[Congressional Record (Bound Edition), Volume 149 (2003), Part 4]
[Senate]
[Pages 5030-5043]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. ALEXANDER (for himself, Mr. Reid, Mr. Gregg, Mr. Santorum, 
        Mr. Nickles, Mr. Inhofe, Mr. Stevens, Mr. Enzi, Mr. Coleman, 
        Mr. Frist, Mr. Dodd, and Mr. Cornyn):
  S. 504. A bill to establish academics for teachers and students of 
American history and civics and a national alliance of teachers of 
American history and civics, and for other purposes; to the Committee 
on Health, Education, Labor, and Pensions.
  Mr. ALEXANDER. 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. 504

       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 ``American History and Civics 
     Education Act of 2003''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) American history and civics.--The term ``American 
     history and civics'' means the key events, key persons, key 
     ideas, and key documents that shaped the institutions and 
     democratic heritage of the United States.
       (2) Chairperson.--The term ``Chairperson'' means the 
     Chairperson of the National Endowment for the Humanities.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in section 101(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1001(a)).
       (4) Key documents.--The term ``key documents'' means the 
     documents that established or explained the foundational 
     principles of democracy in the United States, including the 
     United States Constitution and the amendments to the 
     Constitution (particularly the Bill of Rights), the 
     Declaration of Independence, the Federalist Papers, and the 
     Emancipation Proclamation.
       (5) Key events.--The term ``key events'' means the critical 
     turning points in the history of the United States (including 
     the American Revolution, the Civil War, the world wars of the 
     twentieth century, the civil rights movement, and the major 
     court decisions and legislation) that contributed to 
     extending the promise of democracy in American life.
       (6) Key ideas.--The term ``key ideas'' means the ideas that 
     shaped the democratic institutions and heritage of the United 
     States, including the notion of equal justice under the law, 
     freedom, individualism, human rights, and a belief in 
     progress.
       (7) Key persons.--The term ``key persons'' means the men 
     and women who led the United States as founding fathers, 
     elected officials, scientists, inventors, pioneers, advocates 
     of equal rights, entrepreneurs, and artists.
       (8) Nonprofit educational institution.--The term 
     ``nonprofit educational institution''--
       (A) means--
       (i) an institution of higher education; or
       (ii) a nonprofit educational research center; and
       (B) includes a consortium of entities described in 
     subparagraph (A).
       (9) State.--The term ``State'' means each of the 50 States 
     and the District of Columbia.

     SEC. 3. PRESIDENTIAL ACADEMIES FOR TEACHING OF AMERICAN 
                   HISTORY AND CIVICS.

       (a) Establishment.--From amounts appropriated under 
     subsection (j), the Chairperson shall award grants, on a 
     competitive basis, to nonprofit educational institutions to 
     establish Presidential Academies for Teaching of American 
     History and Civics (in this section referred to as 
     ``Academies'') that shall offer workshops for teachers of 
     American history and civics--
       (1) to learn how better to teach the subjects of American 
     history and civics; and
       (2) to strengthen such teachers' knowledge of such 
     subjects.
       (b) Application.--
       (1) In general.--A nonprofit educational institution that 
     desires to receive a grant under this section shall submit an 
     application to the Chairperson at such time, in such manner, 
     and containing such information as the Chairperson may 
     require.
       (2) Contents.--An application submitted under paragraph (1) 
     shall--
       (A) include the criteria the nonprofit educational 
     institution intends to use to determine which teachers will 
     be selected to attend workshops offered by the Academy;
       (B) identify the individual the nonprofit educational 
     institution intends to appoint to be the primary professor at 
     the Academy; and
       (C) include a description of the curriculum to be used at 
     workshops offered by the Academy.
       (c) Number of Grants.--Except as provided in subsection 
     (e)(2)(B), the Chairperson shall award not more than 12 
     grants to different nonprofit educational institutions under 
     this section.
       (d) Distribution.--In awarding grants under this section, 
     the Chairperson shall ensure that such grants are equitably 
     distributed among the geographical regions of the United 
     States.
       (e) Grant Terms.--
       (1) In general.--Grants awarded under this section shall be 
     for a term of 2 years.
       (2) Grants after first two years.--Upon completion of the 
     first 2-year grant term, the Chairperson shall--
       (A) renew a grant awarded under this section to a nonprofit 
     educational institution for one more term of 2 years; or
       (B) award a new grant to a nonprofit educational 
     institution having an application approved under this section 
     for a term of 2 years, notwithstanding the 12 grant award 
     maximum under subsection (c).
       (f) Use of Funds.--
       (1) Workshops.--
       (A) In general.--A nonprofit educational institution that 
     receives a grant under this section shall establish an 
     Academy that shall offer a workshop during the summer, or 
     during another appropriate time, for kindergarten through 
     grade 12 teachers of American history and civics--
       (i) to learn how better to teach the subjects of American 
     history and civics; and
       (ii) to strengthen such teachers' knowledge of such 
     subjects.
       (B) Duration of workshop.--A workshop offered pursuant to 
     this section shall be approximately 2 weeks in duration.
       (2) Academy staff.--
       (A) Primary professor.--Each Academy shall be headed by a 
     primary professor identified in the application submitted 
     under subsection (b) who shall--
       (i) be accomplished in the field of American history and 
     civics; and
       (ii) design the curriculum for and lead the workshop.
       (B) Core teachers.--Each primary professor shall appoint an 
     appropriate number of core teachers. At the direction of the 
     primary professor, the core teachers shall teach and train 
     the workshop attendees.
       (3) Selection of teachers.--
       (A) In general.--
       (i) Number of teachers.--Each year, each Academy shall 
     select approximately 300 kindergarten through grade 12 
     teachers of American history and civics to attend the 
     workshop offered by the Academy.
       (ii) Flexibility in number of teachers.--An Academy may 
     select more than or fewer than 300 teachers depending on the 
     population in the region where the Academy is located.
       (B) Teachers from same region.--In selecting teachers to 
     attend a workshop, an Academy shall select primarily teachers 
     who teach in schools located in the region where the Academy 
     is located.
       (C) Teachers from public and private schools.--An Academy 
     may select teachers from public schools and private schools 
     to attend the workshop offered by the Academy.
       (g) Costs.--
       (1) In general.--Except as provided in paragraph (2), a 
     teacher who attends a workshop offered pursuant to this 
     section shall not incur costs associated with attending the 
     workshop, including costs for meals, lodging, and materials 
     while attending the workshop.
       (2) Travel costs.--A teacher who attends a workshop offered 
     pursuant to this section shall use non-Federal funds to pay 
     for such teacher's costs of transit to and from the Academy.
       (h) Evaluation.--Not later than 90 days after completion of 
     all of the workshops assisted in the third year grants are 
     awarded under this section, the Chairperson shall conduct an 
     evaluation to--
       (1) determine the overall success of the grant program 
     authorized under this section; and
       (2) highlight the best grantees' practices in order to 
     become models for future grantees.
       (i) Non-Federal Funds.--A nonprofit educational institution 
     receiving Federal assistance under this section may 
     contribute non-Federal funds toward the costs of operating 
     the Academy.
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $7,000,000 for 
     each of fiscal years 2004 through 2007.

     SEC. 4. CONGRESSIONAL ACADEMIES FOR STUDENTS OF AMERICAN 
                   HISTORY AND CIVICS.

       (a) Establishment.--From amounts appropriated under 
     subsection (j), the Chairperson shall award grants, on a 
     competitive basis, to nonprofit educational institutions to 
     establish Congressional Academies for Students of American 
     History and Civics (in this section referred to as 
     ``Academies'') that shall offer workshops for outstanding 
     students of American history and civics to broaden and deepen 
     such students' understanding of American history and civics.

[[Page 5031]]

       (b) Application.--
       (1) In general.--A nonprofit educational institution that 
     desires to receive a grant under this section shall submit an 
     application to the Chairperson at such time, in such manner, 
     and containing such information as the Chairperson may 
     require.
       (2) Contents.--An application submitted under paragraph (1) 
     shall--
       (A) include the criteria the nonprofit educational 
     institution intends to use to determine which students will 
     be selected to attend workshops offered by the Academy;
       (B) identify the individual the nonprofit educational 
     institution intends to appoint to be the primary professor at 
     the Academy; and
       (C) include a description of the curriculum to be used at 
     workshops offered by the Academy.
       (c) Number of Grants.--Except as provided in subsection 
     (e)(2)(B), the Chairperson shall award not more than 12 
     grants to different nonprofit educational institutions under 
     this section.
       (d) Distribution.--In awarding grants under this section, 
     the Chairperson shall ensure that such grants are equitably 
     distributed among the geographical regions of the United 
     States.
       (e) Grant Terms.--
       (1) In general.--Grants awarded under this section shall be 
     for a term of 2 years.
       (2) Grants after first two years.--Upon completion of the 
     first 2-year grant term, the Chairperson shall--
       (A) renew a grant awarded under this section to a nonprofit 
     educational institution for one more term of 2 years; or
       (B) award a new grant to a nonprofit educational 
     institution having an application approved under this section 
     for a term of 2 years, notwithstanding the 12 grant award 
     maximum under subsection (c).
       (f) Use of Funds.--
       (1) Workshops.--
       (A) In general.--A nonprofit educational institution that 
     receives a grant under this section shall establish an 
     Academy that shall offer a workshop during the summer, or 
     during another appropriate time, for outstanding students of 
     American history and civics to broaden and deepen such 
     students' understanding of American history and civics.
       (B) Duration of workshop.--A workshop offered pursuant to 
     this section shall be approximately 4 weeks in duration.
       (2) Academy staff.--
       (A) Primary professor.--Each Academy shall be headed by a 
     primary professor identified in the application submitted 
     under subsection (b) who shall--
       (i) be accomplished in the field of American history and 
     civics; and
       (ii) design the curriculum for and lead the workshop.
       (B) Core teachers.--Each primary professor shall appoint an 
     appropriate number of core teachers. At the direction of the 
     primary professor, the core teachers shall teach the workshop 
     attendees.
       (3) Selection of students.--
       (A) In general.--
       (i) Number of students.--Each year, each Academy shall 
     select approximately 300 eligible students to attend the 
     workshop offered by the Academy.
       (ii) Flexibility in number of students.--An Academy may 
     select more than or fewer than 300 eligible students 
     depending on the population in the region where the Academy 
     is located.
       (B) Eligible students.--A student shall be eligible to 
     attend a workshop offered by an Academy if the student--
       (i) is recommended by the student's secondary school 
     principal (or other head of such student's secondary school) 
     to attend the workshop; and
       (ii) will be a junior or senior in a public or private 
     secondary school in the academic year following attendance at 
     the workshop.
       (C) Students from same region.--In selecting students to 
     attend a workshop, an Academy shall select primarily students 
     who attend secondary schools located in the region where the 
     Academy is located.
       (g) Costs.--
       (1) In general.--Except as provided in paragraph (2), a 
     student who attends a workshop offered pursuant to this 
     section shall not incur costs associated with attending the 
     workshop, including costs for meals, lodging, and materials 
     while attending the workshop.
       (2) Travel costs.--A student who attends a workshop offered 
     pursuant to this section shall use non-Federal funds to pay 
     for such student's costs of transit to and from the Academy.
       (h) Evaluation.--Not later than 90 days after completion of 
     all of the workshops assisted in the third year grants are 
     awarded under this section, the Chairperson shall conduct an 
     evaluation to--
       (1) determine the overall success of the grant program 
     authorized under this section; and
       (2) highlight the best grantees' practices in order to 
     become models for future grantees.
       (i) Non-Federal Funds.--A nonprofit educational institution 
     receiving Federal assistance under this section may 
     contribute non-Federal funds toward the costs of operating 
     the Academy.
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $14,000,000 for 
     each of fiscal years 2004 through 2007.

     SEC. 5. NATIONAL ALLIANCE OF TEACHERS OF AMERICAN HISTORY AND 
                   CIVICS.

