[Congressional Record (Bound Edition), Volume 149 (2003), Part 10]
[Senate]
[Pages 13459-13465]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    AMENDMENTS SUBMITTED & PROPOSED

       SA 843. Mrs. FEINSTEIN proposed an amendment to amendment 
     SA 539 proposed by Mr. Frist (for himself, Mr. Daschle, Mr. 
     Inhofe, Mr. Dorgan, Mr. Lugar, Mr. Johnson, Mr. Grassley, Mr. 
     Harkin, Mr. Hagel, Mr. Durbin, Mr. Voinovich, Mr. Nelson of 
     Nebraska, Mr. Talent, Mr. Dayton, Mr. Coleman, Mr. Edwards, 
     Mr. Crapo, Mr. Conrad, Mr. DeWine, and Mr. Baucus) to the 
     bill S. 14, to enhance the energy security of the United 
     States, and for other purposes.
       SA 844. Mrs. FEINSTEIN (for herself, Mr. Nickles, Mr. 
     McCain, Mr. Kyl, Mr. Gregg, Mr. Wyden, Mr. Leahy, Mr. 
     Schumer, Mr. Sununu, and Mr. Reed) proposed an amendment to 
     amendment SA 539 proposed by Mr. Frist (for himself, Mr. 
     Daschle, Mr. Inhofe, Mr. Dorgan, Mr. Lugar, Mr. Johnson, Mr. 
     Grassley, Mr. Harkin, Mr. Hagel, Mr. Durbin, Mr. Voinovich, 
     Mr. Nelson of Nebraska, Mr. Talent, Mr. Dayton, Mr. Coleman, 
     Mr. Edwards, Mr. Crapo, Mr. Conrad, Mr. DeWine, and Mr. 
     Baucus) to the bill S. 14, supra.
       SA 845. Mr. BINGAMAN (for Mrs. Lincoln) proposed an 
     amendment to amendment SA 539 proposed by Mr. Frist (for 
     himself, Mr. Daschle, Mr. Inhofe, Mr. Dorgan, Mr. Lugar, Mr. 
     Johnson, Mr. Grassley, Mr. Harkin, Mr. Hagel, Mr. Durbin, Mr. 
     Voinovich, Mr. Nelson of Nebraska, Mr. Talent, Mr. Dayton, 
     Mr. Coleman, Mr. Edwards, Mr. Crapo, Mr. Conrad, Mr. DeWine, 
     and Mr. Baucus) to the bill S. 14, supra.
       SA 846. Mr. FITZGERALD (for Mr. Gregg) proposed an 
     amendment to the bill S. 313, to amend the Federal Food, 
     Drug, and Cosmetic Act to establish a program of fees 
     relating to animal drugs.

                           TEXT OF AMENDMENTS

  SA 843. Mrs. FEINSTEIN proposed an amendment to amendment SA 539 
proposed by Mr. Frist (for himself, Mr. Daschle, Mr. Inhofe, Mr. 
Dorgan, Mr. Lugar, Mr. Johnson, Mr. Grassley, Mr. Harkin, Mr. Hagel, 
Mr. Durbin, Mr. Voinovich, Mr. Nelson of Nebraska, Mr. Talent, Mr. 
Dayton, Mr. Coleman, Mr. Edwards, Mr. Crapo, Mr. Conrad, Mr. DeWine, 
and Mr. Baucus) to the bill S. 14, to enhance the energy security of 
the United States, and for other purposes; as follows:

       On page 12, strike lines 19 through 24 and insert the 
     following:
       ``(i) based on a determination by the Administrator, after 
     public notice and opportunity for comment, that 
     implementation of the renewable fuel requirement--

       ``(I) is not needed for the State or region to comply with 
     this Act because the State or region can comply in ways other 
     than adding renewable fuel; or
       ``(II) would harm the economy or environment of a State, a 
     region, or the United States; or''.

                                 ______
                                 
  SA 844. Mrs. FEINSTEIN (for herself, Mr. Nickles, Mr. McCain, Mr. 
Kyl, Mr. Gregg, Mr. Wyden, Mr. Leahy, Mr. Schumer, Mr. Sununu, and Mr. 
Reed) proposed an amendment to amendment SA 539 proposed by Mr. Frist 
(for himself, Mr. Daschle, Mr. Inhofe, Mr. Dorgan, Mr. Lugar, Mr. 
Johnson, Mr. Grassley, Mr. Harkin, Mr. Hagel, Mr. Durbin, Mr. 
Voinovich, Mr. Nelson of Nebraska, Mr. Talent, Mr. Dayton, Mr. Coleman, 
Mr. Edwards, Mr. Crapo, Mr. Conrad, Mr. DeWine, and Mr. Baucus) to the 
bill S. 14, to enhance the energy security of the United States, and 
for other purposes; as follows:

       On page 6, between lines 17 and 18, insert the following:
       ``(C) Election by states.--The renewable fuel program shall 
     apply to a State only if the Governor of the State notifies 
     the Administrator that the State elects to participate in the 
     renewable fuel program.
                                 ______
                                 
  SA 845. Mr. BINGAMAN (for Mrs. Lincoln) proposed an amendment to 
amendment SA 539 proposed by Mr. Frist (for himself, Mr. Daschle, Mr. 
Inhofe, Mr. Dorgan, Mr. Lugar, Mr. Johnson, Mr. Grassley, Mr. Harkin, 
Mr. Hagel, Mr. Durbin, Mr. Voinovich, Mr. Nelson of Nebraska, Mr. 
Talent, Mr. Dayton, Mr. Coleman, Mr. Edwards, Mr. Crapo, Mr. Conrad, 
Mr. DeWine, and Mr. Baucus) to the bill S. 14, to enhance the energy 
security of the United States, and for other purposes; as follows:

       At the end of the amendment, insert the following:

[[Page 13460]]



     SEC. __. ACCELERATION OF INCREASE IN REFUNDABILITY OF THE 
                   CHILD TAX CREDIT.

       (a) Acceleration of Refundability.--
       (1) In general.--Section 24(d)(1)(B)(i) of the Internal 
     Revenue Code of 1986 (relating to portion of credit 
     refundable) is amended by striking ``(10 percent in the case 
     of taxable years beginning before January 1, 2005)''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2002.
       (b) Advance Payment.--
       (1) In general.--Subsection (b) of section 6429 of the 
     Internal Revenue Code of 1986 (relating to advance payment of 
     portion of increased child credit for 2003) is amended by 
     striking ``and'' at the end of paragraph (2), by striking the 
     period at the end of paragraph (3) and inserting ``, and'', 
     and by adding at the end the following new paragraph:
       ``(4) section 24(d)(1)(B)(i) applied without regard to the 
     parenthetical therein.''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect as if included in the amendments made by 
     section 101(b) of the Jobs and Growth Tax Relief 
     Reconciliation Act of 2003.

