[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Pages 20554-20622]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. BUNNING (for himself, Mr. Breaux, and Mr. Bond):
  S. 1506. A bill to amend the Internal Revenue Code of 1986 to allow 
distilled spirits wholesalers a credit against income tax for their 
cost of carrying Federal excise taxes prior to the sale of the product 
bearing the tax; to the Committee on Finance.
  Mr. BUNNING. Mr. President, I rise today to introduce legislation 
that will resolve a longstanding inequity in the tax treatment of U.S. 
distilled spirits that penalizes the wholesalers, and in some cases 
suppliers, of these products.
  Under current law, wholesalers of distilled spirits are not required 
to pay the Federal excise tax on imported spirits until after the 
product is removed from a bonded warehouse for sale to a retailer.
  In contrast, the tax on domestically produced spirits is included as 
part of the purchase price and passed on from the supplier to 
wholesaler. After factoring in the Federal excise tax (FET)--which is 
$13.50 per proof gallon--domestically produced spirits can cost 
wholesalers 40 percent more to purchase than comparable imported 
spirits.
  In some instances, wholesalers and even suppliers can carry this tax-
paid inventory for an average of 60 days before selling it to a 
retailer. Interest charges--more commonly referred to as float--
resulting from financing the Federal excise tax can be quite 
considerable.
  For example, at a 5 percent interest rate on the sale of 100,000 
cases of domestic spirits, a wholesaler will incur finance charges of 
$21,106.85 for loans related to underwriting the cost of paying the 
Federal excise tax. It is important to note that it is not uncommon for 
wholesalers to sell a million or more cases per year of domestic 
spirits.
  The costs associated with financing Federal excise taxes amount to a 
tax on a tax, making the effective rate of the Federal excise tax for 
domestic spirits much higher than $13.50 per proof gallon.
  The Distilled Spirits Tax Equity Act would give wholesalers and 
suppliers in bailment states a tax credit towards the cost of financing 
the FET for domestically produced products.
  I believe this legislation is fundamentally fair and will help 
protect and create jobs for the wholesale tier in Kentucky and other 
States. However, I wish to emphasize that I will reject any connection 
between a repeal of Section 5010 within the Internal Revenue Code or an 
increase in federal taxes for distilled spirits. Tax equity for one 
tier should not be achieved by placing additional burden on other tiers 
within the same industry.
  My colleagues, Senators Bond and Breaux join me in introducing this 
legislation, which the Joint Tax Committee estimates would reduce 
Federal revenues by approximately $249 million over ten years. 
Congressmen Collins and Neal have introduced similar legislation that 
has garnered significant support in the House of Representatives. I 
urge my colleagues to support this legislation when it comes before the 
Senate.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Bingaman, Mr. Kennedy, Ms. 
        Cantwell, Mr. Durbin, Mr. Wyden, Mr. Corzine, Mr. Akaka, and 
        Mr. Jeffords):
  S. 1507. A bill to protect privacy by limiting the access of the 
government to library, bookseller, and other personal records for 
foreign intelligence and counterintelligence purposes; to the Committee 
on the Judiciary.
  Mr. FEINGOLD. Mr. President, today I introduce the Library, 
Bookseller, and Personal Records Privacy Act.
  This bill would amend the Patriot Act to protect the privacy of law-
abiding Americans. It would set reasonable limits on the Federal 
Government's access to library, bookseller, medical, and other 
sensitive, personal information under the Foreign Intelligence 
Surveillance Act and related foreign intelligence authority.
  I am pleased that several of my distinguished colleagues--Senators 
Bingaman, Kennedy, Cantwell, Durbin, Wyden, Corzine, Akaka, and 
Jeffords--have joined me as original cosponsors of this important 
legislation.
  I and millions of other patriotic Americans love our country and 
support our military men and women in their difficult missions abroad, 
but worry about the fate of our Constitution here at home.
  Much of our Nation's strength comes from our constitutional liberties 
and respect for the rule of law. That is what has kept us free for our 
two and a quarter century history. Our constitutional freedoms, our 
American values, are what make our country worth fighting for in the 
fight against terrorism.
  Here at home, there is no question that the FBI needs ample resources 
and legal authority to prevent future acts of terrorism. But the 
Patriot Act went too far when it comes to the government's access to 
personal information about law-abiding Americans.
  Even though in the end I opposed the Patriot Act, there were several 
provisions that I did support. For example, Congress was right to 
expand the category of business records that the FBI could obtain by 
subpoena pursuant to the Foreign Intelligence Surveillance Act. Prior 
to the Patriot Act, the FBI could seek a court order to obtain only 
travel records--such as airline, hotel, and car rental records--and 
records maintained by storage facilities. The Patriot Act allows any 
business records to be subpoenaed. I don't quibble with that change.
  But what my colleagues and I do find problematic--and an increasing 
number of Americans who value their privacy and First Amendment rights 
agree with us--is that the current law allows the FBI broad, almost 
unfettered access to personal information about law-abiding Americans 
who have no connection to terrorism or spying.
  Section 215 of the Patriot Act requires the FBI to show in an 
application to the court for a subpoena that the documents are ``sought 
for'' an international terrorism or foreign intelligence investigation. 
There is no requirement that the FBI make a showing of individualized 
suspicion that the documents relate to a suspected terrorism or spy.
  In other words, under current law, the FBI could serve a subpoena on 
a library for all the borrowing records of its patrons or on a 
bookseller for the purchasing records of its customers simply by 
asserting that they want the records for a terrorism investigation.
  During the last year, librarians and booksellers have become 
increasingly concerned by the potential for abuse of this law. I was 
pleased to stand with the American Booksellers Association and the Free 
Expression Network a little over a year ago when we first started to 
raise these concerns.
  Librarians and booksellers are concerned that under the Patriot Act, 
the FBI could seize records from libraries and booksellers in order to 
monitor what books Americans have purchased or borrowed, or who has 
used a library's or bookstore's internet computer stations, even if 
there is no evidence that the person is a terrorist or spy, or has any 
connection to a terrorist or spy.
  These concerns are so strong, that some librarians across the country 
have taken the unusual step of destroying records of patrons' book and 
computer use, as well as posting signs on computer stations warning 
patrons that whatever they read or access on the internet could be 
monitored by the Federal Government.
  As a librarian in California said, ``We felt strongly that this had 
to be done. . . . The government has never had this kind of power 
before. It feels like Big Brother.''
  And as the executive director of the American Library Association 
said, ``This law is dangerous. . . . I read murder mysteries--does that 
make me a murderer? I read spy stories--does that mean I'm a spy? 
There's no clear link between a person's intellectual pursuits and 
their actions.''
  The American people do not know how many or what kind of requests 
federal agents have made for library records under the Patriot Act. The 
Justice Department refuses to release that information to the public.

[[Page 20555]]

  But in a survey released by the University of Illinois at Urbana-
Champaign, about 550 libraries around the Nation reported having 
received requests from Federal or local law enforcement during the past 
year. About half of the libraries said they complied with the law 
enforcement request, and another half indicated that they had not.
  Americans don't know much about these incidents, because the law also 
contains a provision that prohibits anyone who receives a subpoena from 
disclosing that fact to anyone.
  David Schwartz, president of Harry W. Schwartz Bookshops, the oldest 
and largest independent bookseller in Milwaukee, summed up well the 
American values at stake when he said: ``The FBI already has 
significant subpoena powers to obtain records. There is no need for the 
government to invade a person's privacy in this way. This is a uniquely 
un-American tool, and it should be rejected. The books we read are a 
very private part of our lives. People could stop buying books, and 
they could be terrified into silence.''
  Afraid to read books, terrified into silence. Is that the America we 
want? Is that the America where we'd like to live? I don't think so. 
And I hope my colleagues will agree.
  It is time to reconsider those provisions of the Patriot Act that are 
un-American and, frankly, un-patriotic.
  Bu my concerns with the Patriot Act go beyond library and bookseller 
records. Under section 215 of the Patriot Act, the FBI could seek any 
records maintained by a business. These business records could contain 
sensitive, personal information--for example, medical records 
maintained by a doctor or hospital or credit records maintained by a 
credit agency. All the FBI would have to do is simply assert that the 
records are ``sought for'' its terrorism or foreign intelligence 
investigation.
  Section 215 of the Patriot Act goes too far. Americans rightfully 
have a reasonable expectation of privacy in their library, bookstore, 
medical, financial, or other records containing personal information. 
Prudent safeguards are needed to protect these legitimate privacy 
interests.
  The Library, Bookseller, and Personal Records Privacy Act is a 
reasonable solution. It would restore a pre-Patriot Act requirement 
that the FBI make a factual, individualized showing that the records 
sought pertain to a suspected terrorist or spy.
  My bill will not prevent the FBI from doing its job. My bill 
recognizes that the post-September 11 world is a different world. There 
are circumstances when the FBI should legitimately have access to 
library, bookseller, or other personal information.
  I would like to take a moment to explain how the safeguard in my bill 
would be applied. Suppose the FBI is conducting an investigation of an 
international terrorist organization. It has information that suspected 
members of the group live in a particular neighborhood. The FBI would 
like to serve a subpoena on the library in the suspects' neighborhood. 
Under current law, the FBI could decide to ask the library for all 
records concerning anyone who has ever borrowed a book or used a 
computer, and what books were borrowed, simply by asserting that the 
documents are sought for a terrorism investigation. But under my bill, 
the FBI could not do so. The FBI would have to set forth specific and 
articulable facts giving reason to believe that the person to whom the 
records pertain is a suspected terrorist. The FBI could subpoena only 
those library records--such as borrowing records or computer sign-in 
logs--that pertain to the suspected terrorists. The FBI could not 
obtain library records concerning individuals who are not suspected 
terrorists.
  So, under my bill, the FBI can still obtain documents that it 
legitimately needs, but my bill would also protect the privacy of law-
abiding Americans. I might add, that if, as the Justice Department 
says, the FBI is using its Patriot Act powers in a responsible manner, 
does not seek the records of law-abiding Americans, and only seeks the 
records of suspected terrorists or suspected spies, then there is no 
reason for the Department to object to my bill.
  The second part of my bill would address privacy concerns with 
another Federal law enforcement power expanded by the Patriot Act--the 
FBI's national security letter authority, or what is sometimes referred 
to as ``administrative subpoena'' authority because the FBI does not 
need court approval to use this power.
  My bill would amend section 505 of the Patriot Act. Part of this 
section relates to the production of records maintained by electronic 
communications providers. Libraries or bookstores with internet access 
for customers could be deemed ``electronic communication providers'' 
and therefore be subject to a request by the FBI under its 
administrative subpoena authority.
  As I mentioned earlier, some librarians are so concerned about the 
potential for abuse by the FBI that they have taken matters into their 
own hands before the FBI knocks on their door. Some librarians have 
begun shredding on a daily basis sign-in logs and other documents 
relating to the public's use of library computer terminals to access 
the Internet.
  Again, safeguards are needed to ensure that any individual who 
accesses the internet at a library or bookstore does not automatically 
give up all expectations of privacy. Like the section 215 I've 
discussed, my bill would require an individualized showing by the FBI 
of how the records of internet usage maintained by a library or 
bookseller pertain to a suspected terrorist or spy.
  Yes, the American people want the FBI to be focused on preventing 
terrorism. And, yes, it may make sense to make some changes to the law 
to allow the FBI access to the information that it needs to prevent 
terrorism. But we do not need to change the values that constitute who 
we are as a nation in order to protect ourselves from terrorism. We can 
protect both our nation and our privacy and civil liberties.
  An increasing number of Americans are beginning to understand that 
the Patriot Act went too far. Three States and over 130 cities and 
counties across the country have now passed resolutions expressing 
opposition to the Patriot Act. And it's not just the Berkeleys and 
Madisons of the Nation, but other States and communities with strong 
libertarian values, such as Alaska and cities in Montana, have passed 
such resolutions.
  I have many concerns with the Patriot Act. I am not seeking to repeal 
it, in whole or in part. My colleagues and I are only seeking to modify 
two provisions that pose serious potential for abuse.
  The privacy of law-abiding Americans is at stake. Congress should act 
to protect our privacy. And my bill is a reasonable approach to do just 
that.
  I urge my colleagues to join me and support the Library, Bookseller, 
and Personal Records Privacy Act.
  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. 1507

       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 ``Library, Bookseller, and 
     Personal Records Privacy Act''.

     SEC. 2. PRIVACY PROTECTIONS ON GOVERNMENT ACCESS TO LIBRARY, 
                   BOOKSELLER, AND OTHER PERSONAL RECORDS UNDER 
                   FOREIGN INTELLIGENCE SURVEILLANCE ACT OF 1978.

       (a) Applications for Orders.--Subsection (b) of section 501 
     of the Foreign Intelligence Surveillance Act of 1978 (50 
     U.S.C. 1861) is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(3) shall specify that there are specific and articulable 
     facts giving reason to believe that the person to whom the 
     records pertain is a foreign power or an agent of a foreign 
     power.''.
       (b) Orders.--Subsection (c)(1) of that section is amended 
     by striking ``finds'' and all that follows and inserting 
     ``finds that--
       ``(A) there are specific and articulable facts giving 
     reason to believe that the person

[[Page 20556]]

     to whom the records pertain is a foreign power or an agent of 
     a foreign power; and
       ``(B) the application meets the other requirements of this 
     section.''.
       (c) Oversight of Requests for Production of Records.--
     Section 502 of that Act (50 U.S.C. 1862) is amended--
       (1) in subsection (a), by striking ``the Permanent'' and 
     all that follows through ``the Senate'' and inserting ``the 
     Permanent Select Committee on Intelligence and the Committee 
     on the Judiciary of the House of Representatives and the 
     Select Committee on Intelligence and the Committee on the 
     Judiciary of the Senate''; and
       (2) in subsection (b), by striking ``On a semiannual 
     basis,'' and all that follows through ``a report setting 
     forth'' and inserting ``The report of the Attorney General to 
     the Committees on the Judiciary of the House of 
     Representatives and the Senate under subsection (a) shall set 
     forth''.

     SEC. 3. PRIVACY PROTECTIONS ON GOVERNMENT ACCESS TO 
                   INFORMATION ON COMPUTER USERS AT BOOKSELLERS 
                   AND LIBRARIES UNDER NATIONAL SECURITY 
                   AUTHORITY.

       (a) In General.--Section 2709 of title 18, 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) Records of Booksellers and Libraries.--(1) When a 
     request under this section is made to a bookseller or 
     library, the certification required by subsection (b) shall 
     also specify that there are specific and articulable facts 
     giving reason to believe that the person or entity to whom 
     the records pertain is a foreign power or an agent of a 
     foreign power.
       ``(2) In this subsection:
       ``(A) The term `bookseller' means a person or entity 
     engaged in the sale, rental, or delivery of books, journals, 
     magazines, or other similar forms of communication in print 
     or digitally.
       ``(B) The term `library' means a library (as that term is 
     defined in section 213(2) of the Library Services and 
     Technology Act (20 U.S.C. 9122(2))) whose services include 
     access to the Internet, books, journals, magazines, 
     newspapers, or other similar forms of communication in print 
     or digitally to patrons for their use, review, examination, 
     or circulation.
       ``(C) The terms `foreign power' and `agent of a foreign 
     power' have the meaning given such terms in section 101 of 
     the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 
     1801).''.
       (b) Sunset of Certain Modifications on Access.--Section 
     224(a) of the USA PATRIOT ACT of 2001 (Public Law 107-56; 115 
     Stat. 295) is amended by inserting ``and section 505'' after 
     ``by those sections)''.
                                 ______
                                 
      By Mr. HAGEL (for himself, Mr. Sununu, and Mrs. Dole):
  S. 1508. A bill to address regulation of secondary mortgage market 
enterprises, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. HAGEL. Mr. President, I rise today to introduce, along with my 
colleagues Senator Sununu and Senator Dole, the Federal Enterprise 
Regulatory Reform Act of 2003. This is needed regulatory reform at a 
critical time for the Federal National Mortgage Association (Fannie 
Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
  There is no doubt that our housing government sponsored enterprises 
(GSEs) have been successful in carrying out their mission of creating a 
secondary market for home mortgages. The housing market has remained 
strong through tough economic times, and homeownership in this country 
is at an all-time high.
  The housing GSEs, however, are uncommon institutions with a unique 
set of responsibilities and stakeholders. Fannie and Freddie are 
chartered by Congress, limited in scope, and are subject to 
Congressional mandates, yet they are publicly traded companies with all 
the earnings pressure that Wall Street demands. Additionally, Fannie 
and Freddie enjoy an implicit guarantee by the Federal Government that 
has aided them in developing substantial clout on Wall Street. With 
their influence in the markets, their ability to raise capital at near-
Treasury Bill rates, and their use of the most sophisticated portfolio 
management tools, Fannie and Freddie today are no longer simply 
secondary market facilitators for mortgages.
  Freddie Mac's recent disclosure of management failures and accounting 
deficiencies resulting in upwards of $4.5 billion in understated 
earnings precipitated the need for Congress to exercise its oversight 
of the GSEs. The Senate Banking Committee has held one hearing already 
and more are planned after our August recess.
  If we are to continue to provide GSEs with the framework to operate 
under an implied government backing, I believe that they should be held 
to a higher standard than private organizations and subject to more 
scrutiny than the private sector. Furthermore, I believe it is possible 
to realign oversight and operating rules for Fannie and Freddie without 
jeopardizing the strong housing market that America enjoys today.
  It is my view that the Office of Federal Housing Enterprise Oversight 
(OFHEO) has not been given the tools needed to effectively regulate 
Fannie Mae and Freddie Mac. Our legislation would create a new, 
stronger regulator in the Department of the Treasury. Treasury 
regulates banks and other financial institutions through the Office of 
the Comptroller of the Currency (OCC) and the Office of Thrift 
Supervision (OTS), and it has the experience and expertise needed to 
supervise Fannie Mae and Freddie Mac. Our bill also would provide the 
new regulator with enhanced regulatory flexibility and enforcement 
tools like those afforded to OCC and OTS. Furthermore, the bill would: 
give OFES oversight of Fannie Mae and Freddie Mac's ``mission'' as well 
as safety and soundness; give OFES authority to regulate the type and 
amount of non-mission related assets Fannie Mae and Freddie Mac can 
hold; give OFES enhanced enforcement powers much like those of other 
financial regulators; fund OFES through assessments instead of through 
Congressional appropriations; require several government studies, 
including one on the risk implications of GSEs purchasing their own 
mortgage backed securities, one on the feasibility of merging OFES with 
the Federal Housing Finance Board (FHFB), and one on the feasibility of 
consolidating OFES with the Office of Thrift Supervision (OTS).
  This reform is important to restoring and maintaining the confidence 
that investors and the markets require. In light of the recent problems 
at Freddie Mac, it is even more important. I urge my colleagues to 
support this reform effort and invite them to cosponsor our bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1508

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Federal 
     Enterprise Regulatory Reform Act of 2003''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.

      TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC

                 Subtitle A--Improvement of Supervision

Sec. 101. Establishment of Office of Federal Enterprise Supervision in 
              the Department of the Treasury.
Sec. 102. Duties and authorities of Director and HUD.
Sec. 103. Examiners and accountants.
Sec. 104. Regulations.
Sec. 105. Assessments.
Sec. 106. Independence of Director in congressional testimony and 
              recommendations.
Sec. 107. Limitation on nonmission-related assets.
Sec. 108. Reports.
Sec. 109. Risk-based capital test for enterprises.
Sec. 110. Minimum and critical capital levels.
Sec. 111. Definitions.

                  Subtitle B--Prompt Corrective Action

Sec. 131. Capital classifications.
Sec. 132. Supervisory actions applicable to undercapitalized 
              enterprises.
Sec. 133. Supervisory actions applicable to significantly 
              undercapitalized enterprises.

                    Subtitle C--Enforcement Actions

Sec. 151. Cease-and-desist proceedings.
Sec. 152. Temporary cease-and-desist proceedings.
Sec. 153. Removal and prohibition authority.
Sec. 154. Enforcement and jurisdiction.
Sec. 155. Civil money penalties.
Sec. 156. Criminal penalty.

[[Page 20557]]

                    Subtitle D--Reports to Congress

Sec. 161. Studies and reports.

                     Subtitle E--General Provisions

Sec. 171. Conforming and technical amendments.
Sec. 172. Effective date.

        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

Sec. 201. Abolishment of OFHEO.
Sec. 202. Continuation and coordination of certain regulations.
Sec. 203. Transfer and rights of employees of OFHEO.
Sec. 204. Transfer of property and facilities.

      TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC

                 Subtitle A--Improvement of Supervision

     SEC. 101. ESTABLISHMENT OF OFFICE OF FEDERAL ENTERPRISE 
                   SUPERVISION IN THE DEPARTMENT OF THE TREASURY.

       (a) In General.--Part 1 of Subtitle A of title XIII of the 
     Housing and Community Development Act of 1992 is amended by 
     striking sections 1311 and 1312 (12 U.S.C. 4511, 4512) and 
     inserting the following:

     ``SEC. 1311. ESTABLISHMENT OF OFFICE OF FEDERAL ENTERPRISE 
                   SUPERVISION.

       ``(a) Establishment.--
       ``(1) In General.--There is established the Office of 
     Federal Enterprise Supervision, which shall be an office in 
     the Department of the Treasury.
       ``(2) Authority.--The Office shall succeed to the authority 
     of the Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban Development 
     and the general regulatory and any other authority of the 
     Secretary of Housing and Urban Development with respect to 
     the enterprises (except as specifically provided otherwise in 
     this Act, the Federal National Mortgage Association Charter 
     Act (12 U.S.C. 1716 et seq.), the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1451 et seq.), and any other 
     provision of Federal law).
       ``(b) Prohibition of Merger of Office.--Notwithstanding any 
     other provision of this law, the Secretary of the Treasury 
     may not merge or consolidate the Office, or any of the 
     functions or responsibilities of the Office, with any 
     function or program administered by the Secretary.
       ``(c) Savings Provision.--The authority of the Director to 
     take actions under subtitles B and C does not in any way 
     limit the general supervisory and regulatory authority 
     granted to the Director under subsection (a).

     ``SEC. 1312. DIRECTOR.

       ``(a) Establishment of Position.--There is established the 
     position of the Director of the Office of Federal Enterprise 
     Supervision, who shall be the head of the Office.
       ``(b) Appointment; Term.--
       ``(1) Appointment.--The Director shall be appointed by the 
     President, by and with the advice and consent of the Senate, 
     from among individuals who are citizens of the United States.
       ``(2) Term.--The Director shall be appointed for a term of 
     5 years.
       ``(3) Vacancy.--
       ``(A) In general.--A vacancy in the position of Director 
     that occurs before the expiration of the term for which a 
     Director was appointed shall be filled in the manner 
     established under paragraph (1).
       ``(B) Term .--The Director appointed to fill a vacancy 
     under subparagraph (A) shall be appointed only for the 
     remainder of such term.
       ``(4) Service after end of term.--An individual may serve 
     as Director after the expiration of the term for which the 
     individual was appointed until a successor Director has been 
     appointed.
       ``(5) Transitional provision.--Notwithstanding paragraphs 
     (1) and (2), the Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development on the date of enactment of the Federal 
     Enterprise Regulatory Reform Act of 2003, shall be the 
     Director until the date on which that individual's term as 
     Director of the Office of Federal Housing Enterprise 
     Oversight would have expired.
       ``(c) Prohibition on Financial Interests.--The Director 
     shall not have a direct or indirect financial interest in any 
     enterprise, nor hold any office, position, or employment in 
     any enterprise.''.
       (b) Appointment of Director.--Notwithstanding the effective 
     date under section 172 or any other provision of law, the 
     President may, at any time after the date of enactment of 
     this Act, appoint an individual to serve as the Director in 
     accordance with the provisions of the amendment made by 
     subsection (a) of this section.

     SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR AND HUD.

       (a) In General.--Section 1313 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4513) is amended to read 
     as follows:

     ``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be to ensure that the enterprises--
       ``(A) operate in a financially safe and sound manner;
       ``(B) carry out their missions in a financially safe and 
     sound manner and only through activities that have been 
     authorized under, and are consistent with the purposes of, 
     the provisions of Federal law that charter the enterprises; 
     and
       ``(C) remain adequately capitalized.
       ``(2) Other duties.--To the extent consistent with 
     paragraph (1), the duty of the Director shall be to exercise 
     general supervisory and regulatory authority over the 
     enterprises, in accordance with this title, the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.), the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1451 et seq.), and any other provisions of law.
       ``(b) Authority Exclusive of Secretary.--Except as 
     specifically provided under this Act, the Federal National 
     Mortgage Association Charter Act, the Federal Home Loan 
     Mortgage Corporation Act, or any other provision of Federal 
     law, the authority of the Director with respect to the 
     enterprises shall not be subject to the review, approval, or 
     intervention of the Secretary of the Treasury.
       ``(c) Delegation of Authority.--The Director may delegate 
     to officers and employees of the Director any of the 
     functions, powers, and duties of the Director, with respect 
     to supervision and regulation of the enterprises, as the 
     Director considers appropriate.''.
       (b) Prior Approval Authority for New Programs.--Part 1 of 
     Subtitle A of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended 
     by adding at the end the following:

     ``SEC. 1319H. PRIOR APPROVAL AUTHORITY FOR NEW PROGRAMS.

       ``(a) In general.--The Director shall require each 
     enterprise to obtain the approval of the Director for any new 
     program of the enterprise before implementing the program.
       ``(b) Standard for approval.--The Director shall approve 
     any new program of an enterprise for purposes of subsection 
     (a) unless--
       ``(1) in the case of a new program of the Federal National 
     Mortgage Association, the Director determines that the 
     program is not authorized under section 304 or paragraph (2), 
     (3), (4), or (5) of section 302(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b));
       ``(2) in the case of a new program of the Federal Home Loan 
     Mortgage Corporation, the Director determines that the 
     program is not authorized under paragraph (1), (4), or (5) of 
     section 305(a) of the Federal Home Loan Mortgage Corporation 
     Act (12 U.S.C. 1451 et seq.); or
       ``(3) the Director determines that the new program is not 
     in the public interest.
       ``(c) Procedure for Approval.--
       ``(1) Submission of request.--An enterprise shall submit to 
     the Director a written request for approval of a new program 
     under subparagraph (A) that describes the program in such 
     form as prescribed by order or regulation of the Director.
       ``(2) Response.--
       ``(A) In general.--Not later than 45 days after the date of 
     submission of a request for approval under paragraph (1), the 
     Director shall--
       ``(i) approve the request; or
       ``(ii) deny the request and submit a report explaining the 
     reasons for the denial to the Committee on Financial Services 
     of the House of Representatives and the Committee on Banking, 
     Housing and Urban Affairs of the Senate.
       ``(B) Extension.--The Director may extend the time period 
     under subparagraph (A) for a single additional 15 day period 
     only if the Director requests additional information from the 
     enterprise.
       ``(3) Failure to respond.--If the Director fails to approve 
     the request or fails to submit a report under paragraph 
     (2)(A)(ii) during the period provided, the request shall be 
     considered to have been approved by the Director.
       ``(4) Review of disapproval.--
       ``(A) Submission of new information.--If the Director 
     submits a report under paragraph (2)(A)(ii) denying a request 
     for reasons listed under paragraph (1) or (2) of subsection 
     (b), the Director shall allow the enterprise to submit new 
     information in support of the request for approval.
       ``(B) New programs not in the public interest.--If the 
     Director submits a report under paragraph (2)(A)(ii) denying 
     a request after finding that the program is not in the public 
     interest under subsection (b)(3), the Director shall provide 
     the enterprise with notice and opportunity for a hearing on 
     the record regarding such denial.''.
       (c) Repeal of HUD Authority.--Part 2 of Subtitle A of title 
     XIII of the Housing and Community Development Act of 1992 (12 
     U.S.C.4501 et seq.) is amended by striking sections 1321 and 
     1322.
       (d) Authority of HUD for Housing Goals.--
       (1) In general.--Section 1331 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4561) is amended--
       (A) in the first sentence of subsection (a), by inserting 
     ``of Housing and Urban Development'' after ``The Secretary''; 
     and
       (B) by adding at the end the following:
       ``(d) Definition.--For purposes of this part, the term 
     `Secretary' means the Secretary of Housing and Urban 
     Development.''.
       (2) Annual report on housing goals.--Section 1324 of the 
     Housing and Community

[[Page 20558]]

     Development Act of 1992 (12 U.S.C. 4544) is amended by 
     inserting ``of Housing and Urban Development'' after 
     ``Secretary'' each place such term appears.
       (e) Technical and Conforming Amendments.--
       (1) Fannie mae.--Section 302(b)(6) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716(b)(6)) is 
     amended by striking ``Secretary under section 1322'' and 
     inserting ``Director under section 1319H''.
       (2) Freddie mac.--Section 305(c) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended by 
     striking ``Secretary under section 1322'' and inserting 
     ``Director under section 1319H''.
       (3) Financial Institutions Examination Council.--Section 
     1004(a) of the Federal Financial Institutions Examination 
     Council Act of 1978 (12 U.S.C. 3303(a)) is amended--
       (A) in paragraph (5), by striking the period; and
       (B) by adding at the end the following:
       ``(6) the Director of the Office of Federal Enterprise 
     Supervision.''.

     SEC. 103. EXAMINERS AND ACCOUNTANTS.

       (a) Examinations.--Section 1317 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4517) is 
     amended--
       (1) in the second sentence of subsection (c), by striking 
     ``The'' and inserting ``During the 3-year period that begins 
     upon the date of enactment of the Federal Enterprise 
     Regulatory Reform Act of 2003, the''; and
       (2) in subsection (d), by striking ``Federal Reserve 
     banks'' and inserting ``Director of the Office of Thrift 
     Supervision''.
       (b) Enhanced Authority To Hire Examiners and Accountants.--
     Section 1317 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 4517) is amended by adding at the end the 
     following:
       ``(g) Appointment of Accountants, Economists, and 
     Examiners.--
       ``(1) Applicability.--This section applies with respect to 
     any position of examiner, accountant, and economist at the 
     Office, with respect to supervision and regulation of the 
     enterprises, that is in the competitive service.
       ``(2) Appointment authority.--
       ``(A) In general.--The Director may appoint candidates to 
     any position described in paragraph (1)--
       ``(i) in accordance with the statutes, rules, and 
     regulations governing appointments in the excepted service; 
     and
       ``(ii) notwithstanding any statutes, rules, and regulations 
     governing appointments in the competitive service.
       ``(B) Rule of construction.--The appointment of a candidate 
     to a position under this paragraph shall not be considered to 
     cause such position to be converted from the competitive 
     service to the excepted service.
       ``(3) Reports.--
       ``(A) In general.--Not later than 90 days after the end of 
     fiscal year 2003 (for fiscal year 2003) and 90 days after the 
     end of fiscal year 2005 (for fiscal years 2004 and 2005), the 
     Director shall submit a report with respect to its exercise 
     of the authority granted by paragraph (2) during such fiscal 
     years to the--
       ``(i) Committee on Government Reform and the Committee on 
     Financial Services of the House of Representatives; and
       ``(ii) Committee on Governmental Affairs and the Committee 
     on Banking, Housing, and Urban Affairs of the Senate.
       ``(B) Contents.--The reports submitted under subparagraph 
     (A) shall describe the changes in the hiring process 
     authorized by paragraph (2), including relevant information 
     related to--
       ``(i) the quality of candidates;
       ``(ii) the procedures used by the Director to select 
     candidates through the streamlined hiring process;
       ``(iii) the numbers, types, and grades of employees hired 
     under the authority;
       ``(iv) any benefits or shortcomings associated with the use 
     of the authority;
       ``(v) the effect of the exercise of the authority on the 
     hiring of veterans and other demographic groups; and
       ``(vi) the way in which managers were trained in the 
     administration of the streamlined hiring system.''.

     SEC. 104. REGULATIONS.

       Section 1319G of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4526) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Authority.--The Director shall issue any regulations 
     and orders necessary to carry out the duties of the Director, 
     with respect to supervision and regulation of the 
     enterprises, under this title, the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1716 et seq.), and the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et 
     seq.), and to ensure that the purposes of this title and such 
     Acts are accomplished.''; and
       (2) in subsection (c), by striking ``Committee on Banking, 
     Finance and Urban Affairs'' and inserting ``Committee on 
     Financial Services''.

     SEC. 105. ASSESSMENTS.

       Section 1316 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4516) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the enterprises annual assessments in an amount 
     not exceeding the amount sufficient to provide for all 
     reasonable costs and expenses of the Office, including--
       ``(1) the expenses of any examinations under section 1317; 
     and
       ``(2) the expenses of obtaining any reviews and credit 
     assessments under subsection section 1319.'';
       (2) in subsection (b), in paragraph (2), by moving the 
     margin 2 ems to the right;
       (3) in subsection (c), by adding at the end the following: 
     ``The Director may adjust the amounts of any semiannual 
     assessments for an assessment under subsection (a) that are 
     to be paid pursuant to subsection (b) by an enterprise, as 
     necessary in the discretion of the Director, to ensure that 
     the costs of enforcement activities under subtitles B and C 
     for an enterprise are borne only by that enterprise.'';
       (4) in subsection (f), by striking ``Any assessments 
     collected'' and all that follows and inserting the following: 
     ``Notwithstanding any other provision of law, any assessments 
     collected by the Director pursuant to this section shall be 
     deposited in the Fund in an account for the Director. Any 
     amounts in the Fund are hereby made available, without fiscal 
     year limitation, to the Director (to the extent of amounts in 
     the Director's account) for carrying out the supervisory and 
     regulatory responsibilities of the Director, with respect to 
     the enterprises, including any necessary administrative and 
     nonadministrative expenses of the Director in carrying out 
     the purposes of this title, the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1716 et seq.), and the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et 
     seq.).''; and
       (5) in subsection (g), by striking paragraphs (1) and (2) 
     and inserting the following:
       ``(1) Financial operating plans and forecasts.--Before the 
     beginning of each fiscal year, the Director shall submit a 
     copy of the financial operating plans and forecasts for the 
     Office to the Director of the Office of Management and 
     Budget.
       ``(2) Reports of operations.--As soon as practicable after 
     the end of each fiscal year and each quarter thereof, the 
     Director shall submit a copy of the report of the results of 
     the operations of the Office during such period to the 
     Director of the Office of Management and Budget.''.

     SEC. 106. INDEPENDENCE OF DIRECTOR IN CONGRESSIONAL TESTIMONY 
                   AND RECOMMENDATIONS.

       Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended 
     by inserting ``the Director of the Office of Federal 
     Enterprise Supervision of the Department of the Treasury,'' 
     after ``the Federal Housing Finance Board,''.

     SEC. 107. LIMITATION ON NONMISSION-RELATED ASSETS.

       Subtitle B of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
       (1) by striking the subtitle designation and heading and 
     inserting the following:

    ``Subtitle B--Required Capital Levels for Enterprises, Special 
   Enforcement Powers, and Limitation on Nonmission-Related Assets'';

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

     ``SEC. 1369E. LIMITATION ON NONMISSION-RELATED ASSETS.

       ``(a) In General.--The Director may, by regulation, 
     determine the type and amount of nonmission-related assets 
     that an enterprise may hold at any time. The Director shall, 
     in any such regulation, define the term `nonmission-related 
     asset' for purposes of this section.
       ``(b) Rule of Construction.--Subsection (a) may not be 
     construed to authorize an enterprise to engage in any new 
     program relating to any nonmission-related asset without 
     obtaining the prior approval of the Director in accordance 
     with section 1319H.''.

     SEC. 108. REPORTS.

       Sections 1327 and 1328 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4547, 4548) are amended by 
     striking ``Secretary'' each place it appears and inserting 
     ``Director''.

     SEC. 109. RISK-BASED CAPITAL TEST FOR ENTERPRISES.

       Section 1361 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4611) is amended--
       (1) in subsection (a)(2)(A), by inserting ``, or change in 
     such other manner as the Director considers appropriate,'' 
     after ``subparagraph (C),'';
       (2) in subsection (b)(1), by adding at the end the 
     following: ``Notwithstanding subsection (a), the Director 
     may, in the sole discretion of the Director, make any 
     assumptions that the Director considers appropriate regarding 
     interest rates, home prices, and new business. Such 
     assessment shall ensure that enterprise risk-based capital 
     standards are, to the greatest extent feasible, comparable to 
     those imposed by the appropriate Federal banking agency (as 
     defined in section 3 of the Federal Deposit Insurance Act (12 
     U.S.C. 1813)) for comparable risk. The risk-based assessment 
     relating to new business under this paragraph shall ensure 
     that the enterprise is able to remain a viable enterprise in 
     full compliance with all applicable risk-based capital and 
     minimum capital

[[Page 20559]]

     standards, and that it can fulfill its role of ensuring 
     appropriate secondary market liquidity throughout the stress 
     test.''; and
       (3) in subsection (c)(2), by inserting ``, or such other 
     percentage as the Director considers appropriate'' before the 
     period at the end.

     SEC. 110. MINIMUM AND CRITICAL CAPITAL LEVELS.

       (a) Minimum Capital Level.--Section 1362 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4612) is 
     amended--
       (1) by striking subsection (b);
       (2) by striking ``(a) In General.--''; and
       (3) in the matter preceding paragraph (1), by inserting 
     before ``the sum of'' the following: ``the amount established 
     by the Director, by regulation or order, as such amount may 
     be adjusted from time-to-time by the Director to achieve the 
     purposes of this title, that is not less than''.
       (b) Critical Capital Level.--Section 1363 of the Housing 
     and Community Development Act of 1992 (12 U.S.C. 4613) is 
     amended, in the matter preceding paragraph (1), by inserting 
     before ``the sum of'' the following: ``the amount established 
     by the Director, by regulation or order, as such amount may 
     be adjusted from time-to-time by the Director to achieve the 
     purposes of this title, that is not less than''.

     SEC. 111. DEFINITIONS.

       Section 1303 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4502) is amended--
       (1) in paragraph (5), by striking ``Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Federal Enterprise Supervision 
     of the Department of the Treasury'';
       (2) in paragraphs (8), (9), (10), and (19), by inserting 
     ``of Housing and Urban Development'' after ``Secretary'' each 
     place such term appears;
       (3) in paragraph (14), by striking ``Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Federal Enterprise Supervision 
     of the Department of the Treasury'';
       (4) by striking paragraph (15);
       (5) by redesignating paragraphs (7) through (14) (as 
     amended by the preceding provisions of this Act) as 
     paragraphs (8) through (15), respectively; and
       (6) by inserting after paragraph (6) the following:
       ``(7) Enterprise-affiliated party.--The term `enterprise-
     affiliated party' means--
       ``(A) any director, officer, employee, or controlling 
     stockholder of, or agent for, an enterprise;
       ``(B) any shareholder, consultant, joint venture partner, 
     and any other person as determined by the Director (by 
     regulation or case-by-case) who participates in the conduct 
     of the affairs of an enterprise; and
       ``(C) any independent contractor (including any attorney, 
     appraiser, or accountant) who knowingly or recklessly 
     participates in--
       ``(i) any violation of any law or regulation;
       ``(ii) any breach of fiduciary duty; or
       ``(iii) any unsafe or unsound practice,
     which caused or is likely to cause more than a minimal 
     financial loss to, or a significant adverse effect on, the 
     enterprise.''.

                  Subtitle B--Prompt Corrective Action

     SEC. 131. CAPITAL CLASSIFICATIONS.

       Section 1364 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4614) is amended--
       (1) by striking subsection (b) and inserting the following:
       ``(b) Discretionary Classification.--
       ``(1) Grounds for reclassification.--The Director may 
     reclassify an enterprise under paragraph (2) if--
       ``(A) at any time, the Director determines in writing that 
     an enterprise is engaging in conduct that could result in a 
     rapid depletion of core capital or that the value of the 
     property subject to mortgages held or securitized by the 
     enterprise has decreased significantly;
       ``(B) after notice and an opportunity for hearing, the 
     Director determines that an enterprise is in an unsafe or 
     unsound condition; or
       ``(C) pursuant to section 1371(b), the Director deems an 
     enterprise to be engaging in an unsafe or unsound practice.
       ``(2) Reclassification.--In addition to any other action 
     authorized under this title, including the reclassification 
     of an enterprise for any reason not specified in this 
     subsection, if the Director takes any action described in 
     paragraph (1) the Director may classify an enterprise--
       ``(A) as undercapitalized, if the enterprise is otherwise 
     classified as adequately capitalized;
       ``(B) as significantly undercapitalized, if the enterprise 
     is otherwise classified as undercapitalized; and
       ``(C) as critically undercapitalized, if the enterprise is 
     otherwise classified as significantly undercapitalized.'';
       (2) by redesignating subsection (d) as subsection (e); and
       (3) by inserting after subsection (c) the following:
       ``(d) Restriction on Capital Distributions.--
       ``(1) In general.--An enterprise shall make no capital 
     distribution if, after making the distribution, the 
     enterprise would be undercapitalized.
       ``(2) Exception.--Notwithstanding paragraph (1), the 
     Director may permit an enterprise to repurchase, redeem, 
     retire, or otherwise acquire shares or ownership interests if 
     the repurchase, redemption, retirement, or other 
     acquisition--
       ``(A) is made in connection with the issuance of additional 
     shares or obligations of the enterprise in at least an 
     equivalent amount; and
       ``(B) will reduce the financial obligations of the 
     enterprise or otherwise improve the financial condition of 
     the enterprise.''.

     SEC. 132. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   ENTERPRISES.

       (a) Effective Date for Supervisory Actions.--Section 
     1365(c) of the Housing and Community Development Act of 1992 
     (12 U.S.C. 4615(c)) is amended by striking ``1-year'' and 
     inserting ``6-month''.
       (b) Supervisory Actions.--Section 1365 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4615) is 
     amended--
       (1) in subsection (a)--
       (A) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively;
       (B) by inserting before paragraph (2) the following:
       ``(1) Required monitoring.--The Director shall--
       ``(A) closely monitor the condition of any undercapitalized 
     enterprise;
       ``(B) closely monitor compliance with the capital 
     restoration plan, restrictions, and requirements imposed 
     under this section; and
       ``(C) periodically review the plan, restrictions, and 
     requirements applicable to the undercapitalized enterprise to 
     determine whether the plan, restrictions, and requirements 
     are achieving the purpose of this section.''; and
       (C) by inserting at the end the following:
       ``(4) Restriction of asset growth.--An undercapitalized 
     enterprise shall not permit its average total assets during 
     any calendar quarter to exceed its average total assets 
     during the preceding calendar quarter unless--
       ``(A) the Board has accepted the enterprise's capital 
     restoration plan;
       ``(B) any increase in total assets is consistent with the 
     plan; and
       ``(C) the ratio of tangible equity to assets of the 
     enterprise increases during the calendar quarter at a rate 
     sufficient to enable the enterprise to become adequately 
     capitalized within a reasonable time.
       ``(5) Prior approval of acquisitions and issuance of new 
     products.--An undercapitalized enterprise shall not, directly 
     or indirectly, acquire any interest in any entity or issue a 
     new product unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the enterprise, the enterprise is implementing the 
     plan, and the Director determines that the proposed action is 
     consistent with and will further the achievement of the plan; 
     or
       ``(B) the Director determines that the proposed action will 
     further the purpose of this section.''; and
       (2) in the subsection heading for subsection (b), by 
     striking ``From Undercapitalized to Significantly 
     Undercapitalized'';
       (3) by redesignating subsection (c) (as amended by 
     subsection (a)) as subsection (d); and
       (4) by inserting after subsection (b) the following:
       ``(c) Other Discretionary Safeguards.--The Director may 
     take, with respect to an undercapitalized enterprise, any of 
     the actions authorized to be taken under section 1366 with 
     respect to a significantly undercapitalized enterprise, if 
     the Director determines that such actions are necessary to 
     carry out the purpose of this subtitle.''.

     SEC. 133. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED ENTERPRISES.

       Section 1366 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4616) is amended--
       (1) in subsection (b)--
       (A) in the subsection heading, by striking ``Discretionary 
     Supervisory Actions'' and inserting ``Specific Actions'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may, at any time, take any'' and inserting ``shall carry 
     out this section by taking, at any time, 1 or more'';
       (C) by redesignating paragraphs (5) and (6) as paragraphs 
     (6) and (7), respectively;
       (D) by inserting after paragraph (4) the following:
       ``(5) Improvement of management.--Take one or more of the 
     following actions:
       ``(A) New election of board.--Order a new election for the 
     board of directors of the enterprise.
       ``(B) Dismissal of directors or executive officers.--
     Require the enterprise to dismiss from office any director or 
     executive officer who had held office for more than 180 days 
     immediately before the enterprise became undercapitalized. 
     Dismissal under this subparagraph shall not be construed to 
     be a removal pursuant to the Director's enforcement powers 
     under section 1377.
       ``(C) Employ qualified executive officers.--Require the 
     enterprise to employ qualified executive officers (who, if 
     the Director so specifies, shall be subject to approval by 
     the Director).''; and
       (E) by inserting at the end the following:

[[Page 20560]]

       ``(8) Other action.--Require the enterprise to take any 
     other action that the Director determines will better carry 
     out the purpose of this section than any of the actions 
     specified in this paragraph.'';
       (2) by redesignating subsection (c) as subsection (d); and
       (3) by inserting after subsection (b) the following:
       ``(c) Restriction on Compensation of Executive Officers.--
     An enterprise that is classified as significantly 
     undercapitalized may not, without prior written approval by 
     the Director--
       ``(A) pay any bonus to any executive officer; or
       ``(B) provide compensation to any executive officer at a 
     rate exceeding that officer's average rate of compensation 
     (excluding bonuses, stock options, and profit sharing) during 
     the 12 calendar months preceding the calendar month in which 
     the enterprise became undercapitalized.''.

                    Subtitle C--Enforcement Actions

     SEC. 151. CEASE-AND-DESIST PROCEEDINGS.

       Section 1371 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4631) is amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following:
       ``(a) Issuance for Unsafe or Unsound Practices and 
     Violations of Rules or Laws.--
       ``(1) In general.--If, in the opinion of the Director, an 
     enterprise or any enterprise-affiliated party is engaging or 
     has engaged, or the Director has reasonable cause to believe 
     that the enterprise or any enterprise-affiliated party is 
     about to engage, in an unsafe or unsound practice in 
     conducting the business of the enterprise or is violating or 
     has violated, or the Director has reasonable cause to believe 
     that the enterprise or any enterprise-affiliated party is 
     about to violate, a law, rule, or regulation, or any 
     condition imposed in writing by the Director in connection 
     with the granting of any application or other request by the 
     enterprise or any written agreement entered into with the 
     Director, the Director may issue and serve upon the 
     enterprise or such party a notice of charges in respect 
     thereof.
       ``(2) Limitations.--The Director may not enforce compliance 
     with--
       ``(A) any housing goal established under subpart B of part 
     2 of subtitle A of this title;
       ``(B) section 1336 or 1337 of this title;
       ``(C) subsection (m) or (n) of section 309 of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1723a(m), (n)); or
       ``(D) subsection (e) or (f) of section 307 of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)).
       ``(b) Issuance for Unsatisfactory Rating.--If an enterprise 
     receives, in its most recent report of examination, a less-
     than-satisfactory rating for asset quality, management, 
     earnings, or liquidity, the Director may (if the deficiency 
     is not corrected) deem the enterprise to be engaging in an 
     unsafe or unsound practice for purposes of this 
     subsection.''; and
       (2) in subsection (c)(2), by striking ``or director'' and 
     inserting ``director, or enterprise-affiliated party''.

     SEC. 152. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

       Section 1372 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4632) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Grounds for Issuance.--Whenever the Director 
     determines that the violation or threatened violation or the 
     unsafe or unsound practice or practices specified in the 
     notice of charges served upon the enterprise or any 
     enterprise-affiliated party under section 1371(a), or the 
     continuation thereof, is likely to cause insolvency or 
     significant dissipation of assets or earnings of the 
     enterprise, or is likely to weaken the condition of the 
     enterprise prior to the completion of the proceedings 
     conducted pursuant to sections 1371 and 1373, the Director 
     may issue a temporary order requiring the enterprise or such 
     party to cease and desist from any such violation or practice 
     and to take affirmative action to prevent or remedy such 
     insolvency, dissipation, condition, or prejudice pending 
     completion of such proceedings. Such order may include any 
     requirement authorized under subsection 1371(d).'';
       (2) in subsection (b), by striking ``or director'' and 
     inserting ``director, or enterprise-affiliated party'';
       (3) in subsection (d), striking ``or director'' and 
     inserting ``director, or enterprise-affiliated party''; and
       (4) by striking subsection (e) and inserting the following:
       ``(e) Enforcement.--In the case of violation or threatened 
     violation of, or failure to obey, a temporary cease-and-
     desist order issued under this section, the Director may 
     apply to the United States District Court for the District of 
     Columbia or the United States district court within the 
     jurisdiction of which the headquarters of the enterprise is 
     located, for an injunction to enforce such order, and, if the 
     court determines that there has been such violation or 
     threatened violation or failure to obey, it shall be the duty 
     of the court to issue such injunction.''.

     SEC. 153. REMOVAL AND PROHIBITION AUTHORITY.

       (a) In General.--Subtitle C of title XIII of the Housing 
     and Community Development Act of 1992 is amended--
       (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
     4637-41) as sections 1379 through 1379D, respectively; and
       (2) by inserting after section 1376 (12 U.S.C. 4636) the 
     following:

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--Whenever the Director 
     determines that--
       ``(1) any enterprise-affiliated party has, directly or 
     indirectly--
       ``(A) violated--
       ``(i) any law or regulation;
       ``(ii) any cease-and-desist order which has become final;
       ``(iii) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such enterprise; or
       ``(iv) any written agreement between such enterprise and 
     the Director;
       ``(B) engaged or participated in any unsafe or unsound 
     practice in connection with any enterprise; or
       ``(C) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(2) by reason of the violation, practice, or breach 
     described in any subparagraph of paragraph (1)--
       ``(A) such enterprise has suffered or will probably suffer 
     financial loss or other damage; or
       ``(B) such party has received financial gain or other 
     benefit by reason of such violation, practice, or breach; and
       ``(3) such violation, practice, or breach--
       ``(A) involves personal dishonesty on the part of such 
     party; or
       ``(B) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such enterprise,

     the Director may serve upon such party a written notice of 
     the Director's intention to remove such party from office or 
     to prohibit any further participation by such party, in any 
     manner, in the conduct of the affairs of any enterprise.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) to any enterprise-
     affiliated party of the Director's intention to issue an 
     order under, the Director may suspend such party from office 
     or prohibit such party from further participation in any 
     manner in the conduct of the affairs of the enterprise, if 
     the Director--
       ``(A) determines that such action is necessary for the 
     protection of the enterprise; and
       ``(B) serves such party with written notice of the 
     suspension order.
       ``(2) Effective period.--Any suspension order issued under 
     subsection (a)--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g) of this section, shall remain in effect and 
     enforceable until--
       ``(i) the date the Director dismisses the charges contained 
     in the notice served under subsection (a) with respect to 
     such party; or
       ``(ii) the effective date of an order issued by the 
     Director to such party under subsection (a).
       ``(3) Copy of order.--If the Director issues a suspension 
     order under subsection (a) to any enterprise-affiliated 
     party, the Director shall serve a copy of such order on any 
     enterprise with which such party is affiliated at the time 
     such order is issued.
       ``(c) Notice, Hearing, and Order.--A notice of intention to 
     remove an enterprise-affiliated party from office or to 
     prohibit such party from participating in the conduct of the 
     affairs of an enterprise shall contain a statement of the 
     facts constituting grounds for such action, and shall fix a 
     time and place at which a hearing will be held on such 
     action. Such hearing shall be fixed for a date not earlier 
     than 30 days nor later than 60 days after the date of service 
     of such notice, unless an earlier or a later date is set by 
     the Director at the request of (1) such party, and for good 
     cause shown, or (2) the Attorney General of the United 
     States. Unless such party shall appear at the hearing in 
     person or by a duly authorized representative, such party 
     shall be deemed to have consented to the issuance of an order 
     of such removal or prohibition. In the event of such consent, 
     or if upon the record made at any such hearing the Director 
     shall find that any of the grounds specified in such notice 
     have been established, the Director may issue such orders of 
     suspension or removal from office, or prohibition from 
     participation in the conduct of the affairs of the 
     enterprise, as it may deem appropriate. Any such order shall 
     become effective at the expiration of 30 days after service 
     upon such enterprise and such party (except in the case of an 
     order issued upon consent, which shall become effective at 
     the time specified therein). Such order shall remain 
     effective and enforceable except to such extent as it is 
     stayed, modified, terminated, or set aside by action of the 
     Director or a reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any enterprise;

[[Page 20561]]

       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any enterprise;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as an 
     enterprise-affiliated party.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in subparagraph (2), 
     any person who, pursuant to an order issued under subsection 
     (h), has been removed or suspended from office in an 
     enterprise or prohibited from participating in the conduct of 
     the affairs of an enterprise may not, while such order is in 
     effect, continue or commence to hold any office in, or 
     participate in any manner in the conduct of the affairs of 
     any enterprise.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date an order is issued under this section 
     which removes or suspends from office any enterprise-
     affiliated party or prohibits such party from participating 
     in the conduct of the affairs of an enterprise, such party 
     receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the enterprise described in the written 
     consent. If the Director grants such a written consent, it 
     shall publicly disclose such consent.
       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order described in such subsection shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business enterprise.
       ``(g) Stay of Suspension and Prohibition of Enterprise-
     Affiliated Party.--Within 10 days after any enterprise-
     affiliated party has been suspended from office or prohibited 
     from participation in the conduct of the affairs of an 
     enterprise under this section, such party may apply to the 
     United States District Court for the District of Columbia, or 
     the United States district court for the judicial district in 
     which the headquarters of the enterprise is located, for a 
     stay of such suspension or prohibition pending the completion 
     of the administrative proceedings pursuant to the notice 
     served upon such party under this section, and such court 
     shall have jurisdiction to stay such suspension or 
     prohibition.
       ``(h) Suspension or Removal of Enterprise-Affiliated Party 
     Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any enterprise-affiliated party 
     is charged in any information, indictment, or complaint, with 
     the commission of or participation in a crime involving 
     dishonesty or breach of trust which is punishable by 
     imprisonment for a term exceeding one year under State or 
     Federal law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     enterprise or impair public confidence in the enterprise, by 
     written notice served upon such party, suspend such party 
     from office or prohibit such party from further participation 
     in any manner in the conduct of the affairs of any 
     enterprise.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under paragraph (1)(A) 
     shall also be served upon the enterprise.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in such 
     subparagraph is finally disposed of or until terminated by 
     the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against an enterprise-affiliated party in 
     connection with a crime described in paragraph (1)(A), at 
     such time as such judgment is not subject to further 
     appellate review, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     enterprise or impair public confidence in the enterprise, 
     issue and serve upon such party an order removing such party 
     from office or prohibiting such party from further 
     participation in any manner in the conduct of the affairs of 
     the enterprise without the prior written consent of the 
     Director.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under paragraph (2)(A) 
     shall also be served upon the enterprise, whereupon the 
     enterprise-affiliated party who is subject to the order (if a 
     director or an officer) shall cease to be a director or 
     officer of such enterprise.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove such party from office or to prohibit 
     further participation in enterprise affairs under subsection 
     (a), (d), or (e).
       ``(iii) Effective period.--Any notice of suspension or 
     order of removal issued under this subsection shall remain 
     effective and outstanding until the completion of any hearing 
     or appeal authorized under paragraph (4) unless terminated by 
     the Director.
       ``(3) Authority of remaining board members.--
       ``(A) In general.--If at any time, because of the 
     suspension of one or more directors pursuant to this section, 
     there shall be on the board of directors of an enterprise 
     less than a quorum of directors not so suspended, all powers 
     and functions vested in or exercisable by such board shall 
     vest in and be exercisable by the director or directors on 
     the board not so suspended, until such time as there shall be 
     a quorum of the board of directors.
       ``(B) Suspension of all directors.--In the event all of the 
     directors of an enterprise are suspended pursuant to this 
     section, the Director shall appoint persons to serve 
     temporarily as directors in their place and stead pending the 
     termination of such suspensions, or until such time as those 
     who have been suspended, cease to be directors of the 
     enterprise and their respective successors take office.
       ``(4) Hearing regarding continued participation.--Within 30 
     days from service of any notice of suspension or order of 
     removal issued pursuant to paragraph (1) or (2) of this 
     subsection, the enterprise-affiliated party concerned may 
     request in writing an opportunity to appear before the 
     Director to show that the continued service to or 
     participation in the conduct of the affairs of the enterprise 
     by such party does not, or is not likely to, pose a threat to 
     the interests of the enterprise or threaten to impair public 
     confidence in the enterprise. Upon receipt of any such 
     request, the Director shall fix a time (not more than 30 days 
     after receipt of such request, unless extended at the request 
     of such party) and place at which such party may appear, 
     personally or through counsel, before one or more members of 
     the Director or designated employees of the Director to 
     submit written materials (or, at the discretion of the 
     Director, oral testimony) and oral argument. Within 60 days 
     of such hearing, the Director shall notify such party whether 
     the suspension or prohibition from participation in any 
     manner in the conduct of the affairs of the enterprise will 
     be continued, terminated, or otherwise modified, or whether 
     the order removing such party from office or prohibiting such 
     party from further participation in any manner in the conduct 
     of the affairs of the enterprise will be rescinded or 
     otherwise modified. Such notification shall contain a 
     statement of the basis for the Director's decision, if 
     adverse to such party. The Director is authorized to 
     prescribe such rules as may be necessary to effectuate the 
     purposes of this subsection.
       ``(i) Hearings and Judicial Review.--
       ``(1) Venue and procedure.--Any hearing provided for in 
     this section shall be held in the District of Columbia or in 
     the Federal judicial district in which the headquarters of 
     the enterprise is located, unless the party afforded the 
     hearing consents to another place, and shall be conducted in 
     accordance with the provisions of chapter 5 of title 5, 
     United States Code. After such hearing, and within 90 days 
     after the Director has notified the parties that the case has 
     been submitted to the court for final decision, the court 
     shall render its decision (which shall include findings of 
     fact upon which its decision is predicated) and shall issue 
     and serve upon each party to the proceeding an order or 
     orders consistent with the provisions of this section. 
     Judicial review of any such order shall be exclusively as 
     provided in this subsection. Unless a petition for review is 
     timely filed in a court of appeals of the United States, as 
     provided in paragraph (2), and thereafter until the record in 
     the proceeding has been filed as so provided, the Director 
     may at any time, upon such notice and in such manner as it 
     shall deem proper, modify, terminate, or set aside any such 
     order. Upon such filing of the record, the Director may 
     modify, terminate, or set aside any such order with 
     permission of the court.
       ``(2) Review of order.--Any party to any proceeding under 
     paragraph (1) may obtain a review of any order served 
     pursuant to paragraph (1) (other than an order issued with 
     the consent of the enterprise or the enterprise-affiliated 
     party concerned, or an order issued under subsection (h) of 
     this section) by the filing in the United States Court of 
     Appeals for the District of Columbia Circuit or court of 
     appeals of the United States for the circuit in which the 
     headquarters of the enterprise is located, within 30 days 
     after the date of service of such order, a written petition 
     praying that the order of the Director be modified, 
     terminated, or set aside. A copy of such petition shall be 
     transmitted by the clerk of the court to the Director, and 
     thereupon the Director shall file in the court the record in 
     the proceeding, as provided in section 2112 of title 28, 
     United States Code. Upon the filing of such petition, such 
     court shall have jurisdiction, which upon the filing of the 
     record shall (except as provided in the last sentence of 
     paragraph (1)) be exclusive, to affirm, modify, terminate, or 
     set aside, in whole or in part, the order of the Director. 
     Review of such proceedings shall be had as provided in 
     chapter 7 of title 5, United States Code. The judgment and 
     decree of the court shall be final, except that the same 
     shall be subject to review by the Supreme Court upon 
     certiorari, as provided in section 1254 of title 28, United 
     States Code.

[[Page 20562]]

       ``(3) Proceedings not treated as stay.--The commencement of 
     proceedings for judicial review under paragraph (2) shall 
     not, unless specifically ordered by the court, operate as a 
     stay of any order issued by the Director.''.
       (b) Conforming Amendments.--
       (1) 1992 act.--Section 1317(f) of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4517(f)) is amended by 
     striking ``section 1379B'' and inserting ``section 1379D''.
       (2) Fannie mae charter act.--The second sentence of 
     subsection (b) of section 308 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended by striking ``The'' and inserting ``Except to the 
     extent that action under section 1377 of the Housing and 
     Community Development Act of 1992 temporarily results in a 
     lesser number, the''.
       (3) Freddie mac act.--The second sentence of subparagraph 
     (A) of section 303(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by 
     striking ``The'' and inserting ``Except to the extent action 
     under section 1377 of the Housing and Community Development 
     Act of 1992 temporarily results in a lesser number, the''.

     SEC. 154. ENFORCEMENT AND JURISDICTION.

       Section 1375 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4635) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Enforcement.--The Director may, in the discretion of 
     the Director, apply to the United States District Court for 
     the District of Columbia, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     enterprise is located, for the enforcement of any effective 
     and outstanding notice or order issued under this subtitle or 
     subtitle B, or request that the Attorney General of the 
     United States bring such an action. Such court shall have 
     jurisdiction and power to order and require compliance with 
     such notice or order.''; and
       (2) in subsection (b), by striking ``or 1376'' and 
     inserting ``1376, or 1377''.

     SEC. 155. CIVIL MONEY PENALTIES.

       Section 1376 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4636) is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``or any executive officer or'' and 
     inserting ``any executive officer of an enterprise, any 
     enterprise-affiliated party, or any'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Amount of Penalty.--
       ``(1) First tier.--Any enterprise which, or any enterprise-
     affiliated party who--
       ``(A) violates any provision of this title, the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.), the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1451 et seq.), or any order, condition, rule, or 
     regulation under any such title or Act, except that the 
     Director may not enforce compliance with any housing goal 
     established under subpart B of part 2 of subtitle A of this 
     title, with section 1336 or 1337 of this title, with 
     subsection (m) or (n) of section 309 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723a(m), (n)), 
     or with subsection (e) or (f) of section 307 of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f));
       ``(B) violates any final or temporary order or notice 
     issued pursuant to this title;
       ``(C) violates any condition imposed in writing by the 
     Director in connection with the grant of any application or 
     other request by such enterprise;
       ``(D) violates any written agreement between the enterprise 
     and the Director; or
       ``(E) engages in any conduct the Director determines to be 
     an unsafe or unsound practice,

     shall forfeit and pay a civil penalty of not more than 
     $10,000 for each day during which such violation continues.
       ``(2) Second tier.--Notwithstanding paragraph (1)--
       ``(A) if an enterprise, or an enterprise-affiliated party--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) recklessly engages in an unsafe or unsound practice 
     in conducting the affairs of such enterprise; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) the violation, practice, or breach--
       ``(i) is part of a pattern of misconduct;
       ``(ii) causes or is likely to cause more than a minimal 
     loss to such enterprise; or
       ``(iii) results in pecuniary gain or other benefit to such 
     party,

     the enterprise or enterprise-affiliated party shall forfeit 
     and pay a civil penalty of not more than $50,000 for each day 
     during which such violation, practice, or breach continues.
       ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
     any enterprise which, or any enterprise-affiliated party 
     who--
       ``(A) knowingly--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) engages in any unsafe or unsound practice in 
     conducting the affairs of such enterprise; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) knowingly or recklessly causes a substantial loss to 
     such enterprise or a substantial pecuniary gain or other 
     benefit to such party by reason of such violation, practice, 
     or breach,

     shall forfeit and pay a civil penalty in an amount not to 
     exceed the applicable maximum amount determined under 
     paragraph (4) for each day during which such violation, 
     practice, or breach continues.
       ``(4) Maximum amounts of penalties for any violation 
     described in paragraph (3).--The maximum daily amount of any 
     civil penalty which may be assessed pursuant to paragraph (3) 
     for any violation, practice, or breach described in such 
     paragraph is--
       ``(A) in the case of any person other than an enterprise, 
     an amount not to exceed $2,000,000; and
       ``(B) in the case of any enterprise, $2,000,000.''; and
       (3) in subsection (d)--
       (A) by striking ``or director'' each place such term 
     appears and inserting ``director, or enterprise-affiliated 
     party'';
       (B) by striking ``request the Attorney General of the 
     United States to'';
       (C) by inserting ``, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     enterprise is located,'' after ``District of Columbia''; and
       (D) by striking ``, or may, under the direction and control 
     of the Attorney General, bring such an action''.