       (a) Establishment.--
       (1) In general.--From amounts appropriated under subsection 
     (e), the Chairperson shall award a grant to an organization 
     for the creation of a national alliance of elementary school 
     and secondary school teachers of American history and civics.
       (2) Purpose.--The purpose of the national alliance is--
       (A) to facilitate the sharing of ideas among teachers of 
     American history and civics; and
       (B) to encourage best practices in the teaching of American 
     history and civics.
       (b) Application.--An organization that desires to receive a 
     grant under this section shall submit an application to the 
     Chairperson at such time, in such manner, and containing such 
     information as the Chairperson may require.
       (c) Grant Term.--A grant awarded under this section shall 
     be for a term of 2 years and may be renewed after the initial 
     term expires.
       (d) Use of Funds.--An organization that receives a grant 
     under this section may use the grant funds for any of the 
     following:
       (1) Creation of a website on the Internet to facilitate 
     discussion of new ideas on improving American history and 
     civics education.
       (2) Creation of in-State chapters of the national alliance, 
     to which individual teachers of American history and civics 
     may belong, that sponsors American history and civics 
     activities for such teachers in the State.
       (3) Seminars, lectures, or other events focused on American 
     history and civics, which may be sponsored in cooperation 
     with, or through grants awarded to, libraries, States' 
     humanities councils, or other appropriate entities.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $4,000,000 for 
     each of fiscal years 2004 through 2007.
                                 ______
                                 
      By Mr. HATCH (for himself, Mr. Rockefeller, Mr. Jeffords, Ms. 
        Snowe, Mr. Lieberman, Mr. Smith, Mr. Kerry, Mr. Ensign, Mrs. 
        Clinton, Mr. Crapo, Mr. Dorgan, Ms. Collins, and Mr. Chafee):
  S. 505. A bill to amend the Internal Revenue Code of 1986 to 
encourage and accelerate the nationwide production, retail sale, and 
consumer use of new motor vehicles that are powered by fuel cell 
technology, hybrid technology, battery electric technology, alternative 
fuels, or other advanced motor vehicle technologies, and for other 
purposes; to the Committee on Finance.
  Mr. HATCH. Madam President, I rise today to introduce the CLEAR ACT, 
which is short for the Clean Efficient Automobiles Resulting from 
Advanced Car Technologies Act of 2003.
  Joining me in this effort are Senators John Rockefeller and Jim 
Jeffords, who have been my partners in this legislation and its earlier 
versions since the 106th Congress. We are also being joined by an 
impressive and bipartisan lineup of original cosponsors, which includes 
Senators Olympia Snowe, John Kerry, Gordon Smith, Joe Lieberman, John 
Ensign, Hillary Clinton, Mike Crapo, Byron Dorgan, Susan Collins, and 
Lincoln Chafee.
  I believe the CLEAR ACT is the most comprehensive and effective plan 
we have seen in this country to accelerate the transformation of the 
automotive marketplace toward the widespread use of fuel cell vehicles. 
And it does so without any new Federal mandates. Instead, it offers 
powerful market incentives to promote the combination of advances we 
must have in technology, in infrastructure, and in alternative fuels if 
our goal of bringing fuel cell vehicles to the mass market is to become 
a reality.
  As many of my colleagues know, fuel cell vehicles are the most 
promising long-term automotive technology, offering breakthrough fuel 
economy of up to three times today's levels with zero emissions. For a 
variety of reasons, the commercial production of fuel cell vehicles is 
a number of years away. Many things need to change in the automotive 
marketplace before widespread use of these vehicles of the future 
becomes a reality. With the CLEAR ACT, we can achieve this goal much 
faster, while in the meantime we can reap the benefits of cleaner air 
and a reduced dependency on foreign oil.
  Bridging the gap between today's conventional vehicles and the day

[[Page 5032]]

when all of us will be driving fuel cell vehicles are alternative fuel 
and advanced technology vehicles, such as hybrid electrics. These 
vehicles are available today, but not yet widely accepted in the 
marketplace.
  Currently, consumers face three basic obstacles to accepting the use 
of these alternative fueled and advanced technology vehicles. These 
obstacles are the higher cost of these vehicles as compared with their 
conventional counterparts, the cost of the alternative fuel, and the 
lack of an adequate infrastructure of alternative fueling stations. Mr. 
President, the CLEAR ACT would lower all three of these barriers.
  First, we provide a tax credit of 50 cents per gasoline-gallon 
equivalent for the purchase of alternative fuel at retail. This would 
bring the price of these cleaner fuels much closer in line with 
conventional automotive fuels. And, to give customers better access to 
alternative fuel, we extend an existing deduction for the capital costs 
of installing alternative fueling stations. We also provide a 50-
percent credit for the installation costs of retail and residential 
refueling stations.
  Finally, we offer CLEAR ACT credits to consumers who purchase 
alternative fuel and advanced technology vehicles. These credits would 
lower the price gap between these cleaner and more efficient vehicles 
and conventionally fueled vehicles of the same type. To make certain 
that the tax benefit we provide translates into a corresponding benefit 
to the environment, we split the vehicle tax credit into two. The 
amount the consumer receives in a CLEAR ACT credit would depend, first, 
on the level of technology used in the vehicle and, second, on the fuel 
efficiency and emissions reduction of the vehicle. In this way, we are 
confident that the CLEAR ACT will create the greatest social benefit 
possible for every tax dollar.
  The transportation sector in the U.S. accounts for nearly two-thirds 
of all oil consumption, and we are 97-percent dependent on petroleum 
for our transportation needs. Is it any wonder that 50 percent of our 
urban smog is caused by mobile sources? If we want to clean our air and 
address our Nation's energy dependency, we must focus on the 
transportation sector. And we must focus first on those technologies 
and alternative fuels that are already available and abundant 
domestically. The CLEAR ACT is the shortest path to achieving these 
goals.
  Air pollution and energy independence are issues of critical concern 
in my home State of Utah. According to a study by Utah's Division of 
Air Quality, on-road vehicles in Utah account for 22 percent of 
particulate matter. This particulate matter can be harmful to citizens 
who suffer from chronic respiratory or heart disease, influenza, or 
asthma. Automobiles also contribute significantly to hydrocarbon and 
nitrogen oxide emissions in my State. These two pollutants react in 
sunlight to form ozone, which in turn reduces lung function in humans 
and hurts our resistance to colds and asthma. In addition, vehicles 
account for as much as 87 percent of carbon monoxide emissions. Carbon 
monoxide can be harmful to persons with heart, respiratory, or 
circulatory ailments.
  While Utah has made important strides in improving air quality, it is 
a fact that each year more vehicular miles are driven in our State. It 
is clear that if we are to have cleaner air, we must encourage the use 
of alternative fuels and technologies to reduce vehicle emissions.
  Another key aim of the CLEAR ACT is greater energy independence. 
Whether during the energy crisis in the 1970s, during the Persian Gulf 
war, or during our current energy challenge, every American has felt 
the sting of our dependence on foreign oil. And I might add that our 
dependency on foreign oil has steadily increased to the point where we 
now depend on foreign sources for about 60 percent of our oil. When 
enacted, the CLEAR ACT will play a key role in helping our Nation 
improve its energy security by increasing the diversity of our fuel 
options and decreasing our dependency on gasoline.
  Our Nation's energy strategy will not be complete without an 
incentive to increase the use of alternative fuels and advanced car 
technologies. In the future we will not use gasoline-fueled vehicles to 
the same extent we do today. The technology is here today to help 
transform us to the benefits of the future much sooner. We just need to 
find a way to lower those barriers to widespread consumer acceptance, 
which will in turn put the power of mass production to work to lower 
the incremental cost of this technology. In short, our legislation 
would bring the benefits of cleaner air and energy independence to our 
citizens sooner.
  I am very proud to offer this groundbreaking and bipartisan 
legislation. It represents the input and hard work of a very powerful 
and effective coalition the CLEAR ACT Coalition. This coalition 
includes the Union of Concerned Scientists, Ford Motor Company, the 
Natural Resource Defense Council, Toyota, Environmental Defense, Honda, 
the Alliance to Save Energy, the Natural Gas Vehicle Coalition, the 
Propane Vehicle Council, the Methanol Institute, and others. The CLEAR 
ACT reflects the untiring effort and expertise of the members of this 
coalition, and for this we owe them our gratitude.
  I urge my colleagues in the Senate to join me, the CLEAR ACT's 
cosponsors, and this coalition in this forward-looking approach to 
cleaner air and increased energy independence.
  I ask unanimous consent that a summary of the CLEAR ACT be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Summary of the CLEAR ACT of 2003 (Clean Efficient Automobiles Resulting 
                    From Advanced Car Technologies)


                                Overview

       The primary purpose of this bill is to enhance national 
     energy security and promote cleaner air by reducing the 
     consumption of petroleum and advancing alternative fuels. 
     Transportation accounts for nearly \2/3\ of all oil 
     consumption and is almost 97 percent dependent on petroleum.
       This legislation will set the stage for a consumer-based 
     and technology-led transformation of the transportation 
     marketplace. All major vehicle manufacturers are introducing 
     new technology and alternative fuel vehicles into the 
     marketplace. These new technologies reduce petroleum 
     consumption and improve air quality as a result of 
     breakthrough improvements in fuel economy or from the use of 
     non-petroleum alternative fuels. Accelerated acceptance by 
     consumers of these new technologies is needed to increase 
     production volumes and make them cost competitive with 
     conventional vehicles.
       Providing tax incentives for a limited time to consumers 
     will help offset the higher costs associated with new 
     technology and alternative fuel vehicles. As the vehicles 
     gain consumer acceptance and production volumes increase, the 
     cost differential between these and conventional vehicles 
     will be reduced or eliminated.


                    Key Components of the CLEAR ACT

       Tax incentives for new technology and alternative fuel 
     vehicles under this legislation go directly to the consumer. 
     These incentives are based both on technology and 
     performance.
       Fuel Cell Vehicles. Fuel cell vehicles are the most 
     promising long-term technology offering breakthrough fuel 
     economy of up to 3 times today's levels with zero emissions. 
     The CLEAR ACT offers a $4,000 base credit ($8,000 for fuel 
     cell vehicles placed in service before 2009) along with an 
     additional credit of up to $4,000 depending on fuel economy 
     performance. These credits are available for ten years.
       Hybrid Electric Vehicles. Electronics that integrate 
     electric drive with an internal combustion engine offer near-
     term improvements in fuel economy. The CLEAR ACT offers a 
     credit of up to $1,000 for the amount of electric drive power 
     along with an additional credit of up to $3,000 depending 
     upon fuel economy performance. These credits are available 
     for 6 years.
       Dedicated Alternative Fuel Vehicles. Vehicles solely 
     capable of running on alternative fuels promote energy 
     diversity and significant emissions reductions. Natural gas, 
     LPG, and LNG are the most commonly used fuels for dedicated 
     alternative fuel vehicles. The CLEAR ACT provides a base 
     credit of up to $2,500 with an additional $1,500 credit for 
     vehicles certified to ``Super Ultra Low Emission'' (SULEV) 
     standards. ``Flex-fuel'' vehicles are not eligible since they 
     can operate on either gasoline or E85 (ethanol) and are 
     available in the market without any incremental cost.
       Battery Electric Vehicles. Vehicles that utilize stored 
     energy from ``plug-in'' rechargeable batteries offer zero 
     emissions and are not dependent upon petroleum-based

[[Page 5033]]

      fuels. The CLEAR ACT offers a base credit of $4,000 and an 
     incremental credit of $2,000 for vehicles with extended range 
     or payload capabilities.
       Medium and Heavy Duty Vehicles. Medium and heavy duty 
     applications of the same vehicle technologies utilized for 
     passenger vehicles offer similar benefits related to energy 
     efficiency, diversity, and emission reductions. The CLEAR ACT 
     offers credits for individual weight categories and amounts 
     vary with the largest vehicles over 26,000 pounds (e.g., 
     large metro buses) receiving up to $40,000 for fuel cell or 
     battery electric, $32,000 for alternative fuel, or $24,000 
     for hybrid applications.
       Alternative Fuel Incentives. Alternative fuels such as 
     natural gas, LNG, LPG, hydrogen, B100 (biomass) and methanol 
     are primarily used in alternative fueled vehicles and fuel 
     cell vehicles. To encourage the installation of distribution 
     points to support these applications, a credit of up to 50 
     cents for every gallon of gas equivalent is provided to the 
     retail distributor. This credit is available for 6 years.
       Alternative Fuel Infrastructure. Complimentary to the 
     credit for the fuel itself, the CLEAR ACT extends the 
     existing $100,000 tax deduction for 10 years and also 
     provides a 50 percent credit for actual costs of up to 
     $30,000 for the installation of alternative fuel sites 
     available to the public.


                        broad coalition support

       A broad and diverse group that includes representatives 
     from the environmental community, automobile manufacturers, 
     and alternative fuel groups support the CLEAR ACT. 
     Environmental coalition support comes from the Union of 
     Concerned Scientists, Natural Resources Defense Council, 
     Environmental Defense, and the American Council for an Energy 
     Efficient Economy. Ford Motor Company, Honda, and Toyota are 
     among the key automotive industry supporters. Industry 
     coalitions include the Natural Gas Vehicle Coalition, the 
     Propane Vehicle Council, the American Methanol Institute, and 
     the Electric Drive Transportation Association.
                                 ______
                                 
      By Mr. DURBIN (for himself, Mrs. Clinton, Mr. Kennedy, and Mr. 
        Schumer):
  S. 506. A bill to amend the Richard B. Russell National School Lunch 
Act to ensure the safety of meals served under the school lunch program 
and the school breakfast program; to the Committee on Agriculture, 
Nutrition, and Forestry.
  Mr. DURBIN. Madam President, today I am introducing legislation that 
would dramatically improve the safety of food served in our Nation's 
schools. This bill, known as the Safe School Food Act, would fill gaps 
in the inspection, testing, procurement and preparation of food served 
to our schoolchildren, and provide school officials with the necessary 
tools and information to help them prevent food-borne illness among our 
most vulnerable population.
  Each day, more than 27 million children eat meals provided through 
the National School Lunch Act. Despite increased attention in recent 
years to the safety of food provided to schoolchildren, there is 
evidence of serious problems with our school lunch system--between 1990 
and 2000, there were nearly 100 reported outbreaks of food-borne 
illness in our schools affecting thousands of children, with several 
outbreaks resulting in significant health consequences. Since food-
borne illness is preventable, these statistics indicate we are not 
doing enough to protect our children's health when they consume food 
served at our schools.
  Currently, 17 percent of the food served in schools is donated by the 
Federal Government and undergoes stringent U.S. Department of 
Agriculture food-safety standards for inspections and pathogen testing. 
Suppliers' food safety records also are reviewed before they are 
granted contracts to provide food to the USDA donated commodity 
program. However, the remaining 83 percent of food consumed at schools 
is purchased locally and is not subject to these more stringent USDA 
donated commodity standards. State education officials also do not have 
access to the safety records of food suppliers to make the same 
informed decisions as their counterparts at the Federal level.
  If a tainted product enters the food supply, it is often difficult 
for local education officials to quickly determine if they have that 
food in their schools' kitchens due to a complex web of food 
manufacturers, distributors, and brokers who deal with schools. A food 
producer's tainted food may be repackaged by a distributor, leaving a 
school unaware it is serving the product. And many Americans may be 
surprised to discover that our Federal food agencies do not even have 
the authority to mandate the recall of contaminated food in schools. 
Such recalls are currently voluntary.
  The Safe School Food Act would address these gaps in our School Lunch 
Program and provide schools with the tools and information on how to 
more safely purchase and prepare food served to our children.
  Improving Inspections: This legislation will ensure stringent 
inspection and pathogen testing for USDA meat, poultry, seafood, eggs, 
and produce donated to the School Lunch Program, and gives the USDA 
Secretary the authority to require similar pathogen testing as 
necessary for foods purchased directly by the schools. Cafeterias also 
would be inspected more frequently, inspection exemptions would be 
eliminated, and those inspection reports would be made available to the 
public.
  Purchasing Safe Food: By incorporating USDA food safety guidelines in 
their procurement contracts to the maximum extent possible, schools 
will have the tools to help ensure the safety of the food they serve. 
And by providing State education officials with food-safety histories 
of the companies they purchase from, schools can make more informed 
decisions in the purchasing process.
  Planning and Serving Safe Meals: The USDA will provide training and 
assistance to schools in the preparation of required plans to address 
the food-safety risks of meals they prepare.
  Providing Notice and Recalling Unsafe Food: Each State will have an 
up-to-date list of the vendors and suppliers who provide food to their 
schools to enable easier tracking of food that may be tainted. If a 
food product that has been distributed to schools is found to be 
unsafe, the USDA Secretary will have the authority to require a 
mandatory recall of the product if voluntary efforts are unsuccessful. 
Designated food safety coordinators in each State will assist with 
recalls, as well as safety training and information-sharing issues.
  Mr. President, I urge my colleagues to join me in this effort to 
improve the safety of the food served in our schools. The health of our 
schoolchildren is at stake.
  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. 506

       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 ``Safe School Food Act of 
     2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) the national school lunch program under the Richard B. 
     Russell National School Lunch Act (42 U.S.C. 1751 et seq.) is 
     a federally-assisted meal program that--
       (A) operates in more than 97,000 public and nonprofit 
     private schools; and
       (B) provides nutritionally balanced, low-cost or free 
     lunches to more than 27,000,000 children each school day;
       (2) children are among the populations most vulnerable to 
     foodborne illness, which sickens an estimated 76,000,000 
     individuals in the United States each year;
       (3) nearly 100 reported outbreaks of foodborne illnesses 
     occurred in schools between 1990 and 2000;
       (4) Department of Agriculture procurement policies and 
     procedures--
       (A) help ensure the safety of foods donated to schools, 
     which comprise about 17 percent of the school lunch supply; 
     but
       (B) do not apply to the remaining 83 percent of food served 
     under the national school lunch program, which is purchased 
     locally by schools;
       (5) it is essential to maintain public confidence in--
       (A) the safety of the food supply in the schools of the 
     United States; and
       (B) the ability of the Federal Government and State 
     governments to exercise adequate oversight of foods served in 
     the schools of the United States; and
       (6) public confidence can best be maintained by--

[[Page 5034]]

       (A) improving Department of Agriculture procurement and 
     testing standards, and extending the standards, to the 
     maximum extent practicable, to foods purchased by schools;
       (B) preparing and implementing plans to prevent identified 
     food safety risks in the preparation of school meals; and
       (C) improving food safety training, information sharing, 
     and coordination between the Federal Government and States.

     SEC. 3. IMPROVEMENTS TO THE SAFETY OF SCHOOL LUNCHES.

       Section 9 of the Richard B. Russell National School Lunch 
     Act (42 U.S.C. 1758) is amended--
       (1) in subsection (h)--
       (A) in paragraph (1)--
       (i) by striking ``Except as provided in paragraph (2), a'' 
     and inserting ``A'';
       (ii) by striking ``shall, at least once'' and inserting the 
     following: ``shall--
       ``(A) at least twice'';
       (iii) by striking the period at the end and inserting a 
     semicolon; and
       (iv) by adding at the end the following:
       ``(B) post the report on the most recent inspection in a 
     publicly visible location; and
       ``(C) make the report available to the public on 
     request.'';
       (B) by striking paragraph (2) and inserting the following:
       ``(2) State and local government inspections.--Nothing in 
     paragraph (1) prevents any State or local government from 
     adopting or enforcing any requirement for more frequent food 
     safety inspections of schools.''; and
       (C) by adding at the end the following:
       ``(3) Audits and reports by states.--Each State shall 
     annually audit and submit to the Secretary a report on the 
     food safety inspections of schools conducted under paragraphs 
     (1) and (2).
       ``(4) Audit by the secretary.--The Secretary shall annually 
     audit State reports of food safety inspections of schools 
     submitted under paragraph (3).''; and
       (2) by adding at the end the following:
       ``(k) Procurement of Safe Foods.--
       ``(1) Action by school food authorities.--Subject to 
     paragraph (3), the Secretary shall require that a school food 
     authority incorporate into the procurement contracts of the 
     school food authority, to the maximum extent practicable, 
     provisions to help ensure the safety of foods purchased by 
     schools for a program under this Act or the school breakfast 
     program under section 4 of the Child Nutrition Act of 1966 
     (42 U.S.C. 1773).
       ``(2) Rulemaking by the secretary.--Not later than May 1, 
     2004, the Secretary shall promulgate final regulations to 
     implement paragraph (1) that require--
       ``(A) each vendor that provides food products to be served 
     by a school that participates in the school lunch program 
     under this Act or the school breakfast program under section 
     4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773) to 
     supply to the Secretary the name and contact information for 
     each school food supplier of the vendor; and
       ``(B) as appropriate, pathogen testing during production of 
     foods described in that paragraph.
       ``(3) Guidance.--The Secretary shall provide guidance to 
     school food authorities on ensuring the safety of food 
     purchases not subject to the regulations promulgated under 
     paragraph (2).
       ``(l) Food Safety Planning.--
       ``(1) In general.--Each school that participates in the 
     school lunch program under this Act or the school breakfast 
     program under section 4 of the Child Nutrition Act of 1966 
     (42 U.S.C. 1773) shall monthly prepare a plan that assesses--
       ``(A) the food safety risks inherent in the preparation and 
     serving of meals; and
       ``(B) the appropriate methods to prevent or eliminate the 
     identified food safety risks.
       ``(2) Training and technical assistance.--
       ``(A) In general.--The Secretary shall provide training and 
     technical assistance to State educational agencies to assist 
     in preparation of the food safety plans required by paragraph 
     (1).
       ``(B) Use of food service management institute.--In 
     carrying out subparagraph (A), the Secretary shall use, to 
     the maximum extent practicable, a food service management 
     institute established under section 21(a)(2).
       ``(m) Authority To Recall Food Products Served In School 
     Meals.--
       ``(1) Definitions.--In this subsection:
       ``(A) Class i recall.--The term `Class I recall', with 
     respect to a food product, means a recall that involves a 
     health hazard situation where there is a reasonable 
     probability that the use of, or exposure to, the food product 
     will cause serious, adverse health consequences or death.
       ``(B) Food product.--The term `food product' means a 
     commodity donated to, or a food product purchased by, a 
     school for a program under this Act or the school breakfast 
     program under section 4 of the Child Nutrition Act of 1966 
     (42 U.S.C. 1773).
       ``(2) Voluntary actions.--If the Secretary finds that there 
     is a reasonable probability that human consumption of a food 
     product that was, or may have been, distributed to schools 
     would present a threat to public health, the Secretary shall 
     provide each appropriate person (as identified by the 
     Secretary) that prepared, processed, distributed, or 
     otherwise handled the food product with an opportunity--
       ``(A) to recall and collect the food product;
       ``(B) to provide to the Secretary a list of individuals to 
     whom the food product was sold or distributed; and
       ``(C) in consultation with the Secretary, to provide timely 
     notification of the finding of the Secretary to the State 
     food safety coordinator designated under section 12(q) of 
     each State in which the food product was, or may have been, 
     distributed, which notification shall include sufficient 
     information to identify the affected food product.
       ``(3) Mandatory actions.--
       ``(A) Order.--If any appropriate person identified by the 
     Secretary under paragraph (2) does not carry out the actions 
     described in that paragraph within the time period and in the 
     manner required by the Secretary, the Secretary shall, by 
     order, require, as the Secretary determines to be necessary, 
     the person--
       ``(i)(I) to cease immediately distribution of the food 
     product to schools; and
       ``(II) to promptly recall and collect the food product;
       ``(ii) to provide immediately to the Secretary a list of 
     individuals to whom the food product was sold or distributed; 
     and
       ``(iii) to make immediately the notification described in 
     paragraph (2)(C).
       ``(B) Informal hearing.--The order shall provide the person 
     subject to the order with an opportunity for an informal 
     hearing, to be held not later than 10 days after the date of 
     issuance of the order, on the actions required by the order.
       ``(C) Vacating of order.--If, after providing an 
     opportunity for a hearing under subparagraph (B), the 
     Secretary determines that inadequate grounds exist to support 
     the actions required by the order, the Secretary shall vacate 
     the order.
       ``(4) Coordination with secretary of health and human 
     services.--In the case of an activity under paragraph (2) or 
     (3) carried out with respect to a food product regulated 
     under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 
     et seq.), the Secretary shall coordinate with the Secretary 
     of Health and Human Services to ensure that the activity is 
     carried out.
       ``(5) Notification to schools and vendors.--
       ``(A) Provision of vendor contact information to state 
     educational agency.--Not later than August 1, 2004, and as 
     appropriate thereafter, a school that participates in the 
     school lunch program under this Act or the school breakfast 
     program under section 4 of the Child Nutrition Act of 1966 
     (42 U.S.C. 1773) shall provide to the appropriate State 
     educational agency current contact information for each 
     vendor, and each school food supplier of the vendor, that 
     will provide food products to be served by the school.
       ``(B) Notification by state educational agencies.--
       ``(i) In general.--A State educational agency that receives 
     notification under paragraph (2)(C) or (3)(A)(iii) with 
     respect to a food product shall, within 24 hours after 
     receipt of the notification, notify each vendor and each 
     school to which the food product was, or may have been, 
     distributed.
       ``(ii) Contents of notification.--The notification shall 
     include--

       ``(I) the finding of the Secretary under paragraph (2); and
       ``(II) sufficient information to identify the affected food 
     product.

       ``(C) Action by vendors on receipt of notification.--Each 
     vendor that receives notification under paragraph (2)(C), 
     paragraph (3)(A)(iii), or subparagraph (B) shall--
       ``(i) immediately cease distribution of the food product; 
     and
       ``(ii) isolate the affected product to avoid accidental 
     distribution.
       ``(D) Action by schools on receipt of notification.--Each 
     school that receives notification under paragraph (2)(C), 
     paragraph (3)(A)(iii)), or subparagraph (B) shall--
       ``(i) immediately cease serving the food product; and
       ``(ii) isolate the affected product to avoid accidental 
     use.
       ``(6) Notification to the public.--
       ``(A) In general.--If a State educational agency finds that 
     a food product subject to a Class I recall has been consumed 
     under a program operated by a school under this Act or the 
     school breakfast program under section 4 of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1773), the State educational 
     agency shall provide public notification in accordance with 
     subparagraph (B).
       ``(B) Contents of notification.--The notification shall 
     include--
       ``(i) the finding of the Secretary under paragraph (2); and
       ``(ii) sufficient information to identify the recalled food 
     product and the date when and location where the recalled 
     food product was served.
       ``(7) Enforcement.--
       ``(A) In general.--A violation of this subsection may be 
     prosecuted, as applicable--
       ``(i) by the Secretary under--

       ``(I) section 12 of the Poultry Products Inspection Act (21 
     U.S.C. 461);
       ``(II) section 406 of the Federal Meat Inspection Act (21 
     U.S.C. 676); or
       ``(III) section 12 of the Egg Products Inspection Act (21 
     U.S.C. 1041); or

[[Page 5035]]

       ``(ii) by the Secretary of Health and Human Services under 
     section 303 of the Federal Food, Drug, and Cosmetic Act (21 
     U.S.C. 333).
       ``(B) No effect on state prosecutions.--Nothing in this 
     paragraph prevents a State from prosecuting any violation of 
     State law.
       ``(n) Information Sharing on Food Safety Law Compliance.--
       ``(1) In general.--The Secretary, in consultation with the 
     Secretary of Health and Human Services, shall establish an 
     advisory committee (referred to in this subsection as the 
     `Committee') to assist in establishing an information-sharing 
     database, or implementing another method, to provide each 
     State food safety coordinator designated under section 12(q) 
     and other appropriate persons with up-to-date information 
     regarding food safety concerns relating to food 
     manufacturing, processing, and packing facilities that 
     produce any food purchased or acquired for a program under 
     this Act or the school breakfast program under section 4 of 
     the Child Nutrition Act of 1966 (42 U.S.C. 1773), including 
     recalls by and enforcement actions against the facilities.
       ``(2) Composition.--The Committee shall include 
     representatives of--
       ``(A) school food authorities;
       ``(B) State educational agencies;
       ``(C) State agricultural agencies;
       ``(D) consumer groups;
       ``(E) State public health officials; and
       ``(F) food manufacturing, processing, and packing 
     facilities.
       ``(3) Compensation.--
       ``(A) In general.--Subject to subparagraph (B), a member of 
     the Committee shall not receive any compensation for the 
     service of the member on the Committee.
       ``(B) Travel expenses.--A member of the Committee 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 the home or regular place of business 
     of the member in the performance of services for the 
     Committee.
       ``(4) Technical assistance.--The Secretary shall provide 
     for the availability to each State food safety coordinator of 
     training and technical assistance on use of any database or 
     method described in paragraph (1).
       ``(5) Report.--Not later than May 31, 2004, the Committee 
     shall submit to the Committee on Education and the Workforce 
     of the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate a report 
     describing actions taken to carry out this subsection.
       ``(6) Funding.--Section 715 of the Agriculture, Rural 
     Development, Food and Drug Administration, and Related 
     Agencies Appropriations Act, 2003 (Public Law 108-7), and any 
     successor section, shall not apply to expenses of the 
     Committee.''.

     SEC. 4. DESIGNATION OF STATE FOOD SAFETY COORDINATORS.

       Section 12 of the Richard B. Russell National School Lunch 
     Act (42 U.S.C. 1760) is amended by adding at the end the 
     following:
       ``(q) Designation of State Food Safety Coordinators.--Each 
     State educational agency shall designate an individual to 
     serve as the State food safety coordinator to ensure within 
     the State the safety of food served under a program under 
     this Act or the school breakfast program under section 4 of 
     the Child Nutrition Act of 1966 (42 U.S.C. 1773).''.

     SEC. 5. PROCEDURES AND ACTIONS TO ENSURE THE SAFETY OF 
                   DONATED COMMODITIES.

       Section 14 of the Richard B. Russell National School Lunch 
     Act (42 U.S.C. 1762a) is amended--
       (1) in the first sentence of subsection (d)--
       (A) in paragraph (4), by striking ``and'' at the end;
       (B) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(6) require, at a minimum, for any commodity that is used 
     under a program under this Act or the school breakfast 
     program under section 4 of the Child Nutrition Act of 1966 
     (42 U.S.C. 1773)--
       ``(A) daily inspection under the Agricultural Marketing Act 
     of 1946 (7 U.S.C. 1621 et seq.) of any donated commodity that 
     is covered by--
       ``(i) the Poultry Products Inspection Act (21 U.S.C. 451 et 
     seq.);
       ``(ii) the Federal Meat Inspection Act (21 U.S.C. 601 et 
     seq.); or
       ``(iii) the Egg Products Inspection Act (21 U.S.C. 1031 et 
     seq.);
       ``(B) daily inspection of any seafood commodity that is 
     covered by the inspection program carried out by the National 
     Marine Fisheries Service under the Agricultural Marketing Act 
     of 1946 (7 U.S.C. 1621 et seq.); and
       ``(C) quarterly, on-site audits under the Agricultural 
     Marketing Act of 1946 (7 U.S.C. 1621 et seq.) of each 
     establishment that produces a donated fresh or processed 
     fruit or vegetable.'';
       (2) by redesignating subsection (g) as subsection (h); and
       (3) by inserting after subsection (f) the following:
       ``(g) Actions To Ensure the Safety of Donated 
     Commodities.--With respect to commodities purchased by the 
     Secretary for a program under this Act or the school 
     breakfast program under section 4 of the Child Nutrition Act 
     of 1966 (42 U.S.C. 1773), the Secretary shall--
       ``(1) in the case of ground uncooked meat products--
       ``(A) collect samples at least 4 times per day during 
     production; and
       ``(B) conduct at least daily composite testing for 
     compliance with the microbiological limits established by the 
     Secretary on--
       ``(i) Escherichia coli (E. coli) O157:H7 in effect on 
     October 1, 2002; and
       ``(ii) Salmonella in effect on October 1, 2002, unless the 
     Secretary develops a more appropriate scientific and health-
     based standard;
       ``(2)(A) collect and test samples at least 4 times per day 
     during production from food contact surfaces of ready-to-eat 
     meat and poultry product plants; and
       ``(B) if the result of a test under subparagraph (A) is 
     positive for Listeria spp., conduct product sampling for 
     compliance with the microbiological limit on Listeria 
     monocytogenes issued by the Secretary on May 23, 1989 (54 
     Fed. Reg. 22345); and
       ``(3) reject any lot of food products that fails to meet 
     the requirements of paragraph (1) or paragraph (2), as 
     applicable.''.
                                 ______
                                 
      By Ms. SNOWE (for herself, Mrs. Feinstein, Mr. McCain, Mr. Kerry, 
        Mr. Smith, and Mr. Reid):
  S. 507. A bill to amend the Internal Revenue Code of 1986 to provide 
incentives to introduce new technologies to reduce energy consumption 
in buildings; to the Committee on Finance.
  Ms. SNOWE. Madam President, I rise today to introduce the EFFECT Act, 
the Energy Efficiency through Certified Technologies Act, which has 
bipartisan support as I am pleased to be joined by cosponsors Senator 
Feinstein of California, Senator McCain of Arizona, Senator Kerry of 
Massachusetts, Senator Gordon Smith of Oregon, and Senator Reid of 
Nevada.
  As a member of the Finance Committee, I strongly believe that we must 
develop responsible tax credit incentive policies that will increase 
the efficiencies of the homes we build and live in and the buildings in 
which we work. We did an admirable job last year providing sound tax 
incentives in the omnibus energy bill, and it is regrettable that bill 
did not get out of conference and these incentives are not available 
for our consumers to use. That is especially true as the storm clouds 
gather in the Middle East and the price of oil, for instance, reaches 
$40 a barrel.
  This bill provides tax incentives for advanced levels of energy 
efficiency and peak power saving technologies in the buildings in which 
we live, work, and learn. Buildings consume some 35 percent of energy 
nationwide and are responsible for the emissions of a comparable 
percentage of pollution; importantly, they account for more than one-
half of the Nation's energy costs.
  Incentives provided through the tax system are necessary to 
complement existing energy efficiency policies at the Federal and State 
levels. The issue is, incentive programs already being operated cannot 
provide multiyear commitments of money. Such commitments are absolutely 
vital in inducing industries to invest in these technologies. The 1-
year commitments that are offered by many current programs are 
insufficient to promote dramatic new energy efficiency technologies 
even when they are very cost effective.
  Our goal in introducing the legislation is to accelerate the 
commercial success of technologies that are already cost effective but 
are currently impeded by market barriers. These barriers can be 
overcome by financial incentives. Savings of up to 50 percent add up to 
reductions in climate pollution emissions of 65 million metric tons of 
carbon annually after 10 years, accompanied by consumer energy bill 
reductions of $30 billion per year and the creation of almost 500,000 
new jobs as well as stimulation in the growth of small businesses.
  The bill provides for a 6-year--and, in some cases, 3-year--sunset 
for the incentive. Incentives are provided for commercial buildings 
both new and remodeled, including schools and other public buildings 
and rental housing; for air-conditioning, heating, and water heating 
equipment which can reduce peak power demand quickly; for new

[[Page 5036]]

homes and the retrofitting of existing homes; and for solar 
electricity.
  The incentives provided for in this legislation are based on three 
principles: One, independent third-party certification is required so 
that energy savings are certified and the Government is getting real 
energy savings for the tax money invested; two, the incentives are 
workable, not bureaucratic, and are built on programs that have already 
been shown to work with minimal bureaucratic intervention or effort; 
and, three, the incentives sunset in order to provide a transition to a 
market system that already promotes energy efficiency.
  The incentives are performance-based so that the consumer and 
producer have the motivation to reduce costs and to introduce new 
technologies to achieve energy goals in more cost-effective ways than 
existing technologies. The documentation required for certification has 
value in the marketplace in allowing property markets to reflect 
enhanced property values based on energy efficiency.
  Many American homes, for instance, were built years before energy-
efficient technologies were developed. This is certainly true in an 
older State such as my home State of Maine and an incentive for a 
retrofit such as simply putting in certifiable high-energy-efficient 
doors and windows, such a low-emissivity glass, will save a great deal 
of energy loss because of the huge amount of seepage that now occurs 
through the existing windows.
  This bill will also leverage cost-effective investments in saving 
peak powers as well as energy--110,000 megawatts after 10 years. It is 
one of the few public policies that can be enacted that can help avert 
peak power shortages in the next 4 or 5 years. It will lower energy 
costs for consumers and businesses and promote competition and 
innovation.
  The bottom line is, we have the opportunity to raise the bar for our 
future domestic energy systems. Solutions exist in available 
technologies, and most of all in the entrepreneurial spirit of the 
American people. I look forward to working with the chairmen of the 
Finance Committee, as I did last year, to mark up tax incentives that 
reflect the provisions of this legislation, and with the Energy 
Committee chairmen to further our Nation's energy efficiency goals that 
will save on our energy usage--and this will be reflected in the energy 
bills consumers must pay--and thus allow us to use less electricity, 
and less oil and natural gas to produce that energy.
  I am pleased to be joined by Senators representing States throughout 
the country and urge others to seriously consider this legislation and 
join us in working towards our goal for achieving greater energy 
efficiency in the near future.
  Mrs. FEINSTEIN. Madam President, I rise in support of the Efficient 
Energy through Certified Technologies Act which I have cosponsored 
along with Senator Olympia Snowe of Maine.
  The EFFECT Act will provide tax incentives to encourage homeowners 
and businesses to improve the energy efficiency of their buildings and 
equipment. This legislation will stimulate the economy, cut energy 
bills, reduce energy usage, and reduce pollution.
  This bill was originally introduced in the 107th Congress to address 
the Western energy crisis which, as we all know, created exorbitantly 
high prices for power and rolling blackouts. This legislation 
incorporates improvements based on last year's Senate energy tax bill.
  While conditions in the West have improved because there are more 
plants coming online and families and businesses have reduced their 
energy usage, it is important to take steps to continue to increase our 
energy efficiency and reduce energy consumption.
  Simply put, there are only two things one can do when there is not 
enough power to go around: increase supply or decrease demand.
  Without a doubt, the quickest way to address future demand and supply 
imbalances is to provide incentives to increase energy efficiency to 
reduce demand.
  This bill creates economic incentives for Americans to increase 
energy efficiency by establishing the following tax deductions and tax 
credits for commercial and residential properties using specific energy 
efficient technologies:
  A tax deduction of $2.25 per square foot for newly constructed or 
remodeled commercial buildings, including schools and other public 
buildings as well as rental housing, that achieve a 50-percent 
reduction in total annual energy costs, compared to existing national 
standards.
  A $2,000 tax credit to builders of new homes that use 50 percent less 
energy than a national model standard.
  A performance-based tax credit of as much as $6,000 for installing 
solar technology.
  A tax credit of as much as $300 if businesses install a super-
efficient, new electric heat pump, a new central air-conditioner, or a 
new gas or electric water heater.
  A tax credit of as much as $500 if homeowners, tenants, or landlords 
retrofit their homes to achieve a 30 percent or 50 percent reduction in 
annual energy costs.
  The benefits of increasing energy efficiency are immense.
  First, increasing energy efficiency will cut heating, cooling, and 
electricity costs. Homeowners and businesses spend over $250 billion 
each year on heat, air-conditioning, and related energy costs for their 
businesses and homes. If we can reduce energy costs by increasing 
energy efficiency, money will be freed to fuel the economy in other 
areas and create new jobs. Furthermore, increasing energy efficiency 
will reduce the impact of future energy price spikes that harm families 
and businesses. And the incentives will cause businesses to invest in 
producing more efficient equipment and services beginning immediately 
after the bill is enacted.
  Second, increasing energy efficiency will reduce air pollution. 
Energy generation to heat, cool, and light our homes and offices 
produces 35 percent of the air pollution emitted nationwide. If we 
increase efficiency, then less energy will be needed to power our 
buildings, and consequently, we will be able to reduce emissions from 
powerplants.
  Third, increasing energy efficiency will help maintain the 
reliability of our Nation's electricity supply. Since most of our peak 
electricity demand comes from heating, cooling, or lighting needs, 
increasing energy efficiency will lower the probability of blackouts or 
brownouts.
  In fact, with this legislation in place, peak electricity demand in 
the summer would be reduced by tens of thousands of megawatts 
nationwide after a decade--or the equivalent output produced by 
hundreds of large powerplants.
  This could result in over 10,000 MW of savings over the summer just 
in our State and much more on the Western grid that California shares 
with neighboring States.
  Meanwhile, this legislation will also create a market for firms to 
develop more energy-efficient products, such as air-conditioners, heat 
pumps, lighting equipment, windows, insulation, water heaters, and 
solar panels.
  Just think how conditions could have improved in California during 
the Western energy crisis if we had been able to reduce our energy 
consumption instead of purchasing power at exorbitant rates from out-
of-State suppliers.
  According to the Department of Energy, California is already one of 
the most energy-efficient States in the Nation--ranking fourth in 
overall energy efficiency and second in electricity efficiency.
  Nevertheless, Californians responded to the crisis and further 
increased their energy efficiency. This legislation will take energy 
efficiency to the next level and create the opportunity for all 
families and businesses nationwide to make energy efficient 
improvements.
  Instead of waiting for the next energy emergency to occur, we should 
take steps now to reduce energy consumption across the board.
  The bill introduced in the 107th Congress had the support of 
California Governor Gray Davis, the California Energy Commission, the 
Sacramento Municipal Utility District, the Natural

[[Page 5037]]

Resources Defense Council, Union of Concerned Scientists, the 
California Building Industry Association, most California utilities and 
many other organizations and businesses. We expect similar widespread 
support for the bill we are reintroducing today.
  This bill is an important step to help reduce demand. It provides 
financial incentives to offset some of the costs of building new 
energy-efficient buildings and homes, and improving existing structures 
to make them more energy efficient.
  I urge my colleagues to support this important legislation.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself, Mr. Fitzgerald, Mr. Lugar, Mr. 
        Harkin, Ms. Cantwell, Mr. Wyden, and Mr. Leahy):
  S. 509. A bill to modify the authority of the Federal Energy 
Regulatory Commission to conduct investigations, to increase the 
penalties for violations of the Federal Power Act and Natural Gas Act, 
to authorize the Chairman of the Federal Energy Regulatory Commission 
to contract for consultant services, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.
  Mrs. FEINSTEIN. Madam President, yesterday the State of California 
submitted a filing to the Federal Energy Regulatory Commission which 
provides a wholesale indictment of energy companies and shows how a 
number of energy firms engaged in deceptive trading practices to drive 
up prices in the Western Energy Market. I have called on FERC to make 
this evidence public and I want to reiterate my request again.
  I am also introducing a bill with Senators Fitzgerald, Harkin, Lugar, 
Cantwell, Wyden, and Leahy to close a loophole which allows energy 
trades to take place electronically, in private, with no transparency, 
record, audit trail or any oversight to guard against fraud and 
manipulation.
  But before I reintroduce this bill, I want to reiterate the important 
revelations that have been uncovered in the past year and detail what 
we know about yesterday's filing at FERC.
  Last week I came to the floor to update the Senate on recent evidence 
of fraud and manipulation in the energy sector. Today I want to pick up 
where I left off and introduce the Energy Market Oversight Act.
  Mr. President, I draw my colleagues' attention to a filing made at 
FERC. This ``Public Version'' is a 27-page summary of the filing with 
confidential information removed, but it provides a detailed overview 
of the fraud and manipulation carried out by energy companies during 
the Western energy crisis.
  In addition to testimony by expert witnesses, 348 exhibits, 
transcripts of depositions, tapes of trader telephone conversations, 
emails, and other data, the California parties submitted a 161-page 
brief to FERC. The document I have inserted into the Record includes 
the Table of Contents, the Introduction and Overview, and the 
Conclusion of this 161-page document. To be clear, it is part, but not 
all of the brief filed by the State of California.
  Mr. President, the filing submitted by the State of California 
yesterday shows that there was an extensive and coordinated attempt by 
energy companies to engage in the following schemes to drive up prices 
in the Western Energy Market:

       1. Withholding of Power--driving up prices by creating 
     false shortages;
       2. Bidding to Exercise Market Power--suppliers bid higher 
     after the California ISO declared emergencies, knowing the 
     State would need power and be willing to pay any price to get 
     it;
       3. Scheduling of Bogus Load, aka ``Fat Boy'' or ``Inc-
     ing''--suppliers submitted false load schedules to increase 
     prices;
       4. Export-Import Games, aka ``Ricochet or ``Megawatt 
     Laundering''--suppliers exported power out of California and 
     imported it back into the State in an attempt to sell power 
     at inflated prices;
       5. Congestion Games, aka ``Death Star''--suppliers created 
     false congestion and were then paid for relieving congestion 
     without moving any power;
       6. Double-Selling--suppliers sold reserves, but then failed 
     to keep those reserves available for the ISO;
       7. Selling of Non-Existent Ancillary Services, aka ``Get 
     Shorty''--suppliers sold resources that were either already 
     committed to other sales or incapable of being provided;
       8. Sharing of Non-Public Generation Outage Information--the 
     largest suppliers in California shared information from a 
     company called Industrial Information Resources that provided 
     sellers detailed, non-public information on daily plant 
     outages;
       9. Collusion Among Sellers--sellers were jointly 
     implementing or facilitating Enron-type trading strategies;
       10. Manipulation of the Nitrous Oxide (NOX) 
     Emission Market--sellers manipulated the market for 
     NOX emissions in the South Coast Air Quality 
     Management District through a series of wash trades that 
     created the appearance of a dramatic price increase that may 
     have been fabricated. For example, Dynegy, together with AES 
     and others, entered into a series of trades of NOX 
     credits in July and August of 2000 by which Dynegy would sell 
     a large quality of credits and then simultaneously buy back a 
     smaller quantity of credits at a higher per credit price.

  We can assume that the thousands of pages filed by the California 
parties at FERC detail these examples of market abuse. At this point we 
cannot know all of the instances because the specifics remain 
confidential, but we have plenty to go on.
  Yesterday I wrote another letter to FERC Chairman Pat Wood asking the 
Commission to lift its ``Protective Order'' to make this information 
public so that families and businesses harmed during the Western Energy 
Crisis can know the extent of fraud and manipulation that occurred.
  I believe the filing yesterday presents a key decision for FERC. 
Clearly the Commission cannot ignore this mountain of new evidence 
submitted--especially since it comes at a time when other disclosures 
have been made to show pervasive fraud and manipulation in the Western 
Energy Market.
  Last month Jeffrey Richter, the former head of Enron's Short-Term 
California energy trading desk, pled guilty to conspiracy to commit 
fraud as part of Enron's well known schemes to manipulate Western 
energy markets. Richter's plea follows that of head Enron trader Tim 
Belden in the fall of 2002. Belden admitted that he schemed to defraud 
California during the Western energy crisis and also plead guilty to 
conspiracy to commit wire fraud.
  The Enron plea came on the heels of FERC's release of transcripts 
from Reliant Energy that reveal how their traders intentionally 
withheld power from the California market in an attempt to increase 
prices. This is one of the most egregious examples of manipulation and 
it is clear and convincing evidence of coordinated schemes to defraud 
consumers.
  Let me read just one part of the transcript to demonstrate the greed 
behind the market abuse by Reliant and its traders.
  On June 20, 2000 two Reliant employees had the following conversation 
that reveals the company withheld power from the California market to 
drive prices up:

       Reliant Operations Manager 1: ``I don't necessarily foresee 
     those units being run the remainder of this week. In fact you 
     will probably see, in fact I know, tomorrow we have all the 
     units at Coolwater off.'' (The Coolwater plant is a 526 
     Megawatt plant.)
       Reliant Plant Operator 2: ``Really?''
       Reliant Operations Manager 1: ``Potentially. Even number 
     four. More due to some market manipulation attempts on our 
     part. And so, on number four it probably wouldn't last long. 
     It would probably be back on the next day, if not the day 
     after that. Trying to uh . . .''
       Reliant Plant Operator 2: ``Trying to shorten supply, uh? 
     That way the price on demand goes up.''
       Reliant Operations Manager 1: ``Well, we'll see.''
       Reliant Plant Operator 2: ``I can understand. That's 
     cool.''
       Reliant Operations Manager 1: ``We've got some term 
     positions that, you know, that would benefit.''

  Six months after this incident, as the Senate Energy Committee was 
attempting to get to the bottom of why energy prices were soaring in 
the West, the President and CEO of Reliant testified before Congress 
that the State of California ``has focused on an inaccurate perception 
of market manipulation.''
  Reliant's President and CEO went on to say, ``We are proud of our 
contributions to keep generation running to try to meet the demand for 
power in California. Reliant Energy's plant and technical staffs have 
worked hard to

[[Page 5038]]

maximize the performance of our generation.''
  These transcripts prove otherwise and reveal the truth about market 
manipulation in the energy sector.
  Despite this clear and convincing evidence of fraud, on January 31 of 
this year, the Federal Energy Regulatory Commission chose to only give 
Reliant a slap on the wrist for this behavior. The company paid only 
$13.8 million to sweep this criminal behavior under the rug and settle 
with FERC.
  Let me turn to some other recent examples that demonstrate how other 
energy companies manipulated the Western Energy Market as Reliant did. 
On December 11th, FERC finally released audio tapes that show how 
traders at Williams conspired with AES Energy plant operators to keep 
power offline and drive prices up.
  The tapes depict how on April 27, 2000, Williams outage coordinator 
Rhonda Morgan encouraged an AES operator at the company's Alamitos 
plant to extend a plant outage because the California grid operator was 
paying ``a premium'' for power at the time. The Williams employee 
stated, ``that's one reason it wouldn't hurt Williams' feelings if the 
outage ran long.''
  Later that day, Eric Pendergraft, a high-ranking AES employee called 
to confirm with Ms. Morgan that Williams wanted the plant to stay 
offline by saying, ``you guys were saying that it might not be such a 
bad thing if it took us a little while longer to do our work?'' ``I 
don't want to do something underhanded,'' Ms. Morgan responded, ``but 
if there is work you can continue to do . . .'' At this point Mr. 
Pendergraft interrupted to cut off their suspicious conversation, 
saying, ``I understand. You don't have to talk anymore.''
  Clearly, this is evidence of a calculated intent to withhold power to 
raise prices. I find it unconscionable.
  Let's turn to some other examples.
  On January 27, 2003, Michelle Marie Valencia, a 32-year-old former 
senior energy trader for Dynegy was arrested on charges that she 
reported fictitious natural gas transactions to an industry 
publication.
  On December 5, 2002, Todd Geiger, a former vice president on the 
Canadian natural gas trading desk for El Paso Merchant Energy, was 
charged with wire fraud and filing a false report after allegedly 
telling a trade publication about the prices for 48 natural gas trades 
that he never made in an effort to boost prices and company profit.
  These indictments are just the latest examples of how energy firms 
reported inaccurate prices to trade publications to drive energy prices 
higher.
  Industry publications claimed they could not be fooled by false 
prices because deviant prices are rejected, but this claim was 
predicated on the fact that everyone was reporting honestly--which we 
now know they weren't doing.
  CMS Energy, Williams, American Electric Power Company, and Dynegy 
have each acknowledged that its employees gave inaccurate price data to 
industry participants. On December 19th Dynegy agreed to pay a $5 
million fine for its actions.
  In September an Administrative Law Judge at FERC issued a landmark 
ruling concluding that El Paso Corporation withheld natural gas from 
California and recommended penalty proceedings against the company. 
Since the El Paso Pipeline carries most of the natural gas to Southern 
California, this ruling has tremendous implications. The FERC 
Commissioners are expected to take up this case for a final judgement 
soon.
  These have been the latest revelations in a series of energy 
disclosure bombshells that began on Monday, May 6th when the Federal 
Energy Regulatory Commission posted a series of documents on their 
website that revealed Enron manipulated the Western Energy Market by 
engaging in a number of suspect trading strategies.
  These memos revealed for the first time how Enron used schemes called 
``Death Star,'' ``Get Shorty,'' ``Fat Boy,'' and ``Ricochet'' to fleece 
families and businesses in the West.
  The filing made yesterday to FERC shows how other companies did 
engage in these Enron-type trading strategies. The brief submitted by 
the State of California and others states that suppliers ``were jointly 
implementing or facilitating Enron-type trading strategies.''
  Let us turn to other types of fraudulent trades that many energy 
firms have admitted to.
  Dynegy, Duke Energy, El Paso, Reliant Resources Inc., CMS Energy 
Corp., and Williams Cos. all admitted engaging in false ``round-trip `` 
or ``wash trades.''
  What is a ``round-trip'' trade, one might ask?
  ``Round-trip'' trades occur when one firm sells energy to another and 
then the second firm simultaneously sells the same amount of energy 
back to the first company at exactly the same price. No commodity ever 
actually changes hands, but when done on an exchange, these 
transactions send a price signal to the market and they artificially 
boost revenue for the company.
  How widespread are ``round-trip'' trades? Well, the Congressional 
Research Service looked at trading patterns in the energy sector over 
the last few years and reported, ``this pattern of trading suggests a 
market environment in which a significant volume of fictitious trading 
could have taken place.''
  Yet, since most of the energy trading market is unregulated by the 
government, we have only a slim idea of the illusions being perpetrated 
in the energy sector.
  Consider the following recent confessions from energy firms about 
``round-trip'' trades:

       Reliant admitted 10 percent of its trading revenues came 
     from ``round-trip'' trades. The announcement forced the 
     company's President and head of wholesale trading to both 
     step down.
       CMS Energy announced 80 percent of its trades in 2001 were 
     ``round-trip'' trades.

  Remember, these trades are sham deals where nothing was exchanged, 
yet the company booked revenues from the trades.

       Duke Energy disclosed that 1.1 billion dollars-worth of 
     trades were ``round-trip'' since 1999--roughly two-thirds of 
     these were done on InterContinental Exchange, which means 
     that thousands of subscribes would have seen these false 
     price signals.
       A lawyer for J.P. Morgan Chase admitted the bank engineered 
     a series of ``round-trip'' trades with Enron.
       Dynegy and Williams have also admitted to this round-trip 
     trading.
       And although these trades mostly occurred with electricity, 
     there is evidence to suggest that ``round-trip'' trades were 
     made in natural gas and even broadband.

  By exchanging the same amount of a commodity at the same price, I 
believe these companies have not engaged in meaningful transactions, 
but deceptive practices to fool investors and possibly drive energy 
prices up for consumers.
  It is therefore imperative that the Department of Justice, FERC, the 
SEC, the Commodities Futures Trading Commission and every other 
oversight agency conduct an aggressive and vigorous investigation into 
all of the energy companies who participated in Western Energy Market.
  Beyond that I believe Congress must re-examine what tools the 
government needs to keep a better watch over these volatile markets 
that are little understood. In the absence of vigilant government 
oversight of the energy sector, firms have the incentive to create the 
appearance of a mature, liquid, and well-functioning market, but it is 
unclear whether such a market exists.
  The ``round-trip'' trades, the Enron memos, and the filing at FERC 
raise questions about illusions in the energy market.
  To this end, I believe it is critical for the Senate to act soon on 
the legislation I offered last April to regulate online energy trading.
  I am re-introducing this legislation to subject electronic exchanges 
like Enron On-Line to the same oversight, reporting and capital 
requirements as other commodity exchanges like the Chicago Mercantile 
Exchange, the New York Mercantile Exchange and the Chicago Board of 
Trade.
  I am pleased Senator Fitzgerald, Senator Harkin, Senator Lugar, 
Senator Cantwell, Senator Wyden, and Senator Leahy have again signed on 
to this legislation. I am proud of the work we did in the 107th 
Congress and I hope

[[Page 5039]]

we can complete action on this bill soon.
  Without this type of legislation, there is insufficient authority to 
investigate and prevent fraud and price manipulation since parties 
making the trade are not required to keep a record.
  Right now, energy transactions are regulated by the Federal Energy 
Regulatory Commission (FERC) when there is actual delivery.
  For example, if I buy natural gas from you, and you deliver that 
natural gas to me, FERC has the authority to ensure that this 
transaction is transparent and reasonably priced.
  However, many energy transactions no longer result in delivery. A 
giant loophole has opened where there is no government oversight when 
these transactions are done on internet exchanges.
  In 2000, Congress passed the Commodity Futures Modernization Act in 
2000 which exempted energy and metals trading from regulatory oversight 
and excluded it completely if the trade was done electronically.
  So today, as long as there is no delivery, there is no price 
transparency. Again, this lack of transparency and oversight only 
applies to energy. It does not apply if you are selling wheat or pork 
bellies or any other tangible commodity.
  And it did not take long for Enron Online, and others in the energy 
sector, to take advantage of this new freedom by trading energy 
derivatives absent any regulatory oversight.
  Thus, after the 2000 legislation was enacted, Enron OnLine began to 
trade energy derivatives bilaterally without being subject to proper 
regulatory oversight. It should not surprise anyone that without the 
transparency, prices soared.
  Just yesterday Warren Buffett published a warning in Fortune Magazine 
saying that ``Derivatives are financial weapons of mass destruction.'' 
In his annual warning letter to shareholders about what worries him 
about the financial markets, Warren Buffett called derivatives and the 
trading activities that go with them ``time bombs.''
  In the letter, Warren Buffett states, ``In recent years some huge-
scale frauds and near-frauds have been facilitated by derivatives 
trades. In the energy and electric utility sectors, for example, 
companies used derivatives and trading activities to report great 
`earnings'--until the roof fell in when they actually tried to convert 
the derivatives-related receivables on their balance sheets into 
cash.''
  We clearly saw this with Enron.
  Was Enron and its energy derivative trading arm, Enron-On-Line the 
sole reason California and the West had an energy crisis? No.
  Was it a contributing factor to the crisis? I certainly believe that 
it was. Unfortunately, because of the energy exemptions in the 2000 
CFMA, which took away the CFTC's authority to investigate, we may never 
know for sure.
  In the 107th Congress, this legislation was debated during 
consideration of the Senate Energy Bill and it was the subject of a 
hearing in the Agriculture Committee, but time ran out before the 
legislation could be marked up and passed.
  Since that time, Senators Lugar and Harkin have made significant 
improvements to the legislation and we have added stronger penalties 
for market abuse and wrongdoing.
  Today I am pleased to note that the following companies and 
organizations are supporting this legislation:

       The National Rural Electric Cooperative Association,
       The Derivatives Study Center,
       The American Public Gas Association,
       The American Public Power Association,
       The California Municipal Utilities Association,
       The Southern California Public Power Authority,
       The Transmission Access Policy Study Group,
       The U.S. Public Interest Research Group,
       The Consumers Union,
       The Consumers Federation of America,
       Calpine,
       Southern California Edison,
       Pacific Gas and Electric, and
       FERC Chairman Pat Wood.

  I ask unanimous consent that the letters of support from these 
organizations and companies be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    Federal Energy


                                        Regulatory Commission,

                                Washington, DC, February 21, 2003.
     Hon. Dianne Feinstein,
     U.S. Senate,
     Washington, DC.
       Dear Senator Feinstein: Thank you for bringing to my 
     attention your proposed legislation on, inter alia, the 
     penalty provisions in the Federal Power Act (FPA) and the 
     Natural Gas Act (NGA), refund provisions in the FPA, and 
     federal oversight of financial transactions involving energy 
     commodities. Your amendment would expand the penalties 
     allowed under the FPA and NGA, and also allow oversight by 
     the Commodity Futures Trading Commission (CFTC) of financial 
     transactions involving energy commodities.
       I support your proposed changes to the FPA and NGA. 
     Increased penalty authority will help ensure compliance with 
     the requirements of these statutes. Also, your proposed 
     changes to the FPA refund provisions will allow greater 
     protection of utility customers.
       Finally, you know how strongly I feel about customers 
     having access to the broadest range of useful market 
     information. Greater transparency is needed in energy 
     markets. Thus, I support providing for, or clarifying, CFTC 
     or other Federal regulatory oversight of trading platforms 
     that are relied on for price discovery. However, the details 
     of your proposed changes to the Commodity Exchange Act would 
     be better addressed by the CFTC or others and I would defer 
     to them with respect to any changes to the Commodity Exchange 
     Act.
           Best regards,
                                                     Pat Wood III,
     Chairman.
                                  ____



                                             PG&E Corporation,

                               San Francisco, CA, January 8, 2003.
     Hon. Thad Cochran,
     U.S. Senate, Russell Senate Office Building,
     Washington, DC.
       Dear Senator Cochran: Congratulations on your assumption of 
     the Chairmanship of the Agriculture, Nutrition, and Forestry 
     Committee. We are writing to communicate our support for an 
     important bipartisan legislative proposal considered by the 
     Committee last year to provide oversight of energy 
     derivatives trading markets.
       As you know, the Committee considered last summer a 
     proposal introduced by Senator Feinstein and co-sponsored by 
     Senators Harkin and Lugar, S. 2724, to repeal the current 
     exemption of energy derivatives trading from the jurisdiction 
     of the Commodity Futures Trading Commission (``CFTC''). The 
     proposal was similar to legislation offered earlier in the 
     year by Senator Feinstein as an amendment to the Senate 
     Energy Bill. Enclosed for your information is a letter that 
     was sent from our corporation to Senator Feinstein last year 
     concerning her amendment.
       The legislation, which we hope Congress will consider again 
     this year, would re-establish authority over energy 
     derivatives trading to the CFTC, which has the most relevant 
     oversight capability, having regulated such trading prior to 
     2000. As a market participant, we believe that Senator 
     Feinstein's legislation will encourage transparency of market 
     information and ensure market stability, which in turn would 
     enable market participants to better manage risk, reduce 
     price volatility for electricity consumers and preserve 
     ultimately the viability of this marketplace.
       We appreciate your considering our views on this important 
     issue, and look forward to working with you in the 108th 
     Congress.
           Sincerely,
                                                      Dan Richard,
     Senior Vice President, Public Affairs.
                                  ____



                                                      Calpine,

                                   San Jose, CA, February 5, 2003.
     Hon. Dianne Feinstein,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Feinstein: I am writing to let you know of 
     Calpine's continuing support for additional oversight of 
     certain energy derivative markets, as intended by the 
     legislation you plan to introduce again this year. While we 
     do not believe that energy trading was a primary cause of the 
     California energy crisis, we do believe there is a crisis of 
     confidence in the energy markets and that your legislation 
     will assist in restoring much needed public confidence in the 
     energy sector.
       Specifically, we support the bill's strengthening of the 
     CFTC's anti-fraud and anti-manipulation authority and its 
     provision for increased cooperation and liaison between the 
     CFTC and the FERC. We are also pleased that your legislation 
     addresses concerns about the oversight and transparency of 
     electronic trading platforms. It is important that such 
     facilities, which play a significant price discovery role in 
     the energy trading markets, be subject to appropriate 
     reporting and oversight by the CFTC.
       However, I also understand that typical over the counter 
     bilateral trading operations, such as those that operate from 
     a

[[Page 5040]]

     trading desk where various potential counterparties are 
     separately contacted by phone or email, are not intended to 
     be treated as electronic trading facilities under your bill. 
     This is an important distinction and one that may need 
     further clarification as the bill proceeds through the 
     legislative process.
       Calpine would like to thank you for your leadership in 
     advocating reasonable measures to ensure the integrity of 
     important energy trading markets and we stand ready to 
     provide you with any information or assistance that you may 
     need.
           Sincerely,

                                         Joseph E. Ronan, Jr.,

                                            Senior Vice President,
     Government and Regulatory Affairs.
                                  ____



                                         Edison International,

                                   Rosemead, CA, February 4, 2003.
     Hon. Dianne Feinstein,
     U.S. Senate,
     Washington, DC.
       Dear Senator Feinstein: Thank you for asking Edison 
     International for our views on your Exempt Commodities 
     Transactions Act, soon to be reintroduced in the 108th 
     Congress. As you know, Edison shares your concern over 
     manipulation of the California electricity market by some 
     market participants, which contributed to the serious 
     problems the state faced from out-of-control energy prices. 
     Your legislation would provide transparency in the 
     electricity derivatives trading market, an industry that is 
     currently exempted from regulation under the Commodity 
     Futures Modernization Act of 2000 (CFMA).
       I support your legislation, with a suggestion for your 
     consideration to further refine it. Our company and others 
     use energy derivatives trading to protect and hedge the 
     revenue from our power plants. This is in contrast to 
     companies that conduct middleman financial trading with no or 
     few power plants and trade to make money on financial 
     arbitrage. There should be guidance in the final language 
     which recognizes the difference between these two types of 
     businesses, particularly regarding further capital 
     requirements. Otherwise companies that trade in order to 
     hedge physical assets may be required to pay twice--once in 
     order to obtain capital for the assets and a second time in 
     order to meet any capital requirements to back their trades.
       Thank you again for your efforts on behalf of California 
     consumers and businesses.
           Sincerely,

                                               John E. Bryson,

                                           Chairman, President and
     Chief Executive Officer.
                                  ____



                              American Public Gas Association,

                                    Fairfax, VA, January 22, 2003.
     Re amending the Commodities Exchange Act.

     Hon. Dianne Feinstein,
     Hart Senate Office Building, U.S. Senate,
     Washington, DC.
       Dear Senator Feinstein: The American Public Gas Association 
     (APGA) is very pleased that you and Senator Lugar have again 
     taken the lead to amend the Commodity Exchange Act (CEA). The 
     provisions you propose, which amend the CEA, are significant 
     steps towards ensuring that natural gas prices are determined 
     in a competitive and informed marketplace. We applaud your 
     efforts to undo special exclusions and exemptions granted in 
     the closing hours of the 106th Congress, especially when 
     those exclusions and exemptions were specifically rejected by 
     the Senate Agriculture Committee.
       The Commodity Futures Trading Commission (CFTC) plays a 
     front-line role in promoting a competitive natural gas 
     marketplace. Closing the gaps that impede effective federal 
     oversight of the natural gas marketplace is essential in 
     order to foster competitive commodity futures markets and 
     protect market users and the public from fraud, manipulation, 
     and abusive practices. APGA fully supports your provisions to 
     clarify and restore the CFTC's ability to monitor activity in 
     off-exchange, or over-the-counter (OTC), derivatives markets 
     that trade substantial volumes of natural gas derivatives. 
     Your limited and measured steps ensure a fair balance between 
     free market activities and the necessary protections from bad 
     conduct, which undermines the confidence and integrity of 
     market participants and consumers.
       Eliminating those special exclusions and exemptions, which 
     were already rejected three years ago in the committee of 
     jurisdiction, will help the CFTC meet its obligation to make 
     sure that no important trading activities fall between the 
     cracks leaving some energy markets without a federal agency 
     with oversight authority. The consumers served by public gas 
     utilities across the country will benefit from your efforts 
     because they are less likely to be victimized by activities 
     that occur in a market where the CFTC exercises oversight.
       Again, public gas utilities and the hundreds of communities 
     that we serve commend you for your thoughtful and deliberate 
     leadership on this very important issue. While there may be 
     some who will oppose this amendment, one need not look far to 
     see whether the opposition is looking out for the best 
     interests of Wall Street or Main Street. We pledge to work 
     with you in any way we can to pass this much-needed 
     amendment. Please let me know how I can assist you.
           Sincerely,
                                                         Bob Cave,
     President.
                                  ____



                            American Public Power Association,

                                    Washington, DC, March 4, 2003.
     Hon. Dianne Feinstein,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Feinstein: On behalf of the American Public 
     Power Association (APPA), I want to express support for the 
     intent and thrust of your legislation entitled the ``Energy 
     Market Oversight Act'' and to commend you for your leadership 
     in addressing these important consumer protection issues.
       APPA represents the interests of more than 2,000 publicly 
     owned electric utility systems across the country, serving 
     approximately 40 million citizens. APPA member utilities 
     include state public power agencies and municipal electric 
     utilities that serve some of the nation's largest cities. 
     However, the vast majority of these publicly owned electric 
     utilities serve small and medium-sized communities in 49 
     states, all but Hawaii. In fact, 75 percent of our members 
     are located in cities with populations of 10,000 people or 
     less.
       It is my understanding that your legislation would provide 
     the Commodity Futures Trading Commission (CFTC) with 
     jurisdiction over trading in energy derivatives and other 
     financial products. APPA is particularly supportive of 
     language in your bill that would increase the Federal Energy 
     Regulatory Commission's (FERC) ability to investigate market 
     manipulation and penalize such behavior.
       Some of APPA's members may have concerns regarding the 
     impact the bill may have on public power, and I look forward 
     to working with you and your staff in an effort to resolve 
     these concerns. I would also like to join the California 
     Municipal Utilities Association (CMUA) in raising an issue 
     that I believe is consistent with the intent of your bill. 
     CMUA has attempted to get the California ISO to do a 
     benchmarking study comparing their costs to other ISOs 
     throughout the United States. The California ISO has informed 
     CMUA that they cannot conduct such a study because they 
     cannot get the information from other ISOs. To address this 
     problem, while keeping with your bill's goal of increasing 
     transparency, I would use you to add a provision to the bill 
     that would require FERC to gather such information as is 
     necessary from each ISO to compare their cost of services on 
     an annual basis.
       APPA looks forward to working with you and your staff on 
     this legislation and other issues in the 108th Congress.
           Sincerely,
                                               Alan H. Richardson,
     President and CEO.
                                  ____



                                 New York Mercantile Exchange,

                                                     New York, NY.
     Senator Dianne Feinstein,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Feinstein: As a result of concerns surrounding 
     the Enron bankruptcy, numerous congressional committees, 
     regulators, and financial institutions are closely examining 
     the broad impact of the collapse on American markets, 
     investors and employees. Much attention has been paid to 
     corporate governance, financial and accounting standards, and 
     market practices, with considerable focus on the energy 
     marketplace. On behalf of the New York Mercantile Exchange, 
     Inc. (``NYMEX'' or the ``Exchange''), we wish to applaud your 
     efforts to bring more accountability and greater transparency 
     to this nation's vitally important energy marketplace.
       NYMEX is the world's largest forum for the trading and 
     clearing of energy futures contracts. As a federally 
     chartered marketplace, it is overseen by the independent 
     federal regulatory agency, the Commodity Futures trading 
     Commission (``CFTC''). NYMEX serves a diverse domestic and 
     international customer base by bringing price transparency, 
     market neutrality, competition and efficiency to energy 
     markets, and provides businesses with the financial tools to 
     deal with market uncertainty.
       After studying your legislative proposal, we have concluded 
     that it is very worthy of support for the following reasons:
       The proposal would refine the definition of trading 
     facility as applied to energy derivatives markets and would 
     further require that any such market not otherwise regulated 
     by the CFTC would be accountable to them.
       In addition, the proposal would give the CFTC vitally 
     important tools to monitor such markets, including large 
     trader reporting and net capital standards.
       The proposal would also ensure that the CFTC has the 
     authority and ability to obtain access to information 
     critical to market oversight and to make market information 
     public to the extent that the Commission determines that it 
     is in the public interest to do so.
       With numerous reports of reduced confidence in market 
     integrity in the wake of the Enron bankruptcy, never has it 
     been more important to restore faith in the great American 
     resource, our competitive markets. S. 517's provisions 
     relating to addressing regulatory gaps in the CFTC regulatory

[[Page 5041]]

     ``umbrella'' can provide an important and meaningful 
     improvement in market oversight, and is an important step in 
     building faith and confidence in a competitive energy 
     marketplace.
       We strongly support your efforts to enhance market 
     transparency and accountability, and we look forward to 
     working with you in this important endeavor.
           Sincerely,
     Vincent Viola,
       Chairman.
     J. Robert Collins,
       President.
                                  ____

                                               Southern California


                                       Public Power Authority,

                                                February 28, 2003.
     Hon. Dianne Feinstein,
     U.S. Senate,
     Washington, DC.
       Dear Senator Feinstein: On behalf of the Southern 
     California Public Power Authority (SCPPA), I would like to 
     express our support for your proposed legislation, the 
     ``Energy Market Oversight Act,'' which would provide more 
     authority to the Federal Energy Regulatory Commission (FERC) 
     and the Commodity Futures Trading Commission (CFTC) to 
     oversee the trading in energy derivatives and other financial 
     transactions and to investigate and punish market 
     manipulation.
       SCPPA is a non-profit, joint action agency formed in 1980 
     to represent the cities of Anaheim, Azusa, Banning, Burbank, 
     Cerritos, Colton, Glendale, Los Angeles, Pasadena, Riverside, 
     and Vernon; and the Imperial Irrigation District. The 
     community-owned utilities that make up SCPPA's membership 
     serve approximately five million citizens from northern Los 
     Angeles County to the Mexican border.
       We support the intent of your legislation because we 
     believe it will enhance safeguards for consumers and foster a 
     more fully functioning competitive market. As you are well 
     aware, lack of effective market monitoring and market 
     transparency combined to allow for manipulation of the 
     markets, to the extreme detriment of California consumers. We 
     believe that federal legislation that promotes more effective 
     monitoring and remedies for fraud and market abuses will 
     improve the climate for investment in new generation, 
     increase consumer confidence, and reduce market volatility.
       We are encouraged that this legislation increases the civil 
     and criminal penalties for manipulation, allows for prompt 
     investigatory action by FERC, and allows for an earlier 
     refund effective date when rates are not ``just and 
     reasonable.'' We think these actions will provide an improved 
     regulatory deterrent, as well as a means for swift and 
     complete refunds to consumers.
       SCPPA commends you for taking a leadership role on these 
     critical issues and looks forward to working with you to 
     address a few issues of particular concern to our municipal 
     utility members.
           Sincerely,
                                                    Bill Carnahan,
     SCPPA Executive Director.
                                  ____

                                           National Rural Electric


                                      Cooperative Association,

                                  Arlington, VA, January 29, 2003.
     Hon. Dianne Feinstein,
     U.S. Senate, Hart Office Building,
     Washington, DC.
       Dear Senator Feinstein: I would like to take this 
     opportunity to express the appreciation of the National Rural 
     Electric Cooperative Association for our efforts to restore 
     transparency and integrity to the energy markets. We are 
     pleased that you have introduced legislation with Senators 
     Lugar, Harkin, Fitzgerald and others (the Energy Market 
     Oversight Act) that reestablished the ability of the 
     Commodity Futures Trading Commission to police all energy 
     derivatives markets for fraud and commodity price 
     manipulation.
       Today, consumers and investors have little confidence that 
     the energy markets are operating fairly and for the benefit 
     of all. Much blame for the current crisis in confidence can 
     be placed on the so-called ENRON exemption, adopted in 2000, 
     as part of the legislation that deregulated the over-the-
     counter derivatives market for energy commodities.
       The legislation created a gap in the regulation of energy 
     derivatives where price and trade manipulation can occur 
     unchecked by adequate regulatory oversight. Although the 
     Commodity Futures Trading Commission (CFTC) has authority to 
     prosecute fraud and price manipulation that occurs on the 
     commodity exchanges, the CFTC has no clear authority to 
     pursue violations of the Federal anti-fraud and anti-
     manipulation laws in the over-the-counter energy market.
       Energy derivatives contracts, whether traded on well-
     regulated commodities exchanges or in the over-the-counter 
     market, play an important role in determining the costs and 
     availability of electricity and other energy products to 
     consumers. But, consumers suffer when much of the market for 
     energy derivatives lacks transparency and operates without 
     accountability for manipulation and fraud, which is the case 
     for the over-the-counter markets.
       Recent headlines underscore the need for this important 
     legislation. The news has been filed with the indictments of 
     energy traders for manipulation of the energy markets and 
     admissions by energy companies that they have engaged in 
     deceptive market practices, including wash trades on an 
     unregulated over-the-counter exchange.
       Consumer-owned electric co-ops now purchase more than 50% 
     of their electric power on the market and are exposed to the 
     risks that an unstable market creates. As the representative 
     of America's 900 consumer-owned electric co-op utilities, the 
     NRECA believes that it is vitally important to restore 
     confidence in the energy markets by ensuring that market 
     participants have access to reliable and credible 
     information.
       Your legislation represents an important step in creating 
     more transparent energy markets. I want to thank you for your 
     leadership on this critical issue and offer the support of 
     America's electric cooperatives in this effort to restore 
     credibility to the nation's energy markets. We look forward 
     to working with you and your staff to improve the legislation 
     as it moves forward.
           Sincerely,
                                                    Glenn English,
     Chief Executive Officer.
                                  ____



                                               Washington, DC,

                                                 February 7, 2003.
       Dear Senator Feinstein: We are writing to express our 
     support for the Energy Market Oversight Act being offered by 
     yourself and Senators Lugar, Cantwell and Leahy. This 
     important legislation will assure that over-the-counter 
     derivatives markets in ``exempt'' commodities such as energy 
     will be covered by federal prohibitions on fraud and 
     manipulation. This regulatory assistance comes at a critical 
     time. According to the Federal Energy Regulatory Commission's 
     Director of the Office of Market Oversight, ``energy markets 
     are in severe financial distress.'' Along with the decline in 
     credit quality in these markets, the loss of confidence and 
     trust has led to a ruin in the liquidity and depth of these 
     markets. This legislation will go a long way to address this 
     problem.
       Derivatives are highly leveraged financial transactions, 
     and this allows investors to potentially take a large 
     position in the market without committing an equivalent 
     amount of capital. Moreover, derivatives traded in over-the-
     counter markets are devoid of the transparency that 
     characterizes exchange-traded derivatives such as futures, 
     and this lack of transparency that characterizes exchange-
     traded derivatives such as futures, and this lack of 
     transparency introduces a greater potential for abuse through 
     fraud and manipulation.
       Derivatives are often combined into highly complex 
     structured transactions that are difficult--even for seasoned 
     securities traders and finance professionals--to understand 
     and price in the market. Enron used such over-the-counter 
     derivatives extensively in order to hide the nature of their 
     activities from investors. The failure of Enron and the 
     demise of other energy derivatives dealers has had a 
     devastating impact of the level of trust in energy markets.
       This legislation would help ensure that over-the-counter 
     derivatives markets operate with proper federal oversight 
     which will make the markets more stable and transparent. It 
     is appropriate to place this oversight authority with the 
     Commodity Futures Trading Commission which, as the principal 
     federal regulator of derivatives transactions since its 
     founding in 1975, will provide oversight, surveillance and 
     enforcement of anti-fraud and anti-manipulation laws. The 
     CFTC has the experience to handle these complex financial 
     transactions and to develop the best rules to implement these 
     protections. The legislation also requires the cooperation of 
     the Federal Energy Regulatory Commission, the entity charged 
     with overseeing the energy markets, in providing a stable and 
     honest market for the investing public.
       At a time when these energy markets are deeply distressed 
     and the investing public looks skeptically at derivatives 
     trading and firms engaged in derivatives trading, we should 
     take decisive steps to ensure that the public is protected 
     from Enron-like abuses. This amendment is just such a step, 
     and we support it.
       Thank you for introducing this important legislation.
           Sincerely,
     Adam J. Goldberg,
       Policy Analyst, Consumers Union.
     Mark N. Cooper,
       Director of Research, Consumer Federation of America.
     Edmund Mierzwinski,
       Consumer Program Director, U.S. Public Interest Research 
     Group.
     Randall Dodd,
       Director, Derivatives Study Center.
                                  ____

                                               Transmission Access


                                           Policy Study Group,

                                                February 25, 2003.
     Re Energy Market Oversight Act.

     Hon. Dianne Feinstein,
     U.S. Senate, Hart Senate Office Building,
     Washington, DC.
       Dear Senator Feinstein: I understand that you will be 
     introducing shortly a stand-

[[Page 5042]]

     alone bill, entitled The Energy Market Oversight Act, which 
     is similar to the amendment you offered last season to S. 
     517, the Energy Policy Act of 2002. This bill would, among 
     other things, place derivative products for energy under the 
     jurisdiction of the Commodities Future Trading Commission 
     (CFTC), and enhance the Federal Energy Regulatory 
     Commission's (FERC) remedial and penal authority.
       On behalf of the Transmission Access Policy Study Group 
     (TAPS), I would like to express our support for the policy 
     objective of your proposed legislation: better protecting 
     consumers from manipulation in the volatile energy markets. 
     We look forward to working with you to refine the bill as it 
     moves through the legislative process. Expanding the CFTC and 
     FERC role in preventing and redressing energy market abuses 
     is one of a number of avenues for enhanced consumer and 
     market power protection that should be included if an 
     electricity title moves forward this year. TAPS 
     representatives would like to sit down with your staff and 
     discuss the details of your bill and related matters, when 
     convenient.
       The other key related components of any electricity title 
     are (i) strong consumer protections, as were offered in the 
     Cantwell amendment (SA 3234) to the Energy Policy Act of 
     2002, (ii) expanding FERC's merger review authority as was 
     done in S. 517, (iii) a strong market transparency 
     requirement, and (iv) further strengthening FERC powers to 
     remedy and penalize abuses of market power and market 
     manipulation. Finally, we would strongly urge you to oppose 
     repeal of the Public Utility Holding Company Act this year. 
     Repealing PUHCA would lead to massive consolidation in the 
     industry, increasing dramatically opportunities for 
     manipulation of the market.
           Very truly yours,
                                                       Roy Thilly,
                                                    TAPS Chairman.

  Mrs. FEINSTEIN. Mr. President, here is an explanation of what this 
bill does: It applies anti-fraud and anti-manipulation authority to all 
exempt commodity transactions--an exempt commodity is a commodity which 
is not financial and not agricultural and mainly includes energy and 
metals.
  The bill sets up two classes of swaps. For those made between 
``sophisticated persons,'' basically institutions and wealthy 
individuals, that are not entered into on a ``trading facility''--for 
example, an exchange--anti-fraud and anti-manipulation provisions apply 
and wash trades are prohibited.
  The following regulations would apply to all swaps made on an 
``electronic trading facility'' and a ``dealer market'', which includes 
dealers who buy and sell swaps in exempt commodities, and the entity on 
which the swap takes place: anti-fraud and anti-manipulation provisions 
and the prohibition of wash trades apply; if the entity on which the 
swap takes place serves a pricing or price discovery function, 
increased notice, reporting, bookkeeping, and other transparency 
requirements; and the requirement to maintain sufficient capital 
commensurate with the risk associated with the swap;
  Except for the anti-fraud and anti-manipulation provisions, the CFTC 
has the discretion to tailor the above requirements to fit the 
character and financial risk involved with the swap or entity. While 
the CFTC could require daily public disclosure of trading data like 
open and closing prices, similar to the requirements of futures 
exchanges, it could not require real-time publication of proprietary 
trading information or prohibit an entity from selling their data.
  The CFTC may allow entities to meet certain self-regulatory 
responsibilities- as provided in a list of ``core principles.'' If an 
entity chose to become a self-regulator, these core principles would 
obligate the entity to monitor trading to prevent fraud and 
manipulation as well as assure that its other regulatory obligations 
are met.
  The penalties for manipulation are greatly increased. The civil 
monetary penalty for manipulation is increased from $100,000 to $1 
million. Wash trades are subject to the monetary civil penalty for each 
violation, and imprisonment up to 10 years.
  The FERC is required to improve communications with other Federal 
regulatory agencies. A shortcoming in the main anti-fraud provision of 
the CEA is also corrected by allowing CFTC enforcement of fraud to 
apply to instances of either defrauding a person for oneself or on 
behalf of others.
  It requires the FERC and the CFTC to meet quarterly and discuss how 
energy derivative markets are functioning and affecting energy 
deliveries.
  It grants the FERC the authority to use monetary penalties on 
companies that don't comply with requests for information. It is 
essentially the same authority that the SEC has.
  It makes it easier for FERC to hire the necessary outside help they 
need including accountants, lawyers, and investigators for 
investigative purposes.
  It eliminates the requirement that FERC receive approval from the 
Office of Management and Budget before launching an investigation or 
price discovery of electricity or natural gas markets involving more 
than 10 companies.
  It increases the penalty amounts to $1 million instead of the current 
$5,000 for violations of the Federal Power Act and the Natural Gas Act; 
five years instead of the current two for violations of the statute; 
and, $50,000 per violation per day instead of the current $500 for 
violations of rules or orders under the Federal Power Act and Natural 
Gas Act.
  The Commission's authority to impose civil penalties is broadened to 
all sections of Part II of the Federal Power Act and the penalty amount 
is increased from $10,000 to $50,000 per violation per day.
  It modifies Section 206 of the Federal Power Act to allow for an 
earlier refund effective date to increase the opportunity for refunds 
as a deterrent to fraudulent and manipulative behavior in the energy 
markets.
  This legislation is not going to do anything to change what happened 
in California and the West. But it does provide the necessary authority 
for the CFTC and FERC which will help protect against another energy 
crisis.
  When regulatory agencies have the will but not the authority to 
regulate, Congress must step in and ensure that our regulators have the 
necessary tools. Unfortunately, sometimes an agency has neither. In 
this case I am glad to have the support of FERC and I hope that the 
CFTC will reconsider and support this legislation.
                                 ______
                                 
      By Ms. SNOWE (for herself and Ms. Collins):
  S. 510. A bill to establish a commercial truck highway safety 
demonstration program in the State of Maine, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.
  Ms. SNOWE. Mr. President, I rise today, along with my colleague 
Senator Collins, to introduce legislation, the Commercial Truck Highway 
Safety Demonstration Program Act, to create a safety pilot program for 
commercial trucks.
  This bill would authorize a safety demonstration program in my home 
State of Maine that could be a model for other States. I have been 
working closely with the Maine Department of Transportation, 
communities in my State, and others to address statewide concerns about 
the existing Federal interstate truck weight limit of 80,000 pounds.
  I believe that safety must be the No. 1 priority on our roads and 
highways, and I am very concerned that the existing interstate weight 
limit has the perverse impact of forcing commercial trucks onto State 
and local secondary roads that were never designed to handle heavy 
commercial trucks safely. We are talking about narrow roads, lanes, and 
rotaries, with frequent pedestrian crossings and school zones.
  I have been working to address this concern for many years. During 
the 105th Congress, for example, I authored a provision providing a 
waiver from Federal weight limits on the Maine Turnpike, the 100-mile 
section of Maine's interstate in the southern portion of the State, and 
it was signed into law as part of TEA-21. I have also shared my 
concerns with the Department of Transportation and the Senate 
Environment and Public Works Committee to urge them to work with me in 
an effort to address this challenge.
  In addition, the Main Department of Transportation is in the process 
of conducting a study of the truck weight limit waiver on the Maine 
Turnpike, and I have been working closely with the State in the hopes 
of expanding this study, which will focus on the

[[Page 5043]]

safety impact of higher limits, infrastructure issues, air quality 
issues, and economic issues as well, in order to secure the data 
necessary to ensure that commercial trucks operate in the safest 
possible manner.
  Federal law attempts to provide uniform truck weight limits, 80,000 
pounds, on the Interstate System, but the fact is there are a myriad of 
exemptions and grandfathering provisions. Furthermore, interstate 
highways have safety features specifically designed for heavy truck 
traffic, whereas the narrow, winding State and local roads don't.
  The legislation I am submitting today would simply direct the 
Secretary of Transportation to establish a 3-year pilot program to 
improve commercial motor vehicle safety in the State of Maine. 
Specifically, the measure would direct the Secretary, during this 
period, to waive Federal vehicle weight limitations on certain 
commercial vehicles weighing over 80,000 pounds using the Interstate 
System within Maine, permitting the State to set the weight limit. In 
addition, it would provide for the waiver to become permanent unless 
the Secretary determines it has resulted in an adverse impact on 
highway safety.
  I believe this is a measured, responsible approach to a very serious 
public safety issue. I hope to work with all of those with a stake in 
this issue, safety advocates, truckers, States, and communities, to 
address this matter in the most effective possible way, and I hope that 
my colleagues will join me in this effort.
  Ms. COLLINS. Mr. President, I rise to join with my senior colleague 
from Maine in sponsoring the Commercial Truck Highway Safety 
Demonstration Program Act, an important bill that addresses a 
significant safety problem in our State.
  Under current law, trucks weighing as much as 100,000 pounds are 
allowed to travel on Interstate 95 from Maine's border with New 
Hampshire to Augusta, our capital city. At Augusta, trucks weighing 
more than 80,000 pounds are forced off Interstate 95, which proceeds 
north to Houlton. Heavy trucks are forced onto smaller, secondary roads 
that pass through cities, towns, and villages.
  Trucks weighing up to 100,000 pounds are permitted on interstate 
highways in New Hampshire, Massachusetts, and New York as well as the 
Canadian provinces of New Brunswick and Quebec. The weight limit 
disparity on various segments of Maine's Interstate Highway System 
forces trucks traveling to and from destinations in these States and 
provinces to use Maine's State and local roads, nearly all of which 
have two lanes, rather than four. Consequently, many Maine communities 
along the interstate see substantially more truck traffic than would 
otherwise be the case if the weight limit were 100,000 pounds for all 
of Maine's interstate highways.
  The problem Maine faces because of the disparity in truck weight 
limit is perhaps most pronounced in our State capital. Augusta is the 
Maine Turnpike's northern terminus where heavy trucks that are 
prohibited from traveling along the northern segment of Interstate 95 
enter and exit the turnpike. The high number of trucks that must 
traverse Augusta's local roads, and particularly its two rotaries, 
creates a hazard for those who live and work in as well as visit the 
city.
  The Maine Department of Transportation estimates that the truck 
weight disparity sends 310 vehicles in excess of 80,000 pounds through 
Augusta every day. These vehicles, which are sometimes transporting 
hazardous materials, must pass through Cony Circle, one of the State's 
most dangerous traffic circles and the scene of 130 accidents per year. 
The fact that the circle is named for the 1,200 student high school 
that it abuts adds to the severity of the problem.
  A uniform truck weight limit of 100,000 pounds on Maine's interstate 
highways would reduce the highway miles and travel times necessary to 
transport freight through Maine, resulting in economic and 
environmental benefits. Moreover, Maine's extensive network and local 
roads will be better preserved without the wear and tear of heavy truck 
traffic. Most important, however, a uniform truck weight limit will 
keep trucks on the interstate where they belong, rather than on roads 
and highways that pass through Maine's cities, towns, and 
neighborhoods.
  The legislation that Senator Snowe and I are introducing addresses 
the safety issues we face in Maine because of the disparities in truck 
weight limits. The legislation directs the Secretary of Transportation 
to establish a commercial truck safety pilot program in Maine. Under 
the pilot program, the truck weight limit on all Maine highways that 
are part of the Interstate Highway System would be set at 100,000 
pounds for 3 years. During the waiver period, the Secretary would study 
the impact of the pilot program on safety, and would receive the input 
of a panel that would include State officials, safety organizations, 
municipalities, and the commercial trucking industry. The waiver would 
become permanent if the panel determined that motorists were safer as a 
result of a uniform truck weight limit on Maine's Interstate Highway 
System.
  Maine's citizens and motorists are needlessly at risk because too 
many heavy trucks are forced off the interstate and on to local roads. 
The legislation Senator Snowe and I are introducing is a commonsense 
approach to a significant safety problem in my State. I hope my 
colleagues will support passage of this important legislation.

                          ____________________