     SEC. __. LIMITATION ON TRANSFER OR IMPORTATION OF BUILT-IN 
                   LOSSES.

       (a) In General.--Section 362 of the Internal Revenue Code 
     of 1986 (relating to basis to corporations) is amended by 
     adding at the end the following new subsection:
       ``(e) Limitations on Built-In Losses.--
       ``(1) Limitation on importation of built-in losses.--
       ``(A) In general.--If in any transaction described in 
     subsection (a) or (b) there would (but for this subsection) 
     be an importation of a net built-in loss, the basis of each 
     property described in subparagraph (B) which is acquired in 
     such transaction shall (notwithstanding subsections (a) and 
     (b)) be its fair market value immediately after such 
     transaction.
       ``(B) Property described.--For purposes of subparagraph 
     (A), property is described in this subparagraph if--
       ``(i) gain or loss with respect to such property is not 
     subject to tax under this subtitle in the hands of the 
     transferor immediately before the transfer, and
       ``(ii) gain or loss with respect to such property is 
     subject to such tax in the hands of the transferee 
     immediately after such transfer.

     In any case in which the transferor is a partnership, the 
     preceding sentence shall be applied by treating each partner 
     in such partnership as holding such partner's proportionate 
     share of the property of such partnership.
       ``(C) Importation of net built-in loss.--For purposes of 
     subparagraph (A), there is an importation of a net built-in 
     loss in a transaction if the transferee's aggregate adjusted 
     bases of property described in subparagraph (B) which is 
     transferred in such transaction would (but for this 
     paragraph) exceed the fair market value of such property 
     immediately after such transaction.''.

       ``(2) Limitation on transfer of built-in losses in section 
     351 transactions.--
       ``(A) In general.--If--
       ``(i) property is transferred by a transferor in any 
     transaction which is described in subsection (a) and which is 
     not described in paragraph (1) of this subsection, and
       ``(ii) the transferee's aggregate adjusted bases of such 
     property so transferred would (but for this paragraph) exceed 
     the fair market value of such property immediately after such 
     transaction,
     then, notwithstanding subsection (a), the transferee's 
     aggregate adjusted bases of the property so transferred shall 
     not exceed the fair market value of such property immediately 
     after such transaction.
       ``(B) Allocation of basis reduction.--The aggregate 
     reduction in basis by reason of subparagraph (A) shall be 
     allocated among the property so transferred in proportion to 
     their respective built-in losses immediately before the 
     transaction.
       ``(C) Exception for transfers within affiliated group.--
     Subparagraph (A) shall not apply to any transaction if the 
     transferor owns stock in the transferee meeting the 
     requirements of section 1504(a)(2). In the case of property 
     to which subparagraph (A) does not apply by reason of the 
     preceding sentence, the transferor's basis in the stock 
     received for such property shall not exceed its fair market 
     value immediately after the transfer.''.
       (b) Comparable Treatment Where Liquidation.--Paragraph (1) 
     of section 334(b) of the Internal Revenue Code of 1986 
     (relating to liquidation of subsidiary) is amended to read as 
     follows:
       ``(1) In general.--If property is received by a corporate 
     distributee in a distribution in a complete liquidation to 
     which section 332 applies (or in a transfer described in 
     section 337(b)(1)), the basis of such property in the hands 
     of such distributee shall be the same as it would be in the 
     hands of the transferor; except that the basis of such 
     property in the hands of such distributee shall be the fair 
     market value of the property at the time of the 
     distribution--
       ``(A) in any case in which gain or loss is recognized by 
     the liquidating corporation with respect to such property, or
       ``(B) in any case in which the liquidating corporation is a 
     foreign corporation, the corporate distributee is a domestic 
     corporation, and the corporate distributee's aggregate 
     adjusted bases of property described in section 362(e)(1)(B) 
     which is distributed in such liquidation would (but for this 
     subparagraph) exceed the fair market value of such property 
     immediately after such liquidation.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions after February 13, 2003.

     SEC. __. NO REDUCTION OF BASIS UNDER SECTION 734 IN STOCK 
                   HELD BY PARTNERSHIP IN CORPORATE PARTNER.

       (a) In General.--Section 755 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(c) No Allocation of Basis Decrease to Stock of Corporate 
     Partner.--In making an allocation under subsection (a) of any 
     decrease in the adjusted basis of partnership property under 
     section 734(b)--
       ``(1) no allocation may be made to stock in a corporation 
     (or any person which is related (within the meaning of 
     section 267(b) or 707(b)(1)) to such corporation) which is a 
     partner in the partnership, and
       ``(2) any amount not allocable to stock by reason of 
     paragraph (1) shall be allocated under subsection (a) to 
     other partnership property.

     Gain shall be recognized to the partnership to the extent 
     that the amount required to be allocated under paragraph (2) 
     to other partnership property exceeds the aggregate adjusted 
     basis of such other property immediately before the 
     allocation required by paragraph (2).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions after February 13, 2003.

     SEC. __. REPEAL OF SPECIAL RULES FOR FASITS.

       (a) In General.--Part V of subchapter M of chapter 1 of the 
     Internal Revenue Code of 1986 (relating to financial asset 
     securitization investment trusts) is hereby repealed.
       (b) Conforming Amendments.--
       (1) Paragraph (6) of section 56(g) of the Internal Revenue 
     Code of 1986 is amended by striking ``REMIC, or FASIT'' and 
     inserting ``or REMIC''.
       (2) Clause (ii) of section 382(l)(4)(B) of such Code is 
     amended by striking ``a REMIC to which part IV of subchapter 
     M applies, or a FASIT to which part V of subchapter M 
     applies,'' and inserting ``or a REMIC to which part IV of 
     subchapter M applies,''.
       (3) Paragraph (1) of section 582(c) of such Code is amended 
     by striking ``, and any regular interest in a FASIT,''.
       (4) Subparagraph (E) of section 856(c)(5) of such Code is 
     amended by striking the last sentence.
       (5) Paragraph (5) of section 860G(a) of such Code is 
     amended by adding ``and'' at the end of subparagraph (B), by 
     striking ``, and'' at the end of subparagraph (C) and 
     inserting a period, and by striking subparagraph (D).
       (6) Subparagraph (C) of section 1202(e)(4) of such Code is 
     amended by striking ``REMIC, or FASIT'' and inserting ``or 
     REMIC''.
       (7) Subparagraph (C) of section 7701(a)(19) of such Code is 
     amended by adding ``and'' at the end of clause (ix), by 
     striking ``, and'' at the end of clause (x) and inserting a 
     period, and by striking clause (xi).
       (8) The table of parts for subchapter M of chapter 1 of 
     such Code is amended by striking the item relating to part V.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on February 
     14, 2003.
       (2) Exception for existing fasits.--The amendments made by 
     this section shall not apply to any FASIT in existence on the 
     date of the enactment of this Act to the extent that regular 
     interests issued by the FASIT before such date continue to 
     remain outstanding in accordance with the original terms of 
     issuance of such interests.

     SEC. __. EXPANDED DISALLOWANCE OF DEDUCTION FOR INTEREST ON 
                   CONVERTIBLE DEBT.

       (a) In General.--Paragraph (2) of section 163(l) of the 
     Internal Revenue Code of 1986 is amended by striking ``or a 
     related party'' and inserting ``or equity held by the issuer 
     (or any related party) in any other person''.
       (b) Exception for Certain Instruments Issued By Dealers In 
     Securities.--Section 163(l) of the Internal Revenue Code of 
     1986 is amended by redesignating paragraphs (4) and (5) as 
     paragraphs (5) and (6) and by inserting after paragraph (3) 
     the following new paragraph:
       ``(4) Exception for certain instruments issued by dealers 
     in securities.--For purposes of this subsection, the term 
     `disqualified debt instrument' does not include indebtedness 
     issued by a dealer in securities (or a related party) which 
     is payable in, or by reference to, equity (other than equity 
     of the issuer or a related party) held by such dealer in its 
     capacity as a dealer in securities. For purposes of this 
     paragraph, the term `dealer in securities' has the meaning 
     given such term by section 475.''.
       (c) Conforming Amendment.--Paragraph (3) of section 163(l) 
     of the Internal Revenue Code of 1986 is amended by striking 
     ``or a related party'' in the material preceding subparagraph 
     (A) and inserting ``or any other person''.

[[Page 13461]]

       (d) Effective Date.--The amendments made by this section 
     shall apply to debt instruments issued after February 13, 
     2003.

     SEC. __. EXPANDED AUTHORITY TO DISALLOW TAX BENEFITS UNDER 
                   SECTION 269.

       (a) In General.--Subsection (a) of section 269 of the 
     Internal Revenue Code of 1986 (relating to acquisitions made 
     to evade or avoid income tax) is amended to read as follows:
       ``(a) In General.--If--
       ``(1)(A) any person acquires stock in a corporation, or
       ``(B) any corporation acquires, directly or indirectly, 
     property of another corporation and the basis of such 
     property, in the hands of the acquiring corporation, is 
     determined by reference to the basis in the hands of the 
     transferor corporation, and
       ``(2) the principal purpose for which such acquisition was 
     made is evasion or avoidance of Federal income tax by 
     securing the benefit of a deduction, credit, or other 
     allowance,

     then the Secretary may disallow such deduction, credit, or 
     other allowance.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to stock and property acquired after February 13, 
     2003.

     SEC. __. MODIFICATIONS OF CERTAIN RULES RELATING TO 
                   CONTROLLED FOREIGN CORPORATIONS.

       (a) Limitation on Exception From PFIC Rules for United 
     States Shareholders of Controlled Foreign Corporations.--
     Paragraph (2) of section 1297(e) of the Internal Revenue Code 
     of 1986 (relating to passive investment company) is amended 
     by adding at the end the following flush sentence:

     ``Such term shall not include any period if there is only a 
     remote likelihood of an inclusion in gross income under 
     section 951(a)(1)(A)(i) of subpart F income of such 
     corporation for such period.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years on controlled foreign 
     corporation beginning after February 13, 2003, and to taxable 
     years of United States shareholder in which or with which 
     such taxable years of controlled foreign corporations end.

     SEC. __. CONTROLLED ENTITIES INELIGIBLE FOR REIT STATUS.

       (a) In General.--Subsection (a) of section 856 of the 
     Internal Revenue Code of 1986 (relating to definition of real 
     estate investment trust) is amended by striking ``and'' at 
     the end of paragraph (6), by redesignating paragraph (7) as 
     paragraph (8), and by inserting after paragraph (6) the 
     following new paragraph:
       ``(7) which is not a controlled entity (as defined in 
     subsection (l)); and''.
       (b) Controlled Entity.--Section 856 of the Internal Revenue 
     Code of 1986 is amended by adding at the end the following 
     new subsection:
       ``(l) Controlled Entity.--
       ``(1) In general.--For purposes of subsection (a)(7), an 
     entity is a controlled entity if, at any time during the 
     taxable year, one person (other than a qualified entity)--
       ``(A) in the case of a corporation, owns stock--
       ``(i) possessing at least 50 percent of the total voting 
     power of the stock of such corporation, or
       ``(ii) having a value equal to at least 50 percent of the 
     total value of the stock of such corporation, or
       ``(B) in the case of a trust, owns beneficial interests in 
     the trust which would meet the requirements of subparagraph 
     (A) if such interests were stock.
       ``(2) Qualified entity.--For purposes of paragraph (1), the 
     term `qualified entity' means--
       ``(A) any real estate investment trust, and
       ``(B) any partnership in which one real estate investment 
     trust owns at least 50 percent of the capital and profits 
     interests in the partnership.
       ``(3) Attribution rules.--For purposes of this paragraphs 
     (1) and (2)--
       ``(A) In general.--Rules similar to the rules of 
     subsections (d)(5) and (h)(3) shall apply; except that 
     section 318(a)(3)(C) shall not be applied under such rules to 
     treat stock owned by a qualified entity as being owned by a 
     person which is not a qualified entity.
       ``(B) Stapled entities.--A group of entities which are 
     stapled entities (as defined in section 269B(c)(2)) shall be 
     treated as one person.
       ``(4) Exception for certain new reits.--
       ``(A) In general.--The term `controlled entity' shall not 
     include an incubator REIT.
       ``(B) Incubator reit.--A corporation shall be treated as an 
     incubator REIT for any taxable year during the eligibility 
     period if it meets all the following requirements for such 
     year:
       ``(i) The corporation elects to be treated as an incubator 
     REIT.
       ``(ii) The corporation has only voting common stock 
     outstanding.
       ``(iii) Not more than 50 percent of the corporation's real 
     estate assets consist of mortgages.
       ``(iv) From not later than the beginning of the last half 
     of the second taxable year, at least 10 percent of the 
     corporation's capital is provided by lenders or equity 
     investors who are unrelated to the corporation's largest 
     shareholder.
       ``(v) The corporation annually increases the value of its 
     real estate assets by at least 10 percent.
       ``(vi) The directors of the corporation adopt a resolution 
     setting forth an intent to engage in a going public 
     transaction.
     No election may be made with respect to any REIT if an 
     election under this subsection was in effect for any 
     predecessor of such REIT.
       ``(C) Eligibility period.--
       ``(i) In general.--The eligibility period (for which an 
     incubator REIT election can be made) begins with the REIT's 
     second taxable year and ends at the close of the REIT's third 
     taxable year, except that the REIT may, subject to clauses 
     (ii), (iii), and (iv), elect to extend such period for an 
     additional 2 taxable years.
       ``(ii) Going public transaction.--A REIT may not elect to 
     extend the eligibility period under clause (i) unless it 
     enters into an agreement with the Secretary that if it does 
     not engage in a going public transaction by the end of the 
     extended eligibility period, it shall pay Federal income 
     taxes for the 2 years of the extended eligibility period as 
     if it had not made an incubator REIT election and had ceased 
     to qualify as a REIT for those 2 taxable years.
       ``(iii) Returns, interest, and notice.--

       ``(I) Returns.--In the event the corporation ceases to be 
     treated as a REIT by operation of clause (ii), the 
     corporation shall file any appropriate amended returns 
     reflecting the change in status within 3 months of the close 
     of the extended eligibility period.
       ``(II) Interest.--Interest shall be payable on any tax 
     imposed by reason of clause (ii) for any taxable year but, 
     unless there was a finding under subparagraph (D), no 
     substantial underpayment penalties shall be imposed.
       ``(III) Notice.--The corporation shall, at the same time it 
     files its returns under subclause (I), notify its 
     shareholders and any other persons whose tax position is, or 
     may reasonably be expected to be, affected by the change in 
     status so they also may file any appropriate amended returns 
     to conform their tax treatment consistent with the 
     corporation's loss of REIT status.
       ``(IV) Regulations.--The Secretary shall provide 
     appropriate regulations setting forth transferee liability 
     and other provisions to ensure collection of tax and the 
     proper administration of this provision.

       ``(iv) Clauses (ii) and (iii) shall not apply if the 
     corporation allows its incubator REIT status to lapse at the 
     end of the initial 2-year eligibility period without engaging 
     in a going public transaction if the corporation is not a 
     controlled entity as of the beginning of its fourth taxable 
     year. In such a case, the corporation's directors may still 
     be liable for the penalties described in subparagraph (D) 
     during the eligibility period.
       ``(D) Special penalties.--If the Secretary determines that 
     an incubator REIT election was filed for a principal purpose 
     other than as part of a reasonable plan to undertake a going 
     public transaction, an excise tax of $20,000 shall be imposed 
     on each of the corporation's directors for each taxable year 
     for which an election was in effect.
       ``(E) Going public transaction.--For purposes of this 
     paragraph, a going public transaction means--
       ``(i) a public offering of shares of the stock of the 
     incubator REIT;
       ``(ii) a transaction, or series of transactions, that 
     results in the stock of the incubator REIT being regularly 
     traded on an established securities market and that results 
     in at least 50 percent of such stock being held by 
     shareholders who are unrelated to persons who held such stock 
     before it began to be so regularly traded; or
       ``(iii) any transaction resulting in ownership of the REIT 
     by 200 or more persons (excluding the largest single 
     shareholder) who in the aggregate own at least 50 percent of 
     the stock of the REIT.

     For the purposes of this subparagraph, the rules of paragraph 
     (3) shall apply in determining the ownership of stock.
       ``(F) Definitions.--The term `established securities 
     market' shall have the meaning set forth in the regulations 
     under section 897.''.
       (c) Conforming Amendment.--Paragraph (2) of section 856(h) 
     of the Internal Revenue Code of 1986 is amended by striking 
     ``and (6)'' each place it appears and inserting ``, (6), and 
     (7)''.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after May 8, 2003.
       (2) Exception for existing controlled entities.--The 
     amendments made by this section shall not apply to any entity 
     which is a controlled entity (as defined in section 856(l) of 
     the Internal Revenue Code of 1986, as added by this section) 
     as of May 8, 2003, which is a real estate investment trust 
     for the taxable year which includes such date, and which has 
     significant business assets or activities as of such date. 
     For purposes of the preceding sentence, an entity shall be 
     treated as such a controlled entity on May 8, 2003, if it 
     becomes such an entity after such date in a transaction--
       (A) made pursuant to a written agreement which was binding 
     on such date and at all times thereafter, or
       (B) described on or before such date in a filing with the 
     Securities and Exchange

[[Page 13462]]

     Commission required solely by reason of the transaction.

     SEC. __. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.

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

     ``SEC. 7528. INTERNAL REVENUE SERVICE USER FEES.

       ``(a) General Rule.--The Secretary shall establish a 
     program requiring the payment of user fees for--
       ``(1) requests to the Internal Revenue Service for ruling 
     letters, opinion letters, and determination letters, and
       ``(2) other similar requests.
       ``(b) Program Criteria.--
       ``(1) In general.--The fees charged under the program 
     required by subsection (a)--
       ``(A) shall vary according to categories (or subcategories) 
     established by the Secretary,
       ``(B) shall be determined after taking into account the 
     average time for (and difficulty of) complying with requests 
     in each category (and subcategory), and
       ``(C) shall be payable in advance.
       ``(2) Exemptions, etc.--
       ``(A) In general.--The Secretary shall provide for such 
     exemptions (and reduced fees) under such program as the 
     Secretary determines to be appropriate.
       ``(B) Exemption for certain requests regarding pension 
     plans.--The Secretary shall not require payment of user fees 
     under such program for requests for determination letters 
     with respect to the qualified status of a pension benefit 
     plan maintained solely by 1 or more eligible employers or any 
     trust which is part of the plan. The preceding sentence shall 
     not apply to any request--
       ``(i) made after the later of--

       ``(I) the fifth plan year the pension benefit plan is in 
     existence, or
       ``(II) the end of any remedial amendment period with 
     respect to the plan beginning within the first 5 plan years, 
     or

       ``(ii) made by the sponsor of any prototype or similar plan 
     which the sponsor intends to market to participating 
     employers.
       ``(C) Definitions and special rules.--For purposes of 
     subparagraph (B)--
       ``(i) Pension benefit plan.--The term `pension benefit 
     plan' means a pension, profit-sharing, stock bonus, annuity, 
     or employee stock ownership plan.
       ``(ii) Eligible employer.--The term `eligible employer' 
     means an eligible employer (as defined in section 
     408(p)(2)(C)(i)(I)) which has at least 1 employee who is not 
     a highly compensated employee (as defined in section 414(q)) 
     and is participating in the plan. The determination of 
     whether an employer is an eligible employer under 
     subparagraph (B) shall be made as of the date of the request 
     described in such subparagraph.
       ``(iii) Determination of average fees charged.--For 
     purposes of any determination of average fees charged, any 
     request to which subparagraph (B) applies shall not be taken 
     into account.
       ``(3) Average fee requirement.--The average fee charged 
     under the program required by subsection (a) shall not be 
     less than the amount determined under the following table:

                                                                Average
``Category                                                          Fee
  Employee plan ruling and opinion............................$250 ....

  Exempt organization ruling..................................$350 ....

  Employee plan determination.................................$300 ....

  Exempt organization determination...........................$275 ....

  Chief counsel ruling........................................$200.....

       ``(c) Termination.--No fee shall be imposed under this 
     section with respect to requests made after September 30, 
     2013.''.
       (b) Conforming Amendments.--
       (1) The table of sections for chapter 77 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new item:

``Sec. 7528. Internal Revenue Service user fees.''.

       (2) Section 10511 of the Revenue Act of 1987 is repealed.
       (3) Section 620 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is repealed.
       (c) Limitations.--Notwithstanding any other provision of 
     law, any fees collected pursuant to section 7528 of the 
     Internal Revenue Code of 1986, as added by subsection (a), 
     shall not be expended by the Internal Revenue Service unless 
     provided by an appropriations Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.
                                 ______
                                 
  SA 846. Mr. FITZGERALD (for Mr. Gregg) proposed an amendment to the 
bill S. 313, to amend the Federal Food, Drug, and Cosmetic Act to 
establish a program of fees relating to animal drugs; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Animal Drug User Fee Act of 
     2003''.

     SEC. 2. FINDINGS.

       Congress finds as follows:
       (1) Prompt approval of safe and effective new animal drugs 
     is critical to the improvement of animal health and the 
     public health.
       (2) Animal health and the public health will be served by 
     making additional funds available for the purpose of 
     augmenting the resources of the Food and Drug Administration 
     that are devoted to the process for review of new animal drug 
     applications.
       (3) The fees authorized by this title will be dedicated 
     toward expediting the animal drug development process and the 
     review of new and supplemental animal drug applications and 
     investigational animal drug submissions as set forth in the 
     goals identified, for purposes of part 3 of subchapter C of 
     chapter VII of the Federal Food, Drug, and Cosmetic Act, in 
     the letters from the Secretary of Health and Human Services 
     to the Chairman of the Committee on Energy and Commerce of 
     the House of Representatives and the Chairman of the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate as set forth in the Congressional Record.

     SEC. 3. FEES RELATING TO ANIMAL DRUGS.

       Subchapter C of chapter VII of the Federal Food, Drug and 
     Cosmetic Act (21 U.S.C. 379f et seq.) is amended by adding at 
     the end the following part:

                ``PART 4--FEES RELATING TO ANIMAL DRUGS

     ``SEC. 739. AUTHORITY TO ASSESS AND USE ANIMAL DRUG FEES.

       ``(a) Definitions.--For purposes of this subchapter:
       ``(1) The term `animal drug application' means an 
     application for approval of any new animal drug submitted 
     under section 512(b)(1). Such term does not include either a 
     new animal drug application submitted under section 512(b)(2) 
     or a supplemental animal drug application.
       ``(2) The term `supplemental animal drug application' 
     means--
       ``(A) a request to the Secretary to approve a change in an 
     animal drug application which has been approved; or
       ``(B) a request to the Secretary to approve a change to an 
     application approved under section 512(c)(2) for which data 
     with respect to safety or effectiveness are required.
       ``(3) The term `animal drug product' means each specific 
     strength or potency of a particular active ingredient or 
     ingredients in final dosage form marketed by a particular 
     manufacturer or distributor, which is uniquely identified by 
     the labeler code and product code portions of the national 
     drug code, and for which an animal drug application or a 
     supplemental animal drug application has been approved.
       ``(4) The term `animal drug establishment' means a foreign 
     or domestic place of business which is at one general 
     physical location consisting of one or more buildings all of 
     which are within 5 miles of each other, at which one or more 
     animal drug products are manufactured in final dosage form.
       ``(5) The term `investigational animal drug submission' 
     means--
       ``(A) the filing of a claim for an investigational 
     exemption under section 512(j) for a new animal drug intended 
     to be the subject of an animal drug application or a 
     supplemental animal drug application, or
       ``(B) the submission of information for the purpose of 
     enabling the Secretary to evaluate the safety or 
     effectiveness of an animal drug application or supplemental 
     animal drug application in the event of their filing.
       ``(6) The term `animal drug sponsor' means either an 
     applicant named in an animal drug application, except for an 
     approved application for which all subject products have been 
     removed from listing under section 510, or a person who has 
     submitted an investigational animal drug submission that has 
     not been terminated or otherwise rendered inactive by the 
     Secretary.
       ``(7) The term `final dosage form' means, with respect to 
     an animal drug product, a finished dosage form which is 
     approved for administration to an animal without substantial 
     further manufacturing. Such term includes animal drug 
     products intended for mixing in animal feeds.
       ``(8) The term `process for the review of animal drug 
     applications' means the following activities of the Secretary 
     with respect to the review of animal drug applications, 
     supplemental animal drug applications, and investigational 
     animal drug submissions:
       ``(A) The activities necessary for the review of animal 
     drug applications, supplemental animal drug applications, and 
     investigational animal drug submissions.
       ``(B) The issuance of action letters which approve animal 
     drug applications or supplemental animal drug applications or 
     which set forth in detail the specific deficiencies in animal 
     drug applications, supplemental animal drug applications, or 
     investigational animal drug submissions and, where 
     appropriate, the actions necessary to place such 
     applications, supplements or submissions in condition for 
     approval.
       ``(C) The inspection of animal drug establishments and 
     other facilities undertaken as part of the Secretary's review 
     of pending animal drug applications, supplemental animal drug 
     applications, and investigational animal drug submissions.
       ``(D) Monitoring of research conducted in connection with 
     the review of animal drug

[[Page 13463]]

     applications, supplemental animal drug applications, and 
     investigational animal drug submissions.
       ``(E) The development of regulations and policy related to 
     the review of animal drug applications, supplemental animal 
     drug applications, and investigational animal drug 
     submissions.
       ``(F) Development of standards for products subject to 
     review.
       ``(G) Meetings between the agency and the animal drug 
     sponsor.
       ``(H) Review of advertising and labeling prior to approval 
     of an animal drug application or supplemental animal drug 
     application, but not such activities after an animal drug has 
     been approved.
       ``(9) The term `costs of resources allocated for the 
     process for the review of animal drug applications' means the 
     expenses incurred in connection with the process for the 
     review of animal drug applications for--
       ``(A) officers and employees of the Food and Drug 
     Administration, contractors of the Food and Drug 
     Administration, advisory committees consulted with respect to 
     the review of specific animal drug applications, supplemental 
     animal drug applications, or investigational animal drug 
     submissions, and costs related to such officers, employees, 
     committees, and contractors, including costs for travel, 
     education, and recruitment and other personnel activities,
       ``(B) management of information, and the acquisition, 
     maintenance, and repair of computer resources,
       ``(C) leasing, maintenance, renovation, and repair of 
     facilities and acquisition, maintenance, and repair of 
     fixtures, furniture, scientific equipment, and other 
     necessary materials and supplies, and
       ``(D) collecting fees under this section and accounting for 
     resources allocated for the review of animal drug 
     applications, supplemental animal drug applications, and 
     investigational animal drug submissions.
       ``(10) The term `adjustment factor' applicable to a fiscal 
     year refers to the formula set forth in section 735(8) with 
     the base or comparator year being 2003.
       ``(11) The term `affiliate' refers to the definition set 
     forth in section 735(9).
       ``(b) Types of Fees.--Beginning in fiscal year 2004, the 
     Secretary shall assess and collect fees in accordance with 
     this section as follows:
       ``(1) Animal drug application and supplement fee.--
       ``(A) In general.--Each person that submits, on or after 
     September 1, 2003, an animal drug application or a 
     supplemental animal drug application shall be subject to a 
     fee as follows:
       ``(i) A fee established in subsection (c) for an animal 
     drug application; and
       ``(ii) A fee established in subsection (c) for a 
     supplemental animal drug application for which safety or 
     effectiveness data are required, in an amount that is equal 
     to 50 percent of the amount of the fee under clause (i).
       ``(B) Payment.--The fee required by subparagraph (A) shall 
     be due upon submission of the animal drug application or 
     supplemental animal drug application.
       ``(C) Exception for previously filed application or 
     supplement.--If an animal drug application or a supplemental 
     animal drug application was submitted by a person that paid 
     the fee for such application or supplement, was accepted for 
     filing, and was not approved or was withdrawn (without a 
     waiver or refund), the submission of an animal drug 
     application or a supplemental animal drug application for the 
     same product by the same person (or the person's licensee, 
     assignee, or successor) shall not be subject to a fee under 
     subparagraph (A).
       ``(D) Refund of fee if application refused for filing.--The 
     Secretary shall refund 75 percent of the fee paid under 
     subparagraph (B) for any animal drug application or 
     supplemental animal drug application which is refused for 
     filing.
       ``(E) Refund of fee if application withdrawn.--If an animal 
     drug application or a supplemental animal drug application is 
     withdrawn after the application or supplement was filed, the 
     Secretary may refund the fee or portion of the fee paid under 
     subparagraph (B) if no substantial work was performed on the 
     application or supplement after the application or supplement 
     was filed. The Secretary shall have the sole discretion to 
     refund the fee under this paragraph. A determination by the 
     Secretary concerning a refund under this paragraph shall not 
     be reviewable.
       ``(2) Animal drug product fee.--Each person--
       ``(A) who is named as the applicant in an animal drug 
     application or supplemental animal drug application for an 
     animal drug product which has been submitted for listing 
     under section 510, and
       ``(B) who, after September 1, 2003, had pending before the 
     Secretary an animal drug application or supplemental animal 
     drug application;

     shall pay for each such animal drug product the annual fee 
     established in subsection (c). Such fee shall be payable for 
     the fiscal year in which the animal drug product is first 
     submitted for listing under section 510, or is submitted for 
     relisting under section 510 if the animal drug product has 
     been withdrawn from listing and relisted. After such fee is 
     paid for that fiscal year, such fee shall be payable on or 
     before January 31 of each year. Such fee shall be paid only 
     once for each animal drug product for a fiscal year in which 
     the fee is payable.
       ``(3) Animal drug establishment fee.--Each person--
       ``(A) who owns or operates, directly or through an 
     affiliate, an animal drug establishment, and
       ``(B) who is named as the applicant in an animal drug 
     application or supplemental animal drug application for an 
     animal drug product which has been submitted for listing 
     under section 510, and
       ``(C) who, after September 1, 2003, had pending before the 
     Secretary an animal drug application or supplemental animal 
     drug application,

     shall be assessed an annual fee established in subsection (c) 
     for each animal drug establishment listed in its approved 
     animal drug application as an establishment that manufactures 
     the animal drug product named in the application. The annual 
     establishment fee shall be assessed in each fiscal year in 
     which the animal drug product named in the application is 
     assessed a fee under paragraph (2) unless the animal drug 
     establishment listed in the application does not engage in 
     the manufacture of the animal drug product during the fiscal 
     year. The fee shall be paid on or before January 31 of each 
     year. The establishment shall be assessed only one fee per 
     fiscal year under this section, provided, however, that where 
     a single establishment manufactures both animal drug products 
     and prescription drug products, as defined in section 735(3), 
     such establishment shall be assessed both the animal drug 
     establishment fee and the prescription drug establishment 
     fee, as set forth in section 736(a)(2), within a single 
     fiscal year.
       ``(4) Animal drug sponsor fee.--Each person--
       ``(A) who meets the definition of an animal drug sponsor 
     within a fiscal year; and
       ``(B) who, after September 1, 2003, had pending before the 
     Secretary an animal drug application, a supplemental animal 
     drug application, or an investigational animal drug 
     submission,

     shall be assessed an annual fee established under subsection 
     (c). The fee shall be paid on or before January 31 of each 
     year. Each animal drug sponsor shall pay only one such fee 
     each fiscal year.
       ``(c) Fee Amounts.--Except as provided in subsection (b)(1) 
     and subsections (d), (e), (g), and (h), the fees required 
     under subsection (b) shall be established to generate fee 
     revenue amounts as follows:
       ``(1) Total fee revenues for application and supplement 
     fees.--The total fee revenues to be collected in animal drug 
     application fees under subsection (b)(1)(A)(i) and 
     supplemental animal drug application fees under subsection 
     (b)(1)(A)(ii) shall be $1,250,000 in fiscal year 2004, 
     $2,000,000 in fiscal year 2005, and $2,500,000 in fiscal 
     years 2006, 2007, and 2008.
       ``(2) Total fee revenues for product fees.--The total fee 
     revenues to be collected in product fees under subsection 
     (b)(2) shall be $1,250,000 in fiscal year 2004, $2,000,000 in 
     fiscal year 2005, and $2,500,000 in fiscal years 2006, 2007, 
     and 2008.
       ``(3) Total fee revenues for establishment fees.--The total 
     fee revenues to be collected in establishment fees under 
     subsection (b)(3) shall be $1,250,000 in fiscal year 2004, 
     $2,000,000 in fiscal year 2005, and $2,500,000 in fiscal 
     years 2006, 2007, and 2008.
       ``(4) Total fee revenues for sponsor fees.--The total fee 
     revenues to be collected in sponsor fees under subsection 
     (b)(4) shall be $1,250,000 in fiscal year 2004, $2,000,000 in 
     fiscal year 2005, and $2,500,000 in fiscal years 2006, 2007, 
     and 2008.
       ``(d) Adjustments.--
       ``(1) Inflation adjustment.--The revenues established in 
     subsection (b) shall be adjusted by the Secretary by notice, 
     published in the Federal Register, for a fiscal year to 
     reflect the greater of--
       ``(A) the total percentage change that occurred in the 
     Consumer Price Index for all urban consumers (all items; 
     United States city average) for the 12-month period ending 
     June 30 preceding the fiscal year for which fees are being 
     established; or
       ``(B) the total percentage change for the previous fiscal 
     year in basic pay under the General Schedule in accordance 
     with section 5332 of title 5, United States Code, as adjusted 
     by any locality-based comparability payment pursuant to 
     section 5304 of such title for Federal employees stationed in 
     the District Columbia.

     The adjustment made each fiscal year by this subsection will 
     be added on a compounded basis to the sum of all adjustments 
     made each fiscal year after fiscal year 2004 under this 
     subsection.
       ``(2) Workload adjustment.--After the fee revenues are 
     adjusted for inflation in accordance with paragraph (1), the 
     fee revenues shall be further adjusted each fiscal year after 
     fiscal year 2004 to reflect changes in review workload. With 
     respect to such adjustment:
       ``(A) This adjustment shall be determined by the Secretary 
     based on a weighted average of the change in the total number 
     of animal drug applications, supplemental animal

[[Page 13464]]

     drug applications for which data with respect to safety or 
     effectiveness are required, manufacturing supplemental animal 
     drug applications, investigational animal drug study 
     submissions, and investigational animal drug protocol 
     submissions submitted to the Secretary. The Secretary shall 
     publish in the Federal Register the fees resulting from this 
     adjustment and the supporting methodologies.
       ``(B) Under no circumstances shall this workload adjustment 
     result in fee revenues for a fiscal year that are less than 
     the fee revenues for that fiscal year established in 
     subsection (c), as adjusted for inflation under paragraph 
     (1).
       ``(3) Final year adjustment.--For fiscal year 2008, the 
     Secretary may further increase the fees to provide for up to 
     3 months of operating reserves of carryover user fees for the 
     process for the review of animal drug applications for the 
     first 3 months of fiscal year 2009 If the Food and Drug 
     Administration has carryover balances for the process for the 
     review of animal drug applications in excess of 3 months of 
     such operating reserves, then this adjustment will not be 
     made. If this adjustment is necessary, then the rationale for 
     the amount of the increase shall be contained in the annual 
     notice setting fees for fiscal year 2008
       ``(4) Annual fee setting.--The Secretary shall establish, 
     60 days before the start of each fiscal year beginning after 
     September 30, 2003, for that fiscal year, animal drug 
     application fees, supplemental animal drug application fees, 
     animal drug sponsor fees, animal drug establishment fees, and 
     animal drug product fees based on the revenue amounts 
     established under subsection (c) and the adjustments provided 
     under this subsection.
       ``(5) Limit.--The total amount of fees charged, as adjusted 
     under this subsection, for a fiscal year may not exceed the 
     total costs for such fiscal year for the resources allocated 
     for the process for the review of animal drug applications.
       ``(e) Fee Waiver or Reduction.--
       ``(1) In general.--The Secretary shall grant a waiver from 
     or a reduction of 1 or more fees assessed under subsection 
     (b) where the Secretary finds that--
       ``(A) the assessment of the fee would present a significant 
     barrier to innovation because of limited resources available 
     to such person or other circumstances,
       ``(B) the fees to be paid by such person will exceed the 
     anticipated present and future costs incurred by the 
     Secretary in conducting the process for the review of animal 
     drug applications for such person,
       ``(C) the animal drug application or supplemental animal 
     drug application is intended solely to provide for use of the 
     animal drug in--
       ``(i) a Type B medicated feed (as defined in section 
     558.3(b)(3) of title 21, Code of Federal Regulations (or any 
     successor regulation)) intended for use in the manufacture of 
     Type C free-choice medicated feeds, or
       ``(ii) a Type C free-choice medicated feed (as defined in 
     section 558.3(b)(4) of title 21, Code of Federal Regulations 
     (or any successor regulation)),
       ``(D) the animal drug application or supplemental animal 
     drug application is intended solely to provide for a minor 
     use or minor species indication, or
       ``(E) the sponsor involved is a small business submitting 
     its first animal drug application to the Secretary for 
     review.
       ``(2) Use of standard costs.--In making the finding in 
     paragraph (1)(B), the Secretary may use standard costs.
       ``(3) Rules for small businesses.--
       ``(A) Definition.--In paragraph (1)(E), the term ``small 
     business'' means an entity that has fewer than 500 employees, 
     including employees of affiliates.
       ``(B) Waiver of application fee.--The Secretary shall waive 
     under paragraph (1)(E) the application fee for the first 
     animal drug application that a small business or its 
     affiliate submits to the Secretary for review. After a small 
     business or its affiliate is granted such a waiver, the small 
     business or its affiliate shall pay application fees for all 
     subsequent animal drug applications and supplemental animal 
     drug applications for which safety or effectiveness data are 
     required in the same manner as an entity that does not 
     qualify as a small business.
       ``(C) Certification.--The Secretary shall require any 
     person who applies for a waiver under paragraph (1)(E) to 
     certify their qualification for the waiver. The Secretary 
     shall periodically publish in the Federal Register a list of 
     persons making such certifications.
       ``(f) Effect of Failure To Pay Fees.--An animal drug 
     application or supplemental animal drug application submitted 
     by a person subject to fees under subsection (b) shall be 
     considered incomplete and shall not be accepted for filing by 
     the Secretary until all fees owed by such person have been 
     paid. An investigational animal drug submission under section 
     738(5)(B) that is submitted by a person subject to fees under 
     subsection (b) shall be considered incomplete and shall not 
     be accepted for review by the Secretary until all fees owed 
     by such person have been paid. The Secretary may discontinue 
     review of any animal drug application, supplemental animal 
     drug application or investigational animal drug submission 
     from a person if such person has not submitted for payment 
     all fees owed under this section by 30 days after the date 
     upon which they are due.
       ``(g) Assessment of Fees.--
       ``(1) Limitation.--Fees may not be assessed under 
     subsection (b) for a fiscal year beginning after fiscal year 
     2003 unless appropriations for salaries and expenses of the 
     Food and Drug Administration for such fiscal year (excluding 
     the amount of fees appropriated for such fiscal year) are 
     equal to or greater than the amount of appropriations for the 
     salaries and expenses of the Food and Drug Administration for 
     the fiscal year 2003 (excluding the amount of fees 
     appropriated for such fiscal year) multiplied by the 
     adjustment factor applicable to the fiscal year involved.
       ``(2) Authority.--If the Secretary does not assess fees 
     under subsection (b) during any portion of a fiscal year 
     because of paragraph (1) and if at a later date in such 
     fiscal year the Secretary may assess such fees, the Secretary 
     may assess and collect such fees, without any modification in 
     the rate, for animal drug applications, supplemental animal 
     drug applications, investigational animal drug submissions, 
     sponsors, animal drug establishments and animal drug products 
     at any time in such fiscal year notwithstanding the 
     provisions of subsection (b) relating to the date fees are to 
     be paid.
       ``(h) Crediting and Availability of Fees.--
       ``(1) In general.--Fees authorized under subsection (b) 
     shall be collected and available for obligation only to the 
     extent and in the amount provided in advance in 
     appropriations Acts. Such fees are authorized to be 
     appropriated to remain available until expended. Such sums as 
     may be necessary may be transferred from the Food and Drug 
     Administration salaries and expenses appropriation account 
     without fiscal year limitation to such appropriation account 
     for salary and expenses with such fiscal year limitation. The 
     sums transferred shall be available solely for the process 
     for the review of animal drug applications.
       ``(2) Collections and appropriation acts.--
       ``(A) In general.--The fees authorized by this section--
       ``(i) shall be retained in each fiscal year in an amount 
     not to exceed the amount specified in appropriation Acts, or 
     otherwise made available for obligation for such fiscal year, 
     and
       ``(ii) shall only be collected and available to defray 
     increases in the costs of the resources allocated for the 
     process for the review of animal drug applications (including 
     increases in such costs for an additional number of full-time 
     equivalent positions in the Department of Health and Human 
     Services to be engaged in such process) over such costs, 
     excluding costs paid from fees collected under this section, 
     for fiscal year 2003 multiplied by the adjustment factor.
       ``(B) Compliance.--The Secretary shall be considered to 
     have met the requirements of subparagraph (A)(ii) in any 
     fiscal year if the costs funded by appropriations and 
     allocated for the process for the review of animal drug 
     applications--
       ``(i) are not more than 3 percent below the level specified 
     in subparagraph (A)(ii); or
       ``(ii)(I) are more than 3 percent below the level specified 
     in subparagraph (A)(ii), and fees assessed for the fiscal 
     year following the subsequent fiscal year are decreased by 
     the amount in excess of 3 percent by which such costs fell 
     below the level specified in subparagraph (A)(ii); and
       ``(II) such costs are not more than 5 percent below the 
     level specified in subparagraph (A)(ii).
       ``(3) Authorization of appropriations.--There are 
     authorized to be appropriated for fees under this section--
       ``(A) $5,000,000 for fiscal year 2004;
       ``(B) $8,000,000 for fiscal year 2005;
       ``(C) $10,000,000 for fiscal year 2006;
       ``(D) $10,000,000 for fiscal year 2007; and
       ``(E) $10,000,000 for fiscal year 2008;

     as adjusted to reflect adjustments in the total fee revenues 
     made under this section and changes in the total amounts 
     collected by animal drug application fees, supplemental 
     animal drug application fees, animal drug sponsor fees, 
     animal drug establishment fees, and animal drug product fees.
       ``(4) Offset.--Any amount of fees collected for a fiscal 
     year under this section that exceeds the amount of fees 
     specified in appropriations Acts for such fiscal year shall 
     be credited to the appropriation account of the Food and Drug 
     Administration as provided in paragraph (1), and shall be 
     subtracted from the amount of fees that would otherwise be 
     authorized to be collected under this section pursuant to 
     appropriation Acts for a subsequent fiscal year.
       ``(i) Collection of Unpaid Fees.--In any case where the 
     Secretary does not receive payment of a fee assessed under 
     subsection (b) within 30 days after it is due, such fee shall 
     be treated as a claim of the United States Government subject 
     to subchapter II of chapter 37 of title 31, United States 
     Code.
       ``(j) Written Requests for Waivers, Reductions, and 
     Refunds.--To qualify for consideration for a waiver or 
     reduction under subsection (e), or for a refund of any fee 
     collected in accordance with subsection (b), a

[[Page 13465]]

     person shall submit to the Secretary a written request for 
     such waiver, reduction, or refund not later than 180 days 
     after such fee is due.
       ``(k) Construction.--This section may not be construed to 
     require that the number of full-time equivalent positions in 
     the Department of Health and Human Services, for officers, 
     employees, and advisory committees not engaged in the process 
     of the review of animal drug applications, be reduced to 
     offset the number of officers, employees, and advisory 
     committees so engaged.
       ``(l) Abbreviated New Drug Applications.--The Secretary 
     shall--
       ``(1) to the extent practicable, segregate the review of 
     abbreviated new animal drug applications from the process for 
     the review of animal drug applications, and
       ``(2) adopt other administrative procedures to ensure that 
     review times of abbreviated new animal drug applications do 
     not increase from their current level due to activities under 
     the user fee program.''.

     SEC. 4. ACCOUNTABILITY AND REPORTS.

       (a) Public Accountability.--
       (1) Consultation.--In developing recommendations to 
     Congress for the goals and plans for meeting the goals for 
     the process for the review of animal drug applications for 
     the fiscal years after fiscal year 2008, and for the 
     reauthorization of section 739 of the Federal Food, Drug, and 
     Cosmetic Act (as added by section 3), the Secretary of Health 
     and Human Services (referred to in this section as the 
     ``Secretary'') shall consult with the Committee on Energy and 
     Commerce of the House of Representatives, the Committee on 
     Health, Education, Labor, and Pensions of the Senate, 
     appropriate scientific and academic experts, veterinary 
     professionals, representatives of consumer advocacy groups, 
     and the regulated industry.
       (2) Recommendations.--The Secretary shall--
       (A) publish in the Federal Register recommendations under 
     paragraph (1), after negotiations with the regulated 
     industry;
       (B) present the recommendations to the Committees referred 
     to in that paragraph;
       (C) hold a meeting at which the public may comment on the 
     recommendations; and
       (D) provide for a period of 30 days for the public to 
     provide written comments on the recommendations.
       (b) Performance Reports.--Beginning with fiscal year 2004, 
     not later than 60 days after the end of each fiscal year 
     during which fees are collected under part 3 of subchapter C 
     of chapter VII of the Federal Food, Drug, and Cosmetic Act, 
     the Secretary shall prepare and submit to the Committee on 
     Energy and Commerce of the House of Representatives and the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate a report concerning the progress of the Food and Drug 
     Administration in achieving the goals identified in the 
     letters described in section 2(3) of this Act toward 
     expediting the animal drug development process and the review 
     of the new and supplemental animal drug applications and 
     investigational animal drug submissions during such fiscal 
     year, the future plans of the Food and Drug Administration 
     for meeting the goals, the review times for abbreviated new 
     animal drug applications, and the administrative procedures 
     adopted by the Food and Drug Administration to ensure that 
     review times for abbreviated new animal drug applications are 
     not increased from their current level due to activities 
     under the user fee program.
       (c) Fiscal Report.--Beginning with fiscal year 2004, not 
     later than 120 days after the end of each fiscal year during 
     which fees are collected under the part described in 
     subsection (a), the Secretary shall prepare and submit to the 
     Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Health, Education, 
     Labor, and Pensions of the Senate a report on the 
     implementation of the authority for such fees during such 
     fiscal year and the use, by the Food and Drug Administration, 
     of the fees collected during such fiscal year for which the 
     report is made.

     SEC. 5. SUNSET.

       The amendments made by section 3 shall not be in effect 
     after October 1, 2008, and section 4 shall not be in effect 
     after 120 days after such date.

                          ____________________