     SEC. 156. CRIMINAL PENALTY.

       Subtitle C of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4631 et seq.) is amended 
     by inserting after section 1377 (as added by this Act) the 
     following:

     ``SEC. 1378. CRIMINAL PENALTY.

       ``Whoever, being subject to an order in effect under 
     section 1377, without the prior written approval of the 
     Director, knowingly participates, directly or indirectly, in 
     any manner (including by engaging in an activity specifically 
     prohibited in such an order) in the conduct of the affairs of 
     any enterprise shall, notwithstanding section 3571 of title 
     18, be fined not more than $1,000,000, imprisoned for not 
     more than 5 years, or both.''.

                    Subtitle D--Reports to Congress

     SEC. 161. STUDIES AND REPORTS.

       (a) Insured Depository Institution Holdings of Enterprise 
     Debt and Mortgage-Backed Securities.--Not later than 180 days 
     after the date of enactment of the Federal Enterprise 
     Regulatory Reform Act of 2003, the Secretary of the Treasury, 
     the Board of Governors of the Federal Reserve System, the 
     Board of Directors of the Federal Deposit Insurance 
     Corporation, and the National Credit Union Administration 
     Board shall jointly submit a report to Congress regarding--
       (1) the extent to which obligations issued or guaranteed by 
     the enterprises (including mortgage-backed securities) are 
     held by federally insured depository institutions, including 
     such extent by type of institution and such extent relative 
     to the capital of the institution;
       (2) the extent to which the unlimited holdings by federally 
     insured depository institutions of the obligations of the 
     enterprises could produce systemic risk issues, particularly 
     for the safety and soundness of the banking system in the 
     United States, in the event of default or failure by an 
     enterprise; and
       (3) the effects on the enterprises, the banking industry, 
     and mortgage markets, if prudent limits on the holdings of 
     enterprise obligations were placed on federally insured 
     depository institutions.
       (b) Portfolio Operations, Risk Management, and Mission.--
       (1) In general.--Not later than one year after the date of 
     enactment of the Federal Enterprise Regulatory Reform Act of 
     2003, the Director shall submit a report to Congress--
       (A) describing the holdings of the enterprises in retained 
     mortgages and repurchased mortgage-backed securities and the 
     use of derivatives for hedging purposes;
       (B) describing the extent of such holdings relative to 
     other assets and the risk implications of such holdings;
       (C) containing an analysis of such holdings for safety and 
     soundness or mission compliance purposes; and
       (D) containing an assessment of whether such holdings and 
     other assets of the enterprises fulfill the mission purposes 
     of the enterprises under the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1716 et seq.) and the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et 
     seq.).
       (2) Consultation.--The Director shall consult with the 
     Comptroller General of the United States in preparing the 
     report under this subsection and in conducting any research, 
     analyses, and assessments for the report.
       (c) Study of Merger of FHFB With OFES.--
       (1) In General.--The Secretary of the Treasury, after 
     consultation with the Secretary of Housing and Urban 
     Development and the Board of Governors of the Federal Reserve 
     System, shall study the feasibility and advisability of 
     merging the Federal Housing Finance Board and the Office of 
     Federal Enterprise Supervision of the Department of the 
     Treasury.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report

[[Page 20563]]

     to Congress on the results of the study conducted under 
     paragraph (1).
       (d) Study of Consolidation of OTS With OFES.--
       (1) Study.--The Secretary of the Treasury shall study the 
     feasibility and efficacy of consolidating the Office of 
     Thrift Supervision with the Office of Federal Enterprise 
     Supervision of the Department of the Treasury.
       (2) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report to Congress on the results of the study 
     conducted under paragraph (1).
       (e) Recommendations.--Each report submitted pursuant to 
     this section shall include specific recommendations of 
     appropriate policies, limitations, regulations, legislation, 
     or other actions to deal appropriately and effectively with 
     the issues addressed by such report.
       (f) Definitions.--As used in this section, the terms 
     ``Director'' and ``enterprise'' have the meanings given those 
     terms under section 1303 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 4502).
       (g) Clerical Amendments.--Part 3 of subtitle A of title 
     XIII the Housing and Community Development Act of 1992 (106 
     Stat. 3969) is amended--
       (1) by striking sections 1351, 1352, and 1353 (Public Law 
     102-550; 106 Stat. 3969), except that the provisions of law 
     amended by such sections repealed shall not be affected by 
     such repeal; and
       (2) by striking sections 1354, 1355, and 1356 (12 U.S.C. 
     4601-3).

                     Subtitle E--General Provisions

     SEC. 171. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Amendments to 1992 Act.--Title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4501 et seq.), 
     as amended this Act, is further amended--
       (1) in section 1315 (12 U.S.C. 4515)--
       (A) in subsection (a)--
       (i) in the subsection heading, by striking ``Office 
     Personnel'' and inserting ``In General''; and
       (ii) by striking ``The'' and inserting ``Subject to title 
     II of the Federal Enterprise Regulatory Reform Act of 2003, 
     the'';
       (B) in subsection (d)--
       (i) in the subsection heading, by striking ``HUD'' and 
     inserting ``Department of the Treasury''; and
       (ii) by striking ``Housing and Urban Development'' and 
     inserting ``the Department of the Treasury''; and
       (C) by striking subsection (f);
       (2) in section 1319A (12 U.S.C. 4520)--
       (A) by striking ``(a) In General.--''; and
       (B) by striking subsection (b);
       (3) in section 1319F (12 U.S.C. 4525), by striking 
     paragraph (2);
       (4) in the section heading for section 1328, by striking 
     ``SECRETARY'' and inserting ``DIRECTOR'';
       (5) in section 1361 (12 U.S.C. 4611)--
       (A) in subsection (e)(1), by striking the first sentence 
     and inserting the following: ``The Director shall establish 
     the risk-based capital test under this section by 
     regulation.''; and
       (B) in subsection (f), by striking ``the Secretary,'';
       (6) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
     last sentence;
       (7) in section 1367(a)(2) (12 U.S.C. 4617(a)(2)), by 
     striking ``with the written concurrence of the Secretary of 
     the Treasury,'';
       (8) by striking section 1383;
       (9) by striking ``Committee on Banking, Finance and Urban 
     Affairs'' and inserting ``Committee on Financial Services'' 
     each place such term appears in sections 1319B, 1319G(c), 
     1328(a), 1336(b)(3)(C), 1337, and 1369(a)(3); and
       (10) by striking ``Secretary'' and inserting ``Director'' 
     each place such term appears in--
       (A) subpart A of part 2 of subtitle A (except in sections 
     1322, 1324, and 1325); and
       (B) subtitle B (except in section 1361(d)(1) and 1369E); 
     and
       (b) Amendments to Fannie Mae Charter Act.--The Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.) is amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Office of Federal Enterprise Supervision of 
     the Department of the Treasury'', in--
       (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
       (B) section 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)); and
       (C) section 309(k)(1); and
       (2) in section 309(n)--
       (A) in paragraph (1), by inserting ``the Director of the 
     Office of Federal Enterprise Supervision of the Department of 
     the Treasury,'' after ``Senate,''; and
       (B) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Office of Federal Enterprise 
     Supervision of the Department of the Treasury''.
       (c) Amendments to Freddie Mac Act.--The Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1451 et seq.) is 
     amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Office of Federal Enterprise Supervision of 
     the Department of the Treasury'', in--
       (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
       (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
       (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
       (2) in section 306(i) (12 U.S.C. 1455(i))--
       (A) by striking ``section 1316(c)'' and inserting ``section 
     306(c)''; and
       (B) by striking ``section 106'' and inserting ``section 
     1316''; and
       (3) in section 307 (12 U.S.C. 1456)--
       (A) in subsection (f)--
       (i) in paragraph (1), by inserting ``the Director of the 
     Office of Federal Enterprise Supervision of the Department of 
     the Treasury,'' after ``Senate,''; and
       (ii) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Office of Federal Enterprise 
     Supervision of the Department of the Treasury''.
       (d) Amendment to Title 18, United States Code.--Section 
     1905 of title 18, United States Code, is amended by striking 
     ``Office of Federal Housing Enterprise Oversight'' and 
     inserting ``Office of Federal Enterprise Supervision of the 
     Department of the Treasury''.
       (e) Amendments to Flood Disaster Protection Act of 1973.--
     Section 102(f)(3)(A) of the Flood Disaster Protection Act of 
     1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking 
     ``Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Director of the Office of 
     Federal Enterprise Supervision of the Department of the 
     Treasury''.
       (f) Amendment to Department of Housing and Urban 
     Development Act.--Section 5 of the Department of Housing and 
     Urban Development Act (42 U.S.C. 3534) is amended by striking 
     subsection (d).
       (g) Amendment to Title 5, United States Code.--Section 5315 
     of title 5, United States Code, is amended by striking the 
     item relating to the Director of the Office of Federal 
     Housing Enterprise Oversight, Department of Housing and Urban 
     Development and inserting the following new item:

       ``Director of the Office of Federal Enterprise Oversight, 
     Department of the Treasury.''.

     SEC. 172. EFFECTIVE DATE.

       Except as specifically provided otherwise in this title, 
     the amendments made by this title shall take effect on, and 
     shall apply beginning on, the expiration of the 1-year period 
     beginning on the date of enactment of this Act.

        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

     SEC. 201. ABOLISHMENT OF OFHEO.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development and the positions of the 
     Director and Deputy Director of such Office are abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Director 
     of the Office of Federal Housing Enterprise Oversight shall, 
     solely for the purpose of winding up the affairs of the 
     Office of Federal Housing Enterprise Oversight--
       (1) manage the employees of such Office and provide for the 
     payment of the compensation and benefits of any such employee 
     which accrue before the effective date of any transfer of 
     such employee pursuant to section 203; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Office.
       (c) Status of Employees as Federal Agency Employees.--The 
     amendments made by title I and the abolishment of the Office 
     of Federal Housing Enterprise Oversight under subsection (a) 
     of this section may not be construed to affect the status of 
     any employee of such Office as employees of an agency of the 
     United States for purposes of any other provision of law 
     during any time such employee is so employed.
       (d) Use of Property and Services.--
       (1) Property.--The Director of the Office of Federal 
     Enterprise Supervision of the Department of the Treasury may 
     use the property of the Office of Federal Housing Enterprise 
     Oversight to perform functions that have been transferred to 
     the Director of the Office of Federal Enterprise Supervision 
     for such time as is reasonable to facilitate the orderly 
     transfer of functions under any other provision of this Act, 
     or any amendment made by this Act to any other provision of 
     law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Office of Federal 
     Housing Enterprise Oversight before the expiration of the 
     period under subsection (a) in connection with functions that 
     are transferred to the Director of the Office of Federal 
     Enterprise Supervision of the Department of the Treasury 
     shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.

[[Page 20564]]

       (e) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, or any other person, which--
       (A) arises under or pursuant to the title XIII of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 4501 
     et seq.), the Federal National Mortgage Association Charter 
     Act (12 U.S.C. 1716 et seq.), the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1451 et seq.), or any other 
     provision of law applicable with respect to such Office; and
       (B) existed on the day before the abolishment under 
     subsection (a) of this section.
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Director of the Office of Federal 
     Housing Enterprise Oversight shall abate by reason of the 
     enactment of this Act, except that the Director of the Office 
     of Federal Enterprise Supervision of the Department of the 
     Treasury shall be substituted for the Director of the Office 
     of Federal Housing Enterprise Oversight as a party to any 
     such action or proceeding.

     SEC. 202. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

       All regulations, orders, determinations, and resolutions 
     that--
       (1) were issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Office of Federal Housing Enterprise Oversight;
       (B) the Secretary of Housing and Urban Development and that 
     relate to the Secretary's authority under--
       (i) title XIII of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4501 et seq.);
       (ii) under the Federal National Mortgage Association 
     Charter Act (12 U.S.C. 1716 et seq.), with respect to the 
     Federal National Mortgage Association; or
       (iii) the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1451 et seq.); or
       (C) a court of competent jurisdiction and that relate to 
     functions transferred by this Act; and
       (2) are in effect on the date of the abolishment under 
     section 201(a) of this Act,

     shall remain in effect according to the terms of such 
     regulations, orders, determinations, and resolutions, and 
     shall be enforceable by or against the Director of the Office 
     of Federal Enterprise Supervision of the Department of the 
     Treasury until modified, terminated, set aside, or superseded 
     in accordance with applicable law by such Board, any court of 
     competent jurisdiction, or operation of law.

     SEC. 203. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

       (a) Authority to Transfer.--The Director of the Office of 
     Federal Enterprise Supervision of the Department of the 
     Treasury may transfer employees of the Office of Federal 
     Housing Enterprise Oversight to the Office of Federal 
     Enterprise Supervision for employment no later than the date 
     of the abolishment under section 201(a) of this Act, as the 
     Director considers appropriate. This Act and the amendments 
     made by this Act shall not be considered to result in the 
     transfer of any function from one agency to another or the 
     replacement of one agency by another, for purposes of section 
     3505 of title 5, United States Code, except to the extent 
     that the Director of the Office of Federal Enterprise 
     Supervision specifically provides so.
       (b) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--Subject to paragraph (2), in the case of 
     employees occupying positions in the excepted service or the 
     Senior Executive Service, any appointment authority 
     established pursuant to law or regulations of the Office of 
     Personnel Management for filling such positions shall be 
     transferred.
       (2) Decline of transfer.--The Director of the Office of 
     Federal Enterprise Supervision of the Department of the 
     Treasury may decline a transfer of authority under paragraph 
     (1) (and the employees appointed pursuant thereto) to the 
     extent that such authority relates to positions excepted from 
     the competitive service because of their confidential, 
     policy-making, policy-determining, or policy-advocating 
     character, and noncareer positions in the Senior Executive 
     Service (within the meaning of section 3132(a)(7) of title 5, 
     United States Code).
       (c) Reorganization.--If the Director of the Office of 
     Federal Enterprise Supervision of the Department of the 
     Treasury determines, after the end of the 1-year period 
     beginning on the date of the abolishment under section 
     201(a), that a reorganization of the combined work force is 
     required, that reorganization shall be deemed a major 
     reorganization for purposes of affording affected employees 
     retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 
     5, United States Code.
       (d) Employee Benefit Programs.--
       (1) In general.--Any employee of the Office of Federal 
     Housing Enterprise Oversight accepting employment with the 
     Director of the Office of Federal Enterprise Supervision of 
     the Department of the Treasury as a result of a transfer 
     under subsection (a) may retain for 18 months after the date 
     such transfer occurs membership in any employee benefit 
     program of the Director of the Office of Federal Enterprise 
     Supervision of the Department of the Treasury or the Office 
     of Federal Housing Enterprise Oversight, as applicable, 
     including insurance, to which such employee belongs on the 
     date of the abolishment under section 201(a) if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Office of Federal Enterprise Supervision.
       (2) Payment of differential.--The difference in the costs 
     between the benefits which would have been provided by such 
     agency and those provided by this section shall be paid by 
     the Director of the Office of Federal Enterprise Supervision. 
     If any employee elects to give up membership in a health 
     insurance program or the health insurance program is not 
     continued by such Director, the employee shall be permitted 
     to select an alternate Federal health insurance program 
     within 30 days of such election or notice, without regard to 
     any other regularly scheduled open season.

     SEC. 204. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the abolishment under section 201(a), all property of 
     the Office of Federal Housing Enterprise Oversight shall 
     transfer to the Director of the Office of Federal Enterprise 
     Supervision of the Department of the Treasury.
                                 ______
                                 
      By Mr. COLEMAN:
  S 1509. A bill to amend title 38, United States Code, to provide a 
gratuity to veterans, their spouses, and children who contract HIV or 
AIDS as a result of a blood transfusion relating to a service-connected 
disability, and for other purposes; to the Committee on Veterans' 
Affairs.
  Mr. COLEMAN. Mr. President, I ask unanimous consent that the text of 
the bill I introduce today, the Eric and Brian Simon Act of 2003, to 
provide compensation to veterans, their spouses, and children who 
contract HIV or AIDS as a result of a blood transfusion relating to a 
service-connected injury, be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1509

       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 ``Eric and Brian Simon Act of 
     2003''.

     SEC. 2. GRATUITY FOR VETERANS AND DEPENDENTS WHO CONTRACT HIV 
                   OR AIDS FROM BLOOD TRANSFUSIONS RELATING TO 
                   SERVICE-CONNECTED DISABILITIES.

       (a) In General.--Subchapter IV of chapter 11 of title 38, 
     United States Code, is amended by inserting after section 
     1137 the following new section:

     ``Sec. 1138. Gratuity for veterans and dependents who 
       contract HIV or AIDS from blood transfusions relating to 
       service-connected disabilities

       ``(a) In General.--Except as provided in subsection (c), 
     the Secretary shall pay a gratuity in the amount of $100,000 
     to each individual described in subsection (b) who has an HIV 
     infection or is diagnosed with AIDS.
       ``(b) Eligible Individuals.--An individual described in 
     this subsection is any individual as follows:
       ``(1) A veteran who--
       ``(A) was treated with HIV contaminated blood transfusion, 
     HIV contaminated blood components, HIV contaminated human 
     tissue, or HIV contaminated organs (other than Anti-
     hemophiliac Factor) as a result of a service-connected 
     disability; and
       ``(B) can assert through medical evidence acceptable to the 
     Secretary reasonable certainty of transmission of HIV as a 
     result of such treatment.
       ``(2) A lawful spouse, or former lawful spouse, of a 
     veteran described in paragraph (1) after the time of 
     treatment of such veteran as described in that paragraph who 
     can assert through medical evidence acceptable to the 
     Secretary reasonable certainty of transmission of HIV from 
     such veteran.
       ``(3) Each natural child of a veteran described in 
     paragraph (1) conceived after the time of treatment of such 
     veteran as described in that paragraph who can assert through 
     medical evidence acceptable to the Secretary reasonable 
     certainty of perinatal transmission of HIV from such veteran.
       ``(c) Exception.--An individual described in subsection (b) 
     is not entitled to the payment of a gratuity under subsection 
     (a) if the individual has received a payment under section 
     102 of the Ricky Ray Hemophilia Relief Fund Act of 1998 (42 
     U.S.C. 300c-22 note) with respect to an HIV or AIDS 
     infection.
       ``(d) Acceptable Medical Evidence.--(1) Except as provided 
     in paragraph (2), medical evidence acceptable to the 
     Secretary under subsection (b) shall include the following, 
     as applicable:
       ``(A) Evidence of infection with HIV or AIDS.

[[Page 20565]]

       ``(B) In the case of a veteran described in subsection 
     (b)(1), evidence of the treatment described in subsection 
     (b)(1).
       ``(C) Evidence indicating no prior infection with HIV or 
     AIDS before the treatment described in subsection (b)(1) that 
     provided the source of infection with HIV or AIDS.
       ``(D) Evidence indicating that infection with HIV or AIDS 
     occurred after the date of the treatment described in 
     subsection (b)(1) that provided the source of infection with 
     HIV or AIDS.
       ``(E) In the case of an individual described in paragraph 
     (2) or (3) of subsection (b), evidence of transmission of HIV 
     from a veteran described in paragraph (1) of that subsection.
       ``(F) Such other evidence as the Secretary may require.
       ``(2) The Secretary may waive an applicable requirement for 
     any evidence specified in paragraph (1) if the Secretary 
     determines that such evidence was destroyed or is otherwise 
     unavailable as a result of circumstances beyond the control 
     of the individual concerned.
       ``(e) Payment for Deceased Individuals.--(1) If an 
     individual entitled to a gratuity under this section is 
     deceased at the time of payment, payment shall be made as 
     follows:
       ``(A) In the case of an individual who is survived by a 
     spouse living at the time of payment, to the surviving 
     spouse.
       ``(B) In the case of an individual whose surviving spouse 
     is not living at the time of payment, to the children of the 
     individual living at the time of payment in equal shares.
       ``(C) In the case of an individual not described by 
     paragraph (1) or (2), to the parents of the individual living 
     at the time of payment in equal shares.
       ``(2) An individual described in paragraph (2) or (3) of 
     subsection (b) who is entitled to a gratuity under subsection 
     (a) is also entitled to payment under paragraph (1) with 
     respect to a deceased individual.
       ``(3) In this subsection:
       ``(A) The term `spouse', with respect to an individual 
     described in paragraph (1), means the individual who was 
     lawfully married to such individual at the time of death.
       ``(B) The term `child' includes a recognized natural child, 
     a stepchild who lived with such individual in a parent-child 
     relationship, and an adopted child.
       ``(C) The term `parent' includes fathers and mothers 
     through adoption.
       ``(f) Application.--(1) A person seeking payment of a 
     gratuity under subsection (a) shall submit to the Secretary 
     an application therefor in such form and containing such 
     information as the Secretary shall require.
       ``(2) If an individual described in subsection (b) dies 
     before submitting an application for a gratuity under 
     subsection (a), an individual who would be entitled to 
     payment under subsection (e) with respect to such deceased 
     individual may submit an application for the gratuity under 
     paragraph (1).
       ``(g) Treatment of Gratuity for Insurance Purposes.--(1) A 
     payment under this section shall not be considered as any 
     form of compensation or reimbursement for a loss for purposes 
     of imposing liability on the individual receiving the 
     payment, or on the basis of such receipt, to repay any 
     insurance carrier for insurance payments or to repay any 
     person on account of worker's compensation payments.
       ``(2) A payment under this section shall not affect any 
     claim against an insurance carrier with respect to insurance 
     or against any person with respect to worker's compensation.
       ``(h) Definitions.--In this section:
       ``(1) The term `AIDS' means acquired immune deficiency 
     syndrome.
       ``(2) The term `HIV' means human immunodeficiency virus.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 11 of that title is amended by inserting 
     after the item relating to section 1137 the following new 
     item:

``1138. Gratuity for veterans and dependents who contract HIV or AIDS 
              from blood transfusions relating to service-connected 
              disabilities.''.
                                 ______
                                 
      By Mr. LEAHY (for himself, Mr. Jeffords, Mr. Feingold, Mr. 
        Kennedy, Mr. Kerry, and Mr. Dayton):
  S. 1510. A bill to amend the Immigration and Nationality Act to 
provide a mechanism for United States citizens and lawful permanent 
residence to sponsor their permanent partners for residence in the 
United States, and for other purposes; to the Committee on the 
Judiciary.
  Mr. LEAHY. Today I am introducing the Permanent Partners Immigration 
Act, a Senate companion to legislation that Representative Nadler of 
New York has introduced in the House for each of the last three 
Congresses. This legislation would allow U.S. citizens and legal 
permanent residents to petition for their foreign same-sex partners to 
come to the United States under our family immigration system. I am 
pleased to be joined in introducing this bill by Senators Jeffords, 
Feingold, Kennedy, and Kerry.
  Under current law, committed partners of Americans are unable to use 
the family immigration system, which accounts for about 75 percent of 
the green cards and immigrant visas granted annually by the United 
States. As a result, gay Americans who are in this situation must live 
apart from their partners, or leave the country if they want to live 
legally and permanently with them.
  This bill rectifies that situation, while retaining strong 
prohibitions against fraud. To qualify as a permanent partner, 
petitioners must prove that they are at least 18 and in a committed, 
intimate relationship with another adult in which both parties intend a 
lifelong commitment, and are financially interdependent with one's 
partner. They must also prove that they are not married to, or in a 
permanent partnership with, anyone other than that person, and are 
unable to contract with that person a marriage cognizable under the 
Immigration and Nationality Act. Proof could include sworn affidavits 
from friends and family and documentation of financial interdependence. 
Penalties for fraud would be the same as penalties for marriage fraud--
up to five years in prison and $250,000 in fines for the U.S. citizen 
partner, and deportation for the alien partner.
  There are Vermonters who are involved in permanent partnerships with 
foreign nationals and who have felt abandoned by our laws in this area. 
This bill would allow them--and other gay and lesbian Americans 
throughout our Nation who have come to feel that our immigration laws 
are discriminatory--to be a fuller part of our society.
  The idea that immigration benefits should be extended to same-sex 
couples has become increasingly prevalent around the world. Indeed, 
fifteen nations Australia, Belgium, Canada, Denmark, Finland, France, 
Germany, Iceland, Israel, the Netherlands, New Zealand, Norway, South 
Africa, Sweden and the United Kingdom--recognize same-sex couples for 
immigration purposes.
  Our immigration laws treat gays and lesbians in committed 
relationships as second-class citizens, and that needs to change. It is 
the right thing to do for the people involved, it is the sensible step 
to take in the interest of having a fair and consistent policy, and I 
hope that the Senate will act.
  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. 1510

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

     SECTION 1. SHORT TITLE; AMENDMENTS TO IMMIGRATION AND 
                   NATIONALITY ACT.

       (a) Short Title.--This Act may be cited as the ``Permanent 
     Partners Immigration Act of 2003''.
       (b) Amendments to Immigration and Nationality Act.--Except 
     as otherwise specifically provided whenever in this Act an 
     amendment or repeal is expressed as the amendment or repeal 
     of a section or other provision, the reference shall be 
     considered to be made to that section or provision in the 
     Immigration and Nationality Act.

     SEC. 2. DEFINITIONS.

       Section 101(a) (8 U.S.C. 1101(a)) is amended--
       (1) in paragraph (15)(K)(ii), by inserting ``or permanent 
     partnership'' after ``marriage''; and
       (2) by adding at the end the following:
       ``(51) The term `permanent partner' means an individual 18 
     years of age or older who--
       ``(A) is in a committed, intimate relationship with another 
     individual 18 years of age or older in which both parties 
     intend a lifelong commitment;
       ``(B) is financially interdependent with that other 
     individual;
       ``(C) is not married to or in a permanent partnership with 
     anyone other than that other individual;
       ``(D) is unable to contract with that other individual a 
     marriage cognizable under this Act; and
       ``(E) is not a first, second, or third degree blood 
     relation of that other individual.
       ``(52) The term `permanent partnership' means the 
     relationship that exists between two permanent partners.''.

     SEC. 3. WORLDWIDE LEVEL OF IMMIGRATION.

       Section 201(b)(2)(A)(i) (8 U.S.C. 1151(b)(2)(A)(i)) is 
     amended--
       (1) by inserting ``permanent partners,'' after 
     ``spouses,'';

[[Page 20566]]

       (2) by inserting ``or permanent partner'' after ``spouse'' 
     each place such term appears; and
       (3) by striking ``remarries.'' and inserting ``remarries or 
     enters a permanent partnership with another person.''.

     SEC. 4. NUMERICAL LIMITATIONS ON INDIVIDUAL FOREIGN STATES.

       (a) Per Country Levels.--Section 202(a)(4) (8 U.S.C. 
     1152(a)(4)) is amended--
       (1) in the heading, by inserting ``, permanent partners,'' 
     after ``spouses'';
       (2) in subparagraph (A), in the heading by inserting ``, 
     permanent partners,'' after ``spouses''; and
       (3) in subparagraph (C), in the heading by inserting 
     ``without permanent partners'' after ``daughters''.
       (b) Rules for Chargeability.--Section 202(b)(2) (8 U.S.C. 
     1152(b)(2)) is amended--
       (1) by inserting ``or permanent partner'' after ``spouse'' 
     each place such term appears; and
       (2) by inserting ``or permanent partners'' after ``husband 
     and wife''.

     SEC. 5. ALLOCATION OF IMMIGRANT VISAS.

       (a) Preference Allocation for Family Members of Permanent 
     Resident Aliens.--Section 203(a)(2) (8 U.S.C. 1153(a)(2)) is 
     amended--
       (1) in the heading--
       (A) by striking ``and'' after ``Spouses'' and inserting ``, 
     permanent partners,''; and
       (B) by inserting ``without permanent partners'' after 
     ``sons'' and after ``daughters''; and
       (2) in subparagraph (A)--
       (A) by inserting ``, permanent partners,'' after 
     ``spouses''; and
       (B) by inserting ``without permanent partners'' after 
     ``sons'' and after ``daughters''.
       (b) Preference Allocation for Sons and Daughters of 
     Citizens.--Section 203(a)(3) (8 U.S.C. 1153(a)(3)) is 
     amended--
       (1) in the heading, by inserting ``and daughters and sons 
     with permanent partners'' after ``daughters''; and
       (2) by inserting ``or daughters or sons with permanent 
     partners'' after ``daughters''.
       (c) Employment Creation.--Section 203(b)(5)(A)(ii) (8 
     U.S.C. 1153(b)(5)(A)(ii)) is amended by inserting ``permanent 
     partner,'' after ``spouse,''.
       (d) Treatment of Family Members.--Section 203(d) (8 U.S.C. 
     1153(d)) is amended by inserting ``, permanent partner,'' 
     after ``spouse'' each place such term appears.

     SEC. 6. PROCEDURE FOR GRANTING IMMIGRANT STATUS.

       (a) Classification Petitions.--Section 204(a)(1) (8 U.S.C. 
     1154(a)(1)) is amended--
       (1) in subparagraph (A)(ii), by inserting ``or permanent 
     partner'' after ``spouse'';
       (2) in subparagraph (A)(iii)--
       (A) by inserting ``or permanent partner'' after ``spouse'' 
     each place such term appears; and
       (B) in subclause (I), by inserting ``or permanent 
     partnership'' after ``marriage'' each place such term 
     appears; and
       (3) in subparagraph (B)--
       (A) by inserting ``or permanent partner'' after ``spouse'' 
     each place such term appears; and
       (B) by inserting ``or permanent partnership'' after 
     ``marriage'' each place such term appears.
       (b) Immigration Fraud Prevention.--Section 204(c) (8 U.S.C. 
     1154(c)) is amended--
       (1) by inserting ``or permanent partner'' after ``spouse'' 
     each place such term appears; and
       (2) by inserting ``or permanent partnership'' after 
     ``marriage'' each place such term appears.

     SEC. 7. ANNUAL ADMISSION OF REFUGEES AND ADMISSION OF 
                   EMERGENCY SITUATION REFUGEES.

       Section 207(c) (8 U.S.C. 1157(c)) is amended--
       (1) in paragraph (2)--
       (A) by inserting ``, permanent partner,'' after ``spouse'' 
     each place such term appears; and
       (B) by inserting ``, permanent partner's,'' after 
     ``spouse's''; and
       (2) in paragraph (4), by inserting ``, permanent partner,'' 
     after ``spouse''.

     SEC. 8. ASYLUM.

       Section 208(b)(3) (8 U.S.C. 1158(b)(3)) is amended--
       (1) in the heading, by inserting ``or permanent partner'' 
     after ``spouse''; and
       (2) in subparagraph (A), by inserting ``, permanent 
     partner,'' after ``spouse''.

     SEC. 9. ADJUSTMENT OF STATUS OF REFUGEES.

       Section 209(b)(3) (8 U.S.C. 1159(b)(3)) is amended by 
     inserting ``, permanent partner,'' after ``spouse''.

     SEC. 10. INADMISSIBLE ALIENS.

       (a) Classes of Aliens Ineligible for Visas or Admission.--
     Section 212(a) (8 U.S.C. 1182(a)) is amended--
       (1) in paragraph (3)(D)(iv), by inserting ``permanent 
     partner,'' after ``spouse,'' each place such term appears;
       (2) in paragraph (4)(C)(i)(I), by inserting ``, permanent 
     partner,'' after ``spouse'';
       (3) in paragraph (6)(E)(ii), by inserting ``permanent 
     partner,'' after ``spouse,'' each place such term appears; 
     and
       (4) in paragraph (9)(B)(v), by inserting ``, permanent 
     partner,'' after ``spouse'' each place such term appears.
       (b) Waivers.--Section 212(d) (8 U.S.C. 1182(d)) is 
     amended--
       (1) in paragraph (11), by inserting ``permanent partner,'' 
     after ``spouse,''; and
       (2) in paragraph (12), by inserting ``, permanent 
     partner,'' after ``spouse''.
       (c) Waivers of Inadmissibility on Health-Related Grounds.--
     Section 212(g)(1)(A) (8 U.S.C. 1182(g)(1)(A)) is amended by 
     inserting ``, permanent partner,'' after ``spouse''.
       (d) Waivers of Inadmissibility on Criminal and Related 
     Grounds.--Section 212(h)(1)(B) (8 U.S.C. 1182(h)(1)(B)) is 
     amended by inserting ``permanent partner,'' after ``spouse,'' 
     each place such term appears.
       (e) Waiver of Inadmissibility for Misrepresentation.--
     Section 212(i)(1) (8 U.S.C. 1182(i)(1)) is amended--
       (1) by inserting ``permanent partner,'' after ``spouse,''; 
     and
       (2) by inserting ``, permanent partner,'' after ``resident 
     spouse''.

     SEC. 11. NONIMMIGRANT STATUS FOR PERMANENT PARTNERS AWAITING 
                   THE AVAILABILITY OF AN IMMIGRANT VISA.

       Section 214 (8 U.S.C. 1184) is amended--
       (1) by redesignating subsections (o) and (p) as added by 
     sections 1102(b) and 1103(b), respectively, of the 
     Departments of Commerce, Justice, and State, the Judiciary, 
     and Related Agencies Appropriations Act, 2001, as enacted 
     into law by section 1(a)(2) of P.L. 106-553, as subsections 
     (p) and (q), respectively; and
       (2) in subsection (q) (as so redesignated)--
       (A) in paragraph (1), by inserting ``or permanent partner'' 
     after ``spouse''; and
       (B) in paragraph (2), by inserting ``or permanent 
     partnership'' after ``marriage'' each place such term 
     appears.

     SEC. 12. CONDITIONAL PERMANENT RESIDENT STATUS FOR CERTAIN 
                   ALIEN SPOUSES, PERMANENT PARTNERS, AND SONS AND 
                   DAUGHTERS.

       (a) Section Heading.--
       (1) In general.--The section heading for section 216 (8 
     U.S.C. 1186a) is amended by inserting ``and permanent 
     partners'' after ``spouses''.
       (2) Clerical amendment.--The table of contents is amended 
     by amending the item relating to section 216 to read as 
     follows:

``Sec. 216. Conditional permanent resident status for certain alien 
              spouses and permanent partners and sons and daughters.''.

       (b) In General.--Section 216(a) (8 U.S.C. 1186a(a)) is 
     amended--
       (1) in paragraph (1), by inserting ``or permanent partner'' 
     after ``spouse'';
       (2) in paragraph (2)(A), by inserting ``or permanent 
     partner'' after ``spouse'';
       (3) in paragraph (2)(B), by inserting ``permanent 
     partner,'' after ``spouse,''; and
       (4) in paragraph (2)(C), by inserting ``permanent 
     partner,'' after ``spouse,''.
       (c) Termination of Status if Finding that Qualifying 
     Marriage Improper.--Section 216(b) (8 U.S.C. 1186a(b)) is 
     amended--
       (1) in the heading, by inserting ``or Permanent 
     Partnership'' after ``Marriage'';
       (2) in paragraph (1)(A), by inserting ``or permanent 
     partnership'' after ``marriage''; and
       (3) in paragraph (1)(A)(ii)--
       (A) by inserting ``or has ceased to satisfy the criteria 
     for being considered a permanent partnership under this 
     Act,'' after ``terminated,''; and
       (B) by inserting ``or permanent partner'' after ``spouse''.
       (d) Requirements of Timely Petition and Interview for 
     Removal of Condition.--Section 216(c) (8 U.S.C. 1186a(c)) is 
     amended--
       (1) in paragraphs (1), (2)(A)(ii), (3)(A)(ii), (3)(C), 
     (4)(B), and (4)(C), by inserting ``or permanent partner'' 
     after ``spouse'' each place such term appears; and
       (2) in paragraph (3)(A), in the matter following clause 
     (ii), and in paragraphs (3)(D), (4)(B), and (4)(C), by 
     inserting ``or permanent partnership'' after ``marriage'' 
     each place such term appears.
       (e) Contents of Petition.--Section 216(d)(1) (8 U.S.C. 
     1186a(d)(1)) is amended--
       (1) in subparagraph (A)--
       (A) in the heading, by inserting ``or permanent 
     partnership'' after ``marriage'';
       (B) in clause (i)--
       (i) in the matter preceding subclause (I), by inserting 
     ``or permanent partnership'' after ``marriage'';
       (ii) in subclause (I), by inserting before the comma at the 
     end ``, or is a permanent partnership recognized under this 
     Act''; and
       (iii) in subclause (II)--

       (I) by inserting ``or has not ceased to satisfy the 
     criteria for being considered a permanent partnership under 
     this Act,'' after ``terminated,''; and
       (II) by inserting ``or permanent partner'' after 
     ``spouse''; and

       (C) in clause (ii), by inserting ``or permanent partner'' 
     after ``spouse''; and
       (2) in subparagraph (B)(i)--
       (A) by inserting ``or permanent partnership'' after 
     ``marriage''; and
       (B) by inserting ``or permanent partner'' after ``spouse''.
       (e) Definitions.--Section 216(g) (8 U.S.C. 1186a(g)) is 
     amended--
       (1) in paragraph (1)--
       (A) by inserting ``or permanent partner'' after ``spouse'' 
     each place such term appears; and
       (B) by inserting ``or permanent partnership'' after 
     ``marriage'' each place such term appears;
       (2) in paragraph (2), by inserting ``or permanent 
     partnership'' after ``marriage'';

[[Page 20567]]

       (3) in paragraph (3), by inserting ``or permanent 
     partnership'' after ``marriage''; and
       (4) in paragraph (4)--
       (A) by inserting ``or permanent partner'' after ``spouse'' 
     each place such term appears; and
       (B) by inserting ``or permanent partnership'' after 
     ``marriage''.

     SEC. 13. CONDITIONAL PERMANENT RESIDENT STATUS FOR CERTAIN 
                   ALIEN ENTREPRENEURS, SPOUSES, PERMANENT 
                   PARTNERS, AND CHILDREN.

       (a) Section Heading.--
       (1) In general.--Section 216A (8 U.S.C. 1186b) is amended 
     in the heading by inserting ``or permanent partners'' after 
     ``spouses''.
       (2) Clerical amendment.--The table of contents is amended 
     by amending the item relating to section 216A to read as 
     follows:

``Sec. 216. Conditional permanent resident status for certain alien 
              entrepreneurs, spouses or permanent partners, and 
              children.''.

       (b) In General.--Section 216A(a) (8 U.S.C. 1186b(a)) is 
     amended, in paragraphs (1), (2)(A), (2)(B), and (2)(C), by 
     inserting ``or permanent partner'' after ``spouse'' each 
     place such term appears.
       (c) Termination of Status if Finding That Qualifying 
     Entrepreneurship Improper.--Section 216A(b)(1) (8 U.S.C. 
     1186b(b)(1)) is amended in the matter following subparagraph 
     (C), by inserting ``or permanent partner'' after ``spouse''.
       (d) Requirements of Timely Petition and Interview for 
     Removal of Condition.--Section 216A(c) (8 U.S.C. 1186b(c)) is 
     amended, in paragraphs (1), (2)(A)(ii), and (3)(C), by 
     inserting ``or permanent partner'' after ``spouse''.
       (e) Definitions.--Section 216A(f)(2) (8 U.S.C. 1186b(f)(2)) 
     is amended by inserting ``or permanent partner'' after 
     ``spouse'' each place such term appears.

     SEC. 14. DEPORTABLE ALIENS.

       (a) In General.--Section 237(a) (8 U.S.C. 1227(a)) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (D)(i), by inserting ``or permanent 
     partners'' after ``spouses'' each place such term appears;
       (B) in subparagraph (E)--
       (i) in clause (ii), by inserting ``or permanent partner'' 
     after ``spouse''; and
       (ii) in clause (iii), by inserting ``or permanent partner'' 
     after ``spouse'';
       (C) in subparagraph (H)(i)(I), by inserting ``or permanent 
     partner'' after ``spouse''; and
       (D) by adding at the end the following:
       ``(I) Permanent partnership fraud.--An alien shall be 
     considered to be deportable as having procured a visa or 
     other documentation by fraud (within the meaning of section 
     212(a)(6)(C)(i)) and to be in the United States in violation 
     of this Act (within the meaning of subparagraph (B)) if--
       ``(i) the alien obtains any admission to the United States 
     with an immigrant visa or other documentation procured on the 
     basis of a permanent partnership entered into less than 2 
     years prior to such admission and which, within 2 years 
     subsequent to such admission, is terminated because the 
     criteria for permanent partnership are no longer fulfilled, 
     unless the alien establishes to the satisfaction of the 
     Secretary of Homeland Security that such permanent 
     partnership was not contracted for the purpose of evading any 
     provisions of the immigration laws; or
       ``(ii) it appears to the satisfaction of the Secretary of 
     Homeland Security that the alien has failed or refused to 
     fulfill the alien's permanent partnership which in the 
     opinion of the Secretary of Homeland Security was made for 
     the purpose of procuring the alien's admission as an 
     immigrant.'';
       (2) in paragraph (2)(E)(i), by inserting ``or permanent 
     partner'' after ``spouse'' each place such term appears; and
       (3) in paragraph (3)(C)(ii), by inserting ``or permanent 
     partner'' after ``spouse'' each place such term appears.
       (b) Technical and Conforming Amendments.--Section 237(a) (8 
     U.S.C. 1227(a)) is amended by striking ``Attorney General'' 
     each place that term appears and inserting ``Secretary of 
     Homeland Security''.

     SEC. 15. REMOVAL PROCEEDINGS.

       Section 240(e)(1) (8 U.S.C. 1229a(e)(1)) is amended by 
     inserting ``permanent partner,'' after ``spouse,''.

     SEC. 16. CANCELLATION OF REMOVAL; ADJUSTMENT OF STATUS.

       Section 240A(b) (8 U.S.C. 1229b(b)) is amended--
       (1) in paragraph (1)(D), by inserting ``permanent 
     partner,'' after ``spouse,''; and
       (2) in paragraph (2)--
       (A) in the heading, by inserting ``, permanent partner,'' 
     after ``spouse''; and
       (B) in subparagraph (A), by inserting ``, permanent 
     partner,'' after ``spouse'' each place such term appears.

     SEC. 17. ADJUSTMENT OF STATUS OF NONIMMIGRANT TO THAT OF 
                   PERSON ADMITTED FOR PERMANENT RESIDENCE.

       (a) Prohibition on Adjustment of Status.--Section 245(d) (8 
     U.S.C. 1255(d)) is amended by inserting ``or permanent 
     partnership'' after ``marriage''.
       (b) Avoiding Immigration Fraud.--Section 245(e) (8 U.S.C. 
     1255(e)) is amended--
       (1) in paragraph (1), by inserting ``or permanent 
     partnership'' after ``marriage''; and
       (2) by adding at the end the following:
       ``(4) Paragraph (1) and section 204(g) shall not apply with 
     respect to a permanent partnership if the alien establishes 
     by clear and convincing evidence to the satisfaction of the 
     Secretary of Homeland Security that the permanent partnership 
     was entered into in good faith and in accordance with section 
     101(a)(51) and the permanent partnership was not entered into 
     for the purpose of procuring the alien's admission as an 
     immigrant and no fee or other consideration was given (other 
     than a fee or other consideration to an attorney for 
     assistance in preparation of a lawful petition) for the 
     filing of a petition under section 204(a) or 214(d) with 
     respect to the alien permanent partner. In accordance with 
     regulations, there shall be only one level of administrative 
     appellate review for each alien under the previous 
     sentence.''.
       (c) Adjustment of Status for Certain Aliens Paying Fee.--
     Section 245(i)(1)(B) (8 U.S.C. 1255(i)(1)(B)) is amended by 
     inserting ``, permanent partner,'' after ``spouse''.
       (d) Informants.--Section 245(j) (8 U.S.C. 1255(j)) is 
     amended by inserting ``permanent partner,'' after ``spouse,'' 
     each place such term appears.
       (e) Technical and Conforming Amendments.--Section 245 (8 
     U.S.C. 1255) is amended by striking ``Attorney General'' each 
     place that term appears and inserting ``Secretary of Homeland 
     Security''.

     SEC. 18. MISREPRESENTATION AND CONCEALMENT OF FACTS.

       Section 275(c) (8 U.S.C. 1325(c)) is amended by inserting 
     ``or permanent partnership'' after ``marriage''.

     SEC. 19. REQUIREMENTS AS TO RESIDENCE, GOOD MORAL CHARACTER, 
                   ATTACHMENT TO THE PRINCIPLES OF THE 
                   CONSTITUTION.

       Section 316(b) (8 U.S.C. 1427(b)) is amended, in the matter 
     following paragraph (2), by inserting ``or permanent 
     partner'' after ``spouse''.

     SEC. 20. FORMER CITIZENS OF UNITED STATES REGAINING UNITED 
                   STATES CITIZENSHIP.

       Section 324(a) (8 U.S.C. 1435(a)) is amended, in the matter 
     following ``after September 22, 1922,'', by inserting ``or 
     permanent partnership'' after ``marriage'' each place such 
     term appears.

     SEC. 21. APPLICATION OF FAMILY UNITY PROVISIONS TO PERMANENT 
                   PARTNERS OF CERTAIN LIFE ACT BENEFICIARIES.

       Section 1504 of division B of the Miscellaneous 
     Appropriations Act, 2001, as enacted into law by section 
     1(a)(4) of Public Law 106-554, is amended--
       (1) in the section heading, by inserting ``, PERMANENT 
     PARTNERS,'' after ``SPOUSES'';
       (2) in subsection (a), by inserting ``, permanent 
     partner,'' after ``spouse''; and
       (3) in each of subsections (b) and (c)--
       (A) in the subsection headings, by inserting ``, Permanent 
     Partners,'' after ``Spouses''; and
       (B) by inserting ``, permanent partner,'' after ``spouse'' 
     each place such term appears.

  Mr. KENNEDY. Mr. President, it is a privilege to join Senator Leahy 
in the introduction of the Permanent Partners Immigration Act, to 
address the injustice in our immigration law on gay and lesbian 
couples.
  The reunification of families is one of the cornerstones of our 
immigration policy. The American Dream is about opportunity and it is 
about family life as well. When one member of a family comes to the 
United States alone, we try to make it possible for their spouse, 
children, and siblings to join them in the future.
  Every year, our immigration policy reunites literally hundreds of 
thousands of families. In 2002, almost 400,000 immigrants came to the 
United States to join spouses who are citizens or legal permanent 
residents. Thousands more siblings and children joined mothers, 
fathers, brothers and sisters.
  Shamefully, though, our current law left thousands of other families 
permanently divided. Because of their sexual orientation, lesbian and 
gay couples are kept apart, or forced to stay together illegally, with 
one partner in constant fear of deportation. They are denied the half 
of the American Dream that we offer to other citizens and immigrants.
  Our bill will remedy this injustice. It gives the same-sex permanent 
partners of citizens and permanent residents the opportunity to join 
their loved ones in our country. They must meet strict standards of 
eligibility, like those applied to spouses. To gain entrance, they must 
prove that they are financially interdependent with their partners in 
the United States and that they are in a lifelong relationship.
  Most of our major allies and trading partners already grant 
immigration benefits to same-sex couples. Now, by bringing family 
reunification to all of our citizens and residents, our bill recognizes 
the common humanity of gay

[[Page 20568]]

and lesbian Americans. It is time for Congress to act on this issue, 
and I urge my colleagues to support this important step in making our 
immigration laws fairer.
                                 ______
                                 
      By Mr. KYL (for himself and Mr. McCain):
  S. 1511. A bill to designate the Department of Veterans Affairs 
Medical Center in Prescott, Arizona, as the ``Bob Stump Department of 
Veterans Affairs Medical Center''; to the Committee on Veterans' 
Affairs.
  Mr. KYL. Mr. President, today Senator McCain and I are introducing 
legislation to rename the VA Medical Center in Prescott, AZ. to honor 
our colleague Bob Stump, who died on June 20. This legislation was 
introduced by Congressman Jim Kolbe and the other seven Arizona House 
Members on July 21.
  I had the pleasure of serving with Bob Stump in the House of 
Representatives in the late 1980s and early 1900s. He was a fine man, 
and a great public servant. A patriot and a hard-working legislator, he 
did not seek headlines or glory, preferring to work quietly, without 
fanfare, on behalf of Arizona's interests--and the Nation's.
  For Bob Stump, actions were louder than words. He didn't say much, 
but you always knew where he stood.
  Before coming to Congress, Bob served in both houses of the Arizona 
legislature from 1959 to 1976--that final year as president of the 
Arizona State Senate. His congressional tenure culminated in his six 
years as Chairman of the House Committee on Veterans' Affairs, a perch 
from which he improved the lives of his fellow veterans in innumerable 
ways. As Chairman of the House Armed Services Committee for two years, 
he helped to ensure America's military readiness by advocating 
tirelessly for better U.S. military technology and protecting the 
important work underway at Arizona's military bases.
  Bob's concern for the military, of course, was personnel. When he 
entered the Navy to serve his country in time of war, he was all of 16 
years old. He spent three years, 1943 to 1946, as a medic on the U.S.S. 
Tulagi. He was determined to protect Arlington National Cemetery and to 
see to it that a World War II memorial was approved for construction on 
the Mall here in Washington.
  Bob Stump's work to promote the welfare of current and past members 
of the Armed Services is well-known to Arizona's veterans. By naming 
the Prescott VA Health Center in his honor, we will ensure that his 
exemplary character and contributions are remembered by all those who 
pass through its doors in the 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. 1511

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

     SECTION 1. BOB STUMP DEPARTMENT OF VETERANS AFFAIRS MEDICAL 
                   CENTER, PRESCOTT, ARIZONA.

       (a) Designation.--The Department of Veterans Affairs 
     Medical Center located in Prescott, Arizona, is hereby 
     designated as the ``Bob Stump Department of Veterans Affairs 
     Medical Center''.
       (b) References.--Any reference to such medical center in 
     any law, regulation, map, document, or other paper of the 
     United States shall be considered to be a reference to the 
     Bob Stump Department of Veterans Affairs Medical Center.

  Mr. McCAIN. Mr. President, I am proud to join Senator Kyl in 
introducing legislation that would rename the Veterans Administration 
medical center in Prescott, AZ after Bob Stump.
  In June of this year, Arizonans suffered a major loss with the 
passing of Bob Stump, a native son who made his mark for our State and 
our Nation. Congressman Stump had a patriot's devotion to those who 
served our country in uniform. He will be deeply missed by his friends, 
family and a grateful Nation.
  Congressman Stump served his country and the residents of Arizona 
admirably in the United States Navy, during World War II; in the 
Arizona State legislature; and in the United States Congress.
  Congressman Stump's service in the House of Representatives was 
marked by this dedication to his constituents in Arizona. Never one for 
the trappings of a political office, Bob read and responded to all of 
his mail, he never had Press Secretary and often answered the office 
phone personally.
  One could not overlook his leadership in Defense and Veterans issues. 
Serving as Chairman of the Veterans Affairs Committee, his work has so 
beneficial to America's veterans that a street in Arlington National 
Cemetery was named after him. Everywhere I travel, veterans remark to 
me that Bob Stump put Veterans needs first.
  Bob's strong leadership of the House Armed Services Committee helped 
usher in many of the technological advances that characterize our 
modern military.
  This legislation serves as a memorial to a member of Congress who 
left an indelible legacy.
                                 ______
                                 
      By Mr. DODD (for himself and Mr. Lieberman):
  S. 1512. A bill to amend the Internal Revenue Code of 1986 to exclude 
from income and employment taxes and wage withholding property tax 
rebates and other benefits provided to volunteer firefighters and 
emergency medical responders; to the Committee on Finance.
  Mr. DODD. Mr. President. I am pleased to rise today with my colleague 
Senator Lieberman to introduce legislation that would amend the 
Internal Revenue Code to exclude property tax abatements, provided by 
local governments to volunteer firefighters and emergency medical 
responders, from the definition of income and wages. Congressman John 
Larson of Connecticut introduced identical legislation in the House.
  Seventy-five percent of firefighters in our country are volunteers. 
Unfortunately, statistics show that the number of volunteer 
firefighters and emergency responders have been declining in past years 
at an alarming rate. The number of volunteer firefighters around the 
country has declined by 5 to 10 percent since 1983, while the number of 
emergency calls made has sharply increased.
  Many municipalities throughout the country, including the State of 
Connecticut, offer stipends and property tax abatements of up to $1,000 
per year to volunteer firefighters, emergency medical technicians, 
paramedics, and ambulance drivers. These incentives have helped local 
fire departments in their volunteer recruitment efforts throughout the 
country.
  Last year the IRS ruled that property tax abatements to volunteers 
should be treated as wages and income. This ruling would undermine the 
efforts of localities across the country to recruit more volunteer 
firefighters.
  The bill that Senator Lieberman and I are introducing amends the 
Internal Revenue Code to exclude property tax abatements and stipends 
for volunteer firefighters and emergency medical responders from the 
definition of income and wages. This bill would allow local governments 
around the country to continue providing these incentives to their 
volunteer firefighters and emergency medical responders.
  The President has recently called for Americans to volunteer in their 
communities. When both heads of household hold full-time employment, it 
is often too difficult for them to take time away from their families 
without some form of compensation. A $1,000 property tax break is not a 
large request for the great service these men and women provide to our 
communities. They risk their lives for others. The least we can do is 
allow States and towns to offer them modest incentives to serve.
  The IRS ruling undermines the good intentions and creative efforts of 
many localities. If our municipalities are willing to forgo their local 
tax revenues in order to ensure they have enough volunteer firefighters 
and emergency service providers to protect their communities, and if 
members of the community are doing their part by volunteering, then we, 
as a country

[[Page 20569]]

should do our part and support local efforts to ensure that all our 
communities have adequate protection. And that is what our bill will 
ensure.
  I hope that our colleagues will join us in supporting this 
legislation so that we can ensure that state and local governments have 
the flexibility to design and implement recruiting and retention 
programs that benefit not only the volunteer firefighters and emergency 
medical providers, but also the communities they protect.
  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. 1512

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

     SECTION 1. EXCLUSION FROM INCOME AND EMPLOYMENT TAXES AND 
                   WAGE WITHHOLDING FOR PROPERTY TAX REBATES AND 
                   OTHER BENEFITS PROVIDED TO VOLUNTEER 
                   FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.

       (a) Exclusion From Gross Income.--
       (1) In general.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to items 
     specifically excluded from gross income) is amended by 
     redesignating section 140 as section 140A and by inserting 
     after section 139 the following new section:

     ``SEC. 140. PROPERTY TAX REBATES AND OTHER BENEFITS PROVIDED 
                   TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL 
                   RESPONDERS.

       ``(a) Exclusion.--Gross income shall not include a 
     qualified property tax rebate or other benefit.
       ``(b) Qualified Property Tax Rebate or Other Benefit.--For 
     purposes of subsection (a)--
       ``(1) In general.--The term `qualified property tax rebate 
     or other benefit' means a rebate of real or personal property 
     taxes, or any other benefit, provided by a State or political 
     subdivision on account of services performed as a member of a 
     qualified volunteer emergency response organization.
       ``(2) Qualified volunteer emergency response 
     organization.--The term `qualified volunteer emergency 
     response organization' means any volunteer organization--
       ``(A) which is organized and operated to provide 
     firefighting or emergency medical services for persons in the 
     State or political subdivision, as the case may be, and
       ``(B) which is required (by written agreement) by the State 
     or political subdivision to furnish firefighting or emergency 
     medical services in such State or political subdivision.''.
       (2) Clerical amendment.--The table of sections for such 
     part is amended by striking the last item and inserting the 
     following new items:

``Sec. 140. Property tax rebates and other benefits provided to 
              volunteer firefighters and emergency medical responders.
``Sec. 140A. Cross references to other Acts.''.
       (b) Exclusion From Employment Taxes.--
       (1) Social security taxes.--
       (A) Section 3121(a) of the Internal Revenue Code of 1986 
     (relating to definition of wages) is amended by striking 
     ``or'' at the end of paragraph (20), by striking the period 
     at the end of paragraph (21) and inserting ``; or'', and by 
     inserting after paragraph (21) the following new paragraph:
       ``(22) any qualified property tax rebate or other benefit 
     (as defined in section 140(b)).''.
       (B) Section 209(a) of the Social Security Act is amended by 
     striking ``or'' at the end of paragraph (17), by striking the 
     period at the end of paragraph (18) and inserting ``; or'', 
     and by inserting after paragraph (18) the following new 
     paragraph:
       ``(19) Any qualified property tax rebate or other benefit 
     (as defined in section 140(b) of the Internal Revenue Code of 
     1986).''.
       (2) Unemployment taxes.--Section 3306(b) of the Internal 
     Revenue Code of 1986 (relating to definition of wages) is 
     amended by striking ``or'' at the end of paragraph (16), by 
     striking the period at the end of paragraph (17) and 
     inserting ``; or'', and by inserting after paragraph (17) the 
     following new paragraph:
       ``(18) any qualified property tax rebate or other benefit 
     (as defined in section 140(b).''.
       (3) Wage withholding.--Section 3401(a) of such Code 
     (defining wages) is amended by striking ``or'' at the end of 
     paragraph (20), by striking the period at the end of 
     paragraph (21) and inserting ``; or'', and by inserting after 
     paragraph (21) the following new paragraph:
       ``(22) for any qualified property tax rebate or other 
     benefit (as defined in section 140(b).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
      By Mrs. HUTCHISON:
  S. 1514. A bill to amend the Internal Revenue code of 1986 to reform 
certain excise taxes applicable to private foundations, and for other 
purposes; to the Committee on Finance.
  Mrs. HUTCHISON. Mr. President, I am pleased to introduce legislation 
to address concerns regarding the operation of charitable foundations.
  Well-publicized incidents of abuse by a few foundations have raised 
legitimate concerns about whether these entities are properly focusing 
resources on their philanthropic missions. In come cases, excessive 
amounts have gone toward administrative costs, high executive salaries 
and expensive travel.
  My bill will help to ensure that more money is spent on charitable 
activities and that those who abuse the system are properly punished.
  One proposal I support is included in the House version of the CARE 
Act, H.R. 7, the Charitable Giving Act of 1003. It would reduce the 
excise tax on investment income for foundations from two percent to one 
percent, allowing foundations to keep more money so they can direct it 
to those in need.
  However, we must ensure this money actually goes toward the 
charitable activities for which it is intended. The House bill tries to 
do this by preventing any administrative costs from being counted as 
part of the five percent annual distribution requirement foundations 
must meet. While the legislation moves in the right direction, the 
language is too broad and may inadvertently punish some foundations 
that are acting responsibly.
  Many foundations will find it difficult to earn the returns necessary 
to maintain their underlying endowments and cover the five percent 
requirement in addition to all administrative costs. This could lead to 
a diminished ability to fulfill their missions over time, as underlying 
endowments are eroded as an unintended consequence. Some foundations 
may try to meet this challenge by reducing important, legitimate 
spending such as on legal compliance.
  The legislation I am introducing will better address these issues. 
First, I agree we should reduce the excise tax on foundations from two 
percent to one percent. I also agree we should consider limiting which 
administrative expenses are counted as distributions. However, I 
propose doing so in a more defined manner.
  My bill would exclude general overhead expenses, management salaries 
and excessive travel expenses from being counted as distributions. It 
will allow expenses directly attributable to administering grants and 
direct charitable giving, as well as expenses related to maintaining 
legal compliance, to continue to be included.
  By focusing these restrictions on the expenses which tend to be the 
source of abuse, we can deal with the root issues while minimizing 
unintended consequences.
  My bill also goes further than other proposals in penalizing 
wrongdoers. It will raise the penalty for those who abuse the system by 
``self-dealing'' from a five percent to a 25 percent excise tax on the 
amounts involved.
  My bill will lower the net investment tax, tighten the regulations 
allowing administrative expenses to be counted as distributions, and 
increase penalties for those abusing the system. It does so with 
drastic measures that could lead to a decline in foundations in the 
long-term. Together these measures will instill more discipline on the 
foundation community and result in more money going to worthy causes.
  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. 1514

       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 
     ``Philanthropy Expansion and Responsibility Act of 2003''.
       (b) Amendment of 1986 Code.--Whenever in this Act an 
     amendment or repeal is expressed in terms of an amendment to, 
     or repel 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.

[[Page 20570]]



     SEC. 2. REFORM OF CERTAIN EXCISE TAXES RELATED TO PRIVATE 
                   FOUNDATIONS.

       (a) Reduction of Tax on Net Investment Income.--Section 
     4940(a) (relating to tax-exempt foundations) is amended by 
     striking ``2 percent'' and inserting ``1 percent''.
       (b) Repeal of Reduction in Tax Where Private Foundation 
     Meets Certain Distribution Requirements.--Section 4940 
     (relating to excise tax based on investment income) is 
     amended by striking subsection (e).
       (c) Modification of Excise Tax on Self-Dealing.--The second 
     sentence of section 4941(a)(1) (relating to initial excise 
     tax imposed on self-dealer) is amended by striking ``5 
     percent'' and inserting ``25 percent''.
       (d) Modification of Excise Tax on Failure To Distribute 
     Income.--
       (1) Certain administrative expenses not treated as 
     distributions.--
       (A) In general.--Section 4942(g)(1)(A) (defining qualifying 
     distributions) is amended by striking ``(including that 
     portion of reasonable and necessary administrative 
     expenses)'' and inserting ``(including that portion of 
     reasonable and necessary administrative expenses which are 
     directly attributable to direct charitable activities, grant 
     selection activities, grant monitoring and administration 
     activities, compliance with applicable Federal, State, or 
     local law, or furthering public accountability of the private 
     foundation, except as provided in paragraph (4))''.
       (B) Limitations.--Section 4942(g) is amended by striking 
     paragraph (4) and inserting the following new paragraphs:
       ``(4) Limitation on administrative expenses treated as 
     distributions.--For purposes of paragraph (1)(A), the 
     following administrative expenses shall not be treated as 
     qualifying distributions:
       ``(A) Any compensation paid to persons who are considered 
     disqualified persons.
       ``(B) Any traveling expenses incurred for travel outside 
     the United States.
       ``(C) Any traveling expenses incurred for transportation by 
     air solely from one point in the United States to another 
     point in the United States via first-class transportation on 
     a commercial aircraft or via a private aircraft.
       ``(5) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the purposes of 
     paragraphs (1) and (4). Such regulations shall provide that 
     administrative expenses which are excluded from qualifying 
     distributions solely by reason of the limitations in 
     paragraph (1) or (4) shall not subject a private foundation 
     to any other excise taxes imposed by this subchapter.''.
       (2) Disallowance not to apply to certain private 
     foundations.--
       (A) In general.--Section 4942(j)(3) (defining operating 
     foundation) is amended--
       (i) by striking ``(within the meaning of paragraph (1) or 
     (2) of subsection (g))'' each place it appears, and
       (ii) by adding at the end the following new sentence: ``For 
     purposes of this paragraph, the term `qualifying 
     distributions' means qualifying distributions within the 
     meaning of paragraph (1) or (2) of subsection (g) (determined 
     without regard to subsection (g)(4)).''.
       (B) Conforming amendment.--Section 4942(f)(2)(C)(i) is 
     amended by inserting ``(determined without regard to 
     subsection (g)(4))'' after ``within the meaning of subsection 
     (g)(1)(A)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.
                                 ______
                                 
      By Mr. GREGG:
  S. 1515. A bill to establish and strengthen postsecondary programs 
and courses in the subjects of traditional American history, free 
institutions, and Western civilization, available to students preparing 
to teach these subjects, and to other students; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. GREGG. Mr. President, today I am proud to introduce the Higher 
Education for Freedom Act. This bill will establish a competitive grant 
program making funds available to institutions of higher education, 
centers within such institutions, and associated nonprofit foundations 
to promote programs focused on the teaching and study of traditional 
American history and government, and the history and achievements of 
Western Civilization, at both the graduate and undergraduate level, 
including those that serve students enrolled in K-12 teacher education 
programs.
  Today, more than ever, it is important to preserve and defend our 
common heritage of freedom and civilization, and to ensure that future 
generations of Americans understand the importance of traditional 
American history and the principles of free government on which this 
Nation was founded. This basic knowledge is not essential to the full 
participation of our citizenry in America's civic life, but also to the 
continued success of the American experiment in self-government, 
binding together a diverse people into a single Nation with common 
purposes.
  However, college students' lack of historical literacy is quite 
startling, and too few of today's colleges and universities are focused 
on the task of imparting this crucial knowledge to the next generation. 
One survey of students at America's top colleges reported that seniors 
could not identify Valley Forge, words from the Gettysburg Address, or 
even the basic principles of the U.S. Constitution. Given high-school 
level American history questions, 81 percent of the seniors would have 
received a D or F, the report found.
  One college professor even informed me that her students did not know 
which side Lee was on during the Civil War, or whether the Russians 
were allies or enemies in World War II. A student of hers even asked 
why anyone should care what the Founding Fathers wrote.
  Thomas Jefferson once wrote, ``If a nation expects to be ignorant--
and free--in a state of civilization, it expects what never was and 
never will be.'' I believe the time has come for Congress to do 
something to promote the teaching of traditional American history at 
the postsecondary level, and I urge my colleagues to support this 
legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1515

       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 ``Higher Education for 
     Freedom Act''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) Given the increased threat to American ideals in the 
     trying times in which we live, it is important to preserve 
     and defend our common heritage of freedom and civilization 
     and to ensure that future generations of Americans understand 
     the importance of traditional American history and the 
     principles of free government on which this Nation was 
     founded in order to provide the basic knowledge that is 
     essential to full and informed participation in civic life 
     and to the larger vibrancy of the American experiment in 
     self-government, binding together a diverse people into a 
     single Nation with a common purpose.
       (2) However, despite its importance, most of the Nation's 
     colleges and universities no longer require United States 
     history or systematic study of Western civilization and free 
     institutions as a prerequisite to graduation.
       (3) In addition, too many of our Nation's elementary and 
     secondary school history teachers lack the training necessary 
     to effectively teach these subjects, due largely to the 
     inadequacy of their teacher preparation.
       (4) Distinguished historians and intellectuals fear that 
     without a common civic memory and a common understanding of 
     the remarkable individuals, events, and ideals that have 
     shaped our Nation and its free institutions, the people in 
     the United States risk losing much of what it means to be an 
     American, as well as the ability to fulfill the fundamental 
     responsibilities of citizens in a democracy.
       (b) Purposes.--The purposes of this Act are to promote and 
     sustain postsecondary academic centers, institutes, and 
     programs that offer undergraduate and graduate courses, 
     support research, and develop teaching materials, for the 
     purpose of developing and imparting a knowledge of 
     traditional American history, the American Founding, and the 
     history and nature of, and threats to, free institutions, or 
     of the nature, history and achievements of Western 
     Civilization, particularly for--
       (1) undergraduate students who are enrolled in teacher 
     education programs, who may consider becoming school 
     teachers, or who wish to enhance their civic competence;
       (2) elementary, middle, and secondary school teachers in 
     need of additional training in order to effectively teach in 
     these subject areas; and
       (3) graduate students and postsecondary faculty who wish to 
     teach about these subject areas with greater knowledge and 
     effectiveness.

     SEC. 3. DEFINITIONS.

        For purposes of this Act:
       (1) Eligible institution.--The term ``eligible 
     institution'' means--
       (A) an institution of higher education;
       (B) a specific program within an institution of higher 
     education; and
       (C) a non-profit history or academic organization 
     associated with higher education whose mission is consistent 
     with the purposes of this Act.

[[Page 20571]]

       (2) Free institution.--The term ``free institution'' means 
     an institution that emerged out of Western Civilization, such 
     as democracy, individual rights, market economics, religious 
     freedom and tolerance, and freedom of thought and inquiry.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the same meaning 
     given that term under section 101 of the Higher Education Act 
     of 1965 (20 U.S.C. 1001).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (5) Traditional American history.--The term ``traditional 
     American history'' means--
       (A) the significant constitutional, political, 
     intellectual, economic, and foreign policy trends and issues 
     that have shaped the course of American history; and
       (B) the key episodes, turning points, and leading figures 
     involved in the constitutional, political, intellectual, 
     diplomatic, and economic history of the United States.

     SEC. 4. GRANTS TO ELIGIBLE INSTITUTIONS.

       (a) In General.--From amounts appropriated to carry out 
     this Act, the Secretary shall award grants, on a competitive 
     basis, to eligible institutions, which grants shall be used 
     for--
       (1) history teacher preparation initiatives, that--
       (A) stress content mastery in traditional American history 
     and the principles on which the American political system is 
     based, including the history and philosophy of free 
     institutions, and the study of Western civilization; and
       (B) provide for grantees to carry out research, planning, 
     and coordination activities devoted to the purposes of this 
     Act; and
       (2) strengthening postsecondary programs in fields related 
     to the American founding, free institutions, and Western 
     civilization, particularly through--
       (A) the design and implementation of courses, lecture 
     series and symposia, the development and publication of 
     instructional materials, and the development of new, and 
     supporting of existing, academic centers;
       (B) research supporting the development of relevant course 
     materials;
       (C) the support of faculty teaching in undergraduate and 
     graduate programs; and
       (D) the support of graduate and postgraduate fellowships 
     and courses for scholars related to such fields.
       (b) Selection Criteria.--In selecting eligible institutions 
     for grants under this section for any fiscal year, the 
     Secretary shall establish criteria by regulation, which 
     shall, at a minimum, consider the education value and 
     relevance of the institution's programming to carrying out 
     the purposes of this Act and the expertise of key personnel 
     in the area of traditional American history and the 
     principles on which the American political system is based, 
     including the political and intellectual history and 
     philosophy of free institutions, the American Founding, and 
     other key events that have contributed to American freedom 
     and the study of Western civilization.
       (c)  Grant Application.--An eligible institution that 
     desires to receive a grant under this Act shall submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary may prescribe by 
     regulation.
       (d) Grant Review.--The Secretary shall establish procedures 
     for reviewing and evaluating grants made under this Act.
       (e) Grant Awards.--
       (1) Maximum and minimum grants.--The Secretary shall award 
     each grant under this Act in an amount that is not less than 
     $400,000 and not more than $6,000,000.
       (2) Exception.--A subgrant made by an eligible institution 
     under this Act to another eligible institution shall not be 
     subject to the minimum amount specified in paragraph (1).
       (f) Multiple Awards.--For the purposes of this Act, the 
     Secretary may award more than 1 grant to an eligible 
     institution.
       (g) Subgrants.--An eligible institution may use grant funds 
     provided under this Act to award subgrants to other eligible 
     institutions at the discretion of, and subject to the 
     oversight of, the Secretary.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       For the purpose of carrying out this Act, there are 
     authorized to be appropriated--
       (1) $140,000,000 for fiscal year 2004; and
       (2) such sums as may be necessary for each of the 
     succeeding 5 fiscal years.
                                 ______
                                 
      By. Mr. DOMENICI (for himself and Mr. Campbell):
  S. 1516. A bill to further the purposes of the Reclamation Projects 
Authorization and Adjustment Act of 1992 by directing the Secretary of 
the Interior, acting through the commissioner of Reclamation, to carry 
out an assessment and demonstration program to assess potential 
increases in water availability for Bureau of Reclamation projects and 
other uses through control of salt cedar and Russian olive; to the 
Committee on Energy and Natural Resources.
  Mr. DOMENICI. Mr. President, I rise today to reintroduce a piece of 
legislation that is of paramount importance to the State of New Mexico 
and many other western States. This bill will address the mounting 
pressures brought on by the growing demands throughout the west of a 
diminishing water supply.
  This bill that I am introducing today authorizes the Department of 
Interior acting through the Bureau of Reclamation to establish a series 
of research and demonstration programs to help with the eradication of 
this non-native species on rivers in the Western United States. This 
bill will help develop the scientific knowledge and the experience base 
to build a strategy to control these invasive thieves. In addition to 
projects that could benefit the Pecos and the Rio Grande, the bill 
allows other states in the west such as Texas, Colorado, Utah, 
California and Arizona to develop and participate in projects as well.
  Allow me to explain the importance of this bill. A water crisis has 
ravaged the west for four years. Drought conditions are expected to 
expand into the upper mid-west this year. Last year snow packs were 
abnormally low, causing severe drought conditions. Snow pack conditions 
this year were also low, but marginally better in the southwest. The 
rest of the west did not have promising winter snows and spring rains.
  The presence of invasive species compounds the drought situation in 
many states. For instance, New Mexico is home to a vast amount of Salt 
Cedar. Salt Cedar is a water-thirsty non-native tree that continually 
strips massive amounts of water out of New Mexico's two predominant 
water supplies the Pecos and the Rio Grande rivers.
  We have already had numerous catastrophic fires in our Nation's 
forests including the riparian woodland--the Bosque--that runs through 
the heart of New Mexico's most populous city. One of the reasons this 
fire ran its course through Albuquerque was the presence of large 
amounts of Salt Cedar, a plant that burns as easily as it consumes 
water.
  Estimates show that one mature Salt Cedar tree can consume as much as 
200 gallons of water per day; over the growing season that is 7 acre 
feet of water for each acre of Salt Cedar. In addition to the excessive 
water consumption, Salt Cedars increase fire, increase river 
channelization and flood frequency, decrease water flow, and increase 
water and soil salinity along the river. Every problem that drought 
causes is exacerbated by the presence of Salt Cedar.
  I know that the seriousness of the water situation in New Mexico 
becomes more acute every single day. This drought has affected every 
New Mexican and nearly everyone in the west in some way. Wells are 
running dry, farmers are being forced to sell livestock, many of our 
cities are in various stages of conservation and many, many acres have 
been charred by fire.
  The drought and the mounting legal requirements on both the Pecos and 
Rio Grande rivers are forcing us toward a severe water crisis in New 
Mexico. Indeed, every river in the inter-mountain west seems to be 
facing similar problems. Therefore, we must bring to bear every tool at 
our disposal for dealing with the water shortages in the west.
  Solving such water problems is one of my top priorities and I assure 
this Congress that this bill will receive prompt attention by the 
Energy and Natural Resources Committee. Controlling water thirsty 
invasive species is one significant and substantial step in the right 
direction for the dry lands of the west.
  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. 1516

       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 ``Salt Cedar Control 
     Demonstration Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the western United States is currently experiencing its 
     worst drought in modern history;

[[Page 20572]]

       (2) it is estimated that throughout the western United 
     States salt cedar and Russian olive--
       (A) occupy between 1,000,000 and 1,500,000 acres of land; 
     and
       (B) are non-beneficial users of 2,000,000 to 4,500,000 
     acre-feet of water per year;
       (3) the quantity of non-beneficial use of water by salt 
     cedar and Russian olive is greater than the quantity that 
     valuable native vegetation would use;
       (4) much of the salt cedar and Russian olive infestation is 
     located on Bureau of Land Management land or other land of 
     the Department of the Interior; and
       (5) as drought conditions and legal requirements relating 
     to water supply accelerate water shortages, innovative 
     approaches are needed to address the increasing demand for a 
     diminishing water supply.

     SEC. 3. SALT CEDAR AND RUSSIAN OLIVE ASSESSMENT AND 
                   DEMONSTRATION PROGRAM.

       (a) Establishment.--In furtherance of the purposes of the 
     Reclamation Projects Authorization and Adjustment Act of 1992 
     (106 Stat. 4600), the Secretary of the Interior, acting 
     through the Commissioner of Reclamation (referred to in this 
     Act as the ``Secretary''), shall carry out a salt cedar and 
     Russian olive assessment and demonstration program to--
       (1) assess the extent of the infestation of salt cedar and 
     Russian olive in the western United States; and
       (2) develop strategic solutions for long-term management of 
     salt cedar and Russian olive.
       (b) Assessment.--Not later than 1 year after the date on 
     which funds are made available to carry out this Act, the 
     Secretary shall complete an assessment of the extent of salt 
     cedar and Russian olive infestation in the western United 
     States. The assessment shall--
       (1) consider past and ongoing research on tested and 
     innovative methods to control salt cedar and Russian olive;
       (2) consider the feasibility of reducing water consumption;
       (3) consider methods of and challenges associated with the 
     restoration of infested land;
       (4) estimate the costs of destruction of salt cedar and 
     Russian olive, biomass removal, and restoration and 
     maintenance of the infested land; and
       (5) identify long-term management and funding strategies 
     that could be implemented by Federal, State, and private land 
     managers.
       (c) Demonstration Projects.--The Secretary shall carry out 
     not less than 5 projects to demonstrate and evaluate the most 
     effective methods of controlling salt ceder and Russian 
     olive. Projects carried out under this subsection shall--
       (1) monitor and document any water savings from the control 
     of salt cedar and Russian olive;
       (2) identify the quantity of, and rates at which, any water 
     savings under paragraph (1) return to surface water supplies;
       (3) assess the best approach to and tools for implementing 
     available control methods;
       (4) assess all costs and benefits associated with control 
     methods and the restoration and maintenance of land;
       (5) determine conditions under which removal of biomass is 
     appropriate and the optimal methods for its disposal or use;
       (6) define appropriate final vegetative states and optimal 
     revegetation methods; and
       (7) identify methods for preventing the regrowth and 
     reintroduction of salt cedar and Russian olive.
       (d) Control Methods.--The demonstration projects carried 
     out under subsection (c) may implement 1 or more control 
     method per project, but to assess the full range of control 
     mechanisms--
       (1) at least 1 project shall use airborne application of 
     herbicides;
       (2) at least 1 project shall use mechanical removal; and
       (3) at least 1 project shall use biocontrol methods such as 
     goats or insects.
       (e) Implementation.--A demonstration project shall be 
     carried out during a time period and to a scale designed to 
     meet the requirements of subsection (c).
       (f) Costs.--Each demonstration project under subsection (c) 
     shall be carried out at a cost of not more than $7,000,000, 
     including costs of planning, design, implementation, 
     maintenance, and monitoring.
       (2) Cost-sharing.--
       (A) Federal share.--The Federal share of the costs of a 
     demonstration project shall not exceed 75 percent.
       (B) Form of non-federal share.--The non-Federal share of 
     the costs of a demonstration project may be provided in the 
     form of in-kind contributions, including services provided by 
     a State agency.
       (g) Cooperation.--In carrying out the program, the 
     Secretary shall--
       (1) use the expertise of Federal agencies, national 
     laboratories, Indian tribes, institutions of higher 
     education, State agencies, and soil and water conservation 
     districts that are actively conducting research on or 
     implementing salt cedar and Russian olive control activities; 
     and
       (2) cooperate with other Federal agencies and affected 
     States, local units of government, and Indian tribes.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     Act--
       (1) $50,000,000 for fiscal year 2004; and
       (2) such sums as are necessary for each fiscal year 
     thereafter.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Graham of Florida):
  S. 1517. A bill to revoke and Executive Order relating to procedures 
for the consideration of claims of constitutionally based privilege 
against disclosure of Presidential records; to the Committee on 
Governmental Affairs.
  Mr. BINGAMAN. Mr. President, I rise today with my colleague from 
Florida, Senator Graham, to introduce a very simple piece of 
legislation that would revoke President Bush's Executive Order 13233 
and put back in force President Reagan's Executive Order 12667--
restoring the American people's access to Presidential papers. This 
bill is the companion to H.R. 1493, which is sponsored by 
Representative Doug Ose and has enjoyed bipartisan support in the 
House.
  Twenty-five years ago, this body passed the Presidential Records Act 
and declared that a President's papers were the property of the people 
of the United States of America and were to be administered by the 
National Archives and Records Administration, or NARA. The Act provided 
that Presidential papers would be made available twelve years after a 
President left office, allowing the former or incumbent President the 
right to claim executive privilege for particularly sensitive 
documents. In order to fulfill that mandate, President Reagan in 1989 
signed Executive Order 12667, which gave the former or incumbent 
President thirty days to claim executive privilege.
  However, in 2001, President Bush signed Executive Order 13233, 
nullifying President Reagan's order and imposing new regulations for 
obtaining Presidential documents. President Bush's new order greatly 
restricts access to Presidential papers by forcing all requests for 
documents, no matter how innocuous, to be approved by both the former 
President and current White House. In this way the order goes against 
the letter and the spirit of the Presidential Records Act by requiring 
the NARA to make a presumption of non-disclosure, thus allowing the 
White House to prevent the release of records simply by inaction.
  The President's order also limits what types of papers are available 
by expanding the scope of executive privilege into new areas--namely 
communications between the President and his advisors and legal advice 
given to the President. Also, former Presidents can now designate third 
parties to exercise executive privilege on their behalf, meaning that 
Presidential papers could remain concealed many years after a 
President's death. These expansions raise some serious constitutional 
questions and cause unnecessary controversy that could end up 
congesting our already overburdened courts. My legislation simply seeks 
to restore a legitimate, streamlined means of carrying out this body's 
wishes--making Presidential records available for examination by the 
public and by Congress.
  The administration shouldn't fear passage of this bill. Any documents 
that contain sensitive national security information would remain 
inaccessible, as would any documents pertaining to law enforcement or 
the deliberative process of the executive branch. Executive privilege 
for both former and current Presidents would still apply to any papers 
the White House designates. With these safeguards in place, there is no 
reason to further hinder access to documents that are in some cases 
more than twenty years old.
  By not passing this bill, the Congress would greatly limit its own 
ability to investigate previous administrations, not to mention limit 
the ability of historians and other interested parties to research the 
past. Knowledge of the past enriches and informs our understanding of 
the present, and by limiting our access to these documents we do both 
ourselves and future generations a great disservice. Numerous 
historians, journalists, archivists and

[[Page 20573]]

other scholars have voiced their disapproval of Executive Order 13233 
because they understand how important access to Presidential papers can 
be to accurately describing and learning from past events. We here in 
the Congress cannot afford to surrender our ability to investigate 
previous Presidential administrations because doing so would remove a 
vitally important means of ensuring Presidential accountability.
  I believe it is time for these documents to become part of the public 
record. I believe in open, honest, and accountable government, and I do 
not believe in keeping secrets from the American people. The 
Presidential Records Act was one of this country's most vital post-
Watergate reforms and it remains vitally important today. In these 
times when trust in government is slipping more and more every day, we 
need to send a statement to the American people that we here in 
Washington don't need to hide from public scrutiny--that instead we 
welcome and encourage public scrutiny. This bill will send just such a 
message.
  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. 1517

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

     SECTION 1. REVOCATION OF EXECUTIVE ORDER OF NOVEMBER 1, 2001.

       Executive Order number 13233, dated November 1, 2001 (66 
     Fed. Reg. 56025), shall have no force or effect, and 
     Executive Order number 12667, dated January 18, 1989 (54 Fed. 
     Reg. 3403), shall apply by its terms.
                                 ______
                                 
      By Mr. ENZI:
  S. 1518. A bill to restore reliability to the medical justice system 
by fostering alternatives to current medical tort litigation, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. ENZI. Mr. President, I rise today to introduce a bill that will 
help bring about a more reliable system of medical justice for all 
Americans.
  Earlier this month, we had a robust debate on a critical issue--
medical liability reform. Though a majority of the Members of this body 
wanted to begin working to pass the bill, we didn't have the 60 
Senators necessary to begin the real work on the legislation.
  I co-sponsored that bill, the Patients First Act, and I still support 
it. Passing the Patients First Act would be an important short-term 
step to controlling the excesses in our legal system that have sent 
medical liability insurance premiums through the roof. Skyrocketing 
premiums are forcing doctors to move their practices to States with 
better legal environments and lower insurance premiums. This is 
endangering the availability of critical healthcare services in many 
areas of Wyoming and other states.
  Throughout our debate, I heard many of my colleagues say that they 
wanted to work on this issue, but that they simply could not support 
the bill as it stood. We heard that the bill approaches the issue from 
too narrow of a perspective. We heard that the bill's caps on non-
economic damages are unfair to patients, despite the fact that the bill 
places no limits whatsoever on a patient's right to recover all 
quantifiable economic damages.
  While I disagree with my colleagues who oppose the Patients First 
Act, I respect their opposition. I also trust that they sincerely want 
to help solve our Nation's medical liability and litigation crisis.
  During the debate this month, I noticed something interesting. While 
we argued the ``pros and cons'' of the bill, no one stood up to defend 
our current system of medical litigation. Now, we heard a lot about the 
caps, and the insurance industry, and we heard Senators say that ``Yes, 
there is a problem, but the bill before us won't solve it.''
  One thing we didn't hear was a rousing defense of our medical 
litigation system. Even some of the lawyers in this body agreed that 
frivolous lawsuits are a problem and that our medical litigation system 
needs reform.
  Why didn't we hear anyone defend the merits of our current medical 
litigation system? It's because our system doesn't work. It simply 
doesn't work for patients or for healthcare providers.
  Compensation to patients injured by healthcare errors is neither 
prompt nor fair. The randomness and delay associated with medical 
litigation does not contribute to timely, reasonable compensation for 
most injured patients. Some injured patients get huge jury awards, 
while many others get nothing at all.
  Let's look at the facts. In 1991, a group of researchers published a 
study in the New England Journal of Medicine. The study, known as the 
Harvard Medical Practice Study, was the basis for the Institute of 
Medicine's estimate that nearly 100,000 people die every year from 
healthcare errors.
  As part of their study, the researchers reviewed the medical records 
of a random sample of more than 31,000 patients in New York State. They 
matched those records with statewide data on medical malpractice 
claims. The researchers found that nearly 30 percent of injuries caused 
by medical negligence resulted in temporary disability, permanent 
disability or death. However, less than 2 percent of those who were 
injured by medical negligence filed a claim. These figures suggest that 
most people who suffer negligent injuries don't receive any 
compensation.
  When a patient does decide to litigate, only a few recover anything. 
Only one of every ten medical malpractice cases actually goes to trial, 
and of those cases, plaintiffs win less than one of every five. In 
addition, patients who file suit and are ultimately successful must 
wait a long time for their compensation--the average length of a 
medical malpractice action filed in state court is about 30 months.
  While the vast majority of malpractice cases that go to trial are 
settled before the court hands down a verdict, the settlements even 
then don't guarantee that patients are compensated fairly, particularly 
after legal fees are subtracted. Research shows that for every dollar 
paid in malpractice insurance premiums, about 40 cents in compensation 
is actually paid to the plaintiff--the rest goes for legal fees, court 
costs, and other administrative expenditures.
  To sum up: most patients injured by negligence don't file claims or 
receive compensation. Few of those that do file claims and go to court 
recover anything, and those who are successful wait a long time for 
their compensation. And those who settle out of court end up receiving 
only 40 cents for every dollar that healthcare providers pay in 
liability insurance premiums.
  It's hard to say that our medical litigation system does right by 
patients in light of those facts. Unfortunately, our system doesn't 
work for healthcare providers either.
  Earlier, I spoke about those Harvard researchers who found that fewer 
than 2 percent of those who were injured by medical negligence even 
filed a claim. As they reviewed the medical records for their study, 
the researchers also found another interesting fact--most of the 
providers against whom claims were eventually filed were not negligent 
at all.
  That's right--most providers who were sued had not committed a 
negligent act.
  In matching the records they reviewed to data on malpractice claims, 
the Harvard researchers found 47 actual malpractice claims. In only 8 
of the 47 claims did they find evidence that medical malpractice had 
caused an injury. Even more amazingly, the physician reviewers found no 
evidence of any medical injury, negligent or not, in 26 of the 47 
claims. However, 40 percent of these cases where they found no evidence 
of negligence nonetheless resulted in a payment by the provider. 
Basically, the researchers found no positive relationship between 
medical negligence and compensation.
  That study was based on 1984 data. The same group of researchers 
conducted another study in Colorado and Utah in 1992, and they found 
the same thing. As in the 1984 study, they found that only 3 percent of 
patients who suffered an injury as a result of negligence

[[Page 20574]]

actually sued. And again, physician reviewers could not find negligence 
in most of the cases in which lawsuits were filed.
  Now, I assume that the patients who sued had either an adverse 
medical outcome, or at least an outcome that was less satisfactory than 
the patient expected. But our medical litigation system is not supposed 
to compensate patients for adverse outcomes or dissatisfaction--it's 
supposed to compensate patients who are victims of negligent behavior. 
It's supposed to be a deterrent to substandard medical care.
  It's not fair to doctors and hospitals that they must pay to defend 
against meritless lawsuits. Nor is it fair that they must face a choice 
between settling for a small sum, even if they aren't at fault, so that 
they avoid getting sucked into a whirlpool of our medical litigation 
system.
  It's not hard to understand why physicians and hospitals and their 
insurers want to stay out of court. When they lose, the decisions are 
increasingly resulting in mega-awards based on subjective ``non-
economic'' damages. The number of awards exceeding $1 million grew by 
50 percent between the periods of 1994-1996 and 1999-2000. Today, more 
than half of all jury awards exceed $1 million.
  As a result, when a patient suffers a bad outcome and sues, providers 
have an incentive to settle the case out of court, even if the provider 
isn't at fault. But is this how our medical litigation system is 
supposed to work--as a tool for shaking down our healthcare providers?
  Let's face it--our medical litigation system is broken. It doesn't 
work for patients or providers. Even worse, it replaces the trust in 
the provider-patient relationship with distrust.
  Then, when courts and juries render verdicts with huge awards that 
bear no relation to the conduct of the defendants, this destabilizes 
the insurance markets and sends premiums skyrocketing. This forces many 
physicians to curtail, move or drop their practices, leaving patients 
without access to necessary medical care. This is a particular problem 
in states like Wyoming, where we traditionally struggle with recruiting 
doctors and other healthcare providers.
  Perhaps we could live with this flawed system if litigation served to 
improve quality or safety, but it doesn't. Litigation discourages the 
exchange of critical information that could be used to improve the 
quality and safety of patient care. The constant threat of litigation 
also drives the inefficient, costly and even dangerous practice of 
``defensive medicine.''
  Yes, indeed, defensive medicine is dangerous. A recent study found 
that one of every 1200 children who receive a CAT scan may die later in 
life from radiation-induced cancer. Knowing this puts a physician faced 
with anxious parents in a difficult situation. Does the doctor use his 
or her professional judgment and tell the parents of a sick child not 
to worry, or does the doctor order the CAT scan and subject the child 
to radiation that is probably unnecessary, just to provide some 
protection against a possible lawsuit?
  We have a medical litigation system in which many patients who are 
hurt by negligent actions receive no compensation for their loss. Those 
who do receive compensation end up with about 40 cents of every premium 
dollar after legal fees and other costs are subtracted. And the 
likelihood and the outcomes of lawsuits and settlements bear little 
relation to whether or not a healthcare provider was at fault.
  We like to say that justice is blind. With respect to our medical 
litigation system, I would say that justice is absent and nowhere to be 
found.
  During our debate on the Patients First Act, I said that the current 
medical liability crisis and the shortcomings of our medical litigation 
system make it clear that it is time for a major change. I also said 
that regardless of how we voted, we all should work toward replacing 
the current medical tort liability scheme with a more reliable and 
predictable system of medical justice.
  Today, I am introducing a bill that would help achieve that goal.
  Most of us are familiar with the report on medical errors from the 
Institute of Medicine, also known as the IOM. Many of us may be less 
familiar with another report that the IOM published earlier this year. 
That report is called ``Fostering Rapid Advances in Healthcare: 
Learning from System Demonstrations.''
  Our Secretary of Health and Human Services, Tommy Thompson, 
challenged the IOM to identify bold ideas that would challenge 
conventional thinking about some of the most vexing problems facing our 
healthcare system. In response, an IOM committee developed this report, 
which identified a set of demonstration projects that committee members 
felt would break new ground and yield a very high return-on-investment 
in terms of dollars and health.
  Medical liability was one of the areas upon which the IOM committee 
focused. The IOM suggested that the federal government should support 
demonstration projects in the states. These demonstrations should be 
based on ``replacing tort liability with a system of patient-centered 
and safety-focused non-judicial compensation.''
  The bill I am introducing today is in the spirit of this IOM report. 
This bill, the Reliable Medical Justice Act, would authorize funding 
for States to create demonstration programs to test alternatives to 
current medical tort litigation.
  The funding to States under this bill would cover planning grants for 
developing proposals based on the models or other innovative ideas. 
Funding to States would also include the initial costs of getting the 
alternatives up and running.
  The Reliable Medical Justice Act would require participating states 
and the Federal Government to collaborate in continuous evaluations of 
the results of the alternatives as compared to traditional tort 
litigation. This way, all States and the federal government can learn 
from new approaches.
  By funding demonstration projects, I believe Congress could enable 
States to experiment with and learn from ideas that could provide long-
term solutions to the current medical liability and litigation crisis.
  In introducing this bill, I wanted to provide some alternative ideas 
that would contribute to the debate. As a result, the bill describes 
three models to which states could look in designing their 
alternatives.
  For instance, a State could provide healthcare providers and 
organizations with immunity from lawsuits if they make a timely offer 
to compensate an injured patient for his or her actual net economic 
loss, plus a payment for pain and suffering if experts deem such a 
payment to be appropriate. This could give a healthcare provider who 
makes an honest mistake the chance to make amends financially with a 
patient, without the provider fearing that their honesty would land 
them in a lawsuit.
  Another idea would be for a state to set up classes of avoidable 
injuries and a schedule of compensation for them, and then establish an 
administrative board to resolve claims related to those injuries. A 
scientifically rigorous process of identifying preventable injuries and 
setting appropriate compensation would be preferable to the randomness 
of the current system.
  Still another option would be for a state to establish a special 
healthcare court for adjudicating medical malpractice cases. For this 
idea to work, the State would need to ensure that the presiding judges 
have expertise in and an understanding of healthcare, and allow them to 
make binding rulings on issues like causation compensation, and 
standards of care.
  We already have specialized courts for complicated issues like taxes 
and highly charged issues like substance abuse and domestic violence. 
With all the flaws in our current medical litigation system, perhaps we 
should consider special courts for the complex and emotional issue of 
medical malpractice.
  I believe one thing in our medical liability debate is absolutely 
clear--people are demanding change. Ten States have passed some 
liability reform in

[[Page 20575]]

the past year, and another 17 have debated it. States are heeding this 
call for change, and Congress should support those efforts.
  My own State, Wyoming, had a lively legislative debate on medical 
liability reform this year, but we have a constitutional amendment that 
prohibits limits on the amounts that can be recovered through lawsuits. 
The Wyoming Senate considered a bill to amend our State's constitution 
to create a commission on healthcare errors. That commission would have 
had the power to review claims, decide if healthcare negligence had 
occurred, and determine the compensation for the death or injury 
according to a schedule or formula provided by law. However, the bill 
died in a tie vote on the Wyoming Senate floor.
  According to one of the sponsors of the bill, Senator Charlie Scott, 
one of the biggest obstacles to passage was the uncertainty surrounding 
this new idea. No one had any basis for knowing what a proper schedule 
or formula for compensation would be. No one knew how much the system 
might cost, or how much injured patients would recover compared to what 
they recover now.
  Senator Scott wrote me to say that federal support for finding 
answers to these questions might help the bill's sponsors sufficiently 
respond to the legitimate concerns of their fellow Wyoming legislators. 
We should be helping state legislators like Senator Scott develop 
thoughtful and innovative ideas such as the one he has proposed. That's 
one of the reasons I am offering this bill.
  Clearly, the American people and their elected representatives have 
identified the need to reform our current medical litigation system. 
The United States Senate did not vote to proceed to the Patients First 
Act this month, but no member of this body denied that there is a 
medical liability crisis, or that Congress needs to act sooner rather 
than later.
  While we continue that debate, we ought to lend a hand to States that 
are working to change their current medical litigation systems and to 
develop creative alternatives that could work much better for patients 
and providers. The States have been policy pioneers in many areas--
workers' compensation, welfare reform, and electricity de-regulation, 
to name three. Medical litigation should be the next item on the agenda 
of the laboratories of democracy that are our 50 States.
  No one questions the need to restore reliability to our medical 
justice system. But how do we begin the process? One way is to foster 
innovation by encouraging States to develop more rational and 
predictable methods for resolving healthcare injury claims. And that is 
what the Reliable Medical Justice Act aims to do.
  In the long run, we would all be better off with a more reliable 
system of medical justice than we have today. I know that my fellow 
Senators recognize this, so I hope my colleagues on both sides of the 
aisle will work with me on this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1518

       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 ``Reliable Medical Justice 
     Act''.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to restore reliability to the medical justice system by 
     fostering alternatives to current medical tort litigation 
     that promote early disclosure of health care errors and 
     provide prompt, fair, and reasonable compensation to patients 
     who are injured by health care errors; and
       (2) to support and assist States in developing such 
     alternatives.

     SEC. 3. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES 
                   TO CURRENT MEDICAL TORT LITIGATION.

       Part P of title III of the Public Health Service Act (42 
     U.S.C. 280g et seq.) is amended by adding at the end the 
     following:

     ``SEC. 3990. STATE DEMONSTRATION PROGRAM TO EVALUATE 
                   ALTERNATIVES TO CURRENT MEDICAL TORT 
                   LITIGATION.

       ``(a) In General.--The Secretary is authorized to award 
     demonstration grants to States for the development, 
     implementation, and evaluation of alternatives to current 
     tort litigation for resolving disputes over injuries 
     allegedly caused by health care providers or health care 
     organizations.
       ``(b) Duration.--The Secretary may award up to 7 grants 
     under subsection (a) and each grant awarded under such 
     subsection may not exceed a period of 10 years.
       ``(c) Conditions for Demonstration Grants.--
       ``(1) Requirements.--Each State desiring a grant under 
     subsection (a) shall--
       ``(A) develop an alternative to current tort litigation for 
     resolving disputes over injuries allegedly caused by health 
     care providers or health care organizations that may be 1 of 
     the models described in subsection (d); and
       ``(B) establish procedures to allow for patient safety data 
     related to disputes resolved under subparagraph (A) to be 
     collected and analyzed by organizations that engage in 
     voluntary efforts to improve patient safety and the quality 
     of health care delivery, in accordance with guidelines 
     established by the Secretary.
       ``(2) Alternative to current tort litigation.--Each State 
     desiring a grant under subsection (a) shall demonstrate how 
     the proposed alternative described in paragraph (1)(A)--
       ``(A) makes the medical liability system more reliable;
       ``(B) enhances patient safety; and
       ``(C) maintains access to liability insurance.
       ``(3) Sources of compensation.--Each State desiring a grant 
     under subsection (a) shall identify the sources from and 
     methods by which compensation would be paid for claims 
     resolved under the proposed alternative to current tort 
     litigation, which may include public or private funding 
     sources, or a combination of such sources. Funding methods 
     may provide financial incentives for activities that improve 
     patient safety.
       ``(4) Scope.--Each State desiring a grant under subsection 
     (a) may establish a scope of jurisdiction (such as a 
     designated geographic region or a designated area of health 
     care practice) for the proposed alternative to current tort 
     litigation that is sufficient to evaluate the effects of the 
     alternative.
       ``(d) Models.--
       ``(1) In general.--Any State desiring a grant under 
     subsection (a) that proposes an alternative described in 
     paragraph (2), (3), or (4) shall be deemed to meet the 
     criteria under subsection (c)(2).
       ``(2) Early disclosure and compensation model.--In the 
     early disclosure and compensation model, the State shall--
       ``(A) provide immunity from tort liability (except in cases 
     of fraud, or in cases of criminal or intentional harm) to any 
     health care provider or health care organization that enters 
     into an agreement to pay compensation to a patient for an 
     injury;
       ``(B) set a limited time period during which a health care 
     provider or health care organization may make an offer of 
     compensation benefits under subparagraph (A), with 
     consideration for instances where prompt recognition of an 
     injury is unlikely or impossible;
       ``(C) require that the compensation provided under 
     subparagraph (A) include--
       ``(i) payment for the net economic loss of the patient, on 
     a periodic basis, reduced by any payments received by the 
     patient under--

       ``(I) any health or accident insurance;
       ``(II) any wage or salary continuation plan; or
       ``(III) any disability income insurance;

       ``(ii) payment for the patient's pain and suffering, if 
     appropriate for the injury, based on a capped payment 
     schedule developed by the State in consultation with relevant 
     experts; and
       ``(iii) reasonable attorney's fees;
       ``(D) not abridge the right of an injured patient to seek 
     redress through the State tort system if a health care 
     provider does not enter into a compensation agreement with 
     the patient in accordance with subparagraph (A);
       ``(E) prohibit a patient who accepts compensation benefits 
     in accordance with subparagraph (A) from filing a health care 
     lawsuit against other health care providers or health care 
     organizations for the same injury; and
       ``(F) permit a health care provider or health care 
     organization that enters into an agreement to pay 
     compensation benefits to an individual under subparagraph (A) 
     to join in the payment of the compensation benefits of any 
     health care provider or health care organization that is 
     potentially liable, in whole or in part, for the injury.
       ``(3) Administrative determination of compensation model.--
       ``(A) In general.--In the administrative determination of 
     compensation model--
       ``(i) the State shall--

       ``(I) designate an administrative entity (in this paragraph 
     referred to as the `Board') that shall include 
     representatives of--

       ``(aa) relevant State licensing boards;
       ``(bb) patient advocacy groups;
       ``(cc) health care providers and health care organizations; 
     and

[[Page 20576]]

       ``(dd) attorneys in relevant practice areas;

       ``(II) set up classes of avoidable injuries that will be 
     used by the Board to determine compensation under clause 
     (ii)(II) and, in setting such classes, may consider 1 or more 
     factors, including--

       ``(aa) the severity of the disability arising from the 
     injury;
       ``(bb) the cause of injury;
       ``(cc) the length of time the patient will be affected by 
     the injury;
       ``(dd) the degree of fault of the health care provider or 
     health care organization; and
       ``(ee) standards of care that the State may adopt and their 
     breach;

       ``(III) modify tort liability, through statute or contract, 
     to bar negligence claims in court against health care 
     providers and health care organizations for the classes of 
     injuries established under subclause (II), except in cases of 
     fraud, or in cases of criminal or intentional harm;
       ``(IV) outline a procedure for informing patients about the 
     modified liability system described in this paragraph and, in 
     systems where participation by the health care provider, 
     health care organization, or patient is voluntary, allow for 
     the decision by the provider, organization, or patient of 
     whether to participate to be made prior to the provision of, 
     use of, or payment for the health care service;
       ``(V) provide for an appeals process to allow for a review 
     of decisions; and
       ``(VI) establish procedures to coordinate settlement 
     payments with other sources of payment;

       ``(ii) the Board shall--

       ``(I) resolve health care liability claims for certain 
     classes of avoidable injuries as determined by the State and 
     determine compensation for such claims; and
       ``(II) develop a schedule of compensation to be used in 
     making such determinations that includes--

       ``(aa) payment for the net economic loss of the patient, on 
     a periodic basis, reduced by any payments received by the 
     patient under any health or accident insurance, any wage or 
     salary continuation plan, or any disability income insurance;
       ``(bb) payment for the patient's pain and suffering, if 
     appropriate for the injury, based on a capped payment 
     schedule developed by the State in consultation with relevant 
     experts; and
       ``(cc) reasonable attorney's fees; and
       ``(iii) the Board may--

       ``(I) develop guidelines relating to--

       ``(aa) the standard of care; and
       ``(bb) the credentialing and disciplining of doctors; and

       ``(II) develop a plan for updating the schedule under 
     clause (ii)(II) on a regular basis.

       ``(B) Appeals.--The State, in establishing the appeals 
     process described in subparagraph (A)(i)(V), may choose 
     whether to allow for de novo review, review with deference, 
     or some opportunity for parties to reject determinations by 
     the Board and elect to file a civil action after such 
     rejection. Any State desiring to adopt the model described in 
     this paragraph shall indicate how such review method meets 
     the criteria under subsection (c)(2).
       ``(C) Timeliness.--Any claim handled under the system 
     described in this paragraph shall provide for adjudication 
     that is more timely and expedited than adjudication in a 
     traditional tort system.
       ``(4) Special health care court model.--In the special 
     health care court model, the State shall--
       ``(A) establish a special court for adjudication of 
     disputes over injuries allegedly caused by health care 
     providers or health care organizations;
       ``(B) ensure that such court is presided over by judges 
     with expertise in and an understanding of health care;
       ``(C) provide authority to such judges to make binding 
     rulings on causation, compensation, standards of care, and 
     related issues;
       ``(D) provide for an appeals process to allow for a review 
     of decisions; and
       ``(E) at its option, establish an administrative entity 
     similar to the entity described in paragraph (3)(a)(i)(I) to 
     provide advice and guidance to the special court.
       ``(e) Application.--Each State desiring a grant under 
     subsection (a) shall submit to the Secretary an application, 
     at such time, in such manner, and containing such information 
     as the Secretary may require.
       ``(f) Report.--Each State receiving a grant under 
     subsection (a) shall submit to the Secretary a report 
     evaluating the effectiveness of activities funded with grants 
     awarded under such subsection at such time and in such manner 
     as the Secretary may require.
       ``(g) Technical Assistance.--The Secretary shall provide 
     technical assistance to the States awarded grants under 
     subsection (a). Such technical assistance shall include the 
     development, in consultation with States, of common 
     definitions, formats, and data collection infrastructure for 
     States receiving grants under this section to use in 
     reporting to facilitate aggregation and analysis of data both 
     within and between States. States not receiving grants under 
     this section may also use such common definitions, formats, 
     and data collection infrastructure.
       ``(h) Evaluation.--
       ``(1) In general.--The Secretary shall enter into a 
     contract with an appropriate research organization to conduct 
     an overall evaluation of the effectiveness of grants awarded 
     under subsection (a) and to annually prepare and submit a 
     report to the appropriate committees of Congress. Such an 
     evaluation shall begin not later than 18 months following the 
     date of implementation of the first program funded by a grant 
     under subsection (a).
       ``(2) Contents.--The evaluation under paragraph (1) shall 
     include--
       ``(A) an analysis of the effect of the grants awarded under 
     subsection (a) on the number, nature, and costs of health 
     care liability claims;
       ``(B) a comparison of the claim and cost information of 
     each State receiving a grant under subsection (a); and
       ``(C) a comparison between States receiving a grant under 
     this section and States that did not receive such a grant, 
     matched to ensure similar legal and health care environments, 
     and to determine the effects of the grants and subsequent 
     reforms on--
       ``(i) the liability environment;
       ``(ii) health care quality; and
       ``(iii) patient safety.
       ``(i) Option To Provide for Initial Planning Grants.--Of 
     the funds appropriated pursuant to subsection (k), the 
     Secretary may use a portion not to exceed $500,000 per State 
     to provide planning grants to such States for the development 
     of demonstration proposals meeting the criteria described in 
     subsection (c). In selecting States to receive such planning 
     grants, the Secretary shall give preference to those States 
     in which current law would not prohibit the adoption of an 
     alternative to current tort litigation.
       ``(j) Definitions.--In this section:
       ``(1) Health care services.--The term `health care 
     services' means any services provided by a health care 
     provider, or by any individual working under the supervision 
     of a health care provider, that relate to--
       ``(A) the diagnosis, prevention, or treatment of any human 
     disease or impairment; or
       ``(B) the assessment of the health of human beings.
       ``(2) Health care organization.--The term `health care 
     organization' means any individual or entity which is 
     obligated to provide, pay for, or administer health benefits 
     under any health plan.
       ``(3) Health care provider.--The term `health care 
     provider' means any individual or entity--
       ``(A) licensed, registered, or certified under Federal or 
     State laws or regulations to provide health care services; or
       ``(B) required to be so licensed, registered, or certified 
     but that is exempted by other statute or regulation.
       ``(4) Net economic loss.--The term `net economic loss' 
     means--
       ``(A) reasonable expenses incurred for products, services, 
     and accommodations needed for health care, training, and 
     other remedial treatment and care of an injured individual;
       ``(B) reasonable and appropriate expenses for 
     rehabilitation treatment and occupational training;
       ``(C) 100 percent of the loss of income from work that an 
     injured individual would have performed if not injured, 
     reduced by any income from substitute work actually 
     performed; and
       ``(D) reasonable expenses incurred in obtaining ordinary 
     and necessary services to replace services an injured 
     individual would have performed for the benefit of the 
     individual or the family of such individual if the individual 
     had not been injured.
       ``(k) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as may be necessary. Amounts appropriated pursuant to 
     this subsection shall remain available until expended.''.
                                 ______
                                 
      By Mr. BINGAMAN (for himself, Ms. Landrieu, Mrs. Lincoln, Mr. 
        Kerry, Mrs. Clinton, Mrs. Murray, Mr. Lautenberg, and Ms. 
        Mikulski):
  S. 1519. A bill to amend title XIX of the Social Security Act to 
extend medicare cost-sharing for qualifying individuals through 2004; 
to the Committee on Finance.
  Mr. BINGAMAN. Mr. President, I am introducing today emergency 
legislation with Senators Landrieu, Lincoln, Kerry, Clinton, Murray, 
Lautenberg, and Mikulski that would extend a critical Federal-State 
program that assists low-income Medicare beneficiaries in paying their 
health premiums costs through the Medicaid program. This specific 
program, for low-income senior and disabled citizens, was enacted as 
part of the Balanced Budget Act of 1997 and is slated for expiration at 
the end of fiscal year 2003. The program was extended and is slated for 
expiration at the end of fiscal year 2003. The program was extended by 
the two continuing resolutions and the final appropriations bill 
through September 30, 2003. This legislation would simply further 
extend it for another year--through the end of 2004.

[[Page 20577]]

  This program, known as the Qualifying Individual Program, or QI-1, 
within Medicaid is a block grant payment to states to pay the Medicare 
Part B premium of $58.70 per month in 2003 for individuals with monthly 
incomes between $887 and $997 for individuals and between $1,194 and 
$1,344 for couples. This covers Medicare beneficiaries with income 
between 120 and 135 percent of the Federal Poverty Level.
  This amounts to a benefit of over $700 annually that many older and 
disabled Americans depend upon to pay for a portion of their health 
care costs, such as prescription drugs and supplemental coverage. Well 
over 120,000 people nationwide currently rely on the QI-1 and will be 
hard pressed to afford Medicare coverage without this assistance. In 
short, to prevent the erosion of existing low-income protections, 
Congress must extend the QI-1 program this year.
  This is a bipartisan issue as well. President Bush had included QI-1 
reauthorization in his fiscal year 2003 budget. Moreover, an extension 
has been included in S. 1, the ``Prescription Drug and Medicare 
Improvement Act of 2003,'' but the conference is certainly not going to 
be completed, passed by both the House and Senate, and signed into law 
by the President in time before the need for States to send out notices 
to beneficiaries alerting them to their forthcoming loss of cost 
sharing protections at the end of September.
  As Ron Pollack, Executive Director at Families, USA notes in his 
letter of support for this legislation, ``Without an extension, over 
120,000 low-income Medicare beneficiaries will have to be sent notices 
that the program is expiring. The result will be confusion, fear, and 
uncertainty among this population. This disruption can all be avoided 
by the quick and early passage of your extension bill.''
  At the Federal level, the Congress and Administration are often 
criticized for failure to understand what are or are not the 
implications to real people. One hundred and twenty thousand low-income 
beneficiaries face the prospect of their cost sharing increasing by 
over $700 per year at the end of September. They cannot be assured that 
an extension will be passed or done so in a timely fashion. How are 
they supposed to plan and budget?
  When we return in September, we will have just a few legislative days 
to pass an extension in the Senate, the House, and be signed by the 
President to stop the process of States having to send out 
disenrollment letters. We all know this can be very difficult to get 
through the Congress, as it requires unanimous consent, and may not 
occur in a timely fashion. If not, States will be forced to send out 
disenrollment letters to the 120,000 low-income seniors and the 
disabled that rely on the cost-sharing protections provided by the QI-1 
program and begin to shut down their programs.
  Again, this is emergency legislation that simply provisions a one-
year extension of QI-1 program to prevent the cut-off of cost-sharing 
protections for 120,000 low-income Medicare beneficiaries. We should be 
engaging in improving health coverage for low-income elderly and 
disabled citizens rather than leaving these vulnerable Americans facing 
fear, uncertainty, disruption, and increasing costs.
  I urge immediate passage of this legislation and ask unanimous 
consent that the text of the bill to be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1519

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

     SECTION 1. EXTENSION OF MEDICARE COST-SHARING FOR QUALIFYING 
                   INDIVIDUALS THROUGH FISCAL YEAR 2004.

       (a) In General.--Section 1902(a)(10)(E)(iv) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended to 
     read as follows:
       ``(iv) subject to sections 1933 and 1905(p)(4), for making 
     medical assistance available (but only for premiums payable 
     with respect to months during the period beginning with 
     January 1998, and ending with December 2004) for medicare 
     cost-sharing described in section 1905(p)(3)(A)(ii) for 
     individuals who would be qualified medicare beneficiaries 
     described in section 1905(p)(1) but for the fact that their 
     income exceeds the income level established by the State 
     under section 1905(p)(2) and is at least 120 percent, but 
     less than 135 percent, of the official poverty line (referred 
     to in such section) for a family of the size involved and who 
     are not otherwise eligible for medical assistance under the 
     State plan;''.
       (b) State Allocations.--Section 1933(c) of the Social 
     Security Act (42 U.S.C. 1396u-3(c)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (D), by striking ``and'' at the end;
       (B) in subparagraph (E)--
       (i) by striking ``fiscal year 2002'' and inserting ``each 
     of fiscal years 2002 through 2004''; and
       (ii) by striking the period and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(F) the first quarter of fiscal year 2005 is 
     $100,000,000.''; and
       (2) in paragraph (2)(A), by striking ``the sum of'' and all 
     that follows through ``1902(a)(10)(E)(iv)(II) in the State; 
     to'' and inserting ``twice the total number of individuals 
     described in section 1902(a)(10)(E)(iv) in the State; to''.
                                 ______
                                 
      By Mr. GRAHAM of Florida (for himself, Mrs. Feinstein, and Mr. 
        Rockefeller):
  S. 1520. A bill to amend the National Security Act of 1947 to 
reorganize and improve the leadership of the intelligence community of 
the United States, to provide for the enhancement of the 
counterterrorism activities of the United States Government, and for 
other purposes; to the Select Committee on Intelligence.
  Mr. ROCKEFELLER. Mr. President, I am pleased to be an original 
cosponsor of the ``9-11 Memorial Intelligence Reform Act'' which 
Senator Bob Graham is introducing today to implement the 
recommendations of the Joint September 11 Inquiry of the Senate and 
House Intelligence Committees.
  I expect that this important legislation will be referred to the 
Select Committee on Intelligence, on which I serve as vice chairman. I 
am committed to working with the Chairman and our colleagues to ensure 
that the matters addressed in the bill receive the full consideration 
and action that our national security requires. I expect that other 
committees, such as the Committee on the Judiciary, will have an 
interest in some matters covered by the bill, and I look forward to 
working with them.
  The 9-11 Memorial Intelligence Reform Act covers matters ranging from 
the basic structure of the U.S. intelligence community to improvements 
in the sharing and analysis of intelligence information, reforms in 
domestic counterterrorism, and other issues identified in the course of 
the Joint Inquiry. For some matters, notably on reforming the 
leadership structure of the intelligence community, the bill proposes 
specific reforms. For various other matters, the bill calls for 
executive branch reports that can be the basis for subsequent 
congressional action.
  There are two principal aspects of our work ahead.
  The first is to systematically and thoroughly examine the steps that 
the President, the intelligence community, and other departments and 
agencies have taken to correct deficiencies in U.S. intelligence and 
counterterrorism. The Joint Inquiry's recommendations were first 
announced last December. In the months ahead, we should call on the 
agencies of the intelligence community, and other components of the 
executive branch, to report on their concrete measures, both since 
September 11 and since our recommendations were made public, to correct 
deficiencies. We should then assess those reports and Administration 
testimony in committee hearings.
  Our second task is to consider reform proposals, including those in 
Senator Graham's bill. In that regard, I should make clear that the 
answers proposed in the bill are not the last word on any of those 
subjects. They are, instead, a beginning point for the Senate's 
consideration of measures to correct the problems identified by the 
Joint 9-11 Inquiry.
  As we address these important tasks, it will be essential that the 
Congress and the American public have the benefit of the best ideas 
available. We will

[[Page 20578]]

welcome proposals by the administration, by other Members of Congress, 
from the National Commission on Terrorist Attacks Upon the United 
States, and concerned citizens.
  Important ideas should not be bottled up anywhere. They should be put 
on the public table.
  In that regard, I urge the President to release the intelligence 
reform recommendations that former National Security Adviser Brent 
Scowcroft has made to the administration. In public testimony before 
our Joint Inquiry in September 2002, General Scowcroft testified, in 
response to a question that I asked him, that in May 2001--before 
September 11, the President had established a process to review the 
intelligence community. General Scowcroft testified that he chaired the 
external panel of that review, but that he could not get into much 
detail because his report was still classified. It is time, I believe, 
finally to declassify that report to the extent possible. The Congress 
and the American public should have the benefit of that distinguished 
public servant's insights about intelligence community reform.
                                 ______
                                 
      By Mr. REID (for himself and Mr. Ensign):
  S. 1521. A bill to direct the Secretary of the Interior to convey 
certain land to the Edward H. McDaniel American Legion Post No. 22 in 
Pahrump, Nevada, for the construction of a post building and memorial 
park for use by the American Legion, other veterans' groups, and the 
local community; to the Committee on Energy and Natural Resources.
  Mr. REID. Mr. President, I rise today for myself and Senator Ensign 
to introduce the Pahrump American Legion Post Land Conveyance Act. This 
Act will transfer approximately five acres of BLM land in Pahrump, NV, 
to the American Legion for the purpose of constructing a post home and 
other facilities that will benefit veterans' groups and the local 
community.
  The American Legion and other non-profit organizations that represent 
our Nation's veterans in the vicinity of Pahrump, NV, have tripled in 
size over the last 10 years. The local memberships of the American 
Legion, the Veterans of Foreign Wars, and the Disabled American 
Veterans will soon exceed 1000 members, and will continue to expand 
with the rest of the fast-growing local community.
  The existing facility used by the veterans in Pahrump was built by 
the Veterans of Foreign Wars in the 1960s. It is much too small and not 
at all adequate for the veterans' current needs. The nearest facility 
that can accommodate them is located in Las Vegas, more than 60 miles 
away.
  The Pahrump American Legion would like to build a post building, 
veterans' garden, and memorial park. These new facilities would benefit 
not only the local veterans, but would be made available--at no cost--
for community activities. The American Legion has tried for over six 
years to acquire a suitable tract of land to provide a home for a new 
veterans center. The Legion started a pledge campaign and raised over 
$16,000 for the building fund before the parcel of land they sought to 
acquire was removed from consideration by the BLM. Unfortunately, other 
tracts of land that might represent alternative sites in Pahrump are 
not suitable.
  Mr. President, this situation is intolerable. Without a home, the 
Pahrump American Legion Post can't offer the kind of services and 
programs that the veterans in the area deserve. Our veterans aren't the 
only ones who are suffering, either. All across the United States, the 
American Legion is deservedly famous for supporting community 
activities like the Boy Scouts and Girl Scouts, as well as the National 
Oratorical Contest, American Legion Baseball, Girls and Boys State, and 
other activities for young people. All of these worthy groups and 
projects would benefit from the construction of a new post home.
  Our bill simply directs the Secretary of the Interior to convey this 
property from the Bureau of Land Management to American Legion ``Edward 
H McDaniel'' Post No. 22 in Pahrump. Because of the great public 
benefit such a facility will provide, we ask that the land be conveyed 
for free, but that the American Legion cover the costs of the 
transaction.

  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. 1521

       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 ``Edward H. McDaniel American 
     Legion Post No. 22 Land Conveyance Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the membership of the American Legion and other 
     nonprofit organizations that represent the veterans' 
     community in Pahrump, Nevada, has grown immensely in the last 
     10 years;
       (2) the existing facility used by the veterans community in 
     Pahrump, which was constructed in the 1960's, is too small 
     and is inappropriate for the needs of the veterans community;
       (3) the nearest veterans facility that can accommodate the 
     veterans community in Pahrump is located more than 60 miles 
     away in the city of Las Vegas;
       (4) the tracts of land that are available for consideration 
     as potential sites for the location of a new veterans 
     facility are not suitable for the facility;
       (5) conveyance of a suitable parcel of land for the 
     facility, which consists of an odd, triangular tract of land 
     bounded on 2 sides by private land and cut off from other 
     public land by a major highway, conforms with the objective 
     of the Bureau of Land Management, Las Vegas District 1998 
     Resource Management Plan by simplifying the land management 
     responsibilities of the Bureau of Land Management; and
       (6) because the intent of the American Legion is to make 
     the facility available to other veterans organizations and 
     the public for community activities and events at no cost, it 
     would be in the best interests of the United States to convey 
     the land to the Edward H. McDaniel American Legion Post No. 
     22.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Post no. 22.--The term ``Post No. 22'' means the Edward 
     H. McDaniel American Legion Post No. 22 in Pahrump, Nevada.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior, acting through the Director of the Bureau of 
     Land Management.

     SEC. 4. CONVEYANCE OF LAND TO EDWARD H. MCDANIEL AMERICAN 
                   LEGION POST NO. 22.

       (a) Conveyance on Condition Subsequent.--Not later than 120 
     days after the date of enactment of this Act, subject to 
     valid existing rights and the condition stated in subsection 
     (c) and in accordance with the Act of June 14, 1926 (commonly 
     known as the ``Recreation and Public Purposes Act'') (43 
     U.S.C. 869 et seq.), the Secretary shall convey to Post No. 
     22, for no consideration, all right, title, and interest of 
     the United States in and to the parcel of land described in 
     subsection (b).
       (b) Description of Land.--The parcel of land referred to in 
     subsection (b) is the parcel of Bureau of Land Management 
     land that--
       (1) is bounded by Route 160, Bride Street, and Dandelion 
     Road in Nye County, Nevada;
       (2) consists of approximately 4.5 acres of land; and
       (3) is more particularly described as a portion of the S 
     \1/4\ of section 29, T. 20 S., R. 54 E., Mount Diablo and 
     Base Meridian.
       (c) Condition on Use of Land.--
       (1) In general.--Post No. 22 and any successors of Post No. 
     22 shall use the parcel of land described in section (b) for 
     the construction and operation of a post building and 
     memorial park for use by Post No. 22, other veterans groups, 
     and the local community for events and activities.
       (2) Reversion.--Except as provided in paragraph (3), if the 
     Secretary, after notice to Post No. 22 and an opportunity for 
     a hearing, makes a finding that Post No. 22 has used or 
     permitted the use of the parcel for any purpose other than 
     the purpose specified in paragraph (1) and Post No. 22 fails 
     to discontinue that use, title to the parcel shall revert to 
     the United States, to be administered by the Secretary.
       (3) Waiver.--The Secretary may waive the requirements of 
     paragraph (2) if the Secretary determines that a waiver would 
     be in the best interests of the United States.
                                 ______
                                 
      By Mr. SMITH (for himself, Mr. Jeffords, and Mr. Conrad):
  S. 1523. A bill to amend part A of title IV of the Social Security 
Act to allow a State to treat an individual with a disability, 
including a substance abuse problem, who is participating in 
rehabilitation services and who is increasing participation in core 
work activities as being engaged in work for

[[Page 20579]]

purposes of the temporary assistance for needy families program, and to 
allow a State to court as a work activity under that program care 
provided to a child with a physical or mental impairment or an adult 
dependent for care with a physical or mental impairment; to the 
Committee on Finance.

  Mr. SMITH. Mr. President, I rise today to introduce the Pathways to 
Independence Act of 2003, along with Senators Conrad and Jeffords. This 
bill includes two important provisions that we will work to include in 
the TANF reauthorization. These provisions will help both TANF 
recipients with disabilities, and the States as they work with people 
with disabilities in their respective programs.
  In July 2002, the General Accounting Office reported that as many as 
44 percent of TANF families have a parent or a child with a physical or 
mental impairment. This is almost three times as high as among the non-
TANF population in the United States. In eight percent of TANF 
families, there is both a parent and a child with a disability; among 
non-TANF families, this figure is one percent. The GAO's work confirmed 
the findings of earlier studies, including work by the Urban Institute 
and the HHS Inspector General.
  These figures mean that we need to make sure that TANF 
reauthorization legislation give States the ability and incentives to 
help families meet their current needs, while also helping them to move 
from welfare to work. This is the lesson that Oregon and many other 
States have already learned as they developed and refined their TANF 
programs.
  The first provision of my bill provides a pragmatic approach to 
helping parents with disabilities and substance abuse problems receive 
the treatment and other rehabilitative services they will need to 
succeed in a work setting. It is designed so that, over time, States 
can gradually increase the work activity requirements, while continuing 
to provide them with rehabilitative services. Under this proposal, much 
like in other proposals under consideration, a person participating in 
rehabilitation can be counted as engaged in work activity for three 
months. After the first three months, if a person continues to need 
rehabilitative services, the State can continue to count participation 
in those activities for another three months, so long as that person is 
engaged in some number of work hours, to be determined by the State.
  The next step of my proposal builds on the concept of partial credit 
that is being considered in the Senate Finance Committee. If, after six 
months, a State determines that a person has a continuing need for 
rehabilitative services, the State may create a package that combines 
work activity with these services. The State will receive credit for 
the individual's efforts so long as at least one-half of the hours in 
which the individual participates are in core work activities. For 
example, if a State receives full credit for a person who works 30 
hours per week, and the State has determined that an individual needs 
rehabilitative services beyond six months, that individual would need 
to be engaged in core work activities for at least 15 hours per week to 
get full credit, with the remaining 15 hours spent in rehabilitative 
services. Similarly, if partial credit is available for a person who 
works 24 hours per week, then a State could receive that same partial 
credit if the person was engaged in core work activities for at least 
12 hours per week, with the remaining 12 hours spent in rehabilitative 
services.
  This approach is appealing for many reasons. First, it allows States 
to design a system in which a person can move progressively over time 
from rehabilitation toward work. Second, it gives States credit for the 
time and effort they will need to invest to help people move 
successfully from welfare to work by allowing States to use a range of 
strategies to help these families. Third, it creates a more realistic 
structure for individuals with disabilities and addictions who may 
otherwise fall out of the system either through sanction or 
discouragement, despite their need for financial support. Finally, this 
approach is appealing because it is designed to work within the 
structure of the final TANF reauthorization bill.
  The second provision in the bill would allow States the option of 
counting as work activity the time that an adult in a TANF family 
spends caring for a child with a disability or an adult relative who is 
in need of care. The studies reflect that these people often cannot 
find care for their relative so they can work. They are often forced 
into the impossible choice of caring for their child with a disability, 
or leaving that child to go to work in order to continue receiving 
their TANF grant. This is not a choice a parent should ever have to 
make.
  In order to be able to count the care provided by the TANF recipient 
as work activity, the State would first be required to determine that 
the child or adult with a disability is, in fact, truly disabled, and 
that the person needs substantial ongoing care. Then, the State must 
decide that the TANF recipient is the most appropriate means for 
providing the needed care. The State would also have to conduct regular 
periodic evaluations to determine that the child or adult with a 
disability continues to need the care provided by the TANF recipient. 
Nothing in the provision prevents a State from determining that the 
TANF recipient can work outside the home or engage in other work-
related training or other activities that will help the person 
eventually move to work on a full- or part-time basis.
  I would like to submit for the record a letter from close to forty 
national organizations that are members of the Consortium for Citizens 
with Disabilities supporting this legislation, as well as a letter of 
support from my home State of Oregon. I look forward to working with my 
co-sponsors, Senators Conrad and Jeffords, and with the Chairman of the 
Finance Committee on these important provisions in the upcoming months, 
and I urge my colleagues to join us in support of this legislation.
  I ask unanimous consent that the text of the bill and letters of 
support be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows.

                                S. 1523

       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 ``Pathways to Independence Act 
     of 2003''.

     SEC. 2. STATE OPTION TO COUNT REHABILITATION SERVICES FOR 
                   CERTAIN INDIVIDUALS AS WORK FOR PURPOSES OF THE 
                   TEMPORARY ASSISTANCE FOR NEEDY FAMILIES 
                   PROGRAM.

       (a) In General.--Section 407(c)(2) of the Social Security 
     Act (42 U.S.C. 607(c)(2)) is amended by adding at the end the 
     following:
       ``(E) State option to treat an individual with a 
     disability, including a substance abuse problem, who is 
     participating in rehabilitation services as being engaged in 
     work.--
       ``(i) Initial 3-month period.--Subject to clauses (ii) and 
     (iii), for purposes of determining monthly participation 
     rates under paragraphs (1)(B)(i) and (2)(B) of subsection 
     (b), a State may deem an individual described in clause (iv) 
     as being engaged in work for not more than 3 months in any 
     24-month period.
       ``(ii) Additional 3-month period.--A State may extend the 
     3-month period under clause (i) for an additional 3 months 
     only if, during such additional 3-month period, the 
     individual engages in a work activity described in subsection 
     (d) for such number of hours per month as the State 
     determines appropriate.
       ``(iii) Succeeding months.--

       ``(I) Credit for individuals participating in work 
     activities and rehabilitation services.--If a State has 
     deemed an individual described in clause (iv) as being 
     engaged in work for 6 months in accordance with clauses (i) 
     and (ii), and the State determines that the individual is 
     unable to satisfy the work requirement under the State 
     program funded under this part that applies to the individual 
     without regard to this subparagraph because of the 
     individual's disability, including a substance abuse problem, 
     the State shall receive the credit determined under subclause 
     (II) toward the monthly participation rate for the State.
       ``(II) Determination of credit.--For purposes of subclause 
     (I), the credit the State shall receive under that subclause 
     is, with respect to a month, the lesser of--

       ``(aa) the sum of the number of hours the individual 
     participates in an activity described in paragraph (1), (2), 
     (3), (4), (5), (6), (7), (8), or (12) of subsection (d) for 
     the month and the number of hours that the individual

[[Page 20580]]

     participates in rehabilitation services under this 
     subparagraph for the month; or
       ``(bb) twice the number of hours the individual 
     participates in an activity described in paragraph (1), (2), 
     (3), (4), (5), (6), (7), (8), or (12) of subsection (d) for 
     the month.
       ``(iv) Individual described.--For purposes of this 
     subparagraph, an individual described in this clause is an 
     individual who the State has determined has a disability, 
     including a substance abuse problem, and would benefit from 
     participating in rehabilitative services.
       ``(v) Definition of disability.--In this subparagraph, the 
     term `disability' means--

       ``(I) a physical or mental impairment that constitutes or 
     results in a substantial impediment to employment; or
       ``(II) a physical or mental impairment that substantially 
     limits 1 or more major life activities.''.

       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2003.

     SEC. 3. STATE OPTION TO COUNT CARING FOR A CHILD OR ADULT 
                   DEPENDENT FOR CARE WITH A PHYSICAL OR MENTAL 
                   IMPAIRMENT AS MEETING ALL OR PART OF THE WORK 
                   REQUIREMENT.

       (a) In General.--Section 407(c)(2) of the Social Security 
     Act (42 U.S.C. 607(c)(2)), as amended by section 2, is 
     amended by adding at the end the following:
       ``(F) Recipient caring for a child or adult dependent for 
     care with a physical or mental impairment deemed to be 
     meeting all or part of a family's work participation 
     requirements for a month.--
       ``(i) In general.--Subject to clause (ii), for purposes of 
     determining monthly participation rates under paragraphs 
     (1)(B)(i) and (2)(B) of subsection (b), a State may count the 
     number of hours per week that a recipient engages in 
     providing substantial ongoing care for a child or adult 
     dependent for care with a physical or mental impairment if 
     the State determines that--

       ``(I) the child or adult dependent for care has been 
     verified through a medically acceptable clinical or 
     laboratory diagnostic technique as having a significant 
     physical or mental impairment or combination of impairments 
     and as a result of that impairment, it is necessary that the 
     child or adult dependent for care have substantial ongoing 
     care;
       ``(II) the recipient providing such care is the most 
     appropriate means, as determined by the State, by which the 
     care can be provided to the child or adult dependent for 
     care;
       ``(III) for each month in which this subparagraph applies 
     to the recipient, the recipient is in compliance with the 
     requirements of the recipient's self-sufficiency plan; and
       ``(IV) the recipient is unable to participate fully in work 
     activities, after consideration of whether there are supports 
     accessible and available to the family for the care of the 
     child or adult dependent for care.

       ``(ii) Total number of hours limited to being counted as 1 
     family.--In no event may a family that includes a recipient 
     to which clause (i) applies be counted as more than 1 family 
     for purposes of determining monthly participation rates under 
     paragraphs (1)(B)(i) and (2)(B) of subsection (b).
       ``(iii) State requirements.--In the case of a recipient to 
     which clause (i) applies, the State shall--

       ``(I) conduct regular, periodic evaluations of the 
     recipient's family; and
       ``(II) include as part of the recipient's self-sufficiency 
     plan, regular updates on what special needs of the child or 
     the adult dependent for care, including substantial ongoing 
     care, could be accommodated either by individuals other than 
     the recipient or outside of the home.

       ``(iv) 2-parent families.--

       ``(I) In general.--If a parent in a 2-parent family is 
     caring for a child or adult dependent for care with a 
     physical or mental impairment--

       ``(aa) the State may treat the family as a 1-parent family 
     for purposes of determining monthly participation rates under 
     paragraphs (1)(B)(i) and (2)(B) of subsection (b); and
       ``(bb) the State may not count any hours of care for the 
     child or adult dependent for care for purposes of determining 
     such rates.

       ``(II) Special rule.--If the adult dependent for care in a 
     2-parent family is 1 of the parents and the State has 
     complied with the requirements of clause (iii), the State may 
     count the number of hours per week that a recipient engages 
     in providing substantial ongoing care for that adult 
     dependent for care.

       ``(v) Rule of construction.--Nothing in this subparagraph 
     shall be construed as prohibiting a State from including in a 
     recipient's self-sufficiency plan a requirement to engage in 
     work activities described in subsection (d).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2003.

                                           Consortium for Citizens


                                            With Disabilities,

                                                    July 31, 2003.
     Hon. Gordon Smith,
     U.S. Senate,
     Washington, DC.
     Hon. James M. Jeffords,
     U.S. Senate,
     Washington, DC.
     Hon. Kent Conrad,
     U.S. Senate,
     Washington, DC.
       Dear Senators Smith, Conrad and Jeffords: We are writing to 
     thank you for introducing legislation that addresses two key 
     problems facing TANF families with a parent or child with a 
     disability. We believe that these provisions, if included in 
     a larger TANF reauthorization bill, will significantly 
     improve the ability of states to help families successfully 
     move from welfare toward work while also ensuring that the 
     needs of family members with disabilities are met. We 
     enthusiastically support this legislation.
       The Consortium for Citizens with Disabilities (CCD) is a 
     coalition of national consumer, advocacy, provider and 
     professional organizations headquartered in Washington, DC. 
     We work together to advocate for national public policy that 
     ensures the self determination, independence, empowerment, 
     integration and inclusion of children and adults with 
     disabilities in all aspects of society. The CCD TANF Task 
     Force seeks to ensure that families that include persons with 
     disabilities are afforded equal opportunities and appropriate 
     accommodations under the Temporary Assistance for Needy 
     Families (TANF) block grant.
       The research is clear that many TANF families include a 
     parent or a child with a disability, and in some families, 
     there is both a child and a parent with a disability. The 
     numbers are high--GAO has found that as many as 44 percent of 
     TANF families have a child or a parent with a disability--and 
     need to be addressed in the policy choices that Congress 
     makes in TANF reauthorization. We believe that, by designing 
     policies that take into account the needs of families with a 
     member with a disability, Congress can help the states move 
     greater numbers of these families off of welfare and toward 
     greater independence. Without reasonable supports, however, 
     and through no fault of their own, these families sometimes 
     fail at work activity and are often subject to inappropriate 
     sanctioning and the crises that flow from abrupt--and often 
     prolonged--loss of income.
       Your bill could provide low-income families with members 
     with disabilities real opportunities to achieve self-
     sufficiency in two significant ways, if included in larger 
     TANF reauthorization legislation:
       Allow states to count individuals participating in 
     rehabilitative services beyond three months, while the 
     individual progressively engages in work activity.
       Under current law, states have the flexibility--either 
     through a waiver such as Oregon has or as a result of the 
     caseload reduction credit--to ensure that a parent with a 
     disability, including a substance abuse problem, receives the 
     rehabilitative services she needs in order to move towards 
     work. In recent years, increasing numbers of states have used 
     this flexibility as they realized that some parents would 
     need more specialized help if they were going to successfully 
     leave TANF. Some of the current reauthorization proposals, 
     however,--including the House-passed bill, H.R. 4--limit 
     states to counting three months of rehabilitative services as 
     work activity. An arbitrary limit of three months of 
     rehabilitation services would be inadequate to help many 
     families with members with disabilities find and sustain 
     employment, and, in light of proposed increases in state 
     participation rates, would discourage states from designing 
     programs and requirements that work for people with the most 
     severe barriers.
       Your bill will allow states to count rehabilitative 
     services as work activity beyond three months as long as the 
     rehabilitative services are mixed with work activity. We 
     believe this mix of activities and supports will help an 
     individual with severe barriers move toward greater 
     independence. First, the provision would extend the period of 
     time during which rehabilitative services, including 
     substance abuse treatment, can count toward the work 
     participation requirements from three months to six months. 
     However, during the second three months, the state would 
     require a small amount of work activity in addition to 
     rehabilitative services. Further, the provision would allow 
     states to count individuals participating in rehabilitative 
     services after this six month period as long as at least one-
     half of the hours in which the individual participates are in 
     core work activities. This will allow states to create a 
     progression of work activity hours combined with 
     rehabilitative services over time that will assist in moving 
     the family from welfare to work at a pace that is designed to 
     lead to success for that family.
       CCD is not asking Congress to exempt individuals, or family 
     members, with disabilities from participation in the TANF 
     program. On the contrary, we are looking for the essential 
     assistance and supports that will help families move off of 
     welfare toward greater independence. Your bill does not 
     create any exemptions from participation requirements, and in 
     fact, provides the necessary assistance and supports that can 
     come with participation in the TANF program. Under the bill, 
     states would have to engage the same number of recipients in 
     welfare-to-work activities as under the standard set in a new 
     reauthorization law. The provision simply

[[Page 20581]]

     allows states to utilize a broader range of activities to 
     help recipients with barriers move to work. In short, this is 
     a way to make the TANF program work for parents with 
     disabilities and substance abuse problems. The provision 
     would give states credit when recipients with barriers are 
     engaged in activities and, thus, will encourage states to 
     assist families with barriers to progress toward work in a 
     manner and at a pace that is more tailored to their needs and 
     disabilities.
       Allow states to count as work activity the time that the 
     adult in the TANF family spends caring for a child with a 
     disability or an adult relative with a disability.
       It is very difficult to find safe, accessible, and 
     appropriate child care for a child with a disability. This is 
     often the case regardless of the family's income. In 
     addition, the nature of some children's disabilities and 
     health conditions means that parents are called from work 
     regularly to assist a school with the child or to take the 
     child to medical appointments. At the same time, many parents 
     would like to work as much as possible or receive the 
     training they will need to secure a good job when they are no 
     longer needed in the home to care for their children with 
     disabilities.
       Your bill will allow states to receive work credit for the 
     time that a parent spends caring for a child with a 
     disability, if the state has determined that this is the best 
     way to secure the child's care. The provision also would 
     apply to providing care for an adult relative with a 
     disability. This would help to address the bind that some 
     TANF recipients face when they are told they must work away 
     from home, but leave an elderly parent or other relative with 
     a disability without the care they need to continue to live 
     in the community. Nothing in the provision would prevent a 
     state from designing a plan with the parent that combines 
     some amount of in-home care as work activity with other 
     activities that will help the parent prepare to enter the 
     workforce at a time that is appropriate in meeting the needs 
     of the child or adult relative with a disability.
       Thank you again for introducing this legislation and your 
     leadership on these very important issues. We look forward to 
     working with you and your staffs to ensure that these 
     provisions become law.
           Sincerely,
       American Association of People with Disabilities, American 
     Association on Mental Retardation, American Congress of 
     Community Supports and Employment Services, American 
     Counseling Association, American Music Therapy Association, 
     American Network of Community Options And Resources, 
     Association of Maternal and Child Health Programs, 
     Association of University Centers on Disability, Bazelon 
     Center for Mental Health Law, Community Legal Services, 
     Council for Exceptional Children, Council for Learning 
     Disabilities, Council of State Administrators of Vocational 
     Rehabilitation, Disability Service Providers of America, 
     Division for Early Childhood of the Council for Exceptional 
     Children, Easter Seals, Epilepsy Foundation, Goodwill 
     Industries International,
       Helen Keller National Center, Learning Disabilities 
     Association, National Alliance to End Homelessness, National 
     Association of County Behavioral Health Directors, National 
     Association of Protection and Advocacy Systems, National 
     Association of Social Workers, National Association of State 
     Directors of Special Education, National Association of State 
     Mental Health Program Directors, National Coalition of Parent 
     Center, National Coalition on Deaf-Blindness, National 
     Council for Community Behavioral Healthcare, National Mental 
     Health Association, National Rehabilitation Association, 
     National Organization of Social Security Claimants' 
     Representatives, PACER Center, Spina Bifida Association of 
     America, TASH, The Arc of the United States, United Cerebral 
     Palsy.
                                  ____



                                            Oregon Law Center,

                                      Portland, OR, July 31, 2003.
     Hon. Gordon Smith,
     U.S. Senate, Washington, DC.
     Hon. James M. Jeffords,
     U.S. Senate, Washington, DC.
     Hon. Kent Conrad,
     U.S. Senate, Washington, DC.
       Dear Senators Smith, Conrad and Jeffords: I am writing on 
     behalf of the clients of the Oregon Law Center to express our 
     enthusiastic support for the Work and Treatment Act of 2003 
     which you are sponsoring. The Oregon Law Center is a 
     nonprofit law firm with offices throughout Oregon, that 
     advocates on behalf of low income families on a variety of 
     issues including the Temporary Assistance to Needy Families 
     program. The Work and Treatment Act addresses a critical 
     shortcoming in the current TANF law: that is, the failure to 
     address the needs of recipients with disabilities.
       Oregon's TANF waiver, which expired on July 1, 2003, 
     allowed the state to address the treatment needs of adults 
     and children with disabilities in the family's self-
     sufficiency plan. Oregon found, as has substantial national 
     research, that the TANF population contains a high percentage 
     of families who are unemployed or underemployed due to the 
     disability of the head of the household, or due to the need 
     to provide care to household dependents with disabilities. 
     This bill would allow Oregon to continue its work with these 
     families to help them achieve their highest levels of self-
     sufficiency.
       Thanks to all of you and particularly to Senator Smith who 
     has demonstrated great leadership in the TANF debates and 
     great understanding of the desperate needs of low income 
     families in Oregon.
           Respectfully submitted,
                                                 Lorey H. Freeman,
                                                  Attorney at Law.

  Mr. JEFFORDS. Mr. President, it is a pleasure for me to introduce 
today, along with my colleagues Senator Smith of Oregon and Senator 
Conrad of North Dakota, the Pathways to Independence Act of 2003.
  Let me begin by describing why this legislation is necessary. 
Currently, States have to meet a certain level of work participation in 
order to avoid penalties against their welfare funding. This level of 
work participation can be lowered through the ``caseload reduction 
credit.'' This means that States receive credit for moving people off 
of their welfare caseload. The caseload reduction credit has proven to 
be very successful since welfare reform was enacted in 1996. In fact, 
most States have received so much credit for moving people off of their 
caseloads, that their effective work participation rate is 0 percent.
  While this approach has been widely regarded as very successful, it 
has one major flaw. States are rewarded only for removing people from 
welfare, there is no consideration given to where those people end up. 
States get the same credit for training someone to be a nurse, 
electrician, or carpenter as they do for sending that person to live on 
the streets.
  This perverse incentive has been particularly difficult for the many 
welfare recipients who suffer from a disability or struggle with a 
substance abuse problem. In many States it is easier to write these 
people off than to give them the support necessary to become truly 
independent.
  In Vermont, approximately 15 percent of the welfare caseload is 
diagnosed with a disability and receives services through the 
Department of Vocational Rehabilitation. However, that treatment is not 
included in the ``core activities'' allowed under welfare reform. So 
the State receives no credit for moving these individuals to 
independence. This is wrong.
  If we truly want welfare to be an initiative that helps people to 
become independent and self-sufficient, then we must be willing to take 
the steps necessary to get them there. This legislation would give 
States the tools necessary to assist them in that effort.
  Here is how it would work. The bill will allow States to count people 
with disabilities or substance abuse problems as working, provided that 
they are meeting certain criteria. First, a State can count someone as 
working for three months if they are involved in a treatment program. 
At the end of this three month period, the State can re-evaluate the 
status of the individual and decide to continue treatment for another 3 
months. Now, the individual must be engaged in work or work-preparation 
activities in addition to their continuing treatment program. At the 
end of 6 months, the State can continue treatment with the individual 
as long as the individual is meeting half of the regular work 
requirement and following their treatment program for the remaining 
hours.
  This is a common sense proposal. It is consistent with what we know 
about providing effective support programs to people with disabilities 
and effective treatment programs for people struggling with substance 
abuse. Allowing States to count these people in the ``working'' 
category provides the States with the necessary incentives to engage 
their welfare recipients in meaningful interventions. It will allow the 
States to truly place people with disabilities and substance abuse 
problems on a pathway to independence.
  In addition, this bill includes a provision first put forward by 
Senator Conrad that will allow States to exempt people who need to care 
for a child or family member with a disability. This is a proposal that 
was part of last year's Senate Finance Committee Work, Opportunity and 
Responsibility for Kids (WORK) bill, and I

[[Page 20582]]

applaud Senator Conrad for his consistent support of that proposal.
  It is unclear when a full reauthorization of welfare will occur. It 
is clear however, that The Pathways to Independence Act of 2003 should 
be a part of any welfare reform package. I would like to thank the 
Consortium for Citizens with Disabilities for their help in developing 
this legislation and their strong letter in support. I especially want 
to thank my colleague from Oregon, Senator Smith, and my colleague from 
North Dakota, Senator Conrad and their staff for all of the hard work 
that has gone into producing this proposal.
                                 ______
                                 
      By Mr. SANTORUM (for himself, Mr. Allen, Mr. Bunning, Mrs. Dole, 
        and Mr. Kyl):
  S. 1524. A bill to amend the Internal Revenue Code of 1986 to allow a 
7-year applicable recovery period for depreciation of motorsports 
entertainment complexes; to the Committee on Finance.
  Mr. SANTORUM. Mr. President, today I am introducing the Motorsports 
Facilities Fairness Act. This bill would clarify the tax treatment of a 
large and growing industry that contributes to the economies of 
communities across the country.
  The Motorsports Facilities Fairness Act would provide certainty to 
track and speedway operators regarding the depreciation of their 
properties. The Internal Revenue Service has just recently raised 
questions regarding the depreciation treatment used by facility owners. 
For decades, motorsports facilities were classified as ``theme and 
amusement facilities'' for depreciation. This long-standing treatment 
was widely applied and accepted, until now. Over the years, relying on 
this understanding of the tax law, facility owners and operators 
invested hundreds of millions of dollars in building and upgrading 
these properties.
  Pennsylvania is home to many of these facilities, including Pocono 
Raceway, Nazareth Speedway, Lake Erie Speedway, Jennertown Speedway, 
Big Diamond Raceway and Motordrome Speedway. These tracks and others 
boost their local economies. Larger races can draw tens of thousands of 
fans, some from hundreds of miles away. These facilities are an 
important part of the fabric of our national economy. As motorsports 
continues to grow as a national pastime, we must ensure that Federal 
policy does not unnecessarily impede its contribution to the economy.
  To that end I have introduced the Motorsports Facilities Fairness 
Act. This legislation would simply codify the well-understood, long-
standing and widely-accepted treatment of motorsports facilities for 
depreciation purposes. While modest in scope, it will provide needed 
clarity to the hundreds of tracks throughout the United States.
  I urge my colleagues to join me in supporting the Motorsports 
Facilities Fairness Act.
                                 ______
                                 
      By Mr. CAMPBELL (for himself and Mr. Inouye):
  S. 1526. A bill to amend the Internal Revenue Code of 1986 to provide 
for the treatment of Indian tribal governments as State governments for 
purposes of issuing tax-exempt governmental bonds, and for other 
purposes; to the Committee on Finance.
  Mr. CAMPBELL. Mr. President, I am pleased to be join by Senator 
Inouye in introducing the Tribal Government Tax Exempt Bond Fairness 
Act of 2003.
  This bill will assist Indian tribes raise capital in the private 
markets for purposes of job creation and economic development. The bill 
complements the other economic development initiative I am introducing 
today to discipline Federal programs aimed to help tribes strengthen 
their economies.
  While making modest adjustments in current law, this bill will have 
far-reaching and positive effects for tribal governments and their 
members around the Nation.
  The fact is that like State governments, tribal governments are 
responsible for a host of services not only to their members but to 
non-members who live on or hear their lands. These services include 
fire, police and ambulance service, road and bridge maintenance, and a 
host of social services.
  Unlike State governments, however, tribal governments face severe 
restrictions in their ability to finance development through debt 
instruments.
  The law forbids tribes from issuing tax-exempt bonds for any project 
unless it can meet the so-called ``essential government function'' 
test.
  That is, in order for the holder of a tribal bond issue to receive 
income from that bond exempt from Federal tax, it must be issued for 
activities that are ``governmental'' in nature.
  Examples of the kinds of projects that have been ruled by the 
Internal Revenue Service as falling outside this test are tribal 
convention centers, hotels, and golf courses.
  State governments are not limited by the ``essential government 
function'' test when they issue tax-exempt debt. The bill I am 
introducing today will eliminate the disparate treatment tribes now 
receive.
  Armed with this bonding authority, tribal governments will strengthen 
their economies, provide for their members and others, and lessen their 
reliance on Federal programs and services.
  These are all worthy goals and I urge my colleagues to join me in 
supporting this bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1526

       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 ``Tribal Government Tax-
     Exempt Bond Fairness Act of 2003''.

     SEC. 2. DECLARATIONS AND AFFIRMATIONS.

        Congress declares and affirms that--
       (1) The United States Constitution, United States Federal 
     court decisions, and United States statutes recognize that 
     Indian tribes are governments, retaining sovereign authority 
     over their lands.
       (2) Through treaties, statutes, and Executive orders, the 
     United States set aside Indian reservations to be used as 
     ``permanent homelands'' for Indian tribes.
       (3) As governments, Indian tribes have the responsibility 
     and authority to provide governmental services, develop 
     tribal economies, and build community infrastructure to 
     ensure that Indian reservation lands serve as livable 
     ``permanent homelands''.
       (4) Congress is vested with the authority to regulate 
     commerce with Indian tribes, and hereby exercises that 
     authority and affirms the United States government-to-
     government relationship with Indian tribes.

     SEC. 3. MODIFICATIONS OF AUTHORITY OF INDIAN TRIBAL 
                   GOVERNMENTS TO ISSUE TAX-EXEMPT BONDS.

       (a) In General.--Subsection (c) of section 7871 of the 
     Internal Revenue Code of 1986 (relating to Indian tribal 
     governments treated as States for certain purposes) is 
     amended to read as follows:
       ``(c) Additional Requirements for Tax-Exempt Bonds.--
       ``(1) In general.--Subsection (a) of section 103 shall 
     apply to any obligation issued by an Indian tribal government 
     (or subdivision thereof) only if--
       ``(A) such obligation is part of an issue 95 percent or 
     more of the net proceeds of which are to be used to finance 
     any facility located on an Indian reservation, or
       ``(B) such obligation is part of an issue substantially all 
     of the proceeds of which are to be used in the exercise of 
     any essential governmental function.
       ``(2) Exclusion of gaming.--An obligation described in 
     subparagraph (A) or (B) of paragraph (1) may not be used to 
     finance any portion of a building in which class II or III 
     gaming (as defined in section 4 of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2702)) is conducted or housed.
       ``(3) Definitions.--For purposes of this subsection--
       ``(A) Indian tribe.--The term `Indian tribe' means any 
     Indian tribe, band, nation, pueblo, or other organized group 
     or community, including any Alaska Native village, or 
     regional or village corporation, as defined in or established 
     pursuant to the Alaska Native Claims Settlement Act (43 
     U.S.C. 1601 et seq.), which is recognized as eligible for the 
     special programs and services provided by the United States 
     to Indians because of their status as Indians.
       ``(B) Indian reservation.--The term `Indian reservation' 
     means--
       ``(i) a reservation, as defined in section 4(10) of the 
     Indian Child Welfare Act of 1978 (25 U.S.C. 1903(10)), and
       ``(ii) lands held under the provisions of the Alaska Native 
     Claims Settlement Act (43 U.S.C. 1601 et seq.) by a Native 
     corporation

[[Page 20583]]

     as defined in section 3(m) of such Act (43 U.S.C. 
     1602(m)).''.

     SEC. 4. EXEMPTION FROM REGISTRATION REQUIREMENTS.

       The first sentence of section 3(a)(2) of the Securities Act 
     of 1933 (15 U.S.C. 77c(a)(2)) is amended by inserting ``or by 
     any Indian tribal government or subdivision thereof (within 
     the meaning of section 7871 of the Internal Revenue Code of 
     1986),'' after ``or Territories,''.

     SEC. 5. EFFECTIVE DATE.

       The amendments made by this Act shall apply to obligations 
     issued after the date of the enactment of this Act.
                                 ______
                                 
      By Mr. SANTORUM (for himself, Mr. Dodd, Mr. Chafee, Ms. Collins, 
        Mr. Kerry, Mr. Schumer, Mr. Reed, and Mr. Lieberman):
  S. 1527. A bill to establish a Tick-Borne Disorders Advisory 
Committee, and for other purposes; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. SANTORUM. Mr. President, I am proud to join my colleague, Senator 
Chris Dodd of Connecticut, in reintroducing bipartisan legislation to 
address the ruinous effects of America's most common tick-borne 
illness, Lyme disease.
  I thank the senior Senator from Connecticut for his long involvement 
and leadership on this very important public health issue. With 
thousands of Americans contracting Lyme disease each year, it is 
essential that we work aggressively to wage a comprehensive fight 
against Lyme and other tick-borne disorders, which cost our country 
dearly in the way of medical expenditures and human suffering. The 
current lack of physician knowledge about Lyme and the inadequacies of 
existing detection methods stand out as deficiencies in our efforts to 
combat Lyme, and only serve to compound this growing public health 
hazard.
  We have it within our capacity to finally deliver on promises made to 
Lyme patients and their families to better focus the federal 
government's efforts to detect and research a cure for Lyme. Toward the 
end of the last session of Congress, the Senate passed this 
legislation, but unfortunately the House of Representatives did not 
have the opportunity to consider it.
  This legislation represents years of work with the Lyme advocacy 
community to reach consensus how we can best move forward on this 
issue. The goal of our bill is for the federal government to develop 
more accurate and more reliable diagnostic tools, and to provide access 
to more effective treatment and ultimately a cure.
  Between 1991 and 1999, the annual number of reported cases of Lyme 
disease increased by an astonishing 72 percent. Even as this dramatic 
increase took place, poor coordination and the lack of proper funding 
have left too many questions unanswered.
  This legislation will seek to set a new course for our public health 
strategies toward Lyme by ensuring that the proper collaboration is 
taking place between the Federal government and the people it serves.
  With this consensus legislation we are calling for the formation of a 
Department of Health and Human Services Advisory Committee that will 
bring Federal agencies, such as the CDC and the NIH, to the table with 
patient organizations, clinicians, and members of the scientific 
community. This Committee will report its recommendations to the 
Secretary of HHS. It will ensure that all scientific viewpoints are 
given consideration at NIH and the CDC, and will give a voice to the 
patient community which has often been left out of the dialogue.
  Our legislation will also provide an additional $10 million each year 
over the next five years for public health agencies to work with 
researchers around the country to develop better diagnostic tests and 
to increase their efforts to educate the public about Lyme disease.
  I sincerely hope that our colleagues will join Senator Dodd and 
myself in this most worthy cause and cosponsor this important bill. 
Lyme disease patients and their families have waited too long for a 
responsive plan of action to address their suffering and needs.
  The tremendous efforts of the Lyme patient and advocacy community 
have been very helpful in raising awareness and mobilizing support for 
this issue, and for this both Senator Dodd and I thank them. I look 
forward to working with them, Senator Dodd, and our colleagues to enact 
into law strong legislation to help correct the mistakes of the past, 
and to give greater hope for the future by ensuring patients that the 
federal government is doing everything in its power to provide better 
treatments and ultimately a cure.
  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. 1527

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

     SECTION 1. FINDINGS.

       Congress makes the following findings:
       (1) Lyme disease is a common but frequently misunderstood 
     illness that, if not caught early and treated properly, can 
     cause serious health problems.
       (2) Lyme disease is a bacterial infection that is 
     transmitted by a tick bite. Early signs of infection may 
     include a rash and flu-like symptoms such as fever, muscle 
     aches, headaches, and fatigue.
       (3) Although Lyme disease can be treated with antibiotics 
     if caught early, the disease often goes undetected because it 
     mimics other illnesses or may be misdiagnosed. Untreated, 
     Lyme disease can lead to severe heart, neurological, eye, and 
     joint problems because the bacteria can affect many different 
     organs and organ systems.
       (4) If an individual with Lyme disease does not receive 
     treatment, such individual can develop severe heart, 
     neurological, eye, and joint problems.
       (5) Although Lyme disease accounts for 90 percent of all 
     vector-borne infections in the United States, the ticks that 
     spread Lyme disease also spread other disorders, such as 
     ehrlichiosis, babesiosis, and other strains of Borrelia. All 
     of these diseases in 1 patient makes diagnosis and treatment 
     more difficult.
       (6) Although tick-borne disease cases have been reported in 
     49 States and the District of Columbia, about 90 percent of 
     the 15,000 cases have been reported in the following 10 
     States: Connecticut, Pennsylvania, New York, New Jersey, 
     Rhode Island, Maryland, Massachusetts, Minnesota, Delaware, 
     and Wisconsin. Studies have shown that the actual number of 
     tick-borne disease cases are approximately 10 times the 
     amount reported due to poor surveillance of the disease.
       (7) Persistence of symptomatology in many patients without 
     reliable testing makes treatment of patients more difficult.

     SEC. 2. ESTABLISHMENT OF A TICK-BORNE DISORDERS ADVISORY 
                   COMMITTEE.

       (a) Establishment of Committee.--Not later than 180 days 
     after the date of enactment of this Act, there shall be 
     established an advisory committee to be known as the Tick-
     Borne Disorders Advisory Committee (referred to in this Act 
     as the ``Committee'') organized in the Office of the 
     Secretary.
       (b) Duties.--The Committee shall advise the Secretary and 
     Assistant Secretary of Health regarding how to--
       (1) assure interagency coordination and communication and 
     minimize overlap regarding efforts to address tick-borne 
     disorders;
       (2) identify opportunities to coordinate efforts with other 
     Federal agencies and private organizations addressing tick-
     borne disorders; and
       (3) develop informed responses to constituency groups 
     regarding the Department of Health and Human Services' 
     efforts and progress.
       (c) Membership.--
       (1) Appointed members.--
       (A) In general.--The Secretary of Health and Human Services 
     shall appoint voting members to the Committee from among the 
     following member groups:
       (i) Scientific community members.
       (ii) Representatives of tick-borne disorder voluntary 
     organizations.
       (iii) Health care providers.
       (iv) Patient representatives who are individuals who have 
     been diagnosed with tick-borne illnesses or who have had an 
     immediate family member diagnosed with such illness.
       (v) Representatives of State and local health departments 
     and national organizations who represent State and local 
     health professionals.
       (B) Requirement.--The Secretary shall ensure that an equal 
     number of individuals are appointed to the Committee from 
     each of the member groups described in clauses (i) through 
     (v) of subparagraph (A).
       (2) Ex officio members.--The Committee shall have nonvoting 
     ex officio members determined appropriate by the Secretary.
       (d) Co-Chairpersons.--The Assistant Secretary of Health 
     shall serve as the co-chairperson of the Committee with a 
     public co-chairperson chosen by the members described under 
     subsection (c). The public co-chairperson shall serve a 2-
     year term and retain all voting rights.

[[Page 20584]]

       (e) Term of Appointment.--All members shall be appointed to 
     serve on the Committee for 4 year terms.
       (f) Vacancy.--If there is a vacancy on the Committee, such 
     position shall be filled in the same manner as the original 
     appointment. Any member appointed to fill a vacancy for an 
     unexpired term shall be appointed for the remainder of that 
     term. Members may serve after the expiration of their terms 
     until their successors have taken office.
       (g) Meetings.--The Committee shall hold public meetings, 
     except as otherwise determined by the Secretary, giving 
     notice to the public of such, and meet at least twice a year 
     with additional meetings subject to the call of the co-
     chairpersons. Agenda items can be added at the request of the 
     Committee members, as well as the co-chairpersons. Meetings 
     shall be conducted, and records of the proceedings kept as 
     required by applicable laws and Departmental regulations.
       (h) Reports.--
       (1) In general.--Not later than 24 months after the date of 
     enactment of this Act, and annually thereafter, the Secretary 
     shall submit to Congress a report on the activities carried 
     out under this Act.
       (2) Content.--Such reports shall describe--
       (A) progress in the development of accurate diagnostic 
     tools that are more useful in the clinical setting; and
       (B) the promotion of public awareness and physician 
     education initiatives to improve the knowledge of health care 
     providers and the public regarding clinical and surveillance 
     practices for Lyme disease and other tick-borne disorders.
       (i) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this Act, $250,000 for each 
     of fiscal years 2004 and 2005. Amounts appropriated under 
     this subsection shall be used for the expenses and per diem 
     costs incurred by the Committee under this section in 
     accordance with the Federal Advisory Committee Act (5 U.S.C. 
     App.), except that no voting member of the Committee shall be 
     a permanent salaried employee.

     SEC. 3. AUTHORIZATION FOR RESEARCH FUNDING.

       There are authorized to be appropriated $10,000,000 for 
     each of fiscal years 2004 through 2008 to provide for 
     research and educational activities concerning Lyme disease 
     and other tick-borne disorders, and to carry out efforts to 
     prevent Lyme disease and other tick-borne disorders.

     SEC. 4. GOALS.

       It is the sense of the Senate that, in carrying out this 
     Act, the Secretary of Health and Human Services (referred to 
     in this section as the ``Secretary''), acting as appropriate 
     in consultation with the Director of the Centers for Disease 
     Control and Prevention, the Director of the National 
     Institutes of Health, the Committee, and other agencies, 
     should consider carrying out the following:
       (1) Five-year plan.--It is the sense of the Senate that the 
     Secretary should consider the establishment of a plan that, 
     for the five fiscal years following the date of the enactment 
     of this Act, provides for the activities to be carried out 
     during such fiscal years toward achieving the goals under 
     paragraphs (2) through (4). The plan should, as appropriate 
     to such goals, provide for the coordination of programs and 
     activities regarding Lyme disease and other tick-borne 
     disorders that are conducted or supported by the Federal 
     Government.
       (2) First goal: diagnostic test.--The goal described in 
     this paragraph is to develop a diagnostic test for Lyme 
     disease and other tick-borne disorders for use in clinical 
     testing.
       (3) Second goal: surveillance and reporting of lyme disease 
     and other tick-borne disorders.--The goal described in this 
     paragraph is to accurately determine the prevalence of Lyme 
     disease and other tick-borne disorders in the United States.
       (4) Third goal: prevention of lyme disease and other tick-
     borne disorders.--The goal described in this paragraph is to 
     develop the capabilities at the Department of Health and 
     Human Services to design and implement improved strategies 
     for the prevention and control of Lyme disease and other 
     tick-borne diseases. Such diseases may include Masters' 
     disease, ehrlichiosis, babesiosis, other bacterial, viral and 
     rickettsial diseases such as tularemia, tick-borne 
     encephalitis, Rocky Mountain Spotted Fever, and bartonella, 
     respectively.

  Mr. DODD. Mr. President, it is with great pleasure that I rise today 
to introduce legislation for the research, prevention, and treatment of 
Lyme disease. This bipartisan legislation works toward the goal of 
eradicating Lyme disease--a devastating disease that has particularly 
impacted those of us from Connecticut and the Northeast. The Senate 
showed its strong support for this legislation when it passed it in the 
last Congress by Unanimous Consent. It is my hope that the Senate will 
show this same support again to ensure the goals of this legislation 
are achieved.
  Lyme disease can be devastating to those it affects. The disease 
first achieved prominence in the 1980s in the state of Connecticut and 
got its name from the town of Lyme, CT. Today, Connecticut residents 
have the unfortunate distinction of being 10 times more likely to 
contract Lyme disease than the rest of the nation. However, the 
incidence of Lyme disease nationwide is on the rise. In fact, cases of 
Lyme disease have been reported by 49 states and the District of 
Columbia. Since 1982, the number of Lyme disease cases reported to 
health officials has exceeded 200,000. Even more disconcerting are 
reports indicating that the actual incidence of Lyme disease may be 
significantly greater than what is reported.
  Those infected with Lyme disease may experience a number of health 
problems including facial paralysis, joint swelling, loss of 
coordination, irregular heartbeat, liver malfunction, depression, and 
memory loss. Unfortunately, this devastating disease can often be 
misdiagnosed, due to the fact that the symptoms presented by Lyme 
disease often look similar to other conditions. The misdiagnosis of 
this often debilitating illness can result in prolonged pain and 
suffering, unnecessary tests, expensive treatments, as well as severe 
emotional consequences for victims and their families.
  The legislation we introduce today will build on earlier efforts to 
tackle the problem of Lyme disease and other tick-borne disorders. 
Through an amendment that I offered to the Fiscal Year 1999 Department 
of Defense (DoD) appropriations bill, an additional $3 million was 
directed toward DoD's research in this area. This was an important 
first step in the fight to increase our understanding of this disease, 
but much more remains to be done. This legislation will provide what is 
necessary to continue the effort to research, prevent and treat Lyme 
disease and other tick-borne disorders.
  A critical component of this legislation is the creation of a federal 
advisory committee on Lyme disease and other tick-borne disorders. This 
advisory committee, the first of its kind, will include members of the 
scientific community, health care providers, and most directly impacted 
by the disease, Lyme patients and their families. Among its activities, 
the committee will identify opportunities for coordination and 
communication between Federal agencies and private organizations in 
their efforts to combat Lyme disease.
  This legislation also includes other key elements designed to conquer 
Lyme disease and other tick-borne disorders. It provides a framework 
for the government to establish clear goals in the areas of research, 
treatment, and prevention of Lyme disease. Crucial to activities in 
each of these areas, is the fact that this legislation authorizes $10 
million in annual funding for federal activities related to the 
elimination of Lyme disease.
  I would like to thank my colleague from Pennsylvania, Senator Rick 
Santorum, the legislation's chief Republican cosponsor, for his 
dedicated support of this important initiative. I look forward to 
continuing to work with Senator Santorum, my other colleagues, and the 
Lyme disease community to strengthen our efforts to eradicate Lyme 
disease. This legislation provides an important step toward reaching 
this laudable goal.
                                 ______
                                 
      By Mr. CAMPBELL (for himself and Mr. Inouye):
  S. 1528. A bill to establish a procedure to authorize the integration 
and coordination of Federal funding dedicated to the community, 
business, and economic development of Native American communities; to 
the Committee on Indian Affairs.
  Mr. CAMPBELL. Mr. President, I am pleased to be joined by Senator 
Inouye in introducing a bill to assist Indian tribes in their efforts 
to strengthen their economies.
  Despite recent success some Indian tribes have had with gaming, 
tourism and natural resource development, the fact is that most tribes 
still suffer high unemployment, intense poverty and a lack of physical 
infrastructure.
  Most tribal economies continue to perform poorly despite the 
expenditure of hundreds of millions--even billions--

[[Page 20585]]

of Federal dollars over the years by the Departments of Agriculture, 
Commerce, Defense, Interior, Labor, and others.
  The core problem is not the amount of dollars, but rather how they 
are being spent.
  Numerous hearings by the Committee on Indian Affairs and several 
General Accounting Office (GAO) reports show that most Federal efforts 
are poorly timed and coordinated and lack the kind of tribal decision-
making to make the efforts succeed.
  The bill we are introducing today will go a long way in fixing these 
problems.
  The principles that guide the bill are not new. In 1970 President 
Nixon issued his ``Special Message to Congress on Indian Affairs'' that 
called for significant changes in Federal Indian policy.
  Nixon saw that Indians were not in command of the Federal programs 
and services meant for their benefit and he launched a quiet revolution 
in Federal Indian policy.
  The Indian Self-Determination and Education Assistance Act of 1975 
authorizes Indian tribes and tribal consortia to ``step into the 
shoes'' of the Federal government to administer programs and services 
historically provided by the United States.
  Currently, one-half of the programs and services of the Bureau of 
Indian Affairs and the Indian Health Service are now contracted by 
Indian tribes and consortia. Tribal decisionmaking is paramount, 
service quality has improved, and tribal capacity has been enhanced 
significantly.
  This bill will expand the principles of Indian self-determination to 
have the tribes--not the Federal bureaucracy--determine which programs 
and services should be brought to bear in an integrated and coordinated 
way to bring hope, jobs, and strengthened economies to their 
communities.
  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. 1528

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

     SECTION 1. TITLE.

       The Act may be cited as the ``Indian Tribal Development 
     Consolidated Funding Act of 2003''.

     SEC. 2. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) a unique legal and political relationship exists 
     between the United States and Indian tribes that is reflected 
     in article I, section 8, clause 3 of the Constitution, 
     various treaties, Federal statutes, Supreme Court decisions, 
     executive agreements, and course of dealing;
       (2) despite the infusion of a substantial amount of Federal 
     funds into Native American communities over several decades, 
     the majority of Native Americans remain mired in poverty, 
     unemployment, and despair;
       (3) the efforts of the United States to foster community, 
     economic, and business development in Native American 
     communities have been hampered by fragmentation of authority, 
     responsibility, and performance, and lack of timeliness and 
     coordination in resources and decisionmaking; and
       (4) the effectiveness of Federal and tribal efforts in 
     generating employment opportunities and bringing value-added 
     activities and economic growth to Native American communities 
     depends on cooperative arrangements among the various Federal 
     agencies and Indian tribes.
       (b) Purposes.--The purposes of this Act are--
       (1) to enable Indian tribes and tribal organizations to use 
     available Federal assistance more effectively and 
     efficiently;
       (2) to adapt and target such assistance more readily to 
     particular needs through wider use of projects that are 
     supported by more than 1 agency, assistance program, or 
     appropriation of the Federal Government;
       (3) to encourage Federal-tribal arrangements under which 
     Indian tribes and tribal organizations may more effectively 
     and efficiently combine Federal and tribal resources to 
     support economic development projects;
       (4) to promote the coordination of Native American economic 
     programs to maximize the benefits of those programs to 
     encourage a more consolidated, national policy for economic 
     development; and
       (5) to establish a procedure to aid Indian tribes in 
     obtaining Federal resources and in more efficiently 
     administering those resources for the furtherance of tribal 
     self-governance and self-determination.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Applicant.--The term ``applicant'' means an Indian 
     tribe or tribal organization, or a consortium of Indian 
     tribes or tribal organizations, that submits an application 
     under this Act for assistance in carrying out a project.
       (2) Assistance.--The term ``assistance'' means the transfer 
     of anything of value for a public purpose, support, or 
     stimulation that is--
       (A) authorized by a law of the United States;
       (B) provided by the Federal Government through grant or 
     contractual arrangements (including technical assistance 
     programs providing assistance by loan, loan guarantee, or 
     insurance); and
       (C) authorized to include an Indian tribe or tribal 
     organization, or a consortium of Indian tribes or tribal 
     organizations, as eligible for receipt of funds under a 
     statutory or administrative formula for the purposes of 
     community, economic, or business development.
       (3) Assistance program.--The term ``assistance program'' 
     means any program of the Federal Government that provides 
     assistance for which Indian tribes or tribal organizations 
     are eligible.
       (4) Indian tribe.--The term ``Indian tribe'' has the 
     meaning given the term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b).
       (5) Project.--
       (A) In general.--The term ``project'' means a community, 
     economic, or business development undertaking that includes 
     components that contribute materially to carrying out a 
     purpose or closely-related purposes that are proposed or 
     approved for assistance under more than 1 Federal Government 
     program.
       (B) Inclusion.--The term ``project'' includes a project 
     designed to improve the environment, a housing facility, a 
     community facility, a business or industrial facility, or 
     transportation, a road, or a highway, with respect to an 
     Indian tribe, tribal organization, or consortium.
       (6) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (7) Tribal organization.--The term ``tribal organization'' 
     has the meaning given the term in section 4 of the Indian 
     Self-Determination and Education Assistance Act (25 U.S.C. 
     450b).

     SEC. 4. LEAD AGENCY.

       The Department of the Interior shall be the lead agency for 
     purposes of carrying out this Act.

     SEC. 5. SELECTION OF PARTICIPATING TRIBES.

       (a) Participants.--
       (1) In general.--The Secretary may select from the 
     applicant pool described in subsection (b) Indian tribes or 
     tribal organizations, not to exceed 24 in each fiscal year, 
     to submit an application to carry out a project under this 
     Act.
       (2) Consortia.--Two or more Indian tribes or tribal 
     organizations that are otherwise eligible to participate in a 
     program or activity to which this Act applies may form a 
     consortium to participate as an applicant under paragraph 
     (1).
       (b) Applicant Pool.--The applicant pool described in this 
     subsection shall consist of each Indian tribe or tribal 
     organization that--
       (1) successfully completes the planning phase described in 
     subsection (c);
       (2) requests participation in a project under this Act 
     through a resolution or other official action of the tribal 
     governing body; and
       (3) demonstrates, for the 3 fiscal years immediately 
     preceding the fiscal year for which participation is 
     requested, financial stability and financial management 
     capability as demonstrated by a showing by the Indian tribe 
     or tribal organization that there were no material audit 
     exceptions in the required annual audit of the self-
     determination contracts of the Indian tribe or tribal 
     organization.
       (c) Planning Phase.--Each applicant--
       (1) shall complete a planning phase that includes--
       (A) legal and budgetary research; and
       (B) internal tribal government and organizational 
     preparation; and
       (2) on completion of the planning phase, shall be eligible 
     for joint assistance with respect to a project.

     SEC. 6. APPLICATION REQUIREMENTS, REVIEW, AND APPROVAL.

       (a) Requirements.--An applicant shall submit to the head of 
     the Federal agency responsible for administering the primary 
     Federal program to be affected by the project an application 
     that--
       (1) identifies the programs to be integrated;
       (2) proposes programs that are consistent with the purposes 
     described in section 2(b);
       (3) describes--
       (A) a comprehensive strategy that identifies the manner in 
     which Federal funds are to be integrated and delivered under 
     the project; and
       (B) the results expected from the project;
       (4) identifies the projected expenditures under the project 
     in a single budget;
       (5) identifies the agency or agencies of the tribal 
     government that are to be involved in the project;
       (6) identifies any Federal statutory provisions, 
     regulations, policies, or procedures that the applicant 
     requests be waived in order to implement the project; and

[[Page 20586]]

       (7) is approved by the governing body of the applicant, 
     including, in the case of an applicant that is a consortium 
     or tribes or tribal organizations, the governing body of each 
     affected member tribe or tribal organization.
       (b) Review.--On receipt of an application that meets the 
     requirements of subsection (a), the head of the Federal 
     agency receiving the application shall--
       (1) consult with the applicant and with the head of each 
     Federal agency that is proposed to provide funds to implement 
     the project; and
       (2) consult and coordinate with the Department of the 
     Interior as the lead agency under this Act for the purposes 
     of processing the application.
       (c) Approval.--
       (1) Waivers.--
       (A) In general.--Subject to subparagraph (B), 
     notwithstanding any other provision of law, the head of the 
     Federal agency responsible for administering any statutory 
     provision, regulation, policy, or procedure that is 
     identified in an application in accordance with subsection 
     (a)(6) or as a result of the consultation required under 
     subsection (b), and that is requested by the applicant to be 
     waived, shall waive the statutory provision, regulation, 
     policy, or procedure.
       (B) Limitation.--A statutory provision, regulation, policy, 
     or procedure identified for waiver under subparagraph (A) may 
     not be waived by an agency head if the agency head determines 
     that a waiver would be inconsistent with--
       (i) the purposes described in section 2(b); or
       (ii) any provision of the statute governing the program 
     involved that is specifically applicable to Indian programs.
       (2) Project.--
       (A) In general.--Not later than 90 days after the date of 
     receipt of an application that meets the requirements of 
     subsection (a), the head of the Federal agency receiving the 
     application shall inform the applicant, in writing, of the 
     approval or disapproval of the application, including the 
     approval or disapproval of any waiver sought under paragraph 
     (1).
       (B) Disapproval.--If an application or waiver is 
     disapproved--
       (i) the written notice shall identify the reasons for the 
     disapproval; and
       (ii) the applicant shall be provided an opportunity to 
     amend the application or to petition the agency head to 
     reconsider the disapproval.

     SEC. 7. AUTHORITY OF HEADS OF FEDERAL AGENCIES.

       (a) In General.--The President, acting through the heads of 
     the appropriate Federal agencies, shall promulgate 
     regulations necessary--
       (1) to carry out this Act; and
       (2) to ensure that this Act is applied and implemented by 
     all Federal agencies.
       (b) Scope of Coverage.--The Federal agencies that are 
     included within the scope of this Act shall include--
       (1) the Department of Agriculture;
       (2) the Department of Commerce;
       (3) the Department of Defense;
       (4) the Department of Education;
       (5) the Department of Energy;
       (6) the Department of Health and Human Services;
       (7) the Department of Homeland Security;
       (8) the Department of Housing and Urban Development;
       (9) the Department of the Interior;
       (10) the Department of Justice;
       (11) the Department of Labor;
       (12) the Department of Transportation;
       (13) the Department of the Treasury;
       (14) the Department of Veterans Affairs;
       (15) the Environmental Protection Agency;
       (16) the Small Business Administration; and
       (17) such other agencies as the President determines to be 
     appropriate.
       (c) Activities.--Notwithstanding any other provision of 
     law, the head of each Federal agency, acting alone or jointly 
     through an agreement with another Federal agency, may--
       (1) identify related Federal programs that are suitable for 
     providing joint financing of specific kinds of projects with 
     respect to Indian tribes or tribal organizations;
       (2) assist in planning and developing such projects to be 
     financed through different Federal programs;
       (3) with respect to Federal programs or projects that are 
     identified or developed under paragraphs (1) or (2), develop 
     and prescribe--
       (A) guidelines;
       (B) model or illustrative projects;
       (C) joint or common application forms; and
       (D) other materials or guidance;
       (4) review administrative program requirements to identify 
     requirements that may impede the joint financing of such 
     projects and modify the requirements appropriately;
       (5) establish common technical and administrative 
     regulations for related Federal programs to assist in 
     providing joint financing to support a specific project or 
     class of projects; and
       (6) establish joint or common application processing and 
     project supervision procedures, including procedures for 
     designating--
       (A) an agency responsible for processing applications; and
       (B) a lead agency responsible for project supervision.
       (d) Requirements.--In carrying out this Act, the head of 
     each Federal agency shall--
       (1) take all appropriate actions to carry out this Act when 
     administering an assistance program;
       (2) consult and cooperate with the heads of other Federal 
     agencies; and
       (3) assist in the administration of assistance programs of 
     other Federal agencies that may be used to jointly finance 
     projects undertaken by Indian tribes or tribal organizations.

     SEC. 8. PROCEDURES FOR PROCESSING REQUESTS FOR JOINT 
                   FINANCING.

       In processing an application for assistance for a project 
     to be financed in accordance with this Act by at least 2 
     assistance programs, the head of a Federal agency shall take 
     all appropriate actions to ensure that--
       (1) required reviews and approvals are handled 
     expeditiously;
       (2) complete account is taken of special considerations of 
     timing that are made known to the head of the Federal agency 
     by the applicant that would affect the feasibility of a 
     jointly financed project;
       (3) an applicant is required to deal with a minimum number 
     of representatives of the Federal Government;
       (4) an applicant is promptly informed of a decision or 
     problem that could affect the feasibility of providing joint 
     assistance under the application; and
       (5) an applicant is not required to get information or 
     assurances from 1 Federal agency for a requesting Federal 
     agency in a case in which the requesting agency makes the 
     information or assurances directly.

     SEC. 9. UNIFORM ADMINISTRATIVE PROCEDURES.

       (a) In General.--To make participation in a project simpler 
     than would otherwise be practicable because of the 
     application of inconsistent or conflicting technical or 
     administrative regulations or procedures that are not 
     specifically required by the statute that governs the Federal 
     program under which the project is funded, the head of a 
     Federal agency may promulgate uniform regulations concerning 
     inconsistent or conflicting requirements with respect to--
       (1) the financial administration of the project, including 
     with respect to accounting, reporting, and auditing, and 
     maintaining a separate bank account, to the extent consistent 
     with this Act;
       (2) the timing of payments by the Federal Government for 
     the project in a case in which 1 payment schedule or a 
     combined payment schedule is to be established for the 
     project;
       (3) the provision of assistance by grant rather than 
     procurement contract; and
       (4) the accountability for, or the disposition of, records, 
     property, or structures acquired or constructed with 
     assistance from the Federal Government under the project.
       (b) Review.--To make the processing of applications for 
     assistance under a project simpler under this Act, the head 
     of a Federal agency may provide for review of proposals for a 
     project by a single panel, board, or committee in any case in 
     which reviews by separate panels, boards, or committees are 
     not specifically required by the statute that authorizes the 
     Federal program under which the project is funded.

     SEC. 10. DELEGATION OF SUPERVISION OF ASSISTANCE.

       (a) In General.--In accordance with regulations promulgated 
     under section 7(a), the head of a Federal agency may delegate 
     or otherwise enter into an arrangement to have another 
     Federal agency carry out or supervise a project or class of 
     projects jointly financed in accordance with this Act.
       (b) Conditions.--A delegation or other arrangement under 
     subsection (a)--
       (1) shall be made under conditions ensuring that the duties 
     and powers delegated are exercised consistent with Federal 
     law; and
       (2) may not be made in a manner that relieves the head of a 
     Federal agency of responsibility for the proper and efficient 
     management of a project for which the agency provides 
     assistance.

     SEC. 11. JOINT ASSISTANCE FUNDS AND PROJECT FACILITATION.

       (a) Joint Assistance Fund.--In providing support for a 
     project in accordance with this Act, the head of a Federal 
     agency may provide for the establishment in the Treasury by 
     an applicant of a joint assistance fund to ensure that 
     amounts received by the applicant from more than 1 assistance 
     program or appropriation are effectively administered.
       (b) Agreement.--
       (1) In general.--A joint assistance fund may be established 
     under subsection (a) only in accordance with an agreement by 
     the Federal agencies involved concerning the responsibilities 
     of each such agency.
       (2) Requirements of agreement.--An agreement under 
     paragraph (1) shall--
       (A) ensure the availability of necessary information to 
     Federal agencies and Congress; and
       (B) provide that the agency providing for the establishment 
     of the fund under subsection (a) is responsible and 
     accountable by program and appropriation for the amounts 
     provided for the purposes of each fund..
       (c) Use of Excess Funds.--In any project conducted under 
     this Act for which a joint assistance fund has been 
     established under subsection (a) and the actual costs of the

[[Page 20587]]

     project are less than the estimated costs, use of the excess 
     funds shall be determined by the head of the Federal agency 
     administering the joint assistance fund, after consultation 
     with the applicant.

     SEC. 12. FINANCIAL MANAGEMENT, ACCOUNTABILITY, AND AUDITS.

       (a) Single Audit Act.--Recipients of funding provided in 
     accordance with this Act shall be subject to chapter 75 of 
     title 31, United States Code.
       (b) Records.--
       (1) In general.--With respect to each project financed 
     through an account in a joint assistance fund established 
     under section 11, the recipient of amounts from the fund 
     shall maintain records as required by the head of the Federal 
     agency responsible for administering the fund.
       (2) Requirements.--Records described in paragraph (1) shall 
     disclose--
       (A) the amount and disposition by the recipient of 
     assistance received under each Federal assistance program and 
     appropriation;
       (B) the total cost of the project for which such assistance 
     was given or used;
       (C) the part of the cost of the project provided from other 
     sources; and
       (D) such other information as the head of the Federal 
     agency responsible for administering the fund determines will 
     facilitate the conduct of an audit of the project.
       (c) Availability.--Records of a recipient related to an 
     amount received from a joint assistance fund under this Act 
     shall be made available, for inspection and audit, to--
       (1) the head of the Federal agency responsible for 
     administering the fund; and
       (2) the Comptroller General of the United States.

     SEC. 13. TECHNICAL ASSISTANCE AND PERSONNEL TRAINING.

       Amounts available for technical assistance and personnel 
     training under any Federal assistance program shall be 
     available for technical assistance and training under a 
     project approved for joint financing under this Act if the 
     use of the funds involves the Federal assistance program and 
     the project approved for joint financing.

     SEC. 14. JOINT STATE FINANCING FOR FEDERAL-TRIBAL ASSISTED 
                   PROJECTS.

       (a) In General.--Under regulations promulgated under 
     section 7(a), the head of a Federal agency may enter into an 
     agreement with a State to extend the benefits of this Act to 
     a project that involves assistance from--
       (1) at least 1 Federal agency;
       (2) a State; and
       (3) at least 1 tribal agency or instrumentality.
       (b) Joint Action.--An agreement under subsection (a) may 
     include arrangements to process requests or administer 
     assistance on a joint basis.

     SEC. 15. REPORT TO CONGRESS.

       Not later than 1 year after the date of enactment of this 
     Act, the President shall submit to Congress a report that 
     includes--
       (1) a description of actions taken under this Act;
       (2) a detailed evaluation of the implementation of this 
     Act, including information on the benefits and costs of 
     jointly financed projects that accrue to participating Indian 
     tribes and tribal organizations; and
       (3) recommendations (including legislative recommendations) 
     of the President with respect to improvement of this Act.
                                 ______
                                 
      By Mr. CAMPBELL (for himself and Mr. Inouye):
  S. 1529. A bill to amend the Indian Gaming Regulatory Act to include 
provisions relating to the payment and administration of gaming fees, 
and for other purposes; to the Committee on Indian Affairs.

  Mr. CAMPBELL. Mr. President, today I am pleased to be joined by 
Senator Inouye in introducing the Indian Gaming Regulatory Act 
Amendments of 2003 to amend and update the act.
  In amending the Indian Gaming Regulatory Act of 1988 (IGRA) it is 
important to keep in mind the twin aims of the act: to ensure that 
gaming continues to be a tool for Indian economic development; and to 
ensure that the games conducted are kept free from corrupting forces to 
maintain the integrity of the industry.
  This bill will update the IGRA by clarifying how vacancies in the 
National Indian Gaming Commission (NIGC) are filled; revising the NIGC 
statutory rates of pay to correspond with other current Federal rates 
of pay; and expanding the NIGC's reporting requirements to Congress.
  The bill also clarifies the act by making the Johnson Act 
inapplicable to class II technological aids to bring it in line with 
the original intent of Congress in 1988.
  The bill also requires background checks on class III management 
contractors, management employees, and gaming commissioners.
  When the IGRA was enacted in 1988, Indian gaming was mainly high 
stakes bingo operations, known as ``class II gaming'' under the act. 
Virtually no one thought Indian gaming would become the $14.5 billion 
dollar industry that it is today, providing tribes with resources for 
development and employment opportunities where none previously existed.
  In response to this success, questions have been raised--some 
legitimate, some not--about the efficacy of regulation within the 
industry. This bill requires that the NIGC and the gaming tribes 
develop and implement a system of minimum internal control, background 
investigation and licensing standards for all tribes that operate class 
II and class III gaming.
  The bill would also ensure that the NIGC has the resources it needs 
to fulfill its regulatory duties by increasing the fee cap 50 percent 
over the next six years. With that budgetary increase, and prior to 
levying any fees, the NIGC would be required to determine and take into 
account the nature and level of any tribal or joint tribal-state 
regulatory activities and to reduce the fees assessed accordingly.
  The bill will enable the NIGC to provide technical assistance and 
training to Indian tribes. The NIGC would be authorized to expend the 
civil fines it recoups for violations of the IGRA for these purposes.
  The last substantive reform in the bill goes to the very heart of the 
act--economic development for Indian tribes. Because of gaming, some 
tribes have been very successful, employing thousands of people, both 
Indian and non-Indian, and reducing poverty and the welfare rolls in 
their areas.
  This success has attracted the attention of other governments, cash-
strapped and hungry for new revenues. Many States are looking to gaming 
tribes to help eliminate their deficits, and some States are reportedly 
refusing to enter or renew compacts required under IGRA until tribes 
agree to revenue sharing provisions.
  Congress never envisioned that kind of pressure would be applied to 
tribes and, keeping these facts and the goals of IGRA in mind, the bill 
includes provisions to ensure that tribal gaming revenues are first 
used to meet the needs of tribal governments and their members. Only 
after satisfying those needs, would States and tribes be able to 
negotiate a revenue-sharing agreement.
  To encourage States and tribes to negotiate, the bill requires the 
Secretary to perform her existing responsibilities under the act within 
90 days and, at the back end, when existing compacts are up for 
renewal, the bill provides a 180 day grace period beyond the expiration 
date of compacts to encourage tribal-State agreements.
  I ask unanimous consent that a copy 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. 1529

       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 ``Indian Gaming Regulatory Act 
     Amendments of 2003''.

      SEC. 2. PAYMENT AND ADMINISTRATION OF GAMING FEES.

       (a) Definitions.--Section 4(7) of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2703(7)) is amended by adding at 
     the end the following:
       ``(G) Technological aids.--Notwithstanding any other 
     provision of law, sections 1 through 7 of the Act of January 
     2, 1951 (commonly known as the `Gambling Devices 
     Transportation Act') (15 U.S.C. 1171 through 1177) shall not 
     apply to any gaming described in subparagraph (A)(i) for 
     which an electronic aid, computer, or other technological aid 
     is used in connection with the gaming.''.
       (b) National Indian Gaming Commission.--Section 5 of the 
     Indian Gaming Regulatory Act (25 U.S.C. 2704) is amended--
       (1) by striking subsection (c) and inserting the following:
       ``(c) Vacancies.--
       ``(1) In general.--A vacancy on the Commission shall be 
     filled in the same manner as the original appointment.
       ``(2) Successors.--Unless a member of the Commission is 
     removed for cause under subsection (b)(6), the member may--
       ``(A) be reappointed; and
       ``(B) serve after the expiration of the term of the member 
     until a successor is appointed.''; and
       (2) in subsection (e), in the last sentence, by inserting 
     ``or disability'' after ``in the absence''.

[[Page 20588]]

       (c) Powers of Chairman.--Section 6 of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2705) is amended by adding at the 
     end the following:
       ``(c) Delegation.--The Chairman may delegate to an 
     individual Commissioner any of the authorities described in 
     subsection (a).
       ``(d) Applicable Authority.--In carrying out any function 
     under this section, a Commissioner serving in the capacity of 
     the Chairman shall be governed by--
       ``(1) such general policies as are formally adopted by the 
     Commission; and
       ``(2) such regulatory decisions, findings, and 
     determinations as are made by the Commission.''.
       (d) Powers of Commission.--Section 7 of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2706) is amended--
       (1) in paragraphs (1), (2), and (4) of subsection (b), by 
     striking ``class II gaming'' each place it appears and 
     inserting ``class II gaming and class III gaming'';
       (2) by redesignating subsection (c) as subsection (d);
       (3) by inserting after subsection (b) the following:
       ``(c) Strategic Plan.--
       ``(1) In general.--The Commission shall develop a strategic 
     plan for use in carrying out activities of the Commission.
       ``(2) Requirements.--The strategic plan shall include--
       ``(A) a comprehensive mission statement describing the 
     major functions and operations of the Commission;
       ``(B) a description of the goals and objectives of the 
     Commission;
       ``(C) a description of the means by which those goals and 
     objectives are to be achieved, including a description of the 
     operational processes, skills and technology, and the human, 
     capital, information, and other resources required to achieve 
     those goals and objectives;
       ``(D) a performance plan for achievement of those goals and 
     objectives that is consistent with--
       ``(i) other components of the strategic plan; and
       ``(ii) section 1115 of title 31, United States Code;
       ``(E) an identification of the key factors that are 
     external to, or beyond the control of, the Commission that 
     could significantly affect the achievement of those goals and 
     objectives; and
       ``(F) a description of the program evaluations used in 
     establishing or revising those goals and objectives, 
     including a schedule for future program evaluations.
       ``(3) Biennial plan.--
       ``(A) Period covered.--The strategic plan shall cover a 
     period of not less than 5 fiscal years beginning with the 
     fiscal year in which the plan is submitted.
       ``(B) Updates and revisions.--The strategic plan shall be 
     updated and revised biennially.''; and
       (4) in subsection (d) (as redesignated by paragraph (2))--
       (A) in paragraph (3), by striking ``and'' at the end;
       (B) by redesignating paragraph (4) as paragraph (5); and
       (C) by inserting after paragraph (3) the following:
       ``(4) the strategic plan for activities of the Commission 
     described in subsection (c); and''.
       (e) Commission Staffing.--Section 8 of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2707) is amended--
       (1) in subsection (a), by striking ``GS-18 of the General 
     Schedule under section 5332'' and inserting ``level IV of the 
     Executive Schedule under section 5318'';
       (2) in subsection (b)--
       (A) by striking ``(b) The Chairman'' and inserting the 
     following:
       ``(b) Staff.--
       ``(1) In general.--The Chairman''; and
       (B) by striking the last sentence and inserting the 
     following:
       ``(2) Compensation.--
       ``(A) In general.--Staff appointed under paragraph (1) 
     shall be paid without regard to the provision of chapter 51 
     and subchapter III of chapter 53, of title 5, United States 
     Code, relating to General Schedule pay rates.
       ``(B) Maximum rate of pay.--The rate of pay for an 
     individual appointed under paragraph (1) shall not exceed the 
     rate payable for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code.''; and
       (3) by striking subsection (c) and inserting the following:
       ``(c) Temporary Services.--
       ``(1) In general.--The Chairman may procure temporary and 
     intermittent services under section 3109 of title 5, United 
     States Code.
       ``(2) Maximum rate of pay.--The rate of pay for an 
     individual for service described in paragraph (1) shall not 
     exceed the daily equivalent of the maximum rate payable for 
     level IV of the Executive Schedule under section 5318 of 
     title 5, United States Code.
       (f) Tribal Gaming Ordinances.--Section 11 of the Indian 
     Gaming Regulatory Act (25 U.S.C. 2710) is amended--
       (1) in subsection (b)(2)(F), by striking clause (i) and 
     inserting the following:
       ``(i) ensures that--
       ``(I) background investigations are conducted on the tribal 
     gaming commissioners, key tribal gaming commission employees, 
     and primary management officials and key employees of the 
     gaming enterprise; and
       ``(II) oversight of primary management officials and key 
     employees is conducted on an ongoing basis; and''; and
       (2) in subsection (d)--
       (A) in paragraph (4)--
       (i) by striking ``(4) Except'' and inserting the following:
       ``(4) Revenue sharing.--
       ``(A) In general.--Except for any assessments that may be 
     agreed to under paragraph (3)(C)(iii), nothing in this 
     section confers on a State or political subdivision of a 
     State authority to impose any tax, fee, charge, or other 
     assessment on any Indian tribe or any other person or entity 
     authorized by an Indian tribe to engage in a class III 
     activity. No State may refuse to enter into the negotiations 
     described in paragraph (3)(A) based on the lack of authority 
     in the State or a political subdivision of the State to 
     impose such a tax, fee, charge, or other assessment.
       ``(B) Apportionment of revenues.--The Secretary may not 
     approve any Tribal-State compact or other agreement that 
     includes an apportionment of net revenues with a State, local 
     government, or other Indian tribes unless--
       ``(i) in the case of apportionment with other Indian 
     tribes, the net revenues are not distributable by the other 
     Indian tribes to members of the Indian tribes on a per capita 
     basis;
       ``(ii) in the case of apportionment with local governments, 
     the total amount of net revenues exceeds the amounts 
     necessary to meet the requirements of clauses (i) and (ii) of 
     subsection (b)(2)(B), but only to the extent that the excess 
     revenues reflect the actual costs incurred by affected local 
     governments as a result of the operation of gaming 
     activities; or
       ``(iii) in the case of apportionment with a State--

       ``(I) the total amount of net revenues--

       ``(aa) exceeds the amounts necessary to meet the 
     requirements of clauses (i) and (ii) of subsection (b)(2)(B) 
     and clause (ii) of this subparagraph, if applicable; and
       ``(bb) is in accordance with regulations promulgated by the 
     Secretary under subparagraph (C); and

       ``(II) a substantial economic benefit is rendered by the 
     State to the Indian tribe.

       ``(C) Regulations.--Not later than 90 days after the date 
     of enactment of this paragraph, the Secretary shall 
     promulgate regulations to provide guidance to Indian tribes 
     and States on the scope of allowable assessments negotiated 
     under paragraph (3)(C)(iii) and the apportionment of revenues 
     negotiated in accordance with subparagraph (B).'';
       (B) in paragraph (7)(B)(vii), by inserting ``not later than 
     90 days after notification is made'' after ``the Secretary 
     shall prescribe''; and
       (C) by adding at the end the following:
       ``(10) Extension of term of tribal-state compact.--Any 
     Tribal-State compact approved by the Secretary in accordance 
     with paragraph (8) shall remain in effect for up to 180 days 
     after expiration of the Tribal-State compact if--
       ``(A) the Indian tribe certifies to the Secretary that the 
     Indian tribe requested a new compact not later than 90 days 
     before expiration of the compact; and
       ``(B) a new compact has not been agreed on.''.
       (g) Management Contracts.--Section 12 of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2711) is amended--
       (1) by striking the section heading and all that follows 
     through ``Subject'' in subsection (a)(1) and inserting the 
     following:

     ``SEC. 12. MANAGEMENT CONTRACTS.

       ``(a) Class II Gaming and Class III Gaming Activities; 
     Information on Operators.--
       ``(1) Gaming activities.--Subject''; and
       (2) in subsection (a)(1), by striking ``class II gaming 
     activity that the Indian tribe may engage in under section 
     11(b)(1) of this Act,'' and inserting ``class II gaming 
     activity in which the Indian tribe may engage under section 
     11(b)(1), or a class III gaming activity in which the Indian 
     tribe may engage under section 11(d),''.
       (h) Commission Funding.--Section 18 of the Indian Gaming 
     Regulatory Act (25 U.S.C. 2717) is amended--
       (1) in subsection (a)--
       (A) by striking paragraphs (1) through (3) and inserting 
     the following:
       ``(1) Schedule of fees.--
       ``(A) In general.--Except as provided in this section, the 
     Commission shall establish a schedule of fees to be paid 
     annually to the Commission, on a quarterly basis, by each 
     gaming operation that conducts a class II gaming or class III 
     gaming activity that is regulated, in whole or in part, by 
     this Act.
       ``(B) Rates.--The rate of fees under the schedule 
     established under subparagraph (A) that are imposed on the 
     gross revenues from each operation that conducts a class II 
     gaming or class III gaming activity described in that 
     paragraph shall be (as determined by the Commission)--
       ``(i) a progressive rate structure levied on the gross 
     revenues in excess of $1,500,000 from each operation that 
     conducts a class II gaming or class III gaming activity; or

[[Page 20589]]

       ``(ii) a flat fee levied on the gross revenues from each 
     operation that conducts a class II gaming or class III gaming 
     activity.
       ``(C) Total amount.--The total amount of all fees imposed 
     during any fiscal year under the schedule established under 
     subparagraph (A) shall not exceed--
       ``(i) $10,000,000 for each of fiscal years 2004 and 2005;
       ``(ii) $11,000,000 for each of fiscal years 2006 and 2007; 
     and
       ``(iii) $12,000,000 for each of fiscal years 2008 and 
     2009.''; and
       (B) by redesignating paragraphs (4) through (6) as 
     paragraphs (2) through (4), respectively;
       (2) by redesignating subsection (b) as subsection (d);
       (3) in paragraph (2) of subsection (d) (as redesignated by 
     paragraph (2)), by striking ``section 19 of this Act'' and 
     inserting ``section 28''; and
       (4) by inserting after subsection (a) the following:
       ``(b) Fee Procedures.--
       ``(1) In general.--By a vote of not less than 2 members of 
     the Commission, the Commission shall adopt the schedule of 
     fees provided for under this section.
       ``(2) Fees assessed.--In assessing and collecting fees 
     under this section, the Commission shall take into account 
     the duties of, and services provided by, the Commission under 
     this Act.
       ``(3) Regulations.--The Commission shall promulgate such 
     regulations as are necessary to carry out this subsection.
       ``(c) Fee Reduction Program.--
       ``(1) In general.--In making a determination of the amount 
     of fees to be assessed for any class II gaming or class III 
     gaming activity under the schedule of fees under this 
     section, the Commission may provide for a reduction in the 
     amount of fees that otherwise would be collected on the basis 
     of--
       ``(A) the extent and quality of regulation of the gaming 
     activity provided by a State or Indian tribe, or both, in 
     accordance with an approved State-Tribal compact;
       ``(B) the extent and quality of self-regulating activities 
     covered by this Act that are conducted by an Indian tribe; 
     and
       ``(C) other factors determined by the Commission, 
     including--
       ``(i) the unique nature of tribal gaming as compared with 
     commercial gaming, other governmental gaming, and charitable 
     gaming;
       ``(ii) the broad variations in the nature, scale, and size 
     of tribal gaming activity;
       ``(iii) the inherent sovereign rights of Indian tribes with 
     respect to regulating the affairs of Indian tribes;
       ``(iv) the findings and purposes under sections 2 and 3;
       ``(v) the amount of interest or investment income derived 
     from the Indian gaming regulation accounts; and
       ``(vi) any other matter that is consistent with the 
     purposes under section 3.
       ``(2) Rulemaking.--The Commission shall promulgate such 
     regulations as are necessary to carry out this subsection.''.
       (i) Additional Amendments.--The Indian Gaming Regulatory 
     Act is amended--
       (1) by striking section 19 (25 U.S.C. 2718);
       (2) by redesignating sections 20 through 24 (25 U.S.C. 2719 
     through 2723) as sections 23 through 27, respectively;
       (3) by inserting after section 18 (25 U.S.C. 2717) the 
     following:

     ``SEC. 19. INDIAN GAMING REGULATION ACCOUNTS.

       ``(a) In General.--All fees and civil forfeitures collected 
     by the Commission in accordance with this Act shall--
       ``(1) be maintained in separate, segregated accounts; and
       ``(2) be expended only for purposes described in this Act.
       ``(b) Investments.--
       ``(1) In general.--The Commission shall invest such portion 
     of the accounts maintained under subsection (a) as are not, 
     in the judgment of the Commission, required to meet immediate 
     expenses.
       ``(2) Types of investments.--Investments may be made only 
     in interest-bearing obligations of the United States 
     guaranteed as to both principal and interest by the United 
     States.
       ``(c) Sale of Obligations.--Any obligation acquired with 
     funds in an account maintained under subsection (a)(1) 
     (except special obligations issued exclusively to those 
     accounts, which may be redeemed at par plus accrued interest) 
     may be sold by the Commission at the market price.
       ``(d) Credits to Indian Gaming Regulatory Accounts.--The 
     interest on, and proceeds from, the sale or redemption of any 
     obligation held in an account maintained under subsection 
     (a)(1) shall be credited to and form a part of the account.

     ``SEC. 20. MINIMUM STANDARDS.

       ``(a) Class I Gaming.--Notwithstanding any other provision 
     of law, class I gaming on Indian land--
       ``(1) shall remain within the exclusive jurisdiction of the 
     Indian tribe having jurisdiction over the Indian land; and
       ``(2) shall not be subject to this Act.
       ``(b) Class II Gaming.--
       ``(1) In general.--Subject to paragraph (2), an Indian 
     tribe shall retain primary jurisdiction over regulation of 
     class II gaming activities conducted by the Indian tribe.
       ``(2) Conduct of class ii gaming.--Any class II gaming 
     activity shall be conducted in accordance with--
       ``(A) section 11; and
       ``(B) regulations promulgated under subsection (d).
       ``(c) Class III Gaming.--
       ``(1) In general.--Subject to paragraph (2), an Indian 
     tribe shall retain primary jurisdiction over regulation of 
     class III gaming activities conducted by the Indian tribe.
       ``(2) Conduct of class iii gaming.--Any class III gaming 
     operated by an Indian tribe under this Act shall be conducted 
     in accordance with--
       ``(A) section 11; and
       ``(B) regulations promulgated under subsection (d).
       ``(d) Rulemaking.--
       ``(1) In general.--
       ``(A) Promulgation.--Not later than 180 days after the date 
     of enactment of the Indian Gaming Regulatory Act Amendments 
     of 2003, the Commission shall develop procedures under 
     subchapter III of chapter 5 of title 5, United States Code, 
     to negotiate and promulgate regulations relating to--
       ``(i) the monitoring and regulation of tribal gaming;
       ``(ii) the establishment and regulation of internal control 
     systems; and
       ``(iii) the conduct of background investigation.
       ``(B) Publication of proposed regulations.--Not later than 
     1 year after the date of enactment of the Indian Gaming 
     Regulatory Act Amendments of 2003, the Commission shall 
     publish in the Federal Register proposed regulations 
     developed by a negotiated rulemaking committee in accordance 
     with this section.
       ``(2) Committee.--A negotiated rulemaking committee 
     established in accordance with section 565 of title 5, United 
     States Code, to carry out this subsection shall be composed 
     only of Federal and Indian tribal government representatives, 
     a majority of whom shall be nominated by and be 
     representative of Indian tribes that conduct gaming in 
     accordance with this Act.
       ``(e) Elimination of Existing Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), as 
     of the date that is 1 year after the date of enactment of the 
     Indian Gaming Regulatory Act Amendments of 2003, regulations 
     establishing minimum internal control standards promulgated 
     by the Commission that are in effect as of the date of 
     enactment of the Indian Gaming Regulatory Act Amendments of 
     2003 shall have no force or effect.
       ``(2) Exception for affirmation of existing regulations.--
     Notwithstanding paragraph (1), if, before the date of 
     enactment of the Indian Gaming Regulatory Act Amendments of 
     2003, the Commission certifies to the Secretary of the 
     Interior that the Commission has promulgated regulations that 
     establish minimum internal control standards that meet the 
     requirements of subsection (d)(1)(A) and were developed in 
     consultation with affected Indian tribes, the regulations 
     shall--
       ``(A) be considered to satisfy the requirements of 
     paragraph (1); and
       ``(B) remain in full force and effect.

     ``SEC. 21. USE OF NATIONAL INDIAN GAMING COMMISSION CIVIL 
                   FINES.

       ``(a) Account.--Amounts collected by the Commission under 
     section 14 shall--
       ``(1) be deposited in a separate Indian gaming regulation 
     account established under section 19(d)(1)(A); and
       ``(2) be available to the Commission, as provided for in 
     advance in Acts of appropriation, for use in carrying out 
     this Act.
       ``(b) Use of Funds.--
       ``(1) In general.--The Commission may provide grants and 
     technical assistance to Indian tribes using funds secured by 
     the Commission under section 14.
       ``(2) Uses.--A grant or financial assistance provided under 
     paragraph (1) may be used only--
       ``(A) to provide technical training and other assistance to 
     an Indian tribe to strengthen the regulatory integrity of 
     Indian gaming;
       ``(B) to provide assistance to an Indian tribe to assess 
     the feasibility of conducting nongaming economic development 
     activities on Indian land;
       ``(C) to provide assistance to an Indian tribe to devise 
     and implement programs and treatment services for individuals 
     diagnosed as problem gamblers; or
       ``(D) to provide to an Indian tribe 1 or more other forms 
     of assistance that are not inconsistent with this Act.
       ``(c) Source of Funds.--Amounts used to carry out 
     subsection (b) may be derived only from funds--
       ``(1) collected by the Commission under section 14; and
       ``(2) authorized for use in advance by an Act of 
     appropriation.
       ``(d) Regulations.--The Commission may promulgate such 
     regulations as are necessary to carry out this section.

     ``SEC. 22. TRIBAL CONSULTATION.

       ``In carrying out this Act, the Secretary of the Interior, 
     Secretary of the Treasury, and

[[Page 20590]]

     Chairman of the Commission shall involve and consult with 
     Indian tribes to the maximum extent practicable, as 
     appropriate, in a manner that is consistent with the Federal 
     trust and the government-to-government relationship that 
     exists between Indian tribes and the Federal Government.''; 
     and
       (4) by inserting after section 27 (as redesignated by 
     paragraph (2)) the following:

     ``SEC. 28. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--Subject to section 18, there is 
     authorized to be appropriated to carry out this Act, for 
     fiscal year 1998 and each fiscal year thereafter, an amount 
     equal to the amount of funds derived from the assessments 
     authorized by section 18(a).
       ``(b) Additional Amounts.--Notwithstanding section 18, in 
     addition to amounts authorized to be appropriated by 
     subsection (a), there are authorized to be appropriated 
     $2,000,000 to fund the operation of the Commission for fiscal 
     year 1998 and each fiscal year thereafter.''.
                                 ______
                                 
      By Mr. DASCHLE:
  S. 1530. A bill to provide compensation to the Lower Brule and Crow 
Creek Sioux Tribes of South Dakota for damage to tribal land caused by 
Pick-Sloan projects along the Missouri River; to the Committee on 
Indian Affairs.
  Mr. DASCHLE. Mr. President, I am pleased to introduce the Lower Brule 
and Crow Creek Sioux Tribal Parity Act of 2003.
  This legislation is intended to provide additional and final 
compensation to the Lower Brule Sioux and Crow Creek Sioux Tribes for 
losses from the Pick-Sloan Missouri River Basin Program, commonly known 
as the ``Flood Control Act of 1944''.
  The Pick-Sloan Program inundated the fertile bottom land of the Lower 
Brule and Crow Creek Sioux Tribes, which greatly damaged the economy 
and cultural resources of the Tribe. Congress has provided compensation 
to several South Dakota Indian tribes, including Lower Brule and Crow 
Creek, that border the Missouri River. The compensation provided, 
however, has not been consistent in terms of either criteria, or 
methodology.
  Based on the methodology determined appropriate by the General 
Accounting Office and used by Congress to determine the compensation 
for the Cheyenne River Sioux Tribe, new calculations have determined 
that Lower Brule is entitled to additional final compensation of 
$137,065,558 from the United States. The Crow Creek Sioux Tribe is 
entitled to additional compensation of $100,244,040. The legislation I 
am introducing will provide parity for the Lower Brule Sioux and Crow 
Creek Sioux Tribes.
  These two tribes are entitled to a final parity payment based upon 
this GAO-approved methodology. I look forward to moving ahead with this 
legislation for the benefit of the people of Lower Brule and Crow 
Creek.
  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. 1530

       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 ``Tribal Parity Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Pick-Sloan Missouri River Basin Program (authorized 
     by section 9 of the Act of December 22, 1944 (commonly known 
     as the ``Flood Control Act of 1944'') (58 Stat. 891)), was 
     approved to promote the general economic development of the 
     United States;
       (2) the Fort Randall and Big Bend dam and reservoir 
     projects in South Dakota--
       (A) are major components of the Pick-Sloan Missouri River 
     Basin Program; and
       (B) contribute to the national economy;
       (3) the Fort Randall and Big Bend projects inundated the 
     fertile bottom land of the Lower Brule and Crow Creek Sioux 
     Tribes, which greatly damaged the economy and cultural 
     resources of the Tribes;
       (4) Congress has provided compensation to several Indian 
     tribes, including the Lower Brule and Crow Creek Sioux 
     Tribes, that border the Missouri River and suffered injury as 
     a result of 1 or more Pick-Sloan Projects;
       (5) the compensation provided to those Indian tribes has 
     not been consistent;
       (6) Missouri River Indian tribes that suffered injury as a 
     result of 1 or more Pick-Sloan Projects should be adequately 
     compensated for those injuries, and that compensation should 
     be consistent among the Tribes;
       (7) the Lower Brule Sioux Tribe and the Crow Creek Sioux 
     Tribe, based on methodology determined appropriate by the 
     General Accounting Office, are entitled to receive additional 
     compensation for injuries described in paragraph (6), so as 
     to provide parity among compensation received by all Missouri 
     River Indian tribes.

     SEC. 3. LOWER BRULE SIOUX TRIBE.

       Section 4(b) of the Lower Brule Sioux Tribe Infrastructure 
     Development Trust Fund Act (Public Law 105-132; 111 Stat. 
     2565) is amended by striking ``$39,300,000'' and inserting 
     ``$176,398,012''.

     SEC. 4. CROW CREEK SIOUX TRIBE.

       Section 4(b) of the Crow Creek Sioux Tribe Infrastructure 
     Development Trust Fund Act of 1996 (Public Law 104-223; 110 
     Stat. 3027) is amended by striking ``$27,500,000'' and 
     inserting ``$100,244,040''.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Leahy, Mr. Warner, Mr. Bingaman, 
        Mr. Allen, Mr. Nelson of Nebraska, Mr. Cochran, Mr. Lautenberg, 
        Mr. Bond, Mr. Harkin, Mr. Domenici, Mr. Jeffords, Mr. 
        Chambliss, Mr. Rockefeller, Mrs. Dole, and Mr. Breaux):
  S. 1531. A bill to require the Secretary of the Treasury to mint 
coins in commemoration of Chief Justice John Marshall; to the Committee 
on Banking, Housing, and Urban Affairs.
  Mr. HATCH. Mr. President, I rise today in support of S. 1531, the 
John Marshall Commemorative Coin Act. This bill authorizes the Treasury 
Department to mint and issue coins bearing the likeness of Chief 
Justice John Marshall for the purpose of supporting the Supreme Court 
Historical Society. Sales of the coin would, in addition to raising 
funds for the Society, also cover all of the costs of minting and 
issuing these coins, so that the American taxpayer would not bear any 
cost whatsoever if this legislation were enacted.
  Justice Oliver Wendell Holmes once called John Marshall ``the great 
Chief Justice.'' After 34 years on the bench, from 1801-1835, Marshall 
earned that title by establishing many of the constitutional doctrines 
we revere today. Writing over 500 opinions, he truly made the third 
branch of government co-equal with the legislative and executive 
branches.
  Marshall's greatness lay in his ability to figure out how to put in 
practice the concept of checks and balances. In powerfully written 
decisions, the Marshall Court established several constitutional 
doctrines, forming the bedrock of contemporary jurisprudence including: 
establishing judicial review, prohibiting State taxation of the Federal 
Government, making the federal supreme court final arbiter of decisions 
issued by State supreme courts, and expounding the limits of the 
contracts and commerce clauses. Indeed, he solidified early Federalist 
ideas by defining the relationships between the Federal Government and 
the States; a position that was forgotten and is only very recently re-
emerging in our jurisprudence.
  Born in 1755, Marshall was a key player in the founding generation 
who established our constitutional government. He was an early and 
active member in the revolutionary cause, joining with the 
revolutionary army and fighting as one of George Washington's Officers 
in at least four major battles and enduring the winter at Valley Forge. 
Marshall later served as a member of Congress and as Secretary of State 
before his ascension to the Supreme Court.
  There is a no more fitting likeness for a coin that would support the 
efforts of the Supreme Court Historical Society. The Society is a non-
profit organization whose purpose is to preserve and disseminate the 
history of the Supreme Court of the United States. Founded by Chief 
Justice Warren Burger, the Society's mission is to provide information 
and historical research on our Nations highest court. The Society 
accomplishes this mission by conducting programs, publishing books, 
supporting historical research and collecting antiques and artifacts 
related to the Court's history.
  Recent research includes efforts to capture the history of the Court 
during the Franklin D. Roosevelt period, the Civil War, and the 
evolution of the Chief Justice's role on the court. Lectures and 
programs are open to the

[[Page 20591]]

public as well as Society members. Additionally, the Society seeks to 
acquire the private papers, period furnishings, and art work relating 
to court history.
  For all of these reasons, I urge my colleagues to join with me in 
this effort to memorialize the Great Chief Justice John Marshall and 
assist a worthwhile organization like the Supreme Court Historical 
Society.
  Thank you, Mr. President, I yield the floor.
  Mr. LEAHY. Mr. President, I join my Judiciary Committee colleague 
Senator Hatch and others in introducing a bill to authorize the minting 
of a commemorative coin in honor of United States Supreme Court Chief 
Justice John Marshall, commonly known as ``the Great Chief Justice.''
  Marshall's contributions to our country have been noted by members of 
the executive and judicial branches. President John Quincy Adams 
described his father's appointment of Marshall to the Supreme Court as 
``one of the most important services rendered by [his father] to his 
country.'' Fellow Supreme Court Justice Joseph Story described Marshall 
in the following terms: ``Patience, moderation, candor, urbanity, 
quickness of perception, dignity of deportment, gentleness of manners, 
genius which commands respect, and learning which justifies 
confidence.'' Congress' passage of the ``John Marshall Commemorative 
Coin Act'' in honor of the upcoming 250th anniversary of his birth 
would be a fitting complement to these, and other, recognitions of 
``the Great Chief Justice's'' extraordinary accomplishments.
  Marshall presided over the Supreme Court during the formative years 
of 1801-1835. Before that time, the Supreme Court played a 
comparatively minor role in our Federal government. Under Marshall's 
leadership, the Court evolved into a powerful institution and assumed 
its role as guardian of the Constitution, and as the arbiter of 
disputes between the Federal government and the States. As one legal 
scholar commented: ``It is not inconceivable that the Supreme Court 
would have remained a minor appendage of our government, and our 
constitutional development taken a distinctly different course, but for 
the fact that John Marshall occupied the Chief Justice's chair during 
the first three decades of the nineteenth century.''
  Marshall is considered the founding father of American Constitutional 
law. To name just a few of Marshall's groundbreaking opinions, Marbury 
v. Madison the first instance in which the Supreme Court pronounced an 
act of Congress unconstitutional is the leading precedent for the 
Court's power to judge the constitutionality of legislative and 
executive acts. In McCulloch v. Maryland, Marshall asserted the right 
of the Supreme Court to decide questions involving the conflicting 
powers of the Federal and State governments, affirmed Congress' 
authority to act in furtherance of its enumerated powers, and 
established the standard for determining when the exercise of a Federal 
power limits the otherwise sovereign power of a State. In Cohens v. 
Virginia, Marshall established the authority of the Federal judiciary 
to review decisions of the highest State courts. As a final 
illustration of Marshall's many important judicial opinions, in Gibbons 
v. Ogden, he set forth Congress' power to regulate commerce among the 
States and with foreign nations.
  Aside from the specific constitutional principles Marshall 
established while on the Court, he made many other important 
contributions to American constitutional law. For example, Marshall 
advocated that judges, as ultimate guardians of the Constitution, 
should be above politics and that the role of the Nation's courts was 
to mitigate the effects of factional politics. Moreover, Marshall 
adopted an approach to constitutional interpretation termed ``fair 
construction'' which struck a middle ground between an overly 
restrictive, and an overly broad, reading of the Constitution because 
he feared that strict construction would ultimately weaken the 
Constitution and, in due course, the Nation.
  In closing, it is difficult to overstate Chief Justice Marshall's 
contributions to our Nation. Many years ago, when I read Marshall's 
opinions in my first year of law school, I admired the Chief Justice. 
Now, having served in Congress and worked within the principles 
Marshall established, I find him all the more admirable. A 
commemorative coin in his honor would be a fitting tribute to ``the 
Great Chief Justice.''
  I ask unanimous consent that the text of bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1531

       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 ``Chief Justice John Marshall 
     Commemorative Coin Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) John Marshall served as the Chief Justice of the 
     Supreme Court of the United States from 1801 to 1835, the 
     longest tenure of any Chief Justice in the Nation's history;
       (2) Under Marshall's leadership, the Supreme Court 
     expounded the fundamental principles of constitutional 
     interpretation, including judicial review, and affirmed 
     national supremacy, both of which served to secure the newly 
     founded United States against dissolution; and
       (3) John Marshall's service to the nascent United States, 
     not only as Chief Justice, but also as a soldier in the 
     Revolutionary War, as a member of the Virginia Congress and 
     the United States Congress, and as Secretary of State, makes 
     him one of the most important figures in our Nation's 
     history.

     SEC. 3. COIN SPECIFICATIONS.

       (a) Denomination.--In commemoration of the 250th 
     anniversary of the birth of Chief Justice John Marshall, the 
     Secretary of the Treasury (in this Act referred to as the 
     ``Secretary'') shall mint and issue not more than 400,000 $1 
     coins, each of which shall--
       (1) weigh 26.73 grams;
       (2) have a diameter of 1.500 inches; and
       (3) contain 90 percent silver and 10 percent copper.
       (b) Legal Tender.--The coins minted under this Act shall be 
     legal tender, as provided in section 5103 of title 31, United 
     States Code.
       (c) Numismatic Items.--For purposes of sections 5134 and 
     5136 of title 31, United States Code, all coins minted under 
     this Act shall be considered to be numismatic items.

     SEC. 4. DESIGN OF COINS.

       (a) Design Requirements.--
       (1) In general.--The design of the coins minted under this 
     Act shall be emblematic of Chief Justice John Marshall and 
     his contributions to the United States.
       (2) Designation and inscriptions.--On each coin minted 
     under this Act, there shall be--
       (A) a designation of the value of the coin;
       (B) an inscription of the year ``2005''; and
       (C) inscriptions of the words ``Liberty'', ``In God We 
     Trust'', ``United States of America'', and ``E Pluribus 
     Unum''.
       (b) Selection.--The design for the coins minted under this 
     Act shall be--
       (1) selected by the Secretary, after consultation with the 
     Commission of Fine Arts, and the Supreme Court Historical 
     Society; and
       (2) reviewed by the Citizens Coinage Advisory Committee.

     SEC. 5. ISSUANCE OF COINS.

       (a) Quality of Coins.--Coins minted under this Act shall be 
     issued in uncirculated and proof qualities.
       (b) Mint Facility.--Only one facility of the United States 
     Mint may be used to strike any particular quality of the 
     coins minted under this Act.
       (c) Commencement of Issuance.--The Secretary may issue 
     coins minted under this Act beginning on January 1, 2005.
       (d) Termination of Minting Authority.--No coins may be 
     minted under this Act after December 31, 2005.

     SEC. 6. SALE OF COINS.

       (a) Sale Price.--The coins minted under this Act shall be 
     sold by the Secretary at a price equal to the sum of--
       (1) the face value of the coins;
       (2) the surcharge provided in section 7 with respect to 
     such coins; and
       (3) the cost of designing and issuing the coins (including 
     labor, materials, dies, use of machinery, overhead expenses, 
     marketing, and shipping).
       (b) Bulk Sales.--The Secretary shall make bulk sales of the 
     coins minted under this Act at a reasonable discount.
       (c) Prepaid Orders.--
       (1) In general.--The Secretary shall accept prepaid orders 
     for the coins minted under this Act before the issuance of 
     such coins.
       (2) Discount.--Sale prices with respect to pre-paid orders 
     under paragraph (1) shall be at a reasonable discount.

     SEC. 7. SURCHARGES.

       (a) In General.--All sales of coins minted under this Act 
     shall include a surcharge of $10 per coin.

[[Page 20592]]

       (b) Distribution.--Subject to section 5134(f) of title 31, 
     United States Code, all surcharges received by the Secretary 
     from the sale of coins issued under this Act shall be 
     promptly paid by the Secretary to the Supreme Court 
     Historical Society for the purposes of--
       (1) historical research about the Supreme Court and the 
     Constitution of the United States and related topics;
       (2) supporting fellowship programs, internships, and 
     docents at the Supreme Court; and
       (3) collecting and preserving antiques, artifacts, and 
     other historical items related to the Supreme Court and the 
     Constitution of the United States and related topics.
       (c) Audits.--The Supreme Court Historical Society shall be 
     subject to the audit requirements of section 5134(f)(2) of 
     title 31, United States Code, with regard to the amounts 
     received by the Society under subsection (b).

     SEC. 8. FINANCIAL ASSURANCES.

       (a) No Net Cost to the Government.--The Secretary shall 
     take such actions as may be necessary to ensure that the 
     minting and issuance of the coins referred to in section 3(a) 
     shall result in no net cost to the Federal Government.
       (b) Payment for the Coins.--The Secretary may not sell a 
     coin referred to in section 3(a) unless the Secretary has 
     received--
       (1) full payment for the coin;
       (2) security satisfactory to the Secretary to indemnify the 
     Federal Government for full payment; or
       (3) a guarantee of full payment satisfactory to the 
     Secretary from a depository institution, the deposits of 
     which are insured by the Federal Deposit Insurance 
     Corporation, the Federal Savings and Loan Insurance 
     Corporation, or the National Credit Union Administration 
     Board.
                                 ______
                                 
      By Ms. STABENOW (for herself, Mr. Enzi, Mr. Johnson, Mr. Hagel, 
        Mr. Schumer, Mr. Bayh, Mr. Carper, and Mr. Corzine):
  S. 1532. A bill to establish the Financial Literacy Commission, and 
for other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.
  Ms. STABENOW. Mr. President, I rise today to introduce the Financial 
Literacy Community Outreach Act of 2003. This bill, which I am proud to 
introduce with my colleague and friend, Mr. Enzi, is the product of 
several months of work. We have reached out to financial literacy 
advocates, financial institutions, Federal agencies, and other 
interested parties to craft a comprehensive bill to streamline, 
augment, and improve our government's approach to financial literacy.
  The need for this legislation is clear. Studies show alarming 
shortcomings in the state of financial literacy in America. For 
example, in a survey of consumers 18 years and older conducted by the 
American Association of Retired Persons in late 1998, only 11 percent 
of respondents correctly answered 4 basic financial questions. A study 
by the Jump$tart Coalition for Personal Financial Literacy found that, 
in 2002, on average, high school seniors could correctly answer only 
about 50 percent of a set of financial answers put to them a failing 
grade.
  In addition, from 1990 to 2000, the outstanding credit card debt 
among households more than tripled from $200 billion to $600 billion. 
And, a 2002 study by John Hancock found that, in a study it did, 50 
percent of respondents said they spend half an hour or less per month 
managing their retirement funds.
  These are all very disturbing statistics and, just a few examples of 
why I feel the need to act to improve our government's approach to this 
problem. We need a clear and effective strategy to address these 
problems.
  The Federal Government understands that financial literacy is 
essential to a healthy economy and the protection of consumers. That is 
why many Federal departments and agencies have employed their resources 
and expertise to educate the public about how to accomplish such goals 
as realizing the dreams of homeownership, saving for a child's college 
education, and planning for a secure retirement. These agencies do this 
through grant programs, through special training, and by developing 
financial literacy materials.
  Unfortunately, what Mr. Enzi and I, as well as others active on this 
issue, have come to realize is that these programs are uncoordinated 
and, in some places, duplicative. There is no mechanism for these 
agencies to interact and assess the good work they are doing. That is 
why, in our legislation, we set up a Federal Financial Literacy 
Commission.
  Made up of Federal decision makers with jurisdiction over one or more 
financial literacy programs, including the Federal Reserve, the FDIC, 
the Treasury Department, the Department of Housing and Urban 
Development, the Securities and Exchange Commission, and the Small 
Business Administration, our Commission, and its constituent members, 
will take all necessary steps to coordinate, streamline and improve 
existing programs. The Commission will also make recommendations to 
Congress on legislation that may be needed to improve financial 
education.
  I am pleased to say that this new Commission will operate as a nexus 
for all Federal financial literacy materials, grants, and information; 
spearhead efforts to reach out to the public with financial literacy 
messages; manage a toll free hotline; operate a website promoting 
financial literacy and highlighting Federal grants, materials, and 
programs; and, it may feature private and non-profit resources 
available to the public.
  Improving the state of financial literacy is a common sense thing to 
do. It is something that we can do through cooperation and strategic 
thinking about our Federal resources. And, it can be done with the 
input of all concerned interests. Many people in the Senate have worked 
diligently on the subject of financial literacy, including Mr. 
Sarbanes, the Ranking Member of the Banking, Housing, and Urban Affairs 
Committee who has done important work on this subject.
  I am pleased that Mr. Enzi is the lead Republican sponsor of this 
legislation; he is a true leader and cares passionately about this 
issue. And, I appreciate the leadership of the bipartisan group of 
Senators who have agreed to cosponsor our bill: Mr. Hagel, Mr. Johnson, 
Mr. Schumer, Mr. Bayh, Mr. Carper, and Mr. Corzine. I look forward to 
working with them and all of my other colleagues in the Senate to 
ensure that we have an effective, coordinated, and comprehensive 
Federal approach to improving financial literacy in our country.
  I ask unanimous consent that the text of this legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1532

       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 ``Financial Literacy Community 
     Outreach Act''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) although the evolution of our financial system has 
     offered families in the United States many new opportunities 
     to build wealth and security, the ready availability of 
     credit, an overwhelming array of investment and savings 
     options, and the shifting of responsibility for retirement 
     savings from employer to employee has made the understanding 
     of personal finance ever more important;
       (2) many young adults within the United States have 
     demonstrated difficulty understanding basic financial 
     concepts;
       (3) in surveys of high school seniors conducted by the 
     JumpStart Coalition for Personal Financial Literacy--
       (A) in 1997 participants, on average, failed, and answered 
     only 57 percent of the questions correctly;
       (B) in 2000, the average score fell to 51 percent; and
       (C) in 2002, disturbingly, on average, only 50 percent of 
     the questions were answered correctly;
       (4) in a survey of consumers 18 years and older conducted 
     by the American Association of Retired Persons in late 1998, 
     only 11 percent of respondents correctly answered 4 basic 
     financial questions;
       (5) a similar survey of 800 defined benefit contribution 
     plan participants conducted by John Hancock in 2002 found 
     that 50 percent of respondents said they spend half an hour 
     or less per month managing their retirement funds;
       (6) households in the United States are not reaching their 
     full potential in financial management, and as a result--
       (A) the personal savings rate fell to only 1.6 percent of 
     disposable income in 2001;
       (B) from 1990 to 2000, outstanding credit card debt among 
     households more than tripled from $200,000,000,000 to 
     $600,000,000,000;
       (C) in 2001, the total household debt exceeded total 
     household disposable income by nearly 10 percent;
       (D) less than half of all households hold stock in any 
     form, including mutual funds and 401(k)-style pension plans; 
     and

[[Page 20593]]

       (E) almost half of all workers have accumulated less than 
     $50,000 for their retirement, and \1/3\ have saved less than 
     $10,000;
       (7) many Government agencies recognize that the people of 
     the United States lack expertise in financial literacy and 
     are working to help them, including efforts by--
       (A) the Department of Labor and the Federal Deposit 
     Insurance Corporation, which have joined together to create 
     ``Money Smart'', a training program to help adults enhance 
     their money-management skills;
       (B) the Department of the Treasury, which has formed the 
     ``Financial Services Education Council'', and has published a 
     guide called ``Helping People in Your Community Understand 
     Basic Financial Services'';
       (C) the Department of the Treasury in promoting a middle 
     school curriculum called ``Money Math: Lessons for Life'';
       (D) the Federal Trade Commission, which publishes 
     information about credit, including ``Credit Matters: How to 
     qualify for credit, keep a good credit history, and protect 
     your credit'';
       (E) the Department of Agriculture, which runs the ``Family 
     Economics Program'' to assist educators who deliver basic 
     consumer education and teach personal financial management 
     skills to young people;
       (F) the Securities and Exchange Commission, which has an 
     Office of Investor Education and Assistance;
       (G) the Board of Governors of the Federal Reserve System, 
     which has developed materials explaining how to use credit 
     responsibly, obtain a mortgage, build wealth, and lease a 
     car;
       (H) the Department of Housing and Urban Development in 
     funding housing counseling agencies nationwide that provide 
     advice on how to save for and buy a home; and
       (I) the Government Services Administration in hosting the 
     Federal Consumer Information Center, which has an electronic 
     catalogue of information about Federal financial literacy 
     programs;
       (8) there is very little coordination among Federal 
     programs, resulting in duplication of effort and a confusing 
     array of information spread among many agencies;
       (9) there is a serious problem with financial illiteracy 
     among many low-income consumers, who often--
       (A) do not have a relationship with a mainstream financial 
     services provider;
       (B) lack experience and information about personal finance; 
     and
       (C) are ill-prepared to make informed financial decisions;
       (10) many people in the United States--
       (A) are in a precarious financial position because they 
     lack an understanding of economic and financial fundamentals 
     and of financial planning;
       (B) are forgoing opportunities to build wealth by failing 
     to target their investments to higher yielding, yet secure 
     savings vehicles; and
       (C) are failing to adequately plan and save for retirement; 
     and
       (11) financial literacy is the foundation that supports--
       (A) economic independence for the citizens of the United 
     States; and
       (B) the functioning of our free market economy.

     SEC. 3. DEFINITIONS.

       As used in this Act--
       (1) the term ``Commission'' means the Financial Literacy 
     Commission established under section 101; and
       (2) the term ``financial literacy'' means basic personal 
     income and household money management and planning skills, 
     including--
       (A) saving and investing;
       (B) building wealth;
       (C) managing spending, credit, and debt effectively;
       (D) tax and estate planning;
       (E) the ability to ascertain fair and favorable credit 
     terms and avoid abusive, predatory, or deceptive credit 
     offers;
       (F) the ability to understand, evaluate, and compare 
     financial products, services, and opportunities; and
       (G) all other related skills.

                 TITLE I--FINANCIAL LITERACY COMMISSION

     SEC. 101. ESTABLISHMENT OF FINANCIAL LITERACY COMMISSION.

       (a) In General.--There is established a commission to be 
     known as the Financial Literacy Commission.
       (b) Purpose.--The Commission shall serve to improve the 
     financial literacy of persons in the United States by 
     overseeing, implementing, and reporting upon the effects of 
     the performance of the duties of the Commission set forth in 
     section 102.
       (c) Membership.--
       (1) Composition.--The Commission shall be composed of not 
     more than 19 members, including--
       (A) the Comptroller of the Currency;
       (B) the Secretary of Agriculture of the Department of 
     Agriculture;
       (C) the Secretary of Education of the Department of 
     Education;
       (D) the Secretary of Housing and Urban Development of the 
     Department of Housing and Urban Development;
       (E) the Secretary of Labor of the Department of Labor;
       (F) the Secretary of the Treasury;
       (G) the Chairman of the Federal Deposit Insurance 
     Corporation;
       (H) the Chairman of the Board of Governors of the Federal 
     Reserve System;
       (I) the Chairman of the Federal Trade Commission;
       (J) the Administrator of General Services of the General 
     Services Administration;
       (K) the Commissioner of the Internal Revenue Service;
       (L) the Chairman of the National Credit Union 
     Administration Board;
       (M) the Director of the Office of Thrift Supervision;
       (N) the Chairman of the Securities and Exchange Commission;
       (O) the Administrator of the Small Business Administration;
       (P) the Commissioner of the Social Security Administration; 
     and
       (Q) at the discretion of the President, not more than 3 
     individuals appointed by the President from among the 
     administrative heads of any other Federal agency, department, 
     or other Government entity, whom the President believes would 
     be helpful in implementing the purpose of the Commission.
       (2) Designees.--The individuals referred to in paragraph 
     (1) may appoint a designee from within the department or 
     agency of that individual to serve as a member of the 
     Commission.
       (d) Federal Employee Requirement.--Each member of the 
     Commission shall be an officer or employee of the United 
     States.
       (e) Chairperson.--The Commission shall select a Chairperson 
     from among its members. The Secretary of the Treasury, or the 
     designee thereof under subsection (c)(2), shall chair the 
     initial meeting of the Commission.
       (f) Vice Chairperson.--The Commission shall select a Vice 
     Chairperson from among its members.
       (g) Vacancies.--Any vacancy in the Commission shall be 
     filled in the same manner as the original appointment or 
     designation, as provided under subsection (c).
       (h) Initial Meeting.--The Commission shall hold its first 
     meeting not later than 60 days after the date of enactment of 
     this Act.
       (i) Meetings.--
       (1) Semiannual meetings.--The Commission shall hold, at the 
     call of the Chairperson, 1 meeting every 6 months to conduct 
     necessary business. All such meetings shall be open to the 
     public.
       (2) Discretionary meetings.--The Commission may hold, at 
     the call of the Chairperson, such other meetings as the 
     Chairperson sees fit to carry out this Act.
       (j) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (k) Executive Committee.--
       (1) In general.--The Commission shall establish an 
     Executive Committee comprised of--
       (A) the Chairperson;
       (B) the Vice Chairperson; and
       (C) 3 at-large members selected by the Commission from 
     among members appointed under subsection (c).
       (2) Term.--Members of the Executive Committee selected 
     under paragraph (1)(C) shall serve for such time as 
     determined by the Commission.
       (3) Meetings.--The Executive Committee shall hold, at the 
     call of the Chairperson, 1 meeting every 2 months to conduct 
     necessary administrative business.
       (4) Quorum.--A majority of the members of the Executive 
     Committee shall constitute a quorum.

     SEC. 102. DUTIES OF THE COMMISSION.

       (a) In General.--The Commission, through the authority of 
     the members referred to in section 101(c), shall take such 
     actions as it deems necessary to streamline, improve, or 
     augment the financial literacy programs, materials, and 
     grants of the Federal Government.
       (b) Website.--
       (1) In general.--The Commission shall establish and 
     maintain a website, and attempt to register the domain name 
     ``FinancialLiteracy.gov'', or, if such domain name is not 
     available, a similar domain name.
       (2) Purposes.--The website established under paragraph (1) 
     shall--
       (A) serve as a clearinghouse of information about Federal 
     financial literacy programs;
       (B) provide a coordinated entry point for accessing 
     information about all Federal publications, grants, and 
     materials promoting enhanced financial literacy;
       (C) offer information on all Federal grants to promote 
     financial literacy, and offer information to the public on 
     how to target, apply for, and receive a grant that is most 
     appropriate under the circumstances;
       (D) as the Commission considers appropriate, feature 
     website links to private sector efforts, such as the 
     JumpStart Coalition for Personal Financial Literacy, and 
     feature information about private sector financial literacy 
     programs, materials, or campaigns;
       (E) highlight information about best practices for teaching 
     and promoting financial literacy; and
       (F) offer such other information as the Commission finds 
     appropriate to share with the public in the fulfillment of 
     its purpose.

[[Page 20594]]

       (c) Toll Free Hotline.--The Commission shall establish a 
     toll-free telephone number that shall be made available to 
     members of the public seeking information about issues 
     pertaining to financial literacy.
       (d) Development and Dissemination of Materials.--The 
     Commission shall--
       (1) develop materials to promote financial literacy; and
       (2) disseminate such materials to the general public.
       (e) Administration of Grant Programs.--
       (1) Authority.--The Commission shall be authorized to 
     establish and implement grant programs to promote financial 
     literacy.
       (2) Eligibility.--Grants awarded under paragraph (1) may be 
     awarded to schools, non-profit organizations, units of 
     general local government, faith-based organizations, and such 
     other entities as determined eligible by the Commission.
       (3) Preferences.--In awarding grants under paragraph (1), 
     the Commission shall--
       (A) give preference to entities that have a demonstrated 
     record of serving communities with people who have 
     historically had either limited or no access to financial 
     literacy education; and
       (B) to the extent practicable, award grants to as many 
     entities eligible under paragraph (2) as possible.
       (f) Initial and Annual Reports.--
       (1) Initial report.--
       (A) In general.--Not later than 18 months after the date of 
     the first meeting of the Commission, the Commission shall 
     issue an initial report to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives on the 
     progress of the Commission in carrying out this Act.
       (B) Contents.--The report required under subparagraph (A) 
     shall--
       (i) identify all Federal programs, materials, and grants 
     which seek to improve financial literacy, and assess the 
     effectiveness of such programs; and
       (ii) identify all actions that the Commission has taken to 
     streamline, improve, or augment the financial literacy 
     programs, materials, and grants of the Federal Government.
       (2) Annual report.--
       (A) In general.--Not later than November 30 of each year, 
     the Commission shall submit to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives a report 
     detailing the activities of the Commission during the 
     preceding fiscal year, and making recommendations on ways to 
     enhance financial literacy in the United States.
       (B) Contents.--The report required under subparagraph (A) 
     shall include--
       (i) information concerning the content and public use of 
     the website established under subsection (b);
       (ii) information concerning the usage of the toll-free 
     telephone number established under subsection (c);
       (iii) summaries of the financial literacy materials 
     developed under subsection (d), and data regarding the 
     dissemination of such materials;
       (iv) information about the activities of the Commission 
     planned for the next fiscal year;
       (v) a summary of all Federal efforts to reach out to 
     communities that have historically lacked access to financial 
     literacy materials and education; and
       (vi) such other materials relating to the duties of the 
     Commission as the Commission deems appropriate.
       (g) Periodic Studies.--The Commission may conduct periodic 
     studies regarding the state of financial literacy in the 
     United States, as the Commission determines appropriate.

     SEC. 103. POWERS OF THE COMMISSION.

       (a) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out this Act.
       (b) Advisory Committees.--The Commission shall establish 
     not fewer than 1 advisory committee, consisting of 
     representatives of lending institutions, financial literacy 
     nonprofit organizations, consumer advocates, State and local 
     governments, and such other individuals that the Commission 
     believes could contribute to the work of the Commission.
       (c) Information from Federal Agencies.--The Commission may 
     secure directly from any Federal department or agency such 
     information as the Commission considers necessary to carry 
     out this Act. Upon the request of the Chairman, the head of 
     such department or agency shall furnish such information to 
     the Commission.
       (d) Gifts.--The Commission may accept, use, and dispose of 
     gifts or donations of services or property.

     SEC. 104. COMMISSION PERSONNEL MATTERS.

       (a) Compensation of Members.--Each member of the Commission 
     shall serve without compensation in addition to that received 
     for their service as an officer or employee of the United 
     States.
       (b) Travel Expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Commission.
       (c) Staff.--
       (1) In general.--The Chairperson of the Commission may, 
     without regard to civil service laws and regulations, appoint 
     and terminate an executive director and such other additional 
     personnel as may be necessary to enable the Commission to 
     perform its duties. The employment of an executive director 
     shall be subject to confirmation by members of the 
     Commission.
       (2) Compensation.--The Chairperson of the Commission 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, except that the rate of pay for the executive 
     director and other personnel may not exceed the rate payable 
     for level V of the Executive Schedule under section 5316 of 
     title 5, United States Code.
       (3) Detail of government employees.--Any Federal Government 
     employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (4) Temporary and intermittent services.--The Chairperson 
     of the Commission may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which 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 title 
     5, United States Code.

     SEC. 105. TERMINATION.

       The Commission shall terminate on September 30, 2013.

     SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Commission 
     such sums as may be necessary to carry out this Act, 
     including administrative expenses of the Commission.

  Mr ENZI. Mr. President, the U.S. economy is still the greatest 
economy in the world and our credit markets have helped to make that 
happen. During the past decade, our credit markets have taken advantage 
of technology and innovation in order to provide more consumers with 
more timely credit approvals and with more financing options. Nowhere 
is there a better example of this than our housing market.
  Today, the time it takes to review a mortgage application and approve 
it has been cut drastically by our financial institutions. Consumers 
find that they have a wide array of financing options they can choose 
from to secure the purchase of a home--from fixed-rated loans to 
variable-rate loans, or even adjustable rate loans. While the wide 
variety of choices has helped more families to purchase homes in the 
past decade, even more families could buy homes if they understood how 
the credit market works.
  Although there are many pluses to the expansion of the availability 
of credit there is also a downside. Individuals may get in over their 
heads when too much credit is made available to them. In addition, 
identity theft is a bigger problem than it has been before. Consumers 
need to educate themselves about the potential problems they might face 
and how to avoid them. Increasing consumer financial literacy is not 
just about providing information, however, it is about giving families 
the proper informational tools so that they can put their financial 
affairs in order.
  Today, my friend and colleague, Senator Stabenow and I are 
introducing the ``Financial Literacy Community Outreach Act'' to help 
to bring together all of the federal government's financial literacy 
programs under one roof.
  The Department of Treasury, the Federal Deposit Insurance 
Corporation, the Federal Trade Commission, the Securities and Exchange 
Commission, the Department of Housing and Urban Development, and the 
Department of Labor are just a few of the many federal agencies that 
have established excellent financial literacy programs and initiatives. 
These programs cover a wide variety of topics ranging from how to save, 
spend, and invest to programs that provide guidance on how to prepare 
for retirement, select a pension plan, or purchase a home. Still others 
help individuals avoid the threat of identity theft.
  Unfortunately, consumers attempting to find financial literacy 
information from the federal government may

[[Page 20595]]

find that information scattered throughout the government. Our bill 
would provide a one-stop-shop where consumers could find the 
appropriate financial literacy programs for their needs. A single web 
site and a toll-free number will go a long way toward bringing this 
vital information to the individuals and families who need it.
  In addition, the bill establishes the Financial Literacy Commission, 
a body comprised of the heads of the federal agencies with financial 
literacy programs. The Commission will ensure that the federal 
government has a cohesive and coordinated federal policy on financial 
literacy as it provides Congress with vital information on what can be 
improved in our government's financial literacy outreach efforts. In 
addition to the web site and the toll-free number, the Commission will 
highlight successful public/private partnerships already existing 
around the country.
  One such partnership is thriving in my home state of Wyoming. The 
Wyoming Partners in HomeBuyer Education, led by the Wyoming Community 
Development Authority, includes local banks, real estate agents, the 
University of Wyoming, the U.S. Department of Agriculture, the U.S. 
Department of Housing and Urban Development, and Fannie Mae, in the 
effort to provide distance learning to potential home-buyers through 
the use of compressed video technology. This training program is 
perfect for a state like Wyoming in that home-buyers in rural 
communities have access to all of the essential elements of the home 
buying experience just like their urban community counterparts.
  To date, more than 3,000 individuals have completed the training 
program and it has led to making the home-buying process easier and 
more understandable for rural and urban families alike.
  I strongly believe that this bill will help millions of families find 
the appropriate financial literacy materials they need to make better 
credit and investment decisions.
  It is my pleasure to be cosponsoring this bill with Senator Stabenow 
because of our shared concern about making financial literacy available 
to more families across the country. In addition, I would like to 
recognize Senator Sarbanes' tremendous effort to focus our attention on 
financial literacy, both when he was Chairman of the Committee on 
Banking, Housing and Urban Affairs last year and as Ranking Member of 
the Committee this year. He has been an extraordinary advocate for this 
important issue. Chairman Shelby of the Committee has also recognized 
the importance of this issue, as just this week, it was the subject of 
a hearing by the Committee. I look forward to working with my 
colleagues on the Committee and in the full Senate to ensure that we 
expand and build upon the government's present financial literacy 
efforts to help individuals and families increase their knowledge of 
and access to our credit and investment markets.
                                 ______
                                 
      By Ms. CANTWELL (for herself and Mr. Enzi):
  S. 1533. A bill to prevent the crime of identity theft, mitigate the 
harm to individuals throughout the Nation who have been victimized by 
identity theft, and for other purposes; to the Committee on the 
Judiciary.
  Ms. CANTWELL. Mr. President, I rise today to re-introduce legislation 
critical to helping victims of identity theft. This legislation, the 
Identity Theft Victims Assistance Act, passed the Senate by unanimous 
consent in the 107th Congress, and I look forward to its passage again 
this Congress. Last year, the legislation had strong bipartisan 
support, as evidenced by the fact that Senator Mike Enzi is 
cosponsoring it again. The bill has broad support from law enforcement, 
consumers' groups, and privacy advocates. Last year, the National 
Center for the Victims of Crime, the Fraternal Order of Police, 
Consumers Union, Identity Theft Resource Center, U.S. Public Interest 
Group, Police Executive Forum, Privacy Rights Clearinghouse, and 
Amazon.com supported the bill. Twenty-two state Attorneys General 
signed a letter supporting the legislation.
  Identity theft is the fastest-growing crime in the country. The 
Federal Trade Commission found that complaints of identity theft 
increased 87 percent between 2001 and 2002, and over 161,000 complaints 
were received by the agency last year. A July 2003 study by Gartner 
Inc. found that there was a 79 percent increase in identity theft in 
the past year alone. Identity theft now accounts for 43 percent of 
consumer fraud complaints and leads the list of consumer frauds. It is 
an insidious crime because it often occurs without the victim's 
knowledge, yet leaves scars on their credit records and reputations 
that can last for years, and cost thousands of dollars to repair.
  The Secret Service has estimated that consumers lose $745 million to 
the problem each year, and this number is clearly growing as the number 
of identity thefts increases. When a victim realizes that his or her 
identity was stolen it's just the beginning of their troubles. The FTC 
estimates that it costs the average victim $1,000 in long-distance 
phone calls, notary charges, mailing costs and lost wages to get his or 
her financial life back in order after an identity thief strikes. The 
Identity Theft Resources Center estimates that average identity theft 
victims spend 175 hours to clear their records.
  But the costs are not confined to consumers--identity theft hits 
businesses and the economy, too. Identity theft-related losses suffered 
by MasterCard and Visa jumped from $79.9 million in 1996 to $144.3 
million in 2000. One study estimates that by 2006 identity theft will 
cost the financial institution sector alone $8 billion per year.
  To take just one of many examples from my state, Jenni D'Avis of Mill 
Creek, Washington, had her Social Security number stolen when a thief 
took her mail and found the number listed on a letter from her 
community college. The criminal used the number to obtain a state 
identification card, and in turn used that to get credit. In just 23 
days, the thief ran up $100,000 in bad debt--all in Jenni's name. Once 
she became aware of the problem, she had to become a ``Nancy Drew,'' 
and track down information. Businesses were reluctant to give her the 
information she needed to determine the extent of the problem and clear 
her name and credit record. She is still repairing the damage.
  Sadly, Jenni's story is not unique. Victims of identity theft have 
difficulty restoring their credit and regaining control of their 
identity, in part, because they have no simple means to show creditors 
and credit reporting agencies that they are who they say they are. In 
order to prove fraud, a victim often needs copies of creditors records, 
such as applications and information, and records from the companies 
the identity thief did business with. Ironically, victims have 
difficulty obtaining these business records because the victim's 
personal identifying information does not match the information on file 
with the business.
  This bill fixes that problem. The Identity Theft Victims Assistance 
Act creates a standardized national process for a person to establish 
he or she is a victim of identity theft for purposes of tracing 
fraudulent credit transactions and obtaining the evidence to repair 
them. It requires the Federal Trade Commission to make available a 
simple certificate that, when notarized, provides certainty to 
businesses and financial institutions that the person is who they claim 
to be, is a victim of identity theft, and has filed claims with both 
local law enforcement and the FTC. With this document in hand, the 
victim can then obtain from businesses the records they need.
  The need for a national system is readily apparent, as identity theft 
is increasingly a crime that crosses state lines. One of the greatest 
challenges identity theft presents to law enforcement is that a stolen 
identity is used to create false identities in many different 
localities in different states. Although identity theft is a federal 
crime, most often, state and local law enforcement agencies are 
responsible for investigating and prosecuting the crimes. Yet law 
enforcement has yet to fully recognize the serious nature of

[[Page 20596]]

the problem or to develop a coordinated investigative strategy. For 
example, in the case of Michael Calip of Centralia, Washington, 
identity thieves not only ran up $60,000 in debts, they also committed 
crimes using his name--trashing his credit record and creating a 
criminal record. Michael tracked the thieves to Wyoming, but had 
difficulty convincing local authorities there to pursue his case.
  My bill for the first time also permits a victim to designate the 
investigating agency, either local or state law enforcement or federal 
investigators, to act as their agents in obtaining evidence of identity 
theft. This both eases the burden on the victim and aids police in 
investigating suspected identity theft rings. In addition it requires 
the existing Identity Theft Coordinating Committee to consult with 
state and local law enforcement agencies.
  Acquiring the evidence of the fraudulent use of identity currently 
can be an enormous and time-consuming problem for victims. The Identity 
Theft Victims Assistance Act makes this job easier by establishing that 
any business presented with the FTC certificate identifying the person 
as a victim of identity theft, together with a police report and a 
government issued photo ID must deliver copies of all the financial 
records that document the fraud to the victim within 20 days. This is a 
critically important change from current law because it guarantees that 
victims will be able to obtain the evidence they need while also 
providing businesses more certainty that they are not violating 
someone's privacy or providing sensitive information to the wrong 
parties. It also provides new liability protections for businesses that 
make a good faith effort to assist victims of identity theft.
  Of course, the greatest harm to consumers victimized by theft of 
their identity is often a bad credit rating or a poor credit score that 
results from fraudulent use of the consumer's identity. According to 
the FTC, it often takes about a year for people to discover someone is 
using personal information for fraudulent purposes, allowing 
significant damage to otherwise stellar credit records. Even after a 
consumer reports to a credit reporting agency that they have been 
victimized by identity theft, the consumer often can not get the 
reporting agencies to block reporting of activities that resulted from 
the identity theft.
  My bill again requires that presentation of the FTC certificate, 
police report and photo identification establish that the person is in 
fact a victim of identity theft and requires credit-reporting agencies 
to block information that appears on a victim's credit report as a 
result of the identity theft. It also changes current law that requires 
individuals to bring suit against a credit reporting agency within two 
years from the time the agency commits a violation of laws on fair 
reporting of credit. This makes little sense, since it may be years 
before a misrepresentation comes to the attention of a victim of 
identity theft. The bill requires that the statute of limitations begin 
ticking from the time when a consumer discovers or has reason to know 
that a misrepresentation by a credit reporting agency has occurred.
  The bill leaves in place state laws that are more stringent and 
provides that either federal prosecutors or State Attorneys General may 
enforce this law.
  Jenni and Michael's stories illustrate the unique problems victims of 
identity theft face. Although penalties exist for identity thieves, no 
remedies are available for their victims. The scope of the problem is 
made worse because it's too easy for a criminal to steal someone's 
identity and cause serious harm before the theft is even discovered. 
And when these criminals cross state lines, it can be even harder for 
victims to trace the problem and repair the damage. For these reasons, 
it's imperative that we pass federal legislation for the victims of 
identity theft.
  The government, creditors and credit reporting agencies have a shared 
responsibility to assist identity theft victims mitigate the harm that 
results from frauds perpetrated in the victim's name. We need to build 
up the law enforcement network, already started by the Federal Trade 
Commission and other federal agencies under the Identity Theft and 
Assumption Deterrence Act of 1998. We need to further improve law 
enforcement coordination, particularly between the various local and 
state jurisdictions combating identity theft and the associated crimes.
  We also need to provide better and timelier information to businesses 
so they can head off fraud before it happens. That is why my bill also 
expands the jurisdiction of the interagency coordinating committee 
established under the Internet False Identification Act of 2000. 
Currently, the coordination committee has the mandate to study and 
report to Congress on federal investigation and enforcement of identity 
theft crimes. The Identity Theft Victims Assistance Act broadens the 
mandate for the coordinating committee to consider state and local 
enforcement of identity theft law and specifically requires the 
committee to examine and recommend what assistance the federal 
government can provide state and local law enforcement agencies to 
better coordinate in the battle against identity theft.
  Mr. President, there is no doubt about the scope of the problem: 
identity theft is already a major problem, and it's getting worse. We 
must provide victims with the tools they need to regain control of 
their lives. The Identity Theft Victims Assistance of 2003 will help 
victims of identity theft recover their identity and restore their good 
credit. I look forward to working with my colleagues to promptly enact 
this bill into law.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1533

       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 ``Identity Theft Victims 
     Assistance Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The crime of identity theft is the fastest growing 
     crime in the United States. According to a recent estimate, 
     7,000,000 Americans were victims of identity theft in the 
     past year, a 79 percent increase over previous estimates.
       (2) Stolen identities are often used to perpetuate crimes 
     in many cities and States, making it more difficult for 
     consumers to restore their respective identities.
       (3) Identity theft cost consumers more than $745,000,000 in 
     1998 and has increased dramatically in the last few years. 
     The credit card industry alone lost an estimated $144.3 
     million in 2000.
       (4) Identity theft is ruinous to the good name and credit 
     of consumers whose identities are misappropriated, and 
     consumers may be denied otherwise deserved credit and may 
     have to spend enormous time, effort, and money to restore 
     their respective identities.
       (5) Victims are often required to contact numerous Federal, 
     State, and local law enforcement agencies and creditors over 
     many years as each event of fraud arises.
       (6) As of the date of enactment of this Act, a national 
     mechanism does not exist to assist identity theft victims to 
     obtain evidence of identity theft, restore their credit, and 
     regain control of their respective identities.
       (7) Victims of identity theft need a nationally 
     standardized means of--
       (A) establishing their true identities and claims of 
     identity theft to all business entities, credit reporting 
     agencies, and Federal and State law enforcement agencies;
       (B) obtaining information documenting fraudulent 
     transactions from business entities;
       (C) reporting identity theft to consumer credit reporting 
     agencies.
       (8) One of the greatest law enforcement challenges posed by 
     identity theft is that stolen identities are often used to 
     perpetrate crimes in many different localities in different 
     States, and although identity theft is a Federal crime, most 
     often, State and local law enforcement agencies are 
     responsible for investigating and prosecuting the crimes.
       (9) Law enforcement, business entities, credit reporting 
     agencies, and government agencies have a shared 
     responsibility to assist victims of identity theft to 
     mitigate the harm caused by any fraud perpetrated in the name 
     of the victims.

     SEC. 3. TREATMENT OF IDENTITY THEFT MITIGATION.

       (a) In General.--Chapter 47 of title 18, United States 
     Code, is amended by adding after section 1028 the following:

[[Page 20597]]



     ``Sec. 1028A. Treatment of identity theft mitigation

       ``(a) Definitions.--As used in this section--
       ``(1) the term `business entity' means any corporation, 
     trust, partnership, sole proprietorship, or unincorporated 
     association, including any financial service provider, 
     financial information repository, creditor (as that term is 
     defined in section 103 of the Truth in Lending Act (15 U.S.C. 
     1602)), telecommunications, utilities, or other service 
     provider;
       ``(2) the term `consumer' means an individual;
       ``(3) the term `financial information' means information 
     identifiable as relating to an individual consumer that 
     concerns the amount and conditions of the assets, 
     liabilities, or credit of the consumer, including--
       ``(A) account numbers and balances;
       ``(B) nonpublic personal information, as that term is 
     defined in section 509 of the Gramm-Leach-Bliley Act (15 
     U.S.C. 6809); and
       ``(C) codes, passwords, social security numbers, tax 
     identification numbers, State identifier numbers issued by a 
     State department of licensing, and other information used for 
     the purpose of account access or transaction initiation;
       ``(4) the term `financial information repository' means a 
     person engaged in the business of providing services to 
     consumers who have a credit, deposit, trust, stock, or other 
     financial services account or relationship with that person;
       ``(5) the term `identity theft' means a violation of 
     section 1028 or any other similar provision of applicable 
     Federal or State law;
       ``(6) the term `means of identification' has the same 
     meaning given the term in section 1028;
       ``(7) the term `victim' means a consumer whose means of 
     identification or financial information has been used or 
     transferred (or has been alleged to have been used or 
     transferred) without the authority of that consumer with the 
     intent to commit, or with the intent to aid or abet, an 
     identity theft; and
       ``(8) the terms not defined in this section or otherwise 
     defined in section 3(s) of the Federal Deposit Insurance Act 
     (12 U.S.C. 1813(s)) shall have the meaning given to them in 
     section 1(b) of the International Banking Act of 1978 (12 
     U.S.C. 3101).
       ``(b) Information Available to Victims.--
       ``(1) In general.--A business entity that possesses 
     information relating to an alleged identity theft, or that 
     has entered into a transaction, provided credit, provided, 
     for consideration, products, goods, or services, accepted 
     payment, otherwise entered into a commercial transaction for 
     consideration with a person that has made unauthorized use of 
     the means of identification of the victim, or possesses 
     information relating to such transaction, shall, not later 
     than 20 days after the receipt of a written request by the 
     victim, meeting the requirements of subsection (c), provide, 
     without charge, a copy of all application and business 
     transaction information related to the transaction being 
     alleged as an identity theft to--
       ``(A) the victim;
       ``(B) any Federal, State, or local governing law 
     enforcement agency or officer specified by the victim in such 
     a request; or
       ``(C) any law enforcement agency investigating the identity 
     theft and authorized by the victim to take receipt of records 
     provided under this section.
       ``(2) Rule of construction.--
       ``(A) In general.--No provision of Federal or State law 
     prohibiting the disclosure of financial information by a 
     business entity to third parties shall be used to deny 
     disclosure of information to the victim under this section.
       ``(B) Limitation.--Except as provided in subparagraph (A), 
     nothing in this section permits a business entity to disclose 
     information that the business entity is otherwise prohibited 
     from disclosing under any other applicable provision of 
     Federal or State law.
       ``(c) Verification of Identity and Claim.--Unless a 
     business entity, at its discretion, is otherwise able to 
     verify the identity of a victim making a request under 
     subsection (b)(1), the victim shall provide to the business 
     entity--
       ``(1) as proof of positive identification, at the election 
     of the business entity--
       ``(A) the presentation of a government-issued 
     identification card;
       ``(B) if providing proof by mail, a copy of a government-
     issued identification card; or
       ``(C) upon the request of the person seeking business 
     records, the business entity may inform the requesting person 
     of the categories of identifying information that the 
     unauthorized person provided the business entity as 
     personally identifying information, and may require the 
     requesting person to provide identifying information in those 
     categories; and
       ``(2) as proof of a claim of identity theft, at the 
     election of the business entity--
       ``(A) a copy of a police report evidencing the claim of the 
     victim of identity theft;
       ``(B) a properly completed copy of a standardized affidavit 
     of identity theft developed and made available by the Federal 
     Trade Commission; or
       ``(C) any properly completed affidavit of fact that is 
     acceptable to the business entity for that purpose.
       ``(d) Limitation on Liability.--No business entity may be 
     held liable for a disclosure, made in good faith and 
     reasonable judgment, to provide information under this 
     section with respect to an individual in connection with an 
     identity theft to other business entities, law enforcement 
     authorities, victims, or any person alleging to be a victim, 
     if--
       ``(1) the business entity complies with subsection (c); and
       ``(2) such disclosure was made--
       ``(A) for the purpose of detection, investigation, or 
     prosecution of identity theft; or
       ``(B) to assist a victim in recovery of fines, restitution, 
     rehabilitation of the credit of the victim, or such other 
     relief as may be appropriate.
       ``(e) Authority To Decline To Provide Information.--A 
     business entity may decline to provide information under 
     subsection (b) if, in the exercise of good faith and 
     reasonable judgment, the business entity determines that--
       ``(1) this section does not require disclosure of the 
     information;
       ``(2) the request for the information is based on a 
     misrepresentation of fact by the victim relevant to the 
     request for information; or
       ``(3) the information requested is Internet navigational 
     data or similar information about a person's visit to a 
     website or online service.
       ``(f) No New Recordkeeping Obligation.--Nothing in this 
     section creates an obligation on the part of a business 
     entity to obtain, retain, or maintain information or records 
     that are not otherwise required to be obtained, retained, or 
     maintained in the ordinary course of its business or under 
     other applicable law.
       ``(g) Affirmative Defense.--In any civil action brought to 
     enforce this section, it is an affirmative defense (which the 
     defendant must establish by a preponderance of the evidence) 
     for a business entity to file an affidavit or answer stating 
     that--
       ``(1) the business entity has made a reasonable diligent 
     search of its available business records; and
       ``(2) the records requested under this section do not exist 
     or are not available.
       ``(h) No Private Right of Action.--Nothing in this section 
     shall be construed to provide a private right of action or 
     claim for relief.
       ``(i) Enforcement.--
       ``(1) Injunctive actions by the attorney general.--
       ``(A) In general.--Whenever it appears that a business 
     entity to which this section applies has engaged, is engaged, 
     or is about to engage, in any act or practice constituting a 
     violation of this section, the Attorney General of the United 
     States may bring a civil action in an appropriate district 
     court of the United States to--
       ``(i) enjoin such act or practice;
       ``(ii) enforce compliance with this section; and
       ``(iii) obtain such other equitable relief as the court 
     determines to be appropriate.
       ``(B) Other injunctive relief.--Upon a proper showing in 
     the action under subparagraph (A), the court shall grant a 
     permanent injunction or a temporary restraining order without 
     bond.
       ``(2) Administrative enforcement.--
       ``(A) Federal trade commission.--
       ``(i) In general.--Except to the extent that administrative 
     enforcement is specifically committed to another agency under 
     subparagraph (B), a violation of this section shall be deemed 
     an unfair or deceptive act or practice in violation of the 
     Federal Trade Commission Act (15 U.S.C. 41 et seq.), for 
     purposes of the exercise by the Federal Trade Commission of 
     its functions and powers under that Act.
       ``(ii) Available functions and powers.--All of the 
     functions and powers of the Federal Trade Commission under 
     the Federal Trade Commission Act are available to the 
     Commission to enforce compliance by any person with this 
     section.
       ``(B) Other federal agencies.--Compliance with any 
     requirements under this section may be enforced--
       ``(i) under section 8 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1818)--

       ``(I) by the Office of the Comptroller of the Currency, 
     with respect to national banks, and Federal branches and 
     Federal agencies of foreign banks (except brokers, dealers, 
     persons providing insurance, investment companies, and 
     investment advisers);
       ``(II) by the Board of Governors of the Federal Reserve 
     System, with respect to member banks of the Federal Reserve 
     System (other than national banks), branches and agencies of 
     foreign banks (other than Federal branches, Federal agencies, 
     and insured State branches of foreign banks), commercial 
     lending companies owned or controlled by foreign banks, and 
     organizations operating under section 25 or 25A of the 
     Federal Reserve Act (12 U.S.C. 601 et seq. and 611 et seq.);
       ``(III) by the Board of Directors of the Federal Deposit 
     Insurance Corporation, with respect to banks insured by the 
     Federal Deposit Insurance Corporation (other than members of 
     the Federal Reserve System), insured State branches of 
     foreign banks, and any subsidiaries of such entities (except 
     brokers, dealers, persons providing insurance, investment 
     companies, and investment advisers); and

[[Page 20598]]

       ``(IV) by the Director of the Office of Thrift Supervision, 
     with respect to savings associations, the deposits of which 
     are insured by the Federal Deposit Insurance Corporation, and 
     any subsidiaries of such savings associations (except 
     brokers, dealers, persons providing insurance, investment 
     companies, and investment advisers);

       ``(ii) by the Board of the National Credit Union 
     Administration, under the Federal Credit Union Act (12 U.S.C. 
     1751 et seq.), with respect to any federally insured credit 
     union, and any subsidiaries of such credit union;
       ``(iii) by the Securities and Exchange Commission, under 
     the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), 
     with respect to any broker or dealer;
       ``(iv) by the Securities and Exchange Commission, under the 
     Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.), 
     with respect to investment companies;
       ``(v) by the Securities and Exchange Commission, under the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.), 
     with respect to investment advisers registered with the 
     Commission under such Act;
       ``(vi) by the Secretary of Transportation, under subtitle 
     IV of title 49, with respect to all carriers subject to the 
     jurisdiction of the Surface Transportation Board;
       ``(vii) by the Secretary of Transportation, under part A of 
     subtitle VII of title 49, with respect to any air carrier or 
     any foreign air carrier subject to that part; and
       ``(viii) by the Secretary of Agriculture, under the Packers 
     and Stockyards Act, 1921 (7 U.S.C. 181 et seq.), except as 
     provided in section 406 of that Act (7 U.S.C. 226, 2271), 
     with respect to any activities subject to that Act.
       ``(C) Agency powers.--
       ``(i) In general.--A violation of any requirement imposed 
     under this section shall be deemed to be a violation of a 
     requirement imposed under any Act referred to under 
     subparagraph (B), for the purpose of the exercise by any 
     agency referred to under subparagraph (B) of its powers under 
     any such Act.
       ``(ii) Rule of construction.--Nothing in this section shall 
     be construed to prevent a Federal agency from exercising the 
     powers conferred upon such agency by Federal law to--

       ``(I) conduct investigations;
       ``(II) administer oaths or affirmations; or
       ``(III) compel the attendance of witnesses or the 
     production of documentary or other evidence.

       ``(3) Parens patriae authority.--
       ``(A) Civil actions.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been, or is threatened to be, 
     adversely affected by a violation of this section by any 
     business entity, the State, as parens patriae, may bring a 
     civil action on behalf of the residents of the State in a 
     district court of the United States of appropriate 
     jurisdiction to--
       ``(i) enjoin that practice;
       ``(ii) enforce compliance with this section;
       ``(iii) obtain damages--

       ``(I) in the sum of actual damages, restitution, and other 
     compensation on behalf of the affected residents of the 
     State; and
       ``(II) punitive damages, if the violation is willful or 
     intentional; and

       ``(iv) obtain such other equitable relief as the court may 
     consider to be appropriate.
       ``(B) Notice.--Before filing an action under subparagraph 
     (A), the attorney general of the State involved shall, if 
     practicable, provide to the Attorney General of the United 
     States, and where applicable, to the appropriate Federal 
     agency with the authority to enforce this section under 
     paragraph (2)--
       ``(i) a written notice of the action; and
       ``(ii) a copy of the complaint for the action.
       ``(4) Intervention.--
       ``(A) In general.--On receiving notice of an action under 
     paragraph (3), the Attorney General of the United States, and 
     any Federal agency with authority to enforce this section 
     under paragraph (2), shall have the right to intervene in 
     that action.
       ``(B) Effect of intervention.--Any person or agency under 
     subparagraph (A) that intervenes in an action under paragraph 
     (2) shall have the right to be heard on all relevant matters 
     arising therein.
       ``(C) Service of process.--Upon the request of the Attorney 
     General of the United States or any Federal agency with the 
     authority to enforce this section under paragraph (2), the 
     attorney general of a State that has filed an action under 
     this section shall, pursuant to rule 4(d)(4) of the Federal 
     Rules of Civil Procedure, serve the Attorney General of the 
     United States or the head of such Federal agency, with a copy 
     of the complaint.
       ``(5) Construction.--For purposes of bringing any civil 
     action under this subsection, nothing in this section shall 
     be construed to prevent an attorney general of a State from 
     exercising the powers conferred on such attorney general by 
     the laws of that State to--
       ``(A) conduct investigations;
       ``(B) administer oaths or affirmations; or
       ``(C) compel the attendance of witnesses or the production 
     of documentary and other evidence.
       ``(6) Limitation on state action while federal action is 
     pending.--In any case in which an action is instituted by or 
     on behalf of the Attorney General of the United States, or 
     appropriate Federal regulator authorized under paragraph (2), 
     for a violation of this section, no State may, during the 
     pendency of that action, institute an action under this 
     section against any defendant named in the complaint in that 
     action for such violation.
       ``(7) Venue; service of process.--
       ``(A) Venue.--Any action brought under this subsection may 
     be brought in the district court of the United States--
       ``(i) where the defendant resides;
       ``(ii) where the defendant is doing business; or
       ``(iii) that meets applicable requirements relating to 
     venue under section 1391 of title 28.
       ``(B) Service of process.--In an action brought under this 
     subsection, process may be served in any district in which 
     the defendant--
       ``(i) resides;
       ``(ii) is doing business; or
       ``(iii) may be found.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 47 of title 18, United States Code, is 
     amended by inserting after the item relating to section 1028 
     the following new item:

``1028A. Treatment of identity theft mitigation.''.

     SEC. 4. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT.

       (a) Consumer Reporting Agency Blocking of Information 
     Resulting From Identity Theft.--Section 611 of the Fair 
     Credit Reporting Act (15 U.S.C. 1681i) is amended by adding 
     at the end the following:
       ``(e) Block of Information Resulting From Identity Theft.--
       ``(1) Block.--Except as provided in paragraphs (4) and (5) 
     and not later than 30 days after the date of receipt of--
       ``(A) proof of the identity of a consumer; and
       ``(B) an official copy of a police report evidencing the 
     claim of the consumer of identity theft,

     a consumer reporting agency shall block the reporting of any 
     information identified by the consumer in the file of the 
     consumer resulting from the identity theft, so that the 
     information cannot be reported.
       ``(2) Reinvestigation.--A consumer reporting agency shall 
     reinvestigate any information that a consumer has requested 
     to be blocked under paragraph (1) in accordance with the 
     requirements of subsections (a) through (d).
       ``(3) Notification.--A consumer reporting agency shall, 
     within the time period specified in subsection (a)(2)(A)--
       ``(A) provide the furnisher of the information identified 
     by the consumer under paragraph (1) with the information 
     described in subsection (a)(2); and
       ``(B) notify the furnisher--
       ``(i) that the information may be a result of identity 
     theft;
       ``(ii) that a police report has been filed;
       ``(iii) that a block has been requested under this 
     subsection; and
       ``(iv) of the effective date of the block.
       ``(4) Authority to decline or rescind.--
       ``(A) In general.--A consumer reporting agency may at any 
     time decline to block, or may rescind any block, of consumer 
     information under this subsection if--
       ``(i) in the exercise of good faith and reasonable 
     judgment, the consumer reporting agency finds that--

       ``(I) the block was issued, or the request for a block was 
     made, based on a misrepresentation of fact by the consumer 
     relevant to the request to block; or
       ``(II) the consumer knowingly obtained possession of goods, 
     services, or money as a result of a transaction for which a 
     block has been requested, or the consumer should have known 
     that the consumer obtained possession of goods, services, or 
     money as a result of a transaction for which a block has been 
     requested; or

       ``(ii) the consumer agrees that the blocked information or 
     portions of the blocked information were blocked in error.
       ``(B) Notification to consumer.--If the block of 
     information is declined or rescinded under this paragraph, 
     the affected consumer shall be notified, in the same manner 
     and within the same time period as consumers are notified of 
     the reinsertion of information under subsection (a)(5)(B).
       ``(C) Significance of block.--For purposes of this 
     paragraph, if a consumer reporting agency rescinds a block, 
     the presence of information in the file of a consumer prior 
     to the blocking of such information is not evidence of 
     whether the consumer knew or should have known that the 
     consumer obtained possession of any goods, services, or 
     monies as a result of the transaction that was blocked.
       ``(5) Exception.--A consumer reporting agency shall not be 
     required to comply with this subsection when such agency is 
     issuing information for authorizations, for the purpose of 
     approving or processing negotiable instruments, electronic 
     funds transfers, or similar methods of payment, based solely 
     on negative information, including--
       ``(A) dishonored checks;
       ``(B) accounts closed for cause;
       ``(C) substantial overdrafts;
       ``(D) abuse of automated teller machines; or

[[Page 20599]]

       ``(E) other information which indicates a risk of fraud 
     occurring.''.
       (b) False Claims.--Section 1028 of title 18, United States 
     Code, is amended by adding at the end the following:
       ``(j) Any person who knowingly falsely claims to be a 
     victim of identity theft for the purpose of obtaining the 
     blocking of information by a consumer reporting agency under 
     section 611(e)(1) of the Fair Credit Reporting Act (15 U.S.C. 
     1681i(e)(1)) shall be fined under this title, imprisoned not 
     more than 3 years, or both.''.
       (c) Statute of Limitations.--
       (1) In general.--Section 618 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681p) is amended to read as follows:

     ``SEC. 618. JURISDICTION OF COURTS; LIMITATION ON ACTIONS.

       ``(a) In General.--Except as provided in subsections (b) 
     and (c), an action to enforce any liability created under 
     this title may be brought in any appropriate United States 
     district court without regard to the amount in controversy, 
     or in any other court of competent jurisdiction, not later 
     than 2 years from the date of the defendant's violation of 
     any requirement under this title.
       ``(b) Willful Misrepresentation.--In any case in which the 
     defendant has materially and willfully misrepresented any 
     information required to be disclosed to an individual under 
     this title, and the information misrepresented is material to 
     the establishment of the liability of the defendant to that 
     individual under this title, an action to enforce a liability 
     created under this title may be brought at any time within 2 
     years after the date of discovery by the individual of the 
     misrepresentation.
       ``(c) Identity Theft.--An action to enforce a liability 
     created under this title may be brought not later than 5 
     years from the date of the defendant's violation if--
       ``(1) the plaintiff is the victim of an identity theft; or
       ``(2) the plaintiff--
       ``(A) has reasonable grounds to believe that the plaintiff 
     is the victim of an identity theft; and
       ``(B) has not materially and willfully misrepresented such 
     a claim.''.
       (2) Effective date.--The amendments made by this subsection 
     shall take effect 2 years from the date of enactment of this 
     Act.

     SEC. 5. COORDINATING COMMITTEE STUDY OF COORDINATION BETWEEN 
                   FEDERAL, STATE, AND LOCAL AUTHORITIES IN 
                   ENFORCING IDENTITY THEFT LAWS.

       (a) Membership; Term.--Section 2 of the Internet False 
     Identification Prevention Act of 2000 (18 U.S.C. 1028 note) 
     is amended--
       (1) in subsection (b), by striking ``and the Commissioner 
     of Immigration and Naturalization'' and inserting ``the 
     Commissioner of Immigration and Naturalization, the Chairman 
     of the Federal Trade Commission, the Postmaster General, and 
     the Commissioner of the United States Customs Service,''; and
       (2) in subsection (c), by striking ``2 years after the 
     effective date of this Act.'' and inserting ``on December 28, 
     2005.''.
       (b) Consultation.--Section 2 of the Internet False 
     Identification Prevention Act of 2000 (18 U.S.C. 1028 note) 
     is amended--
       (1) by redesignating subsection (d) as subsection (e); and
       (2) by inserting after subsection (c) the following:
       ``(d) Consultation.--In discharging its duties, the 
     coordinating committee shall consult with interested parties, 
     including State and local law enforcement agencies, State 
     attorneys general, representatives of business entities (as 
     that term is defined in section 4 of the Identity Theft 
     Victims Assistance Act of 2003), including telecommunications 
     and utility companies, and organizations representing 
     consumers.''.
       (c) Report Distribution and Contents.--Section 2(e) of the 
     Internet False Identification Prevention Act of 2000 (18 
     U.S.C. 1028 note) (as redesignated by subsection (b)) is 
     amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) In general.--The Attorney General and the Secretary 
     of the Treasury, at the end of each year of the existence of 
     the coordinating committee, shall report on the activities of 
     the coordinating committee to--
       ``(A) the Committee on the Judiciary of the Senate;
       ``(B) the Committee on the Judiciary of the House of 
     Representatives;
       ``(C) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate; and
       ``(D) the Committee on Financial Services of the House of 
     Representatives.'';
       (2) in subparagraph (E), by striking ``and'' at the end; 
     and
       (3) by striking subparagraph (F) and inserting the 
     following:
       ``(F) a comprehensive description of Federal assistance 
     provided to State and local law enforcement agencies to 
     address identity theft;
       ``(G) a comprehensive description of coordination 
     activities between Federal, State, and local law enforcement 
     agencies that address identity theft; and
       ``(H) recommendations in the discretion of the President, 
     if any, for legislative or administrative changes that 
     would--
       ``(i) facilitate more effective investigation and 
     prosecution of cases involving--

       ``(I) identity theft; and
       ``(II) the creation and distribution of false 
     identification documents;

       ``(ii) improve the effectiveness of Federal assistance to 
     State and local law enforcement agencies and coordination 
     between Federal, State, and local law enforcement agencies; 
     and
       ``(iii) simplify efforts by a person necessary to rectify 
     the harm that results from the theft of the identity of such 
     person.''.

  Mr. ENZI. Mr. President, every morning, from the time we wake up to 
the time we turn out the lights and go to sleep, we all spend a good 
portion of our day in cyberspace. Probably without thinking, each time 
we head out to the internet, we broadcast some very specific 
information about our lives as we use our computers for email. Each 
time we use our cell phones we rely on a sense of privacy about the 
information we convey, which may not be present. And, when we use hand 
held devices to send quick messages back and forth to friends, 
coworkers and family we assume no one else is listening or receiving 
our information, which often includes social security numbers, family 
names and even credit card and pin numbers.
  Cyberspace is a high tech criminal's dream and it has helped 
contribute to the fastest growing crime in America--identity theft.
  Simply put, identity theft is the ability to impersonate someone else 
and steal their credit, their money and even their identity for their 
own use.
  Although the use of high-tech devices has certainly contributed to 
the proliferation of identity theft, many individuals have been 
victimized by simple criminals who have carefully picked through trash 
cans and mailboxes to find old receipts and social security numbers. 
Regardless of the medium through which the information is collected, 
identity theft is the result of criminals who have learned how to 
manipulate a growing network of information--some public, some 
private--and then use that data to their own advantage.
  The problem with identity theft is that it is not confined to one 
state. It affects Americans from every walk of life from coast to 
coast. Some Americans may discover that someone else has been using 
their social security number to obtain fraudulent employment, while 
others learn that people have been using fraudulent identification 
cards to obtain lines of credit and then leaving innocent victims to 
deal with the bills they left behind.
  People from small States like Wyoming are not immune to this new 
crime wave. Although there are only 493,000 people in Wyoming, we have 
the same rate of identity theft per capita as is present anywhere else 
in the United States. That is why we have to approach this issue from 
every angle, taking a systemic approach that includes prevention, 
enforcement and assistance to victims of identity theft.
  Today, we will take the first step with victim's assistance for this 
crime. I believe we have to provide some real options for our 
constituents who are trying to recover from the trauma that identity 
theft has caused in their lives. That is why my colleague from 
Washington and I are introducing legislation that will make it easier 
for victims to get the information they need to begin reversing the 
damage and lasting effects of this crime. Our bill, the Identity Theft 
Victim's Assistance Act of 2003, is very similar to a bill we offered 
last year that passed the Senate unanimously in November. I expect and 
hope for the same result this year since this is a growing problem and 
the need for action on this issue grows more urgent with each passing 
day.
  Our bill includes key provisions that would allow victims to work 
with businesses to obtain information related to cases of identity 
theft and then contact credit reporting agencies to block false 
information on credit reports. In drafting this legislation we worked 
with all of the stakeholders to ensure a balance between the needs of 
consumers and the needs of small businesses, banks and other credit 
agencies.
  The reintroduction of this bill is timely given the recent hearings 
in the Senate Banking and Commerce Committees and recent action by both 
the House and Administration.
  Earlier this month, the House Financial Services Subcommittee 
reported a

[[Page 20600]]

bill called the Fair and Accurate Credit Transactions Act. Also known 
as the FACT Act, the bill includes a provision nearly identical to 
Section 4 of our bill. Section 4 of our bill requires consumer credit 
reporting agencies to block information that appears on a victim's 
credit report as a result of identity theft, provided the victim did 
not knowingly obtain goods, services or money as a result of the 
blocked transaction.
  Our provision, which amends the Fair Credit Reporting Act, was also 
addressed in a recent hearing before the Senate Banking Committee. On 
July 10, the Chairman of the Federal Trade Commission testified that 
``blocking would mitigate the harm to consumers' credit record that can 
result from identity theft'' and recommended that this practice be 
codified.
  I am also encouraged by similar recommendations from the Treasury 
Department that would require credit reporting agencies to cease 
reporting allegedly fraudulent account information on consumer reports 
when the consumer submits a police report or similar document, unless 
there is a reason to believe the report is false.
  Providing consumers with the tools necessary to recover from identity 
theft is the first step in providing real relief to the hundreds of 
thousands of individuals whose lives have already been turned upside 
down by identity theft. I urge my colleagues to work with me as we move 
forward on this important issue and make progress on the 
reauthorization of critical legislation like the Fair Credit Reporting 
Act. We must take action this year before the crime of identity theft 
hurts the hundreds of thousands of working people and families who are 
expected to become victims this year.
                                 ______
                                 
      By Mr. REID:
  S. 1534. A bill to limit the closing and consolidation of certain 
post offices in rural communities, and for other purposes; to the 
Committee on Governmental Affairs.
  Mr. REID. Mr. President, I am pleased today to introduce the Rural 
Post Office and Community Preservation Act of 2003.
  My legislation would prohibit the Postal Service from closing post 
offices in our Nation's small rural communities. Where the Postal 
Service has closed a rural post office, my legislation directs the 
Postal Service to provide a plan for the rehabilitation and economic 
development of such closed offices in consultation with the local 
community affected. It also authorizes $10 million in grants to local 
communities to assist in such rehabilitation. Finally, it provides that 
the Postal Service shall transfer the closed post office in Ely, NV, to 
White Pine County for such rehabilitation.
  All across the Nation, the Postal Service is closing, consolidating, 
and moving post offices in our rural communities. Oftentimes, the 
Postal Service sells off centrally located and in many cases historic 
post offices in favor of moving the office to cheaper land on the 
outskirts of town. While this may result in a short-term economic gain 
to the Postal Service, there is both an immediate and long-term 
negative impact on the community.
  A 1993 study by the National Trust for Historic Preservation tells us 
what we intuitively already know. That is, in rural communities, the 
post office is often the economic and social anchor of the town. When 
post offices are closed in our rural communities, nearby businesses 
suffer and the small-town character of the community is diminished.
  Nevada knows the harm caused by closing rural post offices first 
hand.
  Take the small town of Ely, NV, where roughly 3,700 Nevadans make 
their home. Located in northeastern Nevada, Ely is a charming small 
town surrounded by beautiful mountains and the cleanest air in America. 
Decades ago, Ely was a main stopover for public officials and movie 
stars alike as they traveled through the West, and was briefly the 
hometown of Pat Ryan who later became Pat Nixon, the First Lady of the 
United States, At the time, Ely's six-story Hotel Nevada was the 
tallest structure in the whole State of Nevada. Near the Hotel Nevada, 
Ely had a quaint post office that helped form the center of town. Today 
if you go to Ely, you will still find the Hotel Nevada. The mountains 
are just as beautiful. But you won't find the Ely Post Office in the 
center of town. Last year, over my objection and the objection of the 
people of Ely, the Postal Service closed the office.
  My legislation introduced today would help prevent future rural post 
office closings like the one in Ely. It would also give the closed post 
office in Ely to the local community.
  My legislation is not intended to be a criticism of the Postal 
Service. Many fine men and women work there. In fact, my bill is really 
a testament to the importance of our post offices and the Postal 
Service. It recognizes that over the history of our Nation, post 
offices have come to symbolize and offer more than just the practical 
service of keeping people in touch with friends and families in distant 
locales. Increasingly, the local post office has become the heart of 
the community, a place where people within small rural communities keep 
in touch with one and other.
  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. 1534

       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 ``Rural Post Office and 
     Community Preservation Act of 2003''.

      SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) a 1993 study by the National Trust for Historic 
     Preservation found that approximately 80 percent of people in 
     small communities plan their trips around a visit to a post 
     office;
       (2) the Postal Service is increasingly closing small, rural 
     post offices in the center of town and replacing such 
     services with more distant post offices on the outskirts of 
     such communities; and
       (3) closing post offices in the centers of small, rural 
     communities removes the hub of such communities and has a 
     deleterious effect on the economies and quality of life in 
     such communities.
       (b) Purpose.--It is the purpose of this Act to limit the 
     closure of centrally located rural post offices, and to 
     enhance the economic health and quality of life of rural 
     communities.

     SEC. 3. MAINTAINING CENTRALLY LOCATED RURAL POST OFFICES.

       Section 404(b) of title 39, United States Code, is amended 
     by adding at the end the following:
       ``(3)(A) In this paragraph, the term `rural community' 
     means a city, town, or unincorporated area with a population 
     of not more than 20,000 people.
       ``(B) The Postal Service may not make a determination to 
     close or consolidate a post office in a rural community, 
     unless the Postal Service makes a determination that such 
     closing or consolidation will have a positive economic impact 
     on that community and enhance the quality of life in that 
     community.
       ``(C) In making a determination under subparagraph (B), the 
     Postal Service shall presume that the relocation of a 
     centrally located post office in a rural community to the 
     boundaries of that community will have a negative economic 
     impact on that community and will not enhance the quality of 
     life in that community.
       ``(D) If the Postal Service makes a determination to close 
     or consolidate a post office in a rural community, the Postal 
     Service shall develop a plan, in consultation with people in 
     the rural community, to provide for the rehabilitation and 
     use of the post office for purposes favored by the people of 
     that community. Such plan shall be developed before the 
     closing or consolidation takes effect.''.

     SEC. 4. GRANTS FOR REHABILITATION OF POST OFFICES IN RURAL 
                   COMMUNITIES.

       (a) Definition.--In this section, the term `rural 
     community' means a city, town, or unincorporated area with a 
     population of not more than 20,000 people.
       (b) Grants.--The Postal Service may award grants to State 
     and local governments, private organizations, or individuals 
     to provide for the rehabilitation of any closed post office 
     in a rural community.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated $10,000,000 for each of fiscal years 2003 
     through 2007 to carry out this section.

     SEC. 5. TRANSFER OF CLOSED POST OFFICE IN ELY, NEVADA.

       The Postal Service shall transfer the real property 
     (including all buildings and improvements) located at 415 5th 
     Street in Ely,

[[Page 20601]]

     Nevada, and occupied by the closed post office, to the local 
     county government of Ely County, Nevada.
                                 ______
                                 
      By Mr. LEVIN (for himself and Ms. Collins):
  S. 1535. A bill to amend title 23, United States Code, to establish 
programs to facilitate international and interstate trade; to the 
Committee on Environment and Public Works.
  Mr. LEVIN. Mr. President, I am introducing today, with Senator 
Collins, the National Highway Borders and Trade Act. As a resident of 
the State of Michigan, the primary gateway for U.S.-Canadian trade, I 
am familiar with the pressures being placed on our Nation's highways, 
especially the major trade corridors. Six years ago Congress recognized 
the need for highway programs dedicated to interregional and 
international trade corridors. Since then the funds provided under the 
Borders and Corridors programs have helped make improvements to 
thousands of highway miles.
  Although much progress has been made in improving transportation 
efficiencies, the Nation's freight infrastructure needs additional 
improvements. Increased international trade has put strains on the 
highway system that carries 70 percent of the total goods shipped in 
the United States and the total freight traffic is expected to more 
than double by the year 2020. When the Federal Highway Administration 
studied border crossing times for trucks in 2001 it found that some 
trucks experienced delays of over 83 minutes. These delays pose 
significant obstacles to industries dependent on just-in-time 
deliveries.
  The National Highway Borders and Trade Act of 2003 will help reduce 
border crossing times and improve the highway corridors important for 
international and interstate commerce. Although there are only fifteen 
land border States, the goods that arrive via those States eventually 
travel to every one of the contiguous U.S. States plus Alaska. So our 
bill will benefit all 50 States.
  The National Highway Borders and Trade Act reflects the growth in 
international trade and highway traffic being experienced by many 
States. It would increase funding for these programs and authorize $400 
million a year for 6 years for the combined programs. To ensure more 
stability and predictability for states' border region projects, it 
would make the existing borders program half formula based and half 
discretionary.
  The National Highway Borders and Trade Act also clarifies which other 
roads are eligible for funding to help State transportation departments 
plan for and manage highway commercial traffic in borders regions. 
Using he definition of ``borders region'' adopted by international law, 
roads that go through any border region would be eligible for funding.
  Eligibility for funding under the Borders program will also be 
broadened to include certain projects in Canada or Mexico, something 
that many State departments of transportation have been urging for some 
time. By placing inspection stations and other facilities in our 
neighboring countries, we can more efficiently manage border traffic 
and check for dangerous materials before vehicles enter our country. 
This will also help facilitate establishing reverse customs inspection 
at certain border crossings.
  Our bill will also help to relieve congestion and delays at the 
border. According to the Federal Highway Administration, congestion at 
border crossings can lead to long delays. The lost productivity from 
this congestion has a negative impact on the Nation's economy. It also 
causes environmental problems in the border regions. We need to get 
people and commerce across the borders more quickly and with greater 
safety.
  The bill would also focus the corridors program on roads connecting 
to a land border and expand it to allow for funding for road connectors 
to water ports that accept international trade. These changes will 
increase the number of eligible roads but also preserve the purpose of 
the program as facilitating international trade. Water ports play a 
very important role in international trade. For many sectors of the 
economy the vast majority of their supplies travels through these 
ports. The growth in truck traffic at the intermodal ports is taking a 
toll on the connecting highways. Many of these intermodal road 
connectors are in a state of severe deterioration.
  Through TEA-21, 41 States have received funding from the corridors 
program. Because goods imported from Canada and Mexico end up in 
virtually every place in the U.S., improving the Borders and Corridors 
program will benefit every State and the nation's economy as a whole. 
Our bill will grant eligibility to roads in all 50 States.
  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:
       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 ``National Highway Borders and 
     Trade Act of 2003''.

     SEC. 2. COORDINATED BORDER INFRASTRUCTURE PROGRAM.

       Subchapter I of chapter 1 of title 23, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 165. Coordinated border infrastructure program

       ``(a) Definitions.--In this section:
       ``(1) Border region.--The term `border region' means the 
     portion of a border State that is located within 100 
     kilometers of a land border crossing with Canada or Mexico.
       ``(2) Border state.--The term `border State' means any 
     State that has a boundary in common with Canada or Mexico.
       ``(3) Commercial vehicle.--The term `commercial vehicle' 
     means a vehicle that is used for the primary purpose of 
     transporting cargo in international or interstate commercial 
     trade.
       ``(4) Passenger vehicle.--The term `passenger vehicle' 
     means a vehicle that is used for the primary purpose of 
     transporting individuals.
       ``(b) Program.--The Secretary shall establish and implement 
     a coordinated border infrastructure program under which the 
     Secretary shall make allocations to border States for 
     projects within a border region to improve the safe movement 
     of people and goods at or across the border between the 
     United States and Canada and the border between the United 
     States and Mexico.
       ``(c) Eligible Uses.--Allocations to States under this 
     section may only be used in a border region for--
       ``(1) improvements to transportation and supporting 
     infrastructure that facilitate cross-border vehicle and cargo 
     movements;
       ``(2) construction of highways and related safety and 
     safety enforcement facilities that will facilitate vehicle 
     and cargo movements relating to international trade;
       ``(3) operational improvements, including improvements 
     relating to electronic data interchange and use of 
     telecommunications, to expedite cross-border vehicle and 
     cargo movement;
       ``(4) international coordination of planning, programming, 
     and border operation with Canada and Mexico relating to 
     expediting cross-border vehicle and cargo movements;
       ``(5) projects in Canada or Mexico proposed by 1 or more 
     border States that directly and predominantly facilitate 
     cross-border vehicle and commercial cargo movements at the 
     international gateways or ports of entry into a border 
     region; and
       ``(6) planning and environmental studies.
       ``(d) Mandatory and Discretionary Programs.--
       ``(1) Mandatory program.--
       ``(A) In general.--For each fiscal year, the Secretary 
     shall allocate among border States, in accordance with the 
     formula described in subparagraph (B), funds to be used in 
     accordance with subsection (c).
       ``(B) Formula.--Subject to subparagraph (C), the amount 
     allocated to a border State under this paragraph shall be 
     determined by the Secretary, as follows:
       ``(i) 25 percent in the ratio that--

       ``(I) the average annual weight of all cargo entering the 
     border State by commercial vehicle across the international 
     border with Canada or Mexico, as the case may be; bears to
       ``(II) the average annual weight of all cargo entering all 
     border States by commercial vehicle across the international 
     borders with Canada and Mexico.

       ``(ii) 25 percent in the ratio that--

       ``(I) the average trade value of all cargo imported into 
     the border State and all cargo exported from the border State 
     by commercial vehicle across the international border with 
     Canada or Mexico, as the case may be; bears to
       ``(II) the average trade value of all cargo imported into 
     all border States and all cargo exported from all border 
     States by commercial vehicle across the international borders 
     with Canada and Mexico.

       ``(iii) 25 percent in the ratio that--

       ``(I) the number of commercial vehicles annually entering 
     the border State across the

[[Page 20602]]

     international border with Canada or Mexico, as the case may 
     be; bears to
       ``(II) the number of all commercial vehicles annually 
     entering all border States across the international borders 
     with Canada and Mexico.

       ``(iv) 25 percent in the ratio that--

       ``(I) the number of passenger vehicles annually entering 
     the border State across the international border with Canada 
     or Mexico, as the case may be; bears to
       ``(II) the number of all commercial vehicles annually 
     entering all border States across the international borders 
     with Canada and Mexico.

       ``(C) Data source.--
       ``(i) In general.--The data used by the Secretary in making 
     allocations under paragraph (1) shall be based on the Bureau 
     of Transportation Statistics Transborder Surface Freight 
     Dataset (or other similar database).
       ``(ii) Basis of calculation.--All formula calculations 
     shall be made using the average values for the most recent 5-
     year period for which data are available.
       ``(D) Minimum allocation.--Notwithstanding subparagraph 
     (B), for each fiscal year, each border State shall receive at 
     least \1/2\ of 1 percent of the funds made available for 
     allocation under this paragraph for the fiscal year.
       ``(2) Other factors.--
       ``(A) In general.--In addition to funds provided under 
     paragraph (1), the Secretary shall select and make 
     allocations to border States under this paragraph based on 
     the factors described in subparagraph (B).
       ``(B) Factors.--The factors referred to in subparagraph (A) 
     are, with respect to a project to be carried out under this 
     section in a border State--
       ``(i) any expected reduction in, or improvement in the 
     reliability of, commercial and other motor vehicle travel 
     time through an international border crossing as a result of 
     the project;
       ``(ii) strategies to increase the use of underused border 
     crossing facilities and approaches;
       ``(iii) leveraging of Federal funds provided under this 
     section, including--

       ``(I) the use of innovative financing;
       ``(II) the combination of those funds with funding provided 
     for other provisions of this title; and
       ``(III) the combination of those funds with funds from 
     other Federal, State, local, or private sources;

       ``(iv)(I) the degree of multinational involvement in the 
     project; and
       ``(II) demonstrated coordination with other Federal 
     agencies responsible for the inspection of vehicles, cargo, 
     and persons crossing international borders and their 
     counterpart agencies in Canada and Mexico;
       ``(v) the degree of demonstrated coordination with Federal 
     inspection agencies;
       ``(vi) the extent to which the innovative and problem-
     solving techniques of the proposed project would be 
     applicable to other border stations or ports of entry;
       ``(vii) demonstrated local commitment to implement and 
     sustain continuing comprehensive border or affected port of 
     entry planning processes and improvement programs; and
       ``(viii) such other factors as the Secretary determines to 
     be appropriate to promote border transportation efficiency 
     and safety.
       ``(e) Cost Sharing.--The Federal share of the cost of a 
     project carried out using funds allocated under this section 
     shall not exceed 80 percent.
       ``(f) Transfer of Funds to the Administrator of General 
     Services.--
       ``(1) In general.--At the request of a State, funds 
     allocated to the State under this section shall be 
     transferred to the Administrator of General Services for the 
     purpose of funding a project under the administrative 
     jurisdiction of the Administrator in a border State if the 
     Secretary determines, after consultation with the State 
     transportation department, as appropriate, that--
       ``(A) the Administrator should carry out the project; and
       ``(B) the Administrator agrees to use the funds to carry 
     out the project.
       ``(2) No augmentation of appropriations.--Funds transferred 
     under paragraph (1) shall not be deemed to be an augmentation 
     of the amount of appropriations made to the General Services 
     Administration.
       ``(3) Administration.--Funds transferred under paragraph 
     (1) shall be administered in accordance with the procedures 
     applicable to the General Services Administration, except 
     that the funds shall be available for obligation in the same 
     manner as other funds apportioned under this chapter.
       ``(4) Transfer of obligation authority.--Obligation 
     authority shall be transferred to the Administrator of 
     General Services in the same manner and amount as funds are 
     transferred for a project under paragraph (1).
       ``(g) Funding.--
       ``(1) Authorization of appropriations.--There is authorized 
     to be appropriated from the Highway Trust Fund (other than 
     the Mass Transit Account) to carry out this section 
     $200,000,000 for each of fiscal years 2004 through 2009, of 
     which--
       ``(A) $100,000,000 shall be used to carry out subsection 
     (d)(1); and
       ``(B) $100,000,000 shall be used to carry out subsection 
     (d)(2).
       ``(2) Obligation authority.--Funds made available to carry 
     out this section shall be available for obligation as if the 
     funds were apportioned in accordance with section 104.
       ``(3) Exclusion from calculation of minimum guarantee.--The 
     Secretary shall calculate the amounts to be allocated among 
     the States under section 105 without regard to amounts made 
     available to the States under this subsection.''.

     SEC. 3. NATIONAL TRADE CORRIDOR PROGRAM.

       Subchapter I of chapter 1 of title 23, United States Code 
     (as amended by section 2), is amended by adding at the end 
     the following:

     ``Sec. 166. National trade corridor program

       ``(a) Definition of Intermodal Road Connector.--In this 
     section, the term `intermodal road connector' means a 
     connector highway that provides motor vehicle access between 
     a route on the National Highway System and 1 or more major 
     intermodal water port facilities at least 1 of which accepts 
     at least 50,000 20-foot equivalent units of container traffic 
     (or 200,000 tons of container or noncontainer traffic) per 
     year of international trade or trade between Alaska or Hawaii 
     and the 48 contiguous States.
       ``(b) Program.--
       ``(1) In general.--The Secretary shall carry out a program 
     to allocate funds to States to be used for coordinated 
     planning, design, and construction of corridors of national 
     significance.
       ``(2) Applications.--A State that seeks to receive an 
     allocation under this section shall submit to the Secretary 
     an application in such form, and containing such information, 
     as the Secretary may request.
       ``(c) Eligibility of Corridors.--The Secretary may make 
     allocations under this section with respect to--
       ``(1) a high priority corridor in a State--
       ``(A) that is identified in section 1105(c) of the 
     Intermodal Surface Transportation Efficiency Act of 1991 (105 
     Stat. 2031); and
       ``(B) any part of which is located in a border region (as 
     defined in section 165(a)); and
       ``(2) an intermodal road connector.
       ``(d) Eligible Uses of Funds.--A State may use an 
     allocation under this section to carry out, for an eligible 
     corridor described in subsection (c)--
       ``(1) a feasibility study;
       ``(2) a comprehensive corridor planning and design 
     activity;
       ``(3) a location and routing study;
       ``(4) multistate and intrastate coordination for each 
     corridor;
       ``(5) environmental review; and
       ``(6) construction.
       ``(e) Allocation Formula.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall allocate funds among States under this section in 
     accordance with a formula determined by the Secretary after 
     taking into consideration, with respect to the applicable 
     corridor in the State--
       ``(A) the average annual weight of freight transported on 
     the corridor;
       ``(B) the percentage by which freight traffic increased, 
     during the most recent 5-year period for which data are 
     available, on the corridor; and
       ``(C) the annual average number of tractor-trailer trucks 
     that use the corridor to access other States.
       ``(2) Maximum allocation.--Not more than 10 percent of the 
     funds made available for a fiscal year for allocation under 
     this section may be allocated to any State for the fiscal 
     year.
       ``(f) Coordination of Planning.--Planning with respect to a 
     corridor for which an allocation is made under this section 
     shall be coordinated with--
       ``(1) transportation planning being carried out by the 
     States and metropolitan planning organizations along the 
     corridor; and
       ``(2) to the extent appropriate, transportation planning 
     being carried out by--
       ``(A) Federal land management agencies;
       ``(B) tribal governments; and
       ``(C) government agencies in Mexico or Canada.
       ``(g) Cost Sharing.--The Federal share of the cost of a 
     project carried out using funds allocated under this section 
     shall not exceed 80 percent.
       ``(h) Funding.--
       ``(1) Authorization of appropriations.--There is authorized 
     to be appropriated from the Highway Trust Fund (other than 
     the Mass Transit Account) to carry out this section 
     $200,000,000 for each of fiscal years 2004 through 2009.
       ``(2) Obligation authority.--Funds made available to carry 
     out this section shall be available for obligation as if the 
     funds were apportioned in accordance with section 104.''.

     SEC. 4. CONFORMING AMENDMENTS.

       (a) Section 1101(a) of the Transportation Equity Act for 
     the 21st Century (112 Stat. 111) is amended by striking 
     paragraph (9) and inserting the following:
       ``(9) Coordinated border infrastructure program and 
     national trade corridor program.--For the coordinated border 
     infrastructure program and national trade corridor program 
     under sections 165 and 166, respectively, of title 23, United 
     States Code, $400,000,000 for each of fiscal years 2004 
     through 2009.''.
       (b) Sections 1118 and 1119 of the Transportation Equity Act 
     for the 21st Century (112 Stat. 161) are repealed.

[[Page 20603]]

       (c) The analysis for subchapter I of chapter 1 of title 23, 
     United States Code, is amended by inserting after the item 
     relating to section 164 the following:

``165. Coordinated border infrastructure program.
``166. National trade corridor program.''.
                                 ______
                                 
      By Mr. EDWARDS (for himself and Mr. Jeffords):
  S. 1536. A bill to provide for compassionate payments with regard to 
individuals who contracted human immunodeficiency virus due to the 
provision of a contaminated blood transfusion, and for other purposes; 
to the Committee on Health, Education, Labor, and Pensions.
  Mr. EDWARDS. I ask unanimous consent that a letter from Sandra 
Grissom be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:


                                                     Cary, NC,

                                                    July 31, 2003.
       Dear Senator: The Ricky Ray Hemophilia Relief Fund Act of 
     1998 compensated individuals with hemophilia who had received 
     contaminated blood products. Unfortunately, it excluded 
     people like my husband, Steven Grissom, who received 
     contaminated blood transfusions while undergoing treatment 
     for leukemia (AML). He died July 31, he was 52. Steven was a 
     veteran, an avid pilot, a loving father, a loyal and 
     honorable husband and a proud American. This year marked our 
     29th year of marriage, seventeen of which my husband was ill 
     with AIDS. Since his death, I have experienced the deepest 
     sadness I have ever known. He represented the best of 
     mankind. He was everything to me.
       For my husband, there were too many trips to the hospital 
     to recall, too many nights when our children and I sat by his 
     bedside, crying, not knowing whether he would open his eyes 
     again, too many pills at incredible cost, too many HMO 
     battles, disabilities, wheelchairs, oxygen . . .
       There are many other victims who, like Steven, became 
     infected with HIV from contaminated blood transfusions. They 
     are children, mothers, fathers, husbands, and wives who 
     relied on the federal government to protect the blood supply. 
     Yet a report issued by the Institute of Medicine found that 
     in the 1980's the government failed to do just that. The IOM 
     found that despite warnings from the Centers for Disease 
     Control, the Food and Drug Administration failed to require 
     blood banks to perform screening tests on donated blood and 
     neglected to require proper screening of blood donors. The 
     FDA failed to require the recall of contaminated products, 
     nor did it require that recipients of contaminated blood 
     products be promptly notified so they could prevent passing 
     the virus to their loved ones.
       People like us deserve the same consideration given to 
     those in the hemophilia community who suffered the same fate. 
     Congress passed legislation in 1998, to help patients with 
     hemophilia who contracted HIV-tainted blood. Those like 
     Steven who received contaminated blood through transfusions 
     were left out.
       My husband may be gone, but I hope that the Steven Grissom 
     Relief Fund Act will be his legacy to the community of 
     Americans with transfusion AIDS, an expression of compassion 
     to a community nearly forgotten.
           Sincerely,
                                                   Sandra Grissom.
                                 ______
                                 
      By Mrs. LINCOLN:
  S. 1537. A bill to direct the Secretary of Agriculture to convey to 
the New Hope Cemetery Association certain land in the State of Arkansas 
for use as a cemetery; to the Committee on Agriculture, Nutrition, and 
Forestry.
  Mrs. LINCOLN. 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. 1537

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

     SECTION 1. CONVEYANCE OF PROPERTY IN POPE COUNTY, ARKANSAS.

       (a) Conveyance on Condition Subsequent.--Not later than 90 
     days after the date of enactment of this Act, subject to 
     valid existing rights and the condition stated in subsection 
     (c), the Secretary of Agriculture, acting through the Chief 
     of the Forest Service (referred to in this section as the 
     ``Secretary''), shall convey to the New Hope Cemetery 
     Association (referred to in this section as the 
     ``association''), for no consideration, all right, title, and 
     interest of the United States in and to the parcel of land 
     described in subsection (b).
       (b) Description of Land.--The parcel of land referred to in 
     subsection (a) is the parcel of National Forest System land 
     (including any improvements on the land) that--
       (1) is known as ``New Hope Cemetery Tract 6686c'';
       (2) consists of approximately 1.1 acres; and
       (3) is more particularly described as a portion of the SE 
     \1/4\ of the NW \1/4\ of section 30, T. 11, R. 17W, Pope 
     County, Arkansas.
       (c) Condition on Use of Land.--
       (1) In general.--The association shall use the parcel 
     conveyed under subsection (a) as a cemetery.
       (2) Reversion.--If the Secretary, after notice to the 
     association and an opportunity for a hearing, makes a finding 
     that the association has used or permitted the use of the 
     parcel for any purpose other than the purpose specified in 
     paragraph (1), and the association fails to discontinue that 
     use, title to the parcel shall, at the option of the 
     Secretary, revert to the United States, to be administered by 
     the Secretary.
                                 ______
                                 
      By Mr. REED (for himself, Mr. Voinovich, Mr. Sarbanes, Ms. Snowe, 
        Mr. Jeffords, Mr. Levin, and Mr. Harkin):
  S. 1539. A bill to amend the Federal Water Pollution Control Act to 
establish a National Clean and Safe Water Fund and to authorize the 
Administrator of the Environmental Protection Agency to use amounts in 
the Fund to carry out projects to promote the recovery of waters of the 
United States from damage resulting from violations of that Act and the 
Safe Drinking Water Act, and for other purposes; to the Committee on 
Environment and Public Works.
  Mr. REED. Mr. President, we often don't think about how important 
water is to our everyday lives, for our health and for our economy. As 
Americans, we take for granted that when we turn on the tap that clean 
and safe water will flow from the faucet.
  Over the last three decades, the United States has made substantial 
progress in reducing the pollution flowing into our waters and 
safeguarding drinking water supplies for our communities. Despite our 
progress, we still face many challenges.
  Population growth is increasing demand for water, and pollution from 
point and nonpoint sources threaten the quality and quantity of water 
available to us. According to EPA, the overwhelming majority of the 
population of the United States--218 million people--live within 10 
miles of a polluted river, lake, or coastal water. Nearly 40 percent of 
these waters are not safe for fishing, swimming, boating, drinking 
water, or other needs. And while overall water pollution levels 
decreased dramatically over the last 30 years, recent data may be 
revealing a disturbing trend. Indeed, EPA's most recent National Water 
Quality Inventory found that the number of polluted rivers and 
estuaries increased between 1998 and 2000. Water pollution represents a 
real and daily threat to public health and to the wildlife that depend 
on clean water.
  This year, we are celebrating the Year of Clean Water. To honor our 
national commitment to reduce the pollution flowing into our waters and 
provide safe drinking water for our communities, I am introducing the 
National Clean and Safe Water Fund Act of 2003. The legislation, 
cosponsored by Senators Voinovich, Sarbanes, Snowe, Jeffords, Levin and 
Harkin will create a fund to carry out projects to promote water 
quality and protect watersheds and aquifers. It would establish a fund 
whose sole purpose is to advance the restoration of U.S. waters, 
particularly in the watersheds where these violations occurred. The 
bill is supported by a wide variety of organizations, including: the 
Narragansett Bay Commission, the Association of Metropolitan Water 
Agencies, American Rivers, Environmental Integrity Project, Friends of 
the Earth, National Audubon Society, Natural Resources Defense Council, 
The Ocean Conservancy and the U.S. Public Interest Research Group. I 
asked unanimous consent that the bill and letters of support be 
included in the record following my statement.
  Last year, the Federal Government collected $52 million in civil and 
criminal penalties from violations of the Clean Water Act and Safe 
Drinking Water Acts. The money was deposited in the Treasury with no 
guarantee that the fines collected would be used to correct the water 
pollution for which the penalties were levied. Our legislation would 
make these funds available to local communities, tribes, States and 
non-profit organizations to protect and preserve watersheds and 
aquifers and to improve water quality.

[[Page 20604]]

  This legislation would target this money to worthy projects, such as 
wetland protection and stream buffers to help filter out pathogens and 
pollutants that contaminate drinking water; land acquisition and 
conservation easements to protect watershed and aquifers; best 
management practices to prevent pollution in the first place; and, 
treatment works to control combined sewer or sanitary sewer overflows. 
Our legislation will continue progress to reduce the number of impaired 
waterways in our Nation, and to reduce, or better yet, prevent 
contamination of groundwater and drinking water sources.
  It is imperative that we increase Federal investment in clean water 
and drinking water infrastructure and devote greater resources and 
attention to protecting and improving our watersheds and aquifers.
  The Congressional Budget Office released a report that estimated the 
spending gap for clean water needs could reach as high as $388 billion 
and the spending gap for drinking water needs could reach $362 billion 
over 20 years. The CBO concluded the current funding from all levels of 
government and current revenue generated from ratepayers will not be 
sufficient to meet the Nation's future demand for water infrastructure. 
Yet, despite these grim statistics, the Federal Government is investing 
only $1.35 billion in Clean Water infrastructure each year and $850 
million in Drinking Water infrastructure. And unfortunately, the 
President's budget proposes to cut this funding by $500 million this 
year.
  Given the tremendous need in our communities, and the importance of 
water infrastructure to our economy, it is vital that the Federal 
Government maintain a strong partnership with States and local 
governments to avert this massive funding gap. We need to find new 
funding sources for watershed and aquifer protection. Clean, safe and 
abundant drinking water can no longer be taken for granted.
  The costs of building new reservoirs and treatment facilities 
threaten to overrun our ability to pay, especially during the current 
fiscal crisis. Technology also has limitations in its ability to treat 
polluted water. Many water agencies are focusing on protecting 
watersheds and aquifers and conserving valuable clean water resources. 
In my State, the Providence Water Supply Board collects 1 cent per 100 
gallons in a water usage tax to fund watershed acquisition. This may be 
our best and cheapest way to guarantee water quality and quantity.
  Congress needs to increase support for efforts to protect our water 
resources. Polluted runoff from urban and agricultural land is now the 
most significant source of water pollution in the nation and the 
greatest threat to our drinking water. Our greatest future gains in 
pollution control will, therefore, come from reducing non-point source 
pollution.
  There are cost-effective and environmentally sound projects that 
could help reduce this pollution, but currently, many non-point source 
projects cannot participate in the State revolving loan programs since 
they often do not have a guaranteed source of revenue. Also, without 
making new Federal resources available it is unlikely we will be able 
support increased investment in green infrastructure projects such as 
wetland conservation and stream buffers. The legislation that we are 
introducing today will make greater funding available for water quality 
projects.
  I hope that my colleagues will join Senators Voinovich, Sarbanes, 
Snowe, Jeffords, Levin, Harkin and me in supporting this legislation. 
Creating this fund will help further the Nation's goals of providing 
safe and clean water for our communities and restoring water quality 
for wildlife.
  Mr. President, I ask unanimous consent that the text of bill and 
letters of support be printed in the Record.
  There being no objection, the material ordered to be printed in the 
Record, as follows:

                                S. 1539

       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 ``National Clean and Safe 
     Water Fund Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the Administrator of the Environmental Protection 
     Agency has determined that more than 40 percent of the 
     assessed water of the United States does not meet applicable 
     water quality standards established by States, territories, 
     and Indian tribes;
       (2) the water described in paragraph (1) includes 
     approximately 300,000 miles of rivers and shorelines, and 
     approximately 5,000,000 acres of lakes, that are polluted by 
     sediments, excess nutrients, and harmful microorganisms;
       (3) Congress enacted--
       (A) the Federal Water Pollution Control Act (33 U.S.C. 1251 
     et seq.) to maintain the chemical, physical, and biological 
     integrity of water of the United States; and
       (B) the Safe Drinking Water Act (42 U.S.C. 300f et seq.) to 
     protect public health by regulating the public drinking water 
     supply of the United States;
       (4) because criminal, civil, and administrative penalties 
     assessed under the Acts referred to in paragraph (3) are 
     returned to the Treasury, those amounts are not available to 
     protect, preserve, or enhance the quality of water in 
     watersheds in which violations of those Acts occur; and
       (5) the establishment of a national clean and safe water 
     fund would help States in achieving the goals described in 
     paragraph (1) by providing funding to protect and improve 
     watersheds and aquifers.

     SEC. 3. NATIONAL CLEAN AND SAFE WATER FUND.

       Section 309 of the Federal Water Pollution Control Act (33 
     U.S.C. 1319) is amended by adding at the end the following:
       ``(h) National Clean and Safe Water Fund.--
       ``(1) Establishment.--There is established in the Treasury 
     a fund to be known as the `National Clean and Safe Water 
     Fund' (referred to in this subsection as the `Fund') 
     consisting of amounts transferred to the Fund under paragraph 
     (2) and amounts credited to the Fund under paragraph (3).
       ``(2) Transfer of amounts.--Notwithstanding any other 
     provision of law, for fiscal year 2003 and each fiscal year 
     thereafter, the Secretary of the Treasury shall transfer to 
     the Fund an amount determined by the Secretary to be equal to 
     the total amount deposited in the general fund of the 
     Treasury in the preceding fiscal year from fines, penalties, 
     and other funds collected as a result of enforcement actions 
     brought under this section, section 505(a)(1), or the Safe 
     Drinking Water Act (42 U.S.C. 300f et seq.), excluding any 
     amounts ordered to be used to carry out projects in 
     accordance with subsection (d).
       ``(3) Investment of amounts.--
       ``(A) In general.--The Secretary of the Treasury shall 
     invest in interest-bearing obligations of the United States 
     such portion of the Fund as is not, in the judgment of the 
     Secretary, required to meet current withdrawals.
       ``(B) Administration.--The obligations shall be acquired 
     and sold and interest on, and the proceeds from the sale or 
     redemption of, the obligations shall be credited to the Fund 
     in accordance with section 9602 of the Internal Revenue Code 
     of 1986.
       ``(4) Use of amounts for water quality projects.--
       ``(A) In general.--Amounts in the Fund shall be available 
     to the Administrator, subject to appropriation, to carry out 
     projects the primary purpose of which is water quality 
     maintenance or improvement, including--
       ``(i) water conservation projects;
       ``(ii) wetland protection and restoration projects;
       ``(iii) contaminated sediment projects;
       ``(iv) drinking water source protection projects;
       ``(v) projects consisting of best management practices that 
     reduce pollutant loads in an impaired or threatened body of 
     water;
       ``(vi) decentralized stormwater or wastewater treatment 
     projects, including low-impact development practices;
       ``(vii) projects consisting of conservation easements or 
     land acquisition for water quality protection;
       ``(viii) projects consisting of construction or maintenance 
     of stream buffers;
       ``(ix) projects for planning, design, and construction of 
     treatment works to remediate or control combined or sanitary 
     sewer overflows; and
       ``(x) such other similar projects as the Administrator 
     determines to be appropriate.
       ``(B) Limitations on use of funds.--Amounts in the Fund--
       ``(i)(I) shall be used only to carry out projects described 
     in subparagraph (A); and
       ``(II) shall not be used by the Administrator to pay the 
     cost of any legal or administrative expense incurred by the 
     Administrator (except a legal or administrative expense 
     relating to administration of the Fund); and
       ``(ii) shall be in addition to any amount made available to 
     carry out projects described in subparagraph (A) under any 
     other provision of law.
       ``(5) Selection of projects.--
       ``(A) Priority.--In selecting among projects eligible for 
     assistance under this

[[Page 20605]]

     subsection, the Administrator shall give priority to a 
     project described in paragraph (4) that is located in a 
     watershed in a State in which there has occurred a violation 
     under this Act or the Safe Drinking Water Act (42 U.S.C. 300f 
     et seq.) for which an enforcement action was brought that 
     resulted in the payment of an amount into the general fund of 
     the Treasury.
       ``(B) Selection criteria.--The Administrator, in 
     consultation with the United States Geological Survey and 
     other appropriate agencies, shall establish criteria that 
     maximize water quality improvement in watersheds and aquifers 
     for use in selecting projects to carry out under this 
     subsection.
       ``(C) Coordination with states.--In selecting a project to 
     carry out under this subsection, the Administrator shall 
     coordinate with the State in which the Administrator is 
     considering carrying out the project.
       ``(6) Implementation.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Administrator may carry out a project under this subsection 
     making grants to--
       ``(i) another Federal agency;
       ``(ii) a State agency;
       ``(iii) a political subdivision of a State;
       ``(iv) a publicly-owned treatment works;
       ``(v) a nonprofit entity;
       ``(vi) a public water system (as defined in section 1401 of 
     the Safe Drinking Water Act (42 U.S.C. 300f));
       ``(vii) a Federal interstate water compact commission;
       ``(viii) an Indian tribe (as defined in section 4 of the 
     Indian Self-Determination and Education Assistance Act (25 
     U.S.C. 450b)); or
       ``(ix) a Native Hawaiian (as defined in section 12 of the 
     Native Hawaiian Health Care Improvement Act (42 U.S.C. 
     11710)).
       ``(B) Exclusion.--Under subparagraph (A), the Administrator 
     may not make any grant to or enter into any contract with any 
     private entity that is subject to regulation under--
       ``(i) this Act; or
       ``(ii) the Safe Drinking Water Act (42 U.S.C. 300f et 
     seq.).
       ``(7) Report to congress.--Not later than 1 year after the 
     date of enactment of this subsection and biennially 
     thereafter, the Administrator shall submit to Congress a 
     report that--
       ``(A) identifies the projects selected for funding under 
     this subsection during the period covered by the report;
       ``(B) details the selection criteria established under 
     paragraph (5)(B) that were used to select those projects;
       ``(C) describes the ways in which the Administrator 
     coordinated with States under paragraph (5)(C) in selecting 
     those projects; and
       ``(D) describes the priorities for use of funds from the 
     Fund in future years in order to achieve water quality goals 
     in bodies of impaired or threatened water.
       ``(8) No effect on obligation to comply.--Nothing in this 
     subsection affects the obligation of any person subject to 
     this Act or the Safe Drinking Water Act (42 U.S.C. 300f et 
     seq.) to comply with either of those Acts.''.

     SEC. 4. USE OF CIVIL PENALTIES FOR REMEDIAL PROJECTS.

       (a) In General.--Section 309(d) of the Federal Water 
     Pollution Control Act (33 U.S.C. 1319(d)) is amended by 
     inserting after the second sentence the following: ``The 
     court may order that a civil penalty assessed under this Act 
     or the Safe Drinking Water Act (42 U.S.C. 300f et seq.) 
     (other than a civil penalty that would otherwise be deposited 
     in the Oil Spill Liability Trust Fund under section 9509 of 
     the Internal Revenue Code of 1986) be used to carry out 1 or 
     more projects in accordance with clauses (i) through (iv) of 
     subsection (h)(4)(A).''.
       (b) Conforming Amendment.--Section 505(a) of the Federal 
     Water Pollution Control Act (33 U.S.C. 1365(a)) is amended in 
     the last sentence by inserting before the period at the end 
     the following: ``, including ordering the use of a civil 
     penalty for carrying out projects in accordance with section 
     309(d)''.
                                  ____

                                       Association of Metropolitan


                                               Water Agencies,

                                    Washington, DC, July 31, 2003.
     Hon. Jack Reed,
     U.S. Senate,
     Washington, DC.
       Dear Senator Reed: I write today to express the support of 
     the Association of Metropolitan Water Agencies (AMWA) for 
     your National Clean and Safe Water Fund Act of 2003.
       AMWA is an association of the nation's largest publicly 
     owned drinking water systems. AMWA members serve safe 
     drinking water to more than 110 million Americans.
       Funded with fines collected due to violations of the Clean 
     Water Act and the Safe Drinking Water Act, the National Clean 
     and Safe Water Fund could provide much-needed resources to 
     improve the rivers and lakes that serve as sources of 
     drinking water for millions of Americans.
       Agricultural run-off remains the largest contributor of 
     nonpoint source pollution in our nation's waters. According 
     to the Environmental Protection Agency and the U.S. 
     Geological Survey, agricultural pollution--such as siltation, 
     animal waste, pesticides and fertilizers--contributes to 59 
     percent of reported water quality problems in impaired rivers 
     and streams.
       These and other water quality problems in our nation's 
     sources of drinking water could be reduced with the 
     assistance of land acquisition, reduced pollutant loading, 
     wetlands restoration, wastewater treatment works and other 
     projects eligible for funding in the National Clean and Safe 
     Water Fund Act of 2003.
           Sincerely,
                                                  Diane VanDe Hei,
     Executive Director.
                                  ____



                              The Narragansett Bay Commission,

                                    Providence, RI, July 29, 2003.
     Hon. Jack Reed,
     U.S. Senator, Senate Hart Office Building, Washington, DC.
       Dear Senator Reed: On behalf of the Narragansett Bay 
     Commission, I am writing to express support for the Clean and 
     Safe Water Fund Legislation, as proposed by you and Senators 
     Voinovich and Sarbanes.
       According to the EPA, the Congressional Budget Office, and 
     the Water Infrastructure Network, the nation faces a funding 
     gap as high as $46 billion per year for necessary and 
     mandated water and wastewater infrastructure projects. The 
     burden of paying for these mandated projects currently falls 
     almost exclusively on municipalities. This legislation will 
     be an important first step in moving toward a national trust 
     fund for water and wastewater infrastructure.
       We applaud you and your fellow Senator for your recognition 
     of the importance of a dedicated funding source for water and 
     wastewater infrastructure and we are pleased to support this 
     bill.
           Sincerely,
                                               Paul Pinault, P.E.,
     Executive Director.
                                  ____

         American Rivers Environmental Integrity Project, Friends 
           of the Earth, National Audubon Society, Natural 
           Resources Defense Council, The Ocean Conservancy, U.S. 
           Public Interest Research Group,
                                                        July 2003.
       Dear Senator Reed: On behalf of our organizations and the 
     millions of members we represent, we are writing to express 
     our support for your new legislation, the National Clean and 
     Safe Water Fund Act of 2003. Currently, funds from violators 
     of the Clean Water Act and Safe Drinking Water Act go into 
     the general Treasury, and are not specifically earmarked for 
     the protection and enhancement of water quality. This 
     legislation would establish a fund whose sole purpose is to 
     advance the restoration of U.S. waters, particularly in the 
     areas in which violations of those acts occur.
       This year marks the 30th anniversary of the Clean Water 
     Act, but unfortunately we remain far behind the goals of the 
     authors of the Act. The Environmental Protection Agency 
     acknowledges that over 40 percent of our nation's waters 
     remain unfit for fishing and swimming. We need to do a better 
     job of enforcing the laws that are already on the books, as 
     well as adopting new strategies to ensure that penalties from 
     violations of clean water laws are used to restore the 
     impacted watersheds. The National Clean and Safe Water Fund 
     Act of 2003 outlines many projects for which penalties 
     collected from violators of the Clean Water Act and Safe 
     Drinking Water Act would go towards, including drinking water 
     source protection, wetland protection and restoration, and 
     stormwater and wastewater treatment projects.
       We appreciate your leadership in introducing this 
     legislation, and look forward to working with you to see it 
     passed into law.
     Ellen Athas,
       Director, Clean Oceans Programs, The Ocean Conservancy.
     Richard Caplan,
       Environmental Advocate, U.S. Public Interest Research 
     Group.
     Michele M. Merkel,
       Senior Counsel, Environmental Integrity Project.
     Betsy Otto,
       Senior Director, Watersheds Program, American Rivers.
     Perry Plumart,
       Director of Government Relations, National Audubon Society.
     Nancy Stoner,
       Director, Clean Water Project, Natural Resources Defense 
     Council.
     Sara Zdeb,
       Legislative Director, Friends of the Earth.
                                 ______
                                 
      By Mr. DASCHLE:
  S. 1540. A bill to provide for the payment of amounts owed to Indian 
Tribes and individual Indian money account holders; to the Committee on 
Indian Affairs.
  Mr. DASCHLE. Mr. President, the legislation I am introducing today

[[Page 20606]]

should be important to all Americans--Indians and non-Indians alike. 
The primary goal of the ``Indian Trust Payment Equity Act of 2003'' is 
to start a process for repaying the debt owed by the United States of 
America to Indian tribes and individual American Indians.
  For over one hundred years, the Department of Interior has managed a 
trust fund containing the proceeds of leasing of oil, gas, land and 
mineral rights on Indian land for the benefit of Indian people. Today, 
far from enjoying a sense of security about the investment of these 
assets, tribal and individual Indian account holders cannot even be 
assured of the accuracy of the balances that the Department of Interior 
claims are in their accounts. It is estimated that the trust fund may 
owe anywhere from $10 billion to over $100 billion to Indian tribes and 
Indian people. This is money that everyone agrees is rightfully theirs 
and desperately needed to address a host of human needs.
  There is little disagreement that the Interior Department's 
stewardship of the trust fund, through administrations of both 
political parties, has been a colossal failure. Rather than just 
continue the debate over how best to reorganize the Department of 
Interior, this legislation is intended to jumpstart the process of 
repayment by establishing an Equity Payment Trust Fund.
  The Indian Trust Payment Equity Act calls for appropriating $10 
billion to the Trust Fund over five years, as $10 billion is an 
undeniably low estimate of what is owed by the United States. If an 
account holder accepts the results of a certified audit of their 
account, then the Equity Payment Trust Fund would provide for a partial 
payment until a full accounting is satisfied. Indian tribes would be 
able to voluntarily contract with the Secretary to assist in the audit 
process.
  This bill provides a means for tribes to assist individual allottees 
to obtain an accounting and a more prompt settlement than any proposal 
put forward to date.
  Treaties entered into by the United States constitute a significant 
element of the law of the land. Unfortunately, the Untied States has 
abridged its treaty obligations by grossly mismanaging the trust fund 
it holds as trustee for Indian tribes and people. It is a particularly 
sad story given the high level of human need that exists on Indian 
reservations throughout South Dakota and across the country.
  Last Friday, Senators McCain, Johnson and I introduced S. 1459, ``the 
American Indian Trust Fund Management Reform Act Amendments Act of 
2003.'' We were joined in this effort by Representatives Mark Udall and 
Nick Rahall who introduced the House companion measure, H.R. 2981, that 
same day. The Indian Trust Payment Equity Act of 2003 is intended to 
complement S. 1459 and create a multifaceted solution to the underlying 
problem of trust fund mismanagement.
  Restoring accountability and efficiency to trust management, and 
paying account holders what they are owed, is a matter of fundamental 
justice. And nowhere do the principles of self-determination and tribal 
sovereignty come more into play than in the management and distribution 
of trust funds and assets clearly owed to Indian tribes and Indian 
people.
  It is time to expedite the historical accounting of what is owed and 
deal with the trust management issue once and for all. This legislation 
makes a strong statement about the importance of completing the 
historical accounting and making payments to the tribes and individual 
Indian allottees who are waiting for what is rightfully theirs. They 
have waited long enough.
  I look forward to comments, suggestions and feedback from those 
interested in this issue and hope this bill can serve as a basis for 
serious discussion. I do believe this issue should be of interest and 
of importance to all Americans and, therefore, all members of Congress, 
as it addresses a debt and responsibility of the United States. I hope 
I can count on the support of my Senate colleagues for this effort to 
address the challenging and complex Indian trust reform issue.
                                 ______
                                 
      By Mrs. CLINTON (for herself, Mr. Ensign, and Mr. Bingaman):
  S. 1543. A bill to amend and improve provisions relating to the 
workforce investment and adult education systems of the Nation; to the 
Committee on Health, Education, Labor, and Pensions.
  Mrs. CLINTON. Mr. President, I rise to announce that today I am 
introducing The Access to Employment and English Acquisition Act with 
Senator Ensign and Senator Bingaman. I am grateful to both Senators for 
working with me to develop this legislation. I consider them partners 
in the important effort to expand opportunities for job training for 
Limited English Proficient individuals. I also want to thank the 
dedicated individuals at the New York Immigration Coalition, the 
National Immigration Law Center, the National Council at La Raza and 
the Immigration Forum for their significant contributions to this 
proposal.
  It is vitally important that our workforce investment system be 
responsive to the needs of those who do not speak English. Immigrants 
and Limited English Proficient individuals play a crucial role in the 
New York State and U.S. economy. Immigrants account for nearly half of 
the growth in the civilian labor force between 1990 and 2000 and 
immigrants are projected to account for all of the growth in the prime-
age labor force between 2000 and 2020.
  Immigrants fill critical jobs, are the backbone of many industries, 
and are net contributors to the Nation's tax base. Without current and 
future immigrants in the workforce, our aging society will be short of 
workers; short of savings and investment to support national economic 
growth; and short of tax revenues to finance government services and 
Social Security outlays.
  The Health, Education, Labor and Pensions Committee on which I serve, 
is in the process of reauthorizing the Workforce Investment (WIA). WIA 
reauthorization provides a valuable opportunity for Congress to improve 
our Nation's workforce development system to effectively serve 
immigrants and persons who are Limited English proficient. And I look 
forward to working with my colleagues on the HELP Committee to 
incorporate this legislation into the reauthorization bill.
  The Access to Employment and English Acquisition Act will reduce 
barriers to job training for English language learners by creating 
incentives for training providers to serve these individuals. It will 
also make programs that integrate job training and language acquisition 
more accessible. Employees have found that integrated programs offer a 
significant return on their investment because they improve 
productivity, reduce attendance problems, increase job retention rates, 
and promote overall quality control. Limited English Proficient persons 
also benefit from integrated training through improved job security, 
increased job advancement, and a greater ability to participate in 
society.
  There is no question that English proficiency is critical to economic 
advancement and improved quality of life for LEP workers and their 
families. Workers who are fluent in oral and written English earn about 
24 percent more than those who lack fluency, regardless of their 
qualifications. These individuals are better able to participate in the 
civic life of their community, which so many LEP individuals in New 
York tell me they want to do.
  I look forward to continuing the work with Senator Ensign and Senator 
Bingaman to improve job training services for immigrants and LEP 
individuals.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 1544. A bill to provide for data-mining reports to Congress; to 
the Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, I am pleased today to offer the Data-
Mining Reporting Act of 2003. The untested and controversial 
intelligence procedure known as data-mining is capable of maintaining 
extensive files containing both public and private records on each and 
every American. Almost weekly, we learn about a new data-mining program 
under development like the

[[Page 20607]]

newly named Terrorism Information Awareness program. Congress should 
not be learning the details about these programs after millions of 
dollars are spent testing and using data-mining against unsuspecting 
Americans.
  Coupled with the expanded domestic surveillance already undertaken by 
this Administration, the unchecked development of data-mining is a 
dangerous step that threatens one of the most important values that we 
are fighting for in the war against terrorism--freedom. My bill would 
require all Federal agencies to report to Congress within 90 days and 
every year thereafter on data-mining programs used to find a pattern 
indicating terrorist or other criminal activity and how these programs 
implicate the civil liberties and privacy of all Americans. If it was 
necessary, information in the various reports would even be classified.
  The bill does not end funding for any program, determine the rules 
for use of the technology or threaten any on-going investigation that 
uses data-mining technology. But, with complete information about the 
current data-mining plans and practices of the Federal Government, 
Congress will be able to conduct a thorough review of the costs and 
benefits of the practice of data-mining on a program by program basis 
and make considered judgments about which programs should go forward 
and which should not.
  My bill would provide Congress with information about the nature of 
the technology and the data that will be used. The Data-Mining 
Reporting Act would require all government agencies to assess the 
efficacy of the data-mining technology and whether the technology can 
deliver on the promises of each program. In addition, my bill would 
make sure that the federal agencies using data-mining technology have 
considered and developed policies to protect the privacy and due 
process rights of individuals and ensure that only accurate information 
is collected and used.
  Without Congressional review and oversight, government agencies like 
the Department of Homeland Security, the Department of Justice and the 
Department of Defense will be able to collect and analyze a combination 
of intelligence data and personal information like individuals' traffic 
violations, credit card purchases, travel records, medical records, 
communications records, and virtually any information contained in 
commercial or public databases. Through comprehensive data-mining, 
everything from people's video rentals or drugstore purchases made with 
a credit card to their most private health records could be fed into a 
computer and monitored and reviewed by the Federal Government.
  Using massive data mining, the government hopes to be able to detect 
potential terrorists. There is no evidence, however, that data-mining 
will, in fact, prevent terrorism. Data-mining programs under 
development are being used to look into the future before being tested 
to determine if they would have even been able to anticipate past 
events, like September 11 or the Oklahoma City bombing. Before we 
develop the ability to feed personal information about every man, woman 
and child into a giant computer, we should learn what data-mining can 
and can't do and what limits and protections are needed.
  One must also consider the potential for errors in data-mining for 
example, credit agencies that have data about John R. Smith on John D. 
Smith's credit report make the prospect of ensnaring many innocents is 
real.
  Most Americans believe that their private lives should remain 
private. Data-mining programs run the risk of intruding into the lives 
of individuals who have nothing to do with terrorism but who trust that 
their credit reports, shopping habits and doctor visits would not 
become a part of a gigantic computerized search engine, operating 
without any controls or oversight.
  The Administration should be required to report to Congress about the 
impact of the various data-mining programs now underway or being 
studied, and the impact those programs may have on our privacy and 
civil liberties so that Congress can determine whether the proposed 
benefits of this practice come at too high a price to our privacy and 
personal liberties.
  I urge my colleagues to support this bill. All it asks for is 
information to which Congress and the American people are entitled.
  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. 1544

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Data-Mining Reporting Act of 
     2003''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Data-mining.--The term ``data-mining'' means a query or 
     search or other analysis of 1 or more electronic databases, 
     where--
       (A) at least 1 of the databases was obtained from or 
     remains under the control of a non-Federal entity, or the 
     information was acquired initially by another department or 
     agency of the Federal Government for purposes other than 
     intelligence or law enforcement;
       (B) the search does not use a specific individual's 
     personal identifiers to acquire information concerning that 
     individual; and
       (C) a department or agency of the Federal Government is 
     conducting the query or search or other analysis to find a 
     pattern indicating terrorist or other criminal activity.
       (2) Database.--The term ``database'' does not include 
     telephone directories, information publicly available via the 
     Internet or available by any other means to any member of the 
     public without payment of a fee, or databases of judicial and 
     administrative opinions.

     SEC. 3. REPORTS ON DATA-MINING ACTIVITIES.

       (a) Requirement for Report.--The head of each department or 
     agency of the Federal Government that is engaged in any 
     activity to use or develop data-mining technology shall each 
     submit a public report to Congress on all such activities of 
     the department or agency under the jurisdiction of that 
     official.
       (b) Content of Report.--A report submitted under subsection 
     (a) shall include, for each activity to use or develop data-
     mining technology that is required to be covered by the 
     report, the following information:
       (1) A thorough description of the data-mining technology 
     and the data that will be used.
       (2) A thorough discussion of the plans for the use of such 
     technology and the target dates for the deployment of the 
     data-mining technology.
       (3) An assessment of the likely efficacy of the data-mining 
     technology in providing accurate and valuable information 
     consistent with the stated plans for the use of the 
     technology.
       (4) An assessment of the likely impact of the 
     implementation of the data-mining technology on privacy and 
     civil liberties.
       (5) A list and analysis of the laws and regulations that 
     govern the information to be collected, reviewed, gathered, 
     and analyzed with the data-mining technology and a 
     description of any modifications of such laws that will be 
     required to use the information in the manner proposed under 
     such program.
       (6) A thorough discussion of the policies, procedures, and 
     guidelines that are to be developed and applied in the use of 
     such technology for data-mining in order to--
       (A) protect the privacy and due process rights of 
     individuals; and
       (B) ensure that only accurate information is collected and 
     used.
       (7) A thorough discussion of the procedures allowing 
     individuals whose personal information will be used in the 
     data-mining technology to be informed of the use of their 
     personal information and what procedures are in place to 
     allow for individuals to opt out of the technology. If no 
     such procedures are in place, a thorough explanation as to 
     why not.
       (8) Any necessary classified information in an annex that 
     shall be available to the Committee on Governmental Affairs, 
     the Committee on the Judiciary, and the Committee on 
     Appropriations of the Senate and the Committee on Homeland 
     Security, the Committee on the Judiciary, and the Committee 
     on Appropriations of the House of Representatives.
       (c) Time for Report.--Each report required under subsection 
     (a) shall be--
       (1) submitted not later than 90 days after the date of the 
     enactment of this Act; and
       (2) updated once a year and include any new data-mining 
     technologies.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Durbin, Mr. Lugar, Mr. Leahy, Mr. 
        Craig, Mr. Feingold, Mr. Crapo, and Mr. Grassley):
  S. 1545. A bill to amend the Illegal Immigration Reform and Immigrant 
Responsibility Act of 1996 to permit States to determine State 
residency for higher education purposes and to authorize the 
cancellation of removal and

[[Page 20608]]

adjustment of status of certain alien students who are long-term United 
States residents; to the Committee on the Judiciary.

  Mr. HATCH. Mr. President, I rise today to introduce legislation that 
will help make the American dream a reality for many young people. 
``The Development, Relief and Education for Alien Minors Act,'' or 
``The DREAM Act,'' resolves immigration status problems that plague 
undocumented immigrants who came to our country as youths. It also 
removes barriers to education so that they are better equipped to 
succeed in our society.
  Each year, about fifty thousand young undocumented immigrants 
graduate from high school in the United States. Most of them came to 
this country with their parents as small children and have been raised 
here just like their U.S. citizen classmates. They view themselves as 
Americans, and are loyal to our country. Some may not even realize that 
they are here in violation of our immigration laws. They grow up to 
become honest and hardworking adolescents and young adults, and strive 
for academic as well as professional excellence.
  Many of these youngsters find themselves caught in a catch-22 
situation. As illegal immigrants, they cannot work legally. Moreover, 
they are effectively barred from developing academically beyond high 
school because of the high cost of pursuing higher education. Private 
colleges and universities are very expensive, and under current federal 
law, state institutions cannot grant in-state tuition to illegal 
immigrants, regardless of how long they have resided in that state. To 
make matters worse, as illegal immigrants, these young people are 
ineligible for federal tuition assistance. Moreover, these young people 
have no independent way of becoming legal residents of the United 
States.
  In short, though these children have built their lives here, they 
have no possibility of achieving and living the American dream. What a 
tremendous loss to our society.
  One young man who is in this predicament lives in my home State of 
Utah. His name is Danny Cairo. Danny came to the United States at the 
age of six with his mother who abandoned him eights years later. Danny 
had to drop out of school in order to support himself. Fortunately, he 
met Kevin King, who adopted Danny in 2001. With the help of Mr. King, 
Danny is presently attending the University of Utah.
  This story, however, does not necessarily have a happy ending. 
Because of the date of the adoption, Danny is unable to derive 
immigration status from Mr. King. He, therefore, lives in legal limbo 
and faces the threat of deportation daily. In addition, he may never be 
able to legally work in the United States.
  As Mr. King wrote to me, ``Danny is exactly what our country needs 
more of. He is a natural born leader with charisma and intelligence and 
a drive that will take him wherever he wants to go. But this will not 
be possible if Danny is unable to obtain permanent residency.''
  Our laws should not discourage those with bright young minds from 
seeking higher education. We should instead assist and encourage the 
many ``Dannys'' who are in the United States and who have the 
dedication and drive to achieve their worthy goals. I am proud that the 
DREAM Act provides illegal alien children with options for higher 
education, as well as the opportunity to earn legal residence in the 
United States.
  First, the DREAM Act repeals the provision of Federal law that 
prevents States from granting in-State tuition to undocumented aliens, 
leaving this issue at the discretion of the States. My own State of 
Utah passed a law that will allow in-State tuition for aliens who have 
been residents in Utah for at least three years. My States have either 
passed or are considering the passage of similar legislation.
  But the fact of the matter is that cheaper tuition at State schools, 
no matter how beneficial for these young people, will not solve the 
larger problem: their illegal immigration status. While I do not 
advocate granting unchecked amnesty to illegal immigrants, I am, 
however, in favor of providing children--children who did not make the 
decision to enter the United States illegally--the opportunity to earn 
the privilege of remaining here legally. The DREAM Act will do just 
that. It provides young men and women who immigrated to the United 
States prior to the age of sixteen, who have lived in this country at 
least five years, and who are of good moral character a chance to earn 
their conditional resident status upon acceptance by an institution of 
higher learning or upon graduation from high school. The DREAM Act 
allows these special young people to pursue their worthy goals and 
aspirations.
  The bill I am introducing today will extend DREAM Act benefits to a 
group of people who were excluded from a similar bill negotiated during 
the 107th Congress. Today's bill removes the age ceiling so that no one 
will be arbitrarily cut-off from benefits. Moreover, while the version 
from the last Congress requires high school graduation as a provision 
for obtaining legal status, the bill I am introducing today contains a 
provision that allows high school students who have been accepted into 
an institution of higher learning, but who have not yet graduated from 
high school, to obtain conditional resident status. This provision 
enables these high school students to get an earlier start on procuring 
the necessary funds for financing their education.
  Of course, we have to be mindful that the opportunity provided by the 
DREAM Act is a privilege and not an entitlement. We must make sure that 
those who reap the benefits of the Act are, in fact, worthy of such 
benefits. For this reason, the bill I am introducing today tightens 
certain requirements and eliminates waivers for those who have serious 
criminal records that would qualify them for deportation.
  In addition, while I always want to encourage educational 
advancement, I recognize that not everyone's circumstances allow for 
full-time attendance at a four-year college. For this reason, the DREAM 
Act provides for certain alternatives like attending community college, 
trade school, serving in our armed forces, or performing community 
service.
  The purpose of the DREAM Act is to create incentives for out-of-
status youngsters to achieve as much as they can in life and to 
contribute to the greatness of the United States. I recognize that if 
the bill's requirements are so high that they simply operate as 
barriers to legalizing status, the bill defeats its own stated purpose. 
That is why I am committed to ensuring that the requirements imposed by 
this bill are reasonable and can be met by youngsters who are willing 
to work hard. The DREAM Act will enable youngsters who have ambition 
and motivation to obtain permanent legal status.
  During the 107th Congress, I introduced a version of the DREAM Act, 
S. 1291. Since then, it has been replaced in favor of the Durbin/Hatch/
Kennedy/Brownback substitute. The substitute was put on the Senate 
calendar but did not receive a vote. The House Judiciary Committee 
debated identical legislation during the last Congress but it was 
defeated. The House Judiciary Committee has not yet moved similar 
legislation this Congress. I want to make sure that the DREAM Act we 
introduce in the 108th Congress will not die in the hopper as it did in 
the House last year.
  By introducing this bill, I know I am subjecting myself to criticism 
from both sides of the aisle on my immigration policy. Some proponents 
of strict immigration enforcement argue that the DREAM Act will 
encourage illegal entry into the United States. However, the DREAM Act 
was carefully drafted to avoid this precise problem. The Act 
specifically limits eligibility to those who entered the United States 
five years or more prior to the bill's enactment. It applies to a 
limited number of people who already reside in the United States and 
who have demonstrated favorable equities in and significant ties to the 
United States. Anyone who entered the United States less than five 
years prior to the enactment of this

[[Page 20609]]

bill or who plans to illegally enter the United States in the future 
will not be covered by the DREAM Act.
  On the other hand, proponents for providing general amnesty contend 
that there shouldn't be any requirements after high school graduation. 
I agree that for some of these children, graduation from high school is 
a grand enough accomplishment in itself. My bill recognizes this 
achievement by providing these graduates with the reward of conditional 
resident status so that they may work toward permanent status without 
fear of deportation.
  Nonetheless, some critics argue that most immigrant children cannot 
go to college, nor can they meet the standards set by the current 
version of the DREAM Act. They cite statistics showing that only a 
small percentage of illegal immigrant children ever attend college and 
they argue that this DREAM bill will benefit very few. What these 
critics overlook, however, is that without the DREAM Act, illegal 
immigrant children simply do not have the means nor the incentive to 
obtain a higher education. Since the DREAM Act will remove substantial 
obstacles to higher education, I am confident that many of the children 
who are currently illegal U.S. residents will seek higher education.
  Some critics also contend that these immigrant children do not have 
the aptitude to attend community college or trade school and that even 
joining the military or performing a few hours a week of community 
service is out of reach for them. To this criticism I stress that this 
is not only wholly inaccurate, but it is also an elitist attitude to 
which I cannot subscribe. Immigrant children, whether legal or 
otherwise, are no less capable than other children. They just need the 
opportunity to reach their potential.
  I also want to point out that everyone who was eligible for benefits 
under last year's bill will be eligible again this year. In fact, as I 
explained earlier, those who were left out of last year's bill are 
included in this year's bill. The only difference is that now, the 
applicant has to contribute more to American society before 
transitioning from conditional resident status to permanent resident 
status.
  I believe the DREAM Act will live up to its name. It will allow these 
illegal immigrant children the opportunity to not only dream of the 
infinite possibilities that their futures may hold in the United 
States, but it will also afford them the opportunity to realize their 
dreams. With the passage of the DREAM Act, the United States stands to 
benefit enormously. Once these children become legal residents of this 
Nation, they will prove to be motivated, hard-working, and educated 
contributors to our society. I am pleased and proud once again to work 
with Senator Durbin on this important legislation.
  Mr. DURBIN. Mr. President, today, my colleague Senator Hatch and I 
are again introducing legislation that would provide immigration relief 
to undocumented students of good moral character who want to pursue a 
better life for themselves and their families. It would benefit the 
American economy by unleashing the potential of these students, who 
have grown up in the U.S. and graduated from high school or obtained an 
equivalent degree. The DREAM Act is a bipartisan bill which has broad 
support in the Hispanic, religious and immigrant communities.
  Each year, approximately 50-60,000 undocumented children, including 
honors students and valedictorians, graduate from our nation's high 
schools or receive an equivalent degree. Many of these students were 
brought to the U.S. by their parents at an age when they were too young 
to appreciate the legal consequences of their actions. Despite long-
term residency in the U.S. and a demonstrated commitment to obtaining 
an education, these students have no avenue for adjusting their 
immigration status and it is very difficult for them to attend college 
or work. Instead, they face possible deportation.
  Although these young people are entitled to a free public education 
at the primary and secondary level, Federal law strongly discourages 
states from extending in-state college tuition rates to them. 
Additionally, they cannot legally work, are ineligible for federal 
tuition assistance, and have great difficulty obtaining private loans.
  These roadblocks to higher education hurt our society because we are 
deprived of future leaders, and the increased tax revenues and economic 
growth they would produce. Young people with great potential and 
ambitions are limited to the employment options available to those 
without a college degree. In fact, many of these students do not even 
finish high school, further limiting their options and ability to 
contribute to our economy, because they drop out of school once they 
realize that they will be unable to attend college.
  The DREAM Act would provide meaningful relief to many of these 
students. It would repeal a provision of federal law that makes it 
prohibitively expensive for states to grant post-secondary benefits, 
such as in-state tuition rates, to undocumented children. The bill 
would also provide an earned adjustment mechanism by which young people 
who are long-term U.S. residents may become lawful permanent residents.
  Approving this bill would give accomplished young people the 
opportunity to pursue the American dream. I urge my colleagues to 
support it.
                                 ______
                                 
      By Mr. McCONNELL (for himself and Mr. Lieberman):
  S. 1546. A bill to provide small businesses certain protection from 
litigation excesses and to limit the product liability of non-
manufacturer product sellers; to the Committee on the Judiciary.
  Mr. McCONNELL. Mr. President, today Senator Lieberman and I 
introduced the ``Small Business Liability Reform Act of 2003,'' which 
aims to restore common sense to the way our civil litigation system 
treats small businesses. Small businesses form the backbone of 
America's economy. But in our legal system, small businesses are often 
forced to defend themselves in court for actions they did not commit 
and pay damages for harms they did not cause. These businesses also 
frequently find themselves faced with extraordinarily high punitive 
damages awards. These unfortunate realities threaten the very existence 
of many small businesses, and when American small businesses go under, 
our economy is harmed as new products are not developed, produced, or 
sold, and employers cannot retain employees or hire new ones.
  Small businesses--those with 25 or fewer full-time employees--employ 
almost 60 percent of the American workforce. Because the majority of 
small business owners earn less than $50,000 a year, they often lack 
the resources to fight unfair lawsuits which could put them out of 
business. When faced with such a lawsuit, many of these entrepreneurs 
must either risk a lengthy battle in court, in which they may be 
subjected to large damage awards, or settle the dispute out of court 
for a significant amount. Either way, our current system jeopardizes 
the livelihood and futures of small business owners and their 
employees.
  The Small Business Liability Reform Act of 2003 would remedy these 
ills with three common-sense solutions, all of which protect our 
nation's entrepreneurs from unfair lawsuits and excessive damage 
awards. First, it would allow a punitive damages award against a small 
business only upon clear and convincing evidence, rather than upon a 
simple preponderance of the evidence, and it would set reasonable 
limits on the size of punitive damages awards--the lesser of $250,000 
or three times compensatory damages.
  Second, our bill would restore basic fairness to the law by 
eliminating joint and several liability for small businesses for non-
economic damages, such as pain and suffering, so a small defendant is 
not forced to pay for harms it did not cause. Under the current joint 
and several liability rules, if a small business is found liable with 
other defendants, the small business may be forced to pay a 
disproportionate amount of the damages if it has ``deep pockets'' 
relative to the other responsible parties. For example, a small 
business that was found responsible for only 10 percent of the harm in 
a case may have to pay half, two-thirds

[[Page 20610]]

or even all of the damages. This legislation would prevent this unfair 
situation, but it would not change a small business's joint and several 
liability for economic damages, such as medical expenses and lost 
wages; because a small business could still be responsible for all 
economic damages, regardless of its degree of fault, plaintiffs will 
still be able to recover all of their out of pocket costs. By 
protecting small businesses from having to pay non-economic damages for 
which they are not responsible, though, the Small Business Liability 
Reform Act of 2003 partially relieves a potentially unfair situation.
  Third, our bill addresses some of the iniquities facing non-
manufacturing product sellers. Currently, a person who has nothing to 
do with a defective and harmful product other than simply selling it 
can be sued with the manufacturer. Under the reforms in the Small 
Business Liability Reform Act of 2003, however, a product seller can 
only be held liable for harms caused by his own negligence, intentional 
wrongdoing, or breach of his own warranty.
  This bill would provide much needed protection and relief to small 
business owners, workers, and consumers. By making our legal system 
reasonable and fair to small businesses, we will remove one of the 
greatest barriers to starting and maintaining a small business: the 
threat of crippling, excessive, and unfair lawsuits. That means 
increased competition, better and more affordable goods, and more jobs 
at a time when America could use them all. The Small Business Liability 
Reform Act of 2003 is a win for all Americans, and it is my hope that 
the Senate will pass this bipartisan bill. Finally, I would ask 
unanimous consent that letters in support of this legislation from the 
National Federation of Independent Business, the National Association 
of Wholesale-Distributors, the Motorcycle Industry Council, and the 
Small Business Legal Reform Coalition be printed in the Record.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                                    July 31, 2003.
     Hon. Mitch McConnell,
     U.S. Senate, Washington, DC.
       Dear Senator McConnell: On behalf of the Small Business 
     Legal Reform Coalition, we are writing to thank you for 
     sponsoring the Small Business Liability Reform Act of 2003, 
     and to express our strong support for its passage. We commend 
     you for your efforts to restore common sense to our civil 
     justice system--one that takes a particularly heavy toll on 
     the smallest of America's businesses.
       The frequency and high cost of litigation is a matter of 
     growing concern to small businesses across the country. 
     Today's civil justice system presents a significant 
     disincentive to business start-ups and continued operations. 
     If sued, business owners know they have to choose between a 
     long and costly trial or an expensive settlement. Business 
     owners across the nation risk losing their livelihood, their 
     employees and their future every time they are confronted 
     with an unnecessary lawsuit.
       The Small Business Liability Reform Act of 2003 would make 
     two reforms that have topped the small business community's 
     agenda for years: cap punitive damages and abolish joint 
     liability for non-economic damages for those with fewer than 
     25 employees. These reforms have been among the 
     recommendations of the White House Conference on Small 
     Business since the early 1980s--and the time has come to 
     protect the smallest of small businesses from excessive 
     damage awards and frivolous suits.
       This legislation would also hold non-manufacturing product 
     sellers liable in product liability cases when their own 
     wrongful conduct is responsible for the harm and thus reduce 
     the exposure of innocent product sellers, lessors and renters 
     to lawsuits when they are simply present in a product's chain 
     of distribution or solely due to product ownership. Should 
     the manufacturer be judgment-proof, the product seller would 
     be responsible for any damage award, ensuring that deserving 
     claimants recover fully for their injuries.
       In the end, we believe that enactment of the Small Business 
     Liability Reform Act of 2003 will inject more fairness into 
     the legal system and reduce unnecessary litigation and legal 
     costs. We also believe that it protects the rights of those 
     with legitimate claims. We thank you again for your support 
     of these common sense reforms and look forward to working 
     with you to ensure the success of this important legislation.
           Sincerely,
       American Automotive Leasing Association.
       American Council of Engineering Companies.
       American Insurance Association.
       American Machine Tool Distributors Association.
       American Rental Association.
       Associated Builders and Contractors.
       Associated Equipment Distributors.
       Automotive Parts and Service Alliance.
       Citizens for Civil Justice Reform.
       Coalition for Uniform Product Liability Law.
       Equipment Leasing Association.
       Independent Insurance Agents and Brokers of America.
       International Housewares Association.
       International Mass Retail Association.
       Motorcycle Industry Council.
       National Association of Convenience Stores.
       National Association of Manufacturers.
       National Association of Wholesaler-Distributors.
       National Federation of Independent Business.
       National Grocers Association.
       National Restaurant Association.
       National Retail Federation.
       National Small Business United.
       NPES--Association for Suppliers of Printing, Publishing & 
     Converting Technologies.
       Plumbing-Heating-Cooling Contractors--National Association.
       Small Business Legislative Council.
       Society of Independent Gasoline Marketers of America.
       Specialty Equipment Market Association.
       Tire Industry Association.
       Truck Renting and Leasing Association.
       U.S. Chamber of Commerce.
                                  ____



                                  Motorcycle Industry Council,

                                     Arlington, VA, July 30, 2003.
     Hon. Mitch McConnell,
     U.S. Senate, Washington, DC.
       Dear Senator McConnell: On behalf of the over 300 members 
     of the Motorcycle Industry Council (MIC), I want to express 
     our strong support for the ``Small Business Liability Reform 
     Act of 2003'' and extend sincere thanks for your sponsorship 
     of this important legislation. MIC is a nonprofit national 
     trade association that represents manufacturers and 
     distributors of motorcycles, motorcycle parts and 
     accessories, and members of allied trades. A large number of 
     our member companies are small businesses.
       This Act, which would cap punitive damages and abolish 
     joint liability for non-economic damages for businesses with 
     fewer than 25 employees, is a common sense approach to 
     sustaining the health of America's small businesses. It would 
     hold non-manufacturing product sellers liable in product 
     liability cases when they own wrongful conduct is responsible 
     for the harm and thus reduce the exposure of innocent product 
     sellers to lawsuits when they are simply present in a 
     product's chain of distribution. Should the manufacturer be 
     judgment-proof, the product seller would be responsible for 
     any damage award, ensuring that deserving claimants recover 
     fully for their injuries.
       The frequency and high cost of litigation is a matter of 
     great concern to the business community. Few companies have 
     been left unmarked by the steep increases in product 
     liability insurance costs or the crises in the availability 
     of product liability insurance. The impact on small 
     businesses is especially burdensome. The current civil 
     justice system puts small business owners across the country 
     in jeopardy of losing their livelihood, their employees and 
     their futures when faced with involvement in lawsuits through 
     no fault of their own. This Act would serve to help protect 
     these businesses from excessive damage awards and the costs 
     of defending against frivolous suits.
       Sensible reform brings predictability to the product 
     liability process, stabilizes product liability insurance 
     rates and reduces the overall costs related to product 
     liability litigation imposed on manufacturers, sellers, and 
     ultimately, consumers. This legislation is an important step 
     in alleviating the devastating effects that the current 
     system can have on small businesses and their millions of 
     employees, which continuing to ensure that businesses remain 
     accountable for negligence and intentional wrongdoing and 
     that consumers have full access to the court system for 
     redress.
       Again, thank you for your sponsorship of this legislation 
     which is so important to our small business member companies.
           Sincerely,
                                              Kathy R. Van Kleeck,
     Vice President, Government Relations.
                                  ____

                                              National Association


                                   of Wholesaler-Distributors,

                                    Washington, DC, July 30, 2003.
     Hon. Mitch McConnell,
     Hon. Joe Lieberman,
     U.S. Senate, Washington, DC.
       Dear Senators McConnell and Lieberman: I write on behalf of 
     the National Association of Wholesaler-Distributors (NAW) to 
     express our strong support for the ``Small Business Liability 
     Reform Act of 2003.''
       For nearly two decades, NAW has vigorously advocated 
     Federal civil justice reform legislation to curb unnecessary 
     lawsuits and

[[Page 20611]]

     the wasteful legal costs they generate. Title I of the bill 
     (Small Business Lawsuit Abuse Protection), which proposes 
     modest restraints in the application of joint liability and 
     punitive damages with regard to small business defendants, 
     takes a major step in that direction.
       So, too, does the product seller liability standard 
     proposed in Title II (Product Seller Fair Treatment). 
     Currently in a majority of states, non-manufacturing product 
     sellers such as wholesaler-distributors and retailers may be 
     sued for product-related injuries on the same basis as the 
     product manufacturer. Consequently, product sellers are 
     routinely joined in product liability lawsuits regardless of 
     fault. Despite the fact that product sellers are rarely 
     ultimately responsible for the damages awarded to successful 
     claimants, they do have to mount their defense and pay the 
     legal costs attendant to it. This unnecessary litigation 
     drives up costs that must be passed along and absorbed by 
     consumers in the form of higher prices, and serves the 
     interests of no one.
       By providing that non-manufacturing product sellers will be 
     liable for product-related injuries that are caused by their 
     own negligence, intentional misconduct, breaches of their own 
     express warranties, and when the liable manufacturer is 
     unreachable by judicial process, Title II of the bill 
     corrects this serious flaw in our product liability system. 
     This standard of liability is balanced and fair. It 
     appropriately reflects the different roles of manufacturers, 
     wholesaler-distributors and other non-manufacturing product 
     sellers in the chain of production and distribution, promotes 
     product safety by laying responsibility for harm at the 
     doorstep of the culpable party, and ensures that those who 
     are harmed through no fault of their own by defective, 
     unreasonably dangerous products are fully compensated for 
     their injuries.
       Thank you for your leadership in sponsoring this important 
     legislation. I look forward to working with you toward its 
     prompt enactment.
           Sincerely,
                                           James A. Anderson, Jr.,
     Vice President--Government Relations.
                                  ____

                                               National Federation


                                      of Independent Business,

                                     Washington DC, July 30, 2003.
     Hon. Mitch McConnell,
     U.S. Senate, Washington, DC.
       Dear Senator McConnell: On behalf of the 600,000 members of 
     the National Federation of Independent Business (NFIB), I 
     would like to express our strong support for the Small 
     business Liability Reform Act of 2003. NFIB strongly supports 
     this legislation which would restore common sense to our 
     civil justice system--one that takes a particularly heavy 
     toll on the smallest of America's businesses.
       The frequency and high cost of litigation is a matter of 
     growing concern to small businesses across the country. 
     Today's civil justice system presents a significant 
     disincentive to business start-ups and continued operations. 
     If sued, business owners know they have to choose between a 
     long and costly trial or an expensive settlement. Business 
     owners across the nation risk losing their livelihood, their 
     employees and their future every time they are confronted 
     with an unnecessary lawsuit.
       This legislation would make two reforms that have topped 
     the small business community's agenda for years: cap punitive 
     damages and abolish joint liability for non-economic damages 
     for those with fewer than 25 employees. These reforms have 
     been among the recommendations of the White House Conference 
     on Small Business since the early 1980s--and the time has 
     come to protect the smallest of small businesses from 
     excessive damage awards and frivolous suits.
       This bill would also hold non-manufacturing product sellers 
     liable in product liability cases when their own wrongful 
     conduct is responsible for the harm and thus reduce the 
     exposure of innocent product sellers, lessors and renters to 
     lawsuits when they are simply present in a product's chain of 
     distribution or solely due to product ownership. Should the 
     manufacturer be judgment-proof, the product seller would be 
     responsible for any damage award, ensuring that deserving 
     claimants recover fully for their injuries.
       In the end, we believe that enactment of the Small Business 
     Liability Reform Act will inject more fairness into the legal 
     system and reduce unnecessary litigation and legal costs. We 
     also believe that it protects the rights of those with 
     legitimate claims. We thank you for your consideration of 
     these common sense reforms and look forward to working with 
     you to ensure the success of this important legislation.
           Sincerely,

                                                   Dan Danner,

                                            Senior Vice President,
     Public Policy.
                                  ____


                                S. 1546

       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 ``Small 
     Business Liability Reform Act of 2003''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

            TITLE I--SMALL BUSINESS LAWSUIT ABUSE PROTECTION

Sec. 101. Findings.
Sec. 102. Definitions.
Sec. 103. Limitation on punitive damages for small businesses.
Sec. 104. Limitation on joint and several liability for noneconomic 
              loss for small businesses.
Sec. 105. Exceptions to limitations on liability.
Sec. 106. Preemption and election of State nonapplicability.

                TITLE II--PRODUCT SELLER FAIR TREATMENT

Sec. 201. Findings; purposes.
Sec. 202. Definitions.
Sec. 203. Applicability; preemption.
Sec. 204. Liability rules applicable to product sellers, renters, and 
              lessors.
Sec. 205. Federal cause of action precluded.

                       TITLE III--EFFECTIVE DATE

Sec. 301. Effective date.

            TITLE I--SMALL BUSINESS LAWSUIT ABUSE PROTECTION

     SEC. 101. FINDINGS.

       Congress finds that--
       (1) the United States civil justice system is inefficient, 
     unpredictable, unfair, costly, and impedes competitiveness in 
     the marketplace for goods, services, business, and employees;
       (2) the defects in the United States civil justice system 
     have a direct and undesirable effect on interstate commerce 
     by decreasing the availability of goods and services in 
     commerce;
       (3) there is a need to restore rationality, certainty, and 
     fairness to the legal system;
       (4) the spiralling costs of litigation and the magnitude 
     and unpredictability of punitive damage awards and 
     noneconomic damage awards have continued unabated for at 
     least the past 30 years;
       (5) the Supreme Court of the United States has recognized 
     that a punitive damage award can be unconstitutional if the 
     award is grossly excessive in relation to the legitimate 
     interest of the government in the punishment and deterrence 
     of unlawful conduct;
       (6) just as punitive damage awards can be grossly 
     excessive, so can it be grossly excessive in some 
     circumstances for a party to be held responsible under the 
     doctrine of joint and several liability for damages that 
     party did not cause;
       (7) as a result of joint and several liability, entities 
     including small businesses are often brought into litigation 
     despite the fact that their conduct may have little or 
     nothing to do with the accident or transaction giving rise to 
     the lawsuit, and may therefore face increased and unjust 
     costs due to the possibility or result of unfair and 
     disproportionate damage awards;
       (8) the costs imposed by the civil justice system on small 
     businesses are particularly acute, since small businesses 
     often lack the resources to bear those costs and to challenge 
     unwarranted lawsuits;
       (9) due to high liability costs and unwarranted litigation 
     costs, small businesses face higher costs in purchasing 
     insurance through interstate insurance markets to cover their 
     activities;
       (10) liability reform for small businesses will promote the 
     free flow of goods and services, lessen burdens on interstate 
     commerce, and decrease litigiousness; and
       (11) legislation to address these concerns is an 
     appropriate exercise of the powers of Congress under clauses 
     3, 9, and 18 of section 8 of article I of the Constitution of 
     the United States, and the 14th amendment to the Constitution 
     of the United States.

     SEC. 102. DEFINITIONS.

       In this title:
       (1) Crime of violence.--The term ``crime of violence'' has 
     the same meaning as in section 16 of title 18, United States 
     Code.
       (2) Drug.--The term ``drug'' means any controlled substance 
     (as defined in section 102 of the Controlled Substances Act 
     (21 U.S.C. 802)) that was not legally prescribed for use by 
     the defendant or that was taken by the defendant other than 
     in accordance with the terms of a lawfully issued 
     prescription.
       (3) Economic loss.--The term ``economic loss'' means any 
     pecuniary loss resulting from harm (including the loss of 
     earnings or other benefits related to employment, medical 
     expense loss, replacement services loss, loss due to death, 
     burial costs, and loss of business or employment 
     opportunities) to the extent recovery for such loss is 
     allowed under applicable State law.
       (4) Harm.--The term ``harm'' means any physical injury, 
     illness, disease, or death or damage to property.
       (5) Hate crime.--The term ``hate crime'' means a crime 
     described under section 1(b) of the Hate Crime Statistics Act 
     (28 U.S.C. 534 note).
       (6) International terrorism.--The term ``international 
     terrorism'' has the same meaning as in section 2331 of title 
     18, United States Code.
       (7) Noneconomic loss.--The term ``noneconomic loss'' means 
     loss for physical or emotional pain, suffering, 
     inconvenience,

[[Page 20612]]

     physical impairment, mental anguish, disfigurement, loss of 
     enjoyment of life, loss of society and companionship, loss of 
     consortium (other than loss of domestic service), injury to 
     reputation, or any other nonpecuniary loss of any kind or 
     nature.
       (8) Person.--The term ``person'' means any individual, 
     corporation, company, association, firm, partnership, 
     society, joint stock company, or any other entity (including 
     any governmental entity).
       (9) Punitive damages.--The term ``punitive damages'' means 
     damages awarded against any person or entity to punish or 
     deter such person, entity, or others from engaging in similar 
     behavior in the future. Such term does not include any civil 
     penalties, fines, or treble damages that are assessed or 
     enforced by an agency of State or Federal government pursuant 
     to a State or Federal statute.
       (10) Small business.--
       (A) In general.--The term ``small business'' means any 
     unincorporated business, or any partnership, corporation, 
     association, unit of local government, or organization that 
     has fewer than 25 full-time employees as determined on the 
     date the civil action involving the small business is filed.
       (B) Calculation of number of employees.--For purposes of 
     subparagraph (A), the number of employees of a subsidiary of 
     a wholly owned corporation includes the employees of--
       (i) a parent corporation; and
       (ii) any other subsidiary corporation of that parent 
     corporation.
       (11) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, commonwealth, territory, or possession.

     SEC. 103. LIMITATION ON PUNITIVE DAMAGES FOR SMALL 
                   BUSINESSES.

       (a) General Rule.--Except as provided in section 105, in 
     any civil action against a small business, punitive damages 
     may, to the extent permitted by applicable Federal or State 
     law, be awarded against the small business only if the 
     claimant establishes by clear and convincing evidence that 
     conduct carried out by that defendant with a conscious, 
     flagrant indifference to the rights or safety of others was 
     the proximate cause of the harm that is the subject of the 
     action.
       (b) Limitation on Amount.--In any civil action against a 
     small business, punitive damages awarded against a small 
     business shall not exceed the lesser of--
       (1) three times the total amount awarded to the claimant 
     for economic and noneconomic losses; or
       (2) $250,000,
     except that the court may make this subsection inapplicable 
     if the court finds that the plaintiff established by clear 
     and convincing evidence that the defendant acted with 
     specific intent to cause the type of harm for which the 
     action was brought.
       (c) Application by the Court.--The limitation prescribed by 
     this section shall be applied by the court and shall not be 
     disclosed to the jury.

     SEC. 104. LIMITATION ON JOINT AND SEVERAL LIABILITY FOR 
                   NONECONOMIC LOSS FOR SMALL BUSINESSES.

       (a) General Rule.--Except as provided in section 105, in 
     any civil action against a small business, the liability of 
     each defendant that is a small business, or the agent of a 
     small business, for noneconomic loss shall be determined in 
     accordance with subsection (b).
       (b) Amount of Liability.--
       (1) In general.--In any civil action described in 
     subsection (a)--
       (A) each defendant described in that subsection shall be 
     liable only for the amount of noneconomic loss allocated to 
     that defendant in direct proportion to the percentage of 
     responsibility of that defendant (determined in accordance 
     with paragraph (2)) for the harm to the claimant with respect 
     to which that defendant is liable; and
       (B) the court shall render a separate judgment against each 
     defendant described in that subsection in an amount 
     determined under subparagraph (A).
       (2) Percentage of responsibility.--For purposes of 
     determining the amount of noneconomic loss allocated to a 
     defendant under this section, the trier of fact shall 
     determine the percentage of responsibility of each person 
     responsible for the harm to the claimant, regardless of 
     whether or not the person is a party to the action.

     SEC. 105. EXCEPTIONS TO LIMITATIONS ON LIABILITY.

       The limitations on liability under sections 103 and 104 do 
     not apply--
       (1) to any defendant whose misconduct--
       (A) constitutes--
       (i) a crime of violence;
       (ii) an act of international terrorism; or
       (iii) a hate crime;
       (B) results in liability for damages relating to the injury 
     to, destruction of, loss of, or loss of use of, natural 
     resources described in--
       (i) section 1002(b)(2)(A) of the Oil Pollution Act of 1990 
     (33 U.S.C. 2702(b)(2)(A)); or
       (ii) section 107(a)(4)(C) of the Comprehensive 
     Environmental Response, Compensation, and Liability Act of 
     1980 (42 U.S.C. 9607(a)(4)(C));
       (C) involves--
       (i) a sexual offense, as defined by applicable State law; 
     or
       (ii) a violation of a Federal or State civil rights law; or
       (D) occurred at the time the defendant was under the 
     influence (as determined under applicable State law) of 
     intoxicating alcohol or a drug, and the fact that the 
     defendant was under the influence was the cause of any harm 
     alleged by the plaintiff in the subject action; or
       (2) to any cause of action which is brought under the 
     provisions of title 31, United States Code, relating to false 
     claims (31 U.S.C. 3729 through 3733) or to any other cause of 
     action brought by the United States relating to fraud or 
     false statements.

     SEC. 106. PREEMPTION AND ELECTION OF STATE NONAPPLICABILITY.

       (a) Preemption.--Subject to subsection (b), this title 
     preempts the laws of any State to the extent that State laws 
     are inconsistent with this title.
       (b) Election of State Regarding Nonapplicability.--This 
     title does not apply to any action in a State court against a 
     small business in which all parties are citizens of the 
     State, if the State enacts a statute--
       (1) citing the authority of this subsection;
       (2) declaring the election of such State that this title 
     does not apply as of a date certain to such actions in the 
     State; and
       (3) containing no other provision.

                TITLE II--PRODUCT SELLER FAIR TREATMENT

     SEC. 201. FINDINGS; PURPOSES.

       (a) Findings.--Congress finds that--
       (1) although damage awards in product liability actions may 
     encourage the production of safer products, they may also 
     have a direct effect on interstate commerce and consumers of 
     the United States by increasing the cost of, and decreasing 
     the availability of, products;
       (2) some of the rules of law governing product liability 
     actions are inconsistent within and among the States, 
     resulting in differences in State laws that may be 
     inequitable with respect to plaintiffs and defendants and may 
     impose burdens on interstate commerce;
       (3) product liability awards may jeopardize the financial 
     well-being of individuals and industries, particularly the 
     small businesses of the United States;
       (4) because the product liability laws of a State may have 
     adverse effects on consumers and businesses in many other 
     States, it is appropriate for the Federal Government to enact 
     national, uniform product liability laws that preempt State 
     laws; and
       (5) under clause 3 of section 8 of article I of the United 
     States Constitution, it is the constitutional role of the 
     Federal Government to remove barriers to interstate commerce.
       (b) Purposes.--The purposes of this title, based on the 
     powers of the United States under clause 3 of section 8 of 
     article I of the United States Constitution, are to promote 
     the free flow of goods and services and lessen the burdens on 
     interstate commerce, by--
       (1) establishing certain uniform legal principles of 
     product liability that provide a fair balance among the 
     interests of all parties in the chain of production, 
     distribution, and use of products; and
       (2) reducing the unacceptable costs and delays in product 
     liability actions caused by excessive litigation that harms 
     both plaintiffs and defendants.

     SEC. 202. DEFINITIONS.

       In this title:
       (1) Alcohol product.--The term ``alcohol product'' includes 
     any product that contains not less than \1/2\ of 1 percent of 
     alcohol by volume and is intended for human consumption.
       (2) Claimant.--The term ``claimant'' means any person who 
     brings an action covered by this title and any person on 
     whose behalf such an action is brought. If such an action is 
     brought through or on behalf of an estate, the term includes 
     the claimant's decedent. If such an action is brought through 
     or on behalf of a minor or incompetent, the term includes the 
     claimant's legal guardian.
       (3) Commercial loss.--The term ``commercial loss'' means--
       (A) any loss or damage solely to a product itself;
       (B) loss relating to a dispute over the value of a product; 
     or
       (C) consequential economic loss, the recovery of which is 
     governed by applicable State commercial or contract laws that 
     are similar to the Uniform Commercial Code.
       (4) Compensatory damages.--The term ``compensatory 
     damages'' means damages awarded for economic and noneconomic 
     losses.
       (5) Dram-shop.--The term ``dram-shop'' means a drinking 
     establishment where alcoholic beverages are sold to be 
     consumed on the premises.
       (6) Economic loss.--The term ``economic loss'' means any 
     pecuniary loss resulting from harm (including the loss of 
     earnings or other benefits related to employment, medical 
     expense loss, replacement services loss, loss due to death, 
     burial costs, and loss of business or employment 
     opportunities) to the extent recovery for that loss is 
     allowed under applicable State law.

[[Page 20613]]

       (7) Harm.--The term ``harm'' means any physical injury, 
     illness, disease, or death or damage to property caused by a 
     product. The term does not include commercial loss.
       (8) Manufacturer.--The term ``manufacturer'' means--
       (A) any person who--
       (i) is engaged in a business to produce, create, make, or 
     construct any product (or component part of a product); and
       (ii)(I) designs or formulates the product (or component 
     part of the product); or
       (II) has engaged another person to design or formulate the 
     product (or component part of the product);
       (B) a product seller, but only with respect to those 
     aspects of a product (or component part of a product) that 
     are created or affected when, before placing the product in 
     the stream of commerce, the product seller--
       (i) produces, creates, makes, constructs and designs, or 
     formulates an aspect of the product (or component part of the 
     product) made by another person; or
       (ii) has engaged another person to design or formulate an 
     aspect of the product (or component part of the product) made 
     by another person; or
       (C) any product seller not described in subparagraph (B) 
     that holds itself out as a manufacturer to the user of the 
     product.
       (9) Noneconomic loss.--The term ``noneconomic loss'' means 
     loss for physical or emotional pain, suffering, 
     inconvenience, physical impairment, mental anguish, 
     disfigurement, loss of enjoyment of life, loss of society and 
     companionship, loss of consortium (other than loss of 
     domestic service), injury to reputation, or any other 
     nonpecuniary loss of any kind or nature.
       (10) Person.--The term ``person'' means any individual, 
     corporation, company, association, firm, partnership, 
     society, joint stock company, or any other entity (including 
     any governmental entity).
       (11) Product.--
       (A) In general.--The term ``product'' means any object, 
     substance, mixture, or raw material in a gaseous, liquid, or 
     solid state that--
       (i) is capable of delivery itself or as an assembled whole, 
     in a mixed or combined state, or as a component part or 
     ingredient;
       (ii) is produced for introduction into trade or commerce;
       (iii) has intrinsic economic value; and
       (iv) is intended for sale or lease to persons for 
     commercial or personal use.
       (B) Exclusion.--The term ``product'' does not include--
       (i) tissue, organs, blood, and blood products used for 
     therapeutic or medical purposes, except to the extent that 
     such tissue, organs, blood, and blood products (or the 
     provision thereof) are subject, under applicable State law, 
     to a standard of liability other than negligence; or
       (ii) electricity, water delivered by a utility, natural 
     gas, or steam.
       (12) Product liability action.--
       (A) General rule.--Except as provided in subparagraph (B), 
     the term ``product liability action'' means a civil action 
     brought on any theory for a claim for any physical injury, 
     illness, disease, death, or damage to property that is caused 
     by a product.
       (B) The following claims are not included in the term 
     ``product liability action'':
       (i) Negligent entrustment.--A claim for negligent 
     entrustment.
       (ii) Negligence per se.--A claim brought under a theory of 
     negligence per se.
       (iii) Dram-shop.--A claim brought under a theory of dram-
     shop or third-party liability arising out of the sale or 
     providing of an alcoholic product to an intoxicated person or 
     minor.
       (13) Product seller.--
       (A) In general.--The term ``product seller'' means a person 
     who in the course of a business conducted for that purpose--
       (i) sells, distributes, rents, leases, prepares, blends, 
     packages, labels, or otherwise is involved in placing a 
     product in the stream of commerce; or
       (ii) installs, repairs, refurbishes, reconditions, or 
     maintains the harm-causing aspect of the product.
       (B) Exclusion.--The term ``product seller'' does not 
     include--
       (i) a seller or lessor of real property;
       (ii) a provider of professional services in any case in 
     which the sale or use of a product is incidental to the 
     transaction and the essence of the transaction is the 
     furnishing of judgment, skill, or services; or
       (iii) any person who--

       (I) acts in only a financial capacity with respect to the 
     sale of a product; or
       (II) leases a product under a lease arrangement in which 
     the lessor does not initially select the leased product and 
     does not during the lease term ordinarily control the daily 
     operations and maintenance of the product.

       (14) State.--The term ``State'' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the Northern 
     Mariana Islands, any other territory or possession of the 
     United States, or any political subdivision of any such 
     State, commonwealth, territory, or possession.

     SEC. 203. APPLICABILITY; PREEMPTION.

       (a) Applicability.--
       (1) In general.--Except as provided in paragraph (2), this 
     title governs any product liability action brought in any 
     Federal or State court.
       (2) Actions for commercial loss.--A civil action brought 
     for commercial loss shall be governed only by applicable 
     State commercial or contract laws that are similar to the 
     Uniform Commercial Code.
       (b) Relationship to State Law.--This title supersedes a 
     State law only to the extent that the State law applies to an 
     issue covered by this title. Any issue that is not governed 
     by this title, including any standard of liability applicable 
     to a manufacturer, shall be governed by any applicable 
     Federal or State law.
       (c) Effect on Other Law.--Nothing in this title shall be 
     construed to--
       (1) waive or affect any defense of sovereign immunity 
     asserted by any State under any State law;
       (2) supersede or alter any Federal law;
       (3) waive or affect any defense of sovereign immunity 
     asserted by the United States;
       (4) affect the applicability of any provision of chapter 97 
     of title 28, United States Code;
       (5) preempt State choice-of-law rules with respect to 
     claims brought by a foreign nation or a citizen of a foreign 
     nation;
       (6) affect the right of any court to transfer venue or to 
     apply the law of a foreign nation or to dismiss a claim of a 
     foreign nation or of a citizen of a foreign nation on the 
     ground of inconvenient forum; or
       (7) supersede or modify any statutory or common law, 
     including any law providing for an action to abate a 
     nuisance, that authorizes a person to institute an action for 
     civil damages or civil penalties, cleanup costs, injunctions, 
     restitution, cost recovery, punitive damages, or any other 
     form of relief, for remediation of the environment (as 
     defined in section 101(8) of the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980 (42 U.S.C. 
     9601(8))).

     SEC. 204. LIABILITY RULES APPLICABLE TO PRODUCT SELLERS, 
                   RENTERS, AND LESSORS.

       (a) General Rule.--
       (1) In general.--In any product liability action covered 
     under this title, a product seller other than a manufacturer 
     shall be liable to a claimant only if the claimant 
     establishes that--
       (A)(i) the product that allegedly caused the harm that is 
     the subject of the complaint was sold, rented, or leased by 
     the product seller;
       (ii) the product seller failed to exercise reasonable care 
     with respect to the product; and
       (iii) the failure to exercise reasonable care was a 
     proximate cause of the harm to the claimant;
       (B)(i) the product seller made an express warranty 
     applicable to the product that allegedly caused the harm that 
     is the subject of the complaint, independent of any express 
     warranty made by a manufacturer as to the same product;
       (ii) the product failed to conform to the warranty; and
       (iii) the failure of the product to conform to the warranty 
     caused the harm to the claimant; or
       (C)(i) the product seller engaged in intentional 
     wrongdoing, as determined under applicable State law; and
       (ii) the intentional wrongdoing caused the harm that is the 
     subject of the complaint.
       (2) Reasonable opportunity for inspection.--For purposes of 
     paragraph (1)(A)(ii), a product seller shall not be 
     considered to have failed to exercise reasonable care with 
     respect to a product based upon an alleged failure to inspect 
     the product, if--
       (A) the failure occurred because there was no reasonable 
     opportunity to inspect the product; or
       (B) the inspection, in the exercise of reasonable care, 
     would not have revealed the aspect of the product that 
     allegedly caused the claimant's harm.
       (b) Special Rule.--
       (1) In general.--A product seller shall be deemed to be 
     liable as a manufacturer of a product for harm caused by the 
     product, if--
       (A) the manufacturer is not subject to service of process 
     under the laws of any State in which the action may be 
     brought; or
       (B) the court determines that the claimant is or would be 
     unable to enforce a judgment against the manufacturer.
       (2) Statute of limitations.--For purposes of this 
     subsection only, the statute of limitations applicable to 
     claims asserting liability of a product seller as a 
     manufacturer shall be tolled from the date of the filing of a 
     complaint against the manufacturer to the date that judgment 
     is entered against the manufacturer.
       (c) Rented or Leased Products.--
       (1) Definition.--For purposes of paragraph (2), and for 
     determining the applicability of this title to any person 
     subject to that paragraph, the term ``product liability 
     action'' means a civil action brought on any theory for harm 
     caused by a product or product use.
       (2) Liability.--Notwithstanding any other provision of law, 
     any person engaged in the business of renting or leasing a 
     product (other than a person excluded from the definition of 
     product seller under section 202(13)(B)) shall be subject to 
     liability in a product liability action under subsection (a), 
     but any person engaged in the business of

[[Page 20614]]

     renting or leasing a product shall not be liable to a 
     claimant for the tortious act of another solely by reason of 
     ownership of that product.

     SEC. 205. FEDERAL CAUSE OF ACTION PRECLUDED.

       The district courts of the United States shall not have 
     jurisdiction under this title based on section 1331 or 1337 
     of title 28, United States Code.

                       TITLE III--EFFECTIVE DATE

     SEC. 301. EFFECTIVE DATE.

       This Act shall take effect with respect to any civil action 
     commenced after the date of the enactment of this Act without 
     regard to whether the harm that is the subject of the action 
     occurred before such date.
                                 ______
                                 
      By Mr. BINGAMAN (for himself and Mr. Domenici):
  S. 1547. A bill to amend title XXI of the Social Security Act to make 
a technical correction with respect to the definition of qualifying 
State; considered and passed.

  Mr. BINGAMAN. Mr. President, last evening, I introduced two bills 
with Senator Domenici and yet another one today to address a technical, 
but very important problem that the State of New Mexico and a number of 
other States, including that of the Majority Leader, have faced with 
respect to the Children's Health Insurance Program, or CHIP. When CHIP 
was established by President Clinton and the Congress in 1997, an 
inequity was built into the program whereby certain states that had 
been more progressive and had expanded coverage to children through 
Medicaid prior to the enactment of the bill were penalized.
  In the last Congress and again this year, I introduced the 
``Children's Health Equity Act of 2003'' to address this problem for a 
number of States, including New Mexico, Vermont, Washington, and 
Tennessee. Our states have been unable to fully access Federal CHIP 
funds because the previous expansion of Medicaid to children was not 
recognized or ``grandfathered,'' while certain other States such as New 
York, Florida, and Pennsylvania were explicitly ``grandfathered'' in 
and their State expansions to children were allowed to be covered with 
CHIP dollars.
  The National Governors' Association has long recognized this inequity 
and has, in fact, a policy that read, ``The Governors believe that it 
is critical that innovative states not be penalized for having expanded 
coverage to children before the enactment of S-CHIP, which provides 
enhanced funding to meet these goals. To this end, the Governors 
support providing additional funding flexibility to states that had 
already significantly expanded coverage to the majority of uninsured 
children in their states.''
  S. 621, the ``Children's Health Equity Act,'' did precisely that and 
the critical language from our legislation was included in S. 312 by 
Senators Rockefeller and Chafee, which addressed both expired and 
expiring CHIP funds and the problem addressed by S. 621. We appreciated 
their recognition of that issue and supported the passage of that 
legislation after an extensive set of negotiations and compromises on 
the language.
  For New Mexico, an important issue is that our State expanded 
coverage up to 185 percent of poverty prior to the enactment of CHIP. 
Because of this, the children in our State between 100 percent and 185 
percent of poverty are ineligible for CHIP. Thus, New Mexico has been 
allocated $266 million from CHIP between fiscal years 1998 and 2002, 
and yet has only been able to spend slightly over $26 million as of the 
end of the last fiscal year. In other words, New Mexico has been 
allowed to spend less than 10 percent of its Federal CHIP allocations. 
This, despite the fact our State ranks 2nd in the Nation in the 
percentage of children who are uninsured.
  It is a travesty that money set-aside for New Mexico to address our 
children's coverage problem is not available to be spent and is thereby 
redistributed to other States who have far lower uninsured rates and 
whose children between 100 and 185 percent of poverty are eligible for 
Federal CHIP dollars. The children in those States are certainly no 
more worthy of health insurance coverage than the children of New 
Mexico.
  The consequences for the children of New Mexico are enormous. 
According to the Census Bureau, New Mexico has an estimated 114,000 
uninsured children. Put another way, almost 21 percent of all the 
children in New Mexico are uninsured, despite the fact New Mexico has 
expanded coverage all the way to 235 percent of poverty. Again, this is 
the 2nd highest rate of uninsured children in the country.
  This is a result of the fact that an estimated 80 percent of the 
uninsured children in New Mexico are below 200 percent of poverty. 
These children are often eligible for either Medicaid or CHIP but 
currently unenrolled. With the exception of those few children between 
185 and 200 percent of poverty who are eligible for the enhanced 
federal CHIP dollars, all of the remaining children below 185 percent 
of poverty in New Mexico are denied CHIP funding despite their need.
  For New Mexico, the Senate language that was in S. 621 and included 
in S. 312 would have allowed New Mexico to spend up to 20 percent of 
its Federal CHIP allotments on children enrolled between 150 and 185 
percent of poverty. Unfortunately, the House of Representatives chose 
to modify the Senate language in such a manner through the introduction 
and passage of H.R. 2854 that New Mexico may no longer be eligible.
  The House of Representatives, which did not include language 
addressing New Mexico's problem in the first place, chose to edit the 
Senate language that ``grandfathered'' States that had previous 
expanded coverage ``up to'' 185 percent of poverty and above and 
replaced it with language that the State had to have expanded coverage 
to ``at least'' 185 percent of poverty.
  This sounds rather technical, but this slight difference may 
ironically allow all the other states our bill intended to help, who 
expanded coverage beyond 185 percent of poverty, such as Vermont and 
Washington, to be ``grandfathered'' but not New Mexico. It is my 
contention, after reviewing the materials from our State that our State 
expanded coverage to 185 percent of poverty and operates a full 
Medicaid benefit at 185 percent of poverty and therefore should qualify 
as a State to be ``grandfathered.'' Unfortunately, the language change 
has left the Centers for Medicare and Medicaid Services, or CMS, 
uncertain of our State's eligibility, as some believe the State has 
only some up to 185 percent of poverty, or just short of that level, 
and therefore does not meet the test of ``at least'' 185 percent of 
poverty.
  For six long years, the States of Washington, New Mexico, Vermont, 
and others have sought to fix the inequity in CHIP. Senator Slade 
Gorton of Washington had the original legislation to fix this problem 
and I picked up, modified, and reintroduced that legislation in the 
last two sessions of Congress. After six long years, to now find that 
New Mexico may be the only State excluded by the House change and 
0.0001 percentage points, is both outrageous and unacceptable.
  I contend that the Centers for Medicare and Medicaid Services, or 
CMS, can still make a determination that New Mexico meets this revised 
standard under H.R. 2854 and urge them to do so as soon possible.
  However, in the meantime, since New Mexico's status is now in 
question. I introduced two bills last night and another one today with 
Senator Domenici that all clarify that New Mexico qualifies. The first 
includes New Mexico as a ``qualified state'' explicitly. This would 
leave no question at all. The second bill clarifies that a State found 
to be a partial percentage point below 185 percent of poverty would 
round up to the nearest number, that being 185 percent of poverty, and 
be eligible. That would also undoubtedly ensure New Mexico's 
eligibility. In order to release our hold, I have asked that the bill I 
introduced changing the percentage that a qualified state must be 
changed from 185 to 184 percent of poverty be approved by the State in 
conjunction with H.R. 2854. Unfortunately, our bill will then have to 
be taken up and passed by the House of Representatives and signed into 
law by the President.

[[Page 20615]]

  I have received a letter from Chairman Tauzin, and Ranking Member 
Dingell of the House Energy and Commerce Committee ensuring the intent 
of H.R. 2854 is to include New Mexico and provides their commitment 
that they will ensure any technical problem our State has with the 
language will be fixed immediately upon return from the August recess. 
I thank them for their commitment to New Mexico.
  Once again, many States are accessing their CHIP allotments to cover 
kids at poverty levels far below New Mexico's current or past 
eligibility levels. The children in those states are certainly no more 
worthy and the children of New Mexico deserve better than they are 
getting from the Federal Government. I accept the commitment made by 
the leadership of the Senate Finance Committee and the House Energy and 
Commerce Committee to fix this problem and therefore urge the passage 
of both H.R. 2854 and the original legislation that I introduced today.
  I ask unanimous consent that the letter I referred to be printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
                                                    July 31, 2003.
     Senator Jeff Bingaman,
     Senator Pete Domenici,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senators Bingaman and Domenici:
       We are writing to provide our commitment to pass a 
     technical corrections bill in September that will provide the 
     proper technical fix that will allow New Mexico to use 20% of 
     their SCHIP allotments to pay for certain Medicaid eligible 
     children.
       Prior to House passage of H.R. 2854, CMS had provided 
     technical assistance that indicated that New Mexico would be 
     covered under the language in the bill. The authors of the 
     bill intended that New Mexico would be covered, and drafted 
     the language accordingly, based on the information provided 
     by CMS.
       We have subsequently learned that New Mexico may not be 
     able to use the 20% because of potential flaws in the 
     language contained in H.R. 2854. This was not our intent, and 
     we are committing to passing a technical corrections bill in 
     September that will allow New Mexico to use these funds.
           Sincerely,
     Congressman Billy Tauzin,
       Chairman of the House Committee on Energy & Commerce.
     Congressman John D. Dingell,
       Ranking Member of the House Committee on Energy & Commerce.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Baucus, Mr. Frist, Mr. Daschle, 
        Mr. Domenici, Mr. Bingaman, Mr. Inhofe, Mr. Jeffords, Mr. 
        Thomas, Mr. Voinovich, Mr. Conrad, Mrs. Lincoln, Mr. Coleman, 
        Mr. Dorgan, Mr. Bond, Mr. Harkin, Mr. Dayton, Mr. Durbin, Mr. 
        Talent, Mr. Nelson of Nebraska, and Mr. Brownback):
  S. 1548. A bill to amend the Internal Revenue Code of 1986 to provide 
incentives for the production of renewable fuels and to simplify the 
administration of the Highway Trust Fund fuel excise taxes, and for 
other purposes; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, as Members of the this Senate are well 
aware, I have worked for many years on the development of renewable 
fuels in the marketplace. Twenty-five years ago we created an alcohol 
fuels tax incentive to promote the use of ethanol. Today, I am 
introducing legislation that will simplify the excise tax collection 
system for all transportation and renewable fuels.
  This legislation reforms the alcohol fuels tax credit and creates a 
new ``Volumetric Ethanol Excise Tax Credit'' (VEETC). In addition to 
streamlining the alcohol fuels tax credit, this legislation creates a 
new tax credit for biodiesel.
  Under the VEETC we accomplish three objectives: First, improve the 
tax collection system for renewable fuels; second, increase the revenue 
source for the Highway Trust Fund.
  This is because the full amount of user excise taxes levied will be 
collected and remitted to the Highway Trust Fund (HTF). In simplifying 
the tax collection system, all user excise taxes levied on both 
gasoline and ethanol blended fuels would be collected at 18.4 cents per 
gallon; and all excise taxes levied on diesel and biodiesel blended 
fuels would be collected at 24.4 cents per gallon.
  On average, the proposal would generate more than $2 billion per year 
in additional HTF revenue, which would improve the ability of the 
federal government to address the nation's transportation 
infrastructure needs; and third, we will enhance the delivery of 
renewable fuels in the marketplace.
  The federal government's tax collection system will work in concert 
with the petroleum industry's and independent terminal's fuel delivery 
system.
  The Grassley/Baucus amendment provides tremendous new flexibility to 
gasoline refiners, marketers, and ethanol producers.
  It eliminates the restrictive blend levels, 5.7 percent, 7.7 percent 
and 10 percent dictated by the Tax Code to reflect obsolete Clean Air 
Act requirements, providing significant flexibility to oil companies to 
blend as much or as little ethanol or biodiesel to meet their octane or 
volume needs.
  It streamlines the tax collection system to avoid the potential for 
fraud while accelerating the refund mechanism.
  It provides new market opportunities for ethanol and biodiesel in 
off-road uses, E-85 and ETBE, and, of course, it resolves a 
longstanding issue with regard to the Highway Trust Fund.
  The ``Volumetric Ethanol Excise Tax Credit Act of 2003'' is a 
forward-thinking piece of legislation that deserves universal support 
and it will address a number of tax issues that have created roadblocks 
for the renewable industry for a number of years.
  Specifically, the tax amendment will do the following: eliminate the 
negative impact of the ethanol tax incentive on the Highway Trust Fund; 
eliminate the waste, fraud and abuse of the excise tax collection 
system, which means that 18.4 cents per gallon of each gallon of 
ethanol-blend fuel will be remitted to the U.S. Treasury; streamline 
the delivery of renewable fuels to petroleum blenders at the terminal 
rack because fuel mixtures will not be based on the Clean Air Act 
requirements of 5.7, 7.7 or 10 percent blends--the tax credit is 
allowed for any blend of ethanol and gasoline; streamline the tax 
refund system for below the rack blenders to allow a tax refund of 52 
cents per gallon on each gallon of ethanol blended with gasoline to be 
paid within 20 days of blending gasoline with ethanol; Eliminate the 
need of the alcohol fuels income tax credit that is subject to the 
alternative minimum tax; any taxpayer eligible for the alcohol fuels 
tax credit will be able to use the volume ethanol excise tax credit 
system, which means they will be able to file for a refund for every 
gallon of ethanol used in the marketplace without regard to the income 
of the taxpayer or whether the ethanol is used in a taxed fuel or tax 
exempt fuel.
  Create a new tax credit for biodiesel--$1.00 per gallon for biodiesel 
made from virgin oils derived from agricultural products and animal 
fats; and $.50 per gallon for biodiesel made from agricultural products 
and animal fats.
  Allow the credit to be claimed in both taxable and nontaxable 
markets; tax exempt fleet fuel programs; off road diesel markets (died 
diesel).
  Streamline the use of biodiesel at the terminal rack--the tax 
structure and credit will encourage petroleum blenders to blend 
biodiesel as far upstream as possible, which under the RFS and 
Minnesota's 2 percent volume requirement will allow more biodiesel to 
be used in the marketplace.
  Streamline the tax refund system for below the rack blenders to allow 
a tax refund of the biodiesel tax credit on each gallon of biodiesel 
blended with diesel, dyed and undyed, to be paid within 20 days of 
blending.
  The alternative minimum tax (AMT) will not be an issue for biodiesel; 
any taxpayer eligible for the biodiesel tax credit will be able use the 
volume biodiesel excise tax credit system, which means they will be 
able to file for a refund for every gallon of biodiesel used

[[Page 20616]]

in the marketplace regard to the income of the taxpayer or whether the 
ethanol is used in a taxed fuel or tax exempt fuel.
  No affect on the Highway Trust Fund--the biodiesel tax credit will be 
paid for out of the ``General fund'' not the ``Highway Trust Fund.''
  Eliminate the E85 AMT issue: any taxpayer eligible for the alcohol 
fuels tax credit will be able use the volume ethanol excise tax credit 
system, which means they will be able to file for a refund for every 
gallon of ethanol used in the marketplace without regard to the income 
of the taxpayer or whether the ethanol is used in a taxed fuel or tax 
exempt fuel.
  Allow the alcohol fuels tax credit to be claimed in both taxable and 
nontaxable markets;
  Streamline the tax refund system for below the rack blenders to allow 
a tax refund of the alcohol fuels credit on each gallon of ethanol 
blended with gasoline to be paid within 20 days of blending.
  I feel strongly about the legislation because it eliminates the tax 
infrastructure, and fuel delivery impediments that have been 
problematic throughout the history of the renewable duels industry and 
encourage you to join us in working to enact this legislation during 
this Congress.
  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. 1548

       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 ``Volumetric 
     Ethanol Excise Tax Credit (VEETC) Act of 2003''.
       (b) Amendment of 1986 Code.--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. INCENTIVES FOR BIODIESEL.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by inserting after section 40A the 
     following new section:

     ``SEC. 40B. BIODIESEL USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     biodiesel fuels credit determined under this section for the 
     taxable year is an amount equal to the sum of--
       ``(1) the biodiesel mixture credit, plus
       ``(2) the biodiesel credit.
       ``(b) Definition of Biodiesel Mixture Credit and Biodiesel 
     Credit.--For purposes of this section--
       ``(1) Biodiesel mixture credit.--
       ``(A) In general.--The biodiesel mixture credit of any 
     taxpayer for any taxable year is 50 cents for each gallon of 
     biodiesel used by the taxpayer in the production of a 
     qualified biodiesel mixture.
       ``(B) Qualified biodiesel mixture.--The term `qualified 
     biodiesel mixture' means a mixture of biodiesel and diesel 
     fuel which--
       ``(i) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the taxpayer producing such 
     mixture.
       ``(C) Sale or use must be in trade or business, etc.--
     Biodiesel used in the production of a qualified biodiesel 
     mixture shall be taken into account--
       ``(i) only if the sale or use described in subparagraph (B) 
     is in a trade or business of the taxpayer, and
       ``(ii) for the taxable year in which such sale or use 
     occurs.
       ``(D) Casual off-farm production not eligible.--No credit 
     shall be allowed under this section with respect to any 
     casual off-farm production of a qualified biodiesel mixture.
       ``(2) Biodiesel credit.--
       ``(A) In general.--The biodiesel credit of any taxpayer for 
     any taxable year is 50 cents for each gallon of biodiesel 
     which is not in a mixture with diesel fuel and which during 
     the taxable year--
       ``(i) is used by the taxpayer as a fuel in a trade or 
     business, or
       ``(ii) is sold by the taxpayer at retail to a person and 
     placed in the fuel tank of such person's vehicle.
       ``(B) User credit not to apply to biodiesel sold at 
     retail.--No credit shall be allowed under subparagraph (A)(i) 
     with respect to any biodiesel which was sold in a retail sale 
     described in subparagraph (A)(ii).
       ``(3) Credit for agri-biodiesel.--
       ``(A) In general.--Subject to subparagraph (B), in the case 
     of any biodiesel which is agri-biodiesel, paragraphs (1)(A) 
     and (2)(A) shall be applied by substituting `$1.00' for `50 
     cents'.
       ``(B) Certification for agri-biodiesel.--Subparagraph (A) 
     shall apply only if the taxpayer described in paragraph 
     (1)(A) or (2)(A) obtains a certification (in such form and 
     manner as prescribed by the Secretary) from the producer of 
     the agri-biodiesel which identifies the product produced.
       ``(c) Coordination With Credit Against Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any agri-biodiesel shall, under regulations 
     prescribed by the Secretary, be properly reduced to take into 
     account any benefit provided with respect to such agri-
     biodiesel solely by reason of the application of section 6426 
     or 6427(e).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Biodiesel.--The term `biodiesel' means the monoalkyl 
     esters of long chain fatty acids derived from plant or animal 
     matter for use in diesel-powered engines which meet--
       ``(A) the registration requirements for fuels and fuel 
     additives established by the Environmental Protection Agency 
     under section 211 of the Clean Air Act (42 U.S.C. 7545), and
       ``(B) the requirements of the American Society of Testing 
     and Materials D6751.
       ``(2) Agri-biodiesel.--The term `agri-biodiesel' means 
     biodiesel derived solely from virgin oils. Such term shall 
     include esters derived from vegetable oils from corn, 
     soybeans, sunflower seeds, cottonseeds, canola, crambe, 
     rapeseeds, safflowers, flaxseeds, rice bran, and mustard 
     seeds, and from animal fats.
       ``(3) Biodiesel mixture not used as a fuel, etc.--
       ``(A) Imposition of tax.--If--
       ``(i) any credit was determined under this section with 
     respect to biodiesel used in the production of any qualified 
     biodiesel mixture, and
       ``(ii) any person--

       ``(I) separates such biodiesel from the mixture, or

       ``(II) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the rate applicable under subsection (b)(1)(A) 
     and the number of gallons of the mixture.
       ``(B) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) as if such tax were imposed by section 4081 
     and not by this chapter.
       ``(4) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Termination.--This section shall not apply to any 
     fuel sold after December 31, 2005.''.
       (b) Credit Treated as Part of General Business Credit.--
     Section 38(b) (relating to current year business credit), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (15), by striking the period at the end of 
     paragraph (16) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(17) the biodiesel fuels credit determined under section 
     40B(a).''.
       (c) Conforming Amendments.--
       (1) Section 39(d), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(12) No carryback of biodiesel fuels credit before 
     effective date.--No portion of the unused business credit for 
     any taxable year which is attributable to the biodiesel fuels 
     credit determined under section 40B may be carried back to a 
     taxable year ending on or before the date of the enactment of 
     section 40B.''.
       (2)(A) Section 87, as amended by this Act, is amended--
       (i) by striking ``and'' at the end of paragraph (1),
       (ii) by striking the period at the end of paragraph (2) and 
     inserting ``, and'',
       (iii) by adding at the end the following new paragraph:
       ``(3) the biodiesel fuels credit determined with respect to 
     the taxpayer for the taxable year under section 40B(a).'', 
     and
       (iv) by striking ``FUEL CREDIT'' in the heading and 
     inserting ``AND BIODIESEL FUELS CREDITS''.
       (B) The item relating to section 87 in the table of 
     sections for part II of subchapter B of chapter 1 is amended 
     by striking ``fuel credit'' and inserting ``and biodiesel 
     fuels credits''.
       (3) Section 196(c) is amended by striking ``and'' at the 
     end of paragraph (9), by striking the period at the end of 
     paragraph (10) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(11) the biodiesel fuels credit determined under section 
     40B(a).''.
       (4) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding after the item relating to section 40A the 
     following new item:

``Sec. 40B. Biodiesel used as fuel.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold after the date of the enactment of 
     this Act, in taxable years ending after such date.

[[Page 20617]]



     SEC. 3. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE TAX 
                   CREDIT.

       (a) In General.--Subchapter B of chapter 65 (relating to 
     rules of special application) is amended by inserting after 
     section 6425 the following new section:

     ``SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.

       ``(a) Allowance of Credits.--There shall be allowed as a 
     credit against the tax imposed by section 4081 an amount 
     equal to the sum of--
       ``(1) the alcohol fuel mixture credit, plus
       ``(2) the biodiesel mixture credit.
       ``(b) Alcohol Fuel Mixture Credit.--
       ``(1) In general.--For purposes of this section, the 
     alcohol fuel mixture credit is the applicable amount for each 
     gallon of alcohol used by the taxpayer in producing an 
     alcohol fuel mixture.
       ``(2) Applicable amount.--For purposes of this subsection--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable amount is 52 cents (51 cents in the case of 
     any sale or use after 2004).
       ``(B) Mixtures not containing ethanol.--In the case of an 
     alcohol fuel mixture in which none of the alcohol consists of 
     ethanol, the applicable amount is 60 cents.
       ``(3) Alcohol fuel mixture.--For purposes of this 
     subsection, the term `alcohol fuel mixture' is a mixture 
     which--
       ``(A) consists of alcohol and a taxable fuel, and
       ``(B) is sold for use or used as a fuel by the taxpayer 
     producing the mixture.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Alcohol.--The term `alcohol' includes methanol and 
     ethanol but does not include--
       ``(i) alcohol produced from petroleum, natural gas, or coal 
     (including peat), or
       ``(ii) alcohol with a proof of less than 190 (determined 
     without regard to any added denaturants).

     Such term also includes an alcohol gallon equivalent of ethyl 
     tertiary butyl ether or other ethers produced from such 
     alcohol.
       ``(B) Taxable fuel.--The term `taxable fuel' has the 
     meaning given such term by section 4083(a)(1).
       ``(5) Termination.--This subsection shall not apply to any 
     sale or use for any period after December 31, 2010.
       ``(c) Biodiesel Mixture Credit.--
       ``(1) In general.--For purposes of this section, the 
     biodiesel mixture credit is the product of the applicable 
     amount and the number of gallons of biodiesel used by the 
     taxpayer in producing any qualified biodiesel mixture.
       ``(2) Applicable amount.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable amount is 50 cents.
       ``(B) Amount for agri-biodiesel.--
       ``(i) In general.--Subject to clause (ii), in the case of 
     any biodiesel which is agri-biodiesel, the applicable amount 
     is $1.00.
       ``(ii) Certification for agri-biodiesel.--Clause (i) shall 
     apply only if the taxpayer described in paragraph (1) obtains 
     a certification (in such form and manner as prescribed by the 
     Secretary) from the producer of the agri-biodiesel which 
     identifies the product produced.
       ``(3) Definitions.--Any term used in this subsection which 
     is also used in section 40B shall have the meaning given such 
     term by section 40B.
       ``(4) Termination.--This subsection shall not apply to any 
     sale or use for any period after December 31, 2005.
       ``(d) Mixture Not Used As a Fuel, Etc.--
       ``(1) Imposition of tax.--If--
       ``(A) any credit was determined under this section with 
     respect to alcohol or biodiesel used in the production of any 
     alcohol fuel mixture or qualified biodiesel mixture, 
     respectively, and
       ``(B) any person--
       ``(i) separates such alcohol or biodiesel from the mixture, 
     or
       ``(ii) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the applicable amount and the number of 
     gallons of such alcohol or biodiesel.
       ``(2) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     paragraph (1) as if such tax were imposed by section 4081 and 
     not by this section.''.
       (b) Registration Requirement.--Section 4101(a) (relating to 
     registration) is amended by inserting ``and every person 
     producing biodiesel (as defined in section 40B(d)(1)) or 
     alcohol (as defined in section 6426(b)(4)(A))'' after 
     ``4091''.
       (c) Conforming Amendments.--
       (1) Section 40(c) is amended by striking ``section 4081(c), 
     or section 4091(c)'' and inserting ``section 4091(c), section 
     6426, section 6427(e), or section 6427(f)''.
       (2) Section 40(d)(4)(B) is amended by striking ``or 
     4081(c)''.
       (3) Section 40(e)(1) is amended--
       (A) by striking ``2007'' in subparagraph (A) and inserting 
     ``2010'', and
       (B) by striking ``2008'' in subparagraph (B) and inserting 
     ``2011''.
       (4) Section 40(h) is amended--
       (A) by striking ``2007'' in paragraph (1) and inserting 
     ``2010'', and
       (B) by striking ``, 2006, or 2007'' in the table contained 
     in paragraph (2) and inserting ``through 2010''.
       (5) Section 4041(b)(2)(B) is amended by striking ``a 
     substance other than petroleum or natural gas'' and inserting 
     ``coal (including peat)''.
       (6) Paragraph (1) of section 4041(k) is amended to read as 
     follows:
       ``(1) In general.--Under regulations prescribed by the 
     Secretary, in the case of the sale or use of any liquid at 
     least 10 percent of which consists of alcohol (as defined in 
     section 6426(b)(4)(A)), the rate of the tax imposed by 
     subsection (c)(1) shall be the comparable rate under section 
     4091(c).''.
       (7) Section 4081 is amended by striking subsection (c).
       (8) Paragraph (2) of section 4083(a) is amended to read as 
     follows:
       ``(2) Gasoline.--The term `gasoline'--
       ``(A) includes any gasoline blend, other than qualified 
     methanol or ethanol fuel (as defined in section 
     4041(b)(2)(B)) or a denaturant of alcohol (as defined in 
     section 6426(b)(4)(A)), and
       ``(B) includes, to the extent prescribed in regulations--
       ``(i) any gasoline blend stock, and
       ``(ii) any product commonly used as an additive in 
     gasoline.
     For purposes of subparagraph (B)(i), the term `gasoline blend 
     stock' means any petroleum product component of gasoline.''.
       (9) Section 6427 is amended by inserting after subsection 
     (d) the following new subsection:
       ``(e) Alcohol or Biodiesel Used To Produce Alcohol Fuel and 
     Biodiesel Mixtures or Used as Fuels.--Except as provided in 
     subsection (k)--
       ``(1) Used to produce a mixture.--If any person produces a 
     mixture described in section 6426 in such person's trade or 
     business, the Secretary shall pay (without interest) to such 
     person an amount equal to the alcohol fuel mixture credit or 
     the biodiesel mixture credit with respect to such mixture.
       ``(2) Used as fuel.--If alcohol (as defined in section 
     40(d)(1)) or biodiesel (as defined in section 40B(d)(1)) or 
     agri-biodiesel (as defined in section 40B(d)(2)) which is not 
     in a mixture with a taxable fuel (as defined in section 
     4083(a)(1))--
       ``(A) is used by any person as a fuel in a trade or 
     business, or
       ``(B) is sold by any person at retail to another person and 
     placed in the fuel tank of such person's vehicle,

     the Secretary shall pay (without interest) to such person an 
     amount equal to the alcohol credit (as determined under 
     section 40(b)(2)) or the biodiesel credit (as determined 
     under section 40B(b)(2)) with respect to such fuel.
       ``(3) Coordination with other repayment provisions.--No 
     amount shall be payable under paragraph (1) with respect to 
     any mixture with respect to which an amount is allowed as a 
     credit under section 6426.
       ``(4) Termination.--This subsection shall not apply with 
     respect to--
       ``(A) any alcohol fuel mixture (as defined in section 
     6426(b)(3)) or alcohol (as so defined) sold or used after 
     December 31, 2010, and
       ``(B) any qualified biodiesel mixture (within the meaning 
     of section 6426(c)(1)) or biodiesel (as so defined) or agri-
     biodiesel (as so defined) sold or used after December 31, 
     2005.''.
       (10) Subsection (f) of section 6427 is amended to read as 
     follows:
       ``(f) Aviation Fuel Used To Produce Certain Alcohol 
     Fuels.--
       ``(1) In general.--Except as provided in subsection (k), if 
     any aviation fuel on which tax was imposed by section 4091 at 
     the regular tax rate is used by any person in producing a 
     mixture described in section 4091(c)(1)(A) which is sold or 
     used in such person's trade or business, the Secretary shall 
     pay (without interest) to such person an amount equal to the 
     excess of the regular tax rate over the incentive tax rate 
     with respect to such fuel.
       ``(2) Definitions.--For purposes of paragraph (1)--
       ``(A) Regular tax rate.--The term `regular tax rate' means 
     the aggregate rate of tax imposed by section 4091 determined 
     without regard to subsection (c) thereof.
       ``(B) Incentive tax rate.--The term `incentive tax rate' 
     means the aggregate rate of tax imposed by section 4091 with 
     respect to fuel described in subsection (c)(2) thereof.
       ``(3) Coordination with other repayment provisions.--No 
     amount shall be payable under paragraph (1) with respect to 
     any aviation fuel with respect to which an amount is payable 
     under subsection (d) or (l).
       ``(4) Termination.--This subsection shall not apply with 
     respect to any mixture sold or used after September 30, 
     2007.''.
       (11) Paragraphs (1) and (2) of section 6427(i) are amended 
     by inserting ``(f),'' after ``(d),''.
       (12) Section 6427(i)(3) is amended--
       (A) by striking ``subsection (f)'' both places it appears 
     in subparagraph (A) and inserting ``subsection (e)(1)'',
       (B) by striking ``gasoline, diesel fuel, or kerosene used 
     to produce a qualified alcohol mixture (as defined in section 
     4081(c)(3))'' in subparagraph (A) and inserting ``a mixture 
     described in section 6426'',

[[Page 20618]]

       (C) by striking ``subsection (f)(1)'' in subparagraph (B) 
     and inserting ``subsection (e)(1)'',
       (D) by striking ``20 days of the date of the filing of such 
     claim'' in subparagraph (B) and inserting ``45 days of the 
     date of the filing of such claim (20 days in the case of an 
     electronic claim)'', and
       (E) by striking ``alcohol mixture'' in the heading and 
     inserting ``alcohol fuel and biodiesel mixture''.
       (13) Section 6427(o) is amended--
       (A) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) any tax is imposed by section 4081, and'',
       (B) by striking ``such gasohol'' in paragraph (2) and 
     inserting ``the alcohol fuel mixture (as defined in section 
     6426(b)(3))'',
       (C) by striking ``gasohol'' both places it appears in the 
     matter following paragraph (2) and inserting ``alcohol fuel 
     mixture'', and
       (D) by striking ``Gasohol'' in the heading and inserting 
     ``Alcohol Fuel Mixture''.
       (14) Section 9503(b)(1) is amended by adding at the end the 
     following new flush sentence:
     ``For purposes of this paragraph, taxes received under 
     sections 4041 and 4081 shall be determined without reduction 
     for credits under section 6426.''.
       (15) Section 9503(b)(4) is amended--
       (A) by adding ``or'' at the end of subparagraph (C),
       (B) by striking the comma at the end of subparagraph 
     (D)(iii) and inserting a period, and
       (C) by striking subparagraphs (E) and (F).
       (16) Section 9503(c)(2)(A)(i)(III) is amended by inserting 
     ``(other than subsection (e) thereof)'' after ``section 
     6427''.
       (17) Section 9503(e)(2) is amended by striking subparagraph 
     (B) and by redesignating subparagraphs (C), (D), and (E) as 
     subparagraphs (B), (C), and (D), respectively.
       (18) The table of sections for subchapter B of chapter 65 
     is amended by inserting after the item relating to section 
     6425 the following new item:

``Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold or used after September 30, 2003.
       (e) Format for Filing.--The Secretary of the Treasury shall 
     describe the electronic format for filing claims described in 
     section 6427(i)(3)(B) of the Internal Revenue Code of 1986 
     (as amended by subsection (b)(12)(D)) not later than 
     September 30, 2003.
                                 ______
                                 
      By Mr. GREGG.
  S. 1550. A bill to change the 30-year treasury bond rate to a 
composite corporate rate, and to establish a commission on defined 
benefit plans; to the Committee on Finance.
  Mr. GREGG. Mr. President, I come to the floor today to offer 
legislation to solve a pension funding crisis in our country. The 
approach incorporated in this bill has been supported in the past by 
both the American Federation of Labor-Congress of Industrial 
Organizations and the American business community. As Chairman of the 
Senate Labor Committee, I must say that these two groups do not often 
agree and I want to take this historic opportunity to memorialize their 
agreement.
  These groups have supported the approach taken by this legislation 
because it will generate jobs, improve the financial strength of our 
corporations, and promote capital investment, all at a time when our 
economy sorely needs a shot in the arm.
  My colleagues will remember that Congress adopted a temporary fix to 
the problem raised by the artificially low interest rate set by the 30-
year Treasury bond. Pension law relies on that the 30-year Treasury 
bond, which is no longer being issued, to determine funding levels. A 
low interest rate means employers must put more cash in their plans to 
satisfy full funding requirements. That temporary fix, enacted in March 
2002, is set to expire at the end of this year.
  If no action is taken soon, companies will be required to divert 
billions of dollars from capital investment and job growth in order to 
satisfy the arbitrary funding rules. For example, General Motors will 
have to contribute $7 billion if no action is taken by the end of this 
year. Compounded in businesses across the nation, the total liability 
adds up to--as the late Carl Sagan used to say--``Billions and 
Billions.''
  Both for collective bargaining and corporate financial planning 
purposes, a new fix needs to be in place this summer.
  In a nutshell, the Pension Stability Act, the legislation I am 
introducing today, does four things.
  First, it extends the temporary fix for a longer period of time--five 
years--in order to give Congress time to craft a permanent solution. 
The five year period is important because businesses and their unions 
need time to plan ahead and to make commitments that they can live up 
to.
  Second, the bill temporarily switches form the out-of-date 30-year 
Treasury bond as the benchmark rate and adopts for this five-year 
period a rate based on a high-quality corporate bond index or composite 
of indices. In shifting to this rate, the legislation assumes that the 
highest permissible rate of interest is 105 percent of the four-year 
weighted average of that rate for the first two years--2004 and 2005. 
For the remaining three years--so as not to permit long term 
underfunding of pensions--the highest permissible rate of interest 
drops down to 100 percent of the weighted average.
  Third, the legislation incorporates a smooth transition from the out-
of-date 30-year Treasury Bond rate to the composite rate that will be 
used for determining funding obligations. No change in the lump sum 
distribution rate is made for the first two years. Then, in 20 percent 
increments, the new rate is phased in. My bill does not take the 
interest rate to 100 percent of the composite rate, as most 
commentators assert is the appropriate rate. But my bill makes 
significant progress toward that goal, and gives Congress time to make 
informed decisions on this important issue that affects very many 
lives.
  Finally, the Pension Stability Act acknowledges that reasonable 
people can differ on the best permanent solution to the pension funding 
issues. The amendment calls for the creation of an independent 
commission to consider all of the issues relevant to funding of 
pensions, and making concrete recommendations to Congress. The goal is 
to take controversy and politics out of the deliberation.
  The issues confronting our pension system are too important, and the 
dollar figures too large, for an internal task force within any 
administration. Stakeholders in this debate include company financial 
and human resources officers, stockholders, plan participants and 
beneficiaries, unions, and financial markets. If they are not included 
in the process, they are more likely to oppose the proffered solutions. 
The intent with this legislation is to create a bipartisan commission 
that includes business, union and pension rights groups. Such a panel 
would be able to address both the funding issues presented here, 
including the ``private yield curve'' approach, and evaluate other 
ideas for revitalizing the defined benefit system.
  I urge my colleagues to support this amendment.
                                 ______
                                 
      By Mr. McCAIN.
  S. 1551. A bill to provide educational opportunities for 
disadvantaged children, and for other purposes; to the Committee on 
Health, Education, Labor, and Pensions.
  Mr. McCAIN. Mr. President, today, I am pleased to reintroduce 
legislation to authorize a three-year nationwide school choice 
demonstration program targeted at children from economically 
disadvantaged families. The Excellence Through Choice to Elevate 
Learning Act, or the EXCEL Act, will expand educational opportunities 
for low-income children by providing parents and students the freedom 
to choose the best school for their unique academic needs while 
encouraging schools to be creative and responsive to the needs of all 
students.
  This bill authorizes $1.8 billion annually for fiscal years 2004 
through 2007 to be used to provide school choice vouchers to 
economically disadvantaged children throughout the nation. The funds 
allocated by the bill will be divided among states based upon the 
number of children they have enrolled in public schools. States will 
then conduct a lottery among low-income children who attend the public 
schools with the lowest academic performance in their State. Each child 
selected in the lottery would receive $2,000 per year for three years 
to be used to pay tuition at any school of their choice in the State, 
including private or religious schools. The money could also be used to 
pay for transportation to the school or supplementary educational

[[Page 20619]]

services to meet the unique needs of the individual student.
  In total, this bill authorizes $5.4 billion for the three-year school 
choice demonstration program, as well as an evaluation of the program 
by the General Accounting Office. The cost of this important test of 
school vouchers is fully offset by eliminating more than $5.4 billion 
in unnecessary pork and inequitable corporate tax loopholes.
  We all know that one of the most important issues facing our nation 
is the education of our children. We must strive to develop and 
implement initiatives which strengthen and improve our education system 
thereby ensuring that our children are provided with the essential 
academic tools for succeeding professionally, economically and 
personally. I am sure we all agree that increasing the academic 
performance and skills of all our nation's students must be the 
paramount goal of any education reform we implement.
  School vouchers are a viable method of allowing all American children 
access to high quality schools, including private and religious 
schools. Every parent, not just the wealthy, should be able to obtain 
the highest quality education for their children. Tuition vouchers 
would provide low-income children trapped in poor or mediocre schools 
the same educational choices as children of economic privilege.
  Some of my colleagues may argue that vouchers would divert money away 
from our Nation's public schools. They will claim it is better to pour 
more and more money into poor performing public schools, rather than 
promote competition in our school systems. I respectfully disagree. 
While I support strengthening financial support for education in our 
nation, the solution to what ails our system is not money alone.
  Currently our nation spends significantly more money on education 
than most countries and yet our students consistently score lower than 
their peers. Students in countries which are struggling economically, 
socially and politically, such as Russia, outscore U.S. children in 
critical subjects such as math and physics. Clearly, we must make 
significant change beyond blindly throwing money into the current 
structure in order to improve our children's academic performance in 
order to maintain a viable force in the world economy.
  It is shameful that we are failing to provide many of our children 
with adequate training and quality academic preparation for the real 
world. The number of college freshmen who require remedial courses in 
reading, writing and mathematics when they begin their higher education 
is unacceptably high. It does not bode well for our future economy if 
the majority of workers are not prepared with the basic skills to 
engage in a competitive global marketplace.
  I concede that school vouchers are not the magic bullet for 
eradicating all that is wrong with our current educational system, but 
they are an important opportunity for providing improved academic 
opportunities for all children, not just the wealthy. Examination of 
the limited voucher programs scattered around our country reveal high 
levels of parent and student satisfaction, an increase in parental 
involvement, and a definite improvement in attendance and discipline at 
the participating schools. Vouchers encourage public schools, 
communities and parents to work together to raise the level of 
education for all students. Through this bill, we have the opportunity 
to replicate these important benefits throughout all our nation's 
communities.
  Thomas Jefferson said, ``The purpose of education is to create young 
citizens with knowing heads and loving hearts.'' If we fail to give our 
children the education they need to nurture their heads and hearts, 
then we threaten their futures and the future of our nation. Each of us 
is responsible for ensuring that our children have both the love in 
their hearts and the knowledge in their heads to not only dream, but to 
make their dreams a reality.
  The time has come for us to finally conduct a national demonstration 
of school choice to determine the benefits or perhaps disadvantages of 
providing educational choices to all students, not just those who are 
fortunate enough to be born into a wealthy family. I urge my colleagues 
to support this bill and put the needs of America's school children 
ahead of pork barrel projects and tax loopholes benefitting only 
special interests and big business.
  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. 1551

       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 ``Excellence through Choice to 
     Elevate Learning Act''.

     SEC. 2. PURPOSES.

       The purposes of this Act are--
       (1) to assist States to--
       (A) give children from low-income families the same choices 
     among all elementary and secondary schools and other academic 
     programs as children from wealthier families already have;
       (B) improve schools and other academic programs by giving 
     parents in low-income families increased consumer power to 
     choose the schools and programs that the parents determine 
     best fit the needs of their children; and
       (C) more fully engage parents in their children's 
     schooling; and
       (2) to demonstrate, through a 3-year national grant 
     program, the effects of a voucher program that gives parents 
     in low-income families--
       (A) choice among public, private, and religious schools for 
     their children; and
       (B) access to the same academic options as parents in 
     wealthy families have for their children.

     SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There is authorized to be appropriated to 
     carry out this Act (other than section 11) $1,800,000,000 for 
     each of fiscal years 2004 through 2007.
       (b) Evaluation.--There is authorized to be appropriated to 
     carry out section 11 $17,000,000 for fiscal years 2005 
     through 2008.

     SEC. 4. PROGRAM AUTHORITY.

       (a) In General.--The Secretary shall make grants to States, 
     from allotments made under section 5 to enable the States to 
     carry out educational choice programs that provide 
     scholarships, in accordance with this Act.
       (b) Limit on Federal Administrative Expenditures.--The 
     Secretary may reserve not more than $1,000,000 of the amounts 
     appropriated under section 3(a) for a fiscal year to pay for 
     the costs of administering this Act.

     SEC. 5. ALLOTMENTS TO STATES.

       (a) Allotments.--The Secretary shall make the allotments to 
     States in accordance with a formula specified in regulations 
     issued in accordance with subsection (b). The formula shall 
     provide that the Secretary shall allot to each State an 
     amount that bears the same relationship to the amounts 
     appropriated under section 3(a) for a fiscal year (other than 
     funds reserved under section 4(b)) as the number of covered 
     children in the State bears to the number of covered children 
     in all such States.
       (b) Formula.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall issue regulations 
     specifying the formula referred to in subsection (a).
       (c) Limit on State Administrative Expenditures.--The State 
     may reserve not more than 1 percent of the funds made 
     available through the State allotment to pay for the costs of 
     administering this Act.
       (d) Definition.--In this section, the term ``covered 
     child'' means a child who is enrolled in a public school 
     (including a charter school) that is an elementary school or 
     secondary school.

     SEC. 6. ELIGIBLE SCHOOLS.

       (a) Eligibility.--
       (1) In general.--Schools identified by a State under 
     paragraph (2) shall be considered to be eligible schools 
     under this Act.
       (2) Determination.--Not later than 180 days after the date 
     the Secretary issues regulations under section 5(b), each 
     State shall identify the public elementary schools and 
     secondary schools in the State that are at or below the 25th 
     percentile for academic performance of schools in the State.
       (b) Performance.--The State shall determine the academic 
     performance of a school under this section based on such 
     criteria as the State may consider to be appropriate.

     SEC. 7. SCHOLARSHIPS.

       (a) In General.--
       (1) Scholarship awards.--With funds awarded under this Act, 
     each State awarded a grant under this Act shall provide 
     scholarships to the parents of eligible children, in 
     accordance with subsections (b) and (c). The State shall 
     ensure that the scholarships may be redeemed for elementary 
     or secondary education for the children at any of a broad 
     variety of public and private schools, including religious 
     schools, in the State.
       (2) Scholarship amount.--The amount of each scholarship 
     shall be $2000 per year.
       (3) Tax exemption.--Scholarships awarded under this Act 
     shall not be considered income of the parents for Federal 
     income tax

[[Page 20620]]

     purposes or for determining eligibility for any other Federal 
     program.
       (b) Eligible Children.--To be eligible to receive a 
     scholarship under this Act, a child shall be--
       (1) a child who is enrolled in a public elementary school 
     or secondary school that is an eligible school; and
       (2) a member of a family with a family income that is not 
     more than 200 percent of the poverty line.
       (c) Award Rules.--
       (1) Priority.--In providing scholarships under this Act, 
     the State shall provide scholarships for eligible children 
     through a lottery system administered for all eligible 
     schools in the State by the State educational agency.
       (2) Continuing eligibility.--Each State receiving a grant 
     under this Act to carry out an educational choice program 
     shall provide a scholarship in each year of the program to 
     each child who received a scholarship during the previous 
     year of the program, unless--
       (A) the child no longer resides in the area served by an 
     eligible school;
       (B) the child no longer attends school;
       (C) the child's family income exceeds, by 20 percent or 
     more, 200 percent of the poverty line; or
       (D) the child is expelled or convicted of a felony, 
     including felonious drug possession, possession of a weapon 
     on school grounds, or a violent act against an other student 
     or a member of the school's faculty.

     SEC. 8. USES OF FUNDS.

       Any scholarship awarded under this Act for a year shall be 
     used--
       (1) first, for--
       (A) the payment of tuition and fees at the school selected 
     by the parents of the child for whom the scholarship was 
     provided; and
       (B) the reasonable costs of the child's transportation to 
     the school, if the school is not the school to which the 
     child would be assigned in the absence of a program under 
     this Act;
       (2) second, if the parents so choose, to obtain 
     supplementary academic services for the child, at a cost of 
     not more than $500, from any provider chosen by the parents, 
     that the State determines is capable of providing such 
     services and has an appropriate refund policy; and
       (3) finally, for educational programs that help the 
     eligible child achieve high levels of academic excellence in 
     the school attended by the eligible child, if the eligible 
     child chooses to attend a public school.

     SEC. 9. STATE REQUIREMENT.

       A State that receives a grant under this Act shall allow 
     lawfully operating public and private elementary schools and 
     secondary schools, including religious schools, if any, 
     serving the area involved to participate in the program.

     SEC. 10. EFFECT OF PROGRAMS.

       (a) Title I.--Notwithstanding any other provision of law, 
     if a local educational agency in the State would, in the 
     absence of an educational choice program that is funded under 
     this Act, provide services to a participating eligible child 
     under part A of title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311 et seq.), the State 
     shall ensure the provision of such services to such child.
       (b) Individuals With Disabilities.--Nothing in this Act 
     shall be construed to affect the requirements of part B of 
     the Individuals with Disabilities Education Act (20 U.S.C. 
     1411 et seq.).
       (c) Aid.--
       (1) In general.--Scholarships under this Act shall be 
     considered to aid families, not institutions. For purposes of 
     determining Federal assistance under Federal law, a parent's 
     expenditure of scholarship funds under this Act at a school 
     or for supplementary academic services shall not constitute 
     Federal financial aid or assistance to that school or to the 
     provider of supplementary academic services.
       (2) Supplementary academic services.--
       (A) In general.--Notwithstanding paragraph (1), a school or 
     provider of supplementary academic services that receives 
     scholarship funds under this Act shall, as a condition of 
     participation under this Act, comply with the provisions of 
     title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
     seq.) and section 504 of the Rehabilitation Act of 1973 (29 
     U.S.C. 794).
       (B) Regulations.--The Secretary shall promulgate 
     regulations to implement the provisions of subparagraph (A), 
     taking into account the purposes of this Act and the nature, 
     variety, and missions of schools and providers that may 
     participate in providing services to children under this Act.
       (d) Other Federal Funds.--No Federal, State, or local 
     agency may, in any year, take into account Federal funds 
     provided to a State or to the parents of any child under this 
     Act in determining whether to provide any other funds from 
     Federal, State, or local resources, or in determining the 
     amount of such assistance, to such State or to a school 
     attended by such child.
       (e) No Discretion.--Nothing in this Act shall be construed 
     to authorize the Secretary to exercise any direction, 
     supervision, or control over the curriculum, program of 
     instruction, administration, or personnel of any educational 
     institution or school participating in a program under this 
     Act.

     SEC. 11. EVALUATION.

       The Comptroller General of the United States shall conduct 
     an evaluation of the program authorized by this Act. Such 
     evaluation shall, at a minimum--
       (1) assess the implementation of educational choice 
     programs assisted under this Act and their effect on 
     participants, schools, and communities in the school 
     districts served, including parental involvement in, and 
     satisfaction with, the program and their children's 
     education;
       (2) compare the educational achievement of participating 
     eligible children with the educational achievement of similar 
     non-participating children before, during, and after the 
     program; and
       (3) compare--
       (A) the educational achievement of eligible children who 
     use scholarships to attend schools other than the schools the 
     children would attend in the absence of the program; with
       (B) the educational achievement of children who attend the 
     schools the children would attend in the absence of the 
     program.

     SEC. 12. ENFORCEMENT.

       (a) Regulations.--The Secretary shall promulgate 
     regulations to enforce the provisions of this Act.
       (b) Private Cause.--No provision or requirement of this Act 
     shall be enforced through a private cause of action.

     SEC. 13. FUNDING.

       The Committee on Finance and the Committee on 
     Appropriations of the Senate and the Committee on Ways and 
     Means and the Committee on Appropriations of the House of 
     Representatives shall identify wasteful spending (including 
     loopholes to revenue raising tax provisions) by the Federal 
     Government as a means of providing funding for this Act. Not 
     later than 60 days after the date of enactment of this Act, 
     the committees referred to in the preceding sentence shall 
     jointly prepare and submit to the Majority and Minority 
     Leaders of the Senate and the Speaker and Minority Leader of 
     the House of Representatives, a report concerning the 
     spending (and loopholes) identified under such sentence.

     SEC. 14. DEFINITIONS.

       In this Act:
       (1) Charter school.--The term ``charter school'' has the 
     meaning given the term in section 5210 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 7221i).
       (2) Elementary school; local educational agency; parent; 
     secondary school; state educational agency.--The terms 
     ``elementary school'', ``local educational agency'', 
     ``parent'', ``secondary school'', and ``State educational 
     agency'' have the meanings given the terms in section 9101 of 
     the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
     7801).
       (3) Poverty line.--The term ``poverty line'' means the 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2))) applicable to a family of the size involved.
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Education.
       (5) State.--The term ``State'' means each of the 50 States.
                                 ______
                                 
      By Mr. CRAIG:
  S. 1553. A bill to amend title 18, United States Code, to combat, 
deter, and punish individuals and enterprises engaged in organized 
retail theft; to the Committee on the Judiciary.
  Mr. CRAIG. Mr. President, today I am introducing legislation to 
respond to a growing crime problem that is harming honest businesses, 
endangering public health, and dragging down our economy.
  The problem I am talking about is organized retail theft.
  Organized retail theft is a quantum leap in criminality beyond petty 
shoplifting. It involves professional gangs or theft rings that move 
quickly from store to store, from community to community, and across 
State lines to pilfer large amounts of merchandise that can be easily 
sold through fencing operations, flea markets, swap meets and shady 
storefront operations.
  This type of criminal activity is a growing problem throughout the 
United States, harming many segments of the retail community, including 
supermarkets, chain drug stores, independent pharmacies, convenience 
stores, large discount operations, mass merchandisers, and specialty 
shops, among others. Organized retail theft has become the most 
pressing security problem confronting retailers and their suppliers, 
accounting for an estimated $30 billion in losses at the retail level 
annually, according to the Federal Bureau of Investigation's interstate 
theft task force.
  This kind of theft also presents significant health and safety risks 
for consumers. While items that are in

[[Page 20621]]

high demand and prized by these organized gangs include software, 
videos, DVDs and CDs, razor blades, camera film, and batteries--they 
also include over-the-counter drug products, such as analgesics, cough 
and cold medications, and infant formula. Professional theft rings do 
not provide ideal or required storage conditions for consumable items, 
and as a result, the integrity and nutrient content of these products 
is often compromised. Furthermore, when products are near the end of 
their expiration date, it is not uncommon for unscrupulous middlemen to 
change the expiration date, lot numbers, and labels to falsely extend 
the shelf-life of the products or to disguise the fact that the 
merchandise has been stolen.
  Clearly, theft of this kind adversely affects both retailers and 
consumers in a variety of ways. For example, because theft by 
professional gangs has become so rampant in certain product categories, 
such as infant formula, many retail stores are taking the product off 
the shelves and placing them behind the counter or under lock and key. 
In some cases, products are simply unavailable due to high pilferage 
rates.
  Let me commend the Federal Bureau of Investigation and the Department 
of Justice for their work in this area. I know the Department has 
successfully prosecuted a number of cases against professional 
shoplifting rings. However, retail organizations and individual 
companies are crying out for help because this type of criminal 
activity is escalating, and there is no federal statute that 
specifically addresses organized retail theft. I believe more can be 
done to help in the investigation, apprehension, and prosecution of 
these criminal gangs.
  The legislation that I am introducing is in response to the concerns 
that have been brought to my attention by the retailing community. I 
hope my colleagues will join me in this effort. While this bill is not 
a cure-all, I hope it will help to highlight the magnitude of the 
problem so that we can begin considering appropriate initiatives with 
all interested parties, including our federal law enforcement agencies, 
on how to effectively combat and deter organized retail theft in the 
future.
  I ask unanimous consent that the text of the Organized Retail Theft 
Act be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1553

       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 ``Organized Retail Theft Act 
     of 2003''.

     SEC. 2. PROHIBITION AGAINST ORGANIZED RETAIL THEFT.

       (a) In General.--Chapter 103 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2120. Organized retail theft

       ``(a) In General.--Whoever in any material way or degree 
     obstructs, delays, or affects commerce or the movement of any 
     article or commodity in commerce, by taking possession of, 
     carrying away, or transferring or causing to be carried away, 
     with intent to steal, any goods offered for retail sale with 
     a total value exceeding $1,000, but not exceeding $5,000, 
     during any 180-day period shall be fined not more than 
     $1,000, imprisoned not more than 1 year, or both.
       ``(b) High Value.--Whoever in any material way or degree 
     obstructs, delays, or affects commerce or the movement of any 
     article or commodity in commerce, by taking possession of, 
     carrying away, or transferring or causing to be carried away, 
     with intent to steal, any goods offered for retail sale with 
     a total value exceeding $5,000, during any 180-day period, 
     shall be fined under this title, imprisoned not more than 10 
     years, or both.
       ``(c) Receipt and Disposal.--Whoever receives, possesses, 
     conceals, stores, barters, sells, disposes of, or travels in 
     interstate or foreign commerce, with the intent to 
     distribute, any property which the person knows, or should 
     know has been taken or stolen in violation of subsection (a) 
     or (b), or who travels in interstate or foreign commerce, 
     with the intent to distribute the proceeds of goods which the 
     person knows or should know to be the proceeds of an offense 
     described in subsection (a) or (b), or to otherwise knowingly 
     promote, manage, carry on, or facilitate an offense described 
     in subsection (a) or (b), shall be fined or imprisoned as 
     provided in subsection (a) if the actions involved a 
     violation of subsection (a) and as provided in subsection (b) 
     if the actions involved a violation of subsection (b).
       ``(d) Enhanced Penalties.--
       ``(1) Assault.--Whoever, in committing, or in attempting to 
     commit, any offense defined in subsections (a) and (b) of 
     this section, assaults any person, or puts in jeopardy the 
     life of any person by the use of a dangerous weapon or 
     device, shall be fined under this title, imprisoned not more 
     than 25 years, or both.
       ``(2) Death and kidnapping.--Whoever, in committing any 
     offense under this section, or in avoiding or attempting to 
     avoid apprehension for the commission of such offense, or in 
     freeing himself or attempting to free himself from arrest or 
     confinement for such offense, kills any person, or forces any 
     person to accompany him without the consent of such person, 
     shall be imprisoned not less than 10 years, or if death 
     results shall be punished by death or life imprisonment.
       ``(e) Forfeiture and Disposition of Goods.--
       ``(1) In general.--Whoever violates this section shall 
     forfeit to the United States, irrespective of any provision 
     of State law any interest in the retail goods the person 
     knows or should know to have been acquired or maintained in 
     violation of this section.
       ``(2) Injunctions and impounding, forfeiture, and 
     disposition of goods.--
       ``(A) Injunctions and impounding.--In any prosecution under 
     this subsection, upon motion of the United States, the court 
     may--
       ``(i) grant 1 or more temporary, preliminary, or permanent 
     injunctions on such terms as the court determines to be 
     reasonable to prevent or restrain the alleged violation; and
       ``(ii) at any time during the proceedings, order the 
     impounding on such terms as the court determines to be 
     reasonable, of any good that the court has reasonable cause 
     to believe was involved in the violation.
       ``(B) Forfeiture and disposition of goods.--Upon conviction 
     of any person of a violation under this subsection, the court 
     shall--
       ``(i) order the forfeiture of any good involved in the 
     violation or that has been impounded under subparagraph 
     (A)(ii);
       ``(ii) either--

       ``(I) order the disposal of the good by delivery to such 
     Federal, State, or local government agencies as, in the 
     opinion of the court, have a need for such good, or by gift 
     to such charitable or nonprofit institutions as, in the 
     opinion of the court, have a need for such good, if such 
     disposition would not otherwise be in violation of law and if 
     the manufacturer consents to such disposition; or
       ``(II) order the return of any goods seized or impounded 
     under subparagraph (A)(ii) to their rightful owner; and

       ``(iii) find that the owner of the goods seized or 
     impounded under subparagraph (A)(ii) aided in the 
     investigation and order that such owner be reimbursed for the 
     expenses associated with that aid.
       ``(C) Terms.--For purposes of remission and mitigation of 
     goods forfeited to the Government under this subsection, the 
     provisions of section 981(d) of this title shall apply.
       ``(f) Civil Remedies.--
       ``(1) In general.--Any person injured by a violation of 
     this section, or who demonstrates the likelihood of such 
     injury, may bring a civil action in an appropriate United 
     States district court against the alleged violator. The 
     complaint shall set forth in detail the manner and form of 
     the alleged violation.
       ``(2) Injunctions and impounding and disposition of 
     goods.--In any action under paragraph (1), the court may--
       ``(A) grant 1 or more temporary, preliminary, or permanent 
     injunctions upon the posting of a bond at least equal to the 
     value of the goods affected and on such terms as the court 
     determines to be reasonable to prevent or restrain the 
     violation;
       ``(B) at any time while the action is pending, order the 
     impounding upon the posting of a bond at least equal to the 
     value of the goods affected and, on such terms as the court 
     determines to be reasonable, if the court has reasonable 
     cause to believe the goods were involved in the violation; 
     and
       ``(C) as part of a final judgment or decree, in the court's 
     discretion, order the restitution of any good involved in the 
     violation or that has been impounded under subparagraph (B).
       ``(3) Damages.--In any action under paragraph (1), the 
     plaintiff shall be entitled to recover the actual damages 
     suffered by the plaintiff as a result of the violation, and 
     any profits of the violator that are attributable to the 
     violation and are not taken into account in computing the 
     actual damages. In establishing the violator's profits, the 
     plaintiff shall be required to present proof only of the 
     violator's sales, and the violator shall be required to prove 
     all elements of cost or deduction claimed.
       ``(4) Costs and attorney's fees.--In any action under 
     paragraph (1), in addition to any damages recovered under 
     paragraph (3), the court in its discretion may award the 
     prevailing party its costs in the action and its reasonable 
     attorney's fees.
       ``(5) Repeat violations.--
       ``(A) Treble damages.--In any case in which a person 
     violates this section within 3 years after the date on which 
     a final judgment was entered against that person for a 
     previous violation of this section, the court

[[Page 20622]]

     may, in its discretion, in an action brought under this 
     subsection, increase the award of damages for the later 
     violation to not more than 3 times the amount that would 
     otherwise be awarded under paragraph (3), as the court 
     considers appropriate.
       ``(B) Burden of proof.--A plaintiff that seeks damages 
     described in subparagraph (A) shall bear the burden of 
     proving the existence of the earlier violation.
       ``(h) Definition.--In this section, the term `value' has 
     the meaning given that term in section 2311 of this title.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 103 of title 18, United States Code, is amended by 
     inserting at the end the following:

``2120. Organized retail theft.''.

     SEC. 3. COMMISSION OF ORGANIZED RETAIL THEFT A PREDICATE FOR 
                   RICO CLAIM.

       Section 1961(1) of title 18, United States Code, is amended 
     by adding ``, section 2120 (relating to organized retail 
     theft)'' before ``, sections 2251''.

     SEC. 4. FLEA MARKETS.

       (a) Prohibitions.--No person at a flea market shall sell, 
     offer for sale, or knowingly permit the sale of any of the 
     following products:
       (1) Baby food, infant formula, or similar products used as 
     a sole or major source of nutrition, manufactured and 
     packaged for sale for consumption primarily by children under 
     3 years of age.
       (2) Any drug, food for special dietary use, cosmetic, or 
     device, as such terms are defined in the Federal Food, Drug, 
     and Cosmetic Act and regulations issued under that Act.
       (b) Exclusion.--Nothing in this section shall prohibit a 
     person from engaging in activity otherwise prohibited by 
     subsection (a), in the case of a product described in 
     subsection (a)(2), if that person maintains for public 
     inspection written documentation identifying the person as an 
     authorized representative of the manufacturer or distributor 
     of that product.
       (c) Flea Market Defined.--
       (1) In general.--As used in this section, the term ``flea 
     market'' means any physical location, other than a permanent 
     retail store, at which space is rented or otherwise made 
     available to others for the conduct of business as transient 
     or limited vendors.
       (2) Exclusion.--For purposes of paragraph (1), transient or 
     limited vendors shall not include those persons who sell by 
     sample or catalog for future delivery to the purchaser.
       (d) Criminal Penalties.--Any person who willfully violates 
     this section shall be punished as provided in section 2120 of 
     title 18, United States Code.

     SEC. 5. ATTORNEY GENERAL REPORTING REQUIREMENTS.

       Beginning with the first year after the date of enactment 
     of this Act, the Attorney General shall include in the report 
     of the Attorney General to Congress on the business of the 
     Department of Justice prepared pursuant to section 522 of 
     title 28, United States Code, an accounting, on a district by 
     district basis, of the following with respect to all actions 
     taken by the Department of Justice that involve organized 
     retail theft (as punishable under section 2120 of title 18, 
     United States Code, as added by this Act), including--
       (1) the number of open investigations;
       (2) the number of cases referred by the United States 
     Customs Service;
       (3) the number of cases referred by other agencies or 
     sources; and
       (4) the number and outcome, including settlements, 
     sentences, recoveries, and penalties, of all prosecutions 
     brought under section 2120 of title 18, United States Code.

                          ____________________