written waiver applies to 
     the following:
       ``(1) The modification, termination, or cancellation of--
       ``(A) a contract, lease, or bailment; or
       ``(B) an obligation secured by a mortgage, trust, deed, 
     lien, or other security in the nature of a mortgage.
       ``(2) The repossession, retention, foreclosure, sale, 
     forfeiture, or taking possession of property that--

[[Page 12914]]

       ``(A) is security for any obligation; or
       ``(B) was purchased or received under a contract, lease, or 
     bailment.
       ``(c) Coverage of Periods After Orders Received.--For the 
     purposes of this section--
       ``(1) a person to whom section 106 applies shall be 
     considered to be a servicemember; and
       ``(2) the period with respect to such a person specified in 
     subsection (a) or (b), as the case may be, of section 106 
     shall be considered to be a period of military service.

     ``SEC. 108. EXERCISE OF RIGHTS UNDER ACT NOT TO AFFECT 
                   CERTAIN FUTURE FINANCIAL TRANSACTIONS.

       ``Application by a servicemember for, or receipt by a 
     servicemember of, a stay, postponement, or suspension 
     pursuant to this Act in the payment of a tax, fine, penalty, 
     insurance premium, or other civil obligation or liability of 
     that servicemember shall not itself (without regard to other 
     considerations) provide the basis for any of the following:
       ``(1) A determination by a lender or other person that the 
     servicemember is unable to pay the civil obligation or 
     liability in accordance with its terms.
       ``(2) With respect to a credit transaction between a 
     creditor and the servicemember--
       ``(A) a denial or revocation of credit by the creditor;
       ``(B) a change by the creditor in the terms of an existing 
     credit arrangement; or
       ``(C) a refusal by the creditor to grant credit to the 
     servicemember in substantially the amount or on substantially 
     the terms requested.
       ``(3) An adverse report relating to the creditworthiness of 
     the servicemember by or to a person engaged in the practice 
     of assembling or evaluating consumer credit information.
       ``(4) A refusal by an insurer to insure the servicemember.
       ``(5) An annotation in a servicemember's record by a 
     creditor or a person engaged in the practice of assembling or 
     evaluating consumer credit information, identifying the 
     servicemember as a member of the National Guard or a reserve 
     component.
       ``(6) A change in the terms offered or conditions required 
     for the issuance of insurance.

     ``SEC. 109. LEGAL REPRESENTATIVES.

       ``(a) Representative.--A legal representative of a 
     servicemember for purposes of this Act is either of the 
     following:
       ``(1) An attorney acting on the behalf of a servicemember.
       ``(2) An individual possessing a power of attorney.
       ``(b) Application.--Whenever the term `servicemember' is 
     used in this Act, such term shall be treated as including a 
     reference to a legal representative of the servicemember.

                       ``TITLE II--GENERAL RELIEF

     ``SEC. 201. PROTECTION OF SERVICEMEMBERS AGAINST DEFAULT 
                   JUDGMENTS.

       ``(a) Applicability of Section.--This section applies to 
     any civil action or proceeding in which the defendant does 
     not make an appearance.
       ``(b) Affidavit Requirement.--
       ``(1) Plaintiff to file affidavit.--In any action or 
     proceeding covered by this section, the court, before 
     entering judgment for the plaintiff, shall require the 
     plaintiff to file with the court an affidavit--
       ``(A) stating whether or not the defendant is in military 
     service and showing necessary facts to support the affidavit; 
     or
       ``(B) if the plaintiff is unable to determine whether or 
     not the defendant is in military service, stating that the 
     plaintiff is unable to determine whether or not the defendant 
     is in military service.
       ``(2) Appointment of attorney to represent defendant in 
     military service.--If in an action covered by this section it 
     appears that the defendant is in military service, the court 
     may not enter a judgment until after the court appoints an 
     attorney to represent the defendant. If an attorney appointed 
     under this section to represent a servicemember cannot locate 
     the servicemember, actions by the attorney in the case shall 
     not waive any defense of the servicemember or otherwise bind 
     the servicemember.
       ``(3) Defendant's military status not ascertained by 
     affidavit.--If based upon the affidavits filed in such an 
     action, the court is unable to determine whether the 
     defendant is in military service, the court, before entering 
     judgment, may require the plaintiff to file a bond in an 
     amount approved by the court. If the defendant is later found 
     to be in military service, the bond shall be available to 
     indemnify the defendant against any loss or damage the 
     defendant may suffer by reason of any judgment for the 
     plaintiff against the defendant, should the judgment be set 
     aside in whole or in part. The bond shall remain in effect 
     until expiration of the time for appeal and setting aside of 
     a judgment under applicable Federal or State law or 
     regulation or under any applicable ordinance of a political 
     subdivision of a State. The court may issue such orders or 
     enter such judgments as the court determines necessary to 
     protect the rights of the defendant under this Act.
       ``(4) Satisfaction of requirement for affidavit.--The 
     requirement for an affidavit under paragraph (1) may be 
     satisfied by a statement, declaration, verification, or 
     certificate, in writing, subscribed and certified or declared 
     to be true under penalty of perjury.
       ``(c) Penalty for Making or Using False Affidavit.--A 
     person who makes or uses an affidavit permitted under 
     subsection (b) (or a statement, declaration, verification, or 
     certificate as authorized under subsection (b)(4)) knowing it 
     to be false, shall be fined as provided in title 18, United 
     States Code, imprisoned for not more than one year, or both.
       ``(d) Stay of Proceedings.--In an action covered by this 
     section in which the defendant is in military service, the 
     court shall grant a stay of proceedings for a minimum period 
     of 90 days under this subsection upon application of counsel, 
     or on the court's own motion, if the court determines that--
       ``(1) there may be a defense to the action and a defense 
     cannot be presented without the presence of the defendant; or
       ``(2) after due diligence, counsel has been unable to 
     contact the defendant or otherwise determine if a meritorious 
     defense exists.
       ``(e) Inapplicability of Section 202 Procedures.--A stay of 
     proceedings under subsection (d) shall not be controlled by 
     procedures or requirements under section 202.
       ``(f) Section 202 Protection.--If a servicemember who is a 
     defendant in an action covered by this section receives 
     actual notice of the action, the servicemember may request a 
     stay of proceeding under section 202.
       ``(g) Vacation or Setting Aside of Default Judgments.--
       ``(1) Authority for court to vacate or set aside 
     judgment.--If a default judgment is entered in an action 
     covered by this section against a servicemember during the 
     servicemember's period of military service (or within 60 days 
     after termination of or release from such military service), 
     the court entering the judgment shall, upon application by or 
     on behalf of the servicemember, reopen the judgment for the 
     purpose of allowing the servicemember to defend the action if 
     it appears that--
       ``(A) the servicemember was materially affected by reason 
     of that military service in making a defense to the action; 
     and
       ``(B) the servicemember has a meritorious or legal defense 
     to the action or some part of it.
       ``(2) Time for filing application.--An application under 
     this subsection must be filed not later than 90 days after 
     the date of the termination of or release from military 
     service.
       ``(h) Protection of Bona Fide Purchaser.--If a court 
     vacates, sets aside, or reverses a default judgment against a 
     servicemember and the vacating, setting aside, or reversing 
     is because of a provision of this Act, that action shall not 
     impair a right or title acquired by a bona fide purchaser for 
     value under the default judgment.

     ``SEC. 202. STAY OF PROCEEDINGS WHEN SERVICEMEMBER DEFENDANT 
                   HAS NOTICE.

       ``(a) Applicability of Section.--This section applies to 
     any civil action or proceeding in which the defendant at the 
     time of filing an application under this section--
       ``(1) is in military service or is within 90 days after 
     termination of or release from military service; and
       ``(2) has received notice of the action or proceeding.
       ``(b) Automatic Stay.--
       ``(1) Authority for stay.--At any stage before final 
     judgment in a civil action or proceeding in which a 
     servicemember described in subsection (a) is a party, the 
     court may on its own motion and shall, upon application by 
     the servicemember, stay the action for a period of not less 
     than 90 days, if the conditions in paragraph (2) are met.
       ``(2) Conditions for stay.--An application for a stay under 
     paragraph (1) shall include the following:
       ``(A) A letter or other communication setting forth facts 
     stating the manner in which current military duty 
     requirements materially affect the servicemember's ability to 
     appear and stating a date when the servicemember will be 
     available to appear.
       ``(B) A letter or other communication from the 
     servicemember's commanding officer stating that the 
     servicemember's current military duty prevents appearance and 
     that military leave is not authorized for the servicemember 
     at the time of the letter.
       ``(c) Application Not a Waiver of Defenses.--An application 
     for a stay by a servicemember or a servicemember's 
     representative under this section does not constitute an 
     appearance for jurisdictional purposes and does not 
     constitute a waiver of any substantive or procedural defense 
     (including a defense relating to lack of personal 
     jurisdiction).
       ``(d) Additional Stay.--
       ``(1) Application.--A servicemember who is granted a stay 
     of a civil action or proceeding under subsection (b) may 
     apply for an additional stay based on continuing material 
     affect of military duty on the servicemember's ability to 
     appear. Such an application may be made by the servicemember 
     at the time of the initial application under subsection (b) 
     or when it appears that the servicemember is unavailable to 
     prosecute or defend the action. The same information required 
     under

[[Page 12915]]

     subsection (b)(2) shall be included in an application under 
     this subsection.
       ``(2) Appointment of counsel when additional stay 
     refused.--If the court refuses to grant an additional stay of 
     proceedings under paragraph (1), the court shall appoint 
     counsel to represent the servicemember in the action or 
     proceeding.
       ``(e) Coordination With Section 201.--A servicemember who 
     applies for a stay under this section and is unsuccessful may 
     not seek the protections afforded by section 201.
       ``(f) Inapplicability to Section 301.--The protections of 
     this section do not apply to section 301.

     ``SEC. 203. FINES AND PENALTIES UNDER CONTRACTS.

       ``(a) Prohibition of Penalties.--When an action for 
     compliance with the terms of a contract is stayed pursuant to 
     this Act, a penalty shall not accrue for failure to comply 
     with the terms of the contract during the period of the stay.
       ``(b) Reduction or Waiver of Fines or Penalties.--If a 
     servicemember fails to perform an obligation arising under a 
     contract and a penalty is incurred arising from that 
     nonperformance, a court may reduce or waive the fine or 
     penalty if--
       ``(1) the servicemember was in military service at the time 
     the fine or penalty was incurred; and
       ``(2) the ability of the servicemember to perform the 
     obligation was materially affected by such military service.

     ``SEC. 204. STAY OR VACATION OF EXECUTION OF JUDGMENTS, 
                   ATTACHMENTS, AND GARNISHMENTS.

       ``(a) Court Action Upon Material Affect Determination.--If 
     a servicemember, in the opinion of the court, is materially 
     affected by reason of military service in complying with a 
     court judgment or order, the court may on its own motion and 
     shall on application by the servicemember--
       ``(1) stay the execution of such judgment or order entered 
     against the servicemember; and
       ``(2) vacate or stay an attachment or garnishment of 
     property, money, or debts in the possession of the 
     servicemember or a third party, whether before or after such 
     judgment.
       ``(b) Applicability.--This section applies to an action or 
     proceeding commenced in a court against a servicemember 
     before or during the period of the servicemember's military 
     service or within 60 days after such service terminates.

     ``SEC. 205. DURATION AND TERM OF STAYS; CODEFENDANTS NOT IN 
                   SERVICE.

       ``(a) Period of Stay.--A stay of an action, proceeding, 
     attachment, or execution made pursuant to the provisions of 
     this Act by a court may be ordered for the period of military 
     service and 90 days thereafter, or for any part of that 
     period. The court may set the terms and amounts for such 
     installment payments as is considered reasonable by the 
     court.
       ``(b) Codefendants.--If the servicemember is a codefendant 
     with others who are not in military service and who are not 
     entitled to the relief and protections provided under this 
     Act, the plaintiff may proceed against those other defendants 
     with the approval of the court.
       ``(c) Inapplicability of Section.--This section does not 
     apply to sections 202 and 701.

     ``SEC. 206. STATUTE OF LIMITATIONS.

       ``(a) Tolling of Statutes of Limitation During Military 
     Service.--The period of a servicemember's military service 
     may not be included in computing any period limited by law, 
     regulation, or order for the bringing of any action or 
     proceeding in a court, or in any board, bureau, commission, 
     department, or other agency of a State (or political 
     subdivision of a State) or the United States by or against 
     the servicemember or the servicemember's heirs, executors, 
     administrators, or assigns.
       ``(b) Redemption of Real Property.--A period of military 
     service may not be included in computing any period provided 
     by law for the redemption of real property sold or forfeited 
     to enforce an obligation, tax, or assessment.
       ``(c) Inapplicability to Internal Revenue Laws.--This 
     section does not apply to any period of limitation prescribed 
     by or under the internal revenue laws of the United States.

     ``SEC. 207. MAXIMUM RATE OF INTEREST ON DEBTS INCURRED BEFORE 
                   MILITARY SERVICE.

       ``(a) Interest Rate Limitation.--
       ``(1) 6-percent limit.--An obligation or liability bearing 
     interest at a rate in excess of 6 percent per year that is 
     incurred by a servicemember, or the servicemember and the 
     servicemember's spouse jointly, before the servicemember 
     enters military service shall not bear interest at a rate in 
     excess of 6 percent per year during the period of military 
     service.
       ``(2) Applicability to student loans.--Notwithstanding 
     section 428(d) of the Higher Education Act of 1965 (20 U.S.C. 
     1078(d)), paragraph (1) applies with respect to an obligation 
     or liability of a servicemember, or the servicemember and the 
     servicemember's spouse jointly, entered into under the Higher 
     Education Act of 1965 (20 U.S.C. 1001 et seq.)
       ``(3) Forgiveness of interest in excess of 6 percent.--
     Interest at a rate in excess of 6 percent per year that would 
     otherwise be incurred but for the prohibition in paragraph 
     (1) is forgiven.
       ``(4) Prevention of acceleration of principal.--The amount 
     of any periodic payment due from a servicemember under the 
     terms of the instrument that created an obligation or 
     liability covered by this section shall be reduced by the 
     amount of the interest forgiven under paragraph (3) that is 
     allocable to the period for which such payment is made.
       ``(b) Implementation of Limitation.--
       ``(1) Written notice to creditor.--In order for an 
     obligation or liability of a servicemember to be subject to 
     the interest rate limitation in subsection (a), the 
     servicemember shall provide to the creditor written notice 
     and a copy of the military orders calling the servicemember 
     to military service and any orders further extending military 
     service, not later than 180 days after the date of the 
     servicemember's termination or release from military service.
       ``(2) Limitation effective as of date of order to active 
     duty.--Upon receipt of written notice and a copy of orders 
     calling a servicemember to military service, the creditor 
     shall treat the debt in accordance with subsection (a), 
     effective as of the date on which the servicemember is called 
     to military service.
       ``(c) Creditor Protection.--A court may grant a creditor 
     relief from the limitations of this section if, in the 
     opinion of the court, the ability of the servicemember to pay 
     interest upon the obligation or liability at a rate in excess 
     of 6 percent per year is not materially affected by reason of 
     the servicemember's military service.
       ``(d) Interest Defined.--As used in this section, the term 
     `interest' means simple interest plus service charges, 
     renewal charges, fees, or any other charges (except bona fide 
     insurance) with respect to an obligation or liability.

``TITLE III--RENT, INSTALLMENT CONTRACTS, MORTGAGES, LIENS, ASSIGNMENT, 
                                 LEASES

     ``SEC. 301. EVICTIONS AND DISTRESS.

       ``(a) Court-Ordered Eviction.--Except by court order, a 
     landlord (or another person with paramount title) may not--
       ``(1) evict a servicemember, or the dependents of a 
     servicemember, during a period of military service of the 
     servicemember, from premises--
       ``(A) that are occupied or intended to be occupied 
     primarily as a residence; and
       ``(B) for which the monthly rent does not exceed the 
     greater of--
       ``(i) $1,950; or
       ``(ii) the monthly basic allowance for housing to which the 
     servicemember is entitled under section 403 of title 37, 
     United States Code; or
       ``(2) subject such premises to a distress during the period 
     of military service.
       ``(b) Stay of Execution.--
       ``(1) Court authority.--Upon an application for eviction or 
     distress with respect to premises covered by this section, 
     the court may on its own motion and shall, if a request is 
     made by or on behalf of a servicemember whose ability to pay 
     the agreed rent is materially affected by military service--
       ``(A) stay the proceedings for a period of 90 days, unless 
     in the opinion of the court, justice and equity require a 
     longer or shorter period of time; or
       ``(B) adjust the obligation under the lease to preserve the 
     interests of all parties.
       ``(2) Relief to landlord.--If a stay is granted under 
     paragraph (1), the court may grant to the landlord (or other 
     person with paramount title) such relief as equity may 
     require.
       ``(c) Penalties.--
       ``(1) Misdemeanor.--Except as provided in subsection (a), a 
     person who knowingly takes part in an eviction or distress 
     described in subsection (a), or who knowingly attempts to do 
     so, shall be fined as provided in title 18, United States 
     Code, imprisoned for not more than one year, or both.
       ``(2) Preservation of other remedies and rights.--The 
     remedies and rights provided under this section are in 
     addition to and do not preclude any remedy for wrongful 
     conversion (or wrongful eviction) otherwise available under 
     the law to the person claiming relief under this section, 
     including any award for consequential and punitive damages.
       ``(d) Rent Allotment From Pay of Servicemember.--To the 
     extent required by a court order related to property which is 
     the subject of a court action under this section, the 
     Secretary concerned shall make an allotment from the pay of a 
     servicemember to satisfy the terms of such order, except that 
     any such allotment shall be subject to regulations prescribed 
     by the Secretary concerned establishing the maximum amount of 
     pay of servicemembers that may be allotted under this 
     subsection.
       ``(e) Limitation of Applicability.--Section 202 is not 
     applicable to this section.

     ``SEC. 302. PROTECTION UNDER INSTALLMENT CONTRACTS FOR 
                   PURCHASE OR LEASE.

       ``(a) Protection Upon Breach of Contract.--
       ``(1) Protection after entering military service.--After a 
     servicemember enters military service, a contract by the 
     servicemember for--

[[Page 12916]]

       ``(A) the purchase of real or personal property (including 
     a motor vehicle); or
       ``(B) the lease or bailment of such property,

     may not be rescinded or terminated for a breach of terms of 
     the contract occurring before or during that person's 
     military service, nor may the property be repossessed for 
     such breach without a court order.
       ``(2) Applicability.--This section applies only to a 
     contract for which a deposit or installment has been paid by 
     the servicemember before the servicemember enters military 
     service.
       ``(b) Penalties.--
       ``(1) Misdemeanor.--A person who knowingly resumes 
     possession of property in violation of subsection (a), or in 
     violation of section 108, or who knowingly attempts to do so, 
     shall be fined as provided in title 18, United States Code, 
     imprisoned for not more than one year, or both.
       ``(2) Preservation of other remedies and rights.--The 
     remedies and rights provided under this section are in 
     addition to and do not preclude any remedy for wrongful 
     conversion otherwise available under law to the person 
     claiming relief under this section, including any award for 
     consequential and punitive damages.
       ``(c) Authority of Court.--In a hearing based on this 
     section, the court--
       ``(1) may order repayment to the servicemember of all or 
     part of the prior installments or deposits as a condition of 
     terminating the contract and resuming possession of the 
     property;
       ``(2) may, on its own motion, and shall on application by a 
     servicemember when the servicemember's ability to comply with 
     the contract is materially affected by military service, stay 
     the proceedings for a period of time as, in the opinion of 
     the court, justice and equity require; or
       ``(3) may make other disposition as is equitable to 
     preserve the interests of all parties.

     ``SEC. 303. MORTGAGES AND TRUST DEEDS.

       ``(a) Mortgage as Security.--This section applies only to 
     an obligation on real or personal property owned by a 
     servicemember that--
       ``(1) originated before the period of the servicemember's 
     military service and for which the servicemember is still 
     obligated; and
       ``(2) is secured by a mortgage, trust deed, or other 
     security in the nature of a mortgage.
       ``(b) Stay of Proceedings and Adjustment of Obligation.--In 
     an action filed during, or within 90 days after, a 
     servicemember's period of military service to enforce an 
     obligation described in subsection (a), the court may after a 
     hearing and on its own motion and shall upon application by a 
     servicemember when the servicemember's ability to comply with 
     the obligation is materially affected by military service--
       ``(1) stay the proceedings for a period of time as justice 
     and equity require, or
       ``(2) adjust the obligation to preserve the interests of 
     all parties.
       ``(c) Sale or Foreclosure.--A sale, foreclosure, or seizure 
     of property for a breach of an obligation described in 
     subsection (a) shall not be valid if made during, or within 
     90 days after, the period of the servicemember's military 
     service except--
       ``(1) upon a court order granted before such sale, 
     foreclosure, or seizure with a return made and approved by 
     the court; or
       ``(2) if made pursuant to an agreement as provided in 
     section 108.
       ``(d) Penalties.--
       ``(1) Misdemeanor.--A person who knowingly makes or causes 
     to be made a sale, foreclosure, or seizure of property that 
     is prohibited by subsection (c), or who knowingly attempts to 
     do so, shall be fined as provided in title 18, United States 
     Code, imprisoned for not more than one year, or both.
       ``(2) Preservation of other remedies.--The remedies and 
     rights provided under this section are in addition to and do 
     not preclude any remedy for wrongful conversion otherwise 
     available under law to the person claiming relief under this 
     section, including consequential and punitive damages.

     ``SEC. 304. SETTLEMENT OF STAYED CASES RELATING TO PERSONAL 
                   PROPERTY.

       ``(a) Appraisal of Property.--When a stay is granted 
     pursuant to this Act in a proceeding to foreclose a mortgage 
     on or to repossess personal property, or to rescind or 
     terminate a contract for the purchase of personal property, 
     the court may appoint three disinterested parties to appraise 
     the property.
       ``(b) Equity Payment.--Based on the appraisal, and if undue 
     hardship to the servicemember's dependents will not result, 
     the court may order that the amount of the servicemember's 
     equity in the property be paid to the servicemember, or the 
     service-
     member's dependents, as a condition of foreclosing the 
     mortgage, repossessing the property, or rescinding or 
     terminating the contract.

     ``SEC. 305. TERMINATION OF LEASES BY LESSEES.

       ``(a) Covered Leases of Real Property.--This section 
     applies to the lease of premises occupied, or intended to be 
     occupied, by a servicemember or a servicemember's dependents 
     for a residential, professional, business, agricultural, or 
     similar purpose if--
       ``(1) the lease is executed by or on behalf of a person who 
     thereafter and during the term of the lease enters military 
     service; or
       ``(2) the servicemember, while in military service, 
     executes a lease and thereafter receives military orders for 
     a permanent change of station or to deploy with a military 
     unit for a period of not less than 90 days.
       ``(b) Covered Leases of Vehicles.--This section applies to 
     the lease of a motor vehicle used, or intended to be used, by 
     a servicemember or a servicemember's dependents if the lease 
     is executed by or on behalf of a person who thereafter and 
     during the term of the lease enters military service.
       ``(c) Notice to Lessor.--
       ``(1) Delivery of notice.--A lease described in subsection 
     (a) or (b) is terminated when written notice is delivered by 
     the lessee to the lessor (or the lessor's grantee) or to the 
     lessor's agent (or the agent's grantee).
       ``(2) Time for notice.--The written notice may be delivered 
     at any time after the lessee's entry into military service 
     or, in the case of a lease described in subsection (a), the 
     date of the military orders for a permanent change of station 
     or to deploy for a period of not less than 90 days.
       ``(3) Nature of notice.--Delivery may be accomplished--
       ``(A) by hand delivery;
       ``(B) by private business carrier; or
       ``(C) by placing the written notice in an envelope with 
     sufficient postage and addressed to the lessor (or the 
     lessor's grantee) or to the lessor's agent (or the agent's 
     grantee) and depositing the written notice in the United 
     States mails.
       ``(d) Effective Date of Termination.--
       ``(1) Lease with monthly rent.--Termination of a lease 
     providing for monthly payment of rent shall be effective 30 
     days after the first date on which the next rental payment is 
     due and payable after the date on which the notice is 
     delivered.
       ``(2) Other lease.--All other leases terminate on the last 
     day of the month following the month in which the notice is 
     delivered.
       ``(e) Arrearages.--Rents or lease amounts unpaid for the 
     period preceding termination shall be paid on a prorated 
     basis.
       ``(f) Amounts Paid in Advance.--Rents or lease amounts paid 
     in advance for a period succeeding termination shall be 
     refunded to the lessee by the lessor (or the lessor's 
     assignee or the assignee's agent).
       ``(g) Relief to Lessor.--Upon application by the lessor to 
     a court before the termination date provided in the written 
     notice, relief granted by this section to a servicemember may 
     be modified as justice and equity require.
       ``(h) Penalties.--
       ``(1) Misdemeanor.--Any person who knowingly seizes, holds, 
     or detains the personal effects, security deposit, or other 
     property of a servicemember or a servicemember's dependent 
     who lawfully terminates a lease covered by this section, or 
     who knowingly interferes with the removal of such property 
     from premises covered by such lease, for the purpose of 
     subjecting or attempting to subject any of such property to a 
     claim for rent or lease payments accruing after the date of 
     termination of such lease, or attempts to do so, shall be 
     fined as provided in title 18, United States Code, imprisoned 
     for not more than one year, or both.
       ``(2) Preservation of other remedies.--The remedy and 
     rights provided under this section are in addition to and do 
     not preclude any remedy for wrongful conversion otherwise 
     available under law to the person claiming relief under this 
     section, including any award for consequential or punitive 
     damages.

     ``SEC. 306. PROTECTION OF LIFE INSURANCE POLICY.

       ``(a) Assignment of Policy Protected.--If a life insurance 
     policy on the life of a servicemember is assigned before 
     military service to secure the payment of an obligation, the 
     assignee of the policy (except the insurer in connection with 
     a policy loan) may not exercise, during a period of military 
     service of the servicemember or within one year thereafter, 
     any right or option obtained under the assignment without a 
     court order.
       ``(b) Exception.--The prohibition in subsection (a) shall 
     not apply--
       ``(1) if the assignee has the written consent of the 
     insured made during the period described in subsection (a);
       ``(2) when the premiums on the policy are due and unpaid; 
     or
       ``(3) upon the death of the insured.
       ``(c) Order Refused Because of Material Affect.--A court 
     which receives an application for an order required under 
     subsection (a) may refuse to grant such order if the court 
     determines the ability of the servicemember to comply with 
     the terms of the obligation is materially affected by 
     military service.
       ``(d) Treatment of Guaranteed Premiums.--For purposes of 
     this subsection, premiums guaranteed under the provisions of 
     title IV shall not be considered due and unpaid.
       ``(e) Penalties.--
       ``(1) Misdemeanor.--A person who knowingly takes an action 
     contrary to this section, or attempts to do so, shall be 
     fined as provided in title 18, United States Code, imprisoned 
     for not more than one year, or both.

[[Page 12917]]

       ``(2) Preservation of other remedies.--The remedy and 
     rights provided under this section are in addition to and do 
     not preclude any remedy for wrongful conversion otherwise 
     available under law to the person claiming relief under this 
     section, including any consequential or punitive damages.

     ``SEC. 307. ENFORCEMENT OF STORAGE LIENS.

       ``(a) Liens.--
       ``(1) Limitation on foreclosure or enforcement.--A person 
     holding a lien on the property or effects of a servicemember 
     may not, during any period of military service of the 
     servicemember and for 90 days thereafter, foreclose or 
     enforce any lien on such property or effects without a court 
     order granted before foreclosure or enforcement.
       ``(2) Lien defined.--For the purposes of paragraph (1), the 
     term `lien' includes a lien for storage, repair, or cleaning 
     of the property or effects of a servicemember or a lien on 
     such property or effects for any other reason.
       ``(b) Stay of Proceedings.--In a proceeding to foreclose or 
     enforce a lien subject to this section, the court may on its 
     own motion, and shall if requested by a serv-
     icemember whose ability to comply with the obligation 
     resulting in the proceeding is materially affected by 
     military service--
       ``(1) stay the proceeding for a period of time as justice 
     and equity require; or
       ``(2) adjust the obligation to preserve the interests of 
     all parties.

     The provisions of this subsection do not affect the scope of 
     section 303.
       ``(c) Penalties.--
       ``(1) Misdemeanor.--A person who knowingly takes an action 
     contrary to this section, or attempts to do so, shall be 
     fined as provided in title 18, United States Code, imprisoned 
     for not more than one year, or both.
       ``(2) Preservation of other remedies.--The remedy and 
     rights provided under this section are in addition to and do 
     not preclude any remedy for wrongful conversion otherwise 
     available under law to the person claiming relief under this 
     section, including any consequential or punitive damages.

     ``SEC. 308. EXTENSION OF PROTECTIONS TO DEPENDENTS.

       ``Upon application to a court, a dependent of a 
     servicemember is entitled to the protections of this title if 
     the dependent's ability to comply with a lease, contract, 
     bailment, or other obligation is materially affected by 
     reason of the servicemember's military service.

                         ``TITLE IV--INSURANCE

     ``SEC. 401. DEFINITIONS.

       ``For the purposes of this title:
       ``(1) Policy.--The term `policy' means any contract for 
     whole, endowment, universal, or term life insurance, 
     including any benefit in the nature of such insurance arising 
     out of membership in any fraternal or beneficial association 
     which--
       ``(A) provides that the insurer may not--
       ``(i) decrease the amount of coverage or increase the 
     amount of premiums if the insured is in military service; or
       ``(ii) limit or restrict coverage for any activity required 
     by military service; and
       ``(B) is in force not less than 180 days before the date of 
     the insured's entry into military service and at the time of 
     application under this title.
       ``(2) Premium.--The term `premium' means the amount 
     specified in an insurance policy to be paid to keep the 
     policy in force.
       ``(3) Insured.--The term `insured' means a servicemember 
     whose life is insured under a policy.
       ``(4) Insurer.--The term `insurer' includes any firm, 
     corporation, partnership, association, or business that is 
     chartered or authorized to provide insurance and issue 
     contracts or policies by the laws of a State or the United 
     States.

     ``SEC. 402. INSURANCE RIGHTS AND PROTECTIONS.

       ``(a) Rights and Protections.--The rights and protections 
     under this title apply to the insured when the insured, the 
     insured's designee, or the insured's beneficiary applies in 
     writing for protection under this title, unless the Secretary 
     of Veterans Affairs determines that the insured's policy is 
     not entitled to protection under this title.
       ``(b) Notification and Application.--The Secretary of 
     Veterans Affairs shall notify the Secretary concerned of the 
     procedures to be used to apply for the protections provided 
     under this title. The applicant shall send the original 
     application to the insurer and a copy to the Secretary of 
     Veterans Affairs.
       ``(c) Limitation on Amount.--The total amount of life 
     insurance coverage protection provided by this title for a 
     servicemember may not exceed $250,000, or an amount equal to 
     the Servicemember's Group Life Insurance maximum limit, 
     whichever is greater, regardless of the number of policies 
     submitted.

     ``SEC. 403. APPLICATION FOR INSURANCE PROTECTION.

       ``(a) Application Procedure.--An application for protection 
     under this title shall--
       ``(1) be in writing and signed by the insured, the 
     insured's designee, or the insured's beneficiary, as the case 
     may be;
       ``(2) identify the policy and the insurer; and
       ``(3) include an acknowledgement that the insured's rights 
     under the policy are subject to and modified by the 
     provisions of this title.
       ``(b) Additional Requirements.--The Secretary of Veterans 
     Affairs may require additional information from the 
     applicant, the insured, and the insurer to determine if the 
     policy is entitled to protection under this title.
       ``(c) Notice to the Secretary by the Insured.--Upon receipt 
     of the application of the insured, the insurer shall furnish 
     a report concerning the policy to the Secretary of Veterans 
     Affairs as required by regulations prescribed by the 
     Secretary.
       ``(d) Policy Modification.--Upon application for protection 
     under this title, the insured and the insurer shall have 
     constructively agreed to any policy modification necessary to 
     give this title full force and effect.

     ``SEC. 404. POLICIES ENTITLED TO PROTECTION AND LAPSE OF 
                   POLICIES.

       ``(a) Determination.--The Secretary of Veterans Affairs 
     shall determine whether a policy is entitled to protection 
     under this title and shall notify the insured and the insurer 
     of that determination.
       ``(b) Lapse Protection.--A policy that the Secretary 
     determines is entitled to protection under this title shall 
     not lapse or otherwise terminate or be forfeited for the 
     nonpayment of a premium, or interest or indebtedness on a 
     premium, after the date of the application for protection.
       ``(c) Time Application.--The protection provided by this 
     title applies during the insured's period of military service 
     and for a period of two years thereafter.

     ``SEC. 405. POLICY RESTRICTIONS.

       ``(a) Dividends.--While a policy is protected under this 
     title, a dividend or other monetary benefit under a policy 
     may not be paid to an insured or used to purchase dividend 
     additions without the approval of the Secretary of Veterans 
     Affairs. If such approval is not obtained, the dividends or 
     benefits shall be added to the value of the policy to be used 
     as a credit when final settlement is made with the insurer.
       ``(b) Specific Restrictions.--While a policy is protected 
     under this title, cash value, loan value, withdrawal of 
     dividend accumulation, unearned premiums, or other value of 
     similar character may not be available to the insured without 
     the approval of the Secretary. The right of the insured to 
     change a beneficiary designation or select an optional 
     settlement for a beneficiary shall not be affected by the 
     provisions of this title.

     ``SEC. 406. DEDUCTION OF UNPAID PREMIUMS.

       ``(a) Settlement of Proceeds.--If a policy matures as a 
     result of a servicemember's death or otherwise during the 
     period of protection of the policy under this title, the 
     insurer in making settlement shall deduct from the insurance 
     proceeds the amount of the unpaid premiums guaranteed under 
     this title, together with interest due at the rate fixed in 
     the policy for policy loans.
       ``(b) Interest Rate.--If the interest rate is not 
     specifically fixed in the policy, the rate shall be the same 
     as for policy loans in other policies issued by the insurer 
     at the time the insured's policy was issued.
       ``(c) Reporting Requirement.--The amount deducted under 
     this section, if any, shall be reported by the insurer to the 
     Secretary of Veterans Affairs.

     ``SEC. 407. PREMIUMS AND INTEREST GUARANTEED BY UNITED 
                   STATES.

       ``(a) Guarantee of Premiums and Interest by the United 
     States.--
       ``(1) Guarantee.--Payment of premiums, and interest on 
     premiums at the rate specified in section 406, which become 
     due on a policy under the protection of this title is 
     guaranteed by the United States. If the amount guaranteed is 
     not paid to the insurer before the period of insurance 
     protection under this title expires, the amount due shall be 
     treated by the insurer as a policy loan on the policy.
       ``(2) Policy termination.--If, at the expiration of 
     insurance protection under this title, the cash surrender 
     value of a policy is less than the amount due to pay premiums 
     and interest on premiums on the policy, the policy shall 
     terminate. Upon such termination, the United States shall pay 
     the insurer the difference between the amount due and the 
     cash surrender value.
       ``(b) Recovery From Insured of Amounts Paid by the United 
     States.--
       ``(1) Debt payable to the united states.--The amount paid 
     by the United States to an insurer under this title shall be 
     a debt payable to the United States by the insured on whose 
     policy payment was made.
       ``(2) Collection.--Such amount may be collected by the 
     United States, either as an offset from any amount due the 
     insured by the United States or as otherwise authorized by 
     law.
       ``(3) Debt not dischargeable in bankruptcy.--Such debt 
     payable to the United States is not dischargeable in 
     bankruptcy proceedings.
       ``(c) Crediting of Amounts Recovered.--Any amounts received 
     by the United States as repayment of debts incurred by an 
     insured under this title shall be credited to the 
     appropriation for the payment of claims under this title.

     ``SEC. 408. REGULATIONS.

       ``The Secretary of Veterans Affairs shall prescribe 
     regulations for the implementation of this title.

[[Page 12918]]



     ``SEC. 409. REVIEW OF FINDINGS OF FACT AND CONCLUSIONS OF 
                   LAW.

       ``The findings of fact and conclusions of law made by the 
     Secretary of Veterans Affairs in administering this title may 
     be reviewed by the Board of Veterans' Appeals and the United 
     States Court of Appeals for Veterans Claims.

                   ``TITLE V--TAXES AND PUBLIC LANDS

     ``SEC. 501. TAXES RESPECTING PERSONAL PROPERTY, MONEY, 
                   CREDITS, AND REAL PROPERTY.

       ``(a) Application.--This section applies in any case in 
     which a tax or assessment, whether general or special (other 
     than a tax on personal income), falls due and remains unpaid 
     before or during a period of military service with respect to 
     a servicemember's--
       ``(1) personal property; or
       ``(2) real property occupied for dwelling, professional, 
     business, or agricultural purposes by a servicemember or the 
     servicemember's dependents or employees--
       ``(A) before the servicemember's entry into military 
     service; and
       ``(B) during the time the tax or assessment remains unpaid.
       ``(b) Sale of Property.--
       ``(1) Limitation on sale of property to enforce tax 
     assessment.--Property described in subsection (a) may not be 
     sold to enforce the collection of such tax or assessment 
     except by court order and upon the determination by the court 
     that military service does not materially affect the 
     servicemember's ability to pay the unpaid tax or assessment.
       ``(2) Stay of court proceedings.--A court may stay a 
     proceeding to enforce the collection of such tax or 
     assessment, or sale of such property, during a period of 
     military service of the servicemember and for a period not 
     more than 180 days after the termination of, or release of 
     the servicemember from, military service.
       ``(c) Redemption.--When property described in subsection 
     (a) is sold or forfeited to enforce the collection of a tax 
     or assessment, a servicemember shall have the right to redeem 
     or commence an action to redeem the servicemember's property 
     during the period of military service or within 180 days 
     after termination of or release from military service. This 
     subsection may not be construed to shorten any period 
     provided by the law of a State (including any political 
     subdivision of a State) for redemption.
       ``(d) Interest on Tax or Assessment.--Whenever a 
     servicemember does not pay a tax or assessment on property 
     described in subsection (a) when due, the amount of the tax 
     or assessment due and unpaid shall bear interest until paid 
     at the rate of 6 percent per year. An additional penalty or 
     interest shall not be incurred by reason of nonpayment. A 
     lien for such unpaid tax or assessment may include interest 
     under this subsection.
       ``(e) Joint Ownership Application.--This section applies to 
     all forms of property described in subsection (a) owned 
     individually by a servicemember or jointly by a servicemember 
     and a dependent or dependents.

     ``SEC. 502. RIGHTS IN PUBLIC LANDS.

       ``(a) Rights Not Forfeited.--The rights of a servicemember 
     to lands owned or controlled by the United States, and 
     initiated or acquired by the servicemember under the laws of 
     the United States (including the mining and mineral leasing 
     laws) before military service, shall not be forfeited or 
     prejudiced as a result of being absent from the land, or by 
     failing to begin or complete any work or improvements to the 
     land, during the period of military service.
       ``(b) Temporary Suspension of Permits or Licenses.--If a 
     permittee or licensee under the Act of June 28, 1934 (43 
     U.S.C. 315 et seq.), enters military service, the permittee 
     or licensee may suspend the permit or license for the period 
     of military service and for 180 days after termination of or 
     release from military service.
       ``(c) Regulations.--Regulations prescribed by the Secretary 
     of the Interior shall provide for such suspension of permits 
     and licenses and for the remission, reduction, or refund of 
     grazing fees during the period of such suspension.

     ``SEC. 503. DESERT-LAND ENTRIES.

       ``(a) Desert-Land Rights Not Forfeited.--A desert-land 
     entry made or held under the desert-land laws before the 
     entrance of the entryman or the entryman's successor in 
     interest into military service shall not be subject to 
     contest or cancellation--
       ``(1) for failure to expend any required amount per acre 
     per year in improvements upon the claim;
       ``(2) for failure to effect the reclamation of the claim 
     during the period the entryman or the entryman's successor in 
     interest is in the military service, or for 180 days after 
     termination of or release from military service; or
       ``(3) during any period of hospitalization or 
     rehabilitation due to an injury or disability incurred in the 
     line of duty.

     The time within which the entryman or claimant is required to 
     make such expenditures and effect reclamation of the land 
     shall be exclusive of the time periods described in 
     paragraphs (2) and (3).
       ``(b) Service-Related Disability.--If an entryman or 
     claimant is honorably discharged and is unable to accomplish 
     reclamation of, and payment for, desert land due to a 
     disability incurred in the line of duty, the entryman or 
     claimant may make proof without further reclamation or 
     payments, under regulations prescribed by the Secretary of 
     the Interior, and receive a patent for the land entered or 
     claimed.
       ``(c) Filing Requirement.--In order to obtain the 
     protection of this section, the entryman or claimant shall, 
     within 180 days after entry into military service, cause to 
     be filed in the land office of the district where the claim 
     is situated a notice communicating the fact of military 
     service and the desire to hold the claim under this section.

     ``SEC. 504. MINING CLAIMS.

       ``(a) Requirements Suspended.--The provisions of section 
     2324 of the Revised Statutes of the United States (30 U.S.C. 
     28) specified in subsection (b) shall not apply to a 
     servicemember's claims or interests in claims, regularly 
     located and recorded, during a period of military service and 
     180 days thereafter, or during any period of hospitalization 
     or rehabilitation due to injuries or disabilities incurred in 
     the line of duty.
       ``(b) Requirements.--The provisions in section 2324 of the 
     Revised Statutes that shall not apply under subsection (a) 
     are those which require that on each mining claim located 
     after May 10, 1872, and until a patent has been issued for 
     such claim, not less than $100 worth of labor shall be 
     performed or improvements made during each year.
       ``(c) Period of Protection From Forfeiture.--A mining claim 
     or an interest in a claim owned by a servicemember that has 
     been regularly located and recorded shall not be subject to 
     forfeiture for nonperformance of annual assessments during 
     the period of military service and for 180 days thereafter, 
     or for any period of hospitalization or rehabilitation 
     described in subsection (a).
       ``(d) Filing Requirement.--In order to obtain the 
     protections of this section, the claimant of a mining 
     location shall, before the end of the assessment year in 
     which military service is begun or within 60 days after the 
     end of such assessment year, cause to be filed in the office 
     where the location notice or certificate is recorded a notice 
     communicating the fact of military service and the desire to 
     hold the mining claim under this section.

     ``SEC. 505. MINERAL PERMITS AND LEASES.

       ``(a) Suspension During Military Service.--A person holding 
     a permit or lease on the public domain under the Federal 
     mineral leasing laws who enters military service may suspend 
     all operations under the permit or lease for the duration of 
     military service and for 180 days thereafter. The term of the 
     permit or lease shall not run during the period of 
     suspension, nor shall any rental or royalties be charged 
     against the permit or lease during the period of suspension.
       ``(b) Notification.--In order to obtain the protection of 
     this section, the permittee or lessee shall, within 180 days 
     after entry into military service, notify the Secretary of 
     the Interior by registered mail of the fact that military 
     service has begun and of the desire to hold the claim under 
     this section.
       ``(c) Contract Modification.--This section shall not be 
     construed to supersede the terms of any contract for 
     operation of a permit or lease.

     ``SEC. 506. PERFECTION OR DEFENSE OF RIGHTS.

       ``(a) Right To Take Action Not Affected.--This title shall 
     not affect the right of a servicemember to take action during 
     a period of military service that is authorized by law or 
     regulations of the Department of the Interior, for the 
     perfection, defense, or further assertion of rights initiated 
     or acquired before entering military service.
       ``(b) Affidavits and Proofs.--
       ``(1) In general.--A servicemember during a period of 
     military service may make any affidavit or submit any proof 
     required by law, practice, or regulation of the Department of 
     the Interior in connection with the entry, perfection, 
     defense, or further assertion of rights initiated or acquired 
     before entering military service before an officer authorized 
     to provide notary services under section 1044a of title 10, 
     United States Code, or any superior commissioned officer.
       ``(2) Legal status of affidavits.--Such affidavits shall be 
     binding in law and subject to the same penalties as 
     prescribed by section 1001 of title 18, United State Code.

     ``SEC. 507. DISTRIBUTION OF INFORMATION CONCERNING BENEFITS 
                   OF TITLE.

       ``(a) Distribution of Information by Secretary Concerned.--
     The Secretary concerned shall issue to servicemembers 
     information explaining the provisions of this title.
       ``(b) Application Forms.--The Secretary concerned shall 
     provide application forms to servicemembers requesting relief 
     under this title.
       ``(c) Information From Secretary of the Interior.--The 
     Secretary of the Interior shall furnish to the Secretary 
     concerned information explaining the provisions of this title 
     (other than sections 501, 510, and 511) and related 
     application forms.

     ``SEC. 508. LAND RIGHTS OF SERVICEMEMBERS.

       ``(a) No Age Limitations.--Any servicemember under the age 
     of 21 in military service shall be entitled to the same 
     rights under the laws relating to lands owned or controlled 
     by the United States, including mining and mineral leasing 
     laws, as 


[[Page 12919]]

     those servicemembers who are 21 years of age.
       ``(b) Residency Requirement.--Any requirement related to 
     the establishment of a residence within a limited time shall 
     be suspended as to entry by a servicemember in military 
     service until 180 days after termination of or release from 
     military service.
       ``(c) Entry Applications.--Applications for entry may be 
     verified before a person authorized to administer oaths under 
     section 1044a of title 10, United States Code, or under the 
     laws of the State where the land is situated.

     ``SEC. 509. REGULATIONS.

       ``The Secretary of the Interior may issue regulations 
     necessary to carry out this title (other than sections 501, 
     510, and 511).

     ``SEC. 510. INCOME TAXES.

       ``(a) Deferral of Tax.--Upon notice to the Internal Revenue 
     Service or the tax authority of a State or a political 
     subdivision of a State, the collection of income tax on the 
     income of a servicemember falling due before or during 
     military service shall be deferred for a period not more than 
     180 days after termination of or release from military 
     service, if a servicemember's ability to pay such income tax 
     is materially affected by military service.
       ``(b) Accrual of Interest or Penalty.--No interest or 
     penalty shall accrue for the period of deferment by reason of 
     nonpayment on any amount of tax deferred under this section.
       ``(c) Statute of Limitations.--The running of a statute of 
     limitations against the collection of tax deferred under this 
     section, by seizure or otherwise, shall be suspended for the 
     period of military service of the servicemember and for an 
     additional period of 270 days thereafter.
       ``(d) Application Limitation.--This section shall not apply 
     to the tax imposed on employees by section 3101 of the 
     Internal Revenue Code of 1986.

     ``SEC. 511. RESIDENCE FOR TAX PURPOSES.

       ``(a) Residence or Domicile.--A servicemember shall neither 
     lose nor acquire a residence or domicile for purposes of 
     taxation with respect to the person, personal property, or 
     income of the servicemember by reason of being absent or 
     present in any tax jurisdiction of the United States solely 
     in compliance with military orders.
       ``(b) Military Service Compensation.--Compensation of a 
     servicemember for military service shall not be deemed to be 
     income for services performed or from sources within a tax 
     jurisdiction of the United States if the servicemember is not 
     a resident or domiciliary of the jurisdiction in which the 
     servicemember is serving in compliance with military orders.
       ``(c) Personal Property.--
       ``(1) Relief from personal property taxes.--The personal 
     property of a servicemember shall not be deemed to be located 
     or present in, or to have a situs for taxation in, the tax 
     jurisdiction in which the servicemember is serving in 
     compliance with military orders.
       ``(2) Exception for property within member's domicile or 
     residence.--This subsection applies to personal property or 
     its use within any tax jurisdiction other than the 
     servicemember's domicile or residence.
       ``(3) Exception for property used in trade or business.--
     This section does not prevent taxation by a tax jurisdiction 
     with respect to personal property used in or arising from a 
     trade or business, if it has jurisdiction.
       ``(4) Relationship to law of state of domicile.--
     Eligibility for relief from personal property taxes under 
     this subsection is not contingent on whether or not such 
     taxes are paid to the State of domicile.
       ``(d) Increase of Tax Liability.--A tax jurisdiction may 
     not use the military compensation of a nonresident 
     servicemember to increase the tax liability imposed on other 
     income earned by the nonresident servicemember or spouse 
     subject to tax by the jurisdiction.
       ``(e) Federal Indian Reservations.--An Indian servicemember 
     whose legal residence or domicile is a Federal Indian 
     reservation shall be taxed by the laws applicable to Federal 
     Indian reservations and not the State where the reservation 
     is located.
       ``(f) Definitions.--For purposes of this section:
       ``(1) Personal property.--The term `personal property' 
     means intangible and tangible property (including motor 
     vehicles).
       ``(2) Taxation.--The term `taxation' includes licenses, 
     fees, or excises imposed with respect to motor vehicles and 
     their use, if the license, fee, or excise is paid by the 
     servicemember in the servicemember's State of domicile or 
     residence.
       ``(3) Tax jurisdiction.--The term `tax jurisdiction' means 
     a State or a political subdivision of a State.

                  ``TITLE VI--ADMINISTRATIVE REMEDIES

     ``SEC. 601. INAPPROPRIATE USE OF ACT.

       ``If a court determines, in any proceeding to enforce a 
     civil right, that any interest, property, or contract has 
     been transferred or acquired with the intent to delay the 
     just enforcement of such right by taking advantage of this 
     Act, the court shall enter such judgment or make such order 
     as might lawfully be entered or made concerning such transfer 
     or acquisition.

     ``SEC. 602. CERTIFICATES OF SERVICE; PERSONS REPORTED 
                   MISSING.

       ``(a) Prima Facie Evidence.--In any proceeding under this 
     Act, a certificate signed by the Secretary concerned is prima 
     facie evidence as to any of the following facts stated in the 
     certificate:
       ``(1) That a person named is, is not, has been, or has not 
     been in military service.
       ``(2) The time and the place the person entered military 
     service.
       ``(3) The person's residence at the time the person entered 
     military service.
       ``(4) The rank, branch, and unit of military service of the 
     person upon entry.
       ``(5) The inclusive dates of the person's military service.
       ``(6) The monthly pay received by the person at the date of 
     the certificate's issuance.
       ``(7) The time and place of the person's termination of or 
     release from military service, or the person's death during 
     military service.
       ``(b) Certificates.--The Secretary concerned shall furnish 
     a certificate under subsection (a) upon receipt of an 
     application for such a certificate. A certificate appearing 
     to be signed by the Secretary concerned is prima facie 
     evidence of its contents and of the signer's authority to 
     issue it.
       ``(c) Treatment of Servicemembers in Missing Status.--A 
     servicemember who has been reported missing is presumed to 
     continue in service until accounted for. A requirement under 
     this Act that begins or ends with the death of a 
     servicemember does not begin or end until the servicemember's 
     death is reported to, or determined by, the Secretary 
     concerned or by a court of competent jurisdiction.

     ``SEC. 603. INTERLOCUTORY ORDERS.

       ``An interlocutory order issued by a court under this Act 
     may be revoked, modified, or extended by the court upon its 
     own motion or otherwise, upon notification to affected 
     parties as required by the court.

                      ``TITLE VII--FURTHER RELIEF

     ``SEC. 701. ANTICIPATORY RELIEF.

       ``(a) Application for Relief.--A servicemember may, during 
     military service or within 180 days of termination of or 
     release from military service, apply to a court for relief--
       ``(1) from any obligation or liability incurred by the 
     servicemember before the servicemember's military service; or
       ``(2) from a tax or assessment falling due before or during 
     the servicemember's military service.
       ``(b) Tax Liability or Assessment.--In a case covered by 
     subsection (a), the court may, if the ability of the 
     servicemember to comply with the terms of such obligation or 
     liability or pay such tax or assessment has been materially 
     affected by reason of military service, after appropriate 
     notice and hearing, grant the following relief:
       ``(1) Stay of enforcement of real estate contracts.--
       ``(A) In the case of an obligation payable in installments 
     under a contract for the purchase of real estate, or secured 
     by a mortgage or other instrument in the nature of a mortgage 
     upon real estate, the court may grant a stay of the 
     enforcement of the obligation--
       ``(i) during the servicemember's period of military 
     service; and
       ``(ii) from the date of termination of or release from 
     military service, or from the date of application if made 
     after termination of or release from military service.
       ``(B) Any stay under this paragraph shall be--
       ``(i) for a period equal to the remaining life of the 
     installment contract or other instrument, plus a period of 
     time equal to the period of military service of the 
     servicemember, or any part of such combined period; and
       ``(ii) subject to payment of the balance of the principal 
     and accumulated interest due and unpaid at the date of 
     termination or release from the applicant's military service 
     or from the date of application in equal installments during 
     the combined period at the rate of interest on the unpaid 
     balance prescribed in the contract or other instrument 
     evidencing the obligation, and subject to other terms as may 
     be equitable.
       ``(2) Stay of enforcement of other contracts.--
       ``(A) In the case of any other obligation, liability, tax, 
     or assessment, the court may grant a stay of enforcement--
       ``(i) during the servicemember's military service; and
       ``(ii) from the date of termination of or release from 
     military service, or from the date of application if made 
     after termination or release from military service.
       ``(B) Any stay under this paragraph shall be--
       ``(i) for a period of time equal to the period of the 
     servicemember's military service or any part of such period; 
     and
       ``(ii) subject to payment of the balance of principal and 
     accumulated interest due and unpaid at the date of 
     termination or release from military service, or the date of 
     application, in equal periodic installments during this 
     extended period at the rate of interest as may be prescribed 
     for this obligation, liability, tax, or assessment, if paid 
     when due, and subject to other terms as may be equitable.
       ``(c) Affect of Stay on Fine or Penalty.--When a court 
     grants a stay under this

[[Page 12920]]

     section, a fine or penalty shall not accrue on the 
     obligation, liability, tax, or assessment for the period of 
     compliance with the terms and conditions of the stay.

     ``SEC. 702. POWER OF ATTORNEY.

       ``(a) Automatic Extension.--A power of attorney of a 
     servicemember shall be automatically extended for the period 
     the servicemember is in a missing status (as defined in 
     section 551(2) of title 37, United States Code) if the power 
     of attorney--
       ``(1) was duly executed by the service-
     member--
       ``(A) while in military service; or
       ``(B) before entry into military service but after the 
     servicemember--
       ``(i) received a call or order to report for military 
     service; or
       ``(ii) was notified by an official of the Department of 
     Defense that the person could receive a call or order to 
     report for military service;
       ``(2) designates the servicemember's spouse, parent, or 
     other named relative as the servicemember's attorney in fact 
     for certain, specified, or all purposes; and
       ``(3) expires by its terms after the servicemember entered 
     a missing status.
       ``(b) Limitation on Power of Attorney Extension.--A power 
     of attorney executed by a servicemember may not be extended 
     under subsection (a) if the document by its terms clearly 
     indicates that the power granted expires on the date 
     specified even though the servicemember, after the date of 
     execution of the document, enters a missing status.

     ``SEC. 703. PROFESSIONAL LIABILITY PROTECTION.

       ``(a) Applicability.--This section applies to a 
     servicemember who--
       ``(1) after July 31, 1990, is ordered to active duty (other 
     than for training) pursuant to sections 688, 12301(a), 
     12301(g), 12302, 12304, 12306, or 12307 of title 10, United 
     States Code, or who is ordered to active duty under section 
     12301(d) of such title during a period when members are on 
     active duty pursuant to any of the preceding sections; and
       ``(2) immediately before receiving the order to active 
     duty--
       ``(A) was engaged in the furnishing of health-care or legal 
     services or other services determined by the Secretary of 
     Defense to be professional services; and
       ``(B) had in effect a professional liability insurance 
     policy that does not continue to cover claims filed with 
     respect to the servicemember during the period of the 
     servicemember's active duty unless the premiums are paid for 
     such coverage for such period.
       ``(b) Suspension of Coverage.--
       ``(1) Suspension.--Coverage of a servicemember referred to 
     in subsection (a) by a professional liability insurance 
     policy shall be suspended by the insurance carrier in 
     accordance with this subsection upon receipt of a written 
     request from the serv-
     icemember, or the servicemember's legal representative, by 
     the insurance carrier.
       ``(2) Premiums for suspended contracts.--A professional 
     liability insurance carrier--
       ``(A) may not require that premiums be paid by or on behalf 
     of a servicemember for any professional liability insurance 
     coverage suspended pursuant to paragraph (1); and
       ``(B) shall refund any amount paid for coverage for the 
     period of such suspension or, upon the election of such 
     servicemember, apply such amount for the payment of any 
     premium becoming due upon the reinstatement of such coverage.
       ``(3) Nonliability of carrier during suspension.--A 
     professional liability insurance carrier shall not be liable 
     with respect to any claim that is based on professional 
     conduct (including any failure to take any action in a 
     professional capacity) of a servicemember that occurs during 
     a period of suspension of that servicemember's professional 
     liability insurance under this subsection.
       ``(4) Certain claims considered to arise before 
     suspension.--For the purposes of paragraph (3), a claim based 
     upon the failure of a professional to make adequate provision 
     for a patient, client, or other person to receive 
     professional services or other assistance during the period 
     of the professional's active duty service shall be considered 
     to be based on an action or failure to take action before the 
     beginning of the period of the suspension of professional 
     liability insurance under this subsection, except in a case 
     in which professional services were provided after the date 
     of the beginning of such period.
       ``(c) Reinstatement of Coverage.--
       ``(1) Reinstatement required.--Professional liability 
     insurance coverage suspended in the case of any servicemember 
     pursuant to subsection (b) shall be reinstated by the 
     insurance carrier on the date on which that servicemember 
     transmits to the insurance carrier a written request for 
     reinstatement.
       ``(2) Time and premium for reinstatement.--The request of a 
     servicemember for reinstatement shall be effective only if 
     the servicemember transmits the request to the insurance 
     carrier within 30 days after the date on which the 
     servicemember is released from active duty. The insurance 
     carrier shall notify the servicemember of the due date for 
     payment of the premium of such insurance. Such premium shall 
     be paid by the servicemember within 30 days after receipt of 
     that notice.
       ``(3) Period of reinstated coverage.--The period for which 
     professional liability insurance coverage shall be reinstated 
     for a servicemember under this subsection may not be less 
     than the balance of the period for which coverage would have 
     continued under the insurance policy if the coverage had not 
     been suspended.
       ``(d) Increase in Premium.--
       ``(1) Limitation on premium increases.--An insurance 
     carrier may not increase the amount of the premium charged 
     for professional liability insurance coverage of any 
     servicemember for the minimum period of the reinstatement of 
     such coverage required under subsection (c)(3) to an amount 
     greater than the amount chargeable for such coverage for such 
     period before the suspension.
       ``(2) Exception.--Paragraph (1) does not prevent an 
     increase in premium to the extent of any general increase in 
     the premiums charged by that carrier for the same 
     professional liability coverage for persons similarly covered 
     by such insurance during the period of the suspension.
       ``(e) Continuation of Coverage of Unaffected Persons.--This 
     section does not--
       ``(1) require a suspension of professional liability 
     insurance protection for any person who is not a person 
     referred to in subsection (a) and who is covered by the same 
     professional liability insurance as a person referred to in 
     such subsection; or
       ``(2) relieve any person of the obligation to pay premiums 
     for the coverage not required to be suspended.
       ``(f) Stay of Civil or Administrative Actions.--
       ``(1) Stay of actions.--A civil or administrative action 
     for damages on the basis of the alleged professional 
     negligence or other professional liability of a servicemember 
     whose professional liability insurance coverage has been 
     suspended under subsection (b) shall be stayed until the end 
     of the period of the suspension if--
       ``(A) the action was commenced during the period of the 
     suspension;
       ``(B) the action is based on an act or omission that 
     occurred before the date on which the suspension became 
     effective; and
       ``(C) the suspended professional liability insurance would, 
     except for the suspension, on its face cover the alleged 
     professional negligence or other professional liability 
     negligence or other professional liability of the 
     servicemember.
       ``(2) Date of commencement of action.--Whenever a civil or 
     administrative action for damages is stayed under paragraph 
     (1) in the case of any servicemember, the action shall have 
     been deemed to have been filed on the date on which the 
     professional liability insurance coverage of the 
     servicemember is reinstated under subsection (c).
       ``(g) Effect of Suspension Upon Limitations Period.--In the 
     case of a civil or administrative action for which a stay 
     could have been granted under subsection (f) by reason of the 
     suspension of professional liability insurance coverage of 
     the defendant under this section, the period of the 
     suspension of the coverage shall be excluded from the 
     computation of any statutory period of limitation on the 
     commencement of such action.
       ``(h) Death During Period of Suspension.--If a 
     servicemember whose professional liability insurance coverage 
     is suspended under subsection (b) dies during the period of 
     the suspension--
       ``(1) the requirement for the grant or continuance of a 
     stay in any civil or administrative action against such 
     servicemember under subsection (f)(1) shall terminate on the 
     date of the death of such servicemember; and
       ``(2) the carrier of the professional liability insurance 
     so suspended shall be liable for any claim for damages for 
     professional negligence or other professional liability of 
     the deceased servicemember in the same manner and to the same 
     extent as such carrier would be liable if the servicemember 
     had died while covered by such insurance but before the claim 
     was filed.
       ``(i) Definitions.--For purposes of this section:
       ``(1) The term `active duty' has the meaning given that 
     term in section 101(d)(1) of title 10, United States Code.
       ``(2) The term `profession' includes occupation.
       ``(3) The term `professional' includes occupational.

     ``SEC. 704. HEALTH INSURANCE REINSTATEMENT.

       ``(a) Reinstatement of Health Insurance.--A servicemember 
     who, by reason of military service as defined in section 
     703(a)(1), is entitled to the rights and protections of this 
     Act shall also be entitled upon termination or release from 
     such service to reinstatement of any health insurance that--
       ``(1) was in effect on the day before such service 
     commenced; and
       ``(2) was terminated effective on a date during the period 
     of such service.
       ``(b) No Exclusion or Waiting Period.--The reinstatement of 
     health care insurance coverage for the health or physical 
     condition of a servicemember described in subsection (a), or 
     any other person who is covered by the insurance by reason of 
     the coverage of the servicemember, shall not be subject to an 
     exclusion or a waiting period, if--

[[Page 12921]]

       ``(1) the condition arose before or during the period of 
     such service;
       ``(2) an exclusion or a waiting period would not have been 
     imposed for the condition during the period of coverage; and
       ``(3) if the condition relates to the servicemember, the 
     condition has not been determined by the Secretary of 
     Veterans Affairs to be a disability incurred or aggravated in 
     the line of duty (within the meaning of section 105 of title 
     38, United States Code).
       ``(c) Exceptions.--Subsection (a) does not apply to a 
     servicemember entitled to participate in employer-offered 
     insurance benefits pursuant to the provisions of chapter 43 
     of title 38, United States Code.
       ``(d) Time for Applying for Reinstatement.--An application 
     under this section must be filed not later than 120 days 
     after the date of the termination of or release from military 
     service.

     ``SEC. 705. GUARANTEE OF RESIDENCY FOR MILITARY PERSONNEL.

       ``For the purposes of voting for any Federal office (as 
     defined in section 301 of the Federal Election Campaign Act 
     of 1971 (2 U.S.C. 431)) or a State or local office, a person 
     who is absent from a State in compliance with military or 
     naval orders shall not, solely by reason of that absence--
       ``(1) be deemed to have lost a residence or domicile in 
     that State, without regard to whether or not the person 
     intends to return to that State;
       ``(2) be deemed to have acquired a residence or domicile in 
     any other State; or
       ``(3) be deemed to have become a resident in or a resident 
     of any other State.

     ``SEC. 706. BUSINESS OR TRADE OBLIGATIONS.

       ``(a) Availability of Non-Business Assets to Satisfy 
     Obligations.--If the trade or business (without regard to the 
     form in which such trade or business is carried out) of a 
     servicemember has an obligation or liability for which the 
     servicemember is personally liable, the assets of the 
     servicemember not held in connection with the trade or 
     business may not be available for satisfaction of the 
     obligation or liability during the servicemember's military 
     service.
       ``(b) Relief to Obligors.--Upon application to a court by 
     the holder of an obligation or liability covered by this 
     section, relief granted by this section to a servicemember 
     may be modified as justice and equity require.

     ``SEC. 707. RETURN TO CLASSES AT NO ADDITIONAL COST.

       ``(a) In General.--Each institution of higher education 
     that receives Federal assistance or participates in a program 
     assisted under the Higher Education Act of 1965 (20 U.S.C. 
     1001 et seq.) shall permit each student who is enrolled in 
     the institution and enters into military service--
       ``(1) to return to the institution of higher education 
     after completion of the period of military service; and
       ``(2) complete, at no additional cost, each class the 
     student was unable to complete as a result of the period of 
     military service.
       ``(b) Institution of Higher Education Defined.--In this 
     section, the term `institution of higher education' has the 
     meaning given the term in section 101 of the Higher Education 
     Act of 1965 (20 U.S.C. 1001).''.

     SEC. 2. CONFORMING AMENDMENTS.

       (a) Military Selective Service Act.--Section 14 of the 
     Military Selective Service Act (50 U.S.C. App. 464) is 
     repealed.
       (b) Title 5, United States Code.--(1) Section 
     5520a(k)(2)(A) of title 5, United States Code, is amended by 
     striking ``Soldiers' and Sailors' Civil Relief Act of 1940'' 
     and inserting ``Servicemembers Civil Relief Act''; and
       (2) Section 5569(e) of title 5, United States Code, is 
     amended--
       (A) in paragraph (1), by striking ``provided by the 
     Soldiers' and Sailors' Civil Relief Act of 1940'' and all 
     that follows through ``of such Act'' and inserting ``provided 
     by the Servicemembers Civil Relief Act, including the 
     benefits provided by section 702 of such Act but excluding 
     the benefits provided by sections 104 and 106, title IV, and 
     title V (other than sections 501 and 510) of such Act''; and
       (B) in paragraph (2), by striking ``person in the military 
     service'' and inserting ``serv-
     icemember''.
       (c) Title 10, United States Code.--Section 1408(b)(1)(D) of 
     title 10, United States Code, is amended by striking 
     ``Soldiers' and Sailors' Civil Relief Act of 1940'' and 
     inserting ``Servicemembers Civil Relief Act''.
       (d) Internal Revenue Code.--Section 7654(d)(1) of the 
     Internal Revenue Code of 1986 is amended by striking 
     ``Soldiers' and Sailors' Civil Relief Act'' and inserting 
     ``Servicemembers Civil Relief Act''.
       (e) Public Law 91-621.--Section 3(a)(3) of Public Law 91-
     621 (33 U.S.C. 857-3(a)(3)) is amended by striking 
     ``Soldiers' and Sailors' Civil Relief Act of 1940, as 
     amended'' and inserting ``Servicemembers Civil Relief Act''.
       (f) Public Health Service Act.--Section 212(e) of the 
     Public Health Service Act (42 U.S.C. 213(e)) is amended by 
     striking ``Soldiers' and Sailors' Civil Relief Act of 1940'' 
     and inserting ``Servicemembers Civil Relief Act''.
       (g) Elementary and Secondary Education Act of 1965.--
     Section 8001 of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 7701) is amended by striking ``section 514 of 
     the Soldiers' and Sailors' Civil Relief Act of 1940 (50 
     U.S.C. App. 574)'' in the matter preceding paragraph (1) and 
     inserting ``section 511 of the Servicemembers Civil Relief 
     Act''.

     SEC. 3. EFFECTIVE DATE.

       The amendment made by section 1 shall apply to any case 
     decided after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. COLEMAN:
  S. 1138. A bill to amend the Employee Retirement Income Security Act 
of 1974, Public Health Service Act, and the Internal Revenue Code of 
1986 to provide parity with respect to substance abuse treatment 
benefits under group health plans and health insurance coverage; to the 
Committee on Health, Education, Labor, and Pensions.
  Mr. COLEMAN. Mr. President, I ask unanimous consent that the bill I 
introduce today to provide parity with respect to substance abuse 
treatment benefits under group health plans and health insurance 
coverage be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1138

       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 ``Help Expand Access to 
     Recovery and Treatment Act of 2003'' or the ``HEART Act''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Substance abuse, if left untreated, is a medical 
     emergency and a private and public heath crisis.
       (2) Nothing in this Act should be construed as prohibiting 
     application of the concept of parity to substance abuse 
     treatment provided by faith-based treatment providers.

     SEC. 3. PARITY IN SUBSTANCE ABUSE TREATMENT BENEFITS.

       (a) Group Health Plans.--
       (1) Public health service act amendments.--
       (A) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act is amended by adding at the end the 
     following new section:

     ``SEC. 2707. PARITY IN THE APPLICATION OF TREATMENT 
                   LIMITATIONS AND FINANCIAL REQUIREMENTS TO 
                   SUBSTANCE ABUSE TREATMENT BENEFITS.

       ``(a) In General.--In the case of a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan) that provides both medical and surgical benefits and 
     substance abuse treatment benefits, the plan or coverage 
     shall not impose treatment limitations or financial 
     requirements on the substance abuse treatment benefits unless 
     similar limitations or requirements are imposed for medical 
     and surgical benefits.
       ``(b) Construction.--Nothing in this section shall be 
     construed--
       ``(1) as requiring a group health plan (or health insurance 
     coverage offered in connection with such a plan) to provide 
     any substance abuse treatment benefits; or
       ``(2) to prevent a group health plan or a health insurance 
     issuer offering group health insurance coverage from 
     negotiating the level and type of reimbursement with a 
     provider for care provided in accordance with this section.
       ``(c) Exemptions.--
       ``(1) Small employer exemption.--
       ``(A) In general.--This section shall not apply to any 
     group health plan (and group health insurance coverage 
     offered in connection with a group health plan) for any plan 
     year of a small employer.
       ``(B) Small employer.--For purposes of subparagraph (A), 
     the term `small employer' means, in connection with a group 
     health plan with respect to a calendar year and a plan year, 
     an employer who employed an average of at least 2 but not 
     more than 50 employees on business days during the preceding 
     calendar year and who employs at least 2 employees on the 
     first day of the plan year.
       ``(C) Application of certain rules in determination of 
     employer size.--For purposes of this paragraph--
       ``(i) Application of aggregation rule for employers.--Rules 
     similar to the rules under subsections (b), (c), (m), and (o) 
     of section 414 of the Internal Revenue Code of 1986 shall 
     apply for purposes of treating persons as a single employer.
       ``(ii) Employers not in existence in preceding year.--In 
     the case of an employer which was not in existence throughout 
     the preceding calendar year, the determination of whether 
     such employer is a small employer shall be based on the 
     average number of employees that it is reasonably expected 
     such employer will employ on business days in the current 
     calendar year.
       ``(iii) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.
       ``(2) Increased cost exemption.--This section shall not 
     apply with respect to a group health plan (or health 
     insurance coverage offered in connection with a group health 
     plan)

[[Page 12922]]

     if the application of this section to such plan (or to such 
     coverage) results in an increase in the cost under the plan 
     (or for such coverage) of at least 1 percent.
       ``(d) Separate Application to Each Option Offered.--In the 
     case of a group health plan that offers a participant or 
     beneficiary two or more benefit package options under the 
     plan, the requirements of this section shall be applied 
     separately with respect to each such option.
       ``(e) Definitions.--For purposes of this section:
       ``(1) Treatment limitation.--The term `treatment 
     limitation' means, with respect to benefits under a group 
     health plan or health insurance coverage, any day or visit 
     limits imposed on coverage of benefits under the plan or 
     coverage during a period of time.
       ``(2) Financial requirement.--The term `financial 
     requirement' means, with respect to benefits under a group 
     health plan or health insurance coverage, any deductible, 
     coinsurance, or cost-sharing or an annual or lifetime dollar 
     limit imposed with respect to the benefits under the plan or 
     coverage.
       ``(3) Medical or surgical benefits.--The term `medical or 
     surgical benefits' means benefits with respect to medical and 
     surgical services, as defined under the terms of the plan or 
     coverage (as the case may be), but does not include substance 
     abuse treatment benefits.
       ``(4) Substance abuse treatment benefits.--The term 
     `substance abuse treatment benefits' means benefits with 
     respect to substance abuse treatment services.
       ``(5) Substance abuse treatment services.--The term 
     `substance abuse treatment services' means any of the 
     following items and services provided for the treatment of 
     substance abuse:
       ``(A) Inpatient treatment, including detoxification.
       ``(B) Nonhospital residential treatment.
       ``(C) Outpatient treatment, including screening and 
     assessment, medication management, individual, group, and 
     family counseling, and relapse prevention.
       ``(D) Prevention services, including health education and 
     individual and group counseling to encourage the reduction of 
     risk factors for substance abuse.
       ``(6) Substance abuse.--the term `substance abuse' includes 
     chemical dependency.
       ``(f) Notice.--a group health plan under this part shall 
     comply with the notice requirement under section 714(f) of 
     the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements of this section as if such 
     section applied to such plan.''.
       (B) Conforming amendment.--Section 2723(c) of such Act (42 
     U.S.C. 300gg--23(c)) is amended by striking ``section 2704'' 
     and inserting ``sections 2704 and 2707''.
       (2) ERISA amendments.--
       (A) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 is 
     amended by adding at the end the following new section:

     ``SEC. 714. PARITY IN THE APPLICATION OF TREATMENT 
                   LIMITATIONS AND FINANCIAL REQUIREMENTS TO 
                   SUBSTANCE ABUSE TREATMENT BENEFITS.

       ``(a) In General.--In the case of a group health plan (or 
     health insurance coverage offered in connection with such a 
     plan) that provides both medical and surgical benefits and 
     substance abuse treatment benefits, the plan or coverage 
     shall not impose treatment limitations or financial 
     requirements on the substance abuse treatment benefits unless 
     similar limitations or requirements are imposed for medical 
     and surgical benefits.
       ``(b) Construction.--Nothing in this section shall be 
     construed--
       ``(1) as requiring a group health plan (or health insurance 
     coverage offered in connection with such a plan) to provide 
     any substance abuse treatment benefits; or
       ``(2) to prevent a group health plan or a health insurance 
     issuer offering group health insurance coverage from 
     negotiating the level and type of reimbursement with a 
     provider for care provided in accordance with this section.
       ``(c) Exemptions.--
       ``(1) Small employer exemption.--
       ``(A) In general.--This section shall not apply to any 
     group health plan (and group health insurance coverage 
     offered in connection with a group health plan) for any plan 
     year of a small employer.
       ``(B) Small employer.--For purposes of subparagraph (A), 
     the term small employer means, in connection with a group 
     health plan with respect to a calendar year and a plan year, 
     an employer who employed an average of at least 2 but not 
     more than 50 employees on business days during the preceding 
     calendar year and who employs at least 2 employees on the 
     first day of the plan year.
       ``(C) Application of certain rules in determination of 
     employer size.--For purposes of this paragraph--
       ``(i) Application of aggregation rule for employers.--Rules 
     similar to the rules under subsections (b), (c), (m), and (o) 
     of section 414 of the Internal Revenue Code of 1986 shall 
     apply for purposes of treating persons as a single employer.
       ``(ii) Employers not in existence in preceding year.--In 
     the case of an employer which was not in existence throughout 
     the preceding calendar year, the determination of whether 
     such employer is a small employer shall be based on the 
     average number of employees that it is reasonably expected 
     such employer will employ on business days in the current 
     calendar year.
       ``(iii) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.
       ``(2) Increased cost exemption.--This section shall not 
     apply with respect to a group health plan (or health 
     insurance coverage offered in connection with a group health 
     plan) if the application of this section to such plan (or to 
     such coverage) results in an increase in the cost under the 
     plan (or for such coverage) of at least 1 percent.
       ``(d) Separate application to each option offered.--In the 
     case of a group health plan that offers a participant or 
     beneficiary two or more benefit package options under the 
     plan, the requirements of this section shall be applied 
     separately with respect to each such option.
       ``(e) Definitions.--For purposes of this section:
       ``(1) Treatment limitation.--The term `treatment 
     limitation' means, with respect to benefits under a group 
     health plan or health insurance coverage, any day or visit 
     limits imposed on coverage of benefits under the plan or 
     coverage during a period of time.
       ``(2) Financial requirement.--The term `financial 
     requirement' means, with respect to benefits under a group 
     health plan or health insurance coverage, any deductible, 
     coinsurance, or cost-sharing or an annual or lifetime dollar 
     limit imposed with respect to the benefits under the plan or 
     coverage.
       ``(3) Medical or surgical benefits.--The term `medical or 
     surgical benefits' means benefits with respect to medical or 
     surgical services, as defined under the terms of the plan or 
     coverage (as the case may be), but does not include substance 
     abuse treatment benefits.
       ``(4) Substance abuse treatment benefits.--The term 
     `substance abuse treatment benefits' means benefits with 
     respect to substance abuse treatment services.
       ``(5) Substance abuse treatment services.--The term 
     `substance abuse treatment services' means any of the 
     following items and services provided for the treatment of 
     substance abuse:
       ``(A) Inpatient treatment, including detoxification.
       ``(B) Nonhospital residential treatment.
       ``(C) Outpatient treatment, including screening and 
     assessment, medication management, individual, group, and 
     family counseling, and relapse prevention.
       ``(D) Prevention services, including health education and 
     individual and group counseling to encourage the reduction of 
     risk factors for substance abuse.
       ``(6) Substance abuse.--The term `substance abuse' includes 
     chemical dependency.
       ``(f) Notice Under Group Health Plan.--The imposition of 
     the requirements of this section shall be treated as a 
     material modification in the terms of the plan described in 
     section 102(a)(1), for purposes of assuring notice of such 
     requirements under the plan; except that the summary 
     description required to be provided under the last sentence 
     of section 104(b)(1) with respect to such modification shall 
     be provided by not later than 60 days after the first day of 
     the first plan year in which such requirements apply.''.
       (B) Section 731(c) of such Act (29 U.S.C. 1191(c)) is 
     amended by striking ``section 711'' and inserting ``sections 
     711 and 714''.
       (C) Section 732(a) of such Act (29 U.S.C. 1191a(a)) is 
     amended by striking ``section 711'' and inserting ``sections 
     711 and 714''.
       (D) The table of contents in section 1 of such Act is 
     amended by inserting after the item relating to section 713 
     the following new item:

``714. Parity in the application of treatment limitations and financial 
              requirements to substance abuse treatment benefits.''.

       (3) Internal revenue code amendments.--(A) Subchapter B of 
     chapter 100 of the Internal Revenue Code of 1986 (relating to 
     other requirements) is amended by adding at the end the 
     following new section:

     ``SEC. 9813. PARITY IN THE APPLICATION OF TREATMENT 
                   LIMITATIONS AND FINANCIAL REQUIREMENTS TO 
                   SUBSTANCE ABUSE TREATMENT BENEFITS.

       ``(a) In General.--In the case of a group health plan that 
     proves both medical and surgical benefits and substance abuse 
     treatment benefits, the plan shall not impose treatment 
     limitations or financial requirements on the substance abuse 
     treatment benefits unless similar limitations or requirements 
     are imposed for medical and surgical benefits.
       ``(b) Construction.--Nothing in this section shall be 
     construed--
       ``(1) as a requiring a group health plan to provide any 
     substance abuse treatment benefits; or
       ``(2) to prevent a group health plan from negotiating the 
     level and type of reimbursement with a provider for care 
     provided in accordance with this section.
       ``(c) Exemptions.--
       ``(1) Small employer exemption.--
       ``(A) In general.--This section shall not apply to any 
     group health plan for any plan year of a small employer.

[[Page 12923]]

       ``(B) Small employer.--For purposes of subparagraph (A), 
     the term `small employer' means, in connection with a group 
     health plan with respect to a calendar year and a plan year, 
     an employer who employed an average of at least 2 but not 
     more than 50 employees on business days during the preceding 
     calendar year and who employs at least 2 employees on the 
     first day of the plan year.
       ``(C) Application of certain rules in determination of 
     employer size.--For purposes of this paragraph--
       ``(i) Application of aggregation rule for employers.--Rule 
     similar to the rules under subsections (b), (c), (m), and (o) 
     of section 414 shall apply for purposes of treating persons 
     as a single employer.
       ``(ii) Employers not in existence in preceding year.--In 
     the case of an employer which was not in existence throughout 
     the preceding calendar year, the determination of whether 
     such employer is a small employer shall be based on the 
     average number of employees that it is reasonably expected 
     such employer will employ on business days in the current 
     calendar year.
       ``(iii) Predecessors.--Any reference in this paragraph to 
     an employer shall include a reference to any predecessor of 
     such employer.
       ``(2) Increased cost exemption.--This section shall not 
     apply with respect to a group health plan if the application 
     of this section to such plan results in an increase in the 
     cost under the plan of at least 1 percent.
       ``(d) Separate Application to Each Option Offered.--In the 
     case of a group health plan that offers a participant or 
     beneficiary two or more benefit package options under the 
     plan, the requirements of this section shall be applied 
     separately with respect to each such option.
       ``(e) Definitions.--For purposes of this section:
       ``(1) Treatment limitation.--The term `treatment 
     limitation' means, with respect to benefits under a group 
     health plan, any day or visit limits imposed on coverage of 
     benefits under the plan during a period of time.
       ``(2) Financial requirement.--The term `financial 
     requirement' means, with respect to benefits under a group 
     health plan, any deductible, coinsurance, or cost-sharing or 
     an annual or lifetime dollar limit imposed with respect to 
     the benefits under the plan.
       ``(3) Medical or surgical benefits.--The term `medical or 
     surgical benefits' means benefits with respect to medical or 
     surgical services, as defined under the terms of the plan, 
     but does not include substance abuse treatment benefits.
       ``(4) Substance abuse treatment benefits.--The term 
     `substance abuse treatment benefits' means benefits with 
     respect to substance abuse treatment services.
       ``(5) Substance abuse treatment services.--The term 
     `substance abuse treatment services' means any of the 
     following items and services provided for the treatment of 
     substance abuse:
       ``(A) Inpatient treatment, including detoxification.
       ``(B) Non-hospital residential treatment.
       ``(C) Outpatient treatment, including screening and 
     assessment, medication management, individual, group, and 
     family counseling, and relapse prevention.
       ``(D) Prevention services, including health education and 
     individual and group counseling to encourage the reduction of 
     risk factors for substance abuse.
       ``(6) Substance abuse.--The term `substance abuse' includes 
     chemical dependency.''.
       ``(B) Section 4980D(d)(1) of such Code is amended by 
     inserting ``(other than a failure attributable to section 
     9813)'' after ``on any failure''.
       ``(C) The table of sections of subchapter B of chapter 100 
     of such Code is amended by adding at the end the following 
     new item:

``9813. Parity in the application of treatment limitations and 
              financial requirements to substance abuse treatment 
              benefits.''.

       (b) Individual Health Insurance.--(1) Part B of title XXVII 
     of the Public Health Service Act is amended by inserting 
     after section 2752 the following new section:

     ``SEC. 2753. PARITY IN THE APPLICATION OF TREATMENT 
                   LIMITATIONS AND FINANCIAL REQUIREMENTS TO 
                   SUBSTANCE ABUSE BENEFITS.

       ``(a) In General.--The provisions of section 2707 (other 
     than subsection (e)) shall apply to health insurance coverage 
     offered by a health insurance issuer in the individual market 
     in the same manner as it applies to health insurance coverage 
     offered by a health insurance issuer in connection with a 
     group health plan in the small or large group market.
       ``(b) Notice.--A health insurance issuer under this part 
     shall comply with the notice requirement under section 714(f) 
     of the Employee Retirement Income Security Act of 1974 with 
     respect to the requirements referred to in subsection (a) as 
     if such section applied to such issuer and such issuer were a 
     group health plan.''.
       (2) Section 2762(b)(2) of such Act (42 U.S.C. 300gg-
     62(b)(2)) is amended by striking ``section 2751'' and 
     inserting ``sections 2751 and 2753''.
       (c) Effective Dates.--(1) Subject to paragraph (3), the 
     amendments made by subsection (a) apply with respect to group 
     health plans for plan years beginning on or after January 1, 
     2004.
       (2) The amendments made by subsection (b) apply with 
     respect to health insurance covered offered, sold, issued, 
     renewed, in effect, or operated in the individual market on 
     or after January 1, 2004.
       (3) In the case of a group health plan maintained pursuant 
     to 1 or more collective bargaining agreements between 
     employee representatives and 1 or more employers ratified 
     before the date of enactment of this Act, the amendments made 
     by subsection (a) shall not apply to plan years beginning 
     before the later of--
       (A) the date on which the last collective bargaining 
     agreements relating to the plan terminates (determined 
     without regard to any extension thereof agreed to after the 
     date of enactment of this Act), or
       (B) January 1, 2004.
       For purposes of subparagraph (A), any plan amendment made 
     pursuant to a collective bargaining agreement relating to the 
     plan which amends the plan solely to conform to any 
     requirement added by subsection (a) shall not be treated as a 
     termination of such collective bargaining agreement.
       (d) Coordinated Regulations.--Section 104(1) of the Health 
     Insurance Portability and Accountability Act of 1996 is 
     amended by striking ``this subtitle  (and the amendments made 
     this subtitle and section 401)'' and inserting ``the 
     provisions of part 7 of the subtitle B of title I of the 
     Employee Retirement Congressional Income Security Act of 
     1974, and the provisions of parts A and C of title XXVII of 
     the Public Health Service Act, and chapter 100 of the 
     Internal Revenue Code of 1986''.
       (e) Preemption.--Nothing in the amendments made by this 
     section shall be construed to preempt any provision of State 
     law that provides protections to individuals that are greater 
     than the protections provided under such amendments.
                                 ______
                                 
      By Mr. DeWINE (for himself and Mr. Lautenberg):
  S. 1139. A bill to direct the National Highway Traffic Safety 
Administration to establish and carry out traffic safety law 
enforcement and compliance campaigns, and for other purposes; to the 
Committee on Commerce, Science, and Transportation.
  Mr. DeWINE. Mr. President, I rise today, along with my colleague from 
New Jersey, Senator Lautenberg, to introduce a bi-partisan bill aimed 
at reducing the number of vehicle incidents associated with drinking 
and driving.
  Last year, the Nation experienced an increase in alcohol-related 
traffic fatalities for the third year in a row. This increase resulted 
in 17,970 deaths or 42 percent of the 42,850 people killed in traffic 
incidents. Statistics from the National Highway Traffic Safety 
Administration show that motor vehicle crashes are the leading cause of 
death for Americans ages 1 to 35 years of age. In fact, on average, 117 
people die each day from motor vehicle crashes in the United States.
  Our bill--the Traffic Safety Law Enforcement Campaign Act--would 
require States to conduct a combined media/law enforcement campaign 
aimed at reducing these traffic fatalities. Specifically, the law 
enforcement portion consists of sobriety checkpoints in the District of 
Columbia and in the 39 States that allow them and saturation patrols in 
those States that do not. The Centers for Disease Control estimate that 
the sobriety checkpoints proposed in the underlying bill may reduce 
alcohol related crashes by as much as 20 percent. More than 75 percent 
of the public has indicated in NHTSA polls support for sobriety 
checkpoints. In fact, NHTSA has concluded that 62 percent of Americans 
want sobriety checkpoints to be used more often.
  I urge each of my colleagues to join this bi-partisan effort to save 
lives and promote highway safety.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1139

       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 ``Traffic Safety Law 
     Enforcement Campaign Act''.

     SEC. 2. TRAFFIC SAFETY LAW ENFORCEMENT CAMPAIGNS.

       (a) In General.--The Administration of the National Highway 
     Traffic Safety Administration shall establish a program to 
     conduct at least 3 high-visibility traffic safety law 
     enforcement campaigns each year.

[[Page 12924]]

       (b) Focus.--The campaigns shall focus on--
       (1) reducing alcohol-impaired driving;
       (2) increasing seat belt use; and
       (3) a combination of reducing alcohol-impaired driving and 
     increasing seat belt use.
       (c) Advertising.--The Administrator may use, or authorize 
     the use of, funds available to carry out this section for the 
     development, production, and use of broadcast and print media 
     advertising in carrying out this section.
       (d) Evaluation and Report.--The Administrator shall 
     evaluate the effectiveness of the campaigns at the end of 
     each year and submit a report to the Senate Committee on 
     Commerce, Science, and Transportation and the House of 
     Representatives Committee on Transportation and 
     Infrastructure within 90 days after the end of each year 
     setting forth the findings, conclusions, and recommendations 
     of the Administrator with respect to the program.

     SEC. 3. FUNDING.

       (a) In General.--There are authorized to be appropriated 
     out of the Highway Trust Fund (other than from the Mass 
     Transmit Account) to the Administrator to carry out this Act 
     $150,000,000 for each of fiscal years 2004 through 2009, of 
     which--
       (a) $48,000,000 shall be used for each fiscal year for 
     nationwide advertising by the Administration;
       (2) $48,000,000 shall be made available each fiscal year by 
     the Administrator to States for advertising;
       (3) $48,000,000 shall be made available each fiscal year by 
     the Administrator to States for traffic safety law 
     enforcement; and
       (4) $6,000,000 shall be available to the Administrator for 
     evaluation of the program under section 2.
       (b) Program Standards.--Within 120 days after the date of 
     enactment of this Act, the Administrator shall promulgate 
     program standards and criteria for the use of funds under 
     subsection (a)(2) and (3) that will ensure the effective and 
     appropriate use of such funds in accordance with this Act, 
     taking into account State efforts, needs, administrative 
     resources, and priorities.
       (c) Apportionment.--The Administrator shall apportion funds 
     under subsection (a)(2) and (3) among the States on the same 
     basis as funds are apportioned among the States under section 
     402(c) of title 23, United States Code.
                                 ______
                                 
      By Mr. LAUTENBERG (for himself, Mr. DeWine, and Mrs. Feinstein):
  S. 1140. A bill to amend titles 23 and 49, United States Code, 
concerning length and weight limitations for vehicles operating on 
Federal-aid highways, and for other purposes; to the Committee on 
Environment and Public Works.
  Mr. LAUTENBERG. Mr. President, today, I am proud to introduce, along 
with my colleagues Senator DeWine and Senator Feinstein, legislation 
which will make our roads safer and last longer. Anyone who has ever 
shared the road with a large tractor trailer truck has wondered whether 
the truck driver is aware of the smaller vehicles around the truck. 
Anyone who has seen the third trailer on a triple-trailer truck 
swinging around like the tail end of a snake knows that these trucks 
are to be avoided.
  The State of New Jersey sees its share of the Nation's truck traffic, 
but, incidentally, not its share of federal highway dollars. We are 
concerned about these 53-foot, 80,000-pound vehicles on our highways 
and the pressure from other states to increase weight and length 
limitations to allow bigger trucks to come through our State. This 
makes truck safety even more important to New Jersey drivers.
  Twelve years ago, I got a provision into the highway reauthorization 
bill we call ``ICE-TEA'' to ban triple-trailer trucks and other so-
called ``longer combination vehicles'', LCVs, from New Jersey and most 
other States. At that time and ever since, the trucking industry has 
fought to defeat and repeal this ban, under the guise of arguments for 
``states' rights'' and ``unfair re-distribution of business to 
railroads.'' But these are not rational arguments for allowing bigger 
and heavier trucks as well as triple-trailer trucks on our roads. 
Additionally, the trucking industry's proclaimed hardships have not 
materialized. In fact, the trucking companies have survived the current 
laws quite well, and trucks have refined their role in our national 
freight transportation system.
  Our bill, the ``Safe Highways and Infrastructure Preservation Act, 
will extend the current limited ban which only applies to our 44,000-
mile Interstate Highway System to the entire 156,000-mile National 
Highway System, NHS. This extension will make more roads safer and will 
further reduce the wear and tear of our highways and bridges.
  Bigger trucks are not safe. The U.S. Department of Transportation has 
determined that multi-trailer trucks are likely to be involved in more 
fatal crashes--11 percent more--than today's single-trailer trucks. By 
expanding the limits on triples and other longer combination vehicles 
to the entire NHS--including more than 2,000 miles of highway in New 
Jersey--the Safe Highways and Infrastructure Protection Act will save 
lives and prevent further deterioration of our roads and bridges.
  Triple-trailers and other LCVs do more damage to our roads and 
bridges but don't come close to paying associated maintenance and 
repair costs. The fees, tolls and gasoline taxes paid by the operator 
of a 100,000-pound truck only covers 40 percent of the cost of the 
damage that truck does to our roads and bridges. The rest of the 
taxpayers make up the difference. I believe that motorists should not 
have to share the road with these dangerous behemoths and pay for the 
extra damage they cause.
  I thank my colleagues Senator DeWine and Senator Feinstein for 
joining me in sponsoring this important legislation, and I look forward 
to working with my colleagues in the Congress to improve the highway 
safety and increase the remaining life of our country's roads and 
bridges.
                                 ______
                                 
      By Mr. LAUTENBERG (for himself and Mr. DeWine):
  S. 1141. A bill to amend title 23, United States Code, to increase 
penalties for individuals who operate motor vehicles while intoxicated 
or under the influence of alcohol; to the Committee on Environment and 
Public Works.
  Mr. LAUTENBERG. Mr. President, today Senator Mike DeWine of Ohio and 
I are helping to make a big stride in re-arming our country in the war 
against drunk driving. Together, we have introduced two pieces of 
legislation which will help reduce the number of civilian casualties in 
this war by arming our government safety officials with the weapons 
they need to keep drunk drivers off of our roads.
  First, I am proud to be a cosponsor of Senator DeWine's legislation 
on improving enforcement of drunk driving laws. There are some good 
drunk driving laws on the books and they should not be ignored. Since 
September 11, 2001, much of our country's law enforcement focus has 
been on ensuring the security of citizens from terrorist attack. This 
legislation will ensure that efforts to reduce drunk driving are not 
given short shrift. Almost 18,000 people died last year in alcohol-
related motor vehicle traffic crashes, and we must not neglect the 
safety of our highways. This bill provides needed resources for law 
enforcement and will deter people from drinking and driving to begin 
with.
  Second, I am proud to introduce, along with Senator DeWine, 
legislation targeting higher-risk drivers. This includes repeat 
offenders and drivers with blood alcohol concentration levels of 0.15 
percent or higher. Once these offenders are caught, we need to make 
sure they don't fall through the cracks in the legal system. These 
criminals should not be behind the wheel--I believe they are a menace 
to our society, and we should not tolerate their existence.
  I have long been interested in making our roads and highways safer. 
During my previous tenure, I saw to it that the Federal government took 
responsibility for reducing the number of fatalities due to drunk 
driving. I authored laws to increase the minimum drinking age for 
alcoholic beverages from 18 to 21, and to encourage States to establish 
.08 percent as the blood alcohol concentration standard for drunk 
driving nationwide. These laws have made our roads and highways safer 
and my hope is that they have saved many precious lives.
  I feel that the Federal Government needs to take a strong leadership 
role to reduce alcohol-impaired driving. States cannot deal with these 
problems in a comprehensive manner. We have

[[Page 12925]]

passed legislation encouraging states to establish tougher standards 
for highways safety and drunk driving, but: 32 States still don't have 
a primary enforcement safety belt law; 11 States still have not adopted 
the .08 percent Blood Alcohol Content (BAC) standard; 24 States still 
don't have an open container law; and 27 States still don't have a 
repeat offender law for drunk driving offenses.
  I am particularly disappointed that my home State of New Jersey has 
not yet adopted the .08 percent BAC standard. At risk are millions of 
dollars in Federal highway funding that our State desperately needs to 
repair and improve our roads and bridges. Here in Congress, I fight 
desperately for this funding. But the State puts this funding at risk 
rather than make a sensible safety choice and adopt a .08 percent BAC 
standard. This is why I feel that the Federal Government needs to take 
a leadership role in setting policies that will save lives by reducing 
drunk driving.
  I feel that States need stronger ``encouragement'' to address these 
important highway safety issues. We have already tried threatening 
withholding highway construction funds, but if we allow a loophole for 
States to recover the funds within 4 years; maybe that still is not 
enough encouragement.
  Now it is time to take the next step in getting drunk drivers off our 
roads. I look forward to working with Senator DeWine and the rest of my 
colleagues in the Senate to reduce the 18,000 alcohol-related traffic 
fatalities that occur each year. I urge my colleagues to join me and 
Senator DeWine in supporting both of these important pieces of 
legislation.

                          ____